The starting point for your forex trading day – the currency dashboard

The starting point for your forex trading day – the currency dashboard

Not sure where to start when you settle at your trading screen ahead of another forex trading session? The answer is to start with the currency dashboard from Quantum Trading which gives you a complete window on the world of currencies. Start with the currency strength indicator, which reveals those currencies which are moving strongly, those which are in congestion, and those which are overbought or oversold. From there it’s off to the charts to analyze the price action and associated volume.

Then, on to the currency matrix for sentiment across the complex, followed by the currency array, which reveals the currency pairs trending strongly and moving toward overbought or oversold conditions. And finally, to the currency heatmap for an assessment of the trend across the timeframes and for some longer-term reversal opportunities on the ranking ladder.

00:01

Webinar introduction and disclaimer

00:01

The webinar begins with a welcome and an apology for technical issues experienced earlier. The host outlines the session’s focus on past, present, and future developments in the forex market. They also highlight the importance of the trading disclaimer, reminding participants that trading carries risks and advising never to invest money they cannot afford to lose. The session marks the start of a new webinar series with new attendees, including existing quantum users.

01:02

Overview of forex market analysis methods

01:02

The session begins with an overview of the forex program, emphasizing the use of volume price analysis as a key technical analysis method. This approach focuses on price action combined with trading volume to analyze market charts. Additionally, the importance of considering fundamental factors and related markets is highlighted, as these often influence currency movements. The instructor explains that currencies are closely linked to other financial instruments, and events in those related markets can drive buying and selling in forex pairs. Traders may encounter scenarios where technical setups are perfect, but unexpected moves occur due to fundamental news or developments in connected markets. The methodology is further detailed in accompanying books available on Amazon.

02:36

Volume Price Analysis and indicators

02:36

The speaker discusses the methodology of volume price analysis (VPA), highlighting companion books with worked examples that explain key concepts such as buying and selling climaxes and candle patterns. They emphasize that market behaviors repeat across different time frames, making VPA a valuable tool. Additionally, specific forex indicators have been created to provide instant insights into current and potential future market movements. These include four specialist indicators, notably the Currency Strength Indicator (CSI), which tracks currency flows to aid traders in understanding market dynamics.

03:46

The explanation continues by noting the importance of understanding relationships between individual currencies and other markets. An example is given where the rising Canadian dollar, shown as a purple line, suggests activity in the oil markets. The Currency Matrix is introduced as a tool that organizes data from the CSI into currency pairs, helping traders interpret market conditions more effectively.

04:16

Currency strength and trend indicators

04:16

The speaker explains various tools used to analyze currency pairs, including ranking pairs by strength of movement, measuring trend strength with an array, and viewing currency performance across multiple time frames with a heat map. They emphasize the importance of seeing these indicators on charts. The speaker introduces David, who uses NinjaTrader, while the speaker uses both MT4 and NinjaTrader platforms. They mention a dashboard combining these indicators for a comprehensive view and reference a specific noise alert on NinjaTrader, previewing a demonstration on the hourly chart for the CSI.

05:20

Using hourly charts for session insights

05:20

The speaker explains their preference for using the hourly chart as the initial reference point when opening trading platforms. They highlight differences in platforms like MT4, MT5, NinjaTrader, and TradeStation regarding how timestamps are displayed. Observations include the market transitioning from the Asian session to waiting for the London session, with recent heavy selling of the euro followed by buying activity. Traders often focus on individual currencies at this stage.

06:24

The discussion continues on focusing on specific currencies rather than pairs, especially depending on the trader’s location and preferences, such as the British pound for those in London. The speaker notes the euro has been heavily sold off and is oversold according to reference points on an indicator, which mark levels like 20 (oversold) and 80 (overbought). These levels help visually assess market conditions, though none of the currencies have recently exceeded 80. The hourly time frame provides a clear snapshot of recent market activity and current status.

08:03

FOMC impact on currency markets

08:03

The segment discusses market behavior around the FOMC event, noting increased consolidation and quietness across markets due to its importance. Attention is given to currency movements, particularly the British pound, which has been showing signs of selling pressure since early Asian trading hours. The speaker highlights the significance of price angle steepness as an indicator of buying or selling decisiveness. Additionally, volatility is noted at the start of the new trading session, with a noticeable drop in the British pound on the hourly chart coinciding with session crossover activity.

09:33

Matrix indicator for currency pairs

09:33

The speaker introduces the Matrix indicator, which complements the CSI by tracking flows into individual currencies and showing which currency pairs have been moving most strongly. It is useful for traders focused on a specific currency, such as the British pound, or those seeking the most active pairs regardless of preference. The example highlights the New Zealand yen, which has been rising strongly, indicating strong market movement in that pair.

11:05

The analysis points out that the New Zealand dollar’s strength and the yen’s weakness suggest a positive risk sentiment in the market, as yen selling generally supports risk assets like equities. The Nasdaq, S&P 500 futures, and Dow futures are all modestly up, reflecting this risk-on environment. However, the Australian dollar is showing a more mixed reaction, influenced by various technical, fundamental, and market order factors.

12:34

The speaker explains that currency movements are driven by multiple factors, including technicals, fundamental economic news, and large institutional trades. The Australian dollar is closely linked to China, which adds complexity to its price action. The narrative of currency and market behavior is effectively captured by the CSI and Matrix indicators, with New Zealand standing out at the top of the Matrix.

13:42

An upcoming upgrade to the Matrix indicator will add a feature to display volume levels on the hourly chart, helping traders discern whether moves are strong or weak. Volume numbers provide important context for price movements. The speaker emphasizes that these tools offer valuable insights for both indiscriminate forex traders and those focused on specific currencies, such as the British pound, which remains the speaker’s preferred currency.

14:51

Preferred currencies and trading pairs

14:51

The speaker discusses their focus on trading currency pairs, particularly pound-aussie and sometimes pound-new zealand, rather than the euro-pound. They explain that certain currencies tend to move more strongly during specific trading sessions due to their connection with those times. Traders should consider these patterns and also be aware of spreads, especially when using fast charts. The euro-dollar pair is popular because of competitive spreads offered by brokers, despite it sometimes moving within a tight range.

15:56

The euro-dollar pair, while heavily traded, may not always exhibit significant movement, which can be challenging for fast chart traders. Conversely, pairs like pound-aussie might have wider spreads, making them less suitable for fast trading. The speaker mentions their own preference for pound-aussie on various time frames, including 10, 4, 30, and 60 minutes. They then transition to discussing Volume Price Analysis (VPA), emphasizing the importance of support and resistance, and introduce David to further explore these concepts using quantum trading indicators.

17:03

Support and resistance via volume analysis

17:03

The speaker introduces the concept of volume resistance, a type of support and resistance based on the volume point of control, distinct from price-based or other volume-based levels. They emphasize the importance of analyzing these levels across multiple time frames and combining them with the CSI indicator, which helps identify overbought conditions, mean reversion, and potential reversals, particularly useful for spotting trend reversals rather than trend continuations.

18:21

The speaker describes their approach to filtering out distractions by focusing exclusively on selected currency pairs, specifically the British Pound, to avoid being swayed by other market movements like those in the Euro. They demonstrate this by analyzing a sell signal on the Pound/Aussie pair using a 10-minute chart and then zooming out to an hourly chart to better understand the price action and forecast near-term movements. The segment concludes with the speaker handing over to a colleague named David.

By Anna Coulling – creator of volume price analysis