It’s all about synthesis trading forex in the London session using volume and price

It’s all about synthesis trading forex in the London session

It’s all about synthesis trading forex in the London session using volume and price, supported by the Quantum Trading tools and indicators. And a great example of a price waterfall and the power of volume, revealing the strength and momentum of the trend lower, as well as where to enter with confidence.

00:00

Introduction and session overview

00:00

The session begins with a warm welcome from the hosts, acknowledging their recent break and some rustiness due to time away from both trading and webinar tools. They mention returning to their usual schedule of two webinars per week and express gratitude to attendees for joining. Before starting, they highlight the importance of the disclaimer regarding the risks involved in trading.

01:09

Trading disclaimer and analysis approach

01:09

The speaker emphasizes the importance of only using money you can afford to lose when trading, highlighting this as good practice. They explain that their analysis of Forex markets involves a combination of volume price analysis, fundamentals, and related markets to understand current conditions and predict what is likely to happen next. For newcomers, the speaker introduces their ‘3D approach,’ which is detailed in books available individually or as a digital box set on Amazon, covering technical, fundamental, and other essential aspects.

02:13

Volume price analysis methodology elements

02:13

The speaker introduces the concept of volume price analysis (VPA) as a method to understand market sentiment and driving forces behind price movements. They outline five key elements that make up this technical analysis approach: volume, price action, candles and candle patterns, support and resistance, and synthesis of these components to form a complete market picture for trading decisions.

03:21

The process of learning VPA is broken down into manageable parts, starting with understanding price action, including price cycles and trends. Volume is then used to confirm the authenticity of price movements. Candle patterns play a significant role despite skepticism about their validity, as they reflect market psychology and behavior. The importance of interpreting these patterns accurately is emphasized.

04:26

The discussion continues on the validity of candle patterns, acknowledging debates about their predictive power but highlighting their practical effectiveness when combined with volume analysis. Traders must become familiar with various patterns and determine which they trust. Support and resistance levels, both price-based and volume-based, are introduced as the fifth element of VPA, crucial for understanding market boundaries and potential reversal points.

05:29

The speaker explains that synthesizing all five elements of VPA is best done by observing charts, where the interplay of volume, price action, candle patterns, and support/resistance becomes clear. Additionally, technical indicators, including proprietary ones used by their community, can be layered on charts to enhance analysis and trading decisions.

06:00

Multiple time frames and forex indicators

06:00

The methodology discussed relies on the synergy between different analytical tools, focusing on multiple time frames to identify key support and resistance levels. Price reversals often occur because broader, slower time frames reveal confluences that are not visible on faster charts. This multi-time frame approach is crucial for understanding market dynamics.

07:04

Specialist forex indicators such as the currency strength indicator are used to track market buying and selling flows, showing which currencies are strong or weak and whether they are overbought or oversold. The matrix pairs this data to highlight the strongest and weakest currency pairs, aiding in identifying entry and exit points as well as trend strength. The currency heat map aggregates performance across multiple time frames, providing a comprehensive view of relative currency strength.

08:14

The discussion introduces a comprehensive trading pro training program designed to equip traders with all necessary skills for forex success. Demonstrations are given using MetaTrader 4 (MT4) alongside other platforms like TradeStation and NinjaTrader. The hourly chart is emphasized as a valuable tool for gaining context on currency movements, showing where currencies have been and their current activity, which is key for informed trading decisions.

09:37

Analysis of recent market behavior highlights strong selling pressure on the euro and Swiss franc, while the US dollar and Japanese yen are showing buying interest. The US dollar index (Dixie) is noted to be in a range, reflecting a mixed or uncertain market mood. This range-bound behavior illustrates the current market sentiment, which will be explored further.

10:43

Market sentiment and risk currencies

10:43

The session focuses on understanding market sentiment and its influence on forex trading, especially regarding risk and safe haven currencies. Risk currencies include the Australian, New Zealand, and Canadian dollars, while safe havens are the Swiss franc, US dollar, and Japanese yen, which can act as both. Current market activity shows mixed signals, with selling in the Australian dollar but buying in the New Zealand and Canadian dollars, indicating uncertainty. Examination of futures indices like the Dow, Nasdaq, and Russell 2000 suggests the market is indecisive and lacks clear direction.

12:25

Russell 2000 index and market uncertainty

12:25

The speaker discusses the Russell index, highlighting its volatile nature with many biotech and pharma stocks. Despite appearing extended, the index has been holding up strongly within a range, unable to break beyond 2355. The market is currently sideways, uncertain whether it will break down or take off again. The speaker emphasizes that markets can remain irrational or overextended for long periods, so traders should focus on price action rather than external opinions.

14:08

Market fragility is noted with poor market internals and breadth metrics suggesting a potential downturn, likened to sitting on a volcano about to erupt. Traders on faster time frames are advised to be cautious with position sizes and to take profits quickly due to rapid shifts in sentiment. An analogy to sailing is used to illustrate the need for preparedness in unpredictable market conditions.

15:50

Analysis of the hourly chart reveals potential reversal signals, especially for the euro which shows strong selling pressure. However, upcoming American trading sessions could cause pullbacks or reversals that may offer trading opportunities before any continued downward trend. The speaker highlights the importance of watching large volume moves and market sentiment.

17:05

Fundamental factors influencing the euro are discussed, focusing on the trade balance which showed better-than-expected exports, supporting the currency. The speaker explains that forex markets are practical markets reflecting goods exchange, thus export strength can bolster a currency. Various economic calendars, including Forex Factory, are recommended to track important releases, but traders should be aware that these calendars may vary in the data they present and how they flag important events.

19:23

The speaker compares different economic calendars and explains the differences between seasonally adjusted and non-adjusted trade balance figures, advising traders not to worry too much about these technical distinctions but to understand their market impact. They note how better-than-expected trade balance data gave a boost to the euro. The discussion transitions to chart analysis of the euro against the Canadian dollar and New Zealand dollar, highlighting how fundamental news is reflected in price movements.

21:06

Detailed chart analysis shows how fundamental data impacted the euro/New Zealand dollar pair, causing a visible reaction on the chart but not enough to reverse the ongoing downward trend. The speaker stresses the importance of combining multiple time frames, candle patterns, and support/resistance levels to synthesize market information effectively. The session concludes with a handover and an invitation for viewers to ask questions.

23:13

Currency strength and radar panel overview

23:13

The speaker introduces the current market situation using five-minute charts showing the pound, yen, dollar, and euro indexes. The pound is starting to show some buying momentum after a period of congestion. The yen remains mostly unchanged with little movement. The dollar is gradually rising and attempting to break higher, while the euro has been actively moving since early morning.

24:09

The speaker presents a newly developed radar panel for TradingView, inspired by the TradeStation radar screen. This tool offers a comprehensive view across multiple markets and time frames, with customizable modules including pivots, volatility, trend monitors, and Camarilla levels. Different versions of the panel display various combinations of these indicators, along with volume data to assess market activity and extremes.

25:18

The radar panel provides detailed volume insights by showing current volume counts alongside midpoint averages, helping traders gauge unusual or low volume activity. It also displays signals for pivots, volatility, and trends, including the number of bars since the last events. This comprehensive data helps traders make informed decisions based on multiple technical factors.

26:16

Alongside the radar panel, the speaker shows a currency strength indicator for cryptocurrencies, measuring various coins against tether. Additional radar panels track multiple time frames and volatility triggers, with Camarilla levels suggesting potential opportunities or reversals. These tools are part of the full TradingView package, which users can access for free if subscribed. The speaker notes ongoing development work focused on NinjaTrader for the coming months.

27:13

NinjaTrader development and new indicators

27:13

The speaker discusses developing Market Analyzer and other tools on the NinjaTrader platform for various markets including stocks, indices, currencies, and commodities. They highlight the Euro Dollar charts, noting a strong support and resistance zone marked by the volume point of control and accumulation distribution level, emphasizing the importance of these technical indicators in analyzing market conditions.

28:19

The presenter addresses a question from a traders’ chatroom about entering strong positions early in the market. The key advice is to be patient and willing to set wider stop losses to accommodate market buffering and congestion, especially during low-activity periods like overnight trading. Patience and proper risk management are essential for capturing strong trade opportunities.

29:26

The speaker illustrates the importance of patience and wider stop losses by analyzing a recent market move where the volume point of control shifted. They describe a valid trade setup where the market breaks through a key level with increased volume confirmed by volatility triggers, signaling genuine market participation by major players and validating the move.

30:22

Detailed analysis of market candles reveals heavy selling pressure despite attempts to rally. The market is described as being forced with volume into a reluctant buying environment. The subsequent buyers are identified as those who buy dips, but these efforts do not lead to sustained upward movement, highlighting the difficulty in reversing a downtrend during strong selling phases.

31:18

The presenter explains the characteristics of certain bearish candles in a downtrend, likening them to a water-filled balloon stretched and eventually bursting. These candles indicate increasing selling pressure and weakening rallies, supported by the bright red trend monitor. The rapid price movement through low volume nodes is also discussed, emphasizing how lack of volume support accelerates market declines.

32:08

The segment concludes with observations about the market building congestion around the volume point of control and the need for confirmation of a continued move through rising volume in the downtrend. The speaker briefly touches on the value of daily charts even for intraday traders, noting that they provide important clues and context for shorter-term trading decisions.

32:33

Daily chart analysis and price action patterns

32:33

The speaker discusses market volume trends during a rally, noting weak signals despite rising volume. They emphasize analyzing the broad market picture on an intraday basis to determine strength or weakness. Attention is then directed to currency arrays, which provide slower timeframe sentiment analysis, particularly highlighting the euro’s overall downward trend.

33:26

The currency array uses an 80-period lookback, offering a longer-term perspective on currency sentiment, distinct from the currency matrix that uses a 7-period lookback and is better suited for scalping. The speaker compares this difference to trend indicators that vary in responsiveness, explaining that the currency matrix reacts quickly to price changes while the currency array gives a more measured view.

34:34

The currency matrix is ideal for scalpers due to its rapid response, but it often does not align with the slower currency array. Both tools complement each other by providing insights on different trading timeframes. The speaker transitions to demonstrating these tools on specific currency pairs, such as Euro/New Zealand and Euro/CAD, to illustrate ongoing market conditions.

36:23

Examining the Euro/CAD hourly chart reveals ongoing selling pressure on the Euro. The speaker emphasizes the value of the CSI tool for quickly assessing market flows and sentiment across currencies, noting that the British Pound showed little movement earlier but has since picked up. The tool helps traders save time by consolidating information from multiple charts.

37:40

The discussion highlights that when currency lines move together, it often indicates range-bound or asymmetric price movements rather than strong trends. Traders seek clear divergent trends, where one currency rises while another falls, to capitalize on reversals or pullbacks. Volume Price Analysis (VPA) is useful to confirm if pullbacks have genuine support, as volume underpins price moves.

38:43

Strong buying or selling in one currency does not always affect all pairs uniformly; this can vary by trading session. For example, the Canadian dollar tends to strengthen during the US session. Traders must be aware of such session-based rotations and shifts in sentiment across currency pairs and time zones, especially when using faster timeframes for trading decisions.

40:00

Synthesis of technical and fundamental analysis

40:00

The speaker discusses the concept of synthesis in trading, combining multiple components including technical analysis, fundamentals, and broader market context. They emphasize the importance of using multiple time frames for analysis, recommending starting with two or three charts, ideally five, such as daily, hourly, 15-minute, 5-minute, and Renko charts. Renko charts are noted for being price-movement based rather than time-based, completing bricks after a set number of pips. The speaker suggests starting with simpler platforms like MT4 before moving to more complex ones.

42:15

Examining the daily and hourly charts, the speaker identifies a selling continuation marked by a shooting star candlestick pattern, indicating market weakness. This pattern coincides with the R1 level on the Camarilla indicator. They explain the significance of Camarilla levels, noting that the third and fourth levels hold more importance as support or resistance. The speaker highlights how candlestick patterns like shooting stars and hammers are useful starting points but should not be used in isolation. The next candle triggered a volatility signal, showing momentum with price action outside the average true range, suggesting a fast-moving market.

44:01

When volatility is triggered, price typically retraces within the candle spread and then either consolidates or reverses. In this case, momentum continued downward, hitting the S3 support level on the Camarilla indicator, which often acts as a cushion or pause point. The speaker explains that these Camarilla levels are calculated weekly and influence price action across time frames. The move down on the hourly chart is reinforced by these support levels, suggesting the market is respecting these technical points and that the S3 level is a logical target for the current move.

46:39

The speaker transitions to the Renko chart to analyze the same price action. Renko charts filter out noise by focusing on price movements rather than time, helping to visualize trends more clearly. The market exhibited choppy moves with volatility. Different types of trends exist—some smooth, some volatile—and the Renko brick size can be adjusted to smooth out the trend. The speaker finds a brick size of three pips effective. Renko charts aid in identifying initial entries and maintaining positions through trend volatility, but exit decisions should be supported by a corresponding time-based chart, such as the 5-minute chart.

49:05

The move lower from the London open is detailed, including pullbacks during low liquidity periods. The S3 support level was hit, which could have been a logical exit point. A bullish engulfing candle appears on the trend lower, but the underlying volume is weak, casting doubt on the strength of a reversal. The speaker compares volume under similar-sized candles to assess momentum, noting that volume did not increase significantly, suggesting limited follow-through. Volume-based support and resistance levels, such as those derived from volume point of control, are integrated with price-based levels to create a more robust analysis framework.

52:06

The speaker emphasizes that traders should use tools and levels they are comfortable with, such as Fibonacci or volume-based indicators, to identify key support and resistance. They explain their preference for volume-based indicators developed for their analysis, which complement price-based Camarilla levels. Despite the price continuing lower, volume remains steady rather than increasing, suggesting a potential reversal setup. The trade balance event briefly boosted price, but the euro on the hourly chart still appeared inclined to move lower. The Canadian dollar’s strength is noted as a factor that could influence future movements.

53:47

Looking at the five-minute chart and recent price action from the London open, the speaker highlights a pullback during which the trend dots only shifted to neutral gray rather than bullish blue. The third and fourth Camarilla levels are identified as key stopping points for the move. Volume support levels are dynamic and adjust as market conditions change. The breaking of the S3 level often leads to a retest, which if successful, can provide another trading entry opportunity. Low volume during early Asian trading hours is expected, and the speaker advises caution given lower liquidity and movement in currency pairs during this timeframe.

56:04

The speaker discusses the importance of the Commodity Strength Indicator (CSI), especially when its lines cross, indicating a likely trend underway and strong buying or selling. The Canadian dollar shows signs of strength, which could signal a reversal or continuation depending on upcoming North American market activity. The price broke through the S4 level, which often acts as support or resistance but should not be treated as absolute. The volume for the recent down candle was low, suggesting the selling pressure may be weakening and a reversal could be possible. Traders are encouraged to consider all components—price action, volume, candle types, momentum, volatility, and multi-time frame analysis—when making decisions.

58:25

The speaker acknowledges the complexity of synthesizing multiple technical components but assures that with experience, traders can integrate these effectively. Beyond technicals, fundamental and sentiment factors also influence markets. The upcoming speech by Christine Lagarde at 1:00 PM is noted as a potentially significant event for the euro, likely causing the market to pause or react cautiously. The session concludes with a mention of an upcoming segment focusing on stocks and Volume Price Analysis (VPA), emphasizing that the core principles apply across asset classes.

01:00:09

Trading platforms and currency futures panel

01:00:09

The speaker discusses the importance of various chart elements such as price action, volume, support, resistance, and market context including fundamentals and sentiment. They mention the flexibility of choosing different charts for analysis and reference upcoming retail sales data. The speaker then introduces a new platform, TradeStation 9.5, explaining its connection to Interactive Brokers for data feeds and how this setup allows users to trade through IB while utilizing TradeStation’s charting capabilities.

01:01:36

The speaker explains the two versions of TradeStation: one linked to Interactive Brokers (version 9.5) and another using TradeStation Securities data feed (version 10 and above). They highlight the power of these platforms for trading various markets, showing a panel displaying major currency futures including the Australian dollar, British pound, Canadian dollar, euro, New Zealand dollar, and Swiss franc. The panel visually indicates dollar buying and selling activity, with colors representing currency strength changes.

01:02:41

The speaker describes how the panel provides a visual overview of dollar movements across multiple time frames, from one to five minutes. They mention the significance of session crossovers at one o’clock and the use of trend monitors and trend dots, which closely track price action. The trend monitor provides a broader perspective while the trend dots react more immediately. This setup helps traders understand intraday currency trends and market dynamics.

01:03:30

The speaker points out the low intraday volatility observed in most currency futures, noting an exception with recent volatility on the British pound (Cable) chart. They highlight the importance of recognizing volatility triggers as potential trading opportunities. Additionally, the speaker references the use of a CSI (Commodity Selection Index) and an Enqueue chart alongside the currency panel to monitor market sentiment and fast-moving trends across multiple time frames, enhancing real-time trading insights.

01:04:27

Trend development and time and sales tool

01:04:27

The speaker explains the concept of trend transitions across different time frames, noting how color changes from bright red to darker red and eventually blue indicate shifts in market trends. These changes begin on the fastest charts, such as the one-minute timeframe, and gradually move to slower ones. This process is compared to ripples spreading from a pebble dropped in a pond. The discussion highlights the importance of multi-timeframe analysis combined with volume price analysis (VPA) and other indicators to understand these trend developments effectively.

01:05:50

Attention is given to the live time and sales data from Interactive Brokers, which shows contract sizes and whether trades occur at the ask or bid prices. Currently, the market is sluggish, but when active, large volumes appear quickly, allowing traders to assess price reactions to volume spikes. This method adds another dimension to volume analysis and requires appropriate data feeds, making it a powerful tool when integrated with platforms like TradeStation.

01:06:51

The speaker highlights the advantages of using TradingView due to its browser-based platform, enabling access across various devices including iOS without compatibility concerns. They mention a focus on NinjaTrader for upcoming developments, particularly porting indicators to NinjaTrader’s Market Analyzer. Customers who purchase the full package receive all future indicators free of charge, and existing users upgrading receive credit for previous purchases. This customer-centric approach is emphasized as a core value of the service.

01:08:11

Forex education and funded trading program overview

01:08:11

The forex education program at quantumtradingeducation.com offers a comprehensive trading course called the complete product trading program. It includes a full suite of indicators, covering key topics such as psychology, fundamentals, relational, technical, and trading mechanics. The program features extensive resources including 450 lessons, 250 to 300 hours of video content, 13 PDF downloads, and webinars, all aimed at building confidence in trading the forex market.

01:09:07

Alongside the education program, there is a supportive VPA chat room hosted by experienced traders to assist students. The funded forex program was introduced to allow students to trade real money accounts of $5,000, $10,000, or $15,000 with no personal financial risk. After paying a one-time entrance fee, students begin an evaluation phase trading 28 spot forex pairs, aiming to reach a profit target based on their starting capital.

01:10:08

Upon reaching the set profit target, traders receive a rebate and can progress to the portfolio manager level, which includes trading gold and indices with a larger capital allocation. Initial accounts are multiplied by four, increasing available trading funds significantly. Capital can then be scaled up in multiples of two, potentially reaching millions. Traders earn ongoing profit rebates, starting at 50% and increasing to 60% for the largest accounts, paid monthly or retained in their accounts as preferred.

01:11:11

Risk and money management rules are enforced, ensuring no risk to the trader since they are not using personal funds. Additional resources are available on anacooling.com, including books, indicator links, market analysis, and social media connections, providing further support and information for traders.

01:11:37

Free trading resources, books, social media and session close

01:11:37

The speaker discusses forex, indices, and commodities trading on the site and thanks viewers for attending. They mention a break until 3 PM UK time and encourage viewers to enjoy the trading day. They note that the euro is expected to move sideways until 1 PM before potentially showing significant price action, while other markets are currently moving sideways. The speaker anticipates more market activity once U.S. markets open and close by expressing hope that viewers learned something new.

By Anna Coulling – creator of volume price analysis