Learn how to trade emini index futures using volume price analysis

Learn how to trade E-Mini Index futures using volume price analysis

In this video from the US futures trading session we show you how to trade emini index futures with confidence using volume price analysis.

00:10

Negative market open on indices

00:10

The speaker provides an overview of the current state of major stock indices, including the Dow (YM), Nasdaq (NQ), and S&P 500 (ES). All three indices experienced significant negative movement this morning, reflecting market reactions to recent overnight news, including ongoing concerns about the pandemic and other factors.

00:44

Recovery and falling VIX explained

00:44

The segment discusses recent market activity, highlighting a significant recovery after a downturn. Despite initial negativity, particularly in the Enkei index, it has rebounded close to its previous level. Similar recovery patterns are observed in the ES index. Additionally, the VIX, a measure of market volatility, is decreasing intraday, indicating reduced market uncertainty.

01:12

VIX level and equity rally analysis

01:12

The discussion focuses on the equity market rally, noting that while equities are rallying as expected, the VIX index remains elevated around 25.4. This level has persisted for weeks, which is unusual because a strong rally typically leads to a significant drop in the VIX. The sustained VIX suggests ongoing market uncertainty despite the upward movement in equities.

01:39

Volume patterns in cash markets

01:39

The segment explains a volume profile observation in a market similar to what was seen previously in the oil chart. It highlights the transition from Globex trading to cash markets, noting a significant increase in volume during this shift. The market initially sells off with rising volume, then experiences buying signals leading to rallies and reversals. This pattern reflects typical volume dynamics and price reactions during key trading periods.

02:36

Primary vs secondary reversal signals

02:36

The discussion focuses on interpreting volume and price action in the oil chart. The speaker explains that the current movement is a secondary reversal within a larger bullish primary trend, indicating ongoing upward momentum despite some falling volume. They analyze specific candles and volume levels, noting that some volume readings are slightly higher than expected but still consistent with the overall bullish reversal. The analysis highlights the importance of volume points of control and minor fluctuations within the broader upward trend.

03:30

Price support and resistance levels

03:30

The analysis discusses a trading scenario with an oil market showing price support tested four times and resistance tested four times, forming a small channel. The highest volume is at the volume point of control. After a breakaway with high volume and market participation, the price encounters a more serious, thick resistance level both price- and volume-based, including a wedge of volume acting as resistance. There is a volatility trigger and ultra-high volume indicating big operators’ involvement. Currently, there is some selling, and the market is experiencing clear congestion while maintaining bullish momentum.

04:24

Profit-taking and scaling out advice

04:24

The speaker advises on managing profits by scaling out of positions. If you have multiple positions, take most off the table and leave one to potentially benefit if the market continues higher. If you only have one position, take it all off to lock in profits and avoid risk during market congestion or potential reversals. The strategy emphasizes minimizing stress and losses by exiting early and re-entering if the market breaks through key price levels.

05:46

Divergence in index movements

05:46

The segment discusses a divergence observed at the market open where the YM and ES indices fell while the NQ index moved upward, illustrating a market fighting between one against two. The presenter explains that typically the weight of the two indices prevails, suggesting the NQ was likely to roll over and join the downward move. A volatility trigger was also noted, indicating an expected congestion or reversal in the market.

06:49

The discussion continues with analysis of buying activity breaking away from the volume point of control and moving through price resistance and support levels. The presenter highlights the importance of volume injections and mentions that the observed movement should progress fairly easily. The relationship between different equity indices is emphasized, noting their similar risk profiles and how they provide useful market insights.

07:42

This part explains how observing volatility triggers in related markets helps understand pauses and selling in the NQ. The ES index’s sharp drop at the open is described, followed by support forming and buying activity increasing. A significant wide candle with heavy volume broke through resistance, which then turned into support, indicating a potential change in market direction.

08:31

The presenter notes that the market moved through resistance with relatively light volume, suggesting it won’t require much effort to push higher due to a low volume node. Attention shifts to the VIX, which is falling and currently at 25.3. Various time frame trend monitors confirm the downward volatility trend, which typically signals rising equity markets. The segment ends with the presenter passing back to a colleague.

By Anna Coulling – creator of volume price analysis