When volume really does reveal the truth behind the price action

An excellent trading session for US indices, commodities and stocks following the extreme moves of last week and at times such as this, volume price analysis becomes ever more powerful in helping to reveal the truth behind the price action. What was interesting here was the volume associated with the wide spread down candle which was the precursor to extreme volatility which followed and which is likely to continue for the next few days as markets calm after the storm. Whilst the volume associated with the candle was high, as we explained in the session, this appears to be an anomaly and certainly when compared to volume on the following day which was extreme, and highlighted this anomaly further. So what are we to make of this, and all was explained in the session as we focused on the YM emini daily chart along with other US indices.

And for intraday index traders, we picked up a great move in the YM emini late in the trading session which delivered a wonderful trend lower on the renko charts and highlighting the power of blending two charting techniques to help keep you in as the trend extends.

A great forex session for the euro, Aussie and the pound!

An excellent forex trading session with Anna and David of Quantum Trading, as Europe opens and followed by London. The focus this week was on the euro and the pound, with Anna tracking the GBP/USD as strong pound buying is counterbalanced by US dollar selling, but as always with an eye on the London open where reversals are always likely as this major centre opens for the trading day. One to watch at present is also the Swiss franc, not only for safe haven flows but also as result of the problems in Italy and the Italian banks, with many moving their cash across the border and into Switzerland as a result, so selling euros and buying the franc, so one to watch over the next few days and weeks.

The euro aussie is always an interesting pair to trade through Europe and into London as the strong cross flows from the Southern Hemisphere then meld into the European currency markets. The currency strength indicator flagged this brilliantly with the euro rising strongly on the faster timeframes, and the Aussie dollar being sold with equal strength and so building a great trend higher. The currency array confirmed the sentiment for the Aussie dollar with the currency heatmap then confirming the longer term bearish sentiment for both the Aussie and New Zealand dollar.

A wonderful day for reversal traders in US markets

A real game of two halves today in the US day trading session with the risk off sentiment expressed in the first half, duly replaced with a return to risk on, as the major US indices and exchanges reversed all the losses of the first part of the session to close near or above the opening price.

In this session we focused on the YM emini index with some classical price action, both intraday and on the daily chart itself. Volume price analysis as always is the starting point, and with last week’s NFP still fresh in the mind, the prospect of rising interest rates had taken their toll on the markets. However, on both the 4th and 5th of October, whilst the indices fell during the session, they also recovered off the lows and more importantly on high volume, sending a clear signal that the big operators were buying and absorbing the selling pressure. Indeed this was the pattern we saw during the webinar, with the dramatic moved lower then reversed and ending the day above the open price and with a deep wick to the lower body once more and again with excellent volume. The buying which created the reversal was instantly clear to volume price analysis traders.

From a relational perspective it was also very easy to see when and why the markets had reversed in sentiment simply by considering the yen index and the yen itself on the currency strength indicator – a signal too strong to be missed with the yen selling off strongly and with the yen index falling.

So a great session once again and one where there was money to be made on both sides of the market, and as always made easier when coupled with the power of the Quantum Trading indicators, helping traders to get in, stay in and then get out at the right time. And in summary, a terrific day for reversal traders in the major US indices and stock markets.

Spoilt for choice in the fx session – which pair to choose!!

A great forex session and one where we were truly spoiled for choice, with the US dollar leading the way as safe haven flows saw the currency of first reserve rise strongly as European markets opened. This was countered with equally strong selling in several different currencies including the Australian dollar, the euro and the pound and clearly signaled on the currency strength indicator.

The move in the euro was triggered as a result of problems once more in the Italian banking system, an issue which like Greece, has never been resolved, and which is now rising once again to the
surface. But in this session we focused on one of these, the Aussie dollar which delivered a wonderful trend lower, and confirmed with all the associated indicators of the currency heatmap, the currency array and the currency matrix, with safe haven flows driving the US dollar, and equally strong bearish flows driving the Aussie, and combining in wonderful trading opportunity to the short side, which has continued later in the morning following a phase of price congestion.

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Euro, yen and pound in focus as London FX opens

In this morning’s forex session David and I started with a look at the EUR/CAD, a pair I highlighted a few days ago on my site, and one which was an interesting confluence of the fundamental, the technical and the relational and something we cover in great detail in the Quantum Trading forex education program.

We then moved to consider some of the strong moves overnight for both the euro and the Japanese yen and the start of the European session was noteable for the congestion phases building around the volume point of control on the faster charts. It is as these points that markets are in price agreement, with the VPOC itself acting as the fulcrum of the market with no bias. The analogy here is of a see-saw, with both sides of equal weight. Once bearish or bullish sentiment develops, this then moves the price action away from the volume point of control and driven by volume as the breakaway trend then develops. At such times, patience is the key, and we have to wait for the trend to develop which is then confirmed by volume price analysis and supported by the Quantum Trading tools and indicators.

Ahead of the London open, the British pound ( yellow line on the currency strength indicator) was heavily overbought, but continuing to move higher before rolling over on the 5 minute time frame as a speculative reversal position developed with the yen moving firmly lower. However, with the open so close, the prospect of a reversal is always likely with a trap move as London markets open with an associated surge in volume. The pair continued higher to 148.20 which is where it stalled as I suggested in the session, and has since fallen back to the volume point of control on the 5 minute chart which remains anchored at 147.98.

Gold, oil and indices all in focus in this session on NinjaTrader

More excellent VPA lessons in this week’s webinar during the US session as David and I focus on commodities, indices and stocks, and in this session we start with gold which had one of its best days for many weeks, with the two drivers of USD weakness and a flight to safe haven, all helping to propel the precious metal away from the drop zone below the $1200 per our region, if albeit only a temporary respite. The safe haven flows were as a result of the uncertainty in Europe and in particular the Italian budget, but as always, this looks likely to be resolved and such flows then likely to reverse just as fast. All of this was beautifully displayed on the renko optimizer for NinjaTrader, along with the other Quantum Trading indicators for NinjaTrader, and also confirmed on the intraday time based charts. Whilst the longer term picture for gold remains bearish, this was a day for the intra gold bulls to make money with volume price analysis confirming the initial rally and the consequent congestion and reversal off the highs.

Other commodities also benefited from the US dollar weakness with oil continuing to rise and with reduced volumes overhead on the volume point of control, we may see the price of oil continue higher and on towards $80 per barrel and beyond. The monthly chart for oil is a classic one revealing as it does the typical extended accumulation phase as the big operators move to buy and absorb all the selling pressure over several months, before developing the bullish trend away from this phase of price action. This is the Wyckoffian cycle of accumulation and distribution which occurs in all time frames and in all markets, and a perfect example on the long term oil chart.

Finally we took a look at a couple of stocks with GE gapping up on the news of the resignation of its CEO, but continuing to remain bearish and another was RES in the oil and gas sector, which was showing an excellent breakout from recent congestion and an opportunity to develop into a bullish trend higher. And of course not forgetting the major indices with the YM in particular breaking out into a new high in the daily chart.

Nice move in the euro along with the pound in the London session

Another great session this morning with David and myself as we showcase the Quantum Trading tools and indicators through the European open and into the London session, and the two currencies we focused on here were the British pound and the euro. As you would expect these are the currencies that take centre stage as European markets open, and we were not disappointed with the euro finding some positive sentiment and sending it firmly higher against the US dollar which was equally bearish on the faster timeframes, and so developing a nice trend. And of course this was clearly in evidence on the currency strength indicator on both the MT5 platform and the NinjaTrader platform.

One of the key issues when trading any pair is to understand whether the sentiment for the currency is universal across the currency complex, and here the currency matrix and the currency array step in to help and display this instantly and in all timeframes. This was also clearly revealed as we moved to the pound with the strong selling on the currency strength indicator, then revealed as broad market sentiment when we move to look at the associated pairs on the matrix and the array. And of course, one of the things we always look out for at the session crossover is a strong reversal, which duly arrived as we suggested it would!

MT5 currency matrix delivers a great eur/jpy trade!

In this video we focus on the currency matrix and how to use it in combination with the currency strength indicator. In this example from early in the London session bullish sentiment for the euro drives several pairs but the euro yen really does deliver, and we return to follow the price action later in the morning, as this pair continues to rise strongly. A fantastic example and supported of course by the Quantum currency strength indicator and the other tools and indicators on the charts themselves.

Understanding universal sentiment and flow is key to currency trading success, and the currency matrix indicator for MT5 delivers, visually and clearly in all time-frames showing you instantly which pairs are rising strongly and which perhaps are not following the general market sentiment.

Great forex session with the GBP/AUD, the GBP/JPY and the AUD/JPY all in focus

A great forex session this morning in the live webinar with David and myself, and one where we were spoilt for choice in terms of trading lessons and also trading opportunities. The pairs we chose were the GBP/AUD on the MT5 platform and the AUD/JPY on the NinjaTrader platform, before moving to look at the GBP/JPY later in the webinar and of course all analysed through the prism of volume price analysis and the Quantum Trading tools and indicators. For the GBP/AUD is was a case of further heavy selling in this pair and reflected in the time based charts supported by the MT5 renko chart. As always the currency strength indicator signalled the strength of the move and again using multiple timeframes giving the clear signals we need to select the currency or currency pair for further analysis. One of the keys to success is in applying volume price analysis which then helps to identify whether a reversal is a primary to primary reversal, or simply a secondary reversal against the primary trend which is then re-established. This is the point many traders exit a strong position as the reversal begins, and so give up future profits as a result. This is one of the reasons many traders struggle to succeed as this undermines the maths of trading returns, which is all about a larger number of small losses, outweighed by a smaller number of larger wins.

As the London open then approaches we saw the clear signals of a potential reversal ahead and very clearly seen on the GBP/JPY on the NinjaTrader platform. Indeed the messages here could not be clearer with both volatility and volume confirming the potential for a reversals, with the Yen index also confirming along with the currency array and the currency strength indicator. So in summary, a great session with many different lessons for forex traders.

Volume price analysis tips for day trading stocks on NinjaTrader

A great session with Anna and David of Quantum Trading as they explain how to get started day trading stocks using the NinjaTrader platform. In the webinar they check out some of the great sites to use for filtering stocks, and then focus on one or two which meet your day trading criteria. One such example was Acorda Therapeutics with the ticker ACOR and which despite the recent sharp move lower offer an excellent trade to the long side in this session. Using a combination of timeframes and the Quantum Trading tools and indicators on the renko and tick charts all combined to deliver an excellent return and all underpinned by volume price analysis.