How to trade a basket of currencies and reversal trading using time and non time based charts

Learn how to trade a basket of currencies and to use reversal trading with time- and non-time-based charts.

00:00

Introduction and New Year Wishes

00:00

The session begins with a welcome to the London forex market open, occurring in about six minutes. The speaker extends a cautious Happy New Year, acknowledging the ongoing difficulties of 2020, including renewed lockdowns and severe impacts of the virus, especially in the UK. They express hope for a better year ahead and send good wishes to viewers worldwide. Before proceeding, a reminder is given about the usual market disclaimer.

01:17

Trading Risks and Educational Disclaimer

01:17

The speaker emphasizes that trading is risky and advises never to use money you cannot afford to lose. They clarify that the webinar content and related materials are for educational purposes only, not investment recommendations. The discussion highlights the surge in new traders entering various financial markets, including forex, options, and stocks, noting that around four million people started trading last year. The importance of understanding these risks and educational intentions is stressed.

02:28

The presenters explain that their webinar aims to help traders succeed by teaching their methodology based on volume price analysis (VPA). They mention their book and trading indicators as resources for learning this approach. VPA combines technical analysis of price charts with a broader perspective on trading, applicable across various markets, not just forex. Newcomers are encouraged to explore their educational materials available digitally and on Amazon.

03:49

The discussion expands on the necessity of considering fundamental factors and related markets when trading forex. Beyond chart analysis and news releases, traders should understand the interconnections among the four main capital markets: forex, commodities, bonds, and stocks. This holistic view is part of the methodology taught in their books and trading programs.

04:19

Forex Market Interrelations and Currency Strength

04:19

The speaker explains the importance of understanding both internal and cross-market relationships in forex trading, emphasizing that the forex market reacts quickly to changes in sentiment. Recognizing certain currencies and pairs as proxies for market sentiment can simplify trading decisions. The discussion then shifts to the use of specially developed indicators, such as a currency strength indicator, which helps traders quickly identify which currencies are being bought or sold. By analyzing these indicators across multiple time frames, traders can better anticipate potential market reversals and pullbacks, aiding in the selection of currency pairs to trade.

06:03

Using Time Frames and Indicators for Analysis

06:03

The speaker explains their approach to trading using just two time frames—the one-hour and the 15-minute charts—unlike David who uses more. They illustrate how these time frames help analyze currency pair movements, particularly identifying pullbacks and corrections, and determining if such corrections are tradable or signal potential reversals. The example focused on is the Australian dollar, which showed a notable trade opportunity with oscillations and reversals during the Asian session.

07:35

The discussion introduces the concept of the currency matrix, which ranks currency pairs to identify the strongest pairs and the most dominant buying or selling forces. The speaker also mentions the currency array, an indicator of trend strength, and the currency heat map, which tracks pair movements across multiple time frames. These tools collectively support a comprehensive analysis of currency strength and trend direction.

08:07

The speaker highlights the comprehensive forex trading program they developed, which combines various indicators and techniques. They share their satisfaction in seeing traders, ranging from complete beginners to those struggling with consistency, achieve success by applying volume price analysis (VPA) alongside these indicators. Furthermore, they introduce the funded forex program, where students can trade with the company’s capital after passing an evaluation stage, removing personal financial risk and allowing progression up to a two million dollar account.

09:13

Details about the funded forex program are expanded, emphasizing no additional costs beyond a one-time entry fee and the absence of personal financial risk since traders use company funds. The conversation returns to analyzing the Australian dollar, noting its heavy buying and status as a risk and commodity proxy currency. The speaker touches on market risk factors and the importance of monitoring such risk currencies in relation to commodities and overall market sentiment.

10:23

US Senate Runoff Impact on Market Sentiment

10:23

The discussion begins with the focus on the market risk related to the runoff elections for two Senate seats in Georgia. The close results from the November election led to a rerun, which is crucial because it will determine the balance of power in the Senate. If the Democrats win both seats, they would tie the Senate, giving Vice President Kamala Harris the casting vote and effectively allowing the Democratic party to pass legislation more easily despite Republican opposition.

11:32

The speaker explains the implications of a Democratic Senate majority on the markets, highlighting expectations of increased government spending, quantitative easing, and stimulus measures that could drive inflation higher and push Treasury yields up. This scenario could weaken the US dollar, which is already heavily oversold. The potential economic and market impact revolves around more debt-funded spending on infrastructure and renewable energy initiatives.

13:21

The conversation continues with the possibility that Republicans might retain at least one Senate seat, which would prevent a Democratic majority. The media predicts a ‘blue wave,’ but the speaker advises caution, noting that markets often react unpredictably and that market makers ultimately decide outcomes. The segment emphasizes the importance of observing market reactions rather than relying solely on media narratives.

14:21

Additional factors influencing the market today include the release of FOMC minutes, Italy’s bank holiday for the Feast of the Epiphany, PMI numbers, and a speech by Governor Bailey. The current market shows slightly positive futures but a decline in the Nasdaq. The forex market’s behavior is highlighted as a potential leading indicator, sometimes diverging from futures markets, indicating the complexity and uncertainty in market reactions.

15:21

The segment concludes by discussing how the forex market may provide early signals ahead of other markets, using the example of the Australian dollar’s movement on MetaTrader platforms. The speaker suggests that forex reactions can be insightful for traders monitoring risk and market sentiment in relation to ongoing political and economic developments.

15:57

Aussie Dollar Price Action and Chart Analysis

15:57

The discussion begins with an observation about inconsistencies in timestamp alignment on charts, noting that times often appear two hours off. The speaker analyzes the Aussie dollar on the hourly chart, highlighting strong buying signals shown by sine waves on the CSI indicator and discussing the potential for a pullback or correction. They mention that similar overextensions were seen in the New Zealand and Canadian dollars. The focus is on identifying whether these pullbacks are tradable corrections or full reversals.

16:58

Attention shifts to the opposite end of the CSI spectrum, where the US dollar and euro are being sold. The speaker emphasizes the importance of recognizing overextensions on the hourly chart as potential reversal trade opportunities. The timing is noted as the end of the New York session moving into the Asian session, which impacts trading setups. The hourly chart is recommended as a benchmark for trend analysis, with the 15-minute chart used for entry timing, showing how faster charts pick up movements first.

18:07

The speaker compares hourly and 15-minute charts, demonstrating how the 15-minute chart captures price movements earlier. They note a pullback occurring around 3 AM that presented a potential short trade opportunity. However, they caution traders to consider whether this pullback is part of a larger continuation of the uptrend influenced by positive sentiment in the Asia Pacific session. The discussion introduces the use of chart combinations to aid entry and exit decisions, emphasizing candle patterns and support/resistance levels.

19:59

Focusing on the daily chart, the speaker highlights a large bullish candle indicating a strong uptrend for the Aussie dollar, supported by high volume. They stress the importance of identifying in which trading session most of the day’s move occurred, as moves can be concentrated in specific sessions. This session-based liquidity and sentiment variation can affect trade timing and outcomes, making it essential for traders to understand currency pair behavior across sessions.

20:58

The speaker elaborates on the unique trading rhythms of currency pairs tied to different market sessions. Using the Aussie dollar as an example, they explain that it tends to move across London, New York, and Asian sessions, making it a versatile pair for 24-hour trading. Traders are encouraged to research and understand these rhythms and the fundamental economic factors influencing currency movements to optimize their trading strategies.

22:32

Continuing with the daily and hourly charts, the speaker observes that the uptrend is continuing with the Aussie dollar moving higher. A specific pullback on the hourly chart is examined as a potential trade. Volume and participation levels relative to the trading session are emphasized as critical factors in interpreting price action and validating trading signals, especially when using volume price analysis (VPA).

23:41

The analysis focuses on volume price analysis on the hourly chart, noting that falling volume during a pullback indicates limited downside momentum, suggesting the uptrend will likely continue. The speaker points out that this behavior aligns with the overextension shown by the CSI indicator. Support and resistance levels, such as the Camarilla R3 level, are used to anticipate possible price retests and reversals, with time of day also playing a role in trading decisions.

24:51

Examining specific candles, the speaker describes a doji-like candle with wicks on both ends indicating market indecision and struggle. Subsequent pullbacks on the hourly chart show falling volume despite wider spreads, reinforcing the view that downside movement is limited and the uptrend is intact. For trade entries, the 15-minute chart is recommended for finer timing, but the speaker suggests that Renko charts may offer an even better option for identifying entry points within the broader hourly trend.

26:32

Renko Charts and Trend Indicators Explained

26:32

The speaker explains how certain indicators help clarify price action by highlighting pullbacks and trends in a geometric, uncluttered way. Trend dots and the trend monitor signal the dominant trend, staying blue during uptrends. The only tradable pullback identified was a small section where these indicators aligned, emphasizing the importance of following the dominant trend rather than counter-trend trades.

27:12

Counter-trend trades carry higher risk since they often represent corrections rather than reversals. Traders should avoid entering counter-trend positions prematurely and instead wait for clear signals from trend dots, the trend monitor, or significant support and resistance levels. The discussion shifts to analyzing potential corrections and reversals using the CSI indicator, which works well across different timeframes.

28:35

The New Zealand Yen is highlighted as a promising pair, with David monitoring several yen pairs. The 15-minute CSI aligns well with hourly charts for faster trading, while the 3-minute chart is recommended on MT5 for more choices. Price action is shown to move in phases of advance, pullback, and consolidation, which traders should wait for before entering positions. The Aussie Dollar example illustrates how to combine multiple timeframes and Renko charts to identify entry and exit points while considering overall market sentiment.

30:20

Trading becomes second nature with experience, much like learning to drive a car. Initially overwhelming, with many factors to monitor, it eventually becomes intuitive. Successful trading requires recognizing necessary information and applying it within broader market contexts. The speaker emphasizes the importance of understanding volatility, managing risk, and adjusting position sizes according to market conditions.

31:57

Volatility impacts trading risk and opportunities; high volatility means higher risk but more chances, while low volatility allows for larger positions. Traders must understand when a currency pair is likely to be volatile, often influenced by fundamental news or market sentiment. The speaker introduces that David will cover volatility indicators, including options market data, and stresses the importance of becoming familiar with the behavior of specific currency pairs.

33:41

David greets the audience and introduces the New Zealand Yen as a key focus, showing multiple timeframes from very fast (15 seconds) to daily. He highlights that trading is not only about scalping but also understanding volume-price relationships over different timeframes. Using volume price analysis (VPA), David explains how narrowing spreads and volume changes can signal weakening trends, illustrated by a price pattern resembling a catenary or arch.

35:09

David discusses how narrowing spreads signal weakening market trends despite volume injections, especially around the London market open when volatility typically increases. A high volume bar with little price movement suggests market indecision rather than a strong reversal. This analysis helps intraday traders and those with longer-term positions anticipate potential market behavior during key trading sessions.

37:22

Examining specific candles, David shows how volume-price discrepancies indicate buying pressure despite price pullbacks. This suggests the market is not ready for a downtrend and buyers are stepping in, creating potential buying opportunities for scalpers on very short timeframes. The example demonstrates core principles of volume price analysis in action, emphasizing the importance of volume confirmation in understanding price moves.

38:40

David explains how trend monitors and accumulation distribution indicators highlight strong resistance levels tested multiple times, pinpoint accurate to individual pips. The price action is approaching a key resistance zone with low volume ahead, indicating potential support if price closes above it. This precise level tracking aids traders in identifying likely reversal or breakout points across different timeframes.

40:05

The trend monitor shifts colors reflecting changes in trend strength, signaling possible reversals or pullbacks. Despite some temporary weakening indicated by darker colors, the trend has resumed upward momentum. The speaker notes that these signals align across various timeframes, though market sentiment may be mixed and not fully synchronized with price action, underscoring the complexity of interpreting multiple indicators together.

40:59

Currency Strength and Matrix Overview

40:59

The speaker reviews current market conditions focusing on major US indices: Dow 30 (YM), Nasdaq 100 (NQ), and S&P 500 (ES). The Nasdaq has sharply sold off, while the Dow has returned to its starting level, and the S&P 500 is following the Nasdaq downward, signaling negative risk sentiment. The discussion highlights the usual strong correlation between yen and Swiss franc flows into safe-haven currencies, but notes occasional disconnects between spot forex markets and these relationships.

42:06

The speaker explains that correlations between currencies and assets like commodities and gold can break down temporarily, so traders should not expect these relationships to hold perfectly every day. This morning there is some disconnect, but overall the yen is leading with strong selling pressure. Currency strength indicators across various timeframes confirm intense selling in the yen, setting the stage to identify currency pairs with strong opposing trends.

43:06

Using currency strength matrices on multiple timeframes, the analysis shows strong buying in the Australian dollar and strong selling in the yen and US dollar. The speaker points out that pairs like dollar-Swiss franc or Aussie-New Zealand dollar are less attractive for trading right now because their currencies are moving in tandem, offering little divergence to exploit.

43:55

Further examination of the currency matrix highlights New Zealand dollar strength, although the Swiss franc is showing sideways movement on slow timeframes. For effective trading, it’s important that supporting currencies move coherently across multiple timeframes. The Australian dollar exhibits strong upward movement, which is visible both in the matrix and real-time dollar charts.

44:52

The currency matrix helps confirm whether sentiment seen on faster timeframes is sustained on slower ones, providing confidence in trade direction. The speaker emphasizes that consistent movement across timeframes reduces risk, as it shows that market sentiment is aligned across the currency complex.

45:19

Trading with the overall market sentiment lowers risk because it means the trader is moving with the prevailing flow rather than against it. However, the speaker acknowledges that trading against the trend can sometimes be justified, such as during political events or major market disruptions, and the matrix tools can also help identify these counter-trend opportunities.

46:46

The speaker transitions to live trading examples, noting recent weakness in the British pound driven by renewed COVID-19 lockdowns in the UK, impacting the currency negatively. This demonstrates how specific economic or political events can cause divergences within currency complexes, such as the yen pairs performing well while the pound is weighed down.

47:52

To illustrate practical application, a live trading account has been set up with modest funds to focus on slower timeframes. The goal is to show that profitable trading doesn’t require constant scalping, emphasizing that slower, more strategic trades can also be profitable.

48:23

Live Trading Account and TradingView Platform

48:23

The speaker discusses trading on slower time frames using the TradingView platform, praising its intuitive interface for placing stop losses and limit orders. They describe their approach of trading with a few hundred dollars and outline two key rules: mandatory stop losses and trading only single micro lots with a maximum of four positions open at once.

49:19

The speaker explains the rationale behind opening positions in various yen currency pairs during Monday evening’s market plunge, highlighting the market makers’ tendency to exploit thin markets with rapid price moves and volatility, known as the ‘souffle effect.’ They emphasize the importance of analyzing volume and price to identify trading opportunities during such events.

50:18

The discussion centers around monitoring trades on four-hour charts, noting significant pip gains across several currency pairs. The speaker mentions adjusting stop losses to lock in profits and explains that some trades are now risk-free, effectively trading with the market’s money. They also touch on basket trading, stressing the principle of closing all positions simultaneously to manage risk and profit effectively.

51:16

The speaker further elaborates on basket trading strategies taught in their forex education program, emphasizing the discipline of closing all positions at once regardless of individual profits or losses. They highlight the versatility of TradingView, including its integration with multiple brokers. Time frames of interest range from 15 minutes to four hours, focusing on letting trades develop and tightening stop losses as profits grow.

53:09

The speaker confirms actively trading with market funds rather than personal capital, reiterating this as a key principle. They announce ongoing development efforts to port all proprietary trading indicators—like the currency matrix and heat map—to TradingView and Tradestation platforms. These indicators will be provided free to existing full-package users before a planned price increase upon general release in the coming months.

54:34

Attention shifts to analyzing major currency pairs and currency futures, noting recent dollar sell-off and sideways intraday movement. The speaker explains the inverse nature of certain futures contracts relative to spot FX pairs, which allows traders to take short positions more effectively. They share a personal preference for short trades and describe how futures and spot FX can be used complementarily.

56:20

The speaker demonstrates the use of Renko charts for precise intraday scalping, blending time-based and non-time-based charting approaches. They explain how Renko brick sizes vary with time frames, with faster frames producing smaller bricks and slower frames larger ones. The Renko optimizer tool helps determine optimal brick size for current market conditions.

58:26

Indicators such as trend dots and trend monitors are described; trend dots react quickly to price changes, while trend monitors respond more slowly, providing complementary perspectives on market trends. This combination helps traders balance short-term price action analysis with longer-term trend confirmation.

59:24

The market is observed to be moving sideways with some minor buying and weakness, with the speaker emphasizing the importance of monitoring congestion and market sentiment, particularly regarding risk. Anticipation of an upcoming vote or news event is noted as a factor likely to impact currency and equity markets significantly.

01:00:26

The speaker concludes the session, addressing viewer questions about trading biases. They acknowledge a common tendency for markets to move faster downward than upward, explaining their own preference for short trades. They stress the importance of starting with a psychology module in forex education to identify and manage personal strengths and weaknesses for trading success.

01:01:29

Details are given about the recent launch of Tradestation integration, including two versions: Tradestation Securities and Tradestation Global, the latter using Interactive Brokers data feed. The speaker praises Tradestation’s user-friendly interface compared to Interactive Brokers alone. They describe the significant work involved in the rollout and announce upcoming webinars focused on Tradestation and stock trading, promising multiple sessions per week.

01:04:04

Funded Forex Program and Education Details

01:04:04

The speaker discusses the migration of indicators from the MT45 platform to TradingView, ensuring users retain credit for any previously purchased indicators when upgrading packages or joining the education program. The complete forex trading program, quantumtradingeducation.com, is introduced as a comprehensive resource covering all essential knowledge for confident market trading. Additionally, they mention the launch of a funded forex program linked to the education course.

01:05:02

Details of the funded forex program are explained, where traders start with an evaluation account of various sizes and must meet simple targets within 12 months. Successful completion leads to progressively larger funded accounts, allowing traders to trade with company funds instead of their own. Profits earned generate a percentage payout to the trader, starting as a lump sum during evaluation and transitioning to monthly payments as account levels increase.

01:06:05

The funded trading program is integrated exclusively with the complete forex trading education program and is not publicly available. The conversation emphasizes the value of combining education with real trading capital to apply learned skills profitably. The speaker directs viewers to Anna’s site for educational analysis, disclaiming that shared content is for education only, not trading advice.

01:07:05

Links to the education and funded programs, as well as the TradeStation platform, are provided. The speaker highlights TradeStation’s powerful radar screen feature that allows filtering and monitoring of thousands of charts and indicators simultaneously. This advanced filtering tool is described as highly intuitive and significantly superior to other market offerings, supporting comprehensive trading analysis.

01:08:06

TradeStation supports various chart types including tick and renko charts and offers flexible time scales from seconds upwards. The platform is praised for its power and user-friendliness, which motivated its inclusion in the program. Pricing details are mentioned, noting that users upgrading from platforms like MT45 only pay the price difference, making transitions cost-effective.

01:09:08

The host thanks attendees and hopes the session answered their questions and provided new insights. A participant comments positively on the Volume Price Analysis (VPA) book, which the hosts endorse as a foundational methodology that greatly influenced their trading approach. They express gratitude for discovering this method and encourage others to explore it as well.

01:10:04

The session concludes with a reminder of a follow-up live event scheduled for 3 PM UK time, covering indices, stocks, and futures. The host thanks everyone for attending, expresses hope that participants enjoyed the session, and signs off with a farewell.

 

 

By Anna Coulling – creator of volume price analysis