Using the indicators to set your stop loss levels

Using the indicators to set your stop loss levels

Learn how to use the Quantum Trading tools and indicators to set your stop loss levels.

00:11

Trading in ranging markets and stop losses

00:11

The speaker discusses the challenges of trading when the market is in a range, highlighting that price action can be choppy and frustrating. Despite these difficulties, short-term trading opportunities still exist, and using levels effectively becomes crucial, especially for managing stop losses.

00:46

Using volume point of control for stops

00:46

This segment explains the concept of setting stop-loss orders using strong support levels, specifically the volume point of control (VPOC). It highlights the advantage of combining price-based support with volume-based support to determine optimal stop placement. The stop-loss is ideally placed just below these support levels to protect against adverse price movements, with examples illustrating multiple instances of price respecting these levels.

01:20

Expecting stop-outs in ranging markets

01:20

The speaker discusses the challenges of trading in ranging markets, emphasizing that traders should expect to be stopped out more frequently compared to trending markets. They note that while many Forex pairs are currently trending on the daily chart, being stopped out occasionally is part of the process and should be anticipated.

01:56

Strong moves with tight stops on Renko

01:56

The segment explains that when you catch a move using a tight stop, the move tends to be very strong. It references a Renko chart to illustrate this point, showing a move upward near the Reebok indicator. The discussion highlights hitting important resistance levels identified on the Camarillo indicator and other tools used to mark significant price levels. The analysis is based on an hourly timeframe, concluding that the move will likely stop at these resistance points.

02:31

Support and resistance levels and volume

02:31

The discussion focuses on the significance of the R3 level as a key resistance point, noting that it was reversed in this instance. The speaker explains that the price briefly broke through this level, but emphasizes the importance of allowing some flexibility around support and resistance levels for accurate analysis. Additionally, the volume accompanying the price action is highlighted as a crucial factor in determining if the price movement will sustain or fail.

03:03

Volume confirms price level breakthroughs

03:03

The segment explains that when a price reaches a significant resistance level, it requires volume to break through it. Without sufficient volume, the price is likely to reverse. The speaker highlights how the price has repeatedly acted as resistance, illustrating the concept with examples. Additionally, there is a mention of differences between the NinjaTrader and MT4/MT5 support and resistance indicators.

03:34

MT4/MT5 vs NinjaTrader support indicators

03:34

The speaker explains that the indicator being discussed is simpler compared to others, as it only displays either a thicker line or a hatched line. The meta quotes language used to develop this indicator is not advanced enough to replicate features seen in NinjaTrader, where the equivalent resistance line thickens incrementally each time it is hit. This visual cue helps traders understand the significance of the resistance level.

04:12

Interpreting resistance line thickness

04:12

The speaker discusses interpreting points on a chart where the price may pause or reverse, emphasizing the importance of your time horizon when deciding to take a reversal trade. They describe color indicators on the chart, mentioning bright red and red signals, as well as an intermediate color for a more conservative approach.

04:47

Choosing entry points in ranges

04:47

The speaker discusses trading strategies, emphasizing the importance of choosing entry points carefully. They mention a preference for entering trades when a signal is clearly strong (‘bright red’) and near a resistance level, indicating confidence in a potential upward move. Observing buying activity under specific candles is highlighted as a key indicator to anticipate further price increases.

05:14

Price action on lower timeframes

05:14

The speaker analyzes a three-minute chart, discussing potential price movements toward a specific support level. They note the significant distance between current and target levels, emphasizing that the price is unlikely to decline in a straight line. On the hourly chart, the price is within a narrow range and moving sideways, suggesting a period of consolidation.

05:46

Stops and price objectives with levels

05:46

The speaker explains how to use price levels for placing stop orders and setting price objectives, highlighting features of the NinjaTrader platform. Specifically, the platform visually thickens lines based on how frequently a price level is hit, which helps traders identify strong support or resistance areas. This feature offers confidence that if the price approaches a thick line, it will likely pause, allowing traders time to reassess their decisions.

06:22

Managing trades using support levels

06:22

The speaker discusses their plan to wait and observe the market, considering the possibility of a retest before a rise. They also mention using certain levels to assist with trade decisions, including stock placement and trade management.

By Anna Coulling – creator of volume price analysis