Understanding the mood of the market

Understanding the mood of the market

The market is driven by fear and greed, or risk on and risk off sentiment. This is reflected in many different ways and is a key part of understanding relational analysis which is covered in the complete forex trading education program which you can discover here https://quantumtradingeducation.com

00:00

Introduction to futures trading and disclaimer

00:00

The session introduces futures trading using volume price analysis and quantum trading tools. The speaker emphasizes the importance of the trading disclaimer, warning that trading is risky and advising participants not to use money they cannot afford to lose. Volume price analysis is introduced as the methodology used by the presenters.

00:28

Volume price analysis overview and book companion

00:28

The speaker discusses a trading methodology they have used for nearly twenty years, emphasizing its universal application across any market or timeframe. This approach focuses on analyzing price action and volume to understand past movements and predict future trends. The methodology is detailed in a book, which has a companion volume containing around 200 practical examples across various markets including indices, stocks, commodities, and Forex. The key concept is recognizing repeating volume and candle patterns, enabling traders to anticipate likely market behavior based on familiar signals.

02:07

Analyzing indices and market reversals

02:07

The speaker expresses initial frustration over a choppy market but then notes a clear move away from congestion on the Nasdaq futures (NQ). They review the market open and discuss the importance of identifying price reversals, which are common after congestion phases or trends. The session emphasizes understanding these reversals through technical and volume price analysis, highlighting tools developed to validate genuine reversals and the triggers behind them.

03:46

Reversal triggers and market sentiment

03:46

The segment discusses the importance of understanding market dynamics, focusing on the balance between buying and selling without access to order books or time and sales data. The speaker explains the current reliance on charts, price action, volume, support and resistance, and specialist tools to identify technical reversals across markets. These reversals can be influenced by patterns, candle formations, and key price levels. Additionally, fundamental news events, such as speeches by figures like Jay Powell, can trigger market reversals. Market sentiment, including risk-on and risk-off moods, also plays a crucial role, and traders often monitor proxy markets like bonds and the VIX to gauge shifts in sentiment that may cause sudden reversals.

06:03

Aussie yen movements and proxy markets

06:03

The speaker analyzes the Aussie yen currency pair’s behavior just before the market open, noting an unusual upward movement despite broader market declines, particularly in Europe. They discuss the price action on the 10-minute chart, clarifying some confusion about the timing and charts. The Aussie yen had been falling to a key RSI 4 level but then started to creep higher, holding that support level even amidst typical market volatility at the open.

07:34

Trap reversals at session crossovers

07:34

The speaker discusses the concept of trap reversals that frequently occur during session crossovers, particularly in forex and futures markets. They explain how movements in Globex trading can lead to classic trap moves when the physical market opens. Using charts, including a 2-minute and 15-minute chart, the speaker illustrates how these reversals are well-defined and can be anticipated by observing market behavior at session transitions.

08:39

The speaker describes the psychological impact of negative financial news on traders at market open, which often biases them toward expecting a downward move. However, despite this mindset and initial downward Globex trends, the market can show upward reversals at key support levels with significant volume. This results in unexpected bullish moves at the open, which can trap traders anticipating further declines.

09:36

Classic trap move at the open explained

09:36

The speaker discusses market behavior following a rally, highlighting initial upward movement quickly reversed by significant downward pressure, reflecting overall market negativity after Powell’s remarks. Traders are cautioned against waiting too long to act, as volatility candles with strong momentum often reverse sharply, trapping late entrants in losing positions. The segment emphasizes the importance of recognizing key support and resistance levels, specifically around 88.50, for timing reversals and managing trades effectively in volatile conditions.

11:11

Key support levels and trading strategies

11:11

The speaker discusses the significance of the 8850 level on the 60-minute chart, highlighting it as a key institutional trading point and potential support (S4). They explain that if this level had been broken, a free fall might have occurred, emphasizing the importance of recognizing such key levels to avoid trap reversals, especially at market opens. The analysis includes checking slower timeframes to confirm the level’s importance.

12:26

After the market bounced off the 8850 level, there was considerable choppiness with wide price swings on the two-minute chart. Traders using various timeframes, from tick to seconds charts, might find different opportunities amid this volatility. For those trading slower timeframes, it was advisable to wait until the market calmed before identifying a clearer trend, which eventually developed despite some pullbacks.

13:25

The segment covers a modest but steady uptrend with intermittent corrections, emphasizing the importance of analyzing candles, volume, and chart structure to identify potential reversal points. It also mentions a tradable downward move, illustrating a two-way market. Congestion around the volume point of control is noted as a challenging area where patience is required until a breakout occurs.

14:01

The speaker explains the need for patience when the price hovers around the volume point of control, as a breakout is inevitable. They reference the daily chart mental map, noting price levels around 8850 and correlations like the Aussie yen’s movements as indicators of market risk appetite. With no upcoming news, the market is expected to trade based on price action until any significant events occur.

15:11

The discussion shifts to the differences in chart refresh rates, with faster timeframes updating daily and hourly-plus charts updating weekly, which reinforces the strength of weekly levels. The speaker highlights that markets tend to rise slowly and cautiously, while declines are faster. They mention approaching the S4 level on the Aussie yen and invite viewers to ask questions for clarification.

16:18

The segment concludes with a handoff to David, who is monitoring different instruments like the YM and gold, indicating a collaborative analysis approach across various markets.

By Anna Coulling – creator of volume price analysis