Getting started trading stocks and futures in the US session using volume price analysis

Getting started trading stocks and futures in the US session using volume price analysis

00:07

Introduction to stock market and VPA

00:07

The session begins with a welcome and an introduction to the focus on the stock market, indices, and some commodities through the lens of volume price analysis (VPA). A disclaimer is emphasized, warning viewers about the risks of trading and advising not to use money they cannot afford to lose. The presenter then transitions directly to reviewing charts and current fundamental news, including anticipation of the upcoming FOMC minutes.

01:14

US CPI and inflation metrics explained

01:14

The speaker discusses their use of multiple economic calendars, highlighting Trading Economics as the most comprehensive. They explain that the US Consumer Price Index (CPI) is a key inflation metric but excludes volatile items like energy and food, which makes it different from the Retail Price Index (RPI) that better reflects everyday price changes. Despite this, traders focus primarily on the CPI and also the Personal Consumption Expenditures (PCE), the Federal Reserve’s preferred inflation measure. The upcoming Fed minutes are expected to shed light on the Fed’s stance on inflation.

02:33

Recent inflation data shows the core inflation rate remained steady, matching projections, though some expected a slight decline. The speaker notes that while inflation is not ideal, it is not escalating uncontrollably. Market reactions to the data are mixed, with initial positive movements in indices followed by a pullback, demonstrating typical knee-jerk responses before stabilization. The overall market sentiment remains cautious as traders digest the inflation figures and await further insights from the Fed.

04:19

Earnings season impact on indices

04:19

The earnings season has begun, with JP Morgan already reporting. It’s crucial for traders, especially those dealing with short-term or intraday stock trades, to monitor earnings reports closely. The consensus suggests upcoming earnings numbers will be positive, potentially providing some relief amid volatile market indices. Additionally, analyzing daily charts is valuable; paying attention to previous day’s closes and strong candlestick patterns, such as candles with long lower wicks, can indicate buying interest and guide intraday trading decisions.

06:00

Russell 2000 as risk appetite gauge

06:00

The speaker explains different stock market indices, highlighting that the Dow Jones includes only 30 stocks and is less representative of the broader market. They also mention the S&P 500 futures (ES) and the Nasdaq, which is tech-heavy. The Russell 2000 is described as a speculative index that serves as a good gauge of market risk appetite. A recent doji candle indicates market indecision, meaning the market could move either way.

07:09

The Russell 2000 index is examined in detail from a volume price analysis perspective. It is currently trading within a range and showing price compression, meaning a significant price move (explosion) is likely soon, though the direction is uncertain. The index has maintained support levels since early in the year. This index is valuable for intraday traders as it reflects broader market trends. The earnings season is just beginning and will influence market momentum. Additionally, global overnight sentiment is briefly introduced as an important factor.

09:13

Global sentiment and South Korean index

09:13

The speaker discusses the South Korean index, describing it as highly volatile and a key indicator of global market sentiment. Despite recent gap downs, there have been attempts to rally, reflecting a fragile and uncertain market environment. The speaker also mentions upcoming clues about inflation and monetary policy from the Federal Open Market Committee (FOMC) meeting, specifically regarding potential reductions in bond buying. Additionally, the stock Amgen has come to their attention recently due to certain market factors.

10:33

Insider trading and Amgen stock analysis

10:33

The discussion begins with an analysis of insider trading activity at Amgen during Q1 and Q2, focusing on how insider buying and selling by company executives and directors can signal potential stock weakness ahead. It is noted that the impact of insider trading on stock price is not immediate but unfolds over time. Despite heavy selling pressure, there is speculation about a possible reversal forming. The speaker highlights the usefulness of the MT4 platform for trading Amgen without needing to buy the stock outright.

11:55

The speaker examines Amgen’s daily chart, observing that the stock appears weak with a recent significant sell-off. However, there is some support indicated by high volume and a key support level, the S6 camarilla price point. Despite these hints of support, the stock remains under pressure, partly due to large insider sales. The weekly chart is also checked for additional support levels, but overall the stock still looks fragile.

13:13

Further analysis of Amgen’s price action reveals a gap up following a volatility candle with a long lower wick from the previous day, followed by a decline back into a congestion area around the volume point of control. An attempted rebound is thwarted as the stock falls below the third camarilla level and volume resistance, indicating strong selling pressure. The presence of bearish candle patterns, including an engulfing candle and a shooting star formation, suggests that the stock is likely to continue downward.

14:24

The speaker emphasizes the benefits of using the MT4 platform to trade with small capital and mentions monitoring the VIX for market sentiment. Despite a slight dip, the VIX remains below 20, indicating that fear in the market is not elevated. This suggests a relatively stable or cautious market environment, with the VIX hovering around a key volume point, reflecting mixed investor sentiment.

15:31

Volume price analysis on AT&T stock

15:31

The speaker discusses using Ninja Trader and Market Beat to analyze stock volume and price action, focusing on AT&T. They examine large volume spikes alongside candlestick patterns, particularly doji candles that indicate market indecision during congestion phases. Emphasis is placed on patience and waiting for clear signals when volume surges occur but price movement remains limited.

17:23

Using a bearish chart, the speaker highlights how support levels under AT&T were breached, leading to falling prices and volume. They explain how volume point of control (VPOC) and accumulation/distribution indicators reveal tight price channels bounded by strong resistance and support zones. These indicators show the significant volume needed to break through these levels during the stock’s congestion phase.

19:15

The analysis continues with details on the volume point of control thickening as price touches resistance and support, indicating strong barriers. Despite a large volume injection, the stock remains range-bound due to price agreement, similar to market profile concepts. The speaker stresses the importance of considering volume alongside price and chart structure to understand the lack of directional movement.

21:12

The speaker points out that despite high volume, AT&T’s price did not break key resistance due to strong support and resistance levels. They describe the presence of low volume nodes that suggest potential for faster price movements through these areas. The segment also demonstrates how volume support lines act as dynamic support and resistance, influencing price behavior across different timeframes.

23:31

Examining shorter timeframes, the speaker notes volatility candles and attempts to rise that fail to break resistance, signaling weakness. They discuss how institutional and retail investors may have buy triggers at certain levels due to the stock’s liquidity and blue-chip status. The combination of volume, support/resistance, and candle patterns suggests potential shorting opportunities as the stock struggles to gain upward momentum.

25:47

The speaker explains the tick speed indicator, which measures market activity levels and volatility throughout the trading session. They illustrate how activity fluctuates between green (high activity), orange (moderate), and red (low activity), affecting price movement speed. The analysis highlights the importance of multi-timeframe volume point of control alignment as a confidence indicator for trend continuation or reversal.

27:28

On hourly and 10-minute charts, the speaker observes consistent volume point of control levels supporting the downward trend for AT&T. Despite potential buying interest due to the stock’s reputation, the volume price analysis suggests further downside until strong reversal signals appear. The speaker emphasizes patience and attention to volume spikes and candle patterns to anticipate possible trend changes.

29:07

The discussion shifts to hammer candles observed in other stocks like HBI and SBRA. The speaker advises patience when interpreting these reversal patterns, noting that immediate price reversals may not occur as market makers could be shaking out sellers first. SBRA’s hammer candle paired with high volume is a notable anomaly indicating potential buying pressure, though confirmation requires observing subsequent price action.

31:32

Further analysis of SBRA shows volume anomalies and subsequent small doji candles with volume, signaling indecision and the need for patience. Eventually, a candle with a wick to the bottom and volume suggests a developing move higher, especially in the healthcare sector. The speaker then introduces examples of stocks with pump-and-dump characteristics, including IPOs like Jupiter Wellness and BLI, noting the importance of insider selling and volume patterns.

33:21

The speaker highlights two IPO stocks, Jupiter Wellness and BLI, as examples of pump-and-dump scenarios. They mention ongoing monitoring of BLI and BTX, illustrating how volume and insider selling data can reveal potential risks in newly listed stocks. The segment underscores the need for caution and thorough analysis when trading IPOs due to their susceptibility to manipulation and volatile price movements.

34:04

IPO pump and dump examples

34:04

The speaker explains the concept of pump and dump schemes using a stock that experienced a long congestion period followed by volatile price spikes and crashes. They highlight the importance of observing volume and price behavior during these phases. The discussion transitions to monitoring specific stocks like Jupiter Wellness, emphasizing the need to regularly check and analyze such stocks over time.

35:10

The speaker shares their Twitter feed and blog focus, primarily covering stocks and commodities while excluding forex, which will have a separate channel. They introduce a specific IPO stock example that appeared promising but showed typical volatile IPO behavior, including a sharp rise followed by a crash and congestion, describing it as an IPO failure and another pump and dump case.

36:39

Continuing with IPO examples, the speaker examines a stock from November last year with significant volume activity post-IPO. They point out the stock’s volatility and volume patterns, emphasizing how the hype and trading activity often result in pump and dump scenarios. Another example, Barkley Lights, is introduced, showing early strong performance but heavy insider selling, suggesting significant short interest and a declining price trend.

38:07

The speaker discusses insider selling in Barkley Lights, highlighting how executives and institutional investors have been offloading shares heavily since the IPO, leading to a continuous slide in price. They caution against blindly following institutional trading as these investors also get caught in unfavorable trends, emphasizing the importance of understanding market dynamics rather than just copying big players.

39:24

Using Volume Price Analysis (VPA), the speaker explains how to interpret price cycles and trends, noting that the stock is currently in a downtrend following a long period of congestion. They describe how institutional investors, such as funds and pension managers, handle large inflows of money by allocating purchases at various levels without necessarily considering the chart’s technical signals, which can lead to buying into a downtrend.

40:47

The speaker elaborates on institutional buying behavior, explaining that funds must deploy large sums regularly but may not always time the market well. Retail traders, by contrast, can use chart analysis to avoid major losses by recognizing price phases and exercising patience. Upcoming webinars and courses will cover fundamentals and technicals in detail to help retail traders make informed decisions and minimize drawdowns.

42:22

The speaker analyzes the stock AT&T, noting that support levels have held during a quiet market period. They caution that markets tend to fall faster than they rise, so patience is needed. If the price reverses, potential targets include key volume points of control and support levels. They emphasize that trading against the major downtrend is counter-trend and should be approached as a short-term strategy.

43:40

The discussion turns to the use of time and sales data and order flow analysis to gain deeper insight into market behavior. Although not fully set up yet, these tools can identify where orders are resting and potential price impacts. The speaker warns about spoofing but highlights the value of confluence between order flow, support/resistance, and volume points to improve trade decisions.

45:27

The speaker reviews the one-minute chart for AT&T, noting the slow upward movement characteristic of rising markets compared to faster declines. They invite questions from participants and mention plans to introduce a custom VWAP indicator, developed uniquely by the speaker and their colleague, to enhance day trading strategies beyond the standard version commonly used.

47:05

Volatility triggers and copper market

47:05

The speaker introduces a live market analysis focusing on copper (HG) and other commodities like gold, silver, and oil. They highlight the importance of volume point of control (VPOC) as key price levels creating strong support and resistance corridors. The discussion emphasizes the significance of these levels in understanding market structure and price action channels, showing how price tends to move within these volume-based ranges.

48:05

The analysis continues by describing a price breakout from the volume channel on strong volume, indicating a developing trend. The speaker notes a low volume area between certain price points, which typically allows price to move smoothly through it. They explain how price surges with high volume can create volatility triggers, signaling potential market moves or reversals after a strong breakout.

49:06

The speaker explains the volatility trigger indicator on a one-minute chart, which signals when price moves beyond the average true range with high volume. This often attracts late traders who may get caught in reversals or congestion. The real-time nature of the indicator is stressed as crucial for timely trading decisions, especially on longer timeframes like five-minute charts.

50:03

The market shows a reversal as price returns to the VPOC after a volatility-triggered surge. Many late entrants face losses or are stopped out. The speaker advises closing most or all positions at such volatility signals to avoid risk. The price action and volume patterns on shorter timeframes (15-second chart) mirror the one-minute chart, confirming the onset of weakness and potential reversal.

51:51

Volume analysis reveals that although price is falling, volume is also decreasing, which is unusual for a strong downtrend since volume typically rises with selling pressure. This suggests the reversal might lack momentum. The speaker compares this with volume-price relationships on the five-minute chart, where a doji candle indicates market indecision and profit taking after a strong upward move.

53:47

On the daily chart, price resistance and volume-based resistance levels around current prices are relatively weak, signaling potential for further upward movement. Historical strong volume support levels were breached, and current volume is low in the price range, indicating less resistance ahead. This suggests if the market breaks through this price region, it could climb higher with less effort, potentially reaching new highs.

55:47

The speaker wraps up the copper analysis, noting that these volume and price action principles apply broadly across different instruments, including stocks, commodities, forex, and futures. They then transition to gold, highlighting its strong upward trend and approaching the key 1800 price level ahead of the upcoming FOMC meeting, with a caution that this rally could be vulnerable to reversal depending on news.

56:18

Gold’s rally and inflation impact

56:18

The speaker discusses the pervasive inflation affecting various sectors such as food and energy, highlighting the risk of stagflation—a combination of rising inflation and a stagnant or declining economy. Central banks face the dilemma of raising interest rates to curb inflation without pushing the already weak economy into deflation. Interest rate hikes are expected to be minimal due to this risk. Gold is identified as a key beneficiary of inflation, with bullish sentiment currently supporting its price.

57:55

From a technical perspective, gold’s price is expected to encounter resistance around the $1800-$1820 range, where trading volume is concentrated, potentially pausing its rally. The current weakening of the dollar is providing momentum for gold’s upward movement. A critical resistance level at $1840 will determine if gold breaks out towards $1900 or even $2000 per ounce. This resistance has historically capped gold’s price multiple times.

59:08

The speaker analyzes gold’s price movement on short-term charts, noting a smooth upward trend supported by volume. The trend monitor tool helps traders stay in profitable trades by balancing frequent small losses against fewer larger wins. Volume plays a key role in confirming price moves and pullbacks, with solid volume supporting recent upward price candles and indicating buyer strength despite profit-taking.

01:00:35

Further volume analysis shows that pullbacks have lower volume, which is typical in an uptrend and suggests continuation rather than reversal. A two-bar reversal pattern reinforces confidence in the ongoing rally. As gold approaches the $1800 level, volume remains supportive but price enters a low-volume region near a psychological resistance point, indicating potential for increased market caution or congestion.

01:02:22

The speaker explains the psychological significance of round numbers like $1800, $1850, $1900, and $2000 in gold trading, where many orders accumulate, causing price congestion. Traders tend to place orders at these levels, leading to pauses in price movements. The trend monitor on various timeframes remains mostly bullish, despite a slight short-term reversal. The discussion concludes with a transition to other market updates.

01:03:21

Indices divergence and trading levels

01:03:21

The speaker analyzes price action across three major indices (YM, NQ, ES) on daily charts, noting divergence with the NQ moving up, YM down, and ES fluctuating. They highlight smooth downward moves on the five-minute charts, reaching key volume points and entering congestion as markets calm ahead of upcoming announcements. The discussion emphasizes the use of multiple timeframes to better understand market pauses and reversals.

01:04:22

The difference between two-bar reversals and hammer candlestick patterns is explained, demonstrating how overlaying different timeframes (five and ten minutes) helps identify these signals. The importance of price space levels and accumulation-distribution indicators is stressed, with specific strong levels tested multiple times acting as support or resistance. These levels provide protection against reversals and help traders manage short positions effectively.

01:05:27

Volume analysis shows declining strength in the current rally, with falling volume and weak upper candle bodies indicating limited upside momentum. This aligns with expectations given imminent fundamental news. The speaker introduces the time and sales window, emphasizing the significance of large block orders over small trades, as these big numbers provide real-time insights into market direction and strength.

01:06:20

The focus remains on tracking large orders in the time and sales data to gauge market receptiveness to bullish or bearish phases. Currently, only small trades dominate, indicating low immediate momentum. The segment concludes with a transition to analyzing soft commodities, particularly noting strong moves in daily charts of corn and wheat futures.

01:07:21

Soft commodities price action

01:07:21

The discussion begins with an analysis of December contracts on five-minute time frames, highlighting smooth price action supported by volume price analysis (VPA). The focus is on soybean, where a strong support level has turned into resistance after being breached. This creates a protective barrier for traders who have taken short positions, providing clear levels for entry and stop-loss placement. The price repeatedly tests this resistance, reinforcing confidence in the short trade setup.

01:08:29

The market attempts to rally but fails to break through resistance, validating the short position with defined stop-loss levels above recent highs. Heavy selling pressure and a bright red trend monitor indicate ongoing weakness. Despite attempts to rally, volume confirms that upward movement is weak, signaling continued bearish sentiment in soybean.

01:09:27

A similar pattern is observed in corn on the five-minute chart, where resistance levels hold and are gradually broken as the market moves downward. Volume increases as the price breaks through support, demonstrating a classic breakaway trade. The market shows volatility with attempts to rally failing due to declining volume, indicating lack of buying strength and reinforcing the bearish trend.

01:10:24

Volume analysis shows falling volume during attempted rallies, which is a negative sign for bulls. The market experiences a significant price drop with high volume and volatility triggers, suggesting a good point to close positions and take profits. The price approaches the volume point of control (VPOC), indicating potential congestion and a pause in trend, signaling traders to be cautious and possibly wait for the next price movement phase.

01:11:20

Wheat shows a similar pattern with a breakaway from the volume point of control and rapid moves through low volume nodes, followed by some volume buildup and minor congestion. A recent up candle on decent volume suggests some buying interest, but the broader context advises caution. The discussion notes that soft commodities do not always move in sync due to differing technical and geographical factors, although they sometimes trend together in the absence of specific supply-demand drivers.

01:12:19

The commentary shifts to silver, noting that while gold is rising steadily, silver’s rise is slower and less pronounced. This indicates that precious metals may not always move in tandem at the same pace, reflecting different market dynamics despite some correlation.

01:12:50

Silver trend following gold

01:12:50

The speaker discusses the relationship between gold and silver prices, noting that silver often moves in tandem with gold. Currently, silver shows a bullish trend on shorter time frames, while gold appears to have paused around the 1800 level. The speaker expects this pause to hold, with limited further upward movement indicated by falling volume and narrowing candle spreads. These signals suggest weakening momentum and that the market is likely to stabilize in the near term.

01:14:18

Currency indices update

01:14:18

The speaker discusses the current state of the yen, noting it is moving sideways while the dollar is falling slightly and the euro’s position is mentioned. They then shift focus to stocks, specifically highlighting Caterpillar, a stock they have consistently followed for many years. The speaker navigates to TradeStation to show Caterpillar’s current stock data and prepares to provide insights on its performance.

01:15:20

Challenges in stock trading and filtering

01:15:20

The speaker highlights a key difference in stock trading compared to forex or futures: the vast number of instruments involved. While forex and futures traders manage relatively few instruments, stock traders must filter through between 10,000 and 15,000 stocks across major indices and exchanges. This necessitates using filters based on criteria such as volume or price movement to identify relevant stocks for watch lists.

01:17:00

Stock traders rely heavily on filtering tools to manage the large universe of stocks. The Tradestation platform offers several ways to filter stocks, including the radar screen, which can scan up to a thousand instruments simultaneously and provide real-time filtering based on indicators like volume, volatility, and trend monitoring. This allows traders to track live data efficiently across multiple time frames.

01:18:20

Another Tradestation tool discussed is the hot lists feature, which provides predefined stock categories such as percentage gainers, losers, 52-week highs and lows, volatility, and volume lists. While useful for sorting and sifting through large data sets, hot lists are not designed for intraday use. This tool helps traders quickly identify market movers and important stock characteristics.

01:19:24

The speaker explains the market scanner tool on Tradestation, which allows users to filter stocks by criteria such as index membership and technical indicators like RSI. The scanner provides static sorting, typically used at the end of the trading day. Additionally, traders can set alerts within this system to notify them when specific conditions, such as a particular RSI level, are met, adding a sophisticated layer of automation to stock monitoring.

01:20:33

Stock screening tools and earnings season

01:20:33

The discussion highlights the importance of having clear criteria and effective software for stock trading and investing to manage the vast amount of information involved. Key points include the need to track fundamental news and earnings releases to avoid trading around critical events. The session wraps up as trading activity quiets down ahead of upcoming news. The speaker thanks the audience, mentions the continuation of sessions next week covering forex and stocks, and wishes everyone a safe and successful trading experience.

By Anna Coulling – creator of volume price analysis