It’s risk on as the London forex markets open

It’s risk on as the London forex markets open

00:10

No best currency pair for intraday trading

00:10

The speaker addresses a question about the best currency pair for intraday trading using CSI, emphasizing that there is no single best or perfect approach. Instead, the choice depends on what suits the individual trader. Some traders focus on one or a few pairs, while others trade any available pairs. The decision also depends on trading style, such as scalping, reversal trading, or trend trading, all of which relate to personal risk preferences. The speaker notes that this is a complex topic covered in detail in the program and promises to provide further explanation during the session.

01:10

Tracking Aussie yen and market indices

01:10

The speaker discusses tracking the Aussie yen across multiple timeframes, noting a steady upward trend. Attention is also given to the FTSE 100, which has surged significantly from 5580 to 5744, presenting a promising early trading opportunity. The conversation then shifts to various US futures indices like the YM, DNQ, and ES, highlighting strong moves and illustrating a typical risk-on market environment. The importance of trading during cash market hours rather than Globex futures is emphasized for effective trading.

02:16

Trading futures and globex market dynamics

02:16

The speaker discusses trading on Globex, highlighting that electronic trading results in more measured and even-paced price action. They note that despite some pullbacks, the overall trend shows rising prices accompanied by rising volume. The trend monitor indicates consistent movement, with notable changes in daily key levels, especially in the S&P 500 (ES). Volume point of control and support and resistance levels are building, suggesting important price regions to watch.

03:10

Volume and trend analysis on S&P 500

03:10

The segment discusses market volume conditions, noting low volume which suggests swift movement unless there are aftershocks. The focus shifts to the Aussie yen currency pair, highlighting steady price action with a solid volume increase followed by a slight pullback. The transition into the London trading session at 8:00 UK time is observed, with attention to multiple time frame analyses and indicators, emphasizing their importance beyond just chart visuals.

04:19

Currency strength and yen selling pressure

04:19

The video discusses the current heavy selling of the Japanese yen, visible across various time frames from 3 to 15 minutes, with the Australian dollar (Aussie) remaining strong and holding its position. The Australian dollar is highlighted as the strongest trend, particularly in the Aussie yen pair, which is approaching a potentially overbought condition. The speaker advises analyzing the hourly chart to determine if this is a trade opportunity, noting that reversal trading carries higher risk but may appeal to some traders.

05:46

The focus shifts to the yen as a counter currency, where the desired market movement is universal selling of the yen across pairs, which is largely occurring except in the dollar-yen pair. The dollar-yen behaves differently from other yen pairs due to unique risk currency dynamics and should not be analyzed in isolation. The steepness of trend lines in the analysis provides quick insights into yen buying or selling pressure, emphasizing the importance of considering risk balances among currencies.

07:20

Currency heat map and sentiment changes

07:20

The speaker discusses the strength of market trends using a heat map, highlighting how currency pairs (especially the M pairs) stack at the top or bottom to indicate sentiment. They emphasize the importance of observing these patterns to understand market momentum.

07:53

A few weeks prior, many M pairs were stacked at the bottom of the heat map, signaling bearish sentiment. The speaker notes that for longer-term traders who cannot monitor charts constantly, the heat map offers a valuable visual tool to track shifts in market risk and sentiment.

08:29

The heat map provides two key perspectives: an intraday view from one-minute to monthly timeframes, allowing traders to observe sentiment changes as they occur across different periods. Increasing numbers on the map indicate growing bullish sentiment for certain currency pairs.

09:08

The matrix view consolidates multiple charts into a compact visual, covering intraday timeframes from one minute upwards. Meanwhile, the ranking ladder weights sentiment changes by timeframe, giving more importance to longer timeframes to better reflect meaningful shifts in market conditions.

09:42

The ranking ladder assigns less weight to sentiment changes on very short timeframes (e.g., one minute) and more weight to longer ones, up to daily charts. This approach helps slower, longer-term traders identify overbought or oversold conditions and potential trade opportunities developing over days or weeks.

10:21

Sentiment on the heat map shows many currency pairs lifting from bearish to bullish, including the Swiss franc and pound yen. The dollar yen pair remains an outlier with bearish sentiment on faster timeframes, but slower daily charts suggest potential upcoming bullish shifts.

10:47

Despite short-term bearishness in the dollar yen, slower timeframes are beginning to transition toward bullish sentiment. This highlights the value of the heat map for slower traders seeking opportunities based on longer-term shifts. The speaker then signals a shift in focus to currency indices.

11:22

Currency indices showing dollar and yen trends

11:22

The speaker analyzes currency indices, highlighting strong selling pressure on the US dollar and significant movements in the yen, Australian dollar, and New Zealand dollar. The impact of the London market opening is noted, with rising buying interest in the euro and the British pound. The discussion emphasizes the importance of monitoring currency pairs in real time and understanding market dynamics as the session progresses.

12:23

A cautionary note is given regarding the British pound due to the UK Prime Minister’s health situation, which could influence the currency independently of global trends. Local news can strongly affect a country’s currency, sometimes moving it contrary to broader market forces. The euro is showing a steady rally, and the indices provide a clear visual confirmation of these currency movements, useful for traders to cross-check with their charts.

13:27

The yen is trending upward with increasing volume and steady price action, showing no signs of traps or sudden reversals. The trend monitor confirms the strength of this movement despite minor congestion or small pullbacks. This segment highlights how volume and trend indicators can help traders stay confident during phases of low volatility or price hesitation.

14:25

The market shows signs of temporary weakness with low volume during minor selling pressure, but no sustained reversal occurs. Volume analysis helps identify areas of hesitation before the trend resumes upward momentum. The price action progresses smoothly into low-volume regions, indicating a likely continuation of the rally with steady pip gains.

15:18

The speaker shifts focus to market sentiment indicators such as the VIX and the FTSE index, noting a generally positive risk-on environment globally. They introduce the use of multiple timeframe Renko charts to better visualize price action across different intervals, explaining how these charts provide a clearer view of market trends and help in confirming movements at various granularities.

16:21

Renko charts and optimal trading settings

16:21

The video explains a trading method combining Renko charts, which are non-time-based, with time-based charts to smooth out price action. The Renko optimizer automatically adjusts the optimal brick size for various time frames, such as 15-second, 30-second, and one-minute charts, allowing traders to select multiple time horizons for a comprehensive view. Larger time frames correspond to larger brick sizes, and this adjustment happens automatically, though manual settings are available.

17:24

Traders are advised to check the Renko optimizer settings periodically, especially on faster time frames like one to five minutes, while slower time frames require less frequent checks. The brick size increases with slower time frames, enhancing trading accuracy. The trend dots and trend monitor indicators work well with the Renko setup, providing clear signals for price action and trend direction.

18:15

The trend dots provide early indications of trend changes, while the trend monitor confirms these changes for stronger signals. A confirmed trend color change signals a full reversal; otherwise, it indicates a minor pullback. Combining these tools with multiple time frames smooths out noise, aids in entry and exit decisions, and can be supplemented by other indicators like accumulation/distribution on Renko charts to identify pullbacks.

19:10

Volume analysis for anticipating market weakness

19:10

The speaker analyzes a Renko chart, noting that while volume is increasing, the candle spread remains similar, indicating emerging weakness. The higher volume on a candle with an unchanged spread signals potential upcoming weakness in price movement. This observation serves as a heads-up to anticipate some selling pressure, suggesting traders should be cautious.

20:10

Using the example candle, the speaker explains that despite higher volume, the price did not rise further, indicating selling as traders take profits after a rally. Volume analysis helps traders manage emotions by encouraging decisions based on logic and facts rather than fear. This approach applies universally across various markets like Forex, indices, futures, and stocks.

21:15

The speaker briefly shows market indicators, specifically the VIX and the FTSE 100, highlighting their current movements before passing control back to another presenter.

By Anna Coulling – creator of volume price analysis