No need for a futures account to trade the Dow Index – use MT4 or MT5

No need for a futures account to trade the Dow Index – use MT4 or MT5

The MT4 platform is often regarded as one which is focused on forex, which is certainly true, but over the years increasingly other markets have been embraced both on MT4 and MT5. And the US indices are no exception and so offer a great way to get started without the need for a futures broker and with hugely reduced margin requirements. In this part of the US trading session I show you how and also the importance of understand the key levels defined by support and resistance, volume, and also the Camarilla levels indicator.

00:11

Introduction to Renko workspace and multiple time frames

00:11

The presenter introduces their Renko workspace, highlighting its unique features and the ongoing reversal that illustrates the effectiveness of using multiple time frames. The setup includes time-based charts at 15 seconds, 30 seconds, and one minute intervals, allowing the application of volume price analysis (VPA). Various indicators such as volume point of control, accumulation distribution for price levels, and a trend monitor are integrated to enhance analysis.

01:05

Optimal Renko brick sizes explained

01:05

The speaker explains the use of Renko charts aligned to different time frames, such as 15 seconds, 30 seconds, and one minute. They demonstrate adjusting the Renko box size from nine to eight points, which translates to forty dollars per brick on a small Dow contract. The process is repeated for larger box sizes, with the 30-second chart set to 12 points and the one-minute chart set to 17 points per brick. The speaker emphasizes the value of these bricks in trading and the careful handling needed when adjusting settings, especially on a mobile broadband network.

02:42

The Renko optimizer in NinjaTrader automatically determines the optimal brick size for Renko charts, eliminating guesswork. This functionality is compared to the tick speedometer used for tick charts. The speaker notes the challenge of selecting appropriate settings for non-time-based charts and mentions that traders can still choose their preferred brick size based on their trading needs.

03:12

Trend monitor and multi-timeframe trend analysis

03:12

The segment explains how trading at the optimal brick size for a given trend enhances the effectiveness of multiple time frame analysis. It highlights the use of trend monitors on varying Renko charts—8, 12, and 17 bricks—and how trend dots closely follow price action to indicate bullish reversals. The trend dots change color as they move relative to the price bricks, signaling shifts in momentum. Despite some fluctuations on faster charts, the overall trend remains bullish, and the Tremontus indicator shows no signs of reversal, providing strong confidence to hold the position. Mastering this aspect of trading is emphasized as a key challenge.

05:22

Importance of holding trends for trading success

05:22

The speaker discusses the challenges of staying in a market trend long enough to maximize profits. They emphasize that traders often get shaken out early, missing the larger gains when the trend continues. Successful trading involves accepting small, frequent losses while holding on for fewer but much larger winning trades. Effective methods are needed to stay in trends without exiting prematurely, aiming for scenarios where a low win rate can still be profitable due to the size of the winners compared to the losses. Additionally, the speaker notes the importance of considering broader market factors such as related markets, bond prices, bond yields, and currencies to manage risk effectively.

07:23

Risk on/off sentiment and currency market overview

07:23

The speaker explains the current market dynamics focusing on the Japanese yen, which is selling off after being overbought. This selling off of the yen reflects a shift toward a risk-on environment, as money flows out of safe-haven currencies like the yen and into riskier assets such as the Australian dollar, New Zealand dollar, and Canadian dollar. This movement highlights the ongoing market sentiment oscillating between risk-on and risk-off modes.

08:26

At its core, trading is driven by money flow shifting between safe-haven and risk assets, a seesaw effect that constantly influences markets across all timeframes. The speaker notes the importance of monitoring indicators like the VIX, which is currently lower, signaling reduced market volatility. The Renko charting method is praised for providing smooth visualizations of price transitions, aiding in identifying changes in market sentiment and trends.

09:21

The trend monitor tool is introduced as a valuable indicator that detects significant trend transitions. It highlights shifts from downtrends to rallies through gradual color changes from dark red to bright blue, signaling increasing trend strength. This visual aid helps traders distinguish important trend changes from minor fluctuations, enhancing decision-making based on clearer market signals.

09:56

Trend monitor and accumulation distribution indicator

09:56

The speaker explains the use of the accumulation distribution indicator to identify market strength and resistance levels visually. Levels tested multiple times, such as one tested eight times, are considered strong, while others with fewer tests are weaker. Clusters of strong levels signal significant zones of support or resistance. The discussion also highlights integrating other technical analysis tools, like non-time-based charts such as Renko or tick charts, to apply volume price analysis more effectively. Examples are given of volume spikes accompanying price movements, with observations on candle formations indicating momentum and emerging market weakness.

12:05

Volume analysis and resistance levels

12:05

The speaker discusses undesirable price action during an upward move, highlighting weakening rallies despite decent volume. They explain the concept of resistance levels using the analogy of Popeye and spinach, where repeated tests of a level strengthen it. A key resistance level has been broken, turning it into potential support, but the market is currently struggling to push through it with sufficient volume.

13:01

Attention is given to higher resistance levels marked by blue lines, with price targets moving from 608 to 610 and then 630. The volume profile shows heavy volume at certain levels that quickly diminishes, implying that less effort will be needed for the market to move higher once it surpasses these points. The speaker notes positive movements in the Australian dollar and a weakening yen while monitoring the volatility index (VIX).

14:00

The VIX is currently at 22.40, reflecting moderate volatility. The speaker briefly shifts focus to reviewing three indices and emphasizes the benefits of trading on the Globex platform, which offers smoother price action and reduced volatility compared to other trading hours.

14:34

Index market analysis and intraday trading outlook

14:34

The speaker discusses the evolving perception of trading on Globex, noting that initial criticism has shifted to acceptance as it proves effective. They analyze the three major indices (ES, NQ, YM) on five-minute charts and daily charts to gain perspective on the current rally in the YM. The market has reached a significant volume point of control, suggesting an expected congestion due to the large volume that must be overcome for further upward movement.

15:28

The analysis continues with the expectation of market congestion around key volume levels, especially near resistance points approximately 20 points above current prices. While the volume resistance is significant, if it dissipates, a rapid price move upward is possible but will require substantial effort. The NQ index shows a similar pattern, attempting to break through its volume point of control, indicating a cautious but potentially bullish intraday environment.

16:23

Trend monitors across the indices reflect a transition from bearish to more bullish signals, with colors indicating market phases shifting to brighter blue, signaling bullish momentum in the longer term. Despite this, the speaker emphasizes the importance of focusing on intraday trading based on real-time screen data. The discussion then shifts toward examining developments in other markets.

16:53

Currency futures and risk currency movements

16:53

The segment reviews currency futures on a 15-minute timeframe, highlighting strong dollar buying since midday. The Japanese yen is beginning to weaken, which could benefit the upcoming trade discussed.

17:21

Risk currencies like the New Zealand dollar, Canadian dollar, and Australian dollar are showing strong buying interest. Although these currencies don’t always move together, they generally follow similar trends as risk assets, which is a positive sign. Meanwhile, the Japanese yen is starting to decline.

17:53

The weakening of the yen on the 15-minute chart reflects a shift in market sentiment towards risk-on, leading to further market rallies. Various currency pairs including the Australian dollar, British pound (cable), and Canadian dollar futures are observed, with futures prices quoted inversely against the dollar.

18:27

Examining euro-dollar, yen-dollar, and New Zealand dollar pairs, the analysis notes that strong dollar buying should push most currencies in the same direction. However, some pairs show subdued movement, partly because commodity currencies like the Canadian and Australian dollars are rising alongside the dollar.

18:53

The market is experiencing congestion with sideways movement in commodity currencies due to them moving in the same direction with the dollar. The euro shows some momentum, and the Japanese yen is beginning to reflect dollar strength by falling. The British pound remains mostly flat, influenced by limited dollar momentum.

19:19

The yen continues to fall while the dollar rises, but the British pound remains range-bound with little movement. The session concludes with a summary and acknowledgment of running over time.

19:49

Forex education and funded trading program details

19:49

The speaker introduces a comprehensive forex education program available at quantumtradingeducation.com, which includes all analysis, books, and links to other related sites. A new opportunity within this program is the funded forex account, where students can trade with company funds starting at $5,000 up to $2 million. This funded account offers a unique upgrade path from education to trading without risking the student’s own money.

20:47

Access to the funded forex program requires enrollment in the complete forex trading program. The funded program allows students to trade company funds risk-free and keep their profits. A webinar about this opportunity is scheduled for Thursday at 2 PM UK time, with details available via email. Additionally, trading indicators can be found on quantumtrading.com for multiple platforms including MT4/5, Ninja Trader 7/8, and TradingView, with TradeStation support coming soon.

21:47

Indicator availability and upcoming webinars

21:47

The speaker discusses upcoming updates to TradeStation, highlighting version 9.5 which integrates with Interactive Brokers for direct trading through a discount brokerage. They also mention TradeStation Securities version 10 and above, focusing heavily on stocks. Separate sessions will cover forex indicators during the London session. The speaker thanks the audience, reminds them of an upcoming webinar on Thursday, and announces the next sessions on Tuesday at 7:45 UK time for London and 3:00 for the US session.

By Anna Coulling – creator of volume price analysis