Trading stocks using volume price analysis and the Quantum tools and indicators

Trading stocks using volume price analysis and the Quantum tools and indicators

00:01

Introduction and trading disclaimer

00:01

The webinar begins with an introduction to day trading stocks using Volume Price Analysis (VPA) and quantum trading indicators. The hosts emphasize the risks involved in trading, urging viewers not to use money they cannot afford to lose. They stress that losses are inevitable in trading and part of the process, highlighting the importance of managing risk and having realistic expectations.

01:10

Accepting losses in trading mindset

01:10

The speaker discusses the difficulty of accepting losses, especially because losing is often associated with failure. Using sports as an analogy, they emphasize that losing is a natural part of any competitive activity, including trading and investing. The key is to understand and manage our emotional response to loss and to learn from these experiences rather than fearing or avoiding them.

02:30

Losses provide valuable opportunities for reflection and learning, similar to how sports teams analyze why they lost to improve. The speaker encourages viewers not to take losses personally but to treat them as experiences that help prevent future mistakes. They also explain that the emotional and physical pain from losses is an evolutionary mechanism designed to keep us safe by reinforcing learning from dangerous or negative experiences.

04:12

Brain’s reaction to losses and safety

04:12

The speaker explains that the brain tends to remember negative experiences more strongly than positive ones as a survival mechanism. Psychologists describe bad experiences as ‘velcro’ that stick in the brain, while good experiences are like ‘teflon’ and tend to slide away. This tendency is partly biological and helps keep us safe. The speaker advises awareness and management of this mental bias, especially in the context of investing, emphasizing the importance of accepting that money invested in the market is money one can afford to lose and that losses are inevitable without proper risk and money management.

05:18

The speaker acknowledges the potentially somber message but stresses its importance. They express hope that engaging with their educational resources, such as books and indicators related to price action trading, will provide traders and investors with an edge. This edge comes from a deeper understanding of price action, chart patterns, and market behavior that many others may lack.

05:51

VPA methodology and chart analysis

05:51

The speaker discusses the importance of candle patterns, support and resistance, and the Volume Price Analysis (VPA) methodology, emphasizing that it provides a significant edge for traders and investors. They mention a book available on Amazon that explains these basic concepts, along with a companion book containing practical examples. The repeating nature of chart signals across all time frames is highlighted, along with the intent to build a narrative using charts reviewed over recent weeks and months. The speaker references previous webinars covering stock selection criteria using tools like Finviz and MarketBeat, focusing on parameters such as relative volume above 1.5 and market capitalization over a million. The integration of VPA with indicators is discussed, clarifying that indicators support understanding of price cycles, trends, and market conditions such as volatility, smoothness, congestion, and breakouts.

08:13

The explanation continues on how standard indicators align with VPA to analyze the price cycle, identifying the type of trend or market phase. The importance of examining price cycles across multiple time frames is stressed, along with the use of proprietary indicators tailored to the trading timeframe. The speaker notes that markets can change quickly, reinforcing the need for this multi-timeframe and methodological approach to trading.

08:52

Current market volatility overview

08:52

The speaker discusses unusual market volatility recently, describing price action as erratic with ups, downs, and sideways movements. They highlight specific market indices like the Dow and Russell, noting significant daily swings and strong upward movements. The volatility is characterized as strange but fitting given current market conditions.

10:06

Attention is drawn to bond yields, particularly the 10-year yield, with a key level at 1.55 percent influencing market sentiment. The speaker explains that a retreat below 1.5 would please markets. They then outline recent factors unsettling markets, including concerns over the U.S. debt ceiling which saw a short-term deal reached, temporarily calming investors. Despite this, significant issues like the energy crisis continue to pose risks.

11:16

The energy crisis is examined in depth, focusing on natural gas price increases caused by geopolitical factors. Putin’s indication of easing gas supply constraints is noted, but ongoing shortages persist. The speaker recalls China’s trade tensions with Australia regarding virus investigations, which led China to restrict Australian coal imports, worsening their energy shortages. This forced China to aggressively purchase natural gas, driving prices sharply higher. There are also suggestions of market manipulation behind these moves. Additionally, the upcoming earnings season is expected to increase market volatility. The speaker plans to discuss insider trading trends next, referencing recent observations of insider activity.

13:25

Insider trading and Federal Reserve changes

13:25

The segment discusses recent resignations of two Federal Reserve members due to conflicts of interest involving active trading, which raises concerns about the objectivity of monetary policy decisions. It also mentions potential scrutiny of the Fed’s vice president, Clarida, and the upcoming reappointment decision for Fed Chair Jay Powell, highlighting the implications for market trust and policy transparency.

14:29

This part explains the differing approaches within the Federal Reserve between hawks, who strictly support raising interest rates when criteria are met, and doves, who adopt a more cautious stance considering economic conditions like unemployment. The recent departures of hawkish members may shift the Fed’s balance, influencing future interest rate decisions.

15:35

Jay Powell is portrayed as a centrist who has supported low interest rates and quantitative easing, actions that have benefited the stock market but raised optics concerns. Elizabeth Warren opposes his reappointment, which is due in February, and the segment considers the possible consequences if the Fed shifts entirely to a dovish stance with no dissenting voices on interest rate policy.

16:32

The discussion turns to the implications of increased quantitative easing and excess liquidity in the market, which fuels stock market gains as investors seek returns. The speaker introduces a focus on trading strategies, particularly examining the stock Amgen using the MT4 trading platform, praised for its capabilities.

17:03

Using MT4 platform and VIX indicator

17:03

The speaker discusses starting out in day trading stocks, mentioning holdings in Amgen and Blackberry. They highlight that many brokers offering MT4 also provide stock trading options. The VIX index is introduced as a key tool to gauge market sentiment, primarily tied to the S&P 500, with similar volatility indices existing for other major indices like the Nasdaq and Dow.

18:41

The VIX’s behavior is explained: spikes indicate high market fear, often signaling buying opportunities during crashes, while low levels reflect market complacency or greed. Historical spikes, such as in 2008, reached very high levels, whereas recent lows have dipped into the teens and single digits, showing extreme market confidence that can persist for long periods.

20:13

Despite recent significant drops in the Dow, the VIX has not spiked dramatically, remaining around 20, which suggests volatility but not a major crash. The VIX also serves as a hedging tool for investors, who tend to buy protection when the VIX is expensive. However, the best time to buy calls is when the market is complacent and the VIX is low, a contrarian approach many traders fail to follow.

21:50

Human nature often leads traders to act contrary to what is ideal, such as buying at market tops and selling at bottoms. The speaker alludes to volume price analysis (VPA) as a method to avoid these mistakes and transitions to discussing specific stocks, indicating a shift to market analysis.

21:58

Stock selection and energy sector insights

21:58

The speaker discusses selecting Amgen as an example stock, using Finviz screener criteria like average volume over one million and relative volume above 1.5. This screening helps identify actively traded sectors and reveals where investment money is flowing, with energy stocks currently attracting attention due to inflation concerns.

23:07

Energy stocks serve as a hedge against inflation because energy costs are unavoidable, driving oil prices higher in a feedback loop as investors seek returns. The discussion shifts to insider trading data on Amgen, showing significant selling activity and very little buying, which could pressure the stock price downward.

24:15

Examining Amgen’s chart reveals a prolonged downtrend correlating with insider selling. The speaker highlights the importance of considering beta, a measure of stock volatility, for trading decisions. Amgen’s beta is relatively low at 0.68, indicating steadiness, unlike more volatile biotech stocks with betas of four or five.

25:33

The speaker advises traders to check beta values after selecting stocks to ensure volatility aligns with their trading style, especially for short-term trading. Higher beta stocks can experience rapid price swings, which can be both an opportunity and a risk.

26:03

Volatility candle traps and price action

26:03

The speaker discusses South Western Energy (SWN) and identifies a large upward candle on the chart as a potential trap move, despite initial positive volume suggesting a strong rally. They explain the use of special volatility indicators to analyze such moves in real time. Technical difficulties with chart software are briefly mentioned but resolved.

27:22

The analysis continues on SWN, focusing on the large upward candle associated with a volatility trigger indicating significant momentum and volume. The speaker explains that when the volatility trigger occurs, a price retrace into the candle’s range is expected, followed either by reversal or congestion. This behavior is typical and predictable.

28:39

The speaker elaborates that the candle’s high and low act as resistance and support but warns this setup is a classic trap that triggers fear of missing out (FOMO). Investors often jump in expecting further gains, only to face reversals. Another example, CEI, is cited as a pump-and-dump scenario, reinforcing the trap pattern with volatility candles followed by sharp declines.

29:55

The speaker confirms that SWN’s price action was a significant trap, causing losses and emotional impact on traders, which can create lasting hesitation in future decisions. This psychological effect is likened to negative experiences sticking in the brain, influencing confidence and timing in market participation.

30:25

The discussion shifts to monitoring the high and low of the trap candle and volume traded within its range. The speaker highlights the importance of analyzing multiple timeframes, such as one-minute and three-minute charts, to understand the price action and identify potential trades despite choppy movement.

31:28

The speaker describes the tick volume indicator, which measures the speed behind price movements with color coding, indicating varying levels of market activity. They point out a strong volume presence under the candle with a significant wick, suggesting the daily and shorter timeframe candles can provide clues about upcoming session behavior.

32:36

The speaker notes that unlike forex, stocks have synchronized open and close times, simplifying analysis. They mention SBRA as another stock under review, cautioning that conclusions drawn from a single candle require careful consideration. The importance of context and multiple data points in stock selection is emphasized.

33:17

Analyzing volume and support/resistance

33:17

The speaker analyzes a chart showing volume and price over time, highlighting the significance of volume support levels and high/low volume nodes derived from the volume point of control. They discuss a recent move lower on the daily chart, noting efforts to rise that were met with weak volume under upward candles and a shooting star candle, indicating a resumption of the primary downward trend.

34:18

Despite heavy volume on a downward candle suggesting strong selling, the spread and volume pattern indicates underlying buying support, causing sideways movement. The speaker points out support and resistance levels, the formation of wicks at the candle bottoms signaling buying interest, and highlights a hammer candle that led to a higher open and a slight upward drift, confirming positive market reaction.

35:17

The discussion focuses on volatility reflected in candle spreads with wicks at the top, which might typically suggest a reversal but in this case, due to ongoing volatility, the downtrend may continue. The speaker notes consolidation and sideways price movement with limited green candles, emphasizing the importance of analyzing daily candle patterns and volume to understand market behavior. They also mention a stock, HBI, worth monitoring for upcoming earnings and insider activity.

36:21

The presenter advises watching for a breakout above the high of a volatility candle in HBI, considering it a valid signal for market direction. HBI shows a deep candle with significant volume, indicating strong interest. The reaction to a daily hammer candle is noted as positive, and the stock is placed on a watchlist for further observation due to its price action and volume characteristics.

37:32

Additional stocks like HBI and energy sector stock FFIE are mentioned in terms of beta values and recent price moves. The speaker plans to review these stocks later, emphasizing the importance of daily closes and strong daily candles as signals for immediate market reactions. They recommend complementing technical analysis with fundamental research using resources like MarketBeat to check short interest, insider trading, and earnings data.

38:49

The session opens the floor for questions and transitions to providing resources for learning about indicators. The speaker highlights the availability of extensive video tutorials on quantumtrading.com, which cover indicator usage across multiple trading platforms such as NinjaTrader and MT4, emphasizing that the techniques taught are platform-agnostic and universally applicable.

40:23

Quantum Trading indicators and platforms

40:23

The speaker explains that the usage method for the indicators is consistent across platforms and mentions available resources such as videos and support pages for configuration and usage. They focus on demonstrating the indicators on two platforms, NinjaTrader and TradeStation, starting with NinjaTrader. The current market conditions show the three main indices (YM, NQ, ES) moving similarly, which is beneficial for trading as it indicates a unified market direction.

41:17

Index market sentiment and volume analysis

41:17

The speaker discusses the synchronized movement of three major market indices, noting that it’s unusual and positive to see them all rising at similar rates. They highlight that market sentiment is broadly aligned across these indices, supported by a significant reversal observed the previous day with strong buying volume. The importance of paying attention to daily charts is emphasized, even for intraday traders, as daily charts provide valuable signals and clues about potential market movements.

42:21

Focus shifts to the Enqueue index approaching a key volume point of control near the psychological level of 15,000. The speaker explains that large round numbers like 15,000 often cause market congestion due to clustered orders placed at these levels. This leads to choppy intraday price action as prices struggle to break cleanly through these thresholds. Such price behavior is typical and expected around significant whole and half numbers.

43:22

The discussion continues on market behavior near big round numbers, reinforcing that many orders tend to cluster at whole, half, and quarter numbers, causing price congestion. The speaker then contrasts this with the S&P 500 (ES) index, which is currently moving away from its volume point of control. They note the complexity of managing multiple data sources and charts simultaneously and suggest that the closing price and volume of the current candle will be critical to analyze for understanding market strength and direction.

44:15

The speaker outlines a method for analyzing volume in relation to price action by benchmarking the current candle against similar past candles. This involves comparing volume levels to determine if the volume supports the price movement or if it is anomalous. This approach helps assess whether there is agreement between effort (volume) and result (price change), and whether the volume aligns with recent market behavior, providing insights into the validity of the price move.

45:43

Attention turns to the five-minute chart, which currently shows a bullish trend with some recent weakness indicated by falling volume during a pullback. The speaker compares two similar candles demonstrating a reversal pattern, explaining how these patterns can be interpreted on different timeframes. The concept of bullish and bearish engulfing candles is introduced, emphasizing their power as indicators of market reversals based on the shape and position of candle bodies and wicks.

46:35

Further explanation is given on bullish and bearish engulfing patterns, illustrating how combined candles on shorter timeframes form recognizable patterns on longer timeframes. The S&P 500 is noted to be approaching its volume point of control, with volume declining and price narrowing, suggesting a lack of strong confirmation for the recent price rise. The speaker also mentions the expected surge in volume and volatility at the U.S. market open, followed by a gradual normalization of volume as the trading session progresses.

48:01

The speaker describes the typical pattern of volume and volatility at market open, where a surge in activity is followed by a decrease as the session settles into a natural rhythm. They then transition to examining multiple workspaces with various timeframes for the YM index, ranging from 15-second to three-minute charts, indicating a detailed multi-timeframe analysis approach.

48:36

Multiple time frame analysis and VPOC use

48:36

The speaker introduces multiple time frames such as 5, 10, and 15 minutes to analyze price action, highlighting the concept of continuity price action where spreads narrow. Narrowing spreads indicate that momentum in the price move is weakening, signaling a potential pause or slowdown in the trend.

49:07

The narrowing spreads suggest momentum is running out, supported by a decrease in volume, although volume naturally falls after market opens so it should be interpreted cautiously. The speaker points to a temporary pause in price movement near the top of the curve, emphasizing the importance of observing these signals for trading decisions.

50:06

Attention shifts to trading around the volume point of control (VPOC) on various time frames. The VPOC represents price levels with the highest traded volume, acting as key support or resistance. The accumulation distribution indicator visually highlights these levels, showing their relative strength based on how often they have been tested.

50:32

The speaker explains that stronger support and resistance levels are those frequently tested by price. The VPOC behaves similarly to price-based support and resistance because volume acts as a barrier or support. When price approaches low volume nodes near the VPOC, it tends to move quickly through these areas due to lack of resistance.

51:29

Price congestion is expected at the VPOC because it represents a balance point where buyers and sellers are evenly matched. The VPOC remains static until an imbalance causes price to move away, which is then supported by volume confirming bullish or bearish moves.

52:07

The importance of considering multiple time frames is emphasized, as slower time frame VPOCs carry more significance than faster ones. Intraday traders should be aware of these key volume levels acting as resistance or support. The VPOC histogram and accumulation distribution indicators can be used together similarly to traditional price-based support and resistance tools for more informed trading decisions.

53:04

TradeStation platform and scanning tools

53:04

The speaker introduces TradeStation version 10, highlighting its data feed and functionality compared to the previous version 9.5, which was integrated with Interactive Brokers. They demonstrate a simple workspace focused on the Dow 30 stocks, showing the radar screen feature that can handle up to a thousand symbols for scanning and sorting. The radar screen includes continuous contracts for ES and NQ and offers extensive scanning and sorting capabilities.

54:46

The radar screen is set to a one-minute interval and uses custom-developed indicators for scanning, including volatility candles and trend monitors. The speaker emphasizes the scanner’s ability to provide instant insights into market trends and volumes, with customizable indicators and variants. They demonstrate symbol linking across multiple timeframes, allowing quick navigation and analysis of stocks like Microsoft with indicators such as volume, VPOC, and accumulation distribution.

56:17

The accumulation distribution indicator is explained as a powerful tool for identifying support and resistance levels, with the workspace showcasing multiple fast-switching charts and intervals. The flexibility of TradeStation is highlighted, allowing users to set independent timeframes across charts and create various workspaces tailored to different monitoring needs. The speaker demonstrates quick scanning of various stocks like Caterpillar, McDonald’s, Honeywell, and Boeing within this simple yet effective workspace.

58:16

The speaker introduces the Hot List feature within TradeStation, a standard app that offers various sorting options such as percentage gainers, losers, 52-week highs and lows, volatility, and volume metrics. This powerful tool allows users to monitor real-time market movers and customize filters extensively. The Hot List integrates with other platform features like market depth, charts, quick trade bars, research, scanners, and time and sales data.

01:00:20

The Market Scanner feature is discussed, enabling users to create custom scans or use pre-built scans for patterns like bearish engulfing, bullish gaps, hammer, hanging man, and growth/value stocks. The speaker stresses the importance of filtering and selecting stocks from thousands of variants to generate manageable watch lists. They reflect on the manual scanning methods used in the past and praise the platform’s efficiency in automating and enhancing this process.

01:02:03

The speaker elaborates on the manual scanning process previously used to identify specific chart patterns such as saucers or distribution tops, emphasizing how the platform simplifies this task. They highlight the ability to filter thousands of stocks using multiple criteria and the power of radar scanner options to manage watch lists effectively. They mention ongoing development for NinjaTrader indicators and their integration into Market Analyzer, which, despite limitations, offers significant scanning and sorting capabilities.

01:03:45

The speaker briefly returns to NinjaTrader, noting a pause in market activity and a recording issue. They then shift focus to currency futures, mentioning decent buying interest in the British pound within the 6A and 6B futures markets, signaling attention to other asset classes beyond stocks.

01:04:17

Currency futures and commodities update

01:04:17

The discussion begins with an analysis of currency movements, noting the US dollar has been selling off since the open, leading to gains in major currencies. The euro, Japanese yen, and New Zealand dollar are highlighted, with the yen-dollar pair showing unusual behavior compared to other pairs. The euro-dollar and New Zealand dollar are mildly bullish but not as strong as others. The CSI indicator is used to analyze these trends, showing that some pairs like euro-dollar and dollar-yen are moving sideways due to their component currencies moving in the same direction.

01:05:17

Further explanation of how the CSI and other forex-specific indicators apply effectively to both spot and futures markets is provided. The speaker then shifts focus to oil, noting it has been very bullish, experienced a sharp drop, but has since recovered strongly. Factors like OPEC’s supply decisions influence oil’s price movements, which currently show signs of a bullish rally with some price congestion.

01:06:17

Gold is described as struggling to regain its price level near 1800. The analysis highlights multiple layers of resistance including price resistance, volume resistance, and a volume point of control (V-POC). Gold must overcome these technical barriers to move higher, indicating ongoing challenges for the precious metal in the current market environment.

01:06:44

Gold price struggles and inflation concerns

01:06:44

The speaker discusses the uncertain future of gold prices, suggesting a potential rise up to 1920 or beyond, driven mainly by inflation. However, the current economic situation, particularly in the UK, is characterized by stagflation—rising inflation combined with stagnant or declining economic output—which poses challenges for central banks. Their typical response of raising interest rates to control inflation risks worsening stagflation, complicating gold’s usual role as an inflation hedge. Despite expectations, gold prices have stagnated rather than increasing significantly. The speaker identifies as a gold enthusiast but acknowledges the market’s current complexity and concludes by directing listeners to quantumtrading.com for more information on indicators.

01:08:19

Indicator packages and support resources

01:08:19

The speaker explains that their trading indicators are available on multiple platforms including MT4/5, NinjaTrader 7/8, TradingView, and TradeStation. Customers can purchase one or several indicators and later upgrade with full credit for prior purchases. Buying the full package grants free access to all future indicators developed. Recently added indicators include the cryptocurrency strength indicator and a radar panel for TradeStation users. Similar developments are planned for NinjaTrader, such as market analyzer tools.

01:09:15

Support resources for all indicators are available on each platform’s website, including installation guides, configuration options, and hundreds of instructional videos. The speaker highlights a comprehensive Forex education program called the Complete Forex Trading Program, which offers around 450 lessons and 250 hours of video content covering all aspects of trading forex and futures.

01:10:19

Complete Forex program and funded accounts

01:10:19

The speaker describes a trading program that includes 13 PDF downloads and direct access to themselves and Anna via a chat room. They highlight a funded trading program where students trade using the company’s money, not their own, eliminating personal financial risk. Students can start with accounts of $5,000, $10,000, or $15,000 by paying a low entry fee once. This funded program is exclusively available to forex students on the course, designed to help them leverage their learning and gain confidence in trading larger capital.

01:11:23

The funded accounts are multiplied by four after starting amounts, so a $15,000 account becomes $60,000. Upon completing a level at $60,000, the account size doubles to $120,000, with further increases up to $2 million. The speaker also mentions Anna’s website, anacooling.com, where users can find books available on Amazon in both Kindle and paperback formats, along with various site links and trading analysis resources.

01:11:50

Additional resources and Q&A wrap-up

01:11:50

The speaker discusses the launch of a forex-specific site separate from Facebook. They address questions about the TV radar, explaining it is limited to 10 cells on TradingView, which is less comprehensive than TradeStation. They confirm that various instruments, including cryptocurrencies, can be scanned on TradingView, demonstrating the cryptocurrency strength indicator and related volatility and camera level indicators.

01:12:56

The session concludes with thanks to the participants, well-wishes for the rest of the trading week, and an invitation to join again next week.

By Anna Coulling – creator of volume price analysis