Discover how to trade index futures using a combination of charts

Discover how to trade index futures using a combination of charts

In this portion of the webclass we show you how to trade index futures using a combination of charrting techniques and also in multiple timeframes. Renko charts on their own are powerful as they smooth out the price action and also reveal momentum, but when using with time based charts, this gives us the best of both worlds with volume price analysis.

00:13

Switching to NQ index and currency strength

00:13

The speaker explains their shift from trading oil to focusing on the NQ index due to recent market movement. They highlight the use of a currency strength indicator, noting that the yen has been fluctuating between selling and buying, indicating market indecision. The speaker also describes using Renko charts set to different time frames (15 seconds, 30 seconds, and one minute) through a Renko optimizer tool that allows customization to match specific time frames.

01:12

Renko optimizer and brick size explanation

01:12

The video explains how to use the optimizer to calculate the optimal Renko brick size based on a selected time frame, such as one minute. The optimal size is derived from the smallest price movement for the instrument, measured in ticks. For example, the optimal brick size of 17 corresponds to 17 ticks, which is then divided by four to get the size of each brick in ticks. The explanation includes comparisons of different brick sizes like 13 and 9 ticks, clarifying how these values relate to price movements.

02:08

Multiple timeframe indicators and trend dots

02:08

The segment explains the setup of a trading workspace where indicators function consistently across different chart types, including Renko charts, which are independent of time. It describes a bullish run followed by a congestion phase indicated by color changes in the chart. The discussion emphasizes the use of multiple time frames simultaneously, noting that slower time frames may not reflect transitions seen on faster ones. The difference in timestamps between Renko and time-based charts is highlighted, showing that these charts move independently. The segment concludes with a reference to the VIX index on TradingView, noting its recent stability.

03:37

VIX sentiment and trend dot behavior

03:37

The session showed limited movement initially, followed by a slight downward rally. The speaker explains the behavior of trend dots, which closely follow price action, changing color and position as trends shift. In an uptrend, trend dots sit below the price, move inside during congestion, and change color if the trend reverses, providing early signals of market direction.

04:29

The trend dots changed color to darker blue, indicating a continuation of the upward trend after a minor pause not reflected in the trend monitor. The trend monitor, designed to keep traders in trades, is especially powerful when used across multiple time frames and with various chart types like time-based or renko charts. It acts like monitoring traffic on a highway, helping traders anticipate upcoming trend changes by observing signals from different time frames.

05:29

The importance of multiple time frame analysis is emphasized, where a true trend change will ripple through all frames, while false signals will be filtered out. Despite minor flattening of trend dots, no real trend reversal is detected yet, and the upward push continues. Analyzing volume in time-based charts shows spikes similar to those seen in oil markets, prompting traders to question if these are anomalies or valid signals, always ensuring coherence and agreement in the data.

06:21

Volume analysis and resistance levels

06:21

The speaker discusses how to interpret price action and volume discrepancies, emphasizing the importance of making judgment calls when price movement looks unusual compared to volume. They analyze resistance and support levels on the accumulation distribution indicator, noting a resistance level that was tested multiple times and then broken, followed by a retest at the volume point of control, indicating potential selling pressure.

07:14

The volume point of control (VPOC) is described as a dynamic level that shifts as volume accumulates at different price points. The speaker explains that the VPOC moves when volume at a new level matches or exceeds the previous level, reflecting changing market sentiment. They highlight the current market being in a risk-off phase with oscillating price action and emphasize how volume ultimately confirms whether bullish or bearish sentiment will dominate as price breaks from the current range.

08:14

Trading congestion phase and market mechanics

08:14

The discussion focuses on the current congestion phase observed at the volume point of control across multiple charts, highlighting how integrating charting, trading mechanics, multiple time frames, and indicators creates a more comfortable and less emotionally driven trading experience. The speaker prefers a laid-back, informed approach to trading rather than reacting fearfully to market movements.

09:16

The segment explains the importance of understanding market behavior and mechanics to make sense of market movements, noting a recent rally followed by a return to congestion. The yen remains inactive, while the VIX has rallied slightly but remains at relatively high levels around 22-23. The Nasdaq has broken into new territory, driven by major tech stocks, and the speaker anticipates potential bullish momentum.

10:26

Breaking congestion with volume and price action

10:26

The market is breaking out of a congestion phase, moving from the 72 level up to around 75-76 with decent volume supporting the move. There are low volume nodes ahead indicating potential weak points. Some candles show heavy selling pressure, evident from the wicks and volume spikes, signaling possible market hesitation. The VIX is moving sideways with decreasing volume, which helps sustain the upward push.

11:57

The market experiences a pause reflecting underlying weakness, suggesting either a reversal, further congestion, or continuation higher. The trend remains strong and supportive, indicated by bright blue trend dots and consistent upward movement. Some profit-taking is observed through wider spread candles closing near the top, but overall the trend is comfortable and stable with buying interest maintaining the momentum.

13:08

Volume remains stable with no significant heavy selling as the price attempts to break through the 81 level on the 15-second chart. The market gradually pushes higher to 82 and 83 with rising volume, supporting the upward price action and indicating growing confidence in the continued move.

14:42

Bearish reversal signals and trading comfort

14:42

The segment discusses trend dots supporting the price action with the color blue, referencing an old football song humorously. It highlights a two-bar reversal pattern appearing alongside a bearish engulfing candle, signaling expected downside price movement. The presence of good volume supports the reliability of this two-bar reversal setup.

15:22

The speaker anticipates price coming off the highs and returning to the volume point of control (V-POC). They mention trading on a one-minute timeframe and discuss managing trades by closing out or letting some contracts run. The focus is on picking the right timing for exits, emphasizing hard work but not fear in trading decisions.

16:43

This part explains the significance of the V-POC level and confirms that the observed price action aligns with expectations. The two-bar reversal signal provided an early warning of further weakness, supported by decent volume. The market is expected to revisit the V-POC, reinforcing the idea that current movements are predictable and consistent with bearish indicators.

17:31

Bearish engulfing candles are described as important and common across all timeframes, serving as reliable signals. The speaker reflects on the effectiveness of these indicators in guiding profitable trades, particularly in thin markets, emphasizing a comfortable and confident trading style shared by themselves and Anna.

18:22

Trading is portrayed as a relaxed process when following market indicators properly. The speaker encourages reading charts to understand upcoming price action instead of reacting emotionally. This demonstration aims to show that successful trading involves observing signals and making informed decisions without stress.

18:49

The discussion focuses on assessing whether there is sufficient opportunity to take a trade and the importance of comfort in trading decisions. The Yen is noted to be moving sideways with a slight uptick, causing minor sell-offs and some market weakness. The speaker advises patience, waiting for better setups if current conditions are not favorable.

19:17

The speaker apologizes for going over time and directs viewers to the forex trading program and quantum trading education resources. They mention Anna’s books and analysis, highlighting a long-term bullish stance on gold and silver, noting that many are now following this trend.

19:49

Quantum Trading resources and upcoming sessions

19:49

The speaker directs viewers to find all analysis and books on Amazon and indicators at quantumtrading.com. Tradestation videos are available on the YouTube channel, offering valuable lessons applicable across trading platforms. The upcoming trading week includes the NFP event, promising typical market volatility. The speaker encourages staying safe, enjoying summer trading, and announces upcoming sessions: the London Forex session on Tuesday at 07:45 UK time and the regular session on Thursday at 17:15 UK time.

21:09

The speaker thanks viewers for attending, hopes they learned something new, and wishes them a great weekend, signing off until next week.

By Anna Coulling – creator of volume price analysis