Multiple renko charts and time charts – a powerful combination

Multiple renko charts and time charts – a powerful combination

Using multiple renko charts alongside time-based charts is a powerful combination – a blend of two different approaches to trading but which when combined provide the best of all worlds. Volume price analysis on the time-based chart and momentum trading on the renko charts.

00:10

Introduction to YM E-mini Futures and MT5 Differences

00:10

The speaker explains they were busy scanning various markets and introduces the YM, which is the e-mini futures contract similar to what was shown in Ana’s MT5 platform. They highlight that the main differences lie in the numerical values and the cost of entering the particular futures contract.

00:52

Futures Trading Costs and Index Price Actions

00:52

Trading futures involves higher costs due to larger contract sizes and increased margin requirements. In contrast, trading futures on the MT5 platform requires significantly less margin, making it an accessible option for those wanting to start trading indices. The speaker demonstrates price action charts for various timeframes, highlighting the similarities across different indices like the DAX, Nikkei, and ES.

01:18

Daily Charts and NQ Leading Market Movement

01:18

The speaker discusses different chart timeframes including ten-minute, fifteen-minute, and daily charts, focusing primarily on the daily chart. They highlight the Nasdaq (NQ) as the leading index currently, noting their personal preference for trading the NQ due to its tendency to lead market movements. The NQ has shown significant upward movement today, which the speaker finds particularly interesting.

01:49

Comparison of YM, NQ, and ES Price Momentum

01:49

The speaker discusses viewing three market indices together: the YM (Dow Jones), the NQ (Nasdaq-100), and the ES (S&P 500). They highlight the price movements on the Nasdaq-100, noting a strong upward run earlier in the morning followed by a slight pullback before prices begin to rise again.

02:21

NQ Resistance Levels and Volume Analysis

02:21

The discussion focuses on the bullish momentum observed in the NQ daily charts. If the NQ breaks above 9200 within the next few days, it will move through a region of relatively low volume resistance. This low volume area suggests that once the price surpasses the high volume zone, it can progress more easily and with less effort, as the volume required to push through this area doesn’t need to be very high but should align with the price action.

03:16

Accumulation Distribution and Resistance Strength

03:16

The speaker explains the significance of a resistance level at 9200 marked by a dashed line on the accumulation distribution indicator. This indicator highlights key support and resistance areas, with line thickness representing the strength of these levels. The thicker the line, the stronger the support or resistance. The level at 9200 has been tested and held multiple times over several days, making it a critical platform of support. Breaking through this region is important because it aligns with price-based resistance and would lead into a low volume area on the volume points histogram, suggesting potential for significant price movement.

04:12

YM Volume Resistance and Price Consolidation

04:12

The speaker discusses the current bullish trend continuation, noting that while the YM (Dow futures) has not significantly moved away from its volume point control, it faces strong overhead resistance at multiple levels. Despite occasional breakthroughs, the YM encounters dense volume resistance up to around 27,000, with only some relief between 27,000 and 28,000. Above that, resistance intensifies again near 29,000, where prolonged consolidation has created a significant price and volume barrier.

05:12

ES Support, Resistance, and Market Position

05:12

The discussion focuses on the market dynamics as prices approach the 30,000 level, indicating an impending intense struggle to break through this resistance. The ES index is positioned mid-range, beginning to move away from its volume point of control and facing less price resistance ahead, supported by a well-tested support platform below. The SP 500 has accumulated significant volume in the current region, creating a challenging area for upward movement due to thick resistance. In contrast, the NQ (Nasdaq) is highlighted as the leading indicator for progress, frequently leading market trends and currently showing signs of stalling in the tech sector. This makes the NQ particularly important from a trading perspective.

06:14

Intraday Trading with NQ Leading Movement

06:14

The speaker discusses intraday trading, focusing on the Nasdaq 100 (NQ) index’s influence on other indices. When NQ leads, it often pulls the others along, though they may move less quickly. This dynamic helps traders decide whether to take short or long positions during the trading day.

06:42

YM Daily Chart Bearish Sentiment and Volume Drop

06:42

The analysis focuses on the YM single instrument, which is currently showing bearish signals after a previous bullish run-up. The daily chart reveals a rollover pattern with volume analysis on shorter timeframes indicating weakening strength. Volume surges at market open fade as the price approaches a resistance area, accompanied by bearish patterns like ‘three two jerseys’ and an ‘up throw scandal’ on low volume. The trend monitor on very short timeframes (15 seconds to 5 minutes) has shifted from bullish to bearish, suggesting increasing downward momentum. The 10-minute trend remains unchanged but may follow if the bearish trend continues.

08:08

Renko Charts Setup and Optimal Brick Sizes

08:08

The speaker explains the use of Renko charts on the NinjaTrader platform, showing multiple timeframes including 15-second, 30-second, and 1-minute charts. They highlight how the indicator automatically sets the optimal brick size based on the timeframe and current market conditions, such as a 6-point brick size on the 15-second chart. This automatic adjustment ensures traders are aligned with the market’s speed. The difference in brick sizes across timeframes, such as 6, 9, and 13 points, has a direct financial impact when trading instruments like the YM futures, where each point is worth $5. Trend dots on the chart react quickly to price action, signaling potential trend changes before the trend monitor does, providing traders timely visual cues.

10:11

Trend Dots and Trend Monitor Indicators

10:11

The market is showing a downward movement into the red, but the overall trend monitor remains firmly red, indicating no change in the trend. The discussion explains the use of multiple Renko charts combined with traditional time-based charts to analyze price action. These charts help smooth out price fluctuations, reduce choppiness, and assist traders in managing positions, scaling in and out more effectively, especially during fast-paced trading.

11:11

Using Renko Charts for Smoother Price Action

11:11

The speaker discusses monitoring short-term charts, such as 15-second and 30-second intervals, particularly on indices. They note that bearish sentiment remains, with the market approaching key levels like 23.9 and whole numbers such as 900 and 858. These whole numbers often cause market congestion because traders at all levels, including institutions and retailers, tend to react around these psychological price points.

11:44

Market Congestion at Whole Number Price Levels

11:44

The speaker explains that market bids and orders often cluster around whole numbers, particularly zeros and fives, such as 23900, 50, or 100. These levels tend to cause market congestion because many traders place orders at these key psychological points. The speaker observes a developing market move and mentions the usefulness of Renko charts for tracking price action. They also highlight the importance of checking volume on slower timeframes to identify significant levels that the market has recently passed.

12:46

Volume Price Analysis and Cluster Support Levels

12:46

The discussion focuses on combining time-based charts with Renko charts to analyze price levels. A solid platform is identified by clustering two levels together, which strengthens support despite individual levels being weak. The speaker explains how thicker price levels and their clusters act as support zones that have been tested and held. They emphasize using volume price analysis alongside Renko charts, which are non-time-based, to gain a clearer perspective on trading signals.

13:46

Non-Time Based Charts Reveal Momentum

13:46

The speaker explains that momentum is revealed on non-time-based charts such as Renko and tick charts, unlike traditional time-based charts. Renko charts build bricks independently of time, based solely on price movement metrics like pips or points, causing bricks to form at varying speeds. The speaker then switches back to time-based charts to observe the price action across different time horizons.

By Anna Coulling – creator of volume price analysis