Trading Dow Jones index

Trading the Dow Jones index during the US futures trading session.

00:12

Trading Globex vs combined cash and electronic markets

00:12

The speaker discusses the difference between trading on the Globex electronic market alone versus trading when both the cash market and electronic market operate simultaneously. Using an example of the London forex session starting at 8 AM UK time, they explain that price action on Globex tends to be more measured and less volatile, showing a steady trend development. The visual indicators transition through various colors, representing changes in market conditions and price trends, illustrating the contrast in price action and volume during different trading periods. The speaker also notes the recent UK clock adjustment affecting the timing.

01:52

US market open impacts volatility and volume

01:52

The U.S. markets now open at half past one instead of half past two, leading to a surge in volume and significant volatility with large price swings and whipsaws. This phase requires traders to be very agile, often using shorter time frames like 15 seconds for effective trading. For those more comfortable with longer time frames such as 5, 10, or 15 minutes, trading on Globex alone offers a smoother, less volatile price action without the influx of algorithms that cause massive whipsaws at market open. Although volume spikes significantly at open, prior price action remains demonstrable and more evenly paced.

03:26

Index futures 24-hour market and session advantages

03:26

The speaker explains that index futures trade in a 24-hour market, which can be advantageous depending on one’s time zone. Being in the northern hemisphere offers access to the most active forex and electronic markets, including the London and U.S. sessions. The current market shows all three major indices moving rapidly but in different directions, indicating divergence rather than the strong, fast movement seen on previous days.

04:24

Analyzing daily and five-minute charts, the YM index is trending lower, the NQ is moving upward, and the ES is fluctuating and trending downward. All three indices are trading near the volume point of control, represented by a yellow dashed line. Recent analysis suggests the market is structurally weak and expected to decline further, with bearish pressure continuing on these indices.

05:21

The speaker shifts focus to multiple time frames for the YM index, including 15-second, 1-minute, 3-minute, 5-minute, 10-minute, and 15-minute charts. During this transition, there is a brief technical interruption while refreshing the workspace, preparing for a more detailed analysis of short-term price movements.

06:05

Multiple timeframe volume and trend monitor analysis

06:05

The speaker discusses the volatility trigger characterized by heavy volume and a large volatility candle, indicating congestion and potential for a downside break below a key candle level. They shift focus to the one-minute chart, highlighting a significant volume point of control and a support platform identified by the accumulation distribution indicator, which visualizes volume concentration through line thickness, signaling areas of strong support and resistance.

07:33

The accumulation distribution indicator’s strength increases as levels are tested multiple times, with clusters of these levels combining to form stronger support or resistance zones. A recent reaction against the primary move is noted, with resistance expected to limit pullbacks. The price is moving away from the volume point of control into a low volume area, which suggests a faster price movement due to less trading activity in that region.

08:36

On the three-minute chart, volume analysis shows strong volume under a down candle and thin volume above, supporting a further downside move. The accumulation distribution indicator marks highly precise price levels that are tested repeatedly, emphasizing their importance and accuracy in trading. This precision helps traders identify critical support and resistance points accurately.

09:38

The breakdown continues with the trend monitor signaling a transition into a strong bearish trend, confirmed by rising volume on falling prices, which indicates increasing selling pressure. This bearish trend is consistent across multiple timeframes, including the five-minute chart, where the trend monitor advises staying short throughout the move.

10:40

The trend monitor’s primary purpose is to help traders remain in profitable positions by managing emotional impulses to exit trades prematurely. It emphasizes the difficulty of holding onto gains when the market moves against a position and encourages staying invested to maximize profits despite discomfort from market fluctuations.

11:08

Trend monitor helps holding positions through reversals

11:08

The trend monitor is designed to help traders identify whether price movements are full reversals or just pullbacks within a downtrend, shown by the bright red indicator during choppy market conditions. Trading around the volume point of control, which functions similarly across time frames, is discussed as a key strategy during congestion phases. The segment also highlights the importance of anticipation in trading decisions, with a brief mention of different experiences on various charts and ongoing tests of support levels.

13:11

Volume price analysis and reversal signal caution

13:11

The speaker discusses a message from a trader who has found success using Volume Price Analysis (VPA) on daily charts, particularly with Indian stocks or the Nifty. However, the trader experienced a losing trade when he took a short position on a shooting star candlestick pattern that did not lead to an immediate reversal despite having volume support. This highlights that even classic reversal signals like shooting stars need careful interpretation and may not always result in immediate trend changes.

14:53

The speaker emphasizes that while strong reversal candles like shooting stars and hammers can indicate potential reversals, traders must consider their risk tolerance since early signals may not fully materialize or might only last briefly. External factors such as news events can cause the trend to continue upward before reversing, so caution and patience are necessary when acting on these signals.

16:02

The discussion continues with an example from the speaker’s 15-minute and 5-minute charts, showing price action that resists moving lower due to buying interest near a volume average line. This buying coincides with a strong support level identified on the hourly chart, suggesting a potential area of price congestion. The speaker notes that it’s still early to determine if the pattern will form a doji candlestick, indicating indecision.

17:06

The speaker examines the Renko chart, which indicates low market activity currently, suggesting a wait-and-see approach. A volume price analysis example is provided where a short position faced increasing buying pressure, demonstrated by volume and price movements. This signals a likely reaction or possible reversal, and highlights the importance of volume analysis across different timeframes to anticipate congestion or trend changes.

18:23

The speaker explains how VPA helps distinguish between a full trend reversal and a minor pullback within a primary trend. In the current case, price congestion near the volume point of control and strong overhead resistance indicate a market pause rather than strong momentum. This nuanced understanding helps traders identify whether market moves are temporary retracements or genuine shifts in trend direction.

19:28

Volume point of control and market congestion explained

19:28

The VIX is currently trading within a relatively tight and sideways range, showing no strong trend unlike the previous day when it was one-directional. Trading is centered around the volume point of control, which is higher than current prices, indicating a sideways market.

19:57

To effectively trade the sideways market, one might need to use faster time frames such as 10, 15, or 30 seconds, which may not be suitable for all traders. The speaker then shifts focus to other markets, quickly checking on gold and oil.

20:28

Gold is currently in heavy congestion, lingering in this state for an extended period. The volume point of control (VP), marked by a yellow dashed line, acts as a fulcrum for the market, where strong price support and resistance levels form based on accumulation and distribution. This creates a clear platform for identifying potential breakout trades.

20:57

Gold trap moves and volatility triggers in trading

20:57

The segment explains a classic trap move in trading, characterized by a rapid price move accompanied by a massive surge in volume. Traders are often tempted to jump in during such moves, thinking the trend will continue, but this leads to being trapped when the price reverses and breaks down. The volatility indicator, based on average true range, helps identify these traps in real time, signaling when the market is becoming congested and vulnerable to reversal.

22:23

The volatility indicator provides a significant advantage by triggering before a candle closes, especially on longer timeframes like 5 or 15 minutes, allowing traders to react faster. The advice given is to close out positions or reduce exposure when the volatility signal triggers, preserving profits and avoiding emotional trading. If the market continues favorably, one can re-enter, but if it moves sideways or reverses, the trader protects gains and avoids stress.

23:48

A comparison between 15-second and one-minute charts illustrates heavy volume and selling pressure despite attempts to rally. The volume profile shows potential price movement before hitting areas of congestion. Low volume areas suggest rapid price movement, but approaching high volume zones indicates likely pauses or support, offering traders clues about where price may stall.

24:43

The discussion focuses on interpreting volume and accumulation/distribution indicators to anticipate price support and congestion zones. Traders are encouraged to assess whether the potential price move justifies entering a trade, considering that heavy volume areas will likely cause the market to pause. These principles apply across different markets and timeframes, using gold as an example to demonstrate how volume signals inform trading decisions.

25:37

Oil market congestion and intraday trading signals

25:37

The segment discusses recent price action highlighting a significant effort to rally with notable volume and wicks indicating weakness in the upper body of the candles. The focus shifts to oil, describing it as being in a longer-term congestion phase on daily charts, which is expected to persist until demand improves or OPEC manages supply. Despite this, oil remains tradable intraday with some upward movement developing. The analysis notes a two-bar reversal and mixed volume signals, but overall trend monitors on various short-term timeframes (15-second to 10-minute) are supporting a continuation of the current price action, suggesting cautious optimism for a short-term upward trend.

27:23

Volume trends confirm ongoing price moves

27:23

The speaker analyzes current market signals, noting the presence of pause levels and congestion but with continuing upward movement supported by good volume under a wide body candle. The market is entering a low volume area on the volume point of control, suggesting a likely rapid price movement through this zone.

27:51

On the three-minute chart, rising volume accompanies rising price, indicating buyer strength and a developing trend. The speaker highlights the ability to adjust volume settings on the indicator for better real-time data visualization, which helps confirm ongoing market momentum.

28:26

The speaker explains how toggling volume display to ‘on each tick’ provides real-time volume data, though they prefer it off to reduce clutter. They emphasize the importance of candles closing with a flat top rather than a long upper wick as confirmation of a sustained and likely continuing trend.

28:54

A volatility trigger occurs on the 15-second chart, indicating congestion and potential reversal. The speaker advises traders who entered late to take profits and exit, noting that the indicator is powerful and that either continuation or reversal is acceptable, reinforcing risk management.

29:27

The speaker remarks on the affordability of the trading tool, emphasizing its value in saving money quickly. They note no significant volatility on slower time frames, which typically carry more weight in trading decisions, suggesting the current volatility is mild.

30:00

Slower time frames provide stronger signals for support, resistance, and volume. Since no strong volatility is detected on these frames, the expected market impact is mild. The speaker advises waiting for a price break above 39.46 to confirm a move away from the volatility zone toward the next resistance level.

30:33

The upper wick on the last candle tops out at the resistance price of 39.46, signaling the need for a clear close above this level (39.46 or 39.47) to confirm upward momentum. The speaker notes that volatility is generally more visible on faster charts and longer time frames, implying that signals on these charts carry more significance.

31:18

Significance of volatility across timeframes

31:18

The speaker explains that slower time frames, such as weeklies and monthlies, show more significant signals for market congestion compared to faster time frames like dailies or intraday charts. While unusual patterns are more frequently seen on faster charts, their presence on slower time frames carries greater importance.

31:49

Time frames carry different levels of significance in trading, with longer time frames generally having more influence than shorter ones. For example, a one-minute chart is more significant than a 15-second chart, and a one-hour chart outweighs a 15-minute chart. This hierarchy affects how traders interpret market signals.

32:22

The market is moving steadily, with progress noted from 46 to 52. The speaker monitors the VIX, which is currently unstable and not providing clear signals. Traders focusing on futures need to actively seek out tradable opportunities in various markets when index futures show little movement.

32:49

If index futures are not trading actively, traders can look to other markets such as gold, silver, oil, or soft commodities for opportunities. However, trading futures requires substantial capital, and many traders specialize in a single market or contract, like oil or gold, which has been a common approach since the 1990s.

33:21

Historical trading methods and futures market tips

33:21

The speaker reflects on the transition from traditional phone-based trading at the Liffey exchange, now defunct, to modern electronic trading, emphasizing that the fundamental principles remain unchanged. They discuss the use of trend monitors, volume price analysis, and multiple time frames to anticipate market movements. The segment concludes with a brief look at the indices, noting minimal tradable opportunities and highlighting the global nature of trading, particularly on the ES futures market.

34:41

Preference for trading interglobal vs Globex markets

34:41

The speaker discusses a trading preference, emphasizing that trading certain instruments is clearly better, countering the idea that one can only trade index futures when both are running. They highlight their extensive 20-year experience, starting from phone-based trades to current methods. The focus then shifts to oil market analysis, where price and volume action indicate expected movement. Volume profile analysis reveals the market is returning to a volume point of control with increasing volume, signaling potential price moves toward lower volume regions.

36:18

Price support, resistance and volume profile insights

36:18

The speaker discusses approaching high volume regions and identifies price-based support and resistance levels using accumulation distribution indicators. They note a platform of support forming and check the gold market, which remains mostly sideways and not currently tradable. The session wraps up with a brief mention of where to find all trading indicators at quantumtrading.com, including compatibility with platforms like MT4/5, Ninja Trader 7/8, TradingView, and upcoming support for TradeStation versions 9.5 and 10.

37:24

Quantum Trading indicators and platform updates

37:24

The speaker discusses the partnership between TradeStation and Interactive Brokers, highlighting the advantage of using Interactive Brokers’ deep discount brokerage through the powerful TradeStation platform, which includes advanced features like RadarScreen. They plan to focus on stock trading, intraday trading with time and sales data, and market depth using this platform. After launching on TradeStation, they will return to TradingView to port over indicators that were previously not possible to code due to Pine Script limitations, now improved with object and line drawing capabilities. TradingView users will receive these new indicators as a free upgrade, aligning TradingView’s pricing with MT4. Additionally, investing in the full package ensures access to all future indicators developed for that platform.

38:57

Future indicator development and education programs

38:57

The speaker explains that the service is offered free of charge as a thank you to investors. They plan to introduce multi-charts after adding one or two new indicators, with potential future platforms like Think or Swim being considered. This is part of the forex education program from quantumtradingeducation.com, named the Complete Forex Trading Program, which is designed to be comprehensive.

39:24

Session wrap-up and next trading schedule

39:24

The speaker directs viewers to anacooling.com for the latest posts and books available on Amazon in both Kindle and paperback formats. They conclude by thanking the audience for joining, announcing the next session will be the London forex session at 7:45 UK time, and wishing everyone a good rest of the trading day and week.

By Anna Coulling – creator of volume price analysis