More volume price analysis lessons in the London forex session

More great volume price analysis lessons this morning in the London forex session as we focused on the British pound, with further volatility expected as Brexit continues to exert its influence across the complex.

But we started with a look at the NZD/CAD on the daily timeframe which continues to remain firmly anchored to the top of the heatmap, as we wait for the pair to weaken and move away from this extreme position. As always, patience is required, and the approach here is the same, whether for the currency strength indicator or the currency heatmap when trading extremes. For the former it is the currencies themselves, and for the latter it is the currency pairs. In either case, patience is required along with wide stop loss positioning and then waiting for the move to develop.

From there we moved to the British pound and in particular a move on the GBP/JPY with several signals suggesting a reversal following the initial move higher, with volume, support and resistance, volatility and of course the currency strength indicator all helping to confirm the price action on the screen.

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The FED, and the Quantum Trading indicators for short and longer term trading

In this session, we stressed once again the importance of distinguishing between the signal and the noise from the FED ahead of the FOMC minutes later. Once again we have seen how the Federal Reserve is the most powerful central bank in the world and how its words and actions impact all markets and the global economy.

We then focused on the pound in a variety of timeframes, with some great volume price anlaysis lessons in several pairs.

Finally we looked at the currency heatmap and the extremes for some longer term trading opportunities.

Some great trading lessons on NinjaTrader in all markets

Another great session with all the markets in focus from commodities and indices to stocks. Some great trading lessons here in all markets and timeframes on the NinjaTrader platform and using the Quantum Trading indicators.

Indicators from Quantum Trading

A great day for trading stocks and indices – & the importance of floating supply

Choosing the best stocks for day trading can be tricky and if you choose the wrong ones, it can be tough make money as a day trader.

In this session, we cover some of the basics of stock selection for day trading and also highlight one of the key issues which is understanding floating supply.

Floating supply is one of the most important factors to consider for the simple reason if the floating supply is small, then volatility is likely to be high as the price can be manipulated by the market makers very easily, or indeed a single large order. The opposite is where floating supply is large and in this case volatility will be reduced as these stocks are harder to corner for the market makers and insiders.

This was also a great trading day with the opportunity to make money in all markets, with the ES index falling strongly along with the sister indices of the YM and NQ emini, and with gold climbing and the US dollar, there were so many opportunities, it was hard to know which to take. But for us, it was the YM emini and the Aussie dollar which really delivered in what we call, a ‘money day’!

The power of using multiple timeframes

Using multiple timeframes is one of the keys to trading success and in this morning’s forex session we explain why, and using several of the GBP pairs.

The reasons are many. First, using this approach reveals how price action in one timeframe, can reveal so much in another. Overlaying two candles is easy, but doing this with several is hard and almost impossible to do quickly. The Quantum Trading indicators for MT5 and NinjaTrader then help, with different signals in different timeframes. One may be signaling a change in trend which is developing, or perhaps a volatility signal is triggered.

Finally, the price action itself reveals areas of support and resistance, of deep concentrations of volume which are not apparent on the timeframe of choice. All of these then provide the pieces of the jigsaw, which answer the simple question ‘where is the market heading next?’ And all underpinned of course by volume price analysis, which again offers powerful insights when applied in multiple timeframes.

Which pairs to choose and how to trade them – all explained here!

Choosing which currency pairs can be a tricky decision, and one each forex trader has to make for themselves, and as this is a frequent question, it’s one we answer in this morning’s forex session. And always there is no right or wrong answer, only what suits you, and perhaps the key here is patience. If you have the patience to wait, then reducing the number of pairs to trade can be an excellent way to become an expert in one or two, perhaps also with a preferred tactic. However, this can create problems as boredom can often be an issue as other pairs are then sought out, and very quickly all the initial discipline has gone, and the trader is then taking trades in all pairs, as before. So it’s not easy.

Another question frequently asked is how to use the currency dashboard and the four trading indicators it contains, and here David walks through the three-step process, with the currency heatmap then providing the over-arching view.

Oil delivers….again, and again, and again….

It’s often hard to find trading opportunities which just deliver, and keep delivering, but for oil this has been the case over the last few weeks, and this was no different yesterday, with the WTI futures as the price of oil fell once more, and offering straightforward, low risk, high return trading opportunities in all time frames.

The primary decision trading decision here is the number of contract to trade, with the time and non time based charts providing those key insights to maximize returns. And here, it really is a case of make hay while the sun shines. These fantastic trading opportunities don’t come along every day, and until OPEC moves and potentially introduces supply cuts, this bearish momentum looks set to continue, but as always it will be volume which reveals any turn points or primary reversals in due course. So enjoy the ride lower!

US mid-term elections dominate price action in all markets

Waiting for the US mid term elections was reflected in the markets this afternoon, and following an initial move higher, that was it for the rest of the session as all three indices rotated around the VPOC on the fast timeframe charts and lacking both direction and participation. The price action was no great surprise given the political landscape along with the FED decision due on Thursday.

But as always on such days, it reminds us we have to be patient and wait for the trading opportunities to arrive and not force them, where none exist which was the case for index traders today. This general lack of momentum was also reflected in related markets with the US dollar and gold both trading in narrow ranges. The terrific price action of October, a nightmare for investors, but joyous for traders, now seems to be a dim and distant memory as we wait for the Santa Claus rally to appear on the horizon!

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