When volatility arrives you can be sure of one thing!

When volatility arrives you can be sure of one thing!

When the volatility indicator triggers on Ninjatrader or on the MT4/MT5 platform you can be sure of one thing. The big operators, insiders or market makers are at work, trapping you into weak positions and either moving into a congestion phase or reversing the price action completely. In the video we explain why.

00:10

Volatility and market makers’ activity

00:10

The speaker points out the market’s volatility and highlights the participation of market makers and major operators during this time. Using cold futures as an example, they mention observing the time and sales window with rolling numbers, emphasizing the significance of this market activity.

00:39

Volatility trigger and volume surge

00:39

The speaker discusses a phase of price action identified as the volatility trigger on a five-minute chart. They emphasize the sudden increase in volume during this period, noting that it occurs in the middle of the afternoon UK time, which is not typically a significant market open or close.

01:13

Volume injection signals fear and FOMO

01:13

The speaker explains that the recent large volume spike in the trading session is due to a volatility trigger. This trigger typically leads to either market congestion or a reversal. The significance of volatility is linked to fear, specifically the fear of missing out, which drives the market activity.

01:47

Big operators exploit rapid market moves

01:47

The segment explains how rapid market moves to the downside often trigger traders’ instincts to jump in quickly to make profits. However, this is usually when big operators and market makers exert strong control, exploiting traders’ fear of missing out (FOMO). The speaker warns that acting on this impulse typically leads to regret, highlighting the value of an indicator that signals these moments effectively.

02:18

Volume surges indicate insider participation

02:18

The speaker emphasizes that large surges in volume during candle formations indicate insider activity, as volatility typically accompanies insider trading. This pattern is consistent except when insiders create a trap move with low volume, signaling their lack of participation.

02:47

Volume patterns predict market reversal

02:47

The segment explains a pattern of heavy selling followed by strong buying, indicated by a large injection of volume and significant price movement. Despite initial upward momentum, the price doesn’t move far before showing signs of weakness. The discussion focuses on a specific candle with a large spread but diminishing volume compared to a previous candle, suggesting that selling pressure has been absorbed and signaling potential upcoming price movement. The speaker also hints at deceptive trading behaviors within the candle’s formation.

03:45

Low volume signals upcoming congestion

03:45

The speaker explains that the current volume level is insufficient for the amount of effort observed, indicating that the price movement is unlikely to continue significantly. They mention entering a congestion period, using a timer and different time frames as examples to illustrate this point.

04:16

Volatility traps and trader psychology

04:16

The speaker emphasizes how volatility in the market attracts big operators who aim to trap traders by exploiting fear of missing out. This behavior is highlighted using a 15-second chart as an example, illustrating how these operators trigger volatility to place others in weak positions.

04:45

Volatility effects across time frames

04:45

The segment explains the concept of volatility in trading, emphasizing that it can be observed across all time frames, from 15-second to weekly charts. It highlights the importance of volume as a key indicator accompanying volatility, which helps traders anticipate market movements. The explanation underscores that volume price analysis forms the foundation of the trading indicator being discussed.

05:13

Managing positions after volatility triggers

05:13

The speaker advises that when a certain trigger occurs during a trade, it’s usually best to close the position to avoid getting stuck in congestion or a reversal. If the position is profitable, closing out to secure gains is recommended. However, if the position is at a loss, the trader must decide whether to hold on and hope for a reversal or to accept the loss and exit. The key takeaway is to take profits when the trigger works in your favor, knowing you can re-enter the market later if it continues to move positively.

06:03

Closing profits and preparing next moves

06:03

The speaker discusses closing out a deal successfully, expressing satisfaction with having secured a profit and avoided losses. They highlight that trading principles apply consistently across different time frames and conclude by handing the session back to Anna.

By Anna Coulling – creator of volume price analysis