Silver futures deliver some classic volume price analysis lessons

Silver futures deliver some classic volume price analysis lessons

More lessons in volume price analysis using silver futures.

00:16

Introduction to volume price analysis

00:16

The speaker begins by ensuring the audience can see the screen and moves the chat interface out of the way. They introduce a silver chart to illustrate key points about volume price analysis. Emphasis is placed on recognizing signals within any chart or timeframe and the importance of patience in allowing those signals to fully develop.

00:47

Silver futures trap move explained

00:47

The speaker discusses silver futures, highlighting a trap move occurring at 1:00 PM UK time, which coincides with the opening of the US cash markets. This time brings increased volume and volatility, demonstrated by a significant trigger and notable volume, characterizing the move as volatile.

01:16

Volatility trigger and reversal

01:16

The volatility trigger appears on the candle in real time, causing many traders to enter the market out of fear of missing out. This often leads to them being caught in a reversal as the price closes off. Following this, the market enters a congestion phase before rolling over into a downward move. Such signals frequently occur and are a key aspect of price analysis, indicating market weakness.

01:47

Patience in trading signals

01:47

The speaker advises patience when trading, emphasizing that although it’s tempting to jump in immediately, it’s important to wait for moves to fully develop. They mention the rare occurrence of a v-shaped reversal or rally, where the market reverses sharply right after a single signal. Missing such quick moves is common, but most trading opportunities do not behave this way.

02:18

Price waterfall with rising volume

02:18

The speaker explains that markets often signal upcoming moves through initial weakness before the main price movement occurs. Using the NQ daily chart as an example, they describe a classic price waterfall pattern characterized by a significant downward price move accompanied by rising volume, which is a desirable confirmation of the market’s direction.

02:47

Market traps and trader mistakes

02:47

The segment explains how the largest volume bar beneath a particular candle signals a volatility trigger, indicating a rapid downward market move. It describes how market makers and large operators use this situation to set traps for traders driven by fear of missing out, causing latecomers to enter at a disadvantage before the trap closes.

03:14

Developing trend reversal signals

03:14

The segment discusses recognizing a market move with strong volume and a deep wick, indicating buying interest and potential trend reversal. It emphasizes patience, noting that on a 15-minute timeframe, several more candles may form, suggesting the market might experience congestion before a clear direction is established. The volume point of control is also a key factor, implying the market is likely to consolidate rather than move sharply at this stage.

04:07

Breakaway trade timing advice

04:07

The speaker discusses taking a long position based on reversal signals and emphasizes the importance of patience in trading. When asked about how many pips to allow on a breakaway trade, they explain there is no strict rule and that traders must use their judgment. The advice given is to wait for the first candle to develop with good volume and agreement before making a decision. The speaker highlights that volume price analysis requires experience and patience, as signals are frequent but must be carefully interpreted.

05:03

Recognizing various price signals

05:03

The speaker discusses various market signals such as high volume on compressed price, hammers, shooting stars, weaknesses, and trap moves. They emphasize the importance of patience and waiting for these signals to manifest. The same patterns are observed on different timeframes, with significant volatility and heavy buying volume, followed by a sharp price move.

05:31

Support, resistance, and volume nodes

05:31

The market is beginning to break higher, prompting analysis of support and resistance levels. There is minor price resistance ahead, as well as a low volume node that could influence price movement. If the market reaches around 17.6 per ounce, it is expected to pass through this level quickly, illustrating the impact of volume nodes on price action.

05:55

Daily chart volume and congestion

05:55

The speaker discusses price action analysis on the daily chart, focusing on the Charles indicator for context. They note a strong previous candle with good volume followed by a narrow spread candle with similar volume, indicating potential weakness. This observation is supported by trading activity near the volume point of control, suggesting expectations for upcoming market behavior.

06:24

Short-term resistance and trade timing

06:24

The speaker discusses expected market congestion and analyzes potential short-term trade opportunities on a 10-minute chart. They highlight strong resistance levels and consider whether a 15 cent per ounce price movement justifies taking a long position or if it is better to wait for a clearer opportunity. The segment ends with a transition back to another speaker.

By Anna Coulling – creator of volume price analysis