Quantum VRSI for Day Trading ETFs on TradingView

00:00

The video introduces the quantum vrsi indicator, which stands for volume relative strength indicator, as part of a series on quantum trading indicators. It emphasizes that this indicator works consistently across different types of financial instruments, including stocks, ETFs, futures, and commodities, and is effective across various time frames. The presenter highlights previous videos covering introductions and other markets, and mentions a detailed longer-term analysis. This segment focuses on intraday setups using 5, 10, and 15-minute charts to demonstrate the indicator’s functionality.

01:27

The VRSI indicator is explained as a complementary tool to the volume price analysis (VPA) methodology, designed to work together to provide deeper insight into market trends. The speaker highlights that the VRSI can be displayed alongside the volume chart for clarity, emphasizing how both analyses mirror each other. The term ‘pressure’ is used to describe the VRSI, reflecting its focus on the momentum and strength of trends. The indicator is noted for being graphical, straightforward, and intuitive, making it a powerful tool when combined with VPA.

03:23

The explanation begins with three main components of the indicator. First is the fulcrum line, marking the shift between bearish and bullish sentiment. Second are the color changes, where darker colors indicate strong sentiment and lighter colors indicate weaker sentiment, with light blue for bullish and salmon pink for bearish trends, customizable by the user. Third, and most crucial, is the height of the pressure bar, which reflects the level of pressure in the market. Taller bars indicate greater pressure, mirroring analysis used in volume price analysis (VPA) charts.

04:37

The discussion continues with how maintaining the height of pressure bars across a trend confirms consistent sentiment, even if color intensity changes. Benchmarking the height of pressure bars relative to previous or following bars provides further insight. The analysis also considers how pressure bars should rise in an uptrend, similar to rising volume, and likewise in a downtrend, rising pressure indicates effort to move prices down. This approach is consistent whether using VPA or Volume Relative Strength Index (VRSI) charts, highlighting the complementary nature of these methods.

05:46

The speaker explains the importance of analyzing multiple time frames when trading or investing. They emphasize using three or more charts representing fast, central, and slow time horizons to gain perspective on market trends. Momentum or pressure observed in the fastest time frame tends to propagate through the central to the slowest time frame, indicating a strong and extended trend. Analogies are used to illustrate this concept: one compares the spread of momentum to ripples from a pebble in a pond, and another likens it to driving on a three-lane highway where the fast lane (fastest time frame) shows changes first, which then move through the central lane (trading window) to the slow lane (slowest time frame). Observing changes first in the fastest time frame and then their migration through longer time frames helps confirm the strength of trends or reversals.

08:21

The speaker begins by focusing on the SPY, one of the most heavily traded ETFs, analyzing its price action during the trading day using a volume pressure indicator (VRSI). They note a gap down open with bearish sentiment dominating for several hours since market open, around 5 hours into the session with 1.5 hours remaining. The speaker highlights how the bearish trend developed after the gap down and how the indicator reflects pressure driving the price lower.

10:21

The bearish trend shows strong pressure indicated by tall volume bars, despite minor pullbacks and congestion phases. The pressure bars remain above a key fulcrum point, signaling sustained bearish momentum. Eventually, the pressure subsides near the fulcrum and a crossover indicates a possible shift toward bullish sentiment. The speaker explains that the height of these pressure bars correlates strongly with the strength and angle of a trend, with steep slopes showing strong momentum either up or down.

13:32

The speaker elaborates that tall pressure bars signify fast-moving trends with volume backing, while shorter bars indicate weakening trends approaching exhaustion. The current bullish recovery on the SPY is described as gentle and slow with low pressure bar heights, showing a weak upward trend with no accelerating momentum. A recent decline in pressure bar height and lighter colors suggest waning bullish sentiment and a return toward the fulcrum, signaling a fragile recovery.

16:19

The relationship between pressure bar height and trend strength is emphasized, with strong trends showing tall bars and weak trends showing low bars. The speaker references multiple timeframes (5, 10, and 15 minutes) showing consistent patterns of declining pressure after an initial surge. The slower 15-minute timeframe displays a clear, almost rhythmic decline in bearish pressure, with a weak and inconclusive bullish attempt emerging.

18:00

Volume Price Analysis (VPA) charts are used to further validate the weak follow-through in price movement. A significant volume injection did not lead to a strong price advance, followed by falling volume and sideways congestion. Comparing today’s session to prior days reveals similarly gentle bullish trends with relatively low pressure, indicating limited momentum behind recent rallies. Rising pressure bars during strong downtrends contrast with the current weak upward attempts.

20:34

An example of a classic price waterfall downtrend is described, with widening spreads and rising pressure bars confirming strong bearish momentum. Despite some pauses, bearish pressure remains strong with further declines. Returning to the current SPY session, the pressure is deflating toward the fulcrum, entering a mild congestion phase with slightly bullish sentiment. The speaker then transitions to analyze GLD (the gold trust), setting up to examine its market activity next.

22:11

The initial analysis focuses on a significant gap down in the market, observed across multiple time frames starting with the 15-minute chart and then the 5-minute. Despite the large gap down and initial pressure, there is no sustained bearish follow-through. The pressure bars from the previous day appear compressed and the price action shows a quick shift away from strong bearish sentiment, indicating a potential recovery phase rather than continued decline.

23:20

The market enters a congestion phase where bearish pressure diminishes significantly, as shown by declining pressure bars that fail to maintain their height. The presence of deep hammer candles, especially if accompanied by high volume, suggests buying interest and a degree of market recovery. However, the existence of two-bar reversals indicates that the rally is limited and unlikely to push the market into a strong bullish phase.

24:21

Although bearish sentiment weakens and levels out, the market remains below the fulcrum, staying in a bullish phase but without strong bullish candles to push it higher. Price movements during rallies are relatively minor, reflecting a state of congestion rather than a clear directional trend. The limited price spread and compressed pressure bars highlight the current lack of momentum.

25:35

The congestion phase is confirmed across multiple time frames, including the 10-minute chart, which also shows compressed pressure bars and no bullish breakout. The 5-minute chart reveals a shooting star candle at the top of a small rally, signaling weak upward momentum. Despite some decline in bearish pressure, the market remains in bearish territory with no strong bullish sentiment emerging.

26:41

Bearish pressure persists, evidenced by slowly declining but still present pressure bars. The market has not shifted convincingly into a bullish phase. Broader market factors such as the dollar and risk sentiment are also considered, with the 15-minute chart showing similar subdued market sentiment and no significant bullish follow-through.

27:48

The session begins with a strong initial volume surge and price injection on the first 15 minutes, typical of market openings with high volatility and volume. However, this early bullish sentiment fails to sustain, and the market gradually subsides, moving into a bearish phase characterized by accelerating pressure and declining momentum throughout the session.

29:30

The analysis emphasizes the importance of chart presentation for clarity, such as adjusting the view to better focus on volume bars and price action. Across 5-minute, 10-minute, and 15-minute charts, the market shows consistent signs of draining momentum and congestion. Volume price analysis highlights key high and low volume bars that help confirm the subdued and indecisive market conditions currently in play.

31:07

The segment analyzes the XLK technology sector ETF using volume price analysis (VPA) charts. It highlights an initial gap down at the open with strong injection volume, followed by sustained bullish pressure indicated by tall, dark red bars. Despite some decline in volume, the pressure remains steady without rapidly dropping back to the fulcrum, suggesting continued bullish sentiment. This phase shows follow-through in price action, confirming the strength of the trend early in the session.

32:48

As the session progresses, the price action enters a congestion phase characterized by narrow, small candles and low, flat volume and pressure bars. This reflects a lack of strong momentum despite the overall bullish trend. The trend is rising at a shallow angle without great strength, indicating a weak but present recovery attempt from the day’s open.

34:27

Further analysis shows a slight injection of volume during this phase, suggesting some encouragement for the bullish trend. The discussion emphasizes the importance of other technical elements such as breaking above previous levels to create support. Overall, this segment reinforces the use of volume price analysis to confirm price action, noting that volume and price remain in agreement during this period.

35:30

The analysis moves to longer time frames, specifically the 10-minute and 15-minute charts. The bearish momentum observed earlier is maintained but slows down as the price nears the fulcrum point, where early signs of a bullish reversal appear. This slower timeframe perspective shows the initial development of bullish sentiment and the gradual shift in trend strength.

36:41

This segment explains the concept of multiple time horizons in trading, illustrating how different traders can have opposing positions yet both profit depending on their respective timeframes. It compares market actions to nested Russian dolls, emphasizing the importance of understanding one’s own trading horizon and strategy rather than getting distracted by other timeframes.

38:14

The speaker discusses the common pitfall of changing trading strategies when a position doesn’t work out as expected, shifting from short-term to long-term views to justify holding trades. Using the analogy of a blinkered horse focused on the finish line, the advice is to maintain focus on one’s original trading plan and timeframe without getting distracted by other charts or perspectives. The segment concludes with a return to the 15-minute chart analysis of XLK.

39:39

The segment introduces the XLU utilities sector ETF, highlighting utilities as defensive, dividend-paying stocks that serve as stable anchors in any portfolio during economic or financial storms. The discussion emphasizes that the specific asset or market doesn’t affect the utility of the indicator being demonstrated. The example shows a strong downward trend with significant momentum, indicated by high pressure bars, signaling confidence in the trend’s continuation despite occasional minor reversals.

42:02

This part focuses on managing emotions during trading by using the indicator to track pressure in a trend. Even when the market shows minor rebounds or green candles, bearish pressure remains strong, advising traders to hold positions. The indicator provides graphical assistance to help traders resist panic selling during pullbacks, reinforcing confidence to stay in the trend for longer and avoid premature exits.

43:28

The explanation continues on how the indicator helps maintain confidence through trend fluctuations. Even when the price approaches the fulcrum point, pressure bars confirm that the trend is intact until a clear transition into bullish territory is observed. The segment notes a mild recovery in the XLU ETF with shorter pressure bars indicating weaker momentum, contrasting with earlier strong downward pressure, illustrating how the indicator visually represents trend strength and sentiment.

45:07

Here, the focus is on comparing momentum across different time frames, showing that the gentle bullish trend has limited strength as indicated by shorter pressure bars. The relationship between pressure bars and volume is discussed, with large pressure bars corresponding to significant volume injections. This comparative analysis helps traders understand the strength behind price movements and momentum across time frames.

46:17

The final segment ties the pressure indicator back to volume price analysis (VPA), emphasizing their complementary nature and how both use similar terminology and concepts. The presenter prefers displaying volume and pressure indicators together on the chart for clarity, despite using more screen space. The video concludes by reaffirming that the VRSI indicator works across all time frames and markets, encouraging viewers to continue exploring its applications.