Choosing the best currency pairs to trade is straightforward with the currency strength indicator

Choosing the best currency pairs to trade is straightforward

Choosing the best currency pairs to trade is straightforward with the currency strength indicator from Quantum Trading Ltd. Whether you trade trends, reversals, or congestion, the indicator works on NinjaTrader, MT4/5, TradingView, and now Tradestation. It is always the starting point, as it breaks the world of forex down into the building blocks of the currencies themselves, which is the basis for analysis from the ground up.

00:12

Introduction and audio check

00:12

The webinar begins with an apology for accidentally broadcasting audio testing. The host asks participants to confirm whether the audio is clear and suggests checking their individual computer settings if it is poor.

00:45

Disclaimer and trading risk reminder

00:45

The speaker begins by humorously blaming David for accidentally starting the session. They mention it’s the first Monday morning session in a while, appreciating the change in schedule. The introduction sets the tone for an engaging start to the week and reminds viewers to note the disclaimer before analyzing recent market activity.

01:11

Volume price analysis overview

01:11

The speaker emphasizes the risks involved in trading and advises never to use money one cannot afford to lose. They explain that their market analysis primarily uses volume price analysis (VPA), which focuses on the relationship between volume and price movements. Additionally, they consider fundamental factors and influences from related markets, highlighting the interconnected nature of currencies and other financial markets. The methodology also integrates candle patterns, support and resistance levels, and optional indicators. For those in the program, specialized quantum tools designed for the forex market are available to enhance trading strategies by deconstructing currency pairs.

03:12

Currency strength and matrix indicators

03:12

The speaker explains how to track money flow in currency trading by identifying which individual currencies are being bought or sold heavily. They describe using a currency strength indicator across three time frames—hourly, 15-minute, and 5-minute—on their MT4 platform to get an overview of market activity. The hourly time frame is highlighted as particularly useful for understanding recent buying and selling trends. An example is given showing strong selling of the Swiss franc, indicated by the steep angle of the currency strength line.

04:44

The speaker discusses the use of a matrix tool that compiles currency strength data to create a leaderboard of currency pairs, showing how buying or selling pressure is distributed. The Swiss franc shows consistent buying across pairs like AUD/CHF, USD/CHF, GBP/CHF, and CHF/JPY. This consistency helps traders identify the best trading opportunities involving the Swiss franc. The speaker notes that if a trader’s preferred pair is not showing strong activity, it might indicate no current trading opportunity in that pair.

06:18

Using matrix for trading pairs

06:18

The speaker introduces an example using the CAD/JPY currency pair to demonstrate how the ranking matrix shows movement extremes in currency pairs. The matrix highlights which pairs are active, indicating potential reversals or continuations. The indicator values on the hourly chart are noted as not particularly high, based on the speaker’s experience.

07:20

The indicator has been upgraded to categorize extreme values as high, medium, or low, currently available on TradingView and planned for other platforms. Despite moderate indicator values, trades can still occur. Attention is drawn to the British pound during the London session, emphasizing its importance and recent selling pressure against the Japanese yen. The dollar is moving lower while the pound is gaining strength.

08:28

The speaker compares the pound/Swiss franc and pound/dollar (cable) pairs, noting divergence in strength between the pound and Swiss franc. Though cable is more popular due to lower spreads, pound/Swiss illustrates how one currency’s strength or weakness may vary between pairs. When lines in the matrix move together, consolidation is expected, requiring patience.

09:34

Strong selling of the British pound can lead to rotations where the pound is sold against one currency but not immediately against another, a pattern often seen with cable in the morning. Initial bursts at open may stall before catching up later. Divergences in pound pairs such as pound/New Zealand and pound/Aussie are noted, with recent crosses indicating shifts in currency flows.

10:27

The speaker tracks currency flows using the matrix to combine individual currency movements into pair trends. Recent observations show pound/Aussie moving from positive to negative values, indicating a shift. The discussion concludes with a preview of the speaker’s profile views on British pounds, demonstrating how the tool helps quickly analyze currency strength and flows.

10:58

Dollar short squeeze and fundamental events

10:58

The discussion focuses on the US dollar, highlighting that it is currently one of the most heavily shorted currencies on the CFTC, which could lead to a short squeeze. The speaker emphasizes the importance of checking both fundamental data and charts, noting the heavy presence of Federal Reserve speakers scheduled before Wednesday, including Powell, Barkin, Daly, Collins, and Bowman. This flurry of communication is significant as markets are closely watching bond yields, which influence the dollar’s movements. Rising bond yields often coincide with a stronger dollar amid concerns over inflation control. The segment concludes with an analysis of the British pound (Cable) using various chart types, including Renko charts, illustrating recent selling pressure marked by a shooting star pattern.

13:11

Cable price action and renko charts

13:11

The segment discusses the London market open characterized by high volume and a strong VPA (Volume Price Analysis) signal, highlighting a weak shooting star candle indicating market weakness and a likely reversal. It emphasizes the importance of support and resistance levels, noting an imminent reversal near a key R3 resistance level, and stresses the value of combining price-based and volume-based support and resistance analysis across different time frames.

14:15

The focus shifts to slower time frames and recent market-moving news, specifically Erdogan’s firing of his fourth Turkish central bank governor, which has caused volatility and a gap down in various currency pairs, including the Australian dollar pairs. The segment highlights the importance of understanding geopolitical events when trading volatile emerging market currencies like the Turkish lira.

15:26

This part explains the market’s reaction to the gap down, noting a hammer candle signaling buying strength returning to the British pound. It introduces volatility candles, which occur when price moves outside the average true range, and how these candles help identify key support and resistance levels. The cable (GBP/USD) pair is discussed as still trading near important price and volume-based levels, with particular interest in the pound/Swiss franc pair for its trading dynamics.

16:29

The analysis focuses on the pound/Swiss franc pair, highlighting the importance of observing divergence and strength in individual currencies to identify strong, momentum-driven trends. The speaker explains the use of Renko charts, which are not time-based but instead mark price movement bricks, facilitating clearer pattern recognition such as double tops and bottoms, and helping to identify key resistance levels like R6 on the daily chart.

18:15

This segment explains how combining daily and hourly chart levels enhances the reliability of support and resistance, often leading to price reversals at coinciding levels. It describes the visual signals from trend indicators that change color before price moves, allowing traders to anticipate potential market direction shifts. The speaker touches on the importance of individual trader personality in deciding how much confirmation is needed before entering trades.

19:15

The final segment introduces the psychological aspects of trading, particularly relating to Volume Price Analysis (VPA). It addresses a common trader experience of making profits and then losing them, linking this to the importance of aligning trading style with personal temperament. The speaker plans to explore trader personality types further after a colleague presents additional information.

19:49

Trading psychology and personality traits

19:49

The speaker discusses the advantages of using Renko charts for trading, particularly for entries and staying in a position. They explain how Renko helps identify confirmatory signals through color matches and how it complements time charts for exits. The time chart offers more nuanced exit signals, such as consolidation and color changes, which can be used alongside Renko signals. Volume analysis and candle patterns, like bullish engulfing candles with wicks and reasonable volume, are also considered when deciding to exit a trade.

22:04

The focus shifts to monitoring the currency pair cable for potential reversals and key resistance levels such as the R3 pivot point. The speaker highlights the importance of recognizing key hourly levels to decide whether to take profits or hold positions. They encourage viewers to ask questions in the chat and then hand over to David, who jokes about technical issues with his microphone and briefly references a classic film before continuing.

23:05

David humorously apologizes for singing due to a song playing before the broadcast and mentions the film ‘My Fair Lady,’ praising the actor Stanley Holloway. He also notes his fondness for ‘The Sound of Music’ but refrains from singing. The segment ends with light-hearted conversation before moving forward.

23:37

Market sentiment and currency setups

23:37

The speaker analyzes slower time frame charts, focusing on the Aussie Yen pair and noting a reversal driven by selling of the dollar and yen. Attention is given to commodity currencies like the Canadian dollar, New Zealand dollar, and Aussie dollar, which are showing strength. The analysis is based on longer-term extremes and sentiment indicators from various platforms, with a focus on key currency movements.

24:28

Market sentiment is examined through U.S. equity futures and volatility indicators. The speaker notes recent selling followed by signs of a bounce in indices like YM, NQ, and ES. Volatility triggers and congestion are observed, with the yen sitting at a high level indicating strong selling pressure, while the Aussie remains weak but the New Zealand dollar is beginning to strengthen. The Canadian dollar is positioned in between, with expectations of a setup involving rising commodity currencies against a weakening yen and dollar.

25:22

The UK 100 (FTSE 100) is discussed, highlighting a significant gap down at the open caused by geopolitical and vaccine-related concerns. The speaker cautions against trading gaps as they often trap traders before being closed. The gap down was quickly reversed with volatility and congestion, and bullish sentiment started to return in equities. This recovery supports the ongoing trend of dollar and yen weakness.

26:46

The speaker shifts focus to currency major matrices and trading platforms such as TradingView and TradeStation integrated with Interactive Brokers. They explain how futures data is used to track currency pairs, with the dollar as the counter currency. The radar screen provides a broad view of market sentiment, showing strong buying of commodity currencies like the Aussie, Canadian, Euro, and New Zealand dollars, alongside selling of the dollar.

27:46

Detailed sentiment analysis reveals that while most commodity currencies are rising against the dollar, the British pound (cable) is an exception, as it is moving lower alongside the dollar, resulting in weaker trends. The Swiss franc is noted for its strong rise against the yen. The sentiment tools, including trend monitors and dots with a 15-minute resolution, offer a clear perspective on market-wide currency trends and underlying strength or weakness.

29:08

Volatility triggers and trend monitoring

29:08

The speaker explains how trend dots change first, followed by the slower trend monitor transitions, illustrating real-time market signals. Using the Aussie dollar on a five-minute chart, the volatility indicator highlights a recent trigger with significant volume entering a congestion area, suggesting a potential upward push through the volume point of control. The method allows quick scanning across different instruments and timeframes.

30:00

Examining the Euro dollar on a three-minute chart, the speaker identifies a volatility trigger from seven bars ago, showing price movement through low and high volume nodes. The trend monitor remains blue, indicating a sustained trend, while the trend dots fluctuate around the candles, changing color and position as price action evolves. The transition of trend monitor colors signals potential trend changes, though in this case, it remains largely stable.

30:55

Further analysis shows trend dots supporting upward price movement amid volatility and congestion, with volume confirming market maker activity. The speaker highlights volatility triggers on the British pound and New Zealand dollar futures, noting similar behavior in trend monitors and dots as prices push through congestion areas. The trend monitor shifts subtly from blue to darker blue without turning red, while trend dots change color and support continued upward momentum.

31:49

The speaker experiences a brief technical issue with workspace settings but resolves it to focus on the British pound versus Swiss franc on a 15-minute chart. They note the pound is very oversold but starting to show signs of upward movement. Adjusting timeframes provides a closer view for potential reversals, demonstrating the flexibility of the analysis tools and the importance of proper workspace setup for accurate market assessment.

33:07

Patience and trading reversals

33:07

The speaker discusses adjusting a trading parameter and highlights the Swiss franc and British pound as key focus points for potential reversals. They emphasize the need for patience and wider stop losses when trading reversals, as the timing of such moves is uncertain. The pound could decline further or remain steady for some time, while the Swiss franc is also expected to eventually sell off, especially if there is a strong shift in market sentiment driven by rising equity markets and continued selling of the dollar and yen.

34:08

Trading against dominant trends requires bravery and careful analysis beyond just price charts, including volume, indicators, support and resistance levels, and market sentiment. The speaker acknowledges that some traders may feel uneasy buying into a declining market but stresses the importance of patience and wider stop losses. A reversal appears to be forming, as indicated by short-term trend monitors, though these signals are rapid and sometimes subtle.

35:32

The speaker reviews various timeframes and volume data, noting signs of a potential reversal and some volatility traps. The trend monitor remains bearish but shows signs of change. Price action is congested around the volume point of control, with a mix of low and decent volume levels suggesting possible upcoming movement. Scalpers may find trading opportunities within this environment due to available price fluctuations.

36:29

Further analysis of volume areas on different timeframes reveals low volume zones where price is expected to move quickly, contrasted with higher but relatively moderate volume regions that may slow price progress. The speaker points out that the price could advance through these zones before encountering stronger volume-based resistance, indicating the probable path and pace of the upcoming move.

37:31

The price is forecasted to move about 20 pips upward before hitting significant volume resistance that could cause market congestion. This resistance area has been tested multiple times, making it a stronger barrier. From a scalping perspective, the potential 20-pip move might be challenging to fully capture given typical spreads on the pound-Swiss franc pair, making it essential for traders to weigh the cost and reward of such moves. The pound shows signs of gaining momentum in this segment.

38:56

Market movement and sentiment analysis

38:56

The speaker discusses market movements, noting the Swiss franc starting to weaken and the New Zealand dollar strengthening, making New Zealand yen or New Zealand dollar good trading options. The Australian dollar is beginning to follow similar patterns. The speaker also mentions upcoming indicators that have been featured in previous videos but are not yet available.

39:54

The process of releasing new trading indicators is explained, highlighting the necessary steps: testing, coding with secure software, uploading to the site, creating product listings, pricing, and support documentation. The speaker apologizes for the delay but emphasizes the extensive work involved, similar to the lengthy preparation for Tradestation indicators.

40:55

The currency array on 15-minute settings and the matrix on 5-minute settings are shown, with new features incorporated into TradingView. The matrix provides visual guides similar to those on CSI, helping traders interpret currency movements, and there are plans to extend this functionality to other platforms.

41:26

Currency matrix vs currency array indicators

41:26

The speaker explains the concept of overbought and oversold conditions in currency trading using currency pairs as an example. They discuss how current values compare to all-time highs and averages, illustrating that the Euro-Dollar pair is currently below its all-time high but above the average, indicating potential room to move. Conversely, some pairs like the Dollar-Swiss and Dollar-Yen are approaching overbought or oversold levels based on their positions relative to their historical highs and lows.

42:22

The discussion shifts to tools used for analyzing currency strength and market conditions. The currency array shows the buying and selling strength for 28 currency pairs and highlights overbought or oversold rankings. These conditions are displayed with different colors or brackets, providing clear visual cues. The currency matrix operates very closely with price action, reflecting rapid changes and trends similar to scalping strategies, whereas the currency array offers a more measured and slower perspective on trend strength and overbought/oversold conditions.

43:12

The speaker contrasts the currency matrix and currency array tools further, noting that the matrix is suited for short-term, price-action-driven trading, while the array provides a broader, slower view of trends and market sentiment. Both tools indicate market sentiment toward various currencies, helping traders identify whether the market is generally buying or selling a particular currency. The importance of trading in line with the overall market flow is emphasized, though exceptions can occur due to political or legislative factors.

44:08

The speaker stresses the value of aligning trading decisions with the universal market flow—buying currencies that are widely being bought. They acknowledge that there are rare instances when trading against the trend might be justified due to external factors. The segment concludes with a transition as the speaker prepares to share their screen for a practical demonstration, signaling a shift from theory to application.

44:41

Cable market analysis and volatility candles

44:41

The speaker discusses analyzing the currency pair ‘cable’ using charts, emphasizing the importance of understanding volatility candles as additional support and resistance zones. These volatility candles influence indicators like the CSI and help identify potential price targets. The top of the volatility candle aligns with the R3 level on the Camarilla indicator, highlighting key resistance points. The buffer zone between R1 and S1 is noted as a neutral area where price congestion often occurs.

46:21

Further insights are given on congestion when price lines move in the same direction, supported by volume and slower time frame indicators. The daily chart shows ‘cable’ trading within a range near the volume point of control (VPOC), representing a price area with high agreement and low divergence. This range-bound behavior suggests no strong trend, with price frequently returning to the VPOC. The presenter notes that divergence is needed to form a trend, and the observed steady price action indicates buying opportunities on pullbacks.

47:55

The analysis highlights a shooting star candle signaling the start of a reversal, which transitions into consolidation. The VPOC at approximately 39.04 serves as a key price target if the upward movement continues. By examining multiple time frames and support/resistance levels, traders can better anticipate price direction. The speaker demonstrates how levels like R3 act as bounce points and discusses patterns where price reverses off these levels, reinforcing the importance of multi-level analysis.

49:34

The discussion continues on price reversals and testing of resistance levels such as the R3 and VPOC. Once price moves through all six levels of the indicator on a faster time frame, traders should shift focus to slower time frames to find the next targets. The speaker references the Renko chart showing a rising but uneven trend and distinguishes between trends with and without volatility. This nuanced understanding of trend types is part of the broader trading program.

50:42

The concept of ‘wheels within wheels’ is introduced, describing how smaller price cycles exist within larger ones, leading to points of confluence where pauses or reversals may occur. The speaker plans to keep the chart running during sessions to illustrate this. They also mention receiving a high volume of emails from traders, most expressing gratitude for the educational materials and support provided.

52:19

Psychology of trading and self-sabotage

52:19

The speaker discusses the importance of understanding trading psychology, highlighting that many traders only address psychological issues after encountering problems. The program focuses on trait theory, which categorizes five major personality traits affecting behavior. One key trait explored is neuroticism, which reflects an individual’s ability to handle emotional stress, particularly relevant in trading where emotions like fear and greed dominate. Understanding where you lie on this spectrum can help tailor trading strategies that suit your personality and improve performance.

54:06

Neuroticism exists on a spectrum, influencing how traders manage market stress. The speaker shares their own low neuroticism score, indicating emotional stability which can be beneficial but may also lead to complacency or delayed reactions to market downturns. Conversely, those with high neuroticism may find it difficult to cope with emotions during trading. Recognizing your position on this spectrum is crucial for developing appropriate trading habits and emotional responses.

56:09

For traders with high neuroticism, the recommendation is to limit market exposure by using shorter time frames and more controlled trading approaches, such as five-minute charts or Renko charts. This allows them to manage emotional stress better by reducing time spent in the market. The speaker emphasizes that these traits are not fixed and that knowing your personality type can help you adapt your trading style to minimize emotional difficulties.

57:16

The speaker addresses self-sabotage among profitable traders who often withdraw after gains. They advise maintaining a base account balance to avoid overtrading and risking large losses. Position sizing is crucial; traders should resist the temptation to scale up trade sizes too quickly after a successful run, as larger positions increase risk substantially. Discipline in money management is essential to protect profits and sustain long-term success.

58:24

Traders are urged to align their trading style and time frames with their emotional responses and personality traits. If self-sabotage occurs, it may be due to scaling up too fast or neglecting risk management during periods of success. The speaker highlights the natural human tendency to get carried away after winning streaks and stresses the importance of self-awareness and consistent money management practices. The segment concludes with a brief introduction to the program and a handover to another speaker, David.

01:00:02

Trading account sizing and risk management

01:00:02

The speaker discusses current market movements, highlighting the steady progress in trades like cable and the Aussie yen. The dollar is falling, and the New Zealand dollar and pound are showing strength, with the Swiss franc remaining stable. They emphasize the importance of patience and note favorable trading opportunities on both fast and slow time frames.

01:01:05

The speaker addresses a common trading mistake where a participant ignored prescribed risk management advice by trading full lot sizes with a very small account, which is deemed reckless. They stress the importance of following a gradual roadmap starting with micro lots to build confidence over time, highlighting that successful trading is a steady process rather than quick gains or losses.

01:02:11

The segment concludes with an introduction to the currency heat map on TradingView, explaining its versatility with multiple time frames and customization options. The speaker encourages setting up various heat maps to monitor currency differences effectively.

01:02:36

Trading view heatmap and accumulation distribution

01:02:36

The speaker explains how to select time frames for trading algorithms depending on the trading style, such as scalping or longer-term trading. The chosen time frames are weighted differently to influence the ranking ladder, with examples showing how the 30-minute time frame can carry the greatest weight compared to shorter intervals. This approach works consistently across different currency pairs and time frames.

01:03:24

An introduction to the accumulation distribution indicator on TradingView is provided, demonstrated on the Pound-Yen 15-minute chart. This indicator visually highlights areas of price strength and weakness, marking points of support and resistance. The speaker points out a strong resistance zone that has been tested multiple times, indicating its significance as a potential barrier to price movement.

01:04:21

The discussion focuses on the importance of watching for breakouts from congestion zones. If the price breaks above the strong resistance, it could signal a significant upward move supported by a solid base of support below. The speaker notes the relevance of broader market trends, such as rising equity markets and yen selling, to the potential strength of the Pound-Yen pair. Patience in waiting for these breakouts and clearly defined levels is emphasized for effective trading.

01:05:16

The speaker elaborates on using congestion phases to set precise stop-loss levels, typically below the support area, adhering to money management rules like a 20-30 pip stop. This setup creates a natural barrier against reversals, making it a classical and effective trading method. Confirmation of a true breakout through volume is crucial to avoid fakeouts. The segment ends with a brief mention of a continuing upward trend in the New Zealand-Yen pair, supported by positive market sentiment across multiple time frames.

01:06:10

Gap trading and market caution

01:06:10

The speaker discusses the common phenomenon of overnight gaps in forex markets, especially in yen pairs, emphasizing that these gaps often get filled quickly. They caution traders not to assume easy profits from such gaps without careful consideration. The segment then introduces the Quantum Trading Education program, specifically the Complete Forex Trading Program, highlighting its recent expansion to include a funded trading component launched four months ago. The program has seen strong participation and success among students, allowing them to trade with the firm’s capital rather than their own.

01:07:05

Quantum funded trading program details

01:07:05

The program involves trading with the company’s money rather than your own, which means the risk is carried by the company. Participants start with an evaluation account funded at either five, ten, or fifteen thousand dollars. The goal is to prove trading consistency by meeting a profit target, with a 35% rebate on profits at this stage. After passing the evaluation, the trading capital is multiplied by four, increasing to accounts of up to sixty thousand dollars, with a 50% profit rebate. Initially, trading is limited to spot forex and 28 currency pairs.

01:08:06

Upon advancing to the portfolio manager levels starting at sixty thousand dollars, traders gain access to additional markets such as the S&P 500, FTSE, Dow, Nasdaq, DAX, and gold. Profit rebates are paid monthly at 50%, providing a steady income. The account sizes then double progressively, reaching up to two million dollars. At the million-dollar account level, profit returns increase to 60%, offering very attractive returns without any personal financial risk since traders are using the company’s capital.

01:09:12

The program is designed to help traders leverage their knowledge into profit while gaining experience managing larger sums of money. The same trading rules and principles apply regardless of account size—whether five thousand or hundreds of thousands of dollars. Progressing through the evaluation stage proves consistency, allowing traders to handle larger accounts and trade bigger lot sizes with confidence. This structure supports skill development and scaling of trading operations.

01:10:05

The comprehensive program includes multiple educational modules, starting with trading psychology to help traders understand and manage their strengths and weaknesses. It also covers fundamental analysis, relational analysis explaining related markets and sentiment, and technical analysis focusing on volume and price action. The program offers extensive video lessons—over 250 to 300 hours across approximately 450 lessons. Additionally, live support is available through the VPA trading room, where instructors provide daily assistance and answer questions.

01:11:01

Indicators, platform support and resources

01:11:01

The speaker emphasizes the supportive and experienced community available for novices, ensuring a friendly learning environment. They mention that all indicators can be found on quantumtrading.com and across multiple platforms including MT4/5, Ninja Trader, TradingView, and TradeStation. Users who have already purchased the package at the old price will receive new indicators free of charge, making it a good time to invest in the TradeStation package to save money.

01:11:56

All future indicators and upgrades come free with the package, including 24/7 support. Transferring indicators between platforms like MT4/5, Ninja Trader, and TradeStation is free, with costs only applicable if upgrading to a full package or purchasing additional indicators unavailable on the original platform. The speaker also directs viewers to AnnaCooling.com for posts, analysis, videos, and books available on Amazon in both Kindle and paperback formats.

01:12:46

The books are selling very well internationally, especially in Vietnam, China, Taiwan, and Japan. The team is interested in finding European publishers and invites contacts in the publishing business to reach out. The speaker thanks the audience for attending and apologizes for running slightly over the expected time.

01:13:17

Session wrap-up and next webinar info

01:13:17

The speaker informs viewers that the session will resume at 2:15 UK time due to the US moving their clocks forward, which affects market opening hours. They thank Dee for joining and bid farewell until the next session.

By Anna Coulling – creator of volume price analysis