Applying volume price analysis to the NQ emini future to answer the question!

Applying volume price analysis to the NQ emini future to answer the question!

The question everyone is asking is whether the NQ emini can continue to climb higher as it leaves the ES and YM futures trailing in its wake, and in this video we answer the question using volume price analysis.

00:01

Introduction and disclaimer

00:01

The host welcomes everyone to the webinar, noting the different time zones of participants from the UK, Canada, the US, and other places. After a brief pause to prepare, the host draws attention to the disclaimer displayed on the screen before beginning the session.

00:37

Trading risk warning

00:37

The speaker emphasizes the importance of only using money that one can afford to lose when trading, highlighting the risks involved in trading activities. They clarify the message to avoid any misunderstanding and mention that the session will include analysis of various charts, including Forex charts, particularly for newcomers.

01:06

Volume price analysis overview

01:06

The discussion focuses on analyzing market indices and commodities using volume price analysis, a methodology that examines the relationship between price action and trading volume. This approach requires both price and volume to align to confirm the authenticity of market moves. The speaker emphasizes the value of seeing this analysis applied in real-time market situations for better understanding.

02:08

Methodology and key rules

02:08

The session introduces a unique trading methodology inspired by Richard Wyckoff’s principles, emphasizing its accessibility even for those unfamiliar with it. The methodology is best understood through practical demonstration during the webinar. It can be learned effectively using faster timeframes, which are recommended for quicker mastery despite not being the preferred trading timeframe, because price action is self-similar across scales. Additional resources include a dedicated book and extensive program materials to support learning and application on charts.

03:13

Application on different timeframes

03:13

The speaker emphasizes the importance of quickly observing price action during trading sessions, noting that the method works well across all time frames, from fast to slow, making it suitable for both trading and investing. They mention a companion book containing about 200 examples across various time frames that demonstrate how to apply the methodology. The key idea is that market patterns are cyclical and repeat on charts. Recognizing anomalies, candle patterns, and support/resistance levels multiple times helps traders and investors anticipate future market moves with confidence.

04:26

Companion books and chart examples

04:26

The speaker discusses different trading platforms, mentioning commodities and Forex versions with varying numbers of examples. They highlight Ninja Trader, currently open, and note that this session focuses on MT5 and Ninja Trader. The speaker plans to switch to MT5 later, emphasizing that MT5 is a multi-asset platform accessible through broker accounts, while Ninja Trader requires paying for the data feed.

05:08

Trading platforms and market access

05:08

The video explains that platforms like MT4 and MT5 include market data feeds as part of the service, with no additional cost beyond broker spreads. MT5 brokers offer access to hundreds of assets, including shares, indices, futures, gold, and oil, making it accessible for independent retail traders at all levels. The speaker emphasizes that traders no longer need large amounts of capital to enter these markets; small investments are sufficient. They also highlight the importance of starting small to learn and to determine if trading suits the individual.

06:20

Trading mindset and loss acceptance

06:20

The speaker emphasizes the importance of accepting losses as a fundamental part of trading and investing, highlighting that success comes from minimizing these losses. They mention volume price analysis as a tool to keep losses minimal. Additionally, a recent book by a former Goldman Sachs vice president is referenced, which discusses market cycles and the necessity of understanding price cycles to succeed. The speaker warns that many traders fail because they buy at market tops and sell at bottoms, often influenced by market makers like Goldman Sachs.

07:28

Market cycles and volume analysis

07:28

The speaker discusses the concept of ‘volume Personalis,’ which involves analyzing market phases to determine whether it is a time to buy, hold, or step aside. This cyclical process occurs across various timeframes. An example is mentioned where David will provide a more detailed explanation using faster timeframes.

08:03

NQ index and distribution phase

08:03

The NQ index continues to rise steadily, appearing unstoppable for now. However, like all markets, it will eventually reach a pause or distribution point. The speaker discusses the importance of volume price analysis and specific indicators based on Camarillo theory to identify key levels. These indicators vary by timeframe: intraday values reset daily, daily chart values hold for the week, and weekly chart values remain valid until the month’s end. This helps traders understand when the NQ’s upward momentum might slow or pause.

09:15

Trader instincts vs market reality

09:15

The speaker discusses traders’ common instinct to expect a market reversal after a strong uptrend, often attempting to short the market prematurely. They caution that this approach is like standing in front of a runaway train. Instead, they emphasize the importance of analyzing volume, price levels, and candle patterns to identify potential pause points. Specifically, they highlight the significance of the fourth resistance level on the Camarilla indicator at around 10,700 on both the weekly and daily charts for the NQ, noting that while the price may have briefly surpassed this level, it typically acts as a key resistance.

10:21

Weekly chart volume anomalies

10:21

The segment discusses two key levels on a weekly chart that may either hold, reverse, or break to a higher level. It emphasizes analyzing volume under weekly candles, noting anomalies where candle spread and volume do not align. The speaker highlights how volume bias analysis reveals important signals, showing examples of different candle behaviors with varying volume on weekly and daily charts, including a candle with half the width but similar volume to a wider candle.

11:31

Doji candle and market indecision

11:31

The speaker discusses market behavior, noting that despite significant effort to push prices higher, the market is not strongly responding. The formation of a doji candle, which indicates market indecision rather than a guaranteed reversal, is highlighted. This uncertainty is primarily attributed to concerns about the virus and the availability of a vaccine.

12:06

Impact of virus on markets

12:06

The speaker discusses the rising number of COVID-19 cases in the U.S. while noting that deaths are not increasing at the same rate. They mention that the situation in the UK seems under control despite ongoing concerns about the virus’s persistence and the possibility of a second wave. The key difference in any future waves will be the improved understanding and treatment methods by medical professionals until a vaccine is available. The speaker then shifts focus to the Forex market, specifically the British pound, addressing questions relevant to day traders and stock traders.

13:17

Forex focus and screening process

13:17

The speaker discusses the challenge of selecting assets in the Forex market, which offers thousands of choices. They explain that unlike Forex, stocks will be covered later using a platform with a screening tool called Radar Screen. Currently, their Forex screening relies on proprietary indicators and possibly developing an additional scanner. They focus on a limited set of 28 currency pairs and further narrow down to eight pairs centered around a specific currency, such as the British Pound this month, to concentrate their analysis and improve effectiveness.

14:28

Day trading and indicator Q&A

14:28

The speaker discusses the importance of scanning for day trading opportunities, especially for stock traders. They mention that this scanning process will be explored further once TradeStation is integrated. The session will then transition to David, followed by a review of the British Pound, particularly the cable currency pair from that morning. The speaker invites questions about any indicators shown on the charts as well as volume price analysis, offering to answer them.

By Anna Coulling – creator of volume price analysis