How to day trade currency futures and stocks such as Apple

How to day trade currency futures and stocks such as Apple

In this session on US futures, I show you how to trade currency futures using indicators associated with spot forex. They can be used in the same way whether trading spot of futures with the currency strength indicator, the currency matrix, the currency array and the currency heatmap. Here, I focus on the 6B, the currency future for the pound ahead of Brexit. Then David takes over on NinjaTrader and shows you how to day trade stocks using the Quantum Trading tools and indicators, as well as the volume-price analysis methodology.

00:01

Introduction and disclaimer

00:01

The webinar begins with a brief introduction by Anna, who is joined by her husband David. They welcome the audience and mention the focus on the U.S. markets. Anna also reminds viewers to pay attention to the disclaimer about the risks involved in trading.

00:36

Overview of volume price analysis (VPA)

00:36

The speaker advises never to use money you cannot afford to lose and introduces the topic of volume price analysis (VPA), a method combining price action and volume to analyze market charts. They mention a foundational book titled ‘A Complete Guide to Volume Price Analysis’ available on Amazon, which initiated interest in this method. To aid learning, a companion book with over 200 worked examples has been created, helping traders recognize repeating market signals and patterns across various time frames and markets.

01:47

The discussion continues on mastering VPA signals, emphasizing their clarity once familiar. The examples book was developed due to numerous trader requests for more practical illustrations beyond the original text. It primarily covers stocks, indices, commodities, and also offers a forex version. The methodology is based on five core elements: volume, price action, candlestick patterns, and support and resistance levels.

02:55

The speaker recalls a recent session that covered volume-based support and resistance using volume profile and volume at price tools. They highlight a slide from a previous presentation that breaks down VPA into its foundational five core principles, which serve as the basis for chart analysis. These core principles establish the framework for understanding and applying VPA effectively.

03:36

Building on the core principles of VPA, the speaker explains the use of technical indicators and tools to structure chart analysis. While standard indicators are available on most platforms, they have also developed proprietary specialist tools tailored to specific market conditions and optimal application. These tools complement the primary VPA methodology to enhance trading analysis.

04:12

Primary and secondary VPA tools

04:12

The speaker introduces the secondary elements of VPA (Volume Price Analysis), clarifying that ‘secondary’ does not mean ‘second best’ but rather supportive components used after mastering the primary methodology. They intend to demonstrate these elements using charts, specifically focusing on currency futures with an example of the British pound (6B). Despite some technical difficulties with their charting software, they plan to explain their profile setup for this instrument. The segment ends with a transition to another presenter, David, who will discuss stocks and the broader market context.

06:04

Current market conditions and news impact

06:04

The market, particularly for the British pound, has been relatively inactive and uncertain. Futures like the Dow and Nasdaq showed little movement. Employment data and a sentiment indicator were the main news releases, with no major economic events expected according to Forex Factory. The speaker emphasizes the importance of having a reliable news feed for trading, recommending Financial Juice for its affordability and comprehensive calendar.

07:10

Financial Juice is praised for its timely updates and a more comprehensive economic calendar than some others like Forex Factory. It includes data releases such as the Red Book, which, while not highly significant, is still monitored by the market. The speaker mentions other Federal Reserve reports like the Beige Book and hints at a mysterious ‘Blue Book.’ The Red Book data shows a decline due to the virus’s economic impact.

08:43

Financial Juice also features a ‘need to know market risk’ section highlighting vaccine approvals, including the FDA approval of Pfizer’s vaccine, which the market had anticipated. The announcement of Pfizer’s 95% efficacy caused a strong market reaction, followed by Moderna’s vaccine announcement. The UK market, especially forex traders focusing on the British pound, is influenced heavily by these developments.

09:45

The British pound has been volatile due to ongoing Brexit negotiations, particularly issues around the Northern Ireland border checks and the withdrawal agreement. The UK government’s legislation is seen by some as breaching international law, causing market uncertainty. Traders dealing with the pound, especially the euro-pound pair, must stay updated as political developments can abruptly impact trades. The speaker also mentions a student affected by these Brexit-related market moves and briefly references setting up a trading profile related to the 6B (British pound futures).

11:33

British Pound futures and indicators setup

11:33

The speaker explains that futures markets have limited activity before the physical cash markets open, but still provide useful signals, especially when spot markets move sharply. They describe using two Renko charts set at different pip values to analyze price action. Additionally, they discuss incorporating a Camarilla indicator and an accumulation and distribution indicator from NinjaTrader, which highlights significant support and resistance levels by thickening lines when those levels are retested, indicating the volume required to break through.

12:40

The accumulation and distribution indicator identifies key levels where price tends to bounce or face resistance, useful for spotting potential re-entries or position additions during trends. The speaker mentions planning webinars to show how Fibonacci methods can be integrated with volume price analysis (VPA) to strengthen trading strategies. They emphasize establishing key price levels on the chosen timeframe and observing how price reacts—whether it bounces or breaks through. The Camarilla indicator is explained as a tool that calculates dynamic support and resistance levels, refreshed daily for intraday charts and weekly for hourly charts.

14:27

The Camarilla S3 level is highlighted as a significant price reversal point that typically requires substantial volume to break. The accumulation and distribution lines shift dynamically as price action evolves, unlike the fixed Camarilla levels. Using Renko charts combined with trend indicators like Trend Dot and Trend Monitor provides traders more precise entry points than traditional candlestick charts. An example is given of a down move after the London market open, following a gap down overnight, illustrating practical application of these tools.

16:20

Volatility candles and market momentum

16:20

The speaker explains the significance of a volatility candle observed in British pound pairs around the London open. This candle indicates a price range beyond the average for that timeframe, marked by a new high and low, followed by a retracement within the candle’s spread. A hammer candle forms during this retracement, signaling buying interest. Such volatility candles often lead to either a congestion and reversal or congestion and continuation of the initial move.

17:36

Volatility and momentum in the market often trap traders on the wrong side, especially during big moves like the London open. Many traders experience fear of missing out, hesitating to enter trades until the price retracts back within the volatility candle’s spread. The speaker advises patience when a volatility candle is triggered, as retracements and congestion are common before the next move. The example given shows a market standoff where anticipated downward moves did not continue, illustrating the importance of waiting for confirmation.

19:06

A reversal trade occurred contrary to the negative news narrative, emphasizing that premature short positions could have missed gains. Later in the afternoon, a promising short setup appeared on faster timeframes following positive news related to a temporary agreement on Northern Ireland issues. Volatility was triggered again with a deep wick and a second candle within the spread, suggesting a potential reversal lower, though confirmation is needed by breaking the candle’s high or low.

20:13

The fourth Camarilla support (S4) and resistance (R4) levels are highlighted as important indicators for potential trade setups, signaling possible long or short positions if price breaks and closes beyond these levels. The hourly candle low near these levels often coincides with price congestion. The current price action remains within the volatility candle’s range, reinforcing the need to watch these key levels closely for potential trade opportunities.

21:25

Trading on very fast timeframes, such as seconds or Renko charts, can capture price action within volatility candles, though the movement is choppy and challenging. The speaker stresses the importance of patience and waiting for key levels to break with sufficient volume before entering trades. Much of the session was about knowing when not to trade. Additionally, a tick speed indicator is used to measure market speed by counting the number of ticks, helping gauge market activity and flow, particularly around significant news events.

23:12

Trading strategies and market patience

23:12

The speaker discusses a recent short trade involving the British pound, highlighting a primary downward trend with some attempts at upward movement that lacked volume support. They note the unpredictable nature of trading the pound due to Brexit uncertainty, which can lead to both profitable and unexpected outcomes. The speaker introduces the Currency Strength Indicator (CSI) from the spot market, focusing on the British pound against the US dollar to analyze currency strength and weakness.

24:25

Using a three-minute chart, the speaker identifies divergence between the dollar, which is strengthening, and the pound, which is weakening or sideways. They emphasize patience during such congestion phases. The conversation shifts to a matrix indicator from the spot forex profiles that measures consistent buying or selling pressure on the British pound across its pairs. This tool helps determine where Cable (GBP/USD) stands relative to other pound pairs and whether selling pressure is widespread, which can influence futures market behavior.

25:42

The speaker notes that GBP/USD is being sold, though not as heavily as GBP/CAD, which isn’t available in the futures market. They stress that consistent selling across British pound pairs in the spot market often reflects and potentially accelerates selling in the futures market. Additionally, the importance of identifying key price levels—such as significant highs and lows or previous day’s ranges—is highlighted, as these levels are crucial not only for individual traders but also for market consensus.

26:54

The discussion focuses on integrating volume-based analysis with price levels to gain a comprehensive three-dimensional view of support and resistance. Volume profiles and points of control help identify significant price areas that may act as barriers. The speaker mentions using Camarilla levels and Fibonacci retracements as complementary tools, noting that while Fibonacci levels provide reference points, volume data adds crucial context to anticipate whether price will reverse or break through these levels. The segment ends with a brief technical issue mention regarding the Ninja Trader platform.

28:49

Transition to stock market analysis

28:49

The speaker begins by discussing the challenges of analyzing the three-minute chart due to a lack of market movement. They then shift focus to the daily charts of major indices—YM, NQ, and ES—highlighting that trading has been very tight with little substantial movement. The market has been mostly sideways as the year-end and holiday season approach, with expectations for volume to decline.

29:56

There is some divergence observed among the three indices: the NQ is down slightly, the YM is up, and the ES remains flat. This is unusual compared to normal pre-COVID market behavior when the indices typically moved in tandem. Currently, intraday divergence and narrow, congested trading dominate, with the indices trading near key volume points—bearish below the NQ’s volume point of control.

31:02

The speaker advises patience for index traders due to the lack of clear trends. For those who trade slower timeframes (above 2-5 minutes), it may be necessary to wait all day for a trend that might not develop. Faster traders can use very short timeframes like 15 or 30 seconds to find opportunities, but many traders avoid this speed. The emphasis is on waiting for meaningful price action rather than forcing trades.

31:57

Shifting to stocks, the speaker highlights Apple as an example to illustrate various trading aspects. They mention having the S&P 500 data set up but focus on Apple due to the large amount of incoming data, cautioning against unnecessary chart switching to stay focused on relevant information.

32:31

Apple stock trading and options overview

32:31

The discussion covers various ways to trade stocks, including owning the physical asset or using options, which are very popular on free trading platforms like Robinhood. The speaker explains how options trading has evolved over 20 years, from monthly and quarterly to weekly options. They mention the higher capital requirements in the UK compared to the US and highlight options as a method to manage risk and create spreads. Multiple trading strategies and platforms are referenced.

33:39

The speaker reviews different chart time frames for Apple stock, from 1-minute to daily, emphasizing the importance of pre-market volume. Pre-market trading volume is lower but significant as it sets key price levels for the physical market open. The volume surge at market open is a critical indicator. The importance of price levels in trading is stressed, and the segment hints at further detailed analysis planned on the Tradestation platform.

34:47

An example of a classic trap move is analyzed, where a rapid price increase with low volume in the pre-market leads to volatility and a potential reversal or congestion. The speaker notes the influence of related markets on these moves and shifts focus to the US dollar’s performance across multiple time frames. The dollar’s recent contained range and attempts to push higher are discussed, noting that a stronger dollar generally negatively impacts stocks.

35:48

The discussion turns to the VIX volatility index, which is currently around 21.39 and trending slightly down after a recent peak. This volatility measure forms part of the market framework affecting the stock under review. The speaker notes that on the 10-minute chart, the price is moving away from the volume point of control with limited price base support, indicating potential challenges for the stock’s near-term stability.

36:19

Volume point of control and price levels

36:19

The speaker discusses the accumulation distribution indicator, noting its price-based nature and limited recent testing, making it a weak signal. They highlight lightweight support levels and a significant volume point of control, represented by a large wedge of volume indicated by a yellow dashed line. The price action is expected to move quickly through areas with little volume or price support, emphasizing the importance of analyzing multiple time frames for stronger support levels.

37:18

Slower time frames carry greater significance in technical analysis, and strong support levels are visually represented by the thickness of indicator lines. The indicator also shows how many times a level has been tested recently, enhancing its reliability. Minor support levels are thinner, while thicker, clustered levels indicate stronger support. The speaker uses a UK childhood game analogy to explain how the strength of a level corresponds to the number of tests it has undergone.

38:20

Clusters of tested support levels increase their importance, with a key level currently holding price action. The volume point of control lies just below this level, indicating a limited downside potential of about 40 cents for Apple stock from its current price. This limited price travel combined with significant volume suggests that shorting Apple intraday may not be an optimal trading opportunity compared to other stocks.

39:17

The speaker compares intraday trading in stocks to scalping in forex, emphasizing the importance of checking spreads. Highly liquid stocks like Apple have tight spreads, making them suitable for intraday trading despite limited price movement. Wider spreads in other stocks and currency pairs can impact trading decisions, and traders should consider both the spread and share price when assessing opportunities.

40:10

Highly liquid stocks such as Apple, Facebook, and Amazon exhibit tight spreads and heavy trading volumes, resulting in fluid price action and clear market signals. The speaker briefly mentions a volume price analysis (VPA) trading room and introduces TradeStation’s scanner as a powerful tool for day traders, contrasting it favorably against NinjaTrader’s scanner. This sets the stage for upcoming sessions focused on using TradeStation for intraday trading.

41:16

Intraday stock trading and scanning tools

41:16

The speaker discusses the challenges intraday stock traders face, particularly in scanning and establishing criteria for trades. Using Apple as an example, they emphasize that the trading principles and indicators apply universally across different instruments. Key concepts include analyzing volume as support, identifying low volume nodes to predict price movement, and monitoring trend indicators to avoid premature exits from positions.

42:08

The focus shifts to combining volume data with price anomalies and confirmations to form a comprehensive trading strategy. The speaker reviews index movements, noting a slight rally in the YM, and examines multiple time frames to better understand market behavior. They highlight the importance of neat chart organization and how volume acts as an immediate signal for market trends, describing the current upward movement as gradual rather than rapid.

43:14

Volume analysis and market momentum

43:14

The segment discusses the significance of volume spikes and price action, indicating potential market weakness due to heavy selling. It explains that high volume on a weak candle suggests selling pressure rather than buying, providing traders with confidence in reading upcoming candles. Understanding why a price movement happens helps manage emotional responses to pauses or reversals in the market. The market currently shows a lack of strong selling or buying momentum, described as ‘mushy’, which is reflected in volume trends.

44:18

This part elaborates on the relationship between price trends and volume, noting that falling volume with a falling market suggests limited further downside, just as rising volume is needed to confirm upward moves. It highlights the concept of effort required both to rise and to fall in price action. The trend monitor indicates stability with no significant movement, reinforcing a generally bullish market sentiment despite the lack of strong volume confirmation.

45:43

The speaker examines the volatility index (VIX), noting its current downward movement which supports potential market gains. A slight tick up in VIX is observed but the expectation is for it to continue falling to sustain momentum. The market is described as pausing with moderate selling pressure, but no clear indication of a reversal yet.

46:51

Attention turns to the US dollar, which is slightly weakening, a factor that could mildly support higher market prices. The discussion then shifts to examining multiple indices to confirm market direction. While divergences exist, confirming upward movement across major indices is considered beneficial. However, recovery in the Nasdaq (NQ) is expected to be challenging due to substantial volume-based resistance overhead.

47:56

The Nasdaq’s recovery is hindered by heavy resistance zones requiring significant buying effort. Despite a couple of upward candles, falling volume indicates weak buying interest, signaling a lack of strong recovery momentum. The focus then moves to Apple’s stock, which is currently moving sideways after bottoming out. It faces considerable volume resistance levels that it must overcome to rally.

49:01

Apple’s stock is poised for a rapid move if it breaks below key support levels due to low volume areas which historically allow quick price movements. The discussion emphasizes the importance of volume and volume point of control in anticipating price behavior, as low volume zones tend to lead to swift price changes, highlighting the critical role of volume analysis in trading decisions.

50:01

Volume nodes and price movement expectations

50:01

The speaker explains why low volume areas in the market offer little resistance or support. Initially, because the volume is low, these areas are not impactful. Secondly, if the market quickly moves through these areas initially, it indicates they are not significant. The discussion highlights the importance of identifying low and high volume nodes as they provide crucial information about potential market movements. This concept applies consistently across various time frames, whether on short-term or longer-term charts, and integrates with volume price analysis (VPA) techniques.

51:05

Gold and oil market updates

51:05

The discussion begins with gold’s recent performance, highlighting its prolonged trading below cost and recent volatility. Gold is currently battling through heavy volume and significant price-based resistance. Despite a reversal in November, the outlook remains bullish. The segment also touches on scalping gold futures contracts, noting potential profit opportunities on shorter time frames like the 15-second and one-minute charts.

52:12

The analysis continues with gold’s price congestion and resistance on the three-minute chart, suggesting limited short-term upside. The focus then shifts to oil, which has been recovering but experienced some pullbacks recently. The speaker emphasizes the impact of volatility candles driven by large trading volumes and advises traders to take profits promptly when trades go in their favor. Caution is advised when facing losses during volatile moves.

53:18

Traders are advised to wait for volatility to subside before re-entering the market after seeing volatility candles, using clear support and resistance levels for guidance. The dollar’s decline is noted as supportive of rising equities, complemented by a falling VIX index, which together provide upward momentum for the market.

54:00

Volatility triggers and dollar index

54:00

The video discusses a recent pause in the market with a solid transition and a volatility trigger indicated by a candle showing increased volume. On slower time frames like 30 seconds or one minute, this pause is expected. The trend monitor remains consistently blue, signaling ongoing upward momentum. The dollar is falling, currently at 90.91, and the VIX is around 21-22. Various time frames and indicators, including trend lines, confirm these observations, suggesting a weakening dollar and continuing market activity.

55:22

The dollar is transitioning from bullish to bearish, shown by trend colors shifting to darker red on TradingView, which aligns with the preference for a weak dollar. The VIX remains steady in the low 20s, supporting a continuing upward trend despite minor reversals. Market candles show slight weakness but overall are pushing into low volume regions, indicating accumulation points. The discussion also touches on Apple stock, which is currently moving sideways, suggesting patience is needed before a clear opportunity emerges.

56:37

Selling pressure in the market is diminishing, which may present a buying opportunity. However, any upward movement will need to overcome significant resistance levels supported by volume to confirm a long position. The VIX continues to decline slightly, and the dollar index (Dixie) remains around 90, reflecting ongoing market conditions that require careful monitoring before taking action.

57:14

Quantum Trading education and funded accounts program

57:14

The speaker wraps up the session by highlighting the availability of various trading indicators across multiple platforms, including quantumtrading.com, MT45, NinjaTrader 7 and 8, TradingView, and soon TradeStation. They emphasize the power of the radar screen, especially for day trading stocks, capable of managing nearly a thousand mini charts simultaneously. Upcoming updates include porting missing Forex indicators like the matrix, array, heat map, volume point of control, and support resistance to TradingView, enabled by recent improvements in Pine Script. Additionally, indicators such as Camarilla levels will be refined for cleaner appearance across platforms.

59:21

Information is provided about additional resources including Anna Cooling’s books available on Amazon in paperback and Kindle, and the Quantum Trading education program called the Complete Forex Trading Program. The program now includes a funded Forex component allowing students to trade live accounts starting from $5,000, $10,000, or $15,000 after passing an evaluation focused on consistency. Successful traders can then access larger accounts up to $2 million by progressing through increasing funding levels, designed to teach conservative risk and money management while providing the experience of trading large capital.

01:01:01

The funded Forex program’s rules are carefully designed to protect capital and promote conservative trading, reinforcing consistent performance. Students leverage their proven skills by trading larger accounts without increasing risk per trade, simply managing greater capital within the same risk parameters. The program has gained popularity and currently supports many students, offering a comprehensive path from education to real live trading with the benefit of receiving a share of profits. Importantly, traders risk the program’s money, not their own, making it a no-risk opportunity for participants.

01:02:23

Details and access to the funded Forex program can be found at quantumtradingeducation.com and within the education dashboard for enrolled students. The speaker concludes the session, announcing the next installment will be held the following week at 3 PM US time and 7:45 AM UK time. They thank participants, wish them well for the rest of the trading day and week, and sign off warmly.

By Anna Coulling – creator of volume price analysis