Considering volume in two ways as we focus on the GBP/USD
At the start of the London forex session, I focus on the GBP/USD and explain how and why we focus on volume on two ways with the pair breaking away from congestion around the volume point of control indicator for NinjaTrader.
00:01
Introduction and webinar start
00:01
The webinar host welcomes participants to the London session of the Forex webinar, apologizing for a delay caused by technical issues with GoToWebinar. They mention having to restart the setup, confirm everything is now working, and greet attendees on a rainy day in Hampshire.
00:31
Trading disclaimer and audience overview
00:31
The speaker begins by drawing attention to a disclaimer about the risks of trading, emphasizing that viewers should never use money they cannot afford to lose. They acknowledge the presence of experienced Forex students and users of quantum indicators in the audience, as well as new participants who may be attending for the first time.
01:00
Volume price analysis explained
01:00
In this session, Anna and her husband David analyze charts using volume price analysis, a type of technical analysis focusing on price action and volume. They aim to determine whether observed price movements are genuine by examining the charts closely and considering overall market conditions.
01:31
Market sentiment and related markets
01:31
The discussion highlights the importance of analyzing not only fundamental news but also related market sentiment across various assets. Market sentiment is observed through movements in risky assets like equities and indices, as well as currency flows, such as buying or selling of the yen or the Australian dollar. Understanding these flows provides a significant advantage in navigating the market’s complexities and divergences. Attention is particularly given to the flow of money into safe haven currencies like the Swiss franc, US dollar, and yen, which reflect broader market trends and investor behavior.
02:40
Currency focus: safe havens and Aussie
02:40
The speaker discusses accessing both a safe haven currency and a risk currency, highlighting the significance of the Australian dollar (Aussie) due to its close alignment with news and economic data from China. They mention the release of July’s Purchasing Managers’ Index (PMI) for China, which came out slightly better than expected, above the critical 50 mark that indicates expansion, emphasizing the importance of carefully interpreting Chinese economic data.
03:17
Currency strength indicators overview
03:17
The market’s reaction to recent news has been positive, particularly for the Australian dollar, which has been bought overnight. The speaker explains the use of specialized indicators designed to track currency flows not only on individual currencies but also across currency pairs. These tools, including the currency matrix, currency array, and currency heat map, help analyze the consistency and strength of flows across multiple timeframes, providing a comprehensive view of market movements.
04:24
London session and cable congestion
04:24
The speaker discusses the London trading session, highlighting it as a period prone to traps for unwary traders. They focus on the cable currency pair, which has been in congestion since just before the European session began. Using a 5-minute chart, the pair is shown oscillating around the volume point of control. Volume is analyzed both as activity and as transacted volume over time, revealing a strong congestion phase with defined resistance and support levels. The market moves sideways awaiting the start of new sessions. The speaker notes a break marked by a volatility candle with low volume, followed by increased volume as the move continued downward. Another volatility candle appeared, but despite reasonable volume, it was insufficient to push prices higher, resulting in a continued downward trend tracked by various indicators.
06:12
Focus on cable and Brexit volatility
06:12
The speaker discusses reaching volume support around 120 to 120.65 and focuses on the cable (GBP/USD) currency pair for the rest of the month. They mention that Brinks is back on the table and plan to share insights that may help assess potential volatility in a currency. Volatility here refers not only to sudden market bursts but also to whether the currency pair will exhibit a reasonable trading range over days, weeks, or months. The discussion includes examining implied volatility data and other volatility metrics from Investing.com, along with observations on the five-minute chart and the volume point of control (VPOC).
07:32
Volume point of control and congestion
07:32
The volume point of control has dropped due to a downward move followed by a congestion phase before the London session, a pattern often seen ahead of significant fundamental data. This dynamic indicator shifted positions, indicating another congestion phase. The analysis focuses on whether this will act as support for a reversal or if the downward trend will continue, alongside identifying key levels relevant to this situation.
08:08
Key weekly levels and Camarillo indicator
08:08
The speaker discusses weekly levels for the cable (British Pound) currency pair, focusing on important price points such as yesterday’s low, which is just below the S3 level. These levels are calculated using the Camarillo indicator and are expected to be relevant for the rest of the week. The speaker notes that support and resistance levels often occur around numbers ending in zeros and fives, a common characteristic in forex markets. Additionally, a ten-minute version of the chart is used for these calculations.
09:20
Daily levels and fundamental news impact
09:20
Every 24 hours, a fresh set of trading levels is provided, combining volume, price action, fundamental news, and political updates to influence movements in the British Pound. The speaker is waiting for the London market open, anticipating a potential reversal, which often appears as a trap following some initial movement and congestion before London starts trading.
10:04
London trap and market movement preview
10:04
The speaker discusses trader behavior during the London market session, noting how traders anticipate continued upward movement after a strong move. However, this can lead to a sudden halt or reversal known as the ‘classic London trap,’ where the price briefly moves against the primary trend before resuming in its original direction.
By Anna Coulling – creator of volume price analysis
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