Markets move on sentiment and risk – here’s how to trade it using renko charts

Markets move on sentiment and risk – here’s how to trade it using renko charts

Using the renko optimizer indicator for NinjaTrader in combination with time-based charts is a powerful way to trade. It blends the volume price analysis methodology with the benefits of trading a non time-based chart such as renko which reveals moment as risk sentiment ebbs and flows.

00:12

Renko charts and futures sentiment overview

00:12

The speaker discusses using Renko charts focused on US futures markets like YM, NQ, and ES on a 5-minute timeframe, highlighting strong selling pressure reflected in red candles. They emphasize that this selling indicates market sentiment and mention monitoring the time and sales window for large trades. The discussion then shifts to currency pairs, specifically the Aussie Yen and the Yen, with the speaker navigating between charts to analyze multiple Renko setups.

01:15

Multiple Renko time frames explained

01:15

The speaker discusses currency pairs, focusing on the pound and Swiss franc, noting that the pound may reverse if it moves lower, which would impact the pound-Swiss exchange rate. They then explain their use of multiple Renko charts for the Aussie yen, highlighting the advantage of combining non-time-based charts with time-based charts. They demonstrate setting different Renko time frames—15 seconds, 30 seconds, and one minute—using the Renko optimizer on NinjaTrader, showing how selecting a time frame automatically adjusts the brick size.

02:13

Brick size optimization by timeframe

02:13

The speaker explains how the Renko brick size has increased from 9 to 12, meaning each brick now represents 1.2 pips on a 15-second timeframe. They then analyze a 30-second chart, which settles at a brick size of 18, equivalent to 1.8 pips. Finally, the one-minute chart shows a brick size of 23, or 2.3 pips. Using multiple Renko charts across different timeframes helps smooth out price action by removing the time element, similar to tick charts.

03:18

Momentum and trend monitoring with Renko

03:18

The segment explains how momentum appears through changes in speed, emphasizing the need to frequently check momentum indicators on very fast time frames, such as sub-minute intervals. It describes how slower time frames correspond to larger Renko brick sizes, illustrating this with an example of brick size increasing from 1.2 pips at 15 seconds to 2.3 pips at one minute. The use of multiple time frames is highlighted as an effective strategy. Additionally, the segment discusses various tools working with Renko charts, including the trend monitor, trend dots, and a transitional color change indicating shifts in price action.

04:10

Combining Renko with time-based charts

04:10

The segment discusses observing a transition in the trend monitor and analyzing time-based charts. It highlights the importance of volume and volatility triggers in identifying reversals. Combining time-based charts with the Rinker tool provides comprehensive data for volume price analysis (VPA). Additionally, non-time-based charts offer a clean view with various indicators, including price-based support and resistance levels, which help assess market actions such as significant selling on the Australian currency.

05:03

Market sentiment and volume analysis

05:03

The speaker discusses the current market conditions, noting that the Australian dollar has moved into oversold territory while the Japanese yen is overbought and starting to reverse. They emphasize using multiple timeframes and sentiment analysis, particularly focusing on the VIX index, which is falling slightly, indicating some positive sentiment toward the indices. However, despite this, recent daily candles show weakness, with a bearish engulfing pattern on the Nasdaq suggesting downward pressure.

05:57

The analysis highlights a weak candle with high volume suggesting a potential but fragile platform of support. A small rally is observed, characterized by a hammer candle with a narrow body and long lower wick, supported by good volume, indicating buyer interest. However, the upward movement is expected to be limited due to significant resistance overhead and volume control, likely capping gains near 52, as reflected in market order flow data.

06:42

Interpreting big orders in time and sales

06:42

The speaker explains the significance of observing large orders in the market, particularly those reaching double figures, such as 20 to 40 units. They note that if such large orders appear without any market reaction, it indicates market weakness. The segment concludes with an apology for going slightly over time and signals the wrap-up of the session.

07:08

Quantum Trading platform updates and education

07:08

The speaker introduces the Quantum Trading platform and its compatibility with NinjaTrader 7 and 8, TradingView, and TradeStation. They mention ongoing final testing for TradeStation Global 9.5, a powerful platform integration with Interactive Brokers. Plans include migrating all indicators to TradingView using Pine Script and developing a scanner for the EM T45. Full package subscribers will receive future updates and tools free of charge as a token of appreciation.

09:04

The speaker explains how to install multiple instances of MetaTrader 4 terminals to optimize computer usage, allowing users to run more charts efficiently. They highlight where to find all indicators on Quantum Trading’s website and describe the comprehensive Forex education package available at Quantum Trading Education. This program includes all indicators, knowledge modules on trading psychology, technical and fundamental analysis, and a vast library of videos and webinars.

10:07

The Forex education program is extensive, featuring over 200 hours of video content covering trading psychology, technical and fundamental trading mechanics, and various webinars. Success in trading is attributed to effort and dedication. The speaker mentions the supportive VP trading room community where students can interact daily, ask questions, and share insights, fostering a friendly and collaborative learning environment.

11:09

The speaker directs viewers to Anna Cooling’s website for books available in Kindle and paperback formats on Amazon, along with regular posts and updates. They thank the audience for attending, encourage questions, and remind viewers of the next session on Thursday afternoons for the US futures market. Contact details for both Anna and David are provided for further support, closing with best wishes for a successful trading week.

By Anna Coulling – creator of volume price analysis