How To Use The Volume Relative Strength Indicator On TradingView For Longer Term Investing

How To Use The VRSI Indicator For Investing

The video focuses on analysing the Quantum VRSI indicator on slower time frames for investing—daily, weekly, and monthly charts—with an emphasis on longer-term swing trading, trend trading, or outright investment strategies. The indicator blends volume price analysis (VPA) with pressure concepts to assess the strength and momentum of trends. Pressure here refers to the strength behind price moves, indicating bullish or bearish sentiment or a congestion phase. Key components of the VRSI indicator include: the fulcrum line, which marks transitions between bullish and bearish sentiment. Different colour intensities that indicate strong vs. weakening bullish or bearish pressure (four colours total: strong/weak bullish and strong/weak bearish).

 

00:00

Introduction to Quantum VRSI Indicator on Slow Time Frames

00:00

The video introduces the Quantum VRSI indicator with a focus on slower time frames such as daily, weekly, and monthly, suitable for swing or trend trading and long-term investing. It references earlier videos covering intraday and futures trading using the indicator. The current market context is the premarket session just before the US open, where volume is thin but not impactful on these longer time frames. The presenter emphasizes the importance of combining volume price analysis with the VRSI indicator, highlighting that the VRSI extracts additional volume-related insights to complement the underlying volume price analysis methodology.

02:11

Concept of Pressure in VRSI Indicator Explained<

02:11

The video explains the concept of pressure as it relates to trend strength and momentum in trading. Pressure indicates whether a trend is strong to the upside or downside, or if there is congestion with little momentum. The indicator discussed has three main components: the fulcrum line marking shifts between bullish and bearish sentiment, color changes that signify sentiment strength, and four colors representing strong and weakening bullish or bearish trends. The workspace separates volume and price analysis to better interpret these indicators.

03:56

The video introduces analysis of seven popular and liquid stocks—Apple, Amazon, Microsoft, Nvidia, Tesla, Meta, and AMD—emphasizing the importance of using multiple time frames in chart analysis. Changes in trend momentum on faster time frames, such as daily charts, tend to migrate into slower time frames like weekly or monthly charts. This concept is likened to ripples or waves spreading out after throwing a pebble into a pond, illustrating how momentum builds and affects longer-term trends. The principle applies universally across different time frame combinations and is essential for effective volume price analysis and indicator-based trading.

06:09

Apple Stock Analysis on Daily, Weekly, Monthly Charts

06:09

The segment begins with an analysis of Apple’s daily chart, highlighting a steady bullish trend over the past four months with a relatively shallow angle of about 30 degrees. This gentler slope results in moderate pressure bars on the VRSI indicator, reflecting consistent but not steep momentum. Minor pullbacks are observed, indicated by color changes and reduced pressure bar height, yet the trend maintains above the zero fulcrum point. Recent days show a reversal from bullish to bearish sentiment, marked by a color shift to dark red and increased pressure bar height, indicating a sharp price decline of about $20. The relationship between the angle of the trend and pressure bar height is emphasized, showing steeper declines produce taller bars, while shallow trends yield smaller bars.

10:20

Attention shifts to Apple’s weekly chart, where earnings and dividends punctuate the price action, often causing spikes in pressure bars. The VRSI indicator confirms strong trends via rising pressure bars matching price movement direction, both in bullish and bearish phases. The weekly trend shows consistent, steady price increases at an angle of approximately 40-45 degrees, with pressure bars reflecting this steadiness without extreme fluctuations. Notable volume and pressure spikes signal potential congestion phases or reversals. Accumulation and stopping volume are identified at price lows, suggesting buying before a new upward campaign. The segment also discusses the importance of consistent pressure bar height as a sign of a stable trend.

15:28

This part covers the impact of quarterly earnings announcements on Apple’s price and pressure bars, noting that while earnings can cause reversals, the pressure bars remain relatively muted, indicating limited momentum behind recent downward moves. Pre-market data hints at a potential bullish rebound, suggesting market makers may be attempting to shake out strong holders. The monthly chart is introduced to underscore the importance of time horizon in trading decisions; long-term investors may view short-term earnings reactions as noise. The current bearish reversal lacks strong negative pressure, supporting the idea of an eventual return to bullish sentiment. The segment ends by noting a significant support level on the monthly chart, which could lead to a price bounce back toward $200 and beyond.

21:11

The final segment reflects on recent Apple price action, emphasizing how earnings and fundamental news serve as catalysts for market volatility and manipulation by market makers, including during the COVID period. The speaker introduces the volume chart to further illustrate these concepts, highlighting how volume spikes accompany key market moves and influence price trends, reinforcing the importance of understanding volume and pressure dynamics in trading.

21:42

Volume Price Analysis and Market Reactions

21:42

The segment discusses extreme trading volume observed in March 2020 during the onset of the global COVID-19 pandemic, highlighting how market makers capitalized on the situation across various assets. It explains key volume price analysis (VPA) concepts such as stopping volume, narrowing spreads, and the significance of volume changes in price action. The example focuses on recent price behavior with rising volume, narrowing candle spreads, and wicks indicating substantial buying pressure, suggesting a potential pause or consolidation in the stock’s movement.

23:16

This part emphasizes the importance of observing further price congestion with good volume and narrower spreads as indicators of potential recovery and upward movement. It uses Apple as a case study, noting that despite expectations of consistently strong earnings, stocks like Apple and Amazon can experience variability in results. The segment concludes by transitioning to a discussion about Amazon, preparing to analyze its price action with similar methods.

24:23

Amazon Stock Trend and Pressure Bar Insights

24:23

The speaker analyzes Apple’s daily chart, noting the trend is flattening as it moves into summer, forming an arc shape. Initially, there is momentum with predominantly blue pressure bars, but as the trend weakens, the bars decrease in height and even show bearish pressure below a key fulcrum point. A gap up occurs with strong volume and pressure bars, indicating a genuine move supported by volume. This analysis highlights how the indicator works in conjunction with volume price analysis (VPA).

26:12

The trend lower is confirmed with brick red pressure bars, but the reversal phase is short-lived as the bars quickly revert to the fulcrum. Rising pressure bars confirm sustained bearish sentiment during the falling trend. A brief congestion phase with weak candles follows, and the trend angle becomes relatively flat, indicating a period of indecision before the next move.

27:18

A strong rally develops with rising dark blue pressure bars indicating good momentum. The weekly chart shows consistent pressure bar heights, confirming solid trend strength despite a slightly lower pre-market opening price. This sustained momentum is a positive sign for the trend’s continuation.

28:19

On the monthly chart, the trend shows strongly rising dark blue pressure bars, reflecting an accelerating and steady uptrend. Congestion phases exhibit two-way price action with narrow spreads, typical of periods of indecision. Patience is advised to wait for breakout signals, which often occur with buying pressure and lead to strong breakout trades. The chart suggests an ascending triangle pattern with a flat upper resistance and rising lower support levels.

29:20

The price tests to the downside become more frequent and rise over time, but buying pressure supports the breakout above resistance, enabling entry with downside protection via stops below prior price action. As the trend peaks and flattens, pressure diminishes as expected. Several large upthrust candles during this phase signal weakening momentum, indicating the stock is unlikely to advance further and is poised to decline.

30:17

The trend transitions into a strongly bearish phase with rising pressure bars. Toward the end, a recovery begins with rising monthly bars of uniform height, though these bars are not as tall or strong as previous uptrends, suggesting the current uptrend may lack strength. The speaker advises monitoring the monthly perspective carefully. The analysis then shifts focus to Microsoft, beginning a similar examination of its daily chart trends.

31:26

Microsoft Trend and Bearish Momentum

31:26

The segment discusses a steadily rising trend with intermittent injections of earnings pressure, leading into a congestion phase characterized by narrow price fluctuations around the fulcrum. Despite bearish sentiment indicated by dark brick red bars, the pressure bars remain at similar heights, suggesting that the bearish momentum is sustained for now with further downward moves possible.

32:24

The price has reached a potentially supportive level, which is critical to watch because breaching this support could cause a significant drop. Multiple indicators across different time frames are used to validate this analysis. The focus is on the height of pressure bars revealing underlying market sentiment and potential bearish continuation.

32:57

Weekly chart analysis shows a mix of bullish and bearish momentum, with a notable injection pushing prices higher followed by a large upthrust candle leading to a sell-off. The decline that followed was gradual rather than sharp, consistent with the moderate height of the pressure bars, which suggest maintained bearish momentum.

33:33

The downtrend on the weekly chart was steady and not extreme, reflected by moderate pressure bars. There was a subsequent injection of bullish momentum with a steep upward trend that quickly flattened, bringing the price back down to the fulcrum. On the monthly chart, a strong upthrust candle is observed with rising pressure bars supporting the uptrend, providing confidence for long-term investors.

34:43

The monthly chart shows a flattening trend after a period of bullish strength, with developing bearish sentiment reversing the earlier gains. Volume analysis reveals stronger volume during the recent candle compared to previous reversals, suggesting potential congestion or a longer-term reversal. The volume price analysis (VPA) shows rising prices with declining volume, aligning with the pressure bar analysis and indicating caution.

35:43

The segment concludes with a transition to analyzing Nvidia, highlighting large pressure bars on the daily chart following a significant gap up. This sets the stage for further detailed examination of Nvidia’s price and volume action using similar indicators.

36:18

Nvidia Trend and Congestion Phase

36:18

The segment analyzes a stock’s price movement on TradingView, highlighting a gradual upward trend with mild bullish momentum. Despite injections of buying pressure, the stock’s upward angle is moderate, around 15° to 20°, indicating steady but not rapid growth. The pressure bars show a decline after the initial surge, suggesting the stock is now in an extended congestion phase where price oscillates around a fulcrum level. Patience is advised to wait for the next breakout move.

37:23

The discussion continues with weekly and monthly charts showing a similar pattern of bullish momentum supported by volume increases. The weekly chart reveals a significant injection of buying pressure, although the rise is relatively steep and shallow in places. The monthly chart confirms supportive volume trends with rising price and volume aligning, indicating strong long-term bullishness. The focus then shifts to Tesla for the next analysis.

38:36

Tesla Trend Reversal and Bearish Sentiment

38:36

The speaker explains a schematic of a bullish trend, describing a transition from a bearish phase to a measured step down towards a fulcrum, followed by a congestion phase with small bars. This congestion is succeeded by a bullish phase marked by price and pressure bars moving upward in alignment, indicating strong and sustained bullish momentum. The trend holds until a slight drop below the fulcrum, after which the bullish phase quickly resumes.

39:43

A recent sentiment reversal is observed as the color indicator changes from light blue to dark brick red, signaling a significant shift to bearish sentiment. This is reflected by tall bearish bars maintaining their height, indicating a developing bearish trend. Despite the bearish movement, the price is sliding lower steadily rather than crashing, with pre-market trading showing a decline but some recovery from the low, suggesting potential buying interest.

40:50

On the weekly chart, the trend mirrors daily observations with a strong rising trend and pressure bars reaching a peak before entering a congestion phase. The pressure bars begin to change color and rotate downward toward the fulcrum, hinting at a possible increase in bearish momentum. The speaker emphasizes monitoring whether this leads to a stronger bearish phase in the future.

41:31

The monthly chart confirms the earlier patterns, showing a decline with stepped-down movement and increasing volume pressure, aligning with the indicator’s signals. The speaker highlights the importance of volume charts for confirmation. Attention then shifts briefly to Meta, described as a highly liquid and popular stock, with plans to examine its daily chart next.

42:07

Meta Trend and Volume Pressure Analysis

42:07

The segment analyzes a stock trend starting with a significant injection on earnings, leading to a large volume and pressure bar. This initial surge drained away due to profit-taking after a sharp jump. The trend then settled into a steady, consistent upward movement with stable pressure bars. A later injection increased momentum before a reversal occurred, accompanied by narrowing spreads and probable buying volume, indicating a shift in market dynamics.

43:12

The discussion shifts to the weekly chart, showing large downside pressure bars during a steep bearish trend. As the decline became more gradual, the pressure bars also decreased in size, confirming sustained bearish sentiment while prices remained below the fulcrum. Toward the end, there was an injection of momentum before the pressure bars flattened, signaling a transition back toward a more balanced state near the fulcrum.

44:17

The segment highlights the emergence of a strong, supportive bullish trend with consistent pressure bars providing confidence to maintain positions despite a slight pre-market dip. Monthly charts show similar bullish momentum as pressure bars steadily increase, confirming the upward trend. A prior strong reversal with high downside pressure bars quickly diminished, allowing a smooth transition into the ongoing bullish phase. The analysis concludes with a preview of Advanced Micro Devices (AMD) to be examined next.

45:32

AMD Congestion Phase and Breakout Potential

45:32

The speaker explains the concept of a congestion phase in price action, characterized by narrow spreads and low volume, typically oscillating within a tight range. During such phases, traders should remain patient because no asset can stay in congestion indefinitely. Eventually, a breakout will occur, leading to a trending move. This follows the principle that the longer the congestion (cause), the more significant and extended the subsequent trend (effect) will be.

46:39

An analogy compares congestion phases to filling a large container with water: a longer congestion phase equates to a larger ’cause’, which results in a bigger ‘effect’ or longer trend. The duration of congestion on different timeframes (daily, weekly, monthly) suggests the length of the resulting trend, with longer congestion phases on higher timeframes indicating trends that may last weeks, months, or even years.

47:44

In congestion phases, traders should set clear support and resistance levels and wait for volume confirmation before acting on a breakout. This approach applies across daily, weekly, and monthly charts. The speaker notes current congestion and bearish sentiment on weekly and monthly timeframes, with recent sharp reversals and mixed signals. Patience is emphasized as bullish momentum diminishes and traders await clearer signals.

49:13

Summary and Use of Indicator Across Time Frames

49:13

The speaker reviews seven stocks with a focus on slower time frames, emphasizing that the volume price analysis (VPA) indicator is applied consistently across different time frames and instruments. The importance of VPA as the foundation of the analysis is strongly highlighted.

49:51

The speaker thanks viewers for watching, mentions that more videos will be coming soon, and signs off with a farewell.