No market trades in isolation, they are all connected by one thing – risk

No market is an island

No market is an island; they are all connected by one thing: risk. Money chasing higher risk for higher reward, or lower risk for lower reward and it is this simple balance that dictates which currency pairs will rise and which will fall. Forex sits at the heart of it all, as it is the gateway through which assets are converted to cash and then moved into other markets.

00:00

Trading disclaimer and volume price analysis overview

00:00

The speaker begins by highlighting an important disclaimer about trading, emphasizing its risks and advising viewers not to use money they cannot afford to lose. The session will focus on market analysis through volume price analysis, which involves studying charts using price action and volume.

00:26

3D approach to forex and fundamental context

00:26

David and the speaker describe their unique 3D approach to forex trading, which integrates chart analysis of volume and price with fundamental market analysis. They emphasize the growing importance of understanding the interactions between capital markets and related markets to provide comprehensive trading insights.

01:21

Risk and commodity currencies with indicators

01:21

The speaker introduces currencies linked to commodities, focusing on risk and commodity currencies’ performance. They mention Volume Price Action (VPA) indicators developed to support the trading methodology, which help identify potential trading signals and setups on charts. The core of VPA involves analyzing volume and price action using candlestick patterns rather than bars, emphasizing the importance of support and resistance levels where price tends to move toward or pause.

02:18

Currency dashboard and strength indicators

02:18

The speaker introduces advanced indicators called the currency dashboard, designed to identify potential pauses and reversals in currency flows within forex trading. These tools begin with a currency strength indicator, which functions more as a flow indicator to reveal where the strongest buying and selling pressures exist among individual currencies. The goal is to match these strengths and weaknesses across currency pairs to identify strong, divergent moves, such as when one currency shows strong buying and its paired currency shows strong selling. The currency matrix is also mentioned as a tool to help analyze these complex movements, especially when a dominant currency like the British pound influences pairs in an asymmetric way.

03:42

Currency matrix, array, and heat map explained

03:42

The segment explains tools for analyzing currency pairs, including identifying individual currencies like the British pound and evaluating their strength and trend movements across multiple timeframes with a currency heat map. It highlights a new, streamlined version of the Currency Heatmap for TradingView, developed despite coding restrictions. Additionally, the segment introduces an educational Forex trading program based on VPA concepts, which includes five modules covering psychology, fundamentals, relationships, technical analysis, and trading mechanics. It also mentions a funded Forex program allowing students to trade with the provider’s money, eliminating personal financial risk.

05:29

Market highlights and upcoming events

05:29

The speaker introduces the trading indicators site and mentions that TradeStation is now fully integrated. The focus then shifts to Forest Factory and the second day of J-PAL’s testimony before Congress, emphasizing the importance of monitoring market events. The speaker notes ongoing interesting price action in the futures market and highlights the current market as being at an inflection point with various undercurrents.

06:24

The discussion turns to upcoming market events, including speeches by FOMC members and the British pound’s monetary policy report. A financial calendar is referenced to keep track of key events. The overall market sentiment is described as fragile, despite an 18-point increase, with a reminder that markets are forward-looking, as seen during the pandemic when markets rose in anticipation of vaccines.

07:20

The NASDAQ has experienced a significant sell-off in tech stocks, which will be discussed in an upcoming webinar. The speaker points out an interesting trading pattern from the previous day, reflecting a drive higher in the market. The segment ends with the speaker preparing to review charts, noting the use of MT4 and NinjaTrader platforms for analysis.

08:09

The speaker explains a challenge with MT4 and MT5 platforms regarding time stamps, requiring a two-hour adjustment to align with local time, which can be inconvenient. There is mention of software solutions that might help provide real-time display on charts, suggesting possible future exploration of these tools.

08:34

Importance of multiple timeframes in VPA

08:34

The speaker discusses the importance of using multiple timeframes in Volume Price Analysis (VPA), recommending three timeframes: the main trading chart, a faster timeframe, and a slower ‘benchmark’ timeframe. This approach helps traders understand the overall trend and decide whether to trade with or against the dominant sentiment on the slower timeframe. Trading counter to the slower timeframe is valid but involves higher risk, as it means going against the prevailing trend. The speaker emphasizes the value of confirming setups with candle patterns and other indicators before taking a trade.

10:31

Strong currency moves and divergence concepts

10:31

The speaker discusses the value of using hourly charts in the Forex market due to the different trading sessions and participation levels. They highlight the importance of observing divergence between currencies during moves, noting that the New Zealand Swiss pair showed a notably strong move recently. However, trading the euro-dollar pair was challenging due to a lack of divergence, with both currencies moving in the same direction, leading to a grinding market without clear trends.

12:46

The speaker explains how a currency strength matrix can help identify which currency pairs are moving strongly, emphasizing the New Zealand Swiss pair’s high strength value on the hourly chart. They note that such extreme moves often indicate a market prone to mean reversion, where prices expand and then snap back toward the average, akin to an elastic band, referencing Bollinger Bands as a tool related to this concept.

14:06

Mean reversion and catching currency moves

14:06

The speaker explains that currency markets often exhibit mean reversion, with prices diverging and then returning to average levels, making them suitable for trading volatility. Traders can choose to catch moves either at reversals or by joining ongoing trends, and using multiple timeframes helps identify pullbacks or corrections within larger moves. The discussion then shifts to reviewing current currency movements, noting that the New Zealand dollar is rising and showing strong moves, while traders can bookmark pairs to monitor them on faster timeframes.

15:29

The analysis continues with observations that the Australian dollar is moving higher, while the Swiss franc and Japanese yen are declining, influenced by positive equity indices and market sentiment following reassuring comments by Powell. The flow into New Zealand dollar pairs is inconsistent at the moment, unlike earlier when it was more uniform. The speaker highlights the ease of tracking yen pairs due to the yen being the counter currency, noting divergence among yen pairs and identifying New Zealand yen as the most extended on the hourly chart.

16:53

The euro yen pair is rising with the euro gaining strength and the yen continuing to weaken, suggesting a potential trading opportunity if the yen’s decline persists. The speaker discusses the concept of consensus among currency pairs for clearer trade signals. Examining shorter timeframes, the yen is still falling but has experienced a minor rally attempt. Caution is advised as currencies can remain in oversold conditions longer than expected, as seen recently with the British pound.

17:51

A brief rally in the yen around 11:30-11:35 is analyzed, with the speaker questioning whether it provided a viable trading opportunity. However, the hourly chart suggests the yen is still rolling over and weakening. The importance of using multiple timeframes is emphasized, as different trends may appear on faster versus slower charts. The focus then shifts to the Swiss franc, encouraging traders to highlight individual currencies and examine their pairs to identify potential trades.

19:12

British pound unusual moves and volatility candles

19:12

The discussion begins with the observation that certain currencies like the Swiss yen are moving uniformly and have low values, making them less interesting for trading. Attention shifts to the British pound, which has been heavily bought despite negative Brexit narratives. Analysts are puzzled by its strength, especially given that it has consistently been bought since the start of the year, defying expectations.

20:05

An unusual overnight price movement occurred in the British pound during the Asian session, which is rare. The pound experienced a sharp surge around 11 PM, creating a volatility candle with a large wick, a sign of market weakness. This kind of spike was last seen during the Brexit period, indicating unpredictable market behavior even in quiet trading sessions.

21:05

The volatility candle, based on average true range calculations, indicated that the price movement was outside normal ranges for the pound at that time, leading to an immediate retracement within the candle’s spread. The unexpected spike and subsequent pullback suggest a momentary market anomaly, with volume confirming the significance of this move despite it happening during a typically low-participation session.

22:00

Following the initial spike and retracement, another rally attempt was made but the pound appears to have rolled over. Key price levels, including the high and low of the volatility candle, serve as important support and resistance points. Most participants were not trading during this session, emphasizing the unusual timing of these movements. The analysis then shifts to the daily chart for a broader perspective.

22:58

On the daily chart, the British pound may be forming a ‘shooting star’ candlestick pattern, suggesting a potential reversal or pullback. The analysis also considers more granular timeframes, such as five-minute and 15-minute charts, and mentions the use of a Renko chart set to three pips to capture price movements more clearly.

23:25

Renko charts and trend monitoring explained

23:25

The speaker explains the Renko indicator developed for trading, which allows users to set a fixed value or calculate it based on average true range. The indicator helps identify potential entry points during trend movements, with a focus on the geometric clarity Renko provides for primary and secondary trends. The importance of matching trend dots to assess trend development is highlighted.

25:04

An overview of primary, secondary, and micro trends is given, emphasizing their role in technical analysis and volume price analysis (VPA). The speaker describes how the Renko indicator signals trends and reversals through color changes and trend dots, advising traders to trust the indicator’s signals during trades. The challenge of distinguishing between pullbacks, corrections, and full reversals is discussed.

26:27

The segment covers how micro trends and trend monitors help traders evaluate pullbacks and reversals. The Renko trend monitor’s color changes indicate potential trading opportunities even during minor reversals. The critical role of support and resistance levels, particularly the R6 level, is introduced as a key factor in confirming trend direction and price behavior.

27:22

The speaker illustrates how the R6 level acts as strong support during price tests before a final break leads to a primary downtrend, tracked effectively using Renko. The interaction of volume-based support and resistance, including the volume point of control, is emphasized as an important complement to price-based levels, enhancing analysis and decision-making on the chart.

28:20

Volume-based support, resistance, and congestion

28:20

The segment explains market profile concepts, focusing on the volume point of control where trading volume creates congestion phases, which are origins of trends. Using a Renko chart alongside a time chart, it illustrates how price action attempts to move away from the volume point of control but initially fails, showing price movements around key resistance levels labeled R6, R5, and R4. These levels act as volume bands, serving as boundaries and support/resistance areas. The discussion also highlights how individual currency lines moving in the same direction indicate a congestion phase, and how the methodology and indicators together help clarify price action and reduce uncertainty in trading.

30:11

This part emphasizes that trading inherently involves uncertainty, but the presented methodology and indicators aim to mitigate some of that uncertainty by providing clear behavioral patterns at key price levels. Recognizing how traders react at significant levels like zeros and fives, as well as price and volume-based support and resistance points such as the R4 level, helps traders anticipate congestion and price behavior, enabling a more relaxed and confident trading approach.

31:05

Trading psychology and managing uncertainty

31:05

The speaker discusses current market conditions focusing on the British pound (cable) and the US dollar, noting a downward turn in both currencies. They highlight the importance of technical support levels, especially volume-based support, and explain the use of the Camarilla indicator on the hourly chart. This indicator refreshes levels differently depending on the timeframe, with hourly charts showing weekly levels. Key levels to watch are the third and fourth Camarilla levels, which are critical for potential price targets or pauses.

32:32

The analysis continues with a focus on the British pound’s relative strength and sell-off patterns. The pound’s decline is not the strongest compared to currencies like the New Zealand dollar, which is currently very strong. The speaker notes how market sentiment might shift during the New York session, causing selling pressure on the pound to pause or move into congestion. This selling pressure could then transfer to other pairs, such as those involving the Canadian dollar, which is more actively traded in the North American session. The segment ends with the speaker passing control to another analyst, David.

34:18

Multiple platforms and yen currency analysis

34:18

The speaker introduces their multi-platform trading setup including NinjaTrader and TradingView, then focuses on the yen as a key counter currency. They explain how the yen’s strength and sentiment are monitored across multiple time frames (5, 10, and 15 minutes) to identify risk-on or risk-off environments. The analysis highlights that the New Zealand yen is currently the strongest, with a steep upward trend, while the pound yen and Swiss yen are weakening. This approach helps traders understand where the strongest universal market flows are.

36:02

The discussion continues on trading with the universal market flow, emphasizing the importance of aligning trades with prevailing trends, such as selling yen when the market is doing so. The speaker also introduces a ranking ladder that identifies currency pairs approaching overbought or oversold conditions, with indicators turning bright red or blue to signal potential reversal setups. They stress the need for patience when trading these extremes, as reversal opportunities come with risks.

37:25

Trading extremes and risk management

37:25

The speaker explains the need for using a wider stop loss when trading currencies to avoid being prematurely stopped out due to market noise in overbought or oversold conditions. Entering trades early requires accepting a larger risk profile. The currency heat map is introduced as a tool that ranks currency pairs more slowly compared to the currency matrix or array, because it applies weighting based on different timeframes.

38:25

Each cell in the heat map carries weight proportional to the timeframe it represents, with longer timeframes like daily charts having more influence on the ranking. When cells begin to shift into bearish territory, the weighting causes the currency pair’s rank to change gradually over days rather than minutes. This slower movement reflects the importance of higher timeframes in assessing currency strength and sentiment changes.

39:43

Sentiment changes start in the fastest timeframe and ripple through to slower ones, highlighting the importance of using multiple timeframes for both charts and indicators. The speaker points to the New Zealand yen on a 60-minute CSI as an example and mentions a strategy involving long positions in yen pairs, driven by US market sentiment. This approach has been consistently profitable over several months.

41:09

Market shakeout and buying pressure example

41:09

The price action from the previous day indicated a massive amount of buying following a significant shakeout where traders were dumping stock. This surge in volume suggests strong market interest and possibly a repeat buying pattern today, with expectations for a shorter to medium-term recovery.

41:38

The discussion covers the YM, NQ, and S markets with a focus on risk assessment. Attention is given to the New Zealand Yen as a scalping opportunity on a 15-second chart, supported by trend monitors signaling favorable conditions and a pause around the volume point of control (VPOC).

42:06

There is resistance overhead supported by accumulation and distribution levels, with a strong support region identified. The New Zealand Yen remains strong but is nearing overbought or oversold conditions, prompting consideration of whether to trade New Zealand Yen or New Zealand Swiss.

42:36

The alignment of three risk currencies moving in the same direction alongside commodity currencies at the opposite extreme creates an ideal market condition. This convergence provides high confidence for trades based on the overall market weight moving in a coordinated manner.

43:04

Commodity currencies and risk currencies at opposite extremes form a market scenario where constructing baskets across these currencies is advantageous. Even if only some currencies in the basket perform well, the diversified exposure mitigates risk and enhances trade potential.

43:31

Basket trading is highlighted as an effective strategy to spread risk, emphasizing the rule of closing all positions in the basket collectively regardless of individual performance. This method avoids cherry-picking and maintains a disciplined approach to trading multiple currencies.

44:00

Price action shows signs of weakness with volume patterns indicating a potential reversal. The analysis focuses on how low volume nodes and low volume concentration areas typically allow the market price to move through quickly, reflecting on the nuances of volume-based support and resistance.

44:27

The market is expected to move swiftly through low volume regions, contrasting with price-based support and resistance levels. Volume point of control histograms provide insight by analyzing the market through volume concentration, where high volume areas act differently compared to low volume zones.

44:56

Support, resistance, and trend monitor utility

44:56

The speaker explains how market behavior changes in low volume areas where price tends to move quickly through congestion zones. They highlight the usefulness of the trend monitor indicator, which helps traders stay confident and remain in profitable trades without being shaken out. The discussion then shifts to analyzing multiple timeframes, showing bearish signals from 15 seconds up to one minute, with price moving through volume points of control (VPOC), signaling potential resistance to further movement.

45:55

The presence of VPOCs across multiple timeframes (one, three, and five minutes) suggests that price movement will face strong holding points, preventing a straightforward continuation of the trade. The speaker emphasizes that slower timeframes carry greater significance than faster ones because the element of time adds weight to technical factors like support, resistance, and volume.

46:53

On the 15-minute timeframe, a pause in price movement is attributed to a previous volatility trigger, with the market still showing bullish tendencies. However, the price is at an extreme overbought or oversold level, which can mislead traders into prematurely entering trades. The speaker advises that trading at such extremes requires patience and a wider stop loss, as tight stops are ineffective during these periods. They illustrate this with the example of the pound’s recent strong sell-off.

47:47

The speaker explains why the pound/yen pair does not exhibit a strong trend despite the pound selling off sharply. This is because both currencies are moving in the same direction (both falling), which weakens the overall trend strength. Strong trends typically occur when one currency is rising and the other is falling, or vice versa, creating more momentum and clearer directional movement.

48:18

TradeStation futures and radar screen setup

52:29

Dollar and commodity currency moves overview

52:29

The speaker discusses the current market timing around 11:45 to 12 o’clock, noting the London and US market opens and the dollar’s movement. They highlight a strong upward trend in the New Zealand dollar over a long period, alongside a notable rise in the Aussie Swiss pair. The importance of patience in trading is emphasized, especially when holding positions over months. Different trading strategies such as scalping and longer-term trades are mentioned, with advice to separate these approaches into different accounts to avoid confusion.

53:20

The speaker elaborates on managing multiple trading accounts: one for scalping with frequent small trades, another for slower-term trades, and a further account for long-term position trades aimed at capturing major trends. They use an hourly chart to illustrate current trends, noting the New Zealand dollar’s strength and the Swiss franc’s weakness. However, they caution that past performance does not guarantee future movements, and traders must carefully analyze charts to avoid false assumptions about currency movements reversing predictably.

54:19

Using currency matrix and heatmap indicators

54:19

The speaker explains how changes in market sentiment are reflected in volume and key levels such as support or the VPOC on different time frames. These indicators help traders identify important areas to focus on, similar to tools like the currency array and heat map, which guide where to look for trading opportunities.

54:47

The matrix and array indicators are demonstrated working well on TradingView. The speaker highlights that purchasing the full TradingView education package grants free access to upcoming indicators including the array, matrix, heat map, VPOC, support and resistance, and Renko charts. This combined offering presents significant value and savings for users.

55:43

The matrix indicator provides unique data not yet available on other platforms, indicating extremes in price levels. It benchmarks current values against all-time highs and lows to give traders a sense of market positioning. This functions similarly to the CSI levels that indicate overbought or oversold states, helping traders assess potential market extremes.

56:38

The speaker discusses limitations with the heat map feature but outlines improvements including fewer sales options and customizable timeframes on TradingView, which supports an extensive range of time intervals. This enhancement is seen as a valuable addition and is currently in development for release on the TradingView platform.

57:34

Volume and price action signals for trend change

57:34

The speaker explains the concept of Volume Price Analysis (VPA), highlighting how it predicts future price action by analyzing volume trends. They point out that falling volume alongside falling price suggests weakening selling pressure and the potential entry of buyers, indicating a possible market support or reversal.

58:29

The discussion continues on the idea that price movements require effort, with falling prices also needing effort, which is less intuitive than rising prices needing effort. The current market situation shows falling prices with declining volume, suggesting a weakening downward trend and the likelihood of some buying or congestion, though a confirmed reversal would require further analysis on slower timeframes and trend indicators.

59:26

The speaker shifts focus to trend monitoring tools, noting that the Australian dollar shows consistent bullish signals across multiple timeframes. The pound is starting to show signs of similar bullish sentiment, transitioning from previously bearish conditions, indicating a potential change in market sentiment.

01:00:20

The analysis extends to the US dollar, which is currently falling strongly on the five-minute chart. The speaker outlines the importance of monitoring multiple timeframes and volatility indicators to gain a comprehensive understanding of market movements. Visual tools help traders quickly identify shifts in sentiment and volatility for informed decision-making.

01:01:18

The session concludes with advice on patience in trading reversals, emphasizing that certain currencies like the yen and New Zealand dollar may remain overbought or oversold for extended periods. However, eventual reversals are expected due to the market’s mean reversion nature, underscoring the importance of waiting for confirmation before acting.

01:01:45

Complete Forex Trading Program overview

01:01:45

The Complete Forex Trading Program is introduced as a comprehensive course covering all essential aspects of trading with confidence. It is recommended to start with the psychology module to understand personal strengths and weaknesses, which helps in adopting a suitable trading approach. Forcing oneself into uncomfortable methods is discouraged. The program includes modules on fundamentals, relationships, technical analysis, and trading mechanics, supported by around 250 hours of video content and resources such as webinars and a topic library.

01:02:43

The course also offers detailed instruction on using trading indicators and a deep dive into Volume Price Analysis (VPA) with extensive chart examples. Support is provided through a VPA chat room staffed by the instructors and experienced traders for real-time questions and assistance. Recently, a funded forex program was added exclusively for students to enhance their learning and trading opportunities.

01:03:12

Funded Forex Program details and profit sharing

01:03:12

The program offers students a unique opportunity to trade using the company’s capital, removing personal financial risk. Participants can start trading with evaluation accounts of $5,000, $10,000, or $15,000, aiming to meet realistic profit targets. Upon achieving these targets within set rules, their account size is multiplied by four, progressing them to manage larger portfolios starting at $60,000.

01:04:11

As traders advance to higher account levels, they receive monthly profit rebates, starting at 50% and increasing to 60% at the $2 million level, providing a substantial income. The evaluation stage is designed to demonstrate consistent trading ability. Once proven, traders gain access to more capital with no personal risk, exclusive to students. Additionally, full package investors receive complimentary access to a range of trading indicators across multiple platforms such as TradeStation, TradingView, NinjaTrader, and MetaTrader.

01:05:07

Indicator packages and upgrade credits

01:05:07

The speaker explains that purchasing the full package grants free access to all future indicators developed. Customers who have previously bought one or two indicators receive credit towards upgrading to the full package or education program. Additionally, they highlight Anna’s analysis resources and mention a new book publisher in Vietnam that has quickly achieved top rankings within a few months, much to the publisher’s satisfaction.

01:06:03

Book publishing success and webinar closing remarks

01:06:03

The speaker announces the release of the stock trading book in Vietnamese, adding to existing versions in Chinese, Japanese, and Taiwanese. They express gratitude for the success of the books and conclude by inviting attendees to join another webinar in 45 minutes, thanking everyone for their participation.

By Anna Coulling – creator of volume price analysis