Currency markets pause ahead of Powell and the FED

Currency markets pause ahead of Powell and the FED

00:00

Introduction to holistic trading approach

00:00

The webinar introduces a holistic approach to trading, emphasizing the importance of considering a broad range of factors beyond one’s specific trading focus. The session will cover forex initially, then indices, and stocks, illustrating how different markets share common elements. The aim is to provide a shortcut to understanding market conditions by using Volume Price Analysis (VPA), applicable to any instrument with price and volume data.

01:53

Participants are encouraged to ask questions during the session. The presenter highlights that the approach is useful regardless of the trading instrument, hoping attendees gain new insights. A trading risk disclaimer is given, advising not to trade with money one cannot afford to lose. The session will be divided into shorter videos for later viewing on YouTube.

02:57

Explanation of Volume Price Analysis (VPA)

02:57

The speaker introduces Volume Price Analysis (VPA), emphasizing the close relationship between price action and volume, best understood through chart analysis. References are made to key literature on the subject, including a comprehensive guide and a forex-specific box set, which help explain the core concepts of technical analysis based on VPA.

04:06

The discussion expands into a holistic approach to forex trading, combining technical analysis, fundamentals, and related markets, highlighting the interconnections between forex, commodities, equities, and bonds. The speaker explains that price action is influenced by trader psychology, which is in turn shaped by fundamental news and market relationships. This integrated perspective forms the foundation methodology, which uses candles and candle patterns alongside support and resistance levels for effective VPA.

06:00

Technical tools and indicators overview

06:00

The speaker discusses various tools traders can use to analyze charts, including Fibonacci, Elliott Wave, moving averages, and specially developed volume-based and price-based support and resistance indicators. These tools are categorized as primary and secondary, with secondary tools serving as additional aids to understand market flow. Emphasis is placed on overlaying analysis with multiple time frames to enhance insight.

06:59

Multiple trading platforms such as MT4, MT5, TradingView, NinjaTrader, and TradeStation are used to apply these tools and multiple time frame analysis. The focus in the forex market is on understanding levels and market flow—what is being bought and sold—through volume and activity. These levels are particularly significant as they help identify institutional activity and influence trading decisions.

08:06

The forex market facilitates practical trade activities including mergers, acquisitions, and currency exchange for multinational corporations like Honda and Toyota. Exchange rates directly impact profitability, especially for exporters. Banks play a key role by fixing exchange rates for clients and trading on their own behalf, highlighting the interconnection between market participants and the importance of understanding institutional behavior.

09:11

The market is partly opaque, but traders can still observe flow and key levels on charts. Important price levels often end with zero or five, marking where banks and large traders place pending orders. Traders are advised not to place stops exactly on these levels to avoid being triggered prematurely. The speaker also mentions using MT4 and MT5 platforms to analyze current market conditions and demonstrate these concepts.

10:15

Focus on British Pound trading pairs

10:15

The speaker focuses their personal trading on the British pound, specifically during the London session when the pound tends to be active. They have refined their approach to concentrate on three currency pairs: pound-yen, pound-aussie, and cable (GBP/USD). These pairs are monitored using MT5 with Renko charts alongside the CSI indicator to track movements during trading times. The speaker notes that these pairs were particularly tricky to trade that morning due to significant market activity.

11:29

The speaker highlights the impact of the FOMC meeting and recent economic news on the British pound pairs they follow. The market is anxious about Federal Reserve Chair Jay Powell’s upcoming statement, with inflation being a key concern. The morning’s data releases caused volatile and mixed movements in the pound pairs, with the pound initially sold then strongly bought. Interestingly, the pound-cad pair was less affected. The speaker aims to analyze these pairs in more detail and share trading tips but encounters technical issues with their browser, prompting them to hand over to a colleague.

13:47

Market sentiment and currency strength

13:47

The speaker discusses recent market activity focusing on currency sentiment, highlighting notable buying in the pound against other currencies like the US dollar and Australian dollar. They use multiple time frames on TradingView to analyze sentiment, showing mixed signals across various currency pairs and indices. The pound and yen indices are reviewed on five-minute charts, emphasizing a current state of congestion in the markets ahead of upcoming economic events.

14:50

Market congestion is observed as traders await the FOMC announcement, expected to trigger significant market movement. The US dollar index is breaking down from congestion, which is seen as positive for intraday trading. The euro is experiencing a strong sell-off after an earlier rally, sliding lower since the London market opened, while the pound remains sideways, reflecting uncertainty about strong directional moves in pound pairs.

15:47

The pound is moving sideways amid unclear strength or weakness to drive its pairs. The yen is beginning to break out from congestion with slight upward movement. Equity indices are described as fragile, with the YM (Dow futures) appearing most vulnerable, while the NQ (Nasdaq futures) tries to push higher. The market’s reaction to the key upcoming meeting will likely determine whether this fragility continues or breaks down.

16:51

The US dollar is weakening, while commodity currencies like the Australian and New Zealand dollars are gaining buying interest. The yen is also showing some upward movement, making yen pairs less attractive for trading. The Australian dollar emerges as the more favorable currency for trading opportunities at this time.

17:14

Aussie Dollar chart analysis and volume

17:14

The speaker analyzes the Aussie dollar chart across multiple time frames, ranging from 15 seconds to daily. The daily chart shows sideways congestion with the price trading around the volume point of control, indicating a lack of directional movement. Despite this, shorter time frames reveal a potential trading opportunity, with buying activity pushing price slightly away from the volume point of control on the 15-second and 1-minute charts.

18:09

The discussion focuses on congestion zones and the accumulation distribution indicator, which defines channel lines around the volume point of control. These channels help identify potential breakout points, especially when confirmed by rising volume. The speaker explains that price tends to move quickly through low-volume areas on the volume profile histogram, as these correspond to fewer pending orders, while high-volume areas act as support or resistance causing pauses in price movement.

19:07

The speaker examines price behavior through low and high volume regions on slower time frames. Price moves swiftly through low-volume zones but begins to encounter resistance as volume builds. Comparing volume bars of equal height with different price spreads reveals that more effort is needed to push price through certain levels, indicating increased market resistance or absorption of selling pressure, rather than a clear directional move.

20:06

A detailed volume-price analysis is made, highlighting a scenario where high volume does not correspond to wide price movement. This suggests that heavy selling might be absorbed by buyers, preventing price from falling significantly. The lack of comparable historical data limits the conclusion, but the speaker infers that buying pressure may currently outweigh selling, with attention focused on a potential breakout above the low-volume region on the five-minute volume profile.

21:09

The speaker emphasizes monitoring multiple time horizons and the use of a trend monitor indicator, which remained in a dark blue congestion phase without signaling a directional shift. This tool helps traders hold positions through minor pullbacks rather than exiting prematurely due to emotional reactions, encouraging patience to maximize profits during consolidation phases.

22:03

Managing trades through congestion phases

22:03

The speaker discusses the difficulty of managing trading positions, emphasizing the challenge of holding profitable trades through emotional and market fluctuations. They shift focus to analyzing the dollar and the Australian dollar, noting a mild bearish trend. Attention is drawn to the currency heat map, highlighting that several top-performing pairs involve the Japanese yen. The heat map rankings are weighted according to slower time frames, which carry more significance for trading decisions compared to rapid, intraday fluctuations.

24:00

The importance of slower time frames in trading is reinforced as they provide more reliable signals. Several currency pairs, including the Canadian dollar, New Zealand dollar, and Australian dollar, have shown strong uptrends for months, influenced by expectations of continued stock market growth. However, the speaker warns that markets may be approaching a fragile state, potentially leading to a significant correction marked by extended congestion and distribution phases before a reversal occurs.

25:31

Trading these currency pairs should be approached with a medium-term perspective of days to weeks, as current conditions suggest possible reversals. The currency strength indicator provides insights on individual currencies, while the ranking ladder offers a broader view of pair sentiment over longer time frames. This ranking ladder is crucial for understanding market positioning and sentiment, as it reflects slower, more meaningful trends rather than rapid intraday movements.

26:32

The discussion delves into the complexities of trading yen pairs, particularly the dollar-yen, which behaves independently of other yen pairs due to unique factors explained in more detail in specialized forex programs. The Australian yen pair is highlighted as a proxy for risk sentiment, with the Australian dollar representing risk and the yen a safe haven. The segment concludes with a mention of useful economic data websites, such as tradingeconomics.com, as alternatives or complements to forex factory for fundamental analysis.

28:10

Fundamental analysis: inflation and news impact

28:10

The speaker discusses the impact grading of economic news, focusing on the British pound and how different calendars assign varying levels of importance to inflation data. They mention using multiple news feeds and calendars in conjunction to better understand market impact, noting that bold or darkened entries indicate more significant events. The complexity of interpreting inflation data and its market implications is highlighted.

29:49

The market’s reaction to inflation concerns is explored, especially regarding forex and stock indices. Inflation uncertainty influences market volatility, with the VIX index acting as a fear gauge inversely correlated to equity prices. Currently, the market shows complacency as equities rise without recent corrections, which supports buying risk currencies like the Australian and New Zealand dollars. However, market positioning remains distorted with many participants heavily long.

31:43

Commodities are identified as the best performing asset class, driven by inflation fears and supply shortages, particularly in soft commodities and construction materials like timber and cement. These shortages and rising commodity prices contribute to the inflation narrative and affect trading decisions. The speaker shares a real-life example of difficulty obtaining building materials, illustrating underlying supply challenges linked to inflation.

33:58

The relationship between inflation, central bank interest rate hikes, and currency strength is explained using the British pound as an example. Inflation data released this morning caused market volatility as traders anticipated potential Bank of England rate increases, which would typically strengthen the currency. The speaker notes some divergence in currency movements and narrow trading ranges, attributed to market anticipation ahead of the upcoming FOMC meeting.

35:40

Market conditions are characterized by narrowing price ranges and reduced volatility as traders await direction from upcoming Federal Reserve actions and geopolitical developments. This environment makes trading challenging, especially for those focused on single charts or timeframes. The speaker emphasizes the need to consider broader fundamental and market context to understand price movements and avoid misleading setups.

37:25

The inflation narrative is further analyzed with consideration of supply chain issues affecting commodity prices like lumber. The speaker outlines three potential scenarios: resolution of supply issues leading to lower prices, sustained inflation due to ongoing demand, or stagflation where inflation persists without economic growth. The discussion highlights the importance of keeping these longer-term inflation and growth dynamics in mind when trading.

39:01

The speaker describes their personal trading setup, using MetaTrader 5 with multiple charts including three-minute and Renko charts, alongside currency strength indicators, to quickly monitor price action. This approach helps them maintain a clear market profile and respond efficiently to changing market conditions.

39:56

Multiple platforms and profile setups

39:56

The speaker explains how using MT5 alongside MT4, available on quantumtrading.com, optimizes computer performance by managing data load efficiently. The platform allows users to set up multiple profiles for quick access, avoiding the need to constantly switch between individual currency pairs. This method supports running multiple charts and profiles simultaneously without slowing down the system. The speaker also mentions sharing a link called the ‘buckets solution’ to facilitate this setup, highlighting its usefulness especially when trading cable (GBP/USD).

41:15

Cable (GBP/USD) price action and key levels

41:15

The speaker analyzes the currency pair GBP/USD (referred to as cable), noting it is currently in a congestion phase, trading within a range just above 1.40. They highlight the formation of support around 1.40 and anticipate that if the price remains in this zone, the volume point of control may shift higher, which would indicate a potential bullish trend continuation. The movement will also depend on the strength of the US dollar, as seen in the dollar index.

42:24

The discussion shifts to technical analysis using the hourly chart, focusing on price-based support and resistance levels derived from the Camarilla method. These levels are fixed for the trading week and carry significant weight, especially the third and fourth levels, which act as key pivot points. When price hits these levels, traders should pay close attention as they often trigger strong reactions such as reversals or congestion phases.

44:06

The speaker describes a recent volatility candle that led to a price reversal back to the S3 support level, where the market has been congesting for some time. They emphasize the importance of these weekly Camarilla levels as swing points for the rest of the week. Lower time frames refresh their levels daily, and the recent price action, especially during the Asia session, showed low movement followed by a sharp reaction after news release, reflected by a large candle with high volume.

45:14

The analysis details the large volatility candle and subsequent candles with high volume that indicate indecision (doji) near the S3 level. Price failed to break higher and reverted back to this key support area. The lines on the chart show no divergence, reinforcing the congestion. The speaker advises patience through congestion phases and highlights the typical behavior of price moves occurring strongly during the London session, often followed by consolidation.

46:15

The timing of moves is discussed, noting that significant price activity often picks up around session crossovers, particularly when New York forex traders start trading or during the cash open at 2:30 pm. The speaker mentions using Renko charts to better visualize session crossovers and momentum changes. An expectation was set for the price to reach the R4 resistance level this morning, but instead, it pulled back, suggesting a potential congestion zone near the R1 and S1 buffer levels.

47:26

The speaker describes an ideal trade setup involving smooth upward movement with shallow pullbacks and minimal volume during corrections, leading to a V-shaped reaction. They caution that session crossovers can disrupt momentum and traders should consider taking profits before these periods. The morning’s price action was messy, but such moves can offer good trading opportunities if managed carefully.

48:29

Comparing recent price ranges, the speaker notes that some days produce strong, steady moves that are easier to trade, while others remain in narrow ranges that can be frustrating. Understanding the reasons behind congestion, such as market waiting for news or session changes, helps manage expectations and reduce frustration during sideways markets.

49:32

The GBP/CAD pair is examined, showing narrow congestion on the daily chart with multiple failed breakouts, making it less appealing for trading. However, the Renko chart reveals some interesting price action and potential entries despite the sideways movement. The speaker encourages not to worry about missing trades elsewhere since there are always other opportunities in the market.

51:14

Focusing on GBP/CAD again, the speaker notes it trades more actively during the North American session and currently sits near the R3 resistance level with some divergence visible on the CSI indicator. This suggests potential for further movement in the US session, but also highlights the possibility of rotation into other currency pairs if the Canadian dollar strengthens. The segment ends with the speaker preparing to hand over to a colleague before moving on to index analysis.

53:12

Currency matrix and sentiment indicators

53:12

The presenter explains the use of multiple fast time frames (1, 5, 10, 15 minutes) for demonstration and teaching purposes, emphasizing that trading concepts are universal regardless of time frame. The focus on faster charts is for clarity and ease of explanation, not because they are the superior trading method.

54:08

The discussion shifts to the yen currency, noting a recent pickup in its movement on the 5-minute chart, which suggests yen pairs may weaken. This weakening could negatively impact indices and stocks. Meanwhile, the dollar has started to rise again after a small reversal, which is generally bearish for stocks, particularly when viewed through the CSI (currency sentiment indicator).

55:02

The speaker highlights the importance of three currencies—yen, Swiss franc, and dollar—in sentiment analysis via the CSI. When these currencies align, it provides a strong signal for sentiment-based trades. The concept of a ‘full house’ approach is introduced, where all pairs of a currency matrix show consistent sentiment direction, indicating strong market consensus.

55:56

Focusing on the yen as a counter currency, the matrix reveals whether yen pairs are collectively moving up or down, reflecting buying or selling pressure. The current trend shows rising yen sentiment, which is important because trading with the prevailing market sentiment increases the probability of success, whereas trading against it requires strong justification such as local events.

57:15

The presenter demonstrates how the matrix helps traders align with market flows, showing a view of currency futures on TradeStation. This workspace highlights trends and volatility for various dollar pairs including the Australian dollar, British pound (cable), Canadian dollar, euro, New Zealand dollar, and Swiss franc. It offers a quick snapshot of dollar sentiment across multiple time frames.

58:32

Examining the trend monitor and radar scanner, the presenter notes mixed dollar sentiment: downtrends on cable and Canadian dollar pairs indicate dollar buying, while the New Zealand dollar shows buying against the dollar. This mixed picture is reflected in the CSI as well, with yen sentiment rising on the 5-minute chart, indicating dollar strength but no universal directional consensus.

59:53

The presenter explains that when two currencies move in the same direction, such as dollar and yen both rising, price action often appears congested with little trend, likened to two trains traveling at similar speeds. Strong trends occur when one currency strengthens while the other weakens, creating directional divergence. Volatility indicators help identify potential triggers for congestion or reversals, aiding in trade timing.

01:00:45

Volatility triggers and market maker impact

01:00:45

The speaker explains the significance of a volatility trigger on a five-minute chart, which typically signals either a congestion phase or a potential reversal. They advise managing positions by closing some trades to reduce risk when a volatility trigger appears. The segment highlights that volatility often involves large volume movements driven by market makers manipulating the market quickly to provoke reactions based on fear of missing out. This rapid price action compresses what might usually take 10-15 minutes into a single five-minute candle, causing traders to rush in or out.

01:02:34

Volatility is described as a tactic used cynically by market makers to trap traders into weak positions through fast-moving price spikes. Often, a congestion phase follows, creating uncertainty and doubt for traders. The example given shows price crashing to the volume point of control, a key level where heavy trading volume indicates market equilibrium. At this point, neither buyers nor sellers dominate, leading to sideways price movement until a new phase begins.

01:03:29

The volume point of control is explained as the price level where the most trading volume occurs, representing a balance between bullish and bearish sentiment. Price tends to stay in equilibrium here until an imbalance triggers movement to the next phase. Traders look for confirmation of breakouts through volume changes, and key resistance and support levels must be overcome for the price to move into low volume areas, which typically precede significant moves.

01:04:21

The focus shifts to recent market action, noting a strong upward spike in the yen, which is expected to influence stock market openings and create nervousness. The speaker mentions ongoing work on charts related to the yen complex, highlighting its importance in the current market context. They also briefly reference the pound and dollar movements, with the dollar showing some rollover, emphasizing the yen’s dominant role in driving market sentiment at this moment.

01:05:18

Yen pairs sentiment and crypto indicator preview

01:05:18

The discussion begins with an analysis of various yen currency pairs, highlighting that the Canadian dollar-yen, Australian dollar-yen, and to a lesser extent the British pound-yen are showing bearish trends from a fast intraday perspective. The speaker then introduces a new cryptocurrency strength indicator tool they are developing, similar to the currency strength index but for cryptocurrencies like Bitcoin, Ethereum, Cardano, and XRP. This tool aims to support crypto traders by providing clear strength signals.

01:06:16

The focus shifts to a one-minute Bitcoin chart demonstrating a significant volatility trigger accompanied by heavy volume. The expected market reaction following such volume influx is either a price reversal or congestion. In this instance, congestion occurred first, followed by a reversal resulting in a strong price move from around 38,925. The volume surge and subsequent price action offer a clear and unmistakable trading signal. The segment concludes with the speaker preparing to shift attention to indices for further market observation.

01:07:14

Indicator platforms and education program overview

01:07:14

The speaker introduces the various trading platforms supported by quantumtrading.com, including MT4, NinjaTrader 7 and 8, TradingView, and the newly launched TradeStation versions 9.5 and 10. They emphasize the ability to transfer indicators freely between platforms without extra charges, accommodating customers who wish to switch platforms such as from MT4 or TradingView to TradeStation or NinjaTrader.

01:08:11

Customers can upgrade indicator packages with full credit for previous purchases, ensuring no loss on initial investments. The TradeStation package is currently priced at $677, with plans to increase prices once additional indicators are developed to align with MT4 pricing. Investing now, especially with TradingView, offers free access to all current and future indicators as a token of appreciation.

01:09:10

The speaker provides an overview of the Complete Forex Trading Program, highlighting its comprehensive curriculum covering trading psychology, fundamental and relational analysis, and technical analysis with a focus on Volume Price Analysis (VPA). The program teaches how to identify trend pauses, reversals, and pullbacks to improve trading decisions and avoid premature exits.

01:10:16

The education program includes 200-300 hours of video content with VPA chart examples, indicator usage, and webinars with instructors. A vast webinar library and resources support learning. Additionally, the QTE Funded Forex Program is introduced exclusively for students, providing an opportunity to trade with company funds under a no-risk arrangement, allowing students to leverage their acquired knowledge.

01:11:16

The funded account program starts with evaluation accounts ranging from $5,000 to $15,000. Upon meeting achievable targets demonstrating consistent trading ability, the account size is multiplied by four and can subsequently double multiple times, potentially reaching up to $1-2 million accounts. There is a one-time fee to join, but no personal financial risk, offering students a chance to manage large capital based on proven skill.

01:12:11

The speaker concludes by encouraging viewers to explore the full offerings at quantumtrading.com, reiterating the availability of various trading platforms and indicator flexibility. They thank the audience for watching and hint at more content to come, reinforcing the comprehensive nature of their education and trading tools.

01:12:46

Reiterating earlier points, the speaker explains the seamless transfer of indicators between platforms without additional charges. Many customers start with platforms like MT4 or TradingView and later move to TradeStation or NinjaTrader, with the company facilitating the transition and protecting customers’ investments through full credit on upgrades.

01:13:44

The TradeStation package currently costs $677 but will increase as new indicators are added to match MT4 pricing. Investing now, particularly with TradingView, ensures access to all current and future indicators free of charge. The speaker briefly revisits the Complete Forex Trading Program, emphasizing its comprehensive coverage and value.

01:14:37

Complete Forex trading program details and funded account option

01:14:37

The program offers comprehensive coverage of market psychology, fundamental and relational analysis, explaining how different markets and instruments like bonds, commodities, and currency pairs interrelate. It includes an in-depth study of technical analysis focusing on Volume Price Analysis (VPA), teaching key principles such as Wyckoff’s three laws. The training helps identify trend pauses and differentiate between reversals and pullbacks, which is crucial for avoiding premature trade exits.

01:15:41

Students gain access to extensive resources including 200–300 hours of video content, VPA chart examples, indicator usage tutorials, and numerous webinars. Additionally, a unique, optional funded forex program is available exclusively to students, offering a risk-free opportunity to trade with the program’s capital through evaluation accounts ranging from $5,000 to $15,000.

01:16:41

Upon meeting achievable targets on the funded accounts, students can have their trading capital multiplied up to four times, and subsequently doubled, potentially reaching accounts worth up to $2 million. The only cost is a one-time fee to join this optional program. This structure allows students to leverage their skills with no personal financial risk, providing a complete learning and trading package.

By Anna Coulling – Creator of volume price analysis