Tips and tricks for trading index futures using volume price analysis with the Quantum Trading indicators

In this video, David explains some of the tips and tricks he uses in trading index futures such as the ES Emini, the NQ Emini and the YM Emini. He also explains how to take the same approach when trading commodities such as gold, silver and copper.

00:21

Introduction and workspace overview

00:21

David introduces himself, mentioning that he is married to Anna and has appeared on her channel before. He humorously notes that he might sound a bit strange but in a nice way. He also mentions that he is using Ninja Trader in this video.

00:52

Three indices: YM, NQ, ES explained

00:52

The speaker discusses a commonly underused but valuable trading workspace featuring the three major indices known as the ‘three sisters’: YM, NQ, and ES. They emphasize the importance of gathering as much information as possible to aid trading decisions, regardless of trading style or timeframe. Displaying these indices simultaneously on different timeframes (one-minute and three-minute charts) provides a comprehensive, multi-dimensional perspective. While these indices generally move in unison, occasional divergences occur, offering additional insights into market behavior.

02:38

Using accumulation distribution indicator

02:38

The video explains the use of the accumulation distribution indicator from a volume price analysis perspective. This indicator visually presents strong price levels with thick dotted lines, showing areas where price might find support or encounter resistance. The width of the lines indicates the significance of these levels, with wider lines representing stronger levels. Examples on the ES 3-minute chart highlight a strong level that was breached and has now turned from support into resistance, tested multiple times. The discussion emphasizes identifying reversal points during a predominantly downward trading day.

04:15

Stopping volume and market maker activity

04:15

The segment explains the concept of stopping volume in volume price analysis, particularly when identifying reversals from a strong downtrend. Stopping volume occurs when significant volume enters the market, halting the downward move. This is typically driven by market makers and insiders becoming active, which is reflected in high volume levels.

04:53

High volume combined with narrow candle bodies and deep lower wicks signals stopping volume. This pattern indicates significant buying pressure during the period, as prices initially fall but then buyers push prices back up. Such candles demonstrate how stopping volume manifests visually on the chart.

05:36

The explanation continues by emphasizing that these candle patterns can only be formed by strong buying activity reversing a price decline within the session. The price moves down to session lows and then rebounds due to mass buying, creating the characteristic candle shape associated with stopping volume.

06:15

Another form of stopping volume is identified through price compression under high volume, where a wide-spread candle is followed by a narrower spread candle with similar volume. This suggests that buyers are strongly entering the market, limiting price movement despite continued high volume.

06:50

The segment concludes by highlighting multiple candles on the chart that clearly indicate stopping volume. This suggests a pause in the recent sharp price decline, implying that a price bounce or possibly a full reversal could be expected due to the influx of buying pressure.

07:28

Volume and price spread analysis

07:28

The speaker discusses how the strength of an uptrend can be assessed by volume and candle spread. Widening green candles with increasing volume indicate a positive trend. However, the current candles are narrow in spread and show signs of weakness, suggesting the uptrend may be pausing.

08:05

The price action is not following a steady upward path but is flattening and showing weakness through doji candles. This pause does not necessarily mean the trend will end but indicates a potential slowdown in momentum.

08:38

Attention is drawn to the relationship between individual candles and volume bars, noting that while some candle spreads look acceptable, the overall trend is flattening. The upcoming price movement is uncertain and worth monitoring closely.

09:10

The analysis focuses on green volume candles and notes that although there was significant buying earlier, the volume supporting the upward trend is decreasing. This reduction in volume during a rally is a negative signal.

09:44

The speaker emphasizes that volume and price trends must be analyzed in groups rather than isolated candles. The current trend appears weak, with narrowing spreads and falling volume, suggesting a lack of strength in the upward move.

10:16

The falling volume against a flattening price trend is a warning sign. While it does not guarantee a bearish reversal, traders should be cautious as the upward momentum has slowed down significantly.

10:46

Analyzing trends with multiple timeframes

10:46

The speaker discusses the importance of analyzing price action on a faster time frame, such as moving from a 3-minute candle to 1-minute candles. This approach breaks down larger time frames into smaller components, providing a clearer view of how price and volume interact within those periods. By examining multiple smaller candles that form a larger one, traders can gain insights into price movements and volume patterns, enhancing volume price analysis. Additionally, tools like the accumulation distribution indicator offer further perspectives on support and resistance levels.

12:18

The speaker notes attempts to rally are weak, as indicated by persistent upper wicks on the candles, signaling selling pressure during rallies. The ENQ (likely an indicator or index) does not contradict this view, reinforcing the idea that the market is congested. This congestion suggests a lack of bullish strength and an unfavorable outlook for upward movement at this time.

12:47

Congestion and support resistance levels

12:47

The speaker discusses a market scenario characterized by a narrow trading range with minor support and resistance levels defining the current channel. Volume is decreasing despite attempts to rally, indicating congestion. The importance of incorporating multiple elements and perspectives is emphasized, such as monitoring multiple indices simultaneously to gain a comprehensive view of volume and price levels.

13:41

The focus shifts to the YM (Dow Jones) index, which behaves differently due to having only 30 stocks compared to the S&P 500 and the NASDAQ 100. The speaker highlights how index construction and weighting methods affect which stocks carry the most influence. Using multiple indices together can provide complementary insights from volume and indicator perspectives, though they do not always move in tandem. An example from commodities illustrates how volatility indicators can signal market moves fueled by fear of missing out (FOMO).

15:16

Volatility indicator and commodity traps

15:16

The market experienced a rapid drop on the one-minute timeframe followed by an immediate snapback. This movement was illustrated using charts of gold, silver, and copper, highlighting a volatility indicator that signals either congestion or reversal. Many traders likely got trapped by this sudden price action, expecting to profit from a short position. However, this is a common tactic used by insiders and market makers who exploit traders’ emotional reactions and fear of missing out by triggering rapid moves that lead to losing positions.

16:48

The video explains how market makers understand traders’ emotional responses and use sudden price moves to trap them, resulting in congestion or reversals. It highlights the similar behavior of related commodities like gold, silver, and copper, emphasizing the importance of analyzing related markets to improve trading decisions. Volume price analysis is also demonstrated as a valuable tool, showing high volume signals that confirm market activity by big operators. The combination of volatility indicators, volume analysis, and market strength indicators provides multiple layers of confirmation for trading signals.

18:03

The presenter concludes by inviting viewers to watch more videos on related channels, expressing hope that the content was helpful and thanking the audience for watching.