More examples of volume price analysis in action in this live session

More examples of volume price analysis in action in this live session

00:00

Introduction and trading disclaimer

00:00

The webinar begins with a welcome to the Forex session focused on the London market. The presenter thanks attendees for their patience while technical issues are resolved. A disclaimer is emphasized, warning viewers about the risks of trading and advising them not to use money they cannot afford to lose. The session will cover relevant Forex trading topics.

00:30

Forex market overview with volume price analysis

00:30

The discussion begins with an overview of the forex market using volume price analysis (VPA) as the primary technical analysis method. VPA combines price action and volume data to interpret market movements. Additionally, it’s important to consider fundamental factors and related market sentiment since some currency pairs are influenced by other markets, and forex can sometimes predict movements elsewhere. The speaker also introduces a practical example of VPA to clarify the concept.

01:33

The methodology of VPA extends beyond price and volume to include candlestick patterns and crucially, support and resistance levels. These form the foundational elements of a trader’s approach to analyzing charts. Once this foundation is established, traders can incorporate additional tools such as standard technical indicators, including moving averages, stochastic oscillators, and fractals, to better interpret market structure.

02:36

VPA guides traders on how to properly use technical indicators, emphasizing that indicators should confirm price action rather than be the starting point of analysis. Starting with chart structure via VPA ensures clarity in understanding market phases. Proprietary indicators developed by the speaker and their colleague complement VPA. Furthermore, time analysis, including multiple time frames, is integral to the approach, and the speaker highlights the importance of seeing these concepts applied practically.

03:41

Proprietary indicators and multiple time frames

03:41

The speaker explains that price action in forex is fractal, meaning patterns seen on shorter time frames mirror those on longer ones but develop more slowly. They introduce proprietary indicators designed for the forex market that analyze currency flows. The currency strength indicator shows the strength of individual currencies, while the matrix and array indicators combine these flows to identify the strongest currency pairs moving up or down. The heat map spreads this data across multiple time frames on a single chart, allowing for easier monitoring of 28 currency pairs.

04:43

Information is shared about the education program available at quantumtradingeducation.com, welcoming students and inviting questions. Another option mentioned is becoming a funded trader, allowing participants to trade with the company’s capital at no personal financial risk. The speaker then shifts focus to analyzing current market conditions using three time frames to get an overview of individual currencies and pairs, emphasizing the usefulness of the currency strength indicator and matrix.

05:52

The analysis highlights strong overnight selling of the New Zealand dollar and some ongoing movement in the Australian dollar. Positive sentiment from Wall Street has carried into the Asian session, reflected by buying in New Zealand currency. However, there is some recent selling on faster time frames suggesting a possible change. The speaker points out that the euro and British pound remain key focus currencies during the London session.

07:00

Discussion centers on the British pound’s mixed movements, with some selling and buying activity observed, particularly in the GBP/USD pair (Cable). The speaker notes the need for caution due to volatility traps during crossover trading sessions. They also mention a detailed post on their website illustrating these concepts, acknowledging some technical difficulties with their internet during the presentation.

08:09

London session volatility and volume spikes

08:09

The segment introduces price action considerations at the London open, focusing on the British pound futures contract (6B). It highlights how the pound tends to move sideways before the London open on a 30-minute chart. There is a notable increase in trading volume at the London open, reflecting London’s role as the premier forex center, handling about 43% of global forex flows. The volume peaks and troughs are explained by differing participation levels across the 24-hour session.

09:15

This part explains a custom volatility indicator developed to detect momentum using average true range. When triggered, it displays purple arrows or dots on the price candles, signaling that price momentum has exceeded the average true range for that timeframe. This is a key warning signal, as such momentum often leads to price retracement within the candle spread, followed by either continuation, congestion, or reversal. The example given is during the London open, where the price retraced and then reversed.

10:28

The segment describes a specific price action pattern: a shooting star candle with high volume leading to a reversal back to the open price level. It discusses the common trader reaction of fear of missing out (FOMO) when seeing sudden momentum, which can lead to impulsive entries. The volatility indicator helps traders manage this emotional response by signaling when momentum is likely to reverse, allowing for better decision-making. The speaker also reflects on this behavior as part of human nature and trading psychology.

11:36

The speaker briefly mentions charts that illustrate volume price analysis elements such as volume, price, and momentum. There is a technical issue being resolved involving software conflicts, but the speaker prepares to continue with the narrative to explain these concepts further.

12:09

Using TradeStation and radar screen for futures

12:09

The speaker is using three trading platforms simultaneously: TradeStation, TradingView, and NinjaTrader. The focus is on currency futures using TradeStation Global, which is integrated with an Interactive Brokers account. TradeStation Global is a collaboration between Interactive Brokers and TradeStation, allowing users to trade directly through Interactive Brokers while utilizing TradeStation’s tools and apps.

13:10

The speaker highlights the RadarScreen feature on TradeStation, which provides a powerful multi-timeframe view of currency futures with many custom-coded indicators. The setup includes various currency pairs displayed in a matrix format, showing their movements from 1 to 15-minute intervals. The speaker explains the quoting conventions for currency futures, noting that the US dollar is always the counter currency, which standardizes the view across all pairs.

14:11

The speaker reviews specific currency futures pairs displayed on the RadarScreen, including the Australian dollar, British pound (cable), Canadian dollar, euro, New Zealand dollar, and Swiss dollar. They note the unusual price scale for pairs where the dollar is the base currency. The current market activity shows increased volume and volatility for the British pound with congestion around the volume point of control, indicating no clear reversal but a market pivot at this level.

15:13

Volatility triggers and market maker behavior

15:13

The speaker discusses a significant spike in trading volume around 8 o’clock London time, highlighting how volatility triggers cause emotional responses like fear of missing out (FOMO). Traders often rush to enter fast-moving markets to capture quick profits after long periods of waiting, but this can lead to getting caught in squeezes or reversals due to emotional pressure and uncertainty.

16:17

The volatility indicator works in real time by triggering as soon as price moves outside the average true range on the selected timeframe, alerting traders to increased volatility immediately. This often leads to congestion or reversals, and traders should be patient, waiting for these outcomes or for price to move away from the volatility zone. Such triggers are common during session crossovers, especially between London and US sessions.

17:17

Volatility triggers frequently appear at key times like the London fix at 4pm and around major news events or political developments, which cause rapid price movements as market makers position themselves. The speaker advises patience and strategic trade management, such as taking profits when positions move favorably and reducing exposure, leaving a portion to run if appropriate.

18:18

The speaker emphasizes the importance of closing profitable trades unless there is a strong reason to hold, explaining their typical approach to trade management. They introduce a trend monitor tool that integrates trend dots and dynamic volatility indicators, providing a comprehensive and efficient way to track market conditions without searching multiple charts. This tool allows fast navigation and real-time insight into volatility triggers.

19:13

The trend monitor aids in analyzing the broader market context, especially the strength and direction of the US dollar across various currency pairs. It highlights divergences, such as some pairs showing weakness while others show strength, helping traders understand current market dynamics and make informed decisions based on this comprehensive view.

19:41

Sentiment analysis with Nasdaq and indices

19:41

The discussion begins with an analysis of dollar buying and selling on a 15-minute chart, noting sideways movement and some weakening after a rally and volatility spike. Attention then shifts to the Nasdaq, highlighting significant volatility despite the U.S. cash markets being closed, reflecting market sentiment and setting the stage for further exploration of trend changes and volume effects.

21:02

The presenter explains how trend changes typically start in the fastest time frames, using visual tools like the quantum trend monitor and trend dots. The analogy of a pebble creating ripples in a pond illustrates how trend shifts propagate from short to longer time horizons, emphasizing the importance of observing these changes across multiple time frames to confirm a true trend reversal.

21:59

Further elaboration on trend transitions shows intermediate trend dots shifting color, indicating a move from bullish to transitional phases before potentially turning bearish. This ripple effect down through various time intervals confirms the validity of a trend change. The segment also highlights the use of tools like NinjaTrader and TradingView to compare market behavior across different indices and markets.

23:27

Market action in UK and U.S. indices is compared, showing mirrored volatility and sentiment patterns despite differences between cash and electronic markets. The presenter warns about traders jumping into volatile moves prematurely, resulting in regret as positions reverse. Emphasis is placed on patience and waiting for confirmation, with volume and volatility indicators used to assess market strength and potential weakness.

24:23

The analysis continues with a focus on volume and price action, noting that high volume under certain candles may indicate temporary weakness but not necessarily negate longer-term bullish potential. The presenter introduces their primary trading tactic, which is based solely on reversals identified on the 30- and 60-minute currency strength indices (CSI), ignoring trends or partial moves and applying this tactic across multiple currency pairs.

25:51

The trading focus is clarified as centered on risk currencies such as the yen, dollar, and Swiss franc, as well as commodity currencies. The presenter looks for currency groupings or divergences, citing the Canadian dollar’s recent divergence linked to rising oil prices. Risk management is emphasized through low leverage and small position sizes, aligning with a conservative approach used in funded trading accounts.

27:26

The presenter shares performance results from the previous week, highlighting consistent pip gains as the key to long-term success rather than large profits. The importance of consistency in trading is reiterated, explaining how mastering steady pip accumulation allows scaling up position sizes and account growth. This approach aligns with evaluation and funded trading programs that reward consistent, low-risk trading.

28:24

Enhancements to the currency matrix on TradingView are introduced, including benchmarks such as all-time highs, lows, and averages for each currency. These additions help traders quickly assess whether a currency’s current strength or weakness is extreme or average, providing useful context similar to overbought and oversold indicators and improving decision-making.

30:47

The presenter analyzes an example using the Aussie Yen chart, pointing out a volatility trigger followed by heavy volume under a candle that indicates strong selling pressure. The analogy of driving on an icy uphill road is used to describe how despite increased effort (volume), price movement stalls, signaling potential for reversal and trapping late buyers. This highlights the importance of volume analysis in confirming market moves.

32:39

Further examination of the volume and price action confirms a divergence between effort and result, consistent with heavy selling despite narrow price movement. The analysis spans multiple time frames down to 15 seconds, demonstrating how early signs of trend changes appear first in the fastest frames and ripple outward. The presenter notes the bullish longer-term trend remains intact, advising patience and monitoring sentiment indicators like the CSI.

34:25

The segment concludes with a brief overview of the presenter’s trading setup using MT4 and MT5 platforms. Multiple chart types and time frames are used simultaneously, including daily, hourly, 15-minute, 5-minute, and Renko charts, with a focus on the 15-minute and hourly charts for trend and sentiment analysis. This multi-chart approach supports informed decision-making across various horizons.

35:08

Support and resistance with Camarilla levels and Renko charts

35:08

The speaker explains the use of key support levels on two time frames, primarily using price-based indicators including a modified camarilla indicator with six levels instead of the usual four. Hourly chart levels remain valid for the week, while 15-minute chart levels reset daily at rollover. Understanding these key support and resistance levels is crucial for identifying potential price pauses, reversals, or congestion.

36:19

Support and resistance levels are fundamental to volume price analysis (VPA). The speaker highlights the importance of having a hierarchy of these levels to determine which are significant. They also discuss using camarilla or Fibonacci indicators and note the advantage of applying camarilla levels to Renko charts in MT4, which enhances the utility of Renko charts by aligning daily levels with price action.

37:35

The Renko chart, combined with trend dots and a trend monitor, helps identify potential entries and exits by showing agreement between indicators through geometric patterns. An example is given where blue dots and bricks indicate an upward trend, followed by a pullback near resistance. Changes in brick color and the position of trend dots signal potential trend shifts, providing traders with visual cues about market direction.

38:45

The progression of trend changes is explained: first, Renko bricks change color, signaling a transition; next, trend dots shift position, reflecting support or resistance on the price. The trend monitor adjusts more slowly, offering a conservative confirmation. Traders can choose between aggressive entries based on initial signals or more conservative ones that require matching bright trend dot and monitor colors, depending on their risk tolerance.

40:03

Entry timing depends on the trader’s comfort with risk and the number of confirmation signals they require. While Renko charts provide price action data, volume information is available only on time-based charts. Using both together helps traders decide on entries. Managing emotions is essential; traders should avoid forcing trades they feel uncomfortable with to prevent stress and anger, aiming for a balanced, semi-detached approach to wins and losses.

41:40

The speaker reviews recent daily price action, noting a significant decline possibly continuing after initial volatility. Important camarilla levels, especially S3 and S4, are marked as key points where price is likely to pause. The Renko chart shows a messy trend with intermittent pullbacks, and traders could have stayed in the trade through corrections by watching color transitions and trend indicators.

43:50

The Renko monitor would likely keep traders in the trade despite corrections until key levels like S3 are breached. The speaker then transitions to showing the Currency Strength Indicator (CSI) on a separate account, noting that while one currency pair showed a potential sell-off or buy signal, it lacked confirmation from other currency pairs. This highlights the importance of multi-currency analysis in confirming setups.

45:38

The CSI revealed divergences among risk currencies, such as the Australian, New Zealand, and Canadian dollars, which undermined the reliability of the single-pair signal. The speaker emphasizes that successful reversal tactics require multiple confirming factors across pairs. The hourly chart for Euro/Canadian shows a strong fall through S3, pausing at S4, consistent with the CSI overbought/oversold signals, supported by candle wicks indicating buying pressure.

48:02

The speaker discusses distinguishing between a longer-term reversal and a short-term pullback, especially important for traders using different time frames. The hourly chart, used for managing the referenced account, indicated a correction rather than a full reversal, while faster time frames like 5- and 15-minute charts presented good trading opportunities. The 15-minute chart expands upon the hourly analysis and is supported by a detailed narrative on volume price analysis (VPA) available online.

49:55

The analysis focuses on a volume-based breakdown of the price move, highlighting two volatility candles where the first had significant volume and the second less so despite a deep wick. This suggests the pullback is anomalous and that downward pressure dominates, leading to continuation lower. The move aligns with the previously noted potential reversal on the CSI and key camarilla levels, reinforcing the nuanced interpretation of price and volume data in assessing trend strength.

51:03

Volume price analysis example and accumulation phase

51:03

The segment explains the classic accumulation phase in price action based on volume price analysis (VPA) and Richard Wyckoff’s principles. It describes a primary downtrend followed by a congestion phase where trends are born. The presence of long lower wicks on candles indicates buying support at a key level (S6). This accumulation phase suggests potential reversal or continuation, supported by volume and candle patterns.

52:19

This section highlights specific candle patterns, including a shooting star candle with high volume at the S3 level, signaling market weakness and a potential reversal. The price then drops about 60 pips, which could present a trade opportunity on lower timeframes, but it didn’t meet criteria for hourly chart reversals. The importance of support and resistance levels in identifying trade signals is emphasized.

53:30

The discussion shifts to how these price movements and trend phases are reflected in Renko charts, which filter out noise and lack candle wicks, showing cleaner geometry. The primary downtrend and accumulation phase are visible, with the secondary trend offering tradable entry points based on support, resistance, volume, and candle patterns. The shooting star pattern isn’t visible on Renko, but S3 remains a critical reversal level.

54:51

This part explains decision-making based on multiple timeframes and indicators. Despite weakness signs on shorter timeframes, traders may choose to exit trades early rather than hold for maximum gain, emphasizing the importance of trading based on real-time information rather than hindsight. The volume and price action help guide trade exits on Renko charts.

55:54

The segment discusses how learning from annotated charts helps traders recognize recurring patterns such as primary trends, congestion phases, accumulation, distribution, reversals, and corrections. Combining candle patterns with multi-timeframe analysis and indicators like VPA enhances confidence by better defining support, resistance, and volatility, improving trade decision-making.

57:04

This final segment emphasizes the value of consistent small gains (e.g., 10-20 pips) over time, highlighting that scalability and consistency in trading are more important than large single wins. The discussion closes with a transition to the topic of using directional bias from higher timeframes to understand trends, setting up the next part of the lesson.

58:24

Understanding directional bias and time frame trends

58:24

The discussion begins by explaining the concepts of primary and secondary trends, emphasizing the importance of identifying trends within different time frames. Using the example of the cable (GBP/USD) daily chart, the speaker points out that currently, the market is in congestion with no clear trend, leading to choppy price action on faster time frames. The daily chart shows alternating up and down days, indicating a lack of a discernible trend, which affects trading decisions on shorter time frames.

01:00:11

When a clear trend exists on the daily chart, such as a move with higher highs and higher lows, the bias on the daily time frame tends to continue through pullbacks or corrections. The forex market operates across three distinct sessions, meaning price action can be inconsistent and choppy as conditions change between sessions. The presence of doji candles signals volatility and indecision, which traders must consider when assessing their trading environment.

01:01:20

The speaker highlights the importance of using multiple time frames, such as hourly, 15-minute, Renko, and 5-minute charts, to identify dominant trends and potential trading opportunities. A clear downtrend on the 15-minute chart can offer a secondary trend for faster trades, while reversals on these shorter frames may be significant only if aligned with the dominant trend on the hourly chart. Renko charts are noted as beneficial for clarifying whether the primary trend will continue, pause, or reverse.

01:03:19

David adds that understanding and focusing on specific time horizons is key to effective trading. He uses the analogy of a racehorse with blinkers to stress the importance of concentrating on the time frame of interest without seeking confirmation from slower or faster frames, which can cause confusion. Different time frames can show conflicting trends, so traders need discipline to focus on their chosen horizon and avoid contradictory signals.

01:04:26

The conversation continues by describing the complex, interrelated nature of currency market movements, likened to interconnected wheels moving at different speeds. For very short-term trading on tick charts, the approach is quick entry and exit, ignoring longer-term trends. Conversely, longer-term traders focus on bigger picture charts and disregard short-term fluctuations. The speakers emphasize sticking to three key time frames relevant to the trading style and caution against the human tendency to seek confirmation by checking slower time frames, which can undermine trading discipline. Finally, they note current market conditions on the 15-minute chart showing increased buying volume and potential reversal signals, which could be a trading opportunity for short-term traders.

01:06:38

Tick charts and scalping techniques explained

01:06:38

The speaker is concluding the session, apologizing for running over time. They describe the education program as comprehensive, called the Complete Forex Trading Program, emphasizing its extensive coverage of all necessary topics in forex trading. The program consists of two parts and is notably large, with around 450 components.

01:07:08

Forex education and funded trader program overview

01:07:08

The speaker introduces a comprehensive trading education program consisting of modules on psychology, fundamentals, relational and technical aspects, and trading mechanics. Alongside this, there is an optional funded forex program where learners can apply for accounts with initial capital of $5,000, $10,000, or $15,000 to trade on an evaluation stage. The program has recently increased profit returns to 50% at the portfolio manager stage, which follows the evaluation stage, and offers larger capital amounts as traders progress.

01:08:29

At the portfolio manager stage, traders can primarily trade 28 currency pairs, indices, and gold, broadening trading opportunities. The speaker highlights where to find trading indicators compatible with platforms like MT4/5, NinjaTrader 7/8, TradingView, TradeStation, and Interactive Brokers. They mention ongoing work to improve indicator availability and direct listeners to AnnaCooling.com for related books and blog posts.

01:09:21

The discussion shifts to tick charts and the tick speedometer tool, which helps optimize chart settings based on market activity rather than fixed time intervals. The speaker explains how the tick speedometer adjusts settings dynamically to reflect volume and momentum shifts, enabling traders to interpret raw momentum and make quicker, more informed scalping decisions.

01:10:41

The speaker emphasizes the fast-paced nature of scalping, where traders enter and exit quickly to capture small price movements. Indicators such as trend monitors and volatility measures assist in identifying congestion and potential breakouts. The tick speedometer helps traders react swiftly to market changes by providing optimal chart settings tailored to current conditions.

01:11:28

The tick speedometer adapts optimal tick settings depending on the asset being traded, as different instruments like major indices and gold have distinct trading volumes and tick values. The tool offers two values for settings: one that changes frequently and a more stable Fibonacci-based number. Traders can choose which to apply based on market conditions, especially during slower sessions like Globex.

01:12:50

The session concludes with a thank you to participants and plans for future, less rushed webinars. The speaker briefly analyzes the trading session, highlighting how volume price analysis (VPA) helped identify a buying opportunity in the pound. The session ends with a farewell and an invitation to return for upcoming trading sessions focused on futures and stocks.

By Anna Coulling – creator of volume price analysis