The power of volume price analysis for scalping index traders

The power of volume price analysis for scalping index traders

Even when markets are trading in congestion, it’s possible to make money trading them. All it means it you have to be quick and take a smash and grab approach to trading and in particular what this means is moving either to the very fast timeframes as we show here using the YM Emini future in the live US session, or alternatively moving to a non-time-based chart such as a Renko or tick chart. All these approaches are equally valid and in this session, we focus on showing you how to use the 15-second chart to trade as the future moves in a narrow range. Volume price analysis works in all timeframes and this is a perfect example of its power for scalping traders.

00:13

Market overview and gold trading ranges

00:13

The speaker discusses current market conditions using gold as an example, highlighting that trading activity is occurring within a narrow range. There was significant two-way price action recently, with prices fluctuating around the volume point of control. Similar patterns are observed in silver, where price movements are also confined to tight ranges. The volatility indicator is prominently featured throughout the analysis, emphasizing market stability and limited price swings.

01:23

Volatility and support/resistance levels

01:23

The speaker discusses the importance of support and resistance levels based on volume, emphasizing how large market participants quickly act on these levels. A recent price reversal is highlighted, supported by low follow-through volume indicating weak selling pressure, leading to a modest price increase. The market is not expected to break away significantly at this time.

02:44

The focus shifts to monitoring the VIX index, which is trading within a narrow range on the one-minute chart, indicating low volatility. Attention is also given to silver and oil markets, both showing high volatility but remaining within tight price ranges, with volume and key levels clearly identifiable.

02:46

Oil and fast timeframe trading challenges

02:46

The speaker discusses trading in low volatility environments, specifically with oil, emphasizing that on such days it is essential to use very fast time frames—sub one minute—to find meaningful trading opportunities. Trading on slower time frames in these conditions results in being ‘chopped’ by the market without clear momentum or volume signals. The speaker advises that on quiet market days, it might be better to watch passively rather than trade actively, as patience is crucial. They explain that in congestion, volume and price action patterns differ from active trending days, and successful trading requires adapting to faster time frames, although this approach may not suit everyone.

04:41

Volume price analysis (VPA) examples

04:41

The speaker analyzes a volume price analysis (VPA) example, highlighting a move higher from the volume point of control followed by a significant volume injection signaling buying activity. However, the next candle shows a smaller spread with almost as much volume, indicating market weakness and selling into that weakness. An indecision candle follows, confirming the lack of strength. The combination of these three candles suggests the market is weak at that level, unlikely to sustain a strong upward move. The explanation emphasizes interpreting VPA signals collectively rather than in isolation.

06:07

The market experiences a downward move from 40.10 to 39.70, which still represents a significant price change for a big oil contract. At the bottom, buying support emerges, indicated by a candle with a lower wick and high volume. Despite this, the upward move lacks strength as volume falls while the price rises. Subsequent price action shows more buying attempts, but resistance appears, marked by a red dashed line on the accumulation distribution indicator, capping the rally efforts and indicating limited upside potential.

07:00

Strong support and resistance clusters

07:00

The segment explains how to interpret market support levels, noting that a level tested and held multiple times is considered strong. Wider lines indicate stronger levels, while clusters of minor levels can collectively form a stronger support area. Specifically, a cluster between 80 and 85 creates decent support, capping off the recent rally. The discussion highlights how to read markets that are trading sideways without a strong trend. Additionally, the VIX volatility index has slightly increased from 27.2 to 27.6, indicating a small rise in market uncertainty.

08:04

Indices and multiple timeframe analysis

08:04

The speaker analyzes multiple time frames for market indices, focusing on the daily and five-minute charts which show tight ranges and significant support and resistance levels. They highlight the volume point of control as a key factor and suggest that the market is not very tradable on these time frames. Attention then shifts to shorter time frames, including 15-second, one-minute, three-minute, five-minute, ten-minute, and fifteen-minute charts, emphasizing the need for quick decision-making when trading on very short intervals like the 15-second chart.

09:05

Quick-fire trading on 15-second charts

09:05

The speaker discusses quick-fire trading strategies involving short trades lasting only seconds to a minute, emphasizing the importance of following the trend monitor, which currently indicates a bearish market. They note the presence of decent buying signals and a volatility trigger, but caution against trading against the trend. The VIX index is monitored, showing a slight increase, suggesting short positions are preferable. A classic price waterfall pattern with rising volume, falling price, and widening spreads is observed on a 15-second chart, illustrating volume price analysis (VPA) concepts applicable across various timeframes.

11:04

The speaker explains the value of each trading point and the importance of volume confirmation, noting that volume data updates only after a bar closes to manage data load. They highlight a strong down candle with good volume and identify a doji candle indicating market indecision as the VIX rises from 27.3 to 27.7 on a one-minute chart. The analysis continues, focusing on price and volume movements to extract trading opportunities while monitoring market volatility.

12:18

Trend monitor and VIX impact on trades

12:18

The trend monitor helps maintain confidence during minor fluctuations by advising to stay with the trend and maximize profits. The VIX has risen to 27.9, indicating increased market volatility, which supports continuing the current trade. The trend monitor on different time frames, including the one-minute and three-minute charts, shows a transition from bright blue to dark blue and then bearish red, reflecting a strong change in trend despite sometimes skipping intermediate signals.

13:29

The VIX continues to rise to 28, confirming the strength of the bearish trend. Various indices, including the NQ and ES, are showing similar weak signals, which is expected in this phase. There is a need to monitor the trend for confirmation on longer-term charts, with caution advised due to potential sudden volatility spikes. The trend monitor’s transition signals are beginning to show on multiple time frames, indicating the market’s current direction.

14:48

On slower time frames like the ten-minute chart, the price has broken through previous support levels, signaling a move downward. However, a volume-dense region ahead could create resistance and slow progress. The market will require sufficient volume to push through this area. The VIX remains elevated at 28, and there is still no strong buying pressure, suggesting the bearish trend might continue until volume conditions change.

16:10

Volume clusters and congestion phases

16:10

The speaker discusses a cluster of potential price support levels with strong volume indications. The VIX index has fluctuated slightly around 28, signaling some market uncertainty. Volume is building during a congestion phase, and the volume point of control (VPOC) is closely monitored as it shifts depending on volume changes. If volume at the lower level surpasses that at the top, the VPOC will drop, indicating a shift in market fair value.

17:43

The VPOC has dropped to a new level, indicating the market is trading at fair value with no clear bullish or bearish sentiment driving price. Price action is confined within a channel with defined resistance and support levels near 80-81 on the upside. Early signs of a potential trend change are observed, suggesting it may be time to exit current positions. The speaker clarifies they do not trade live on this machine but demonstrates their trading approach.

18:57

Live trading explanation and platform notes

18:57

The speaker explains their thought process while trading, clarifying that no trading advice is given. They discuss the WTI crude oil futures contract and confirm that TradeStation version 10 and above supports 15-second charts, unlike version 9.5. The speaker notes a market reversal beginning, linked to the VIX index rolling over from above 28, indicating a shift from bearish to bullish sentiment.

20:15

Market momentum and trading strategies

20:15

The speaker describes a market scenario with a classic reversal in colors indicating shifts in support and resistance levels. Trading is occurring in tight markets without a strong trend, making it challenging. Success on such days requires being agile, using volume and indicators effectively, and often moving to faster time frames. If this approach doesn’t suit a trader, it’s advised to wait on the sidelines for bigger momentum days.

21:24

The session wraps up with reflections on the challenges of trading on slow, tricky days compared to fast-moving days where making money is easier. Floor traders often experience many small gains and losses, breaking even overall. However, the significant portion of their yearly earnings comes from a few ‘big money days’—days with strong market momentum when traders must seize opportunities and maximize profits quickly.

22:49

Trading patience and market drivers

22:49

The speaker advises that to succeed, one must be ready to operate on faster time frames and adapt quickly. If not prepared for such rapid changes, it is better to be patient, sit out, and wait for more significant market moves triggered by events or news, such as statements from Powell. However, these opportunities come with increased volatility, so caution is necessary.

23:11

Trading education and platform info

23:11

The speaker discusses the current market conditions, noting that there is little driving the market at the moment. They mention various trading platforms and tools, including QuantumTrading.com indicators, NinjaTrader, TradingView, and TradeStation. They explain the differences between TradeStation versions, highlighting that version 10 and above offers a wider range of time frames. The speaker also promotes educational resources such as Anna Cooling’s books and the Complete Forex Trading Program at QuantumTradingEducation.com, which covers psychology, fundamental and technical analysis, and includes over 200 hours of video content supported by a daily VPA trade room.

24:39

The speaker elaborates on the comprehensive nature of the forex trading program, emphasizing its extensive video content and live trade room hosted daily by Anna and themselves. They conclude by wishing the audience well for the rest of the trading session, noting that the market could be challenging and unpredictable for the remainder of the day. The speaker also comments on a common webinar experience where market activity often picks up shortly after the session ends.

25:08

Market patience and webinar closing remarks

25:08

The speaker advises not to write off the trading day early despite the market being inactive initially, suggesting to watch the market and use volume price analysis (VPA) at key chart levels to make informed decisions. They thank the audience for attending and announce the next session will be held on Tuesday at 7:45 UK time or 3:00 PM US time, continuing weekly through the end of the year. Contact information is provided for further questions, and the session concludes with well wishes for the day and trading week.

By Anna Coulling – creator of volume price analysis