Wow – great trade this morning as London forex session opens

Wow – great trade this morning as London forex session opens

A wonderful trade on the GBP/CHF as the London forex session opened and a perfect trend lower with the GBP being sold strongly and the Swiss franc being bought strongly and developing a terrific trend as a result.

00:11

Introduction and focusing on Pound Swiss

00:11

The speaker begins by apologizing for initially not having their microphone on and expresses hope that everyone can now hear them. They briefly mention Italy, highlighting its fascinating history, beautiful scenery, and excellent food, though noting it is not ideal for business. The focus then shifts to discussing the British pound and Swiss franc for specific reasons.

00:43

Pound weakness and Swiss franc strength

00:43

The discussion focuses on the pound’s significant downward movement, highlighting that the pound is strongly oversold while the Swiss franc is strongly overbought. The speaker draws attention to the currency strength indicator, particularly noting the prominence of the green line at the top. They then shift focus to a 10-minute chart example that demonstrates congestion building, illustrating this market behavior clearly.

01:20

Resistance levels and price clusters

01:20

The segment explains the significance of a specific price region identified by the accumulation distribution indicator, highlighting a cluster of two overlapping resistance levels. The width of these lines indicates frequent price rejections, making the area a strong resistance or support zone. Additionally, the trading is occurring near the volume point of control, which represents the highest volume concentration, suggesting a critical price area influenced by significant trading activity from Asian and European market sessions.

02:29

Volume analysis and market sessions

02:29

The speaker discusses trading volume fluctuations across different market sessions, highlighting the transition from US cash markets to the Asian session and then into the European and London opens. They emphasize the importance of breakaway trading, noting that it requires patience. The segment explains how to identify volatility candles during a downtrend, which signal potential trading opportunities, and stresses the importance of entering trades at the right moment once a trend is underway.

03:26

Volatility candles and downtrend signs

03:26

The segment explains a market scenario where a big wick to the upper body with a narrow spread candle indicates effort to rise, but actually represents market makers selling into a weak market. Traders are trapped selling into weakness, causing the market to fall further. This continuation of the downward move is detected by the trend monitor, which shifts directly from bullish to bearish without transitional colors, highlighting the aggressive nature of the move and lack of intermediate price congestion.

04:18

Bearish sentiment and multiple timeframes

04:18

The speaker discusses a bearish sentiment reflected by the continued selling of the pound, observed across multiple timeframes. They explain how the price action on the one-minute chart mirrors the ten-minute chart, showing clusters of price agreement points indicating neither bullish nor bearish dominance. Despite some brief shifts in the trend monitor to darker red, the overall sentiment remains strongly bearish.

05:16

The bearish sentiment continues with slight congestion but no reversal, supported by rising volume on key candles. The speaker emphasizes the importance of volume in confirming price movements. They also address managing multiple trading charts using different versions of platforms like MT4 and MT5 simultaneously to optimize system memory and performance, referencing additional resources for further information.

06:19

Low volume regions and price movement

06:19

The speaker discusses price behavior in relation to volume point of control, highlighting the significance of moving into low volume regions. These areas lack volume support, allowing price to move rapidly through them, which benefits short positions. This concept applies similarly to upside moves, where falling volume reduces resistance. The volume point of control offers traders valuable insights into potential price movements, helping them anticipate what comes next. The advice emphasizes staying calm, following the trend, and managing stop-loss orders by gradually moving them down to lock in profits as the price moves in favor.

08:09

Stop-loss management and trade scaling

08:09

The speaker discusses the strategy of using a trailing stop loss by handing control over to the market. If a trader has secured significant profits, they can move the stop loss tight to the last candle, allowing the market to decide when to exit. This approach ensures that if there is a snapback, the trader gets taken out with profits secured.

08:33

If a trader believes there is more potential upside, they should avoid moving the stop loss too close and instead place it near the previous congestion phase for some pullback protection. The speaker emphasizes observing candle patterns showing repeated efforts to rally, which indicate strong volume and market activity.

08:58

The analysis focuses on candle wicks and volume, noting that the primary wicks are on the upper side, showing effort to rally. Despite this, the presence of heavy volume and selling pressure from market makers suggests weakness, as traders tend to buy after a downtrend anticipating a reversal, which may not be reliable.

09:24

The speaker shows how to track volume building in real time using NinjaTrader, highlighting its usefulness in assessing market strength. They caution about false assumptions traders make after a downtrend, buying in anticipation of a reversal, and acknowledge the risk involved with this behavior.

09:53

On a 10-minute chart with volume displayed on a tick basis, volume builds steadily, providing immediate feedback on market activity. The speaker points out that a large wick on the lower side would indicate buying pressure, which is not observed here, suggesting continued selling and weakness as indicated by the red indicators.

10:20

Currency strength indicator overview

10:20

The segment discusses the current heavy selling pressure on the British Pound, especially evident on shorter timeframes like 3, 5, 10, and 15 minutes. The Pound is positioned as the weakest currency in the array, consistently appearing at the bottom of strength rankings. Meanwhile, the Swiss Franc remains strong, and there is no immediate sign that the Pound’s decline will reverse despite some overbought conditions in other currencies.

11:19

The focus is on identifying the strongest and weakest currencies, with an emphasis on the Euro gaining strength against the Pound, which is expected to continue declining. The Pound/New Zealand Dollar pair is noted as an exception, not following the broader trend of Pound weakness. Overall, market sentiment towards the British Pound is negative, reflected by the steep selling trends across multiple pairs, which can be visually assessed by the inclination of lines in the currency strength array.

12:16

This segment explains how the currency strength array also signals potentially overbought or oversold conditions using color-coded shading and bracket indicators. Dark red with brackets signals potential oversold status, while bright red without brackets indicates a possible overbought state. These signals serve as alerts to traders, who should confirm with other tools such as sentiment analysis and chart patterns. The process of evaluating currency strength is ongoing and involves cross-referencing multiple market indicators.

13:16

Potential congestion and trade exit

13:16

The segment discusses observing buying activity under a particular candle characterized by a wick and strong volume, alongside a volatility trigger on the ten-minute chart. This suggests potential congestion or a longer-term reversal in price. The speaker advises that if a trader is holding significant profits in such a situation, it may be prudent to close some or all positions and wait for a clearer market break below the candle before re-entering, minimizing risk and protecting gains.

14:14

The discussion continues on managing profits by scaling out of positions gradually—selling some contracts while leaving others to run. This approach helps lock in gains while maintaining market exposure. The speaker explains that scaling out assumes the initial position was correct, whereas scaling in involves adding to a position based on positive market developments. Traders must find the strategy that suits them best, with novices advised to first focus on understanding market direction before attempting scaling techniques.

15:36

The final segment reiterates the current market condition of being within the spread of a candle that has good volume, indicating buying interest. The speaker emphasizes the importance of observing price action over the next 5 to 20 minutes to gauge the market’s direction. They highlight that this method integrates multiple analytical elements, providing a comfortable and comprehensive approach to trading decisions.

16:08

Currency strength radar and trends

16:08

The discussion focuses on currency strength indicators (CSI), highlighting heavy selling and oversold conditions for the British pound and Swiss franc on faster timeframes. The CSI breaks down the Forex market into individual currencies rather than pairs, helping traders identify which currencies are moving strongly and which are not.

16:43

The CSI aids in selecting potential currency pairs to trade by analyzing the strength of individual currencies. The pound and Swiss franc show clear movements, and the Australian dollar is starting to decline, showing strong selling pressure. The speaker explains how the CSI provides a radar-like view of the market by focusing on individual currency strength.

17:13

The Australian dollar has experienced heavy selling recently, with a steep downward angle indicating strong momentum. There is a notable crossing with the Japanese yen, suggesting a potential developing trend in the AUD/JPY pair. This insight is offered without needing to look at charts.

17:35

On fast timeframes, the AUD/JPY pair shows a clear trend with the Australian dollar declining and the yen strengthening into overbought territory. The trend is expected to continue and extend into slower timeframes as the crossing on longer periods has not yet occurred. This analysis sets up a strong trend development scenario for the pair.

18:01

Sentiment and market dislocations

18:01

The segment discusses recent market sentiment by examining indices and the ES (E-mini S&P 500). It highlights a distorted rally around 7 PM caused by massive volume from a late collapse in the US markets the previous night. The rising VIX alongside equities indicated a market disconnect, which preceded a sharp collapse. The presenter notes a slight rally into 8 PM followed by a sell-off, with currency pairs like the Aussie Yen reflecting this shift in sentiment. The importance of understanding volume price analysis (VPA) and indicators is emphasized for interpreting these movements.

19:33

Trade confirmation and pause point

19:33

The speaker discusses market activity characterized by volatility candles and buying pressure, advising traders to secure profits when volatile triggers occur. They highlight the strong downward movement of the Pound and note that the Pound is oversold while the Swiss Franc is overbought, signaling a potentially comfortable trade. The segment concludes with the observation that the market is reaching a pause point, as indicated by the currency strength indicator and chart signals.

By Anna Coulling – creator of volume price analysis