Discover how to arrive at the correct settings for your tick or renko charts on NinjaTrader

Discover how to arrive at the correct settings for your tick or renko charts on NinjaTrader

In this video taken from the live webclass, we explain the importance of trading using non time based charts, and how to arrive at the correct settings for your tick or renko charts on NinjaTrader. And see the trade develop as the NQ emini sells of delivering an excellent trade to the short side as a result.

00:14

Introduction and audio issues

00:14

The speaker checks audio connectivity, mentioning that Anna’s microphone is off due to a stormy environment affecting the connection. The speaker confirms if others can hear them and prepares to begin the session.

00:44

Overview of US markets price action

00:44

The speaker examines the three major US stock market indices—Dow (YM), Nasdaq (NQ), and S&P 500 (ES)—noting minimal price movement overall. The Dow is essentially flat, with only a tiny amount of price action visible, described as an ‘eyelash’ of movement. The Nasdaq has been moving higher and has slightly influenced the S&P 500, which is crawling upward. Overall, the markets show very limited and subdued activity.

01:54

Focus shifts to the Dow’s price resistance as demonstrated by the accumulation distribution indicator, which is likened to Popeye gaining strength from spinach. A resistance level has been tested 12 times and continues to hold strongly, supported by significant volume around the volume point of control (VPOC). This resistance acts as a ceiling, but if broken with a close above, it could turn into a strong support platform for further upward movement, potentially aided by the Nasdaq and S&P 500.

03:03

The Nasdaq has experienced volatile trading with multiple trap moves—initial spikes followed by reversals and congested trading near the opening candle’s price. Volume is moderate, and prices have not made significant progress, lingering around a key level marked by the volume point of control. The S&P 500 shows similar slow and indecisive price action, making these markets less favorable for active trading at this time. The speaker then introduces non-time-based charts, starting with tick charts for the Nasdaq.

04:03

Tick charts and VIX trend analysis

04:03

The speaker discusses the importance of volume point control in market analysis, noting its consistent presence across various charts and emphasizing patience as the market currently struggles. They analyze the VIX volatility index across multiple time frames (one, three, five, and twenty minutes), observing a gentle downward trend, which aligns with positive equity signals. The discussion also covers the use of tick charts with specific tick values derived from a tick speedometer, explaining its purpose in optimizing tick settings and comparing the advantages of tick and Renko charts for trading.

06:11

Advantages of non-time-based charts

06:11

The speaker explains that non-time-dependent charts, such as tick charts, are based on a set number of trades rather than time. For example, a 377-tick chart closes a candle only after 377 trades occur, regardless of how much time has passed. This means the chart’s pace varies with market activity, moving quickly during high activity and slowly during quiet periods.

06:43

Tick and Renko charts reveal momentum more clearly than time-based charts because they break down traditional candles into smaller, detailed segments. Instead of waiting for a fixed time period to close a candle, these charts show multiple smaller candles within the same timeframe, providing a more granular view of price action and momentum.

07:45

The speaker emphasizes that unlike time-based charts, non-time-based charts such as Renko depend only on price movement or brick size, not time. This independence from time allows traders to see momentum within each candle more distinctly. Many traders combine non-time-based charts with traditional time charts to gain a fuller perspective of market dynamics.

08:48

Non-time-based charts like tick and Renko reflect changes in market speed and momentum as the market speeds up or slows down during trading sessions. Time-based charts cannot show this because their candles form strictly by elapsed time. This key advantage makes non-time-based charts particularly useful for intraday and scalping traders who want to track raw momentum.

09:51

The speaker notes a challenge with non-time-based charts such as tick and Renko: deciding the appropriate settings for them. He mentions having created videos on TradeStation to help traders optimize these settings and indicates that using a blend of time-based and non-time-based charts can be effective for trading.

10:22

Tick speedometer and chart settings

10:22

The speaker explains the complexity of setting parameters for tick and Renko charts, emphasizing that brick sizes or tick settings vary across different instruments and throughout the trading session. They introduce the tick speedometer as a tool developed to address this issue by providing real-time tick speed measurements, which fluctuate constantly during the session, reflecting market activity.

12:03

The tick speedometer uses a mathematical formula related to Fibonacci principles to generate relatively stable tick speed values, avoiding the need to constantly adjust chart settings. The speaker prefers using the actual tick count for Globex trading and a more stable value for cash and Globex combined, highlighting the benefit of fewer necessary changes during trading.

12:26

The speaker outlines the challenges of setting tick charts, noting that every market and instrument has unique characteristics that affect appropriate tick settings. Using the example of the three primary US indices (ES, NQ, YM), they show how tick activity varies widely, justifying the use of the tick speedometer to scientifically determine optimal tick settings rather than relying on guesswork or informal advice.

13:23

The speaker emphasizes that each trading instrument has its own personality and unique tick and Renko profiles, which must be respected to trade effectively. Arbitrarily choosing tick settings without this understanding is merely guessing. The tick speedometer provides a method to align tick and Renko chart settings with the instrument’s actual market behavior, improving trading precision.

14:24

Renko charts and optimal brick sizes

14:24

The speaker explains the use of different Enqueue time frames—15 seconds, 30 seconds, and one minute—highlighting that these are much quicker than traditional tick time frames. They focus on the volume point of control and how it appears on Renko charts, which are set to optimal settings. Specifically, the 15-second time frame is selected, showing an 8-brick size, which corresponds to the smallest price movement size for the contract, representing eight ticks or a two-point brick.

15:28

The presenter emphasizes the value of a two-point brick size on the Enqueue, especially for trading multiple contracts. They note that the optimal settings vary throughout the trading session, as market speed fluctuates. The market does not maintain a constant pace; it speeds up and slows down throughout the day, so a fixed brick size or setting is not effective for the entire session.

16:24

The market’s momentum changes dynamically, with periods of acceleration and deceleration. The speaker illustrates this with market movements that speed up and slow down repeatedly. They then examine the 30-second and one-minute Enqueue settings, which deliver brick sizes of 12 and 18 respectively, explaining that these correspond to three and 4.5 points, reinforcing the idea that brick sizes adapt to market conditions.

17:31

The development of these indicators aims to provide optimal, scientifically derived brick sizes for non-time-based trading approaches, avoiding guesswork. While users can manually set brick sizes on Renko charts, these tools suggest the best settings based on current market activity. Using multiple indicators together allows traders to monitor momentum similarly to time and tick charts.

18:33

Non-time-based charts like Renko and tick charts reveal market momentum as rapid sequences of price movements, likened to machine gun fire, which is not visible on traditional time-based charts. This deconstruction of volatility into recognizable, tradable patterns is a key advantage. The speaker pauses to check volume data, noting the importance of volume in trading decisions.

19:16

Volume, volatility triggers, and reversals

19:16

The speaker explains how volatility triggers and volume patterns appear consistently across different chart timeframes, using a 15-second and a 30-second chart as examples. They describe how initial volatility and volume lead to congestion or reversal, highlighting a bearish engulfing candle signaling a potential reversal, though it may still be congestion until confirmed by a price break below a key candle.

20:15

Discussion focuses on identifying support levels using the volume point of control and volume clusters to assess if there is enough price movement potential for a profitable short trade. The importance of risk-reward analysis is emphasized, with the speaker noting that heavy volume areas act as resistance and support, influencing trade decisions and price movement.

21:17

The speaker details how volume clusters create zones of congestion where price is likely to pause or reverse, supported by price and volume data. They reinforce how volume acts as resistance, making certain price levels significant for market behavior. This understanding helps traders anticipate where moves may stall or reverse.

22:09

The power of the volatility indicator is highlighted as a crucial tool to avoid financial and emotional mistakes. The speaker introduces the Renko chart, which provides smooth price action and momentum signals. Trend dots and trend monitors are explained as complementary indicators that first signal and then confirm trend changes, demonstrating their effectiveness when used together.

23:07

An explanation of multiple timeframe analysis is given, showing how trend signals ripple from the fastest to the slowest charts. The speaker notes the importance of the fastest timeframe initiating the trend change, which then propagates through longer timeframes, reinforcing the reliability of the combined indicators and multiple timeframe approach.

24:10

Volume Price Analysis (VPA) is discussed, showing rising volume with falling prices creating a ‘price waterfall’ pattern. Using a one-minute chart, the speaker points out signs of market weakness such as high volume with big wicks and confirmations of downward pressure. The market breaks through the volume point of control into low volume areas, allowing for rapid price movement.

25:05

The speaker describes an ideal price waterfall setup with progressively larger candle widths and rising volume, illustrating strong downward momentum. This pattern requires effort similar to upward moves and confirms the trend’s strength. The session concludes by emphasizing how live signals and indicator confirmations help manage trades with less stress and greater confidence.

26:07

Trend monitoring and trading psychology

26:07

The speaker emphasizes the challenge of staying in a trade during a trend, which is harder than entering or exiting a position. They explain that mastering this is crucial because the key to profitable trading is taking small, frequent losses while letting the fewer winning trades outweigh these losses. The trend monitoring tools, including trend dots, were developed to help traders maintain confidence and avoid being scared out by market fluctuations.

27:19

The speaker discusses the natural human emotional reaction to pull out of a trade during small market pullbacks due to fear of losing profits. This reaction is instinctual and not a personal fault, which is why the trend monitoring indicators were created to help traders stay in profitable trends despite these emotional challenges.

28:11

Regardless of chart type or market, the principle of staying in a trend remains the same. Using multiple time frames, indicators like trend dots, and non-time-based charts helps reveal market momentum changes. The speaker illustrates how the tick speedometer indicator changes color to signal market participation levels, warning traders to expect congestion when momentum slows.

29:14

The speaker describes how different colors on the momentum indicators represent varying levels of market volume and participation. Green indicates strong momentum, orange is normal activity, and red signals low participation or congestion phases. They highlight the importance of trading when the indicator shows mostly green or orange for better momentum.

29:59

The current market condition is described as congestion, with all red lights indicating little to no momentum, similar to a Formula One starting grid with red lights. The speaker adjusts some settings to better reflect tick speeds and explains that this congestion phase means the market is not actively moving, which is not ideal for trading momentum.

30:41

The speaker notes the ongoing congestion with low market participation and introduces the concept of scaling out as a strategy to maximize gains from a trend. However, they caution that scaling out comes with its own costs, implying a trade-off between securing profits and remaining fully exposed to a trend.

31:20

Scaling in/out strategies explained

31:20

The speaker explains two trading approaches: scaling out and scaling in. Scaling out involves entering multiple contracts and then taking some profits off the table based on the assumption that the initial prediction is correct. Scaling in, on the other hand, builds a position after making a profit, relying on confirmed positive results. Traders choose the approach that suits their comfort level, regardless of contract size.

32:26

Applying the scaling out method, a trader might reduce their position by selling most contracts after achieving decent profits, leaving a smaller portion to continue in the market. The decision on how many contracts to leave running depends on market conditions observed on the chart, such as signs of a potential reversal. Keeping a portion of the position active allows the trader to stay engaged with the market without fully exiting.

33:37

The market analysis focuses on volume trends and price action. A declining volume during an upward rally indicates weakness, suggesting the market is unlikely to sustain the rise. The presence of a low volume node supports the expectation of further downward movement. Observing multiple timeframes, including the three-minute chart, confirms the market’s struggle to rally with low volume, signaling a likely continuation of the downward trend.

34:31

VIX impact and market trend confirmation

34:31

The speaker discusses the VIX indicator rising, signaling a market reversal. They explain how the VIX correlates with trend monitors, highlighting the importance of monitoring this index for equity trends. The speaker recommends finding the VIX on platforms like investing.com or TradingView for effective trading signals. They note some fluctuations in market activity before concluding the session, directing viewers to anna’s website for further analysis and video resources.

36:13

Resources, indicators, and education program

36:13

The speaker explains that their books are available on Amazon in both Kindle and paperback formats, with links to other sites provided. They discuss the availability of various trading indicators on quantumtrading.com for platforms such as MT4/5, NinjaTrader 7 and 8, TradingView, and TradeStation. Although development is taking longer than expected, progress is ongoing with videos and support pages being prepared. Two versions of TradeStation are highlighted: TradeStation Global (version 9.5 with Interactive Brokers) and TradeStation Securities (version 10), both offering powerful charting and trading capabilities.

37:12

The TradeStation Securities platform is praised for features like RadarScreen, emphasizing its quality and excitement for its upcoming launch. After completing the TradeStation work, the team plans to revisit TradingView to port over any previously unavailable indicators. Full-package TradingView customers will receive these upgrades as part of their subscription. The speaker then introduces the Quantum Trading Education program, describing it as a comprehensive forex trading course covering psychology, fundamentals, technical analysis, and trading mechanics with over 200 hours of video content and included indicators.

38:14

The education program has received excellent feedback from many students who appreciate its depth and support. It is complemented by the VPA Traders Room, an active community where members can ask questions daily and interact with fellow students. The speaker concludes by thanking the audience for attending and expressing hope that they found the session enjoyable and informative.

38:42

Closing remarks and next sessions

38:42

The host wraps up the session by thanking viewers, wishing them a great weekend, and reminding them of the upcoming sessions next week at 7:45 UK time for the London Forex session and at 5:15 on Thursday. Viewers are encouraged to stay safe and well, with a farewell until the next meeting.

By Anna Coulling – creator of volume price analysis