Trading volatility on the YM emini index futures at the start of the session

How To Trade Volatility On The YM E-Mini Index Futures At The Start Of The Session

Trading volatility on the YM emini index futures at the start of the session as the cash markets open alongside Globex.

00:00

Session introduction and disclaimer

00:00

The session begins with a brief apology for the slight delay caused by technical setup issues, specifically sorting out headsets. The presenter draws attention to an important disclaimer displayed on screen, emphasizing that trading is risky and advising viewers not to use money they cannot afford to lose. This introduction also acknowledges some first-time attendees.

01:03

Focus on volume price analysis

01:03

The speaker apologizes for displaying the wrong slide and clarifies that the focus will be on analyzing markets through volume price analysis rather than forex. They mention a companion book containing worked examples of this methodology, which has been developed over 20 years with a colleague named David. The speaker intends to demonstrate the approach by examining price action on a four-minute chart of the YM (E-mini Dow futures).

02:09

Analyzing four-minute YM chart volatility

02:09

The segment discusses the volatility and volume patterns at the market open in a 24-hour trading environment. It explains how volume preceding the US open is compressed and emphasizes the surge of trader participation as the market opens. The price action is described as unstable, fluctuating around the volume point of control, indicating a need to wait for the market to stabilize before identifying trading opportunities. Additionally, a faster chart setup including Renko and time charts is referenced to help determine market direction.

03:18

Reviewing daily and hourly charts

03:18

The speaker examines the daily chart highlighting a significant price update accompanied by volume profile data. Attention is then shifted to the hourly chart, emphasizing the importance of having sufficient data points (set to 100) to correctly position the Camarilla indicator lines. The discussion notes that the major price movement occurred overnight during the Globex session, with continued momentum as the London and European markets opened, and further activity as the US physical market session began.

04:29

Impact of Biden-Trump debate on markets

04:29

The market showed little movement, pulling back slightly and trading sideways as traders remained undecided about the next direction. This indecision coincides with the first presidential debate between Biden and Trump, occurring after the physical market closed, meaning any market reaction would be seen in the Globex session. The speaker highlights the importance of treating different trading sessions, especially in 24-hour markets, as independent, noting that sentiment may or may not carry over between them. Despite significant price moves in the Globex and US sessions, day traders saw little opportunity during the physical market open.

06:16

On the four-minute chart, the market hovered around the volume point of control, considered the fair value or fulcrum of the chart. The price lacked clear direction, neither decisively moving higher nor lower, reflecting uncertainty caused by recent market activity and anticipation of the presidential debate. Additionally, the speaker briefly mentions recent news events, including the release of the Conference Board consumer confidence data, which may influence market sentiment.

06:53

Fed speakers and their market influence

06:53

The segment discusses the impact of Federal Reserve speakers on financial markets, emphasizing the importance of understanding each speaker’s position on the dovish-hawkish spectrum and whether they hold voting rights on the FOMC. Recent speakers include Kaplan and Harker, both voters, with many FOMC members actively speaking. The main focus shifts to the first televised debate between Donald Trump and Joe Biden, highlighting its potential to increase market volatility. Market uncertainty is assessed through volatility indices and options markets, reflecting reactions to such political events.

08:41

Options market and VIX explained

08:41

This segment explains how options, particularly volatility options like those related to the VIX, are traded as instruments reflecting market sentiment. The speaker highlights that the options market is forward-looking, with call and put options indicating investor expectations. Examples from articles in October and January show large call option purchases as a form of insurance against anticipated volatility spikes, especially before major market events like the pandemic. The VIX, tied to the S&P 500, is described as a key benchmark for market sentiment, with other indices like the Nasdaq and Dow Jones having their own volatility indexes. The segment emphasizes the importance of understanding these volatility instruments and their role in hedging portfolios.

12:06

Trading strategies and session wrap-up

12:06

The speaker discusses recent market volatility and the need for patience to see if a potential trade opportunity arises, noting that volume is falling and the price is moving away from the volume point of control. There is significant resistance at 24,274.73. They suggest using faster time frames, like the four-minute chart, to capture short-term signals in volatile markets, allowing traders to enter and exit quickly.

14:00

The speaker explains that the market’s reaction to the Biden-Trump debate will become clearer once the market closes. They highlight that reactions will be visible in Globex, forex markets, and currencies that indicate risk sentiment and safe-haven status. The focus will be on forex trades, and David will analyze charts, either on the YM or Nasdaq.

14:28

The speakers invite questions from the audience and mention their use of trading platforms Ninja Trader, MT4, and MT5. They announce plans to introduce TradeStation sessions soon, which will incorporate order flow concepts, time and sales data, and volume-price analysis. This new content is expected to begin in about three to four weeks.

15:03

The segment concludes with the speaker passing the discussion over to David, signaling a transition in the presentation.

By Anna Coulling – creator of volume price analysis