More education on learning to trade stocks and futures in the US session

Lively price action for US stock markets following the repercussions of the comments from Treasury Secretary Yellen, which spooked equities.

00:00

Introduction to day trading stocks and disclaimer

00:00

The session begins with a welcome message and an introduction to the topics to be covered, including day trading stocks, indices, and possibly commodities. The presenter emphasizes a disclaimer about the risks involved in trading and advises viewers not to use money they cannot afford to lose.

00:26

Using Volume Price Analysis (VPA) in trading

00:26

The discussion introduces technical analysis focusing on volume price analysis (VPA), which examines the relationship between price action and volume to predict market movements. The speaker references a principal book on VPA available on Amazon and a companion book containing numerous worked examples applied to stocks, commodities, indices, and forex. These examples illustrate signals and setups that can be recognized across various instruments, emphasizing the repeatability of these patterns.

01:35

The speaker explains that patterns combining price action and volume tend to repeat, making familiarity with these setups essential for learning VPA. Alongside VPA, candle patterns, support and resistance—both price-based and volume-based—are used. The team has developed specific indicators to highlight important levels on charts, though standard platform indicators and moving averages can also be used. They plan to develop more volume-based indicators including a VWAP.

02:47

The importance of using technical indicators appropriately depending on market conditions is emphasized. For example, moving averages perform well in trending markets but are less effective during congested or volatile phases. The VPA methodology includes identifying whether a market is trending, accumulating, or congested, which helps in applying indicators correctly and understanding market structure.

03:50

Indicators may sometimes have a poor reputation due to misuse rather than ineffectiveness. Understanding chart structures—price action supported by volume, resistance levels, and candle patterns—clarifies market analysis. The speaker highlights their custom-developed indicators that extract detailed volume data. The session will focus on these tools and approaches, which are particularly relevant for day traders deciding where to start and what to trade by creating watch lists.

05:03

Developing trading tactics and stock selection

05:03

The speaker discusses the importance of understanding stock charts to develop trading tactics. They emphasize that once you recognize whether a chart is trending or congested, you can apply specific strategies such as reversal, swing, or breakaway trading. These tactics are explained in their forex program but are applicable to any trading asset.

05:43

The speaker elaborates on different trading tactics, highlighting the need to develop skills for identifying setups that match those tactics. They suggest waiting for the right chart conditions before taking trades and stress the value of deep knowledge about a particular stock, using Apple as an example.

06:18

Focusing on Apple, the speaker explains how intimate knowledge of a company’s fundamentals, news, and price action can give a trader an edge. Understanding the chart structure and various time frames allows a trader to quickly identify trading opportunities when the stock price moves.

06:49

The speaker stresses the importance of analyzing chart structure before trading and cautions against using a single technique for all trades, as it is ineffective. They return to the topic of stock selection, specifically considering strong sectors with significant buying activity as a starting point.

07:26

The discussion continues on stock selection within strong sectors, encouraging traders to choose stocks based on their preferred tactics, such as reversal or fading moves. The speaker emphasizes that traders should find approaches that suit their comfort and style, suggesting a personalized strategy is essential.

07:56

Importance of pre-market data and resources

07:56

The speaker discusses the impact of pre-market activity on trading and highlights Janet Yellen’s unexpected comments on interest rates, which influenced market movements. They emphasize that charts don’t move in isolation but are affected by fundamental news, economic cycles, and statements from key figures like the Federal Reserve and Treasury Secretary.

09:34

The importance of understanding how related markets and sectors respond to interest rate changes is explained, especially for interest-rate-sensitive stocks like tech. The speaker stresses combining chart analysis with fundamental news to become a well-rounded trader. They introduce the ISM data release, noting a slight decline below expectations, and mention resources for tracking fundamental economic data.

11:25

The session covers the value of integrating fundamental metrics of individual stocks with technical analysis, regardless of trade duration. The speaker shares free resources, such as investing.com, to access pre-market information when paid services aren’t available, emphasizing the usefulness of this data for understanding market conditions and preparing for the trading day.

12:37

Pre-market volume and activity are crucial for anticipating stock movement during regular trading hours. The speaker explains that knowing average daily volume helps gauge potential price action. They also highlight the importance of monitoring general market sentiment through futures like the US-30 and Nasdaq, as these can influence individual stock performance depending on their index affiliation.

15:01

Analyzing market mood and related markets impact

15:01

The speaker discusses evaluating market performance by analyzing whether an asset is outperforming or underperforming and identifying key index levels, emphasizing that market movements are interconnected. They reference a social media follower who shared successful trades, including one on a co crystal farmer, highlighting how pre-market data and volume profile analysis (VPA) supported price movements in both directions. This sets the stage for further analysis and next steps in the trading process.

16:10

Reviewing high volume stocks and fundamental metrics

16:10

The speaker analyzes high trading volumes in pharmaceutical stocks, particularly Chiasma Inc, using the free resource Finviz. Finviz provides sector classification, fundamental metrics, average volume, and other trading-relevant data. The speaker highlights the importance of sufficient average volume (above 500,000) for trading liquidity and notes that poor fundamentals do not necessarily preclude a stock’s potential, citing Amazon’s early struggles as an example.

17:38

While fundamental metrics may appear poor for some stocks like Chiasma, context is crucial, as early-stage companies often show weak fundamentals. Finviz also offers media headlines relevant to the stock, providing useful background information. The speaker references Ashford Hospitality (AHT), noting that options traders were expecting a significant move weeks prior, and mentions plans to analyze AHT charts using NinjaTrader.

19:18

The discussion moves to MarketBeat as another resource for stock metrics. The speaker attempts to pull up data for Chiasma and Ashford Hospitality, emphasizing the value of toolbar tabs on MarketBeat that provide insights into stock direction based on options data. This highlights the importance of combining various data sources to gauge stock behavior and potential movements.

20:50

Examining Chiasma’s short interest data reveals a short percentage of about 5%, which could indicate potential for a short squeeze. The speaker discusses trading strategies around volatility candles and large volume gaps, mentioning that some traders prefer to ‘fade’ such moves, betting against the initial surge due to fear of missing out (FOMO) causing overreactions. This approach suits traders who capitalize on price reversals after big gap-ups.

22:58

MarketBeat also provides a list of the largest short interest positions, which can help identify stocks susceptible to short squeezes similar to GameStop. Although the data may not always be the most current without a subscription, it remains a valuable free resource to monitor significant short positions held by large funds and traders.

24:01

Combining short interest data with fundamental and sector information from Finviz can help traders anticipate potential short squeeze opportunities. The speaker emphasizes analyzing days to cover and other short interest metrics to identify promising trades. This multi-faceted approach aids in spotting stocks where short sellers might be forced to cover, leading to rapid price increases.

25:09

The speaker introduces options data as another key metric, focusing on open interest near strike prices. Using Ashford Hospitality as an example, they highlight a $5 strike price with high open interest and recent increases, suggesting bullish sentiment among traders. This information, combined with the sector’s recovery from pandemic impacts, provides additional insights into potential price targets and market expectations.

26:11

In conclusion, the speaker mentions practical tools for day trading, such as the MetaTrader 5 platform, which offers a wide selection of stocks and is freely available. This sets the stage for further exploration of stock charts and trading strategies, especially for those new to day trading or without access to advanced platforms.

26:48

Using MT5 platform and Renko charts for analysis

26:48

The speaker discusses the advantages of using the MT4 and MT5 trading platforms, highlighting their ease of use, excellent volume displays, and suitability for practicing stock trading. They explain the use of multiple time frame charts for a stock called AHT, including minute, hourly, daily, and Renko charts. Renko charts, which are non-time-based and focus on price bricks, help filter out volatility to better reveal trends and congestion phases in price action.

28:35

Renko charts are described as providing a clear, geometric view of price action without the noise of volatility, as bricks form only when a price movement of a set size occurs. The speaker notes that AHT’s chart currently appears choppy and stagnant. They analyze recent volume and price movements, noting a bottoming pattern supported by low volume on down candles and occasional injections of volume that cause volatility candles, but overall limited upward momentum.

30:42

The discussion covers how volatility candles often retrace within their range and how AHT’s price recently stalled around the volume point of control, a key level indicating indecision. The speaker introduces a ‘tick speed’ indicator that measures market activity, showing low participation except for typical surges at market open. This tool helps assess whether there is enough momentum to justify trading, with current readings suggesting limited activity.

32:16

Additional technical indicators are mentioned, including accumulation/distribution and Camarilla levels, which indicate key price points. AHT is currently trading between the R3 and S3 levels, suggesting it is range-bound with no clear direction. The speaker emphasizes that despite some explosive candles, overall price action is sideways, and options market expectations should be taken with caution. This analysis helps identify when not to trade.

33:24

The speaker reviews the daily chart with volume point of control (VPOC) and notes a strong volume support level indicating a potential bottom. They suggest patience as the market shows indecision. On the one-minute chart, momentum has waned near the VPOC. Price-based levels have become less meaningful due to recent large price moves. The Renko chart is also examined but limited data restricts its usefulness at this time.

35:04

While exploring different Renko brick sizes and time frames, the speaker notes that Renko charts are particularly useful for identifying choppy market conditions and ranges where price is stuck between levels. Most day traders use minute-based charts, but Renko helps confirm when there is little market movement. The session concludes with an invitation for questions and mentions a future plan to create a flowchart for stock selection based on the concepts covered.

37:16

Returning to AHT’s chart analysis, the speaker highlights a recent break below support on the accumulation/distribution indicator down to the volume point of control, signaling increased activity. They explain how the volume point of control is dynamic, shifting as volume accumulates at different prices. The speaker prepares to hand over to a colleague for further analysis and confirms they have addressed questions so far, also mentioning ongoing work on helpful resources like flowcharts.

39:15

Market overview: indices, dollar, and volatility

39:15

The speaker discusses recent market movements during the forex session, highlighting a significant decline across major currencies followed by a potential congestion phase and reversal. They note the dollar index’s current trading pattern on a five-minute chart, observing increased volatility and a minor correction after a bearish move since the open.

40:15

Attention shifts to the three primary U.S. indices—the Dow, Nasdaq, and S&P 500—displayed on five-minute and daily charts. The Dow showed a recovery above the open after a big move, while the Nasdaq struggled to surpass the important 14,000 level. Despite some late-session buying, the indices failed to reverse their earlier declines amid ongoing uncertainty influenced by the dollar’s behavior and recent market events.

41:21

The speaker analyzes intraday price action and volume for the June YM contract across various time frames, noting increased buying and volume but continued volatility. They highlight the importance of volatility triggers and the open of the U.S. cash market, which typically leads to increased volume and choppier price action compared to the Globex electronic market.

42:23

It is emphasized that trading during Globex hours alone can offer smoother and less volatile price action compared to when the cash markets open and algos trigger increased volume and volatility spikes. The speaker shares personal experience favoring Globex trading, noting exceptions occur only with major overnight news events. Globex operates 24/7, unlike cash markets, allowing continuous price discovery.

44:13

The discussion turns to the current market setup, suggesting a potential recovery opportunity as the volatility index dips below 19 and the dollar weakens. The speaker stresses the importance of monitoring price-based and volume-based resistance levels to gauge the strength and potential limits of any upside move in the market.

45:17

Detailed technical analysis focuses on volume profile levels, explaining how low volume nodes allow price to move quickly through certain areas, while high volume nodes represent significant resistance or support due to accumulated limit orders. The speaker notes that price typically experiences congestion near these volume point of control areas, underscoring the critical need to use multiple time frame charts to anticipate such pauses.

47:31

The importance of time frames in technical analysis is highlighted, with higher time frames carrying more significance for support and resistance levels. Reviewing a 10-minute volume chart shows expected volatility and volume surges at the market open, followed by signs of falling selling pressure as volume declines over consecutive candles, which may indicate an upcoming congestion or reversal.

49:03

The speaker explains the relationship between price movements and volume, emphasizing that strong moves up or down require rising volume to sustain momentum. Weakening volume during a price decline suggests selling pressure is diminishing, increasing the likelihood of congestion or reversal. Current indicators show a sideways volatility index and a weakening dollar, which could support a recovery in equities, although the negative correlation between dollar strength and equity performance is not absolute.

50:33

Sector performance and price action insights

50:33

The speaker discusses how market movements affect different sectors unevenly, highlighting that not all stocks move in unison with the overall market index. For example, financial stocks may rise even when the broader market is falling. The current market is transitioning from a bearish phase to a bullish uptrend. The speaker introduces the use of Renko charts and a specific layout that integrates multiple time frames for more effective analysis.

51:41

The Renko optimizer is explained as a powerful tool that can be attached to different time frames, such as 15-second, 30-second, and one-minute charts. This multi-timeframe approach allows for detailed volume and price analysis on a non-time-based chart. The speaker demonstrates how to load optimal settings for each time frame and explains that the brick size is calculated based on the smallest price unit, requiring some simple math depending on the market.

52:46

The speaker continues to demonstrate loading the Renko optimizer for the 30-second and one-minute time frames, noting that brick sizes increase with longer time frames due to slower price changes. Despite a momentary technical glitch, the tool successfully loads and smooths out price action. When combined with other indicators, this method provides a clearer and more reliable view of market trends and price movements.

54:00

Renko indicators and tick speedometer explained

54:00

The speaker explains the use of two key indicators for trend analysis: trend dots and the trend monitor. Trend dots closely follow price action and change color to indicate reversals or congestion phases, while the trend monitor provides a slower, more considered view of trend changes. The trend monitor uses transitional colors to show shifts in trend strength, though the sequence of color changes can vary.

55:25

The discussion shifts to the ‘tick speedometer,’ a tool that optimizes tick chart settings by indicating the best tick values for trading different timeframes such as 15 seconds, 30 seconds, and 1 minute. The tick speedometer helps traders avoid constant manual adjustments by providing stable, mathematically derived tick settings using Fibonacci-based calculations.

56:57

The speaker describes how to quickly adjust tick chart settings using the NinjaTrader platform, emphasizing how the tick speedometer makes switching between charts effortless. They explain that different contracts, like the YM and ES, require vastly different tick settings due to differences in trading volume, and the tick speedometer adapts accordingly to deliver optimal values.

57:58

The tick speedometer is versatile and can be used on various instruments including gold, currencies, and stocks. It provides visual feedback on market activity through color-coded signals, indicating when trading is slow, normal, or experiencing spikes. The current market is described as sluggish with the trend monitor showing a bullish trend, a weakening dollar, and a flat VIX, suggesting limited momentum but possible trading opportunities.

59:23

The speaker reviews gold’s price action on a daily chart, noting that gold is struggling to break above the key resistance level around $1800 per ounce. They highlight the importance of volume analysis, pointing out that the current price level corresponds to a low volume area compared to higher volume zones above, which may affect gold’s ability to move past this resistance.

01:00:30

Gold and silver price and volume analysis

01:00:30

The speaker explains key price levels for gold, noting that once gold surpasses $1800 per ounce, it should move up to around $1840 with minimal resistance due to insignificant prior tests at these levels. They highlight a low volume region between these prices, indicating an easier price movement with strong support below in case of a reversal. The explanation emphasizes how to analyze charts and volume to predict price behavior.

01:02:04

The discussion shifts to active market orders, focusing on the significance of large order sizes in understanding market momentum. The speaker points out the importance of picking off large orders and notes that gold and silver generally move in the same direction, although not always at the same pace. They highlight a strong resistance level for silver around $27 an ounce, supported by multiple tests on the accumulation distribution indicator.

01:03:03

The speaker describes the use of volume profile and volume point of control (VPOC) to identify support and resistance channels in silver trading. They explain how these tools help determine where to place stop losses and understand retracement barriers. Breakouts from these channels signal clear points for trade management. The method involves using multiple time frames and indicators to improve trading decisions.

01:04:33

Analyzing recent candle volume in silver, the speaker observes an anomaly where a large price move occurred on relatively low volume compared to a prior candle, suggesting underlying market weakness. This discrepancy indicates selling pressure despite the price increase. The explanation underscores the importance of volume analysis for identifying potential weaknesses and avoiding emotional trading decisions.

01:05:56

The speaker highlights the power of volume price analysis (VPA) for gaining confidence in trading decisions by providing objective insights into market behavior, beyond emotional reactions. They discuss the need for quick analysis on shorter time frames, such as 15-second charts available on various platforms. By evaluating volume patterns and candle sizes, traders can better anticipate market moves, although this approach may not suit everyone.

01:07:28

Applying VPA to trading decisions

01:07:28

The speaker discusses a successful trading strategy they have used for nearly 20 years and hopes it will be helpful to the listener. They then analyze an oil market move, highlighting a trap involving high volume and volatility. This move attracts many traders driven by fear of missing out, leading to a rapid price change and a counter-move. The emphasis is on recognizing high volume during volatile moments as an indicator of significant market activity.

01:08:02

Oil market volume and resistance levels

01:08:02

The speaker advises caution in trading, emphasizing the importance of scaling out of positions to lock in profits during volatility rather than holding through congestion or reversals. They recommend closing profitable trades early or reducing contract size to avoid getting trapped by market makers. If the market continues to decline, it is better to exit and re-enter after a pullback rather than endure losses or uncertain congestion periods.

01:08:56

The discussion focuses on recognizing trend reversals using multiple time frame analysis, specifically with trend monitoring indicators that change color to signal shifts. The presenter stresses the importance of not relying on a single time frame but using at least three to confirm trend changes. They observe that the market has passed through a low volume area quickly and is now approaching resistance zones, indicating potential challenges for further price movement.

01:09:51

Attention is drawn to the volume point of control (VPOC), a key level where significant volume has accumulated, which tends to act as strong resistance. The speaker notes that the price is unlikely to break through this level easily, and price action is expected to pause or congest here. This highlights how VPOC provides valuable insight across all time frames, signaling areas of potential weakness or consolidation in the market.

01:10:46

The analysis continues with observations of profit-taking and selling pressure as the market approaches the VPOC, causing congestion rather than a clear breakout. On shorter time frames like one minute, this area is not ideal for scalping trades. The speaker advises checking slower time frames for confirmation, as time duration adds weight to volume and price signals. They describe a volatility spike that likely triggered stop losses and reversals, showing the complexity of short-term trading dynamics.

01:11:38

Further resistance levels are identified on three- and five-minute charts, reinforcing the significance of the VPOC region. The speaker suggests that traders not currently in a position should wait for a decisive breakout above these strong resistance levels before entering a trade. They recommend using multiple time frames—from minutes to longer periods—to determine precise entry and exit points by analyzing volume and price levels comprehensively.

01:13:04

The speaker briefly pauses to address technical issues and then responds to a viewer question about suitable time frames for intraday swing trading regardless of account size. They emphasize that the choice of time frame is not dependent on account size but rather on trading strategy and personal preference, implying flexibility in selecting appropriate time frames for different trading styles.

01:13:50

Trading with small accounts and time frame advice

01:13:50

The speaker discusses trading with a small account, emphasizing the importance of using the smallest contract size available, such as micro lots in forex, which are fractions of mini and full lots. Trading small size does not restrict one to intraday trading; longer-term trades with larger stop losses are possible due to the smaller position size. In futures markets, micro contracts are becoming more common and more fluid, particularly micro index contracts that offer smoother price action compared to earlier micro contracts like those on gold, which could be very spiky and erratic.

01:16:17

Micro contracts have gained popularity and are widely available on platforms like CME, trading similarly to larger contracts. The key factor in trading is finding a time frame and style that suits one’s temperament rather than forcing oneself to trade fast time frames if uncomfortable. Traders should choose slower time frames if they cannot monitor markets continuously. Trading on Globex offers smoother and more straightforward price action, especially for indices, and traders are encouraged to focus on what fits their personality instead of their account size.

01:18:07

The speaker shifts focus to current market conditions in oil and indices. Volume in oil is declining as it approaches a resistance level around 60, suggesting traders should set levels and wait patiently for a breakout. Indices show attempts to recover amid congestion and resistance at key volume points of control on short-term charts. The VIX is dropping, and the dollar is stable, which are positive signs. Patience is stressed as essential in trading, and the session concludes with thanks to participants.

01:19:34

Summary of platforms and indicator packages

01:19:34

The speaker explains the availability of various trading platforms and packages at Quantum Trading, including MT4, NinjaTrader 7 and 8, highlighting that NinjaTrader licenses cover both versions without extra cost. There are two main packages: the essentials package designed for intraday trading, and the full package which includes advanced currency-specific indicators like currency strength, currency array matrix, and heat map. Updates for TradingView indicators are in progress and expected to be released soon, with those purchasing the full TradingView package receiving these new indicators free before a price increase.

01:20:51

The speaker discusses support for TradeStation platforms, covering versions 9.5 and 10+, and mentions ongoing development of additional indicators. Customers who upgrade or switch platforms receive full credit for previous purchases, with free transfers between platforms unlike competitors who charge fees. Examples include customers migrating from MT4 to NinjaTrader or between NinjaTrader, TradeStation, and TradingView. Any additional cost only arises if upgrading to a more expensive package.

01:21:46

The Forex trading program is introduced, which now includes a funded forex option allowing students to trade with up to two million dollars of the company’s money, removing personal risk. The program attracts many stock traders because forex trading is central to all markets, as cash conversion underpins asset exchanges. The course offers a deep dive into Volume Price Analysis (VPA) and covers concepts applicable across various markets, though it has a forex focus.

01:22:44

Additional resources such as books on Amazon (Kindle and paperback) and website links are available at annakung.com. The video from the morning session has been posted online and will also be on YouTube. The speaker confirms all questions have been answered, thanks the audience for attending, and wishes them a good trading session and week, noting the next session will be the following week.

 

By Anna Coulling – creator of volume price analysis