Some great trades on the currency majors as US dollar finds some strength intraday

The London forex session delivered some excellent trading opportunities

The London forex session delivered some excellent trading opportunities across the faster timeframes with the US dollar finding support and reversing the longer-term sentiment for the current of first reserve.

00:00

Webinar introduction and disclaimer

00:00

The webinar begins with a warm welcome and a casual mention of the unexpected sunshine and a neighbor’s bonfire causing some minor inconvenience. The host then shifts focus to the session’s main topic: the forex market. A disclaimer about the risks of trading is emphasized, advising participants not to invest money they cannot afford to lose. The audience includes new attendees, forex program students, and quantum trading users, and the session will involve reviewing charts and forex market analysis.

01:29

Volume price analysis methodology explained

01:29

The speaker introduces volume price analysis (VPA), a methodology that studies the interrelationship between price action and volume in trading. They emphasize that alongside technical analysis, fundamental news and data releases, especially at the start of a new month, significantly impact price movements. Cross-market analysis is also important, as related markets influence individual currencies and currency pairs.

02:38

The speaker explains that VPA uses price and volume data, addressing the challenge of volume measurement in the spot forex market, which lacks a central exchange. Instead, tick volume from individual brokers serves as a useful proxy for actual volume, despite its limitations. This data is sufficient for effective analysis when combined with charting tools.

03:43

The methodology incorporates candlestick charts, pattern recognition, and crucially, support and resistance levels. The speaker describes their preferred charting platforms, mainly MT4, while noting others use TradingView, NinjaTrader, and TradeStation. They also discuss the use of indicators, emphasizing proper application and optimization within the correct market environment to enhance analysis.

04:53

Indicators are valuable tools if applied correctly, and VPA helps identify the current market ‘sea state,’ a concept familiar to program participants. Timeframes, including multiple timeframes, are essential in trading setups. The speaker highlights custom-developed indicators designed to simplify forex and VPA trading, supplementing standard platform tools to improve decision-making.

06:01

Currency strength and dashboard indicators

06:01

The speaker explains the importance of understanding currency flow to interpret price action, highlighting that sentiment drives these movements. They introduce the currency strength indicator, which breaks down individual currency strength, and the currency heat map for analyzing currency pairs. The discussion then shifts to a personalized dashboard used for trading, featuring the Dixie indicator provided by their broker XM, which helps track whether the dollar is being bought or sold.

07:08

The speaker discusses the use of key price levels in trading, derived from methods such as Fibonacci, moving averages, and specifically the Camarilla protocol, which provides six important levels. Additionally, volume levels are emphasized, particularly the volume point of control, a key concept in market profile analysis. These indicators were developed as part of a quantum trading package to integrate volume and price analysis, with the volume point of control marked by a yellow line indicating a significant area on the chart.

08:20

Dollar index volume and price analysis

08:20

The Dixie (dollar index) is trading sideways within a range, showing no clear trend or divergence. This sideways movement is relatively calm with low volatility, characterized by alternating up and down days. The price is hovering around the volume point of control and has established double support both from a price-based level (S4 on the Camarilla) and volume support.

09:28

Despite the sideways movement, the Dixie has a slight bearish bias as price action remains mostly below the volume point of control. For the dollar index to rise, it faces significant resistance from multiple price levels and a dense volume cluster, making upward movement challenging without substantial buying effort.

10:00

The volume histogram shows heavy trading concentrated around the current price zone, indicating strong volume resistance. If the price attempts to move higher, it will encounter difficulty pushing through this area and will require significant market participation and buying pressure to overcome it.

10:30

The dollar is currently bearish partly due to heavy short positions in the futures market, as indicated by CFTC data. This bearish pressure affects both the spot and futures markets, reinforcing the current support and resistance setup observed in the dollar index.

11:02

Hourly chart and currency sentiment

11:02

The speaker explains the usefulness of the hourly CSI chart for forex trading, highlighting its ability to provide a near real-time snapshot of individual currency movements. This timeframe is favored by many traders, including scalpers, as it balances closeness to the previous session with insight into current market conditions. Observations include notable buying activity in the US dollar and the British pound, despite recent volatility in the pound, which aligns with the speaker’s focus on sterling pairs and their relevant time zone.

12:46

Attention is drawn to the local time zone influences on currency trading, such as the yen’s prominence during the Asian session, while still allowing trading across other sessions. The speaker discusses the importance of monitoring safe haven currencies like the dollar, Swiss franc, and yen for market sentiment clues. Current market conditions show divergence among these currencies, reflecting nervousness and fragile sentiment driven largely by inflation concerns and ongoing uncertainty about the virus, contributing to a cautious trading environment.

14:16

The discussion shifts to the impact of commodities on currencies, noting that risk currencies like the Australian dollar may be buoyed by strong commodity demand from countries like China, sometimes defying broader risk-off narratives. The speaker emphasizes how these dynamics can be observed through a single indicator before moving on to analyze flow directions in currency pairs using a matrix tool, which reveals the relative strength and weakness among currencies, such as the recent weakness of the New Zealand dollar and strength of the dollar-Swiss franc pair.

15:53

The speaker explains the value of identifying divergence between currency pairs, where opposing forces of buying and selling can signal strong trading opportunities, whereas parallel movements often indicate congestion and less defined trends. The analysis focuses on the Australian dollar’s relative weakness, especially against the US dollar, and how this relative strength or weakness is reflected in cross pairs. This approach helps confirm whether buying or selling pressure on a currency is consistent across multiple pairs, aiding in more informed trading decisions.

17:07

Currency pairs and relative strength

17:07

The speaker discusses currency pairs focusing on the British pound against the US dollar (Cable). Despite strong buying in the US dollar, Cable is also rising, which is unusual. Traders are cautioned that Cable might not be the best pair to trade at the moment, as the strong dollar move may continue and cause a rotation in currency strengths. The speaker highlights the importance of analyzing currency pairs within their matrix to identify strong buying or selling trends in underlying currencies.

18:20

The analysis shows that the US dollar’s strength is more evident in the Australian and New Zealand dollars than in Cable or the euro-dollar pair. Observing these relationships helps traders anticipate potential reversals or continuation of trends. For example, if the Australian or New Zealand dollar pairs show a pause or reversal while the US dollar remains strong, Cable might soon reflect a stronger move. Indicators tracking currency behavior across pairs assist in identifying trading opportunities, especially during session crossovers, although such signals might not always be immediate.

20:04

Chart setups and time frame usage

20:04

The speaker shares their MT4 setup, which includes five charts: monthly, daily, hourly, 15-minute, 5-minute, and a Renko chart. They explain that MT4 restricts time frame choices, which can be beneficial for beginners to avoid overwhelm. The configuration is designed around Camarilla levels, which are calculated at the end of each trading session for all time frames except the hourly chart. These levels refresh daily but remain valid through the week on hourly to daily charts, offering support and resistance points unless broken early in the trading week.

21:47

The speaker discusses how Camarilla levels interact with market movements, noting that strong moves can blast through these levels but they remain relevant if price reverses. They also mention monitoring individual currencies to understand their movement or divergence. The Pound-Aussie pair is highlighted as having transitioned from a range-bound phase to a trending phase, supported by rising volume, which is a positive indicator. Congestion on slower time frames affects faster time frame price actions, often causing choppy movements before a trend emerges.

23:28

The speaker analyzes the price action during a trending move, identifying key candles that signal strength or weakness. A weak candle with a top wick and pivot indicates potential selling pressure, while a subsequent wide down candle with falling volume suggests limited selling interest. This combination signals a likely continuation of the uptrend once the high of the weak candle is broken. The explanation helps traders distinguish between minor pullbacks and potential reversals within a trend.

24:34

Further examination of pullbacks reveals ‘anomalous candles’ where high volume does not result in deep price drops, indicating sellers struggle to push the price lower. The presence of pivots suggests buying support during these pullbacks, reinforcing the ongoing primary uptrend. The speaker also notes that volume anomalies, like unusually low bars, can be due to holidays and should be interpreted accordingly. This volume and candle shape analysis aids in confirming the continuation of a trend versus a reversal.

26:01

The discussion shifts to the use of Renko charts for trade entries and managing positions. Renko charts offer a geometric view of price action that smooths out choppy movements seen in time-based charts. The speaker shows a trend with intermittent pullbacks and sideways consolidation, emphasizing that trends are rarely smooth. The example highlights a significant support level at the Camarilla S1 level where the price paused, illustrating how Renko charts help identify key levels and trend behavior.

27:51

The speaker explains the importance of the third and fourth Camarilla levels (S3, S4) as key areas where price tends to stop or test multiple times. They illustrate how Renko chart movements correspond with time chart patterns and volume points, showing confluence between indicators. The trend monitor’s color changes provide additional confirmation for potential exits or re-entries. This approach helps traders decide when to stay in a trade or exit based on multi-timeframe and indicator alignment.

29:32

The slower time frames indicate where the pair is likely to pause, specifically at the S3 Camarilla level, which aligns with the Renko chart’s R4 target. The currency strength indicator offers further guidance on whether this level will hold as a pause or continuation point. The speaker emphasizes using these levels as confluence for trading decisions. They conclude by noting the Aussie dollar’s different daily chart setup and prepare to hand over the discussion to another speaker.

31:15

Aussie dollar market volatility and trends

31:15

The speaker discusses the current sideways movement of the Australian dollar, highlighting how the market reflects uncertainty and indecision rather than a clear trend. They explain how volatility is evident on the hourly chart with choppy price action, unusual for the typically steady Aussie dollar. The importance of using price levels and resistance/support lines (such as R3 and S3) to navigate this volatility is emphasized.

32:24

The analysis continues with observations of specific price action signals like the shooting star candlestick near resistance levels and a hammer candle with volume that reversed quickly. The speaker notes the price movement breaking through support levels (S4) and stresses the need to follow volume and price-based levels to understand market direction. They mention plans to review monthly charts later to gain insight into potential future trends.

33:28

The session transitions as the speaker invites questions via chat and prepares to hand over to a colleague named David. They also tease a later discussion about Bitcoin, noting it will be interesting but not for the expected reasons. The speaker briefly comments on the pleasant warm weather, creating a casual and welcoming atmosphere for the audience.

34:01

Indices overview and sentiment impact

34:01

The speaker introduces the current movements in currency indices displayed on TradingView, focusing on the pound, yen, dollar, and euro. They highlight recent strong momentum in these currencies, noting a dollar surge after a brief pause and an inverse movement in the euro and yen.

35:00

The discussion shifts to analyzing currencies through the lens of market sentiment, particularly the dollar, yen, and Swiss franc. The speaker explains that these currencies don’t always move together but generally reflect overall sentiment trends, which can help identify trading opportunities beyond obvious currency pair movements.

35:52

The speaker elaborates on how related currencies typically move in tandem when sentiment is aligned, using examples like the euro-dollar and euro-yen pairs. They explain why the pound-dollar pair shows less strong trends due to simultaneous rises in both currencies, which dampens clear directional movement.

36:45

An analogy is used to describe the dynamic between two currencies moving similarly: like two trains departing a station at similar speeds, the relative strength or speed of one currency’s movement compared to another determines the strength of the trend in that currency pair.

37:34

The speaker briefly mentions the availability of currency heat map indicators on TradingView for subscribers of the full package, encouraging users to check their invited scripts area or contact support if they haven’t received the tools, emphasizing their usefulness in analyzing currency strength.

38:07

Currency heat map and matrix tools

38:07

The currency heat map on TradingView stands out because users can customize time frames easily through the settings, allowing multiple heat maps to run simultaneously. This flexibility lets traders match the heat map to their trading style, especially useful for faster time frames. The algorithm weights time frames differently, with longer time frames like hourly charts carrying more weight than shorter ones such as one minute, maintaining consistent ranking principles across time frames.

39:01

On faster time frames, the heat map values fluctuate more frequently compared to slower frames that align with longer holding periods, like daily or weekly trading. This contrasts with platforms like NinjaTrader, TradeStation, or MT4, where the heat maps move less often to suit longer-term trades. The currency matrix, another tool, includes levels indicating overbought or oversold conditions, a feature not available on other platforms yet but planned for future implementation.

39:58

The currency matrix provides real-time insights into currency pair conditions, showing averages and all-time highs or lows over adjustable bars. For example, the average might be 12.3 with a high of 15 on a two-minute chart. This perspective helps traders gauge positioning on the ranking ladder across all time frames. Users with the full package gain access to additional indicators like the V Park, Accumulation Distribution Indicator, and new Renko charts, enhancing market analysis capabilities.

40:58

Renko charts and time accurate ranking

40:58

The segment introduces a unique Renko chart called the time accurate Renko, demonstrated on the Aussie Yen. This chart type aligns precisely with price action, showing price levels directly on the interface, unlike traditional Renko charts.

41:33

The time accurate Renko chart mirrors price consolidations, creating clear levels and bands that depict price action clinically. It is optimized at 2.2 pips but can easily be switched back to the traditional Renko variant, offering two options for traders.

42:01

Switching back to traditional Renko is simple, but it has limitations. Traditional Renko operates independently of time, making it difficult to align with time-based charts or volume data. This misalignment complicates interpretation over time.

42:26

The speaker explains the challenge of matching traditional Renko price action with time-based charts, showing an example on the Dollar Swiss pair. The segment hints at recent market activity affecting this pair, setting up for further analysis.

42:54

Market analysis shows heavy dollar buying and an overbought condition on the Dollar Swiss pair, with the Swiss franc heavily oversold. A volatility trigger accompanied by high volume preceded a rapid market movement, attracting many traders.

43:24

Dollar Swiss price action and volume

43:24

The speaker discusses a market situation where traders seeking quick profits are now facing pressure as volatility triggers either a reversal or congestion. Currently, congestion is observed, and the advice is to wait for the price to clear a certain level before expecting upward movement. The price action leading to this congestion is typical of anomalies, signaling upcoming market behavior. Volume analysis shows a rising trend initially, followed by mixed signals with some candles showing decent volume and spread, while others have increased volume but less price movement, indicating possible weakness.

44:20

Further analysis focuses on trading around the volume point of control, noting repeated but weak attempts to rally. The speaker references a related dollar chart, which suggests the market isn’t fully exhausted despite some loss of momentum. This highlights the importance of considering multiple indicators and charts rather than relying on a single source. The speaker briefly checks various currency strength indices (CSIs) across multiple timeframes, emphasizing the need to integrate broader market data into trading decisions.

45:09

A detailed look at currency strength indices reveals the dollar is strongly overbought while currencies like the Swiss franc, euro, and Australian dollar are weaker. The speaker notes that certain currency pairs, such as Cable (GBP/USD), are less favorable due to correlated movements rather than strong trends. This suggests that traders should focus on pairs where currencies move more independently to identify clearer opportunities.

45:39

The discussion turns to identifying trading opportunities based on trends seen in longer timeframes, such as 15 minutes and beyond. The speaker considers potential trades involving buying the Australian dollar and selling the dollar, guided by currency strength trends. Additionally, a reference is made to CFTC position data, emphasizing that heavy positioning biases resemble overbought or oversold conditions and should be analyzed similarly to other technical indicators to inform trading decisions.

46:32

Trading strategies and risk management

46:32

The discussion focuses on trading strategies during market extremes when most participants are either buying or selling. Emphasis is placed on analyzing longer-term charts, such as monthly ones, to identify opportunities, particularly for the US dollar. Traders must be brave and confident when buying against a dominant trend, setting wider stop-losses to accommodate natural price congestion and gradual reversals. Sharp V-shaped moves are rare; instead, traders should expect downtrends followed by congestion phases before a reversal takes hold.

48:41

Anna analyzes the Australian dollar (AUD) on short timeframes, noting early signs of buying momentum on the 10-minute and 15-second charts. She highlights the transition from bearish to bullish sentiment, indicated by changes in trend monitoring colors and volume profiles. The volume point of control (VPOC) plays a key role in price action, signaling areas where price is likely to pause or face congestion due to concentrations of past orders.

50:40

The volume profile is explained as a tool combining volume, price, and time to identify market congestion zones where price may stall. Heavy volume areas act like support and resistance, while low volume zones allow rapid price movement. The current bullish momentum in the AUD is driven primarily by buying interest rather than selling pressure on the US dollar, making the trend less strong. A strong trend typically requires opposing movements in the two currencies.

52:02

On higher timeframes (1-minute to 10-minute), the AUD trend shows mixed signals with some resistance levels holding and potential reversals beginning on shorter intervals. The US dollar is not yet contributing significantly to the trend, weakening its overall strength. Comparatively, the Australian dollar against the Canadian dollar (AUD/CAD) shows stronger selling pressure on the CAD, which might present a better buying opportunity for the AUD. The segment concludes with a handover back to Anna.

53:34

Monthly charts and long term outlook

53:34

The speaker discusses analyzing monthly charts, specifically highlighting the British pound and the currency pair Cable (GBP/USD). They emphasize the importance of reviewing monthly charts at the beginning of each month to understand recent price action and trends. The British pound had a strong month, with Cable performing exceptionally well, showing a significant upward move followed by typical pullbacks. This approach helps traders gauge broader market momentum and potential retracements.

54:47

The speaker explains how to interpret price levels on monthly charts, focusing on key resistance areas where price has reversed before. They stress that levels on slower timeframes like monthly charts carry more significance and can indicate potential resistance points. The recent bullish trend in Cable is discussed in this context, suggesting that while the move is strong, traders should be cautious near historical resistance levels.

55:52

The importance of using monthly and weekly charts to gain a broader perspective on currency pairs is highlighted. Traders are encouraged to analyze key levels and upcoming market events over the weekend before trading weeks. The speaker notes that understanding volume points of control and historical price action on these slower timeframes can help anticipate future price movements, using Cable as an example of a pair trading near a significant volume level.

57:04

The speaker examines the Pound-Aussie (GBP/AUD) pair on the monthly chart, noting it is trading near its volume point of control, indicating a significant area of price acceptance. They compare the volume profile of GBP/AUD with Cable, pointing out that despite heavy volume below the recent candle, the price range is not as wide, suggesting possible consolidation or reaction. The discussion emphasizes watching for follow-through or resistance at key volume levels.

58:15

Further analysis is provided on volume resistance levels and how dense volume areas can cause price movement to become labored or slow. The speaker revisits Cable briefly to address volatility candles—price movements that extend beyond the average true range and how these trigger reactions in the market. This leads into an introduction of Bitcoin analysis, signaling a shift to discussing volatility and price action in cryptocurrencies.

01:00:07

Bitcoin volume price analysis and volatility

01:00:07

The speaker discusses Bitcoin from a Volume Price Analysis (VPA) and Wyckoff distribution perspective, emphasizing the asset’s volatility and recent price action. They highlight a distribution phase at the peak, followed by a significant drop and sideways movement, noting a key volatility candle that signals potential market behavior.

01:01:11

Bitcoin experienced a volatile downturn to around $29,000-$30,000, followed by sideways price congestion. The critical volatility candle formed near support indicates two possible outcomes: a reversal or continued sideways trading. This candle establishes important upper and lower price levels that traders should watch.

01:03:04

The price has been consolidating within a range defined by the volatility candle, with volume patterns suggesting potential future movement. A possible double bottom near the $29,000 level could prompt a price rise, but if that level breaks, lower support levels come into play. The analysis applies to various time frames, noting that volatility tends to increase on shorter charts.

01:04:23

Candles within the volatility range are shrinking, indicating reduced participation despite the asset’s popularity. The volatility candle provides clear levels that Bitcoin must breach to establish direction. Holding above $30,000 is crucial, but the longer the price remains congested, the harder it will be to break out, as volume will need to increase significantly.

01:05:01

The current support level near $30,000 is a defining moment for Bitcoin. If it holds, the asset could recover, but prolonged congestion makes upward movement more difficult. The speaker reflects on Bitcoin’s pioneering role in crypto, noting it behaves more like an asset than a currency at present. Market psychology and investor indecision heavily influence the ongoing sideways trend.

01:07:14

If Bitcoin breaks above current resistance levels, it could experience a rapid price increase before slowing near the top. Volume analysis reveals some selling pressure, likely from profit-taking, reflecting trader psychology during the indecisive congestion phase. Understanding these volume patterns helps interpret market sentiment.

01:08:10

The speaker uses Coinbase volume data to analyze Bitcoin’s market behavior, recommending trading through reputable brokers. Chart patterns suggest a triangle or pennant formation, with the volatility candle acting as a flagpole. The key level to watch is the lower boundary of this pattern, as a break there could determine future price direction.

01:09:15

The importance of the key support level is reiterated, emphasizing that this analysis applies broadly. The speaker transitions to another analyst, David, who examines a similar volatility pattern on the Pound-Yen currency pair, demonstrating the concept’s applicability across markets.

01:10:41

David discusses the Pound-Yen pair’s recent trend, highlighting a congestion phase followed by a volatility trigger and a subsequent price drop with significant volume. This example illustrates the volatility concepts previously explained and their relevance to different financial instruments.

01:11:14

Trading decisions and stop loss strategies

01:11:14

The speaker explains the comprehensive approach needed when analyzing market sentiment, including examining indicators like overbought or oversold conditions, volume relationships, support levels, and price-based factors such as camarilla levels. Decision-making involves synthesizing all these elements without a simple formula, applicable to both intraday and longer-term trading. For longer-term trades, additional factors like CFTC volumes and bond yields are considered. Risk management is emphasized, advising wider stop losses for reversal trades and tighter stops for trend trades, regardless of the time frame. The segment concludes with a brief mention of where to find various trading indicators online.

01:13:05

Quantum trading indicators and programs

01:13:05

The speaker discusses plans to develop a new trading platform, likely based on MultiCharts, due to its code similarity with TradeStation. They mention upcoming additions of other platforms as well. Regarding indicators, customers can purchase individual indicators or bundles, with special deals available. Those who invest in full packages receive all future indicators free of charge, maintaining the company’s longstanding policy.

01:13:38

Customers who have bought one or two indicators and want to upgrade to the full package or join the education program receive credit for their previous purchases. The education offering, called the Complete Forex Trading Program, is extensive and designed to provide comprehensive knowledge for confident market trading. The program has recently included a funded forex trading component.

01:14:27

The funded forex program allows traders to trade with the company’s money, removing personal risk. Starting accounts range from $5,000 to $15,000, scaling up to $2 million as traders progress. Traders earn a profit share, beginning with 35% during the evaluation stage, which increases as they advance. This structure incentivizes progression through achievable profit targets.

01:14:58

Upon reaching profit targets, traders advance to higher levels with increased capital—quadrupling the trading amount, for example from $15,000 to $60,000. Profit share also rises to 50%, paid monthly. At the evaluation stage, traders can only trade 28 currency pairs, but higher levels allow trading of additional markets like gold and indices, broadening trading opportunities.

01:15:27

The funded forex program aims to let students apply their knowledge by trading larger accounts without risking their own capital. It offers a secure way to trade with company funds, expanding market access and encouraging practical experience while protecting traders’ personal capital.

01:15:55

Funded forex program and trading benefits

01:15:55

The speaker directs the audience to annacooling.com for the latest analysis, links to various sites, indicators, and educational programs. They conclude by thanking everyone for attending, expressing hope that the session was enjoyable, and mentioning a return later in the day during the early evening rather than the usual mid-afternoon time.

01:16:20

Closing remarks and upcoming sessions

01:16:20

The speaker concludes the session by mentioning it is six o’clock UK time and informs viewers they will return later for stocks and futures coverage. They wish everyone a good rest of the trading day and week, encouraging safety and saying goodbye for now.

 

By Anna Coulling – creator of volume price analysis