Terrific lessons in volume price analysis on the gold futures charts

Terrific lessons in volume price analysis on the gold futures charts

Terrific lessons in volume price analysis on the gold futures charts with some low-risk trades as a result!

00:13

Introduction to Volume Price Analysis on Gold

00:13

The speaker introduces a gold chart to demonstrate a clear example of Volume Price Analysis (VPA), emphasizing that VPA principles apply universally across various markets including stocks, commodities, futures, ETFs, Forex, and currencies. The example focuses on a specific period around US market opening, highlighting volatility triggers and subsequent high volume candles to illustrate important VPA concepts.

01:21

Identifying Weakness with Volume and Price

01:21

The speaker explains that a large volume combined with a small price movement indicates weakness in the market. This is evidenced by a significant drop in volume on the following candle, signaling heavy selling pressure. A two-bar reversal pattern appears, marking the beginning of a downward trend.

01:49

Price Waterfall and Stopping Volume Explained

01:49

The speaker explains a classic price waterfall pattern in trading, highlighting confirmed weakness and rising volume followed by stopping volume, which indicates buying activity. The stopping volume is characterized by deep wicks and high volume, showing that heavy selling pressure has been absorbed by the market. This absorption is confirmed when subsequent candles remain in the same price area despite prior selling. Occasionally, this pattern leads to an immediate V-shaped rally, but typically it signals a strong buy opportunity after the selling is soaked up.

03:19

Volume Price Analysis in Congestion and Rally

03:19

The speaker explains the transition from a congestion phase into a developing rally as an example of volume price analysis. They emphasize the simplicity of this method, focusing on identifying low volume trading opportunities and low-risk trades. The tool VP8 is mentioned as helpful in applying this straightforward approach.

03:58

Importance of Candle Wicks in Volume Analysis

03:58

The discussion emphasizes the importance of including wicks when comparing candle sizes in volume analysis, as wicks represent critical anomalies revealing market weaknesses or traps. Whether at the top or bottom of a candle body, wicks indicate significant buying or selling pressure and help identify deceptive moves. When comparing candles of similar size or shape during an uptrend, it’s crucial to also compare their volumes to a benchmark to better understand market participation.

04:56

Comparing Candles and Volume Benchmarks

04:56

The speaker explains how to analyze trading candles by comparing their volume to benchmark candles of a similar shape. This comparison helps determine if the volume is in line, higher, or lower, indicating balance or imbalance. Additionally, volume comparisons must stay within the same trading session, as crossing sessions (e.g., comparing UK and Asian sessions) is not valid. This method provides a simple yet effective way to judge candle volume contextually.

05:49

Strong Support Levels and Stop-Loss Placement

05:49

The speaker discusses the importance of analyzing multiple timeframes in volume price analysis, highlighting a strong resistance level identified through accumulation distribution indicators. This level is visually represented by thick lines, indicating significant support strength. The strategy involves waiting for a breakaway on good volume before entering a trade, with potential entry points on shorter timeframes like 3 to 5 minutes. Proper stop-loss placement is also emphasized, suggesting stops below key support levels while considering money management rules.

07:10

Multi-Timeframe Volume Analysis and Market Trends

07:10

The segment discusses the analysis of market volatility and volume patterns on different timeframes, starting with a 15-minute chart showing a big volatility candle indicating expected congestion. Despite some weakness and indecision, the market continues upward. The speaker then moves to the 30-minute chart, highlighting key resistance levels around 24 to 26 dollars an ounce supported by significant volume, suggesting that breaking through this volume region could lead to a continued upward move.

08:09

The focus shifts to analyzing shorter timeframes like the 3-minute chart, noting volume distortions from specific times but overall showing signs of weakness and congestion. The speaker explains how small candles with upper wicks and decent volume often foreshadow weakness or congestion without necessarily indicating a market reversal, emphasizing the importance of volume price analysis in anticipating potential market moves.

09:05

The discussion centers on trading strategy based on volume and price signals. The speaker expects possible congestion or a pullback rather than a strong rally and highlights the importance of observing buying support and candle closes to confirm market direction. They recommend scaling out of positions if high-volume down candles appear, retaining a portion of contracts to ride potential moves, demonstrating how volume price analysis aids in making logical, confidence-based trading decisions.

10:02

This segment explains the value of volume price analysis (VPA) in helping traders avoid emotional decisions driven by fear or greed. VPA enables making decisions grounded in logic and market behavior rather than gut feelings, crucial for long-term account growth. The speaker also references trend indicators supporting the current bullish intraday trend despite some longer-term weakness, emphasizing the importance of using multiple tools to maintain discipline and confidence in trading.

By Anna Coulling – creator of volume price analysis