Looking to enter a a price waterfall? This is a classic candle

Looking to enter a price waterfall? This is a classic candle

Looking to enter a a price waterfall? This is a classic candle to watch out for in this move.

00:19

Microphone and audio issues resolved

00:19

The speaker confirms their microphone is working and greets the audience multiple times. They express uncertainty about a previous technical issue, noting that the screen was visible to some but there was no audio. The speaker thanks everyone warmly for their participation.

00:48

Starting analysis with multiple CSIs

00:48

The speaker notes a technical oddity where the microphone icon disappeared from the chat, emphasizing it was likely not caused by their actions. They express a lighthearted frustration with technology before shifting focus to discussing multiple CSI intervals, mentioning having them set at three, five, ten, and fifteen minutes.

01:18

Strong selling on British pound

01:18

The current market shows strong selling pressure on the British pound, indicated by a significant drop in the yellow line. There is also notable selling activity elsewhere, presenting multiple reversal opportunities. Additionally, the three commodity currencies—the New Zealand, Canadian, and Australian dollars—often move in close correlation due to their status as risk and commodity currencies.

01:48

Commodity currencies behavior

01:48

The speaker explains that certain currencies tend to follow each other closely. Currently, there is strong buying interest in the Canadian dollar, which could signal an upcoming rally in the New Zealand dollar and possibly the Australian dollar, which is presently very weak.

02:12

Trading strategy focusing on reversals

02:12

The speaker explains their preferred trading strategy, which focuses on identifying reversals early to maximize profits. They acknowledge that this approach requires patience and accepting higher risk due to wider stop losses. By entering trades before trends fully develop, traders can capitalize on larger movements, illustrated by the example of the falling pound.

03:04

Current pound CAD trade setup

03:04

The speaker discusses trading the Pound CAD pair, noting a crossover developing across multiple timeframes, indicating a trend underway. They caution that jumping onto an ongoing trend means missing the initial move, which cannot be recovered. The example highlights the importance of timing, especially around market opens like the London session, where reversals are common. Patience is advised when entering early trades, as some pairs like the Aussie dollar may require waiting for clear reversal signals due to current momentum and overbought conditions.

04:04

Aussie dollar trend and reversal signs

04:04

The discussion focuses on the Australian dollar’s recent price movements, highlighting that the 15-minute chart shows it is deeply oversold and due for a reversal. The presenter reviews multiple timeframes, noting a consistent downward trend that began earlier in the evening. They also point out that the Australian yen has been rising significantly, causing some pullback in the pair. Despite relatively light trading volume and narrow price action compared to the previous week, there are signs of profit-taking and some weakness. The key question posed is whether to engage with the current downward trend or wait for confirmation.

05:29

Trend monitor and volume analysis

05:29

The speaker discusses whether to take profits on a declining trend or to position for a reversal, highlighting the usefulness of a trend monitor tool that instills confidence by showing consistent bearish signals across multiple timeframes. They note the current strong bearish trend extending to the 15-minute chart, with an expectation that this will eventually reverse to bullish as indicated by volume changes and color shifts on the 15-second chart.

06:24

Trend color transitions across timeframes

06:24

The speaker explains how a true change in market trend will manifest as a color change that moves progressively across different time horizons, starting with the fastest and eventually affecting slower timeframes. This transition indicates a shift from one primary trend to another, such as from bearish to bullish. Early signs of this transition are visible in faster timeframes, while slower timeframes remain unchanged initially. The focus is on observing this gradual ripple effect across multiple timeframes to identify potential reversal opportunities.

07:18

Currency indices and market sentiment

07:18

The discussion focuses on analyzing currency charts and indices over a five-minute timeframe. The speaker highlights various currencies including the Australian dollar, New Zealand dollar, US dollar, Swiss franc, yen, euro, and British pound, noting significant selling pressure on the pound and buying activity on the US dollar. They also mention fluctuating movements in the yen and observe a recent disconnect between strong index rises and currency sentiment within the last 24 hours.

08:11

Yen and indices disconnect explained

08:11

The speaker discusses a recent unusual market behavior where the yen has been selling off contrary to expected sentiment. Despite strong yen selling in the last few hours and previously, the related indices did not show strong movement, indicating a disconnect between market sentiment and currency performance.

08:41

VIX and indices relationship overview

08:41

The speaker discusses the current state of the VIX, noting it is at 26, and compares it with the rising indices, specifically mentioning the Nasdaq (NQ) approaching 10,000. They emphasize that while these indicators provide context, the relationships between them are not guaranteed or fixed, and outcomes may vary.

09:37

Correlations in Forex trading vary

09:37

The speaker explains that correlations in Forex trading are variable and cannot be relied upon with certainty. While relationships between assets exist, they can change or break down over time. Traders should remain aware that correlations are not fixed and should not assume predictable outcomes based solely on them.

10:06

Forex leads broader market sentiment

10:06

The speaker explains that forex market trends often precede broader market sentiment changes. When correlations in the forex market break or disconnect, it usually signals upcoming shifts in related markets. This relationship helps traders anticipate market movements. The discussion then shifts to observing the London Open, noting that there is good trading volume as expected.

11:05

Volume increase during London Open

11:05

The speaker discusses trading volume patterns in London, noting that volume naturally increases during session changes. They observe that volume is still decreasing and consider how much further this decline might continue, highlighting a recent break away from the volume point of control due to an injection of volume.

11:30

Market selling pressure and volume spikes

11:30

The segment explains classic candle patterns observed during downtrends, highlighting how volume injections indicate market weakness. It describes how market makers sell into this weakness, pushing prices up to lure traders into weak positions or potential rallies. This results in candles showing heavy selling despite a brief rally attempt, a pattern visible across various time frames from minutes to daily charts.

12:24

Price action and volume anomaly explained

12:24

The speaker explains that when the market closes near its opening price, whether the candle is green or red doesn’t significantly matter. The key factor is the volume tied to the price action, indicating an anomaly. If there were heavy buying, the candle would be clearly upward, but here, pressure is evident. The market movement is likened to a water-filled balloon that stretches and eventually bursts, causing a cascade, which is referred to as a price waterfall.

By Anna Coulling – creator of volume price analysis