How to use the free resources to filter the best stocks to trade using volume price analysis

How to use the free resources to filter the best stocks to trade with such sites as FinViz and others.

In this video, we explain how to filter on liquidity and the importance of understanding why risk assets play such a key role in the risk on and risk off see-saw which ebbs and flows through currency markets and forex.

00:12

Liquidity and short squeeze overview

00:12

The speaker discusses the importance of liquidity when trading any instrument, especially in elevated markets where many traders are long and short sellers are being squeezed. Using AMC as an example, which experienced a trading suspension due to heavy short interest and activist trader involvement, the speaker highlights the impact of short squeezes fueled by groups like WallStreetBets. They emphasize the need to focus on markets and instruments with high liquidity when taking positions, and suggest considering liquidity as a key parameter for stock selection, particularly when one does not have a predefined watch list.

02:04

Using Finviz for stock volume screening

02:04

The discussion focuses on using Finvis to analyze stock trading volume, with an emphasis on liquidity. The speaker initially sets a high volume threshold of over one million shares to ensure liquidity but notes that this can be adjusted down to around half a million to increase the selection of stocks. They also mention incorporating a relative volume factor to identify stocks trading at unusually high rates. Additionally, price filters are applied, such as selecting stocks trading above five or seven dollars, which can be adjusted to refine the stock list.

03:47

The speaker demonstrates how filtering by volume and price returns a large number of stocks across all sectors, which can then be further refined by sector performance. They highlight the volatility of AMC stock, noting that it is more volatile than Bitcoin, which has become relatively quiet. This leads to a brief mention of Bitcoin’s price action and volatility.

04:53

The conversation shifts to Bitcoin’s technical chart, describing how it is trading within a large volatility candle and forming a pennant pattern. Key levels need to be broken to determine Bitcoin’s direction. The speaker expresses caution about commenting on Bitcoin due to its complex perception as a currency, asset, or speculative instrument. They note that traders see it as an intriguing but uncertain market factor.

05:28

Bitcoin’s volatility and asset behavior

05:28

The speaker discusses the evolving role of certain assets, suggesting they behave more like assets than traditional currencies, though their future as currencies remains uncertain. They highlight the usefulness of a charting tool that simplifies data across multiple pages, making analysis easier. The speaker expresses appreciation for Finviz, a charting platform, and introduces the concept of ‘chart states’ to describe market behavior, focusing on whether the market is in a steady trend, a congested phase, or experiencing high volatility.

06:40

Explaining market volatility with sea states

06:40

The speaker uses the analogy of sailing to explain market volatility, comparing trading environments to different sea states. A force nine gale represents a highly volatile market with increased risk and potential reward, while calmer conditions imply less risk. The doldrums symbolize a stagnant market with no clear direction, similar to being stuck without wind, indicating periods of congestion where traders must wait for momentum.

07:54

The discussion continues by illustrating how different market conditions affect trading risk. A volatility indicator helps identify when the market is ‘choppy,’ signaling higher risk for trades. Understanding these ‘sea states’ allows traders to adjust their capital allocation according to market conditions, risking less during turbulent times and more when conditions are stable. This approach aids in managing financial risk more effectively by aligning trade size with market volatility.

09:40

Example: Airbnb’s chart and market phases

09:40

The discussion begins with Airbnb’s stock chart as an example, highlighting its significant decline due to the pandemic’s impact on the leisure industry. After a sharp sell-off, the stock entered a consolidation phase characterized by accumulation and volume changes. The speaker explains that market downturns tend to happen faster than recoveries, which often follow a slower, steadier upward trend.

11:22

The explanation continues by describing how to identify market volatility through candle wicks and price movement patterns, indicating choppy or smooth trading conditions. The speaker emphasizes visually analyzing volume and price action to gauge market behavior, using the example of a steadily rising chart with increasing volume. The segment concludes with a transition to discussing AMC’s stock.

12:29

Heavily shorted stocks: AMC and GameStop

12:29

The speaker discusses a heavily shorted stock that has been suspended amid high trading activity, likening it to GameStop. Activist traders collectively targeted this stock, resulting in extreme volatility and massive trading volumes. The market is currently unpredictable with no clear rules, and while some investors thrive in such chaotic conditions, the risks are very high and caution is advised.

14:02

The speaker highlights other stocks experiencing unusual volume surges, such as Blackberry and Bed Bath & Beyond, attributing these moves to a mix of speculative interest rather than fundamental reasons. They also mention a real estate stock showing a steady increase in volume and price since April, possibly indicating a shorting opportunity. Carnival is noted as another interesting case. The speaker recommends using tools like Finviz to analyze financial stocks and emphasizes the value of freely accessible data for making informed decisions.

15:35

Finviz bubbles and chart visualization

15:35

The speaker recommends registering for a cleaner, ad-free version of a service by providing an email address. They express excitement about a new visualization tool called ‘bubbles,’ which offers an engaging alternative to traditional heat maps. The speaker appreciates the presentation and briefly mentions experimenting with filters and pop-ups that enhance chart interaction.

16:42

The speaker discusses the effectiveness of the new chart type, highlighting its ability to quickly convey information about stock trends, such as congestion phases and pullbacks, using United Healthcare as an example. Despite some technical difficulties with the interface, they highly recommend experimenting with the tool. The segment ends with a suggestion to use Market Beat for additional stock background information and earnings charts.

18:21

Analyzing AHT stock and options market

18:21

The speaker reviews previous webinars focusing on options markets and highlights a specific stock (AHT) using Finviz. They discuss headlines about auction markets and note significant option trader activity betting on a large move in the hospitality sector around early April. The options chain shows a $5 strike price call option that is now in the money, indicating positive sentiment, with notable open interest and volume.

19:37

The option market appears bullish on the stock, especially anticipating a reopening in the leisure industry. The speaker shifts focus to Carnival, identified via Finviz, noting its recent price action including a strong run-up followed by a period of consolidation or congestion. They consider the possibility of a breakdown but emphasize the need for further analysis using personal charting tools and indicators to assess volume and price control points.

20:38

Carnival stock: trends and volume analysis

20:38

The speaker analyzes Carnival’s stock using various metrics, noting poor fundamental data due to the cruise industry’s struggles. They emphasize looking beyond headlines to understand the broader context. The discussion highlights the importance of examining charts, volume, and market sentiment to gauge potential recovery and investment opportunities.

21:52

The chart shows a congestion phase with gaps indicating support and resistance levels. The speaker discusses waiting for a breakout signal and observes a trend with increasing buying volume. They stress the use of proprietary indicators to confirm trend strength and consistency, while also reviewing options market activity for additional insight.

22:56

Options market interest in Carnival is moderate, with a strike price around $25-26. Short interest has slightly increased to 2%, which is noted as a factor to monitor. The speaker reviews weekly charts showing a prolonged congestion phase since last year, reflecting the travel sector’s decline, and points to a potential breakout based on volume and trend analysis.

24:06

Daily charts reveal Carnival stock reaching volume resistance near $27 with a strong upward move. The speaker drills down to the five-minute chart to observe intraday price action, noting initial volatility at the open followed by a bullish trend supported by volume patterns. They explain how volume under up and down candles helps confirm the strength of movements.

25:09

The stock experienced minor pullbacks and volatility with two-bar reversals, but rising volume under up candles suggests continued bullish momentum. However, some anomalies in candle spread and volume are noted, especially near previous congestion support levels. The analysis emphasizes the importance of support and resistance in understanding price behavior within the trend.

26:15

The daily volume and price structure appear consistent and healthy, fitting well within expected trading patterns. While short-term volatility exists, it does not signal a major reversal. The speaker advises that traders focusing on short timeframes might consider exiting on volatility spikes, but longer-term holders have no clear reason to exit given the steady trend.

27:15

A disclaimer is given clarifying that the discussion is educational and not investment advice. The focus returns to Carnival, where reopening economic conditions are driving demand for travel stocks. Upcoming earnings are noted but distant. The segment stresses the importance of volume in price analysis and credits the speaker and David for popularizing the term ‘volume price analysis’ years ago.

29:22

Trading signals: two-bar reversals explained

29:22

The speaker discusses analyzing battery technology and reviews trading signals using Renko charts. They highlight the effectiveness of two-bar reversal patterns, particularly at the top of trends, explaining how these patterns indicate rapid price declines. The combination of an up candle followed by a bearish engulfing candle is noted as a strong bearish signal. The speaker also mentions the Renko chart’s current status, suggesting a potential pause at resistance (R1) and emphasizes the importance of exiting trades based on these candle patterns, while remaining ready to re-enter the market.

31:20

US vs UK markets and options trading

31:20

The speaker explains that Finviz is primarily US-based and highlights the advantages of trading in the US market, especially for options traders. They note that US stocks require holding only 100 shares for covered call options, whereas in the UK, 1,000 shares are required, making UK options trading more capital-intensive. The US market offers a wider range of opportunities and stocks compared to the limited options in the UK and other markets.

32:25

Multiple Renko charts and volume profile

32:25

The speaker introduces a trading workspace that uses multiple Renko charts across different time frames—15 seconds, 30 seconds, and one minute—along with corresponding indicators. They explain how the workspace delivers the optimal brick size for the current market conditions, which varies by instrument and time of day. The example shows the brick size for the NQ (Nasdaq futures) at around 7:20 PM UK time, demonstrating how the system adjusts dynamically.

33:27

The speaker elaborates on how slower time frames correspond with larger brick sizes in Renko charts, using the NQ as an example. They explain how to calculate the value of each brick by relating it to the market’s tick size and dollar value. The workspace integrates volume price analysis (VPA), support and resistance levels, accumulation/distribution, volume profile, and trend monitoring, providing a comprehensive view of market strength and potential moves.

34:26

The discussion focuses on interpreting volume and price action within the workspace. Falling volume during a rising market signals weakening strength, often indicating congestion rather than a strong trend. The speaker points out a clear channel of support and resistance and notes how volume spikes distort readings temporarily. Overall, the analysis helps identify phases where buying interest is diminishing, signaling possible market pauses or reversals.

35:43

The speaker explains the role of volatility triggers in trading decisions. A volatility trigger can signal an exit point if holding a short position or an entry point if anticipating a reversal. This tool is valuable for managing profits and positioning, highlighting the importance of timing entries and exits based on market volatility and momentum.

36:09

Volatility triggers and trade management

36:09

The speaker advises on managing trades during volatility by taking partial profits off the table to avoid congestion and reversals. They emphasize that exiting some positions while letting others run can minimize losses and reduce stress. This approach is described as highly effective and applicable across different trading platforms like NinjaTrader and TradeStation.

37:05

The discussion shifts to recent market movements, noting a spike followed by a slight pullback. The speaker mentions the inclusion of moving averages as part of the indicator setup, highlighting their value despite their poor reputation. Understanding price action and the context in which moving averages are used is crucial for effective trading.

37:32

Moving averages and price action relevance

37:32

The speaker explains the use of moving averages as a support mechanism in trending markets, emphasizing that they become ineffective during congestion phases. They highlight a current rally with trend indicators showing positive momentum, noting the importance of volume confirmation. The price action is analyzed around key levels like 35 and 40, with volume dropping off after 35, suggesting potential for a strong upward move toward 50-60. The speaker advises careful entry timing, recommending waiting for candle closes beyond resistance levels and considering personal risk tolerance before entering trades. Finally, they mention that all indicators discussed are available on quantumtrading.com and various trading platforms.

39:16

Quantum Trading indicators and platforms

39:16

The speaker discusses Tradestation Global, a powerful trading platform running on version 9.5 and integrated with Interactive Brokers (IB), allowing users with IB accounts to trade using RadarScreen and trade directly off the screen. They emphasize that purchasing any indicators or full packages on their platform grants lifetime access to all future indicators at no additional cost, maintaining this policy as a thank you to their customers. Additionally, if users upgrade from individual indicators to full packages or educational programs, they receive full credit for previous purchases, ensuring no loss in investment. The speaker also mentions resources available on annacooling.com, including analyses, posts, and books available in both Kindle and paperback formats worldwide.

40:36

Forex education and funded trading program

40:36

The speaker introduces the Complete Forex Trading Program, a comprehensive course designed to equip students with all necessary skills to trade forex confidently. The program has been available for nearly three years and includes a funded forex trading opportunity, allowing students to trade with company capital ranging from $5,000 to $2 million at no personal risk. Profits are shared with students, with 35% paid during the evaluation stage and 50% thereafter on a monthly basis. At advanced levels, traders can expand into other markets such as gold, indices, and various currencies. The session concludes with thanks and well wishes for upcoming trading activities.

By Anna Coulling – creator of volume price analysis