Using volume price analysis to trade CME futures including currency futures and index futures on the Tradestation and NinjaTrader platforms

Using volume price analysis to trade CME futures including currency futures and index futures on the Tradestation and NinjaTrader platforms

00:00

Introduction to the webinar and topics

00:00

The webinar begins with a welcome from the hosts, Anna and David, who introduce themselves and the focus of the session on U.S. markets and futures. Anna acknowledges both returning and new viewers, setting the stage for the discussion ahead.

01:16

Overview of day trading session focus

01:16

The webinar series includes multiple sessions, with a break between them. The day trading sessions are split into two parts: one focusing solely on stocks, scheduled for 3:15 PM, and the current session covering day trading concepts with broader applicability to markets like currency futures, indices, and commodities. The methodology discussed is versatile across markets and time frames, but specific stock-related fundamentals and scanning techniques will be addressed in the separate stocks session. The speaker also reminds viewers of the disclaimer before starting.

02:21

Volume Price Analysis methodology

02:21

The speaker emphasizes the risks involved in trading and advises against using money one cannot afford to lose. They introduce the volume price analysis (VPA) methodology, which examines the relationship between price action and volume. This methodology is explained in detail in a book available on Amazon, along with a companion book containing over 200 worked examples. Although price action signals are never exactly identical, similar patterns tend to repeat, allowing traders to identify potential reversal or continuation signals. VPA also incorporates three additional key elements beyond price and volume.

04:06

The additional elements of VPA include candle patterns and, importantly, support and resistance levels, which are crucial in technical analysis. These five elements form the foundation of the VPA trading methodology. Understanding how these components appear on charts is essential before applying any indicators. Many traders make the mistake of relying on indicators like Bollinger Bands prematurely without grasping the basics first. Once the foundation is solid, indicators can be effectively integrated. The speaker also mentions the development of proprietary tools built on top of these principles.

05:45

Market update and economic events

05:45

The speaker reviews various chart tools and discusses the unusual timing of key market events on inauguration day, noting confusion due to discrepancies in Forex Factory’s calendar. Specifically, the Bank of Canada rate statement is scheduled for 8:30 PM instead of the usual afternoon slot, and the Bank of England governor is also set to speak later. The speaker highlights the importance for forex and currency traders to stay aware of these timing changes, especially when trading currency futures like the Canadian dollar and British pound.

07:30

Day trading market sessions explained

07:30

The speaker introduces day trading considerations using the 6B futures contract for the British pound as an example. They explain how trading has evolved from limited hours with clear market opens and closes to now having 24-hour markets and pre-market trading, which adds complexity. Despite the continuous trading, the market still breaks into sessions, and day traders typically aim to either catch reversals or join ongoing moves.

08:43

The discussion focuses on how price movements occur within the context of different market sessions, using a 15-minute chart of the British pound futures. The London session’s impact is noted, with price oscillating around a key resistance level defined by the R3 level of the Camarilla indicator. The speaker emphasizes the importance of identifying support and resistance levels, highlighting how these levels guide trading decisions.

10:36

The speaker explains the use of price-based support and resistance indicators, particularly the Camarilla and accumulation/distribution tools available on the NinjaTrader platform. They describe how repeated testing of a level strengthens it, making it a significant point for trading decisions. Volume-based resistance is also discussed, specifically the volume point of control (VPOC), which represents the price level with the highest traded volume and often acts as a pivot for consolidation or breakout.

12:24

The morning trading session for the 6B and spot cable market is described as initially quiet with extended consolidation before a gradual move higher. The speaker stresses that day traders aim for quick trades, avoiding long-term holdings, and seek strong signals indicating a high probability of a swift price move. The segment ends with a reference to a classic candlestick pattern signal that helps identify such trading opportunities.

13:38

Key trading signals and candle patterns

13:38

The speaker explains the shooting star candlestick pattern as a strong reversal signal confirmed by high volume. They note that while identifying entry signals like shooting stars or hammer candles is relatively straightforward, the challenge lies in determining the reversal target. The example given shows a strong signal on a 15-minute chart, which led to an actual price reversal and a pause at a key price level.

14:44

The discussion focuses on the concept of support and resistance, emphasizing how previous support levels can become resistance after being broken. The price broke through a support level which then became resistance, leading to a further decline. The importance of key support levels, such as the ‘s3’ level, is highlighted, noting that price action tends to return to these critical regions. The speaker also mentions that their analysis is based on two Renko charts and a slower timeframe for context.

15:53

The speaker introduces six key levels calculated by an indicator that remain valid for the entire week, providing important price objectives. They review price movements earlier in the week, noting the failure to reach the fourth resistance level (r4) after hitting r3. The indicator recalculates levels daily for charts shorter than one hour, giving fresh levels every 24 hours, and the current price action shows congestion near the r3 level on the 15-minute chart.

17:45

Attention is drawn to the timing of signals within trading sessions. A strong signal appeared at 11 o’clock during the London session, which has high volume from London and Europe. However, as the US cash markets open later, sentiment can shift, causing price congestion or reversals. Traders are advised to be aware of session timings and their impact on price movements to avoid getting caught in volatile or consolidating phases.

19:01

The speaker stresses the importance of understanding market session cycles within the 24-hour trading day. Volume and price movement strength can vary significantly between sessions like London, Asia Pacific, and North America. They briefly mention combining Renko charts with camarilla levels to analyze pure price action, highlighting that Renko bricks do not show wicks, which affects how candlestick patterns such as shooting stars appear on this type of chart.

20:11

Using Renko charts and trend indicators

20:11

The speaker explains how the Renko chart is used alongside other indicators like the trend dot and trend monitor to identify trend matches and reversals. The Renko chart updates quickly with each three-pip movement, helping to track fast market changes. A recent reversal was noted but deemed potentially tradable only for very small, tick-based trades. Additionally, the tick speedometer indicator is introduced to measure market momentum, showing varying levels of participant activity through color oscillations.

21:56

David takes over to discuss the strong market performance indicated by a high number of companies trading above their 200-day moving average, highlighting the current strength of the market. He praises the Renko chart for its effectiveness in smoothing trends by using a non-time-based approach, which helps to better visualize sustained movements.

22:49

Market analysis and risk signals

22:49

The speaker discusses using multiple trading platforms including NinjaTrader, TradeStation, and TradingView to monitor the enqueue market with Renko optimizers and trend indicators. They explain the optimal Renko brick sizes for different time frames—15 seconds, 30 seconds, and 1 minute—and how these need to be recalibrated as market conditions change. The trend dots closely follow price action, indicating a generally strong upward trend in the enqueue market at the moment.

24:06

The speaker highlights market activity across multiple indices, noting gold’s sharp rise as a concern. They compare the YM, Enqueue, and ES indices, pointing out that YM and ES are trading in narrow ranges while the enqueue shows significant movement. Volatility and volume spikes at market open are discussed, with the market settling into a rhythm afterward. The speaker also emphasizes the importance of volume profile analysis across different timeframes to better understand market dynamics.

25:31

Focusing on gold and silver, the speaker notes a significant move triggered by volatility around quarter past one, supported by trend monitoring tools. They describe recent price action showing congestion and potential reversal signals, with heavy buying volume under a key candle suggesting either continued congestion or an upward move. The analysis includes daily chart perspectives indicating the market’s reaction to a prior sell-off and current buying interest.

26:23

The speaker points out a worrying market divergence where the enqueue is surging higher while the yen and the US dollar index are also rising simultaneously, which is unusual. Normally, the dollar and gold move inversely, but here gold and the dollar are both rising. This anomaly suggests market instability. The speaker also notes other currency pairs like the Aussie yen, New Zealand yen, and Canadian dollar moving sideways, while the British pound is sharply selling off due to ongoing Brexit-related uncertainties.

27:19

Continuing the currency analysis, the speaker highlights the strong sell-off in the British pound supported by trend monitors across 15-minute and hourly charts. The Swiss franc is also selling off, but the dollar continues to rise, contributing to notable moves in the major currency pairs. The speaker briefly mentions TradeStation’s currency futures platform and multiple alert systems generating numerous notifications, which will need managing. They reference monitoring specific currency futures such as 6A and 6B with another analyst named Anna.

29:13

Currency futures and trading platforms

29:13

The speaker explains currency futures notation, highlighting that all futures are quoted against the US dollar, which can lead to inverse pricing such as CAD/USD instead of USD/CAD. They demonstrate the use of TradeStation’s RadarScreen application, which consolidates multiple time frames (1, 2, 3, 5, 10, and 15 minutes) in one workspace. The Trend Monitor within RadarScreen provides an instant overview of market trends across these time frames, helping traders quickly assess market conditions.

30:13

The speaker describes additional features in RadarScreen, including the Quantum Trends indicator that shows trend direction with color-coded dots across time frames, allowing quick identification of trading opportunities. Another workspace includes a volatility trigger indicator that signals potential trade reversals or exit points based on bars elapsed since the trigger. The system provides real-time data updates, reducing the need to search manually for signals.

31:14

Many indicators are integrated into RadarScreen to alert traders without requiring multiple charts. The speaker mentions overbought and oversold signals from the CSI indicator as an example. RadarScreen offers a streamlined interface to monitor relevant signals and opportunities efficiently. Users can switch views easily within the application to focus on different datasets as needed.

32:15

The speaker demonstrates the Volume Point of Control (VPOC) feature in RadarScreen, which tracks the price level with the highest traded volume across various time frames. This data helps traders understand support and resistance levels. The application is highly versatile and is linked to Interactive Brokers for live data feed. The speaker emphasizes the power and flexibility of TradeStation’s RadarScreen, especially in its integration with different data sources and versions.

33:26

The speaker shifts focus to soft commodities, highlighting the strong recent performance of markets like corn. They underline the effectiveness of volume price analysis across different trading instruments and time frames, stressing that it works equally well for intraday and daily trading. The example demonstrates the broad applicability and power of volume price analysis in understanding market behavior.

33:54

Volume Price Analysis on commodities

33:54

The segment analyzes a recent trading day where a large wick appeared on the upper body accompanied by significant volume, indicating potential market weakness ahead. While this does not guarantee a complete price reversal, it suggests the possibility of downside price action developing. Whether this leads to a full transition from a primary bullish to a primary bearish trend depends on subsequent candle behavior. This concept is further explained in the forex program, which details how volume price analysis helps distinguish between secondary pullbacks and major reversals.

35:00

Trend monitoring and maximizing profits

35:00

The segment discusses the importance of identifying whether a market trend reversal is occurring or if the current movement is just a temporary pause. This understanding is crucial for traders to decide whether to hold or exit a position. The speaker highlights tools like the trend monitor and trend dots designed to help maximize profit potential by distinguishing between minor pullbacks and true reversals. The challenge in trading is balancing taking small losses with holding on to larger winners, as premature profit-taking often results in missed gains due to market volatility aimed at shaking traders out of positions.

37:01

The focus shifts to analyzing recent index price action, noting a pause and slight decline accompanied by increased volatility and volume profile indicators like VPOC. The speaker explains typical volume patterns from market opens, where a surge is followed by a decrease, and how price action tends to narrow afterward. Additionally, the synchronized movement of various asset classes is identified as a warning sign, since normally assets like the yen or Swiss franc move inversely as safe havens, indicating potential underlying market instability.

37:30

Market anomalies and risk awareness

37:30

The speaker discusses the importance of monitoring gold and other markets for confirmation and alignment in their movements. They emphasize watching for anomalies as indicators for short-term trades, noting that rapid price movements, like those seen in the enqueue, serve as warning signals. The segment ends with the speaker preparing to switch focus and demonstrate these concepts using Renko charts.

38:21

Using Renko charts, the speaker illustrates a trend reversal as the trend monitor shifts from green to red, indicating a slowdown in price action. They highlight the rapid rise of the US dollar and the yen, with the Swiss franc likely to follow. The discussion centers on understanding market risk, explaining that market movements boil down to money shifting between higher risk for higher reward and lower risk for lower reward across asset classes. The segment concludes as the speaker prepares to wrap up.

39:13

Indicator availability and funded accounts program

39:13

The speaker introduces the availability of various trading indicators on quantumtrading.com, including MT4/5, NinjaTrader 7 and 8, and upcoming support for TradingView. Additional indicators like Matrix Array, CSI support and resistance, and VPOC will soon be included free of charge for those with the full package.

39:40

They announce the launch of the TradeStation education program versions 9.5 and 10, which is already popular. The program supports many successful traders, and a funded trading program has been added as an optional benefit exclusively for students.

40:07

The funded program allows students to trade with accounts starting at $5,000, $10,000, or $15,000, leveraging the provider’s money with no personal risk. There are money management rules, and traders can scale their accounts by multiples up to $2 million, profiting as they trade successfully.

40:34

The account scaling process continues, doubling from $60,000 to $120,000 and up to $2 million. Profits are paid out in lumps as traders earn. The speaker also directs viewers to thecooling.com for books, indicator links, and a complete forex trading program.

41:05

The session concludes with thanks to participants, a reminder of the next webinar at 3:15, and well wishes for the rest of the trading day.

By Anna Coulling – creator of volume price analysis

 

By Anna Coulling – creator of volume price analysis