Learn how to trade futures using volume price analysis

Learn how to trade futures using volume price analysis.

00:00

Webinar introduction and trading disclaimer

00:00

The webinar begins with a welcome and an overview of the session focused on futures trading, separated from stocks for clarity. The speaker emphasizes the risks of trading and advises against investing money one cannot afford to lose. The methodology used throughout the session is volume price analysis, which many attendees are familiar with, and the speaker references a well-reviewed book available on Amazon that explains this approach. The goal of the methodology is to help traders avoid losses by understanding market dynamics, particularly the actions of market makers and large players. Extensive examples have been prepared to help attendees recognize patterns and improve their trading skills.

02:05

Volume price analysis methodology overview

02:05

The speaker explains that the principles of technical analysis remain consistent across different markets such as futures, stocks, currencies, bonds, and commodities. While each market may have unique chart patterns, the core methodology—volume price analysis (VPA), candles, patterns, and support/resistance—applies universally. An example discussed involves analyzing Euro/New Zealand currency pairs to demonstrate combining VPA with custom indicators to identify key support and resistance levels. These levels help traders decide when to join ongoing moves, anticipate pauses or reversals, and better understand price action.

03:57

The speaker continues by highlighting that support and resistance levels not only indicate potential price movement ranges but also assist in stop placement. Although not covered in the morning session, this topic is included in their forex program. On top of core price action analysis, additional technical tools like Bollinger Bands, Gann lines, and Elliott Wave theory provide complementary perspectives, but must be applied appropriately based on market conditions. VPA, rooted in Wyckoff methodology, aids in identifying market phases such as trending, congestion, or volatility. Proprietary tools developed by the speaker’s team, including timing indicators that analyze multiple timeframes, further enhance chart interpretation, especially when trading futures using the MT4 platform.

06:08

Using MT4 platform for futures trading

06:08

The speaker introduces trading index futures on platforms like MT4 and MT5, highlighting their accessibility and suitability for practice. They discuss three main indices: YM, NQ, and ES, noting that the ES (S&P 500) is the most challenging due to algorithmic trading, the Nasdaq (NQ) is moderately difficult, and the YM is more beginner-friendly. Traders can explore different contracts such as gold or silver and use demo platforms to familiarize themselves without worrying about contract rollovers. The recommendation is to start with e-minis, which are smaller contracts, to develop consistent trading tactics and build confidence gradually.

09:08

The speaker shows a live example using the US 30 June 21 futures contract with multiple chart timeframes including daily, hourly, 15-minute, 5-minute, and Renko charts. They note that MT4 offers limited timeframes, which can be beneficial for beginners by preventing overwhelm from too many short-term charts and encouraging a measured approach. The discussion transitions to current market conditions, with a focus on the forthcoming release of the Federal Reserve’s FOMC minutes, which is the main topic capturing fund managers’ and media attention.

09:47

Impact of inflation and economic factors

09:47

The discussion begins with an explanation of inflation and how central banks view it. Central banks focus on stable metrics like employment and wage growth rather than volatile daily expenses like food and services when making interest rate decisions. However, this approach may overlook the real impact of rising living costs on individuals. Supply chain disruptions caused by the pandemic have contributed to rising prices in soft commodities and other goods, affecting everyday expenses and prompting demands for higher wages.

12:06

Inflation concerns influence stock market behavior, as markets tend to anticipate future economic conditions. Some stocks and indices are more sensitive to inflation expectations, which affects their pricing. Despite vaccine rollouts and gradual normalization in places like the UK, the ongoing presence of COVID-19, especially in poorer countries, creates economic uncertainty. Employment data, such as the disappointing US non-farm payroll numbers, adds to concerns about economic recovery and inflation pressures.

13:41

Examples of supply chain issues are highlighted, such as a US fast-food company limiting ketchup sachets due to labor shortages at factories. These seemingly small disruptions illustrate broader challenges caused by the pandemic, including reduced workforce availability and logistical problems. These supply chain constraints contribute to inflationary pressures in the economy.

14:41

The focus shifts to the importance of Federal Open Market Committee (FOMC) decisions on interest rates and their impact on market futures. Traders pay close attention to futures markets in anticipation of FOMC announcements, which can cause market volatility. The speaker references specific futures contracts like the Dow Jones (YM) and mentions prior discussions about currency pairs such as the euro and New Zealand dollar, emphasizing the value of monitoring these instruments.

15:50

Analyzing Dow Jones futures price action

15:50

The speaker discusses a recent three-day market move breaking away from the volume point of control during a congestion phase. They explore strategies for traders to decide whether to join the move or wait for a reversal, emphasizing the importance of analyzing the daily chart. The recent price action involved a sell-off followed by buyers stepping in at volume support, with some anomalies in price-volume correlation noted.

17:04

Further analysis reveals that although prices initially rose, the volume supporting these moves was not strong, indicating potential weakness. The market showed a reversal pattern with decreasing volume on downward candles, and the concept of volume support derived from the volume point of control is introduced as a key factor in assessing price movements and support levels.

18:12

The speaker explains volume support and resistance zones, highlighting how low volume nodes create price gaps that can lead to rapid price movements. They note the current congestion phase is less pronounced than previous ones, and if the price breaks through these zones, a quick move to the next support or resistance level is likely. The discussion also touches on the significance of these volume-based levels as natural support and resistance.

19:25

Transitioning to the hourly chart, the speaker overlays volume point of control with camarilla and support/resistance lines to identify potential points for joining ongoing moves. They compare camarilla levels to Fibonacci retracements, emphasizing the importance of the S3 and S4 levels. The analysis focuses on a breakaway trade triggered during the Asian session, noting lower participation and volume characteristics typical of that time.

21:10

The price reached the S3 camarilla level, where it paused, illustrating a common behavior before either breaking lower or reversing. Despite falling volume, the price action stalled at a volume-derived support line. The speaker advises patience and waiting for confirmation from subsequent candles rather than reacting to a single candle, reinforcing the use of support and resistance levels combined with volume analysis.

22:18

A breakout with increasing volume eventually pushed prices lower, finding new volume support near the S4 camarilla level, coinciding with the market open and another pause point. The speaker explains how these volume and camarilla levels, calculated on different timeframes (15-minute, hourly, 24-hour), provide target zones and trading guidance throughout the week. They highlight the dynamic interplay between levels on various charts and introduce the use of Renko charts as an additional tool for analysis.

24:15

Using multiple time frames and indicators

24:15

The speaker discusses trading strategies in the Asia Pacific market, focusing on using different decision-making levels such as R1 and S3. They emphasize the importance of aligning trend indicators like trend dots and trend monitors for clearer signals. The speaker prefers conservative trades that have a high probability of success, acknowledging that nothing in trading is guaranteed. They highlight a potential reversal and suggest moving away from certain charts to use a five-minute chart to analyze the move lower from the volume point of control.

25:31

The speaker explains the advantages of using Renko charts for maintaining position during pullbacks. They identify key candle patterns on the five-minute chart, including tweezer bottoms and tops, which are strong reversal signals supported by volume at the volume point of control. The discussion includes combining multiple time frame analyses—daily, hourly, and faster charts—with Renko entries to create a steady and reliable trading approach. The tweezer bottom pattern is highlighted as a good example of a potential reversal signal.

26:43

Gold market analysis and moving averages

26:43

The discussion begins with an analysis of gold’s recent price action, highlighting a two-bar reversal and a strong move higher that triggered a volatility candle, indicating the price moved outside the average true range for the timeframe. Attention is drawn to gold’s position at the outer limits of the volume point of control and the presence of rising prices alongside slightly falling volume. The 200-day moving average is introduced as a key resistance level, often seen as a benchmark for strong bullish or bearish trends.

27:55

The speakers elaborate on gold’s position relative to the 200-day moving average, noting it is the first time gold has traded above this level since February. This signals a potential change in longer-term trend. A double bottom and a two-bar reversal are identified as bullish patterns, providing tradable setups for day traders. The discussion contrasts shorter-term trading opportunities with longer-term investment perspectives, suggesting the move above the 200-day MA could mark a significant lift-off.

29:03

Further technical details describe gold’s price congestion phase with wicks on both ends, followed by a sell-off at resistance. The speakers mention the absence of specific camarilla levels from late March but speculate these would align with key support and resistance points. The recent price action includes a test of support with a two-bar reversal and notable tweezer bottoms, leading to a sustained upward move that successfully broke through the 200-day moving average. The segment closes with a handover to another analyst ready to provide additional insights.

30:09

Pound Yen congestion phase trading example

30:09

The speaker discusses market activity as cash markets open, using the Pound Yen chart as an example to explain trading congestion phases. The price had been moving within a tight range all morning before breaking away, supported by strong platform support. The chart shows signs of buying pressure, including a price waterfall and hammer candles, although some patterns like tweezer bottoms are more effective on faster time frames.

31:06

The buying observed after the breakout appears weak as volume declines despite price rising. The speaker emphasizes the importance of patience when trading congestion phases, as these phases often lead to strong trends. Congestion trading offers clear support and resistance levels, aiding in setting stop losses and identifying breakouts. The example illustrates a large wedge of price action, which traders can use to determine risk and potential breakout points.

32:01

After a breakout, the market often retraces to test previous congestion areas, which serve as important support or resistance zones. The speaker highlights the presence of a significant price resistance wedge overhead, providing clear boundaries for stop losses and trade management. This example was shared live during another discussion, demonstrating a sudden price collapse and the dynamic nature of market movements.

32:38

Major indices daily and 5-minute charts

32:38

The speaker reviews the major indices on both daily and five-minute charts, noting some divergence with the Nasdaq rallying while the Dow Jones is falling and the S&P 500 is congested around a key volume point. The daily charts reveal weakening volume during recent rallies, suggesting a lack of strong follow-through and prompting the closure of certain positions based on sentiment analysis.

33:33

Despite the overall bullish longer-term trend, current market conditions show declining volume on rally attempts across the Nasdaq and S&P 500, indicating limited interest from major market participants. Morning trading has been bearish with steady price action but increased volatility and volume are expected as the cash market opens, contrasting with the more subdued Globex trading.

34:54

The speaker explains that trading on Globex alone is feasible despite compressed volume, and highlights the popularity and advantages of micro contracts for indices introduced recently. These smaller contract sizes offer greater liquidity and smoother price action, making them less intimidating for traders, especially beginners, compared to larger contracts that involve bigger price swings.

36:20

Micro contracts on indices like the E-mini Nasdaq and Dow Jones provide a trading experience similar to forex with smaller risk exposure. In contrast, some other contracts like gold futures can be less liquid and exhibit choppier price action. The speaker encourages starting with the smallest contract size to manage risk effectively and notes that these micros have greatly improved trading accessibility compared to the past.

37:45

A live view of executed orders on an Interactive Brokers account illustrates real-time volume and price action for various index contracts. Attention is drawn to the size and frequency of trades, especially larger orders, and their impact on price movement. The speaker emphasizes the importance of observing whether trades occur at, above, or below bid and ask prices to understand market sentiment and volatility spikes.

39:02

The speaker describes using advanced tools such as radar screens, trend monitors, and quantum volatility indicators to visualize sentiment shifts across multiple timeframes, from one minute to weekly charts. These tools help identify volatility triggers and potential trading opportunities, allowing for patient decision-making during periods of congestion or reversal. Despite some technical difficulties with linking timeframes, the overall approach is to wait for volatility to subside before determining the market’s next direction, which currently appears very bearish.

40:30

Multi-time frame Renko charts and volatility

40:30

The speaker emphasizes patience in trading, explaining that seeing initial bearish signals doesn’t mean the entire session will be bearish. They highlight the importance of waiting for key levels to be breached and volatility to subside. The discussion moves to multiple time frame analysis on the YM futures, covering 15-second to 15-minute charts, with most time frames showing bearish trends. The 15-second chart is favored for its detail, and the trend monitor confirms a strong bearish signal across various time horizons.

41:41

Using Renko charts optimized across multiple time frames, the speaker explains how they match Renko brick sizes to each chart’s time frame (15-second, 30-second, and one-minute) for better price action analysis. They demonstrate adjusting the brick size to reflect current market volatility, noting a larger brick size (16) on the 15-second chart due to high volatility. This setup allows for more precise visualization of price trends and market behavior.

42:50

The market is currently trading around the volume point of control on all analyzed time frames, indicating sideways congestion and a settling phase. The speaker notes the importance of waiting to see if the market will move significantly before upcoming major news events, suggesting that traders may need to be patient until after the news to observe clearer market direction.

43:19

Oil resistance level and volume analysis

43:19

The speaker analyzes oil market trends, highlighting a key resistance level around 65-66 dollars per barrel on both weekly and daily charts. Despite persistent attempts, oil prices fail to break through this level, indicating weakness. On shorter time frames, such as five minutes, volume analysis reveals more selling pressure than buying, underscoring the market’s struggle to advance past this resistance.

44:20

The discussion shifts to volatility triggers and volume patterns on very short time frames like 15 seconds. A significant volume spike under one candle did not lead to further price movement, suggesting a lack of momentum despite strong effort. This is likened to a car spinning its wheels on an icy slope—high effort with no progress. Comparing volume and price action from previous times, the current volume levels appear anomalous, reinforcing the idea that the recent price attempt lacks genuine follow-through.

46:13

Gold and silver bullish trends update

46:13

The discussion focuses on identifying anomalies in market behavior, particularly in gold and silver prices. Gold experienced a strong upward movement followed by a congestion phase, but the longer-term outlook remains bullish. The presence of heavy volume during a volatility trigger indicates active participation by major players, supporting the ongoing bullish trend. The speaker anticipates gold reaching $2,000 and beyond, highlighting consistent bullish signals across multiple timeframes from 15 seconds to five minutes.

47:09

The analysis continues with a focus on volume and price behavior, noting that gold is approaching key resistance levels on the volume point of control histogram. The recommendation is to shift attention to slower timeframes such as weekly and monthly charts to identify target levels. Overall, the trend remains bullish, supporting the prospect of gold moving significantly higher in the longer term.

47:38

Long-term bullish momentum for gold is expected to continue, potentially pushing prices well above $2,000. Inflation is identified as a major driving factor behind this trend. The speaker references economic cycles and notes that inflation has regained prominence in market considerations, influencing investor sentiment and asset performance.

48:15

Due to heightened inflation concerns, there is increased market uncertainty and risk, which benefits safe-haven assets like gold. The speaker advises traders to also consider silver, as it often exhibits similar price action patterns to gold. Although the two metals do not always move in perfect sync, silver can provide complementary insights when trading precious metals.

48:44

Soft commodities price action and drivers

48:44

The discussion focuses on price action in futures and commodities trading, emphasizing the importance of monitoring the US dollar due to its correlation with these markets. Soft commodities like soybeans, corn, and wheat have been performing strongly but are now experiencing some profit-taking after extended gains. Price movements are influenced by supply and demand factors, weather patterns, and growing seasons. Intraday trading relies on volume-price analysis and volatility triggers to identify buying and selling opportunities.

50:13

Attention shifts to market indices, which are currently trading within a tight range as expected. There is some divergence visible, with the Nasdaq attempting to rally while other indices appear more bearish. This suggests differing momentum across markets, indicating a cautious trading environment.

50:44

Indices technical levels and trading outlook

50:44

The speaker discusses a bullish outlook on a five-minute chart, focusing on a key resistance level previously tested earlier in the day. They explain that if the price breaks through this level, it presents a trading opportunity due to diminishing volume on the histogram and minimal technical resistance ahead. The accumulation distribution indicator shows lightweight levels above, suggesting the price can move upward without significant pause. The speaker suggests entering a trade around 70 or 80 points with potential gains between 80 and 120 points, as no major obstacles appear to hinder further upward movement.

52:08

While the broader market context is somewhat bearish, the speaker advises patience to see if the price breaks out or moves sideways until the upcoming FOMC announcement. They then shift focus to gold, noting some recent volatility and slight weakness on the latest candle, indicated by an upper wick and decent volume. This suggests some profit-taking but not necessarily a reversal, as traders may look for pullbacks to re-enter the upward trend.

53:04

The speaker emphasizes their strategy of buying on reversals and pullbacks within an overall bullish gold trend, viewing these dips as opportunities to enter or add to positions. They reaffirm a long-term bullish stance on gold, indicating confidence in further gains ahead. The segment ends with a brief mention of currency futures and the benefits of their trading platform setup.

53:40

Currency futures and dollar selling off

53:40

The segment analyzes currency futures including the Aussie pound, CAD dollar, Euro dollar, and New Zealand dollar to assess dollar buying or selling trends. Initially, there was strong dollar buying throughout the morning, but now the trend monitor shows a shift to dollar selling, particularly evident in the Euro dollar and the US Dollar Index (DIX). This shift is accompanied by a sell-off in the VIX index, indicating changing market sentiment. The dollar’s decline is expected to impact commodities and equity indices.

55:08

As the dollar sells off, the Japanese yen is also weakening on the five-minute chart, presenting potential trading opportunities, particularly for going long on indices. The discussion hints at a possible market reversal given these currency movements. The speaker prepares to transition to the next webinar segment, emphasizing the significance of these shifts for trading strategies.

55:43

Webinar closing and resources information

55:43

The speaker discusses opportunities in forex and equities trading, mentioning a possible reversal opportunity to capitalize on upward movements. They highlight the availability of various trading indicators on multiple platforms including QuantumTrading.com, NinjaTrader, TradeStation (versions 9.5 and 10), and TradingView. The radar screen application on TradeStation is praised for its powerful features. The educational site Quantum Trading Education provides detailed resources and programs.

56:51

The speaker introduces the complete forex trading program, which is linked to a funded forex program allowing traders to trade with company capital ranging from $5,000 to $2 million, earning profit kickbacks with no personal risk. Additional details, educational materials, and books are available on the website anacooling.com. The webinar concludes with thanks and an invitation to join the next session starting shortly.

By Anna Coulling – creator of volume price analysis