How to use multiple time frames in trading index futures and commodities

How to use multiple time frames in trading index futures and commodities

In this US trading session, we explain the importance of multiple timeframes not only for your charts, but also for the indicators and how to use multiple time frames trading index futures and commodities. Here we are using both the MT4/MT5 platform and also NinjaTrader 8.

00:01

Welcome and trading disclaimer

00:01

The speaker welcomes the audience to the webinar, acknowledging viewers from different parts of the world. They mention the positive state of the markets at the moment and request attention to the disclaimer displayed on the screen, emphasizing the importance of not trading with money one cannot afford to lose.

00:34

Focus on indices and volume price analysis

00:34

The video begins with an introduction to analyzing market indices, focusing on price action, volume, and other elements crucial for volume price analysis. The speaker mentions that they will be examining charts, specifically referencing the market around Beijing, and hints at including oil in the discussion.

01:01

Support and resistance explained

01:01

The video explains the concept of support and resistance, introduced during a forex webinar and inspired by a viewer’s feedback on a book chapter. It clarifies the practical meaning of support and resistance in trading, emphasizing their role as one of the five pillars of volume price analysis. Alongside price action and volume, these concepts help determine whether market moves are genuine or anomalies. The discussion also touches on the importance of candle patterns and the element of time in analyzing charts for trading decisions.

02:04

Companion book and repeating signals

02:04

The speaker discusses multiple time frames in trading and refers to a companion book that includes 200 examples primarily covering stocks, indices, commodities, and a version for forex. They emphasize the value of Volume Price Analysis (VPA) signals, noting that although signals vary, similar patterns and setups frequently repeat because human behavior in markets tends to be repetitive. By understanding these recurring candle patterns and volume groups, traders can better recognize them on charts. The speaker also mentions their personal blog, anacooling.com, which offers additional analysis resources.

03:16

Longer time frame analysis examples

03:16

The discussion focuses on analyzing four stocks using longer time frames, specifically weekly charts, to illustrate how volume price analysis (VPA) signals develop over time. It emphasizes that strong VPA signals on weekly charts may take several weeks to fully manifest, which can be a drawback for some traders. The speaker encourages viewers to visit their site for further examples and mentions that the content is from a forex education program, highlighting that these principles apply broadly across different markets.

04:22

Primary and secondary trading tools

04:22

The speaker explains their trading methodology, which is built on five key pillars: volume, price, candles, candle patterns, and support and resistance, referred to as primary tools. They also use secondary tools tailored for specific market conditions, including proprietary tools developed for their own trading and visible on their charts. The discussion then shifts to market sentiment, noting that the YM (US 30 futures) and the S&P are sharply higher, while the Nasdaq is lagging slightly, attributed to a rotation out of certain assets as mentioned previously.

05:34

Market sentiment and tech stock rotation

05:34

The discussion focuses on momentum tech stocks, particularly in the Nasdaq, which have shown significant moves. There is a noted shift towards value stocks as the Nasdaq’s slower movement might reflect economic cycle expectations or anticipation of economic expansion. Despite early concerns about the virus’s impact, its devastating effects have not yet materialized in the market. The speaker highlights remarkable current stock metrics, both fundamental and technical, referencing data from sentimenttrader.com.

06:47

Understanding market breadth metrics

06:47

The speaker explains the concept of market breadth, which analyzes the number of advancing stocks relative to declining ones to gauge overall market direction. This measure helps traders understand if the market trend is positive or negative, influencing decisions like whether to follow the trend or look for shorting opportunities. The speaker highlights that currently, the percentage of S&P 500 stocks trading above their 200-day moving averages is at its highest level in five years, indicating a strong long-term momentum across multiple indices.

08:04

Global stock inflows and bullish mood

08:04

The speaker discusses the recent positive movement in value stocks, particularly the Russell index, noting that these have been lagging behind momentum and tech stocks until now. This trend appears to be global, supported by data showing the largest inflow into global stocks in recent weeks. The speaker interprets this as a sign of extremely bullish market sentiment. They also mention using the MetaTrader platform to track futures like the Dow Jones, highlighting its accessibility and data feed advantages.

09:20

Using MT4/MT5 platforms for trading

09:20

The speaker discusses the advantage of using a platform that allows free access to data, enabling users to explore markets they might not usually consider. They explain their chart setup, which includes a five-chart configuration: a Renko chart (non-time based), two five-minute charts with one focusing on price action and volume, and an indicator based on the Camarilla protocol to identify key support and resistance levels.

10:29

Renko chart and support resistance levels

10:29

The price action is currently in a congestion phase at a key resistance level, R4. A breakout above this level would be considered valid, but breakouts often initially fail and retest the level. The congestion persists until the Wall Street market opens, which typically causes a surge in trading volume. Despite the sideways movement on the five-minute chart, most significant price moves in the indices occur during the Globex session. The hourly chart from the previous day shows higher volume activity, indicating key movements happened earlier.

11:42

Volume surge and overnight market moves

11:42

The speaker explains that the volume shown is from the Asian market, which continued to rise even as the Wall Street market was closing. Most of the market movement seen today occurred overnight in Asia. The current focus is on the YM (likely referring to the Dow futures), which is approaching a significant level, important for day traders in the United States who are observing this large move.

12:19

YM futures near key 30,000 level

12:19

The video discusses the important 30,000 level in the market, which was tested last week with some vaccine news influencing movements. After a pullback, a bullish engulfing candle appeared, supported by additional vaccine news from AstraZeneca. The market is approaching the 30,000 mark again, and its ability to break through is uncertain but anticipated. Additionally, some uncertainty has been reduced due to developments in the U.S. election transition process, with the General Services Administration (GSA) transition committee now active.

13:27

US election transition and market impact

13:27

The segment covers the uncertainty around whether Donald Trump will concede the election, highlighting the conflicting signals between ongoing transition efforts and legal challenges to votes. It also discusses market anticipation of upcoming events such as Thanksgiving, the Federal Open Market Committee meeting, and Janet Yellen’s potential appointment as Treasury Secretary under a Biden presidency. The analysis includes a review of market technicals, noting positive signs from support and resistance levels and bullish indicators on the renko chart and trend monitor.

14:22

Renko chart signals and trend monitoring

14:38

The speaker explains placing a line on the Renko chart to mark the market open, helping to contextualize recent price action. They mention not having other period separators on this chart and note the price approaching a key level around thirty thousand, specifically twenty-nine thousand nine hundred and sixty-five, discussing the concept of support and resistance at this point.

15:13

Support resistance defines price cycles

15:13

The speaker explains how to identify your position in the price cycle by recognizing whether the market is trending, approaching a key level, or in a congestion phase. A congestion phase is characterized by sideways price movement between pivot points, especially when fluctuating around key support and resistance levels. This analysis is price-based, distinct from volume-based concepts like the point of control. The longer the price remains in this congestion state, the more explosive the subsequent breakout tends to be. Support and resistance levels help determine price targets and optimal stop placements, providing crucial insights into current price behavior.

16:29

Stop placement and risk management

16:29

The speaker discusses the importance of understanding where a market or asset is likely heading and how to integrate this knowledge into money and risk management strategies. They explain using two different time frames for analysis: levels on charts below one hour refresh every 24 hours and change daily, while levels on the hourly chart remain relevant for the entire trading session and beyond.

17:09

Camarilla levels and weekly chart insights

17:09

The speaker discusses the six levels of their camera system, noting that most people typically use only four levels. Reaching the sixth level often indicates congestion, but if it breaks through, it could support further upward movement into new high ground. They reference checking a weekly chart, which shows that the system has already surpassed the sixth level for the month. The speaker anticipates developments leading up to Thanksgiving and the countdown to Christmas, hinting at upcoming changes or events during this period.

18:26

Forex student question on slow time frames

18:26

The speaker discusses a situation familiar to forex students where the price action on daily and weekly time frames breaks through all levels. In such cases, traders should return to the daily chart because its levels are recalculated, providing fresh targets. This approach helps in adjusting to new market conditions effectively.

19:01

Oil market congestion and breakout

19:01

The speaker discusses current market conditions, focusing on the VIX index which has recently decreased, supporting stock indices. They shift attention to the oil market, highlighting that the January 2021 contract is active, which is notable since it is already past Christmas. The speaker emphasizes that the analysis method, involving various time-frame charts and indicators, can be applied broadly beyond just oil.

19:57

Oil has been trading in a prolonged consolidation phase between $37-$42, repeatedly attempting but failing to break higher. Recently, a breakout has occurred, which is being monitored closely, especially the trading volume accompanying the move. The volume appears somewhat light compared to previous significant candles, raising questions about the breakout’s strength. The speaker also notes seasonal trading patterns, mentioning that market behavior around holidays, such as Christmas in the UK, often shows similar characteristics.

20:55

Holiday volume effects on price action

20:55

The speaker discusses volatile but low-volume price action commonly seen around holiday periods like Thanksgiving. Such days often feature strong, tradable moves driven by market makers, followed by sharp reversals in subsequent sessions. Traders typically treat the holiday weekend as extended, leading to quiet markets on Friday with potential for sudden price ramps on light volume. The trend monitor shows consistent bright blue signals across time frames, indicating no significant reversals yet, though minor pullbacks are visible on the 15-second chart. If these minor reversals develop into full trends, color indicators would shift accordingly, but currently, all time frames remain stable and bullish.

22:24

Volume point of control and congestion

22:24

The discussion focuses on identifying key signals and clues in faster time frames by observing volume points of control, which indicate likely congestion zones. The speaker emphasizes the importance of using multiple charts across different time frames, noting that slower time frames carry more significance because their patterns, such as support or resistance levels and volume, have persisted longer and thus take precedence over faster time frames.

23:28

Time frame hierarchy in trading signals

23:28

The discussion highlights the comparative strength of different chart timeframes, emphasizing that longer timeframes like the one-minute chart provide more reliable signals than very short ones like the five-second chart. The market is currently experiencing a pause in its rally, indicated by significant volume activity that reflects both buying enthusiasm and emerging weakness. Traders in oil have eagerly participated in the recent rally, driving high volume, but congestion and subsequent volume surges suggest the market is starting to show signs of weakening momentum.

24:21

Signs of weakness in oil trading

24:21

The segment discusses analyzing market weakness through multiple time frames, starting with a one-minute chart showing a potential roll over back to the volume point of control. On the 10-minute chart, volatility candles indicate weakness but lack consistent follow-through, highlighting that not all signals lead to congestion or reversal. Volume Price Analysis (VPA) provides early warnings of strength or weakness, though signals should not be taken in isolation. Instead, traders should combine insights from various time frames to form a comprehensive view. The example includes a 15-second chart showing selling pressure and sideways movement, reinforcing the importance of multi-timeframe analysis.

26:19

Volume clusters impact price movement

26:19

The discussion focuses on the significance of the volume point of control as a key support and resistance level in the market. If the price breaks below this level, which is only two cents a barrel away, it is expected to move quickly through low-volume areas, down to around 70, due to the lack of trading volume and orders in those zones. Minor price levels offer some limited support, but overall the downside move would be swift until volume increases again, creating a barrier to further decline. Additionally, a shift in sentiment is observed on the one-minute trend monitor, with colors changing from bright blue to darker blue and then to darker red, indicating a potential transition from a bullish to a bearish trend if these red signals persist.

28:13

Trend monitor shifts to bearish sentiment

28:13

The speaker discusses a bearish trend that is expected to continue potentially into the daily timeframe, though not immediately. They note a recent spike in the VIX index from 22 to 20, indicating a decrease in bullish sentiment and a weakening rally. Attention then shifts to market volume, specifically observing the YM futures where a typical surge in volume occurs at the open. The speaker finds it curious that many traders avoid trading Globex alone due to the lack of strong trends early in the session, despite the price action being tradable.

29:25

Globex trading and volatility patterns

29:25

The market starts off very steady and measured, but volatility sharply increases when the cash markets open at 2:30 local time, a pattern seen daily. Patience is required for this volatility to settle. News releases around 3:00 can impact confidence levels. The speaker notes the advantage for northern hemisphere traders who can trade during these active hours instead of relying on Globex, which is electronic and tends to show more even-paced price action without the same volatility. Currently, the market shows volume concentration across three markets attempting to rally, with visible price wicks indicating attempts to push higher. A divergence is noted where the E-mini Nasdaq (enqueue) is rising strongly while the other two markets lag behind, signaling traders should remain cautious of this discrepancy.

31:05

Rotation from tech to value stocks

31:05

The discussion highlights a market rotation where the Nasdaq (NQ) is weakening while other indices like the YM and ES are showing more positive movement. This rotation is moving from tech-heavy Nasdaq into more diversified markets represented by the Dow Jones (YM) and the S&P 500 (ES). The analysis then shifts to commodities, noting that gold is currently declining and trading around a key market fulcrum, indicating a cautious waiting period for further market direction.

32:15

Oil’s impact on Canadian dollar strength

32:15

The market is currently in a congestion phase while oil prices rise, which has positively impacted the Canadian dollar. This increase in oil prices creates a favorable environment for the CAD, especially against the Japanese yen, as risk-on sentiment drives buying of the CAD and selling of the yen. However, this effect is not yet consistent across all Canadian currency pairs. The discussion then shifts to reviewing individual CAD pairs and analyzing their positions on a trading matrix.

33:32

Currency pair trends and full house buying

33:32

The discussion focuses on currency movements across different time frames, particularly highlighting the Canadian dollar (CAD). On the 5, 10, and 15-minute charts, the CAD is showing strong buying signals, especially against the Swiss franc and yen, forming a ‘full house’ where CAD is predominantly on the top, indicating strong buying interest. However, on faster time frames, the market is more mixed and appears to be pausing, requiring confirmation of continued CAD strength.

34:25

At the one-minute time frame, currency movements are quicker and more volatile, often showing pullbacks that don’t necessarily indicate trend changes unless reflected in longer time frames like 5 and 10 minutes. A sustained move on slower frames signals a genuine shift in market sentiment. Currently, the CAD remains firm on the 10-minute chart, maintaining its strong position. Traders should watch for any breakdown or divergence in these patterns across multiple time frames to assess trend stability.

35:23

Attention shifts to the pound dollar and Aussie dollar pairs, where there is noticeable dollar selling supporting upward movement in these pairs. The market overall is moving sideways with little significant change, and the VIX remains steady at 22.17, indicating a lack of strong volatility or major market shifts at this time.

35:53

VIX and market momentum update

35:53

The speaker analyzes momentum in the VIX, focusing on a five-minute chart of the NQ where a strong resistance level at 950 is noted. They also examine the ES five-minute chart, observing attempts to break higher but facing resistance, indicated by wicks at the upper body. Overall, the VIX is moving sideways, suggesting a cautious approach and the need to wait for clearer market direction.

36:44

Trading congested markets on fast charts

36:44

The speaker discusses trading strategies for day traders in congested markets, emphasizing the use of faster time frames like the 15-second chart for scalping. They highlight that the principles of trading, including volume and price-volume relationships, remain consistent across time frames but require comfort with rapid pace trading. If a trader is not comfortable with fast trades, they should avoid them. For those preferring slower, longer-term trading, focusing on higher time frames such as four-hour or daily charts is appropriate. Currently, the market is moving sideways with no clear trade opportunities, so patience is advised while watching key resistance levels indicated by the accumulation distribution indicator.

38:20

Volume-price divergence and market weakness

38:20

The speaker explains how tight, range-bound markets around the volume point of control create well-defined channels useful for placing stop losses. They highlight the importance of spotting anomalous large candles, which indicate immediate strength or weakness. Despite heavy volume in certain candles, the price action remains subdued, signaling market weakness and heavy selling pressure.

39:53

An analogy is used comparing the market to driving uphill on an icy slope, where increased effort leads to no progress, illustrating market resistance despite heavy pressure. The speaker describes how heavy selling can be met with stopping volume from buyers, leading to brief downward moves or ‘waterfalls.’ They note that while these moves aren’t large or prolonged, they offer opportunities to extract value as the market fluctuates around key levels with low volume.

40:47

Low selling pressure and sideways trade

40:47

The market shows no significant selling pressure under the three candles discussed; selling is average and buying is present but not strong enough to reverse the trend. Price and volume align, with some resistance encountered at the volume point of control near the blue level. There is low volume under one candle and overall weak upward thrust. For trading decisions, it is important to identify key levels of support and resistance across multiple time frames to define comfortable entry points, especially when considering upside opportunities.

42:09

Defining trade entry levels with volume

42:09

The speaker analyzes the accumulation distribution indicator, noting a market decline accompanied by falling volume, suggesting limited downside movement. They discuss potential entry points around 9.40 to 9.50, highlighting the importance of surpassing certain resistance levels to move into low volume regions. The analysis includes observations from different time frames, mentioning a possible two-bar reversal and the significance of clearing the top resistance at 9.40 to access better trading opportunities.

43:11

Higher time frame chart perspectives

43:11

The speaker reviews market charts, focusing on the 30-minute timeframe to identify potential trading opportunities. They mention the VIX remaining steady at 22.14 and observe oil prices climbing, noting a sideways movement after a strong daily run. The analysis aims to provide perspective on current market levels relevant to trading decisions.

44:04

The discussion highlights increasing selling pressure, evidenced by two consecutive downward candles accompanied by rising volume. The market is trading around the volume point of control, signaling potential weakness and a topping pattern. Attention is given to candle wicks and volume to assess market strength, with a tentative observation that momentum may be picking up.

45:07

YM breakout and low volume nodes

45:07

The speaker analyzes market momentum and volume profile, noting a strong value point of control (VPOC) area beginning to break, which could present a trading opportunity. They observe price movement through potential resistance zones and low volume nodes with some congestion and support. There is a slight buying interest attempting to push prices higher, but the speaker suggests any trade here might be short-term. The trend monitor indicators are turning blue, signaling a possible trend shift, and the volume remains low as the price moves into a low volume area.

46:36

Short-term trading and market follow-through

46:36

The speaker discusses the current market conditions, noting the VIX has dropped to 22.12 and describing the trading activity as short-term and opportunistic, with prices fluctuating between 76 and 82. They emphasize the importance of observing broader market trends rather than trading in isolation, as following the universal flow is crucial. The speaker briefly pauses to get a drink before continuing to monitor multiple indicators.

48:25

Waiting for market to settle post-open

48:25

The speaker describes a calm and comfortable market environment with no significant volatility or fear. They emphasize the importance of waiting for the market to settle after the cash market opens, allowing volume to decrease from the initial peak. Once the market calms, price action becomes steadier and more gradual, resembling the isolated trading patterns seen on Globex. The speaker expresses surprise that more traders do not focus solely on Globex, as its price movements are generally more measured and consistent.

49:30

Trading globex alone for smoother trends

49:30

The speaker discusses the effectiveness of the trend monitor tool, which uses color codes across multiple time frames to provide confidence in staying within trades. They emphasize monitoring related markets and the VIX to understand risk currency movements, noting that current market trends are steady and measured rather than highly volatile. The segment ends with the speaker preparing to wrap up as the session approaches full time.

50:32

Quantum trading education and funded program

50:32

The speaker introduces the forex education program available through anacooling.com, highlighting that it includes comprehensive analysis of various assets and books in multiple formats. A newly added funded forex program is exclusively available to students enrolled in the Quantum Trading education program. This program offers funded trading accounts starting from $5,000 up to $2 million, designed to help students apply their learning practically while developing discipline and confidence. The progression involves meeting simple profit targets at smaller account levels before scaling up to larger accounts, maintaining consistent trading strategies throughout. The program has recently launched with a positive response and includes credits for previously purchased indicators for Quantum Trading software customers.

53:03

Indicator platforms and upcoming releases

53:03

The speaker explains that customers who purchased the program four or five years ago will receive credit if they return to forex trading, as the program includes all the necessary indicators. These indicators are available on quantumtrading.com for platforms such as MT4/5, NinjaTrader 7/8, and TradingView, with Tradestation support coming soon. There are two Tradestation versions: 9.5, which uses Interactive Brokers for live data, and version 10 and above, which includes advanced tools like radar screens. The launch of these versions is expected before the end of the year. Additionally, indicators that were previously unavailable on TradingView due to Pine Script limitations can now be ported over, including the matrix, heat map, and array features. These will be available free of charge to full TradingView package holders initially, after which the package price will increase to align with the MT4/5 package cost.

54:35

Oil volume concerns and market outlook

54:35

Michael comments that the volume of the recent oil market movement seems low, expressing curiosity about how the situation will develop in the coming days. He suggests that oil prices may decline, possibly significantly. The segment closes with thanks to the audience for joining and a reminder of the next session scheduled for 7:45 London time next week.

55:07

Session wrap-up and upcoming webinar info

55:07

The speaker discusses the UK Forex session and the upcoming US session at 3 PM UK time. They wish viewers a good trading day and week, extending special Thanksgiving greetings to American customers, hoping they enjoy a long weekend. The segment ends with a warm farewell and anticipation of future meetings.

By Anna Coulling – creator of volume price analysis