Volume price analysis trading

Volume price analysis trading

Volume price analysis trading can be used across all markets and timeframes and here we have an example on the gold chart.

00:11

Intro and VIX overview

00:11

The speaker apologizes for technical difficulties and checks audio clarity before starting the session. They introduce the VIX index charts, showing the one-minute and daily views, noting the current downtrend. The VIX is trading in a tight range with low volume as the session nears its end. The speaker then plans to briefly review gold prices before returning to discuss the indices in more detail.

01:15

Gold weekly chart anomaly explained

01:15

The speaker discusses a significant trend in gold observed recently and references a detailed post made a few days earlier. They highlight the importance of examining the weekly chart, which reveals a classic anomaly not apparent on faster timeframes. The speaker encourages viewers, especially those familiar with a contributor named Nick who provides in-depth weekend analysis, to explore cross-timeframe studies. This anomaly is notably visible on the weekly chart and is recommended for further review on Anna’s site.

02:20

Volume anomaly signals market trap

02:20

The speaker discusses a critical volume anomaly indicated by a specific candle pattern, describing it as a clear trap move suggesting the market is set to rise. They highlight the importance of breaking through the 1700 level as a signal for a decent upward trend, moving away from the current volatility range. The analysis emphasizes trading volume, particularly the volume point of control, as a key factor in understanding market direction. Traders, including intraday ones, are encouraged to examine daily and weekly charts to gain a clearer perspective on levels amid volatility.

03:22

Gold’s steady trend and volume analysis

03:22

The segment explains the concept of the volume point of control (VPOC) in the volume histogram and its relationship with price to predict market direction. Using a gold trade example, it highlights a steady upward trend characterized by strong volume and price action, including a notable breakout with a high-volume candle followed by a minor retracement without significant selling pressure. The discussion then shifts to major stock indices, specifically the Dow Jones (YM), Nasdaq (NQ), and S&P 500 (EES), setting the stage for further analysis.

04:26

Indices update and narrowing spreads

04:26

The discussion focuses on recent market activity, highlighting a concerning candle pattern observed on Tuesday with high volume. Despite ongoing upward movement, narrowing spreads—especially on the Nasdaq—are noted, likely influenced by the approaching holiday period and seasonal volume declines. The speaker also monitors the VIX index, which is currently trending downward and breaking away from a congestion phase on shorter timeframes, indicating potential market shifts.

05:28

Importance of VIX for market sentiment

05:28

The speaker emphasizes the importance of monitoring the VIX indicator when trading any market, whether forex, indices, or commodities. The VIX serves as a sentiment gauge by reflecting the balance of calls and puts and provides a heads-up on market sentiment intraday. The speaker recommends having the VIX visible regardless of the chart timeframe, from one-minute to one-hour charts. They also mention using multiple Renko charts, particularly 15-second and 30-second intervals, acknowledging that while some traders might find this unconventional, it suits their personal trading style and comfort level.

06:36

Using short timeframes for quick analysis

06:36

The speaker explains the usefulness of analyzing market data in short time frames like 15 to 30 seconds, which provides a quick and effective heads-up on market movements. This approach enhances the ability to perform rapid volume analysis, making traders more alert and responsive to real-time market changes compared to longer intervals like two or five minutes.

07:45

The speaker adjusts their chart settings to include multiple time frames, from 10 to 15 minutes, to get a comprehensive view of market activity. They observe that the volume point of control is consistent across these intervals, indicating a period of market congestion late in the trading session. Given the low volume and upcoming holiday, the speaker advises patience, noting that while sudden news could cause movement, the current market condition is one of consolidation after previous significant moves.

09:13

Market anomaly: rising markets on bad news

09:13

The speaker discusses the paradox of current market behavior, highlighting that despite poor employment numbers and ongoing economic turmoil, markets continue to rise. This counterintuitive movement confounds traders who expect a downturn, emphasizing the importance of trading based on market data and chart patterns rather than personal opinions or emotional reactions. The challenge lies in ignoring the overwhelming bad news headlines and focusing purely on observable market actions.

10:51

The focus shifts to commodity markets, noting that while oil remains relatively stagnant, gold is showing a strong upward move. The analysis points out the significance of volume patterns supporting the price increase, illustrating a clear and confident market action within a short timeframe.

11:22

Volume-price signals of market strength

11:22

The speaker explains how volume and candle patterns indicate market control and potential weakness. When large volume appears without a price drop, it signals buying support by major players, preventing further decline. Conversely, certain candle formations suggest impending weakness, prompting decisions on holding or closing positions. Volume spikes and wicks indicate profit-taking and selling pressure during upward moves. The trend monitor tool is highlighted as a valuable indicator that complements Renko charts by providing a broader perspective, helping traders stay aligned with market trends during minor reversals and pullbacks.

13:03

Challenges of staying in winning trades

13:03

The speaker discusses the common challenge traders face in holding positions, especially when profits start to reverse. Many traders prematurely close positions to avoid losses, only to miss out on further gains when the market continues in the original direction. Volume price analysis is highlighted as a crucial tool for distinguishing between primary trends and minor pullbacks, helping traders avoid emotional decisions and better understand market movements.

14:09

Trader’s instinct and emotional challenges

14:09

The speaker reflects on how current circumstances have triggered a primal hunter-gatherer instinct to protect and provide for their family, highlighting how deeply ingrained this behavior is in human DNA. They note this as a curious anomaly that also relates to challenges faced in trading. Despite going off on a tangent, the speaker emphasizes the interest of this observation and shifts back to discussing a positive, ongoing upward trend in the market, linking it to a question previously mentioned by Anna.

15:19

Trading single vs multiple instruments

15:19

The speaker discusses the advantages and challenges of trading single instruments like gold or oil. While it may seem easier since you only focus on one market without dealing with multiple currencies or economies, a key issue is market inactivity leading to boredom. Traders who specialize in one instrument may struggle to find opportunities when that market is stagnant. The broader point is that although technical and fundamental analysis apply universally, limiting yourself to a single market can restrict trading opportunities.

16:23

The conversation shifts to the relative ease of entering the forex market, highlighting that you don’t need a futures account to trade currencies like the US dollar. The speaker illustrates a recent market move on a five-minute chart, noting a clean upward move with a strong candle and no wicks, indicating a solid price increase. This example emphasizes the accessibility and clarity of trading in currency pairs compared to other markets.

17:02

Dollar weakness aiding gold rally

17:02

The segment discusses recent market activity characterized by increased volume and some weakness likely due to profit-taking. The speaker highlights the importance of comparing volume levels and candle heights to assess selling pressure. Attention is also given to the US dollar’s behavior, noting it has been in congestion but is now moving lower and is very oversold. This dollar weakness is supportive of rising gold prices. The segment concludes by observing a minor pullback in gold with a $3.00 per ounce wick, indicating some short-term weakness.

18:18

Signs of short-term weakness in gold

18:18

The speaker explains how volume is visualized on a candle chart in real time, specifically on a five-minute chart. They highlight a classic sign of weakness forming on the upper wick of the candle, suggesting a potential short-term reversal. This does not indicate a trend change but rather some intraday weakness. Traders using fast charts might see this as an opportunity to close positions. The discussion then shifts towards analyzing a three-minute chart.

19:16

Volume-price analysis confirms reversal

19:16

The speaker explains how volume price analysis helps identify a two-bar reversal pattern on the six-minute chart, providing confidence in predicting market reversals. This analytical approach allows traders to make decisions based on logic and data rather than gut feelings, fear, or emotions. It helps prevent impulsive trades driven by market volatility and instinctive reactions.

20:22

Volatility triggers emotional trading traps

20:22

The speaker explains the instinctive reaction traders have to act quickly, comparing it to a predator chasing fast-moving prey when hungry. This emotional response drives the urgency to trade immediately, even if a better, slower opportunity might be available. The volatility indicator is highlighted as a valuable tool because it signals when to pause and reconsider entering or exiting a trade, encouraging patience rather than impulsive decisions. The discussion then shifts back to reviewing market indices to observe their recent performance.

21:15

Indices congestion and support zones

21:15

The market is in a strong congestion phase, with price action repeatedly dipping and holding above a key support level around 850 to 900. This area is being tested continuously, indicating a solid base forming. A breakout above 900 on decent volume could signal a long position opportunity as the trend turns positive, confirmed by color-coded trend indicators shifting from dark to bright blue.

22:14

The VIX is showing a slight decline, indicating reduced market volatility and a tentative rally attempt. This inverse relationship between VIX and market movement suggests the current tight trading range is typical for this phase, with the market waiting for a clear directional breakout.

22:44

VIX ticking down and market caution

22:44

The speaker discusses risk tolerance in trading, noting a reluctance to enter trades in the current market conditions despite potential breakouts. They analyze the daily NQ chart and express concern about narrowing spreads. The market is expected to remain sideways, with multiple Renko charts across different timeframes (15 seconds, 30 seconds, and one minute) showing congestion and no clear trend. The speaker anticipates observing how levels and trends develop over the weekend and early next week, hoping for improved news to influence market movement.

23:45

Renko charts and multi-timeframe analysis

23:45

The speaker discusses using multiple Renko charts across different time frames, emphasizing that combining indicators on non-time-based charts can be effective. They illustrate this by referring to trading indices and gold, noting the importance of monitoring multiple time frames and indicators. The conversation then shifts to the political uncertainty surrounding gold, mentioning postponed or virtual meetings affecting trading decisions.

24:47

The focus returns to the gold chart, highlighting signs of market weakness and pauses in price movement. The speaker notes a two-bar reversal on the 6-minute chart with good volume, indicating some buying activity despite the overall weakness observed.

25:25

Volume signals predicting gold weakness

25:25

The speaker analyzes volume patterns indicating market weakness despite some volume spikes that are not signs of strength. They highlight a pattern of effort to rise followed by falling back, confirmed on the 5-minute chart, signaling a likely market reversal. Traders are advised to consider closing long positions and taking profits while monitoring subsequent candles for further volume changes to decide on holding or exiting.

26:21

The discussion continues with the application of a real-time indicator to track market movements, revealing a small doji candle on the 10-minute chart accompanied by significant volume, indicating developing weakness in gold prices. The speaker notes that gold is retreating from intraday highs, which is expected due to the holiday period and session end as major traders close positions and take profits. The market dynamics reflect typical end-of-session profit-taking behavior.

27:42

Volatility and FOMO in Aussie dollar move

27:42

The segment discusses a significant price move on the Australian dollar within a 15-second chart timeframe, highlighting its high volatility. It warns against the common emotional reaction of jumping in quickly to capitalize on rapid price movements, driven by fear of missing out (FOMO), which often leads to losses. The speaker explains that after a sharp move up, prices typically either enter a consolidation phase or reverse, depending on volume levels and key support zones. The volume point control and low volume areas are used to predict potential price behavior, with strong support levels confirmed by multiple tests mentioned as important for maintaining price stability.

29:22

Strong support levels and trader regrets

29:22

The speaker discusses a strong support level formed by two clustered points in the market, suggesting it’s a solid foundation if prices return there. Traders who entered at this point are now likely regretting their decision due to a market reversal, facing emotional uncertainty about their next moves. They may either close their positions or hope for improvement, often shifting between different timeframes—from 15-minute to daily charts—to seek confirmation on whether to hold or exit, leading to a state of panic and indecision.

30:20

Session end trap moves and holiday effect

30:20

The speaker discusses a market move at the end of a session, highlighting how big operators and market makers are creating a trap. They emphasize the opportunity to make money before the holiday season begins, describing the process as straightforward.

 

By Anna Coulling – creator of volume price analysis