Quantum VRSI for Day Trading Stocks on TradingView

Tutorial About The Volume Relative Strength Indicator – Day Trading Stocks

Traders can customise chart layouts by overlaying or separating volume and VRSI indicators based on personal preferences and workspace constraints. This comprehensive overview captures the essence of the Quantum VRSI indicator, its relationship with volume-price analysis, its practical use across multiple stocks and time frames, and its indispensable role in providing traders with confidence and clarity in their decision-making. In this tutorial, we focus on day trading stocks and how to use the indicator to help traders identify reversals and strong trends.

00:00

Introduction to Quantum VRSI Indicator

00:00

The video introduces the Quantum VRSI indicator, which stands for Volume Relative Strength Indicator, and emphasizes the importance of watching the introductory video for foundational understanding. It highlights that the indicator should always be used alongside the core methodology of Volume Price Analysis (VPA), which has been central to the creators’ educational work over 25 years. VPA is versatile, applicable to any instrument and timeframe, forming the basis for all related analysis.

01:34

The VRSI indicator complements Volume Price Analysis by providing a graphical, simple, and intuitive representation of market dynamics. It deepens the understanding of VPA principles and helps visualize the concept of ‘pressure’ in the market. This pressure concept is key to interpreting trends and congestion areas, offering insight into the strength or lack thereof behind market movements.

02:52

Setup with Seven Stocks for Analysis

02:52

The speaker explains the concept of lack of pressure in trading, similar to low volume or participation during congestion periods, and introduces the VRSI indicator. They outline the setup using seven stocks—Nike, Oracle, Disney, JP Morgan, PepsiCo, Exxon Mobil, and Wells Fargo—and describe the workspace designed to separate volume from the VRSI indicator. The charts show a combination of 5, 10, and 1550-minute intervals, with price charts above and volume charts below, providing a clear volume-price analysis.

03:58

The layout is explained further, noting that all charts are linked and update automatically when switching between stocks. The analysis begins with Nike on a 5-minute chart, emphasizing the importance of using multiple time frames for effective indicator application, a principle that applies broadly across different indicators and charts.

04:29

Key Elements of VRSI Indicator Explained

04:29

The segment explains the use of the indicator across multiple time frames, focusing on its three key elements. The fulcrum point at zero marks the shift between bullish and bearish pressure. Color changes indicate sentiment strength, with dark blue representing strong bullish sentiment and brick red indicating strong bearish sentiment. The height of the pressure bars reflects the strength of the trend, where taller bars signify higher pressure and a steeper trend angle, while shorter bars indicate weaker pressure and a flatter trend.

06:16

This segment highlights the relationship between trend strength and pressure bar height, emphasizing that a lower bar height signals weaker trend pressure even if the trend persists. It draws a parallel between the indicator and volume price analysis (VPA), noting that a strong rising trend should coincide with rising pressure bars, just as strong volume supports price movement in VPA. The combination of these methods provides a comprehensive approach to analyzing market trends.

07:28

Trend Strength and Pressure Bars

07:28

The segment explains the behavior of pressure bars during a price trend. Initially, there is a slight decline followed by a renewed injection of pressure indicating sustained trend strength. As the price moves into a lower region, the bars decline steadily leading to a rollover and a steep downward trend characterized by tall, rising pressure bars in a darker color, signaling a strong bearish trend. Attempts to rally against this trend are short-lived, with the color quickly reverting to dark brick red and bar height increasing, confirming the trend’s persistence. The strength of the trend is monitored by the height of the bars, which only diminishes near the end when bars turn salmon pink and the first bullish bar appears. Notably, the transition to bullish sentiment is marked by a sudden shift to bright dark blue, indicating rapid sentiment improvement and subsequent price injections.

09:11

The discussion shifts to the 15-minute chart, illustrating the indicator’s key elements more clearly. A strong rising trend is confirmed by tall, dark pressure bars. As the trend weakens, the bars’ height decreases steadily, signaling a congestion phase and waning bullish sentiment. This is followed by a sharp price decline with strong brick red bars increasing in height, affirming strong bearish momentum. Despite brief pauses suggesting potential reversals, bearish sentiment quickly resumes with additional downward pushes. The segment concludes with a brief mention of volume price analysis (VPA), highlighting its complementary role alongside the VRSI indicator in confirming price action trends, though detailed VPA analysis is deferred to other resources.

11:21

Combining VRSI with Volume Price Analysis

11:21

The segment explains the development of a waterfall pattern characterized by widening spreads and rising volume during a falling market, confirming the trend’s strength. It highlights how volume and price indicators like VRSI work together to build confidence in holding market positions. The discussion emphasizes managing emotions during market pullbacks or pauses, which often trigger premature exits and regret when trends resume strongly. The indicators are designed to help traders maintain positions and avoid being shaken out by emotional reactions or market makers’ tactics.

13:39

Oracle Stock VRSI Analysis Example

13:39

The segment explains the behavior of volume and pressure during the market open, highlighting a sharply rising rally accompanied by big injections of volume and pressure. Initially, there is a steadily rising trend with dark blue pressure bars, followed by a mildly bullish congestion phase where pressure bars diminish significantly, indicating a loss of momentum and a shift toward bearish price action. The pressure bars fall metronomically, signaling that the momentum behind the move has died away and the market is flattening out with declining momentum.

15:13

This segment discusses observations on a 15-minute timeframe, emphasizing consistent pressure bars during an upward trend with punctuated dark blue bars. At the top of the trend, a two-bar reversal occurs, marked by a sharp drop in pressure bars followed by rising pressure bars that confirm the reversal. The analysis highlights how the pressure bars during congestion decline slowly, suggesting bearish sentiment is maintained rather than quickly fading, which is confirmed by a subsequent down candle finishing the move. The lessons from Volume Price Analysis (VPA) are noted as consistent across multiple timeframes.

16:43

The focus shifts to analyzing Disney’s chart on a five-minute timeframe, showing similar patterns to previous examples. The market exhibits a phase of bearish price action transitioning into bullish price action with diminishing bullish sentiment. The discussion indicates that the same principles of volume and pressure behavior apply, reinforcing the earlier lessons drawn from the Oracle example.

17:21

Walt Disney VRSI Trend Observations

17:21

The segment explains a rotational view of price action moving from bullish to bearish phases. It highlights how pressure bars confirm the strength of bearish trends and notes that the indicator used works across different time frames, including less liquid pre- and post-market periods.

17:52

This part describes a transition from bearish to bullish phases, indicated by changes in pressure bar colors and heights. The bullish sentiment develops rapidly despite some weakening trend phases and congestion, ultimately leading back into bearish price action. The process is cyclical and continuous.

18:54

The discussion moves to faster time frames, showing similar bullish sentiments with rising pressure bars and eventual weakening as indicated by dropping bar heights. The principles remain consistent across different time frames.

19:23

On the 15-minute chart, the analysis reinforces observations from faster time frames. A notable large upthrust candle with good volume suggests potential market weakness, signaling a possible upcoming reversal trade opportunity.

19:56

The focus shifts to JP Morgan on a five-minute chart, emphasizing the congestion phase characterized by very small, tight pressure bars near the fulcrum. This phase represents a period of low activity and minimal price movement, typical during market congestion.

20:40

JP Morgan Congestion and Trend Phases

20:40

The segment explains the analysis of narrow spread candles associated with low volume, highlighting the importance of benchmarking candle heights and volume against each other to assess market pressure. It emphasizes that lower bars indicate less pressure and momentum, affecting the strength of the trend both upwards and downwards.

22:08

This part discusses the significance of candle height and shape in identifying market trends, focusing on a price waterfall pattern that signals weakness in a downward trend. Strong volume accompanying a candle with a long upper wick followed by a collapse suggests accelerating downward momentum, which eventually leads to a congestion phase where market activity quiets down.

23:14

The speaker reviews a 10- and 15-minute chart showing a clear arcing trend that begins strongly but weakens as spreads narrow and pressure bars diminish. This indicates a bullish trend losing momentum, described as a tiring trend running out of energy. The segment also highlights the congestion phase marked by flat, small pressure bars, signaling market indecision or pause.

24:56

The final segment describes the market’s transition after the congestion phase, noting a surge in pressure and volume as the day begins, followed by a gradual decline into a bearish trend. It concludes by introducing the analysis of PepsiCo’s stock, characterized by predominantly red and salmon-colored bars on the 5-minute chart, indicating bearish sentiment.

25:32

PepsiCo Bearish Trend and Pressure Bars

25:32

The segment explains a strong downward trend supported by volume and price indicators, specifically the volume relative strength indicator (VRSI) and volume price analysis methodology. It emphasizes the importance of volume rising in agreement with price trends, whether rising or falling, to confirm momentum and strength in the trend.

26:41

This part highlights that the height of the pressure bars on the 10-minute and 15-minute charts remains relatively steady, indicating the bearish trend is still present but not very strong or accelerating. The benchmarking of these bars is crucial to understanding the strength and momentum of the trend, showing the difference between a slow decline and a rapid fall.

27:49

The speaker stresses the importance of continuous benchmarking to assess trend strength accurately. The discussion shifts to analyzing Exxon Mobil (XOM), noting a significant volume injection at the session’s start, which creates a tall pressure bar indicative of strong market activity.

28:27

Exxon Mobile Volume and Pressure Insights

28:27

The speaker explains the market’s volatility pattern, highlighting phases of low interest from bullish traders and periods of congestion with small volume bars. They emphasize the significant volume spikes at market open, which correspond to strong price movements. A technique is demonstrated where volume data is scaled and compared side-by-side to better visualize and benchmark trend strength, improving clarity and confirming the validity of market moves without distortion.

30:04

The discussion shifts to index futures trading, noting how volume appears compressed when transitioning from Globex to cash markets due to a surge of volume at market open. This compression can mislead volume interpretation, but understanding this helps clarify the true market activity. The speaker points out a clear decline in bullish sentiment followed by a bearish phase, demonstrated through volume and price action on charts. The segment concludes with a mention of Wells Fargo as the next example to be analyzed.

31:13

Wells Fargo Pressure and Trend Summary

31:13

The speaker discusses how to interpret charts using volume price analysis combined with various indicators, emphasizing the importance of understanding the injection of volume and pressure. They highlight a phase where volume quickly diminishes followed by a congestion period with minimal price movement. The segment then transitions into a bearish phase marked by changes in price color and consistent pressure bar heights, which only vary towards the end before shifting into a bullish phase with rising pressure bars and a color change.

32:20

This part illustrates a clear example of pressure bars forming a near-perfect CER curve, which helps traders maintain confidence to hold their positions through market fluctuations and avoid being shaken out by market makers. The video reinforces these concepts on a slower timeframe, showing how an initially tall pressure bar at the session’s start fades quickly, leading to a bearish trend that aligns visually with the trend’s inclination, approximately 40 degrees.

33:32

The speaker explains how the height of pressure bars visually represents the strength and support of a trend without being extreme, using the trend angle as a reference. This approach provides a clear, visual way to understand market trends through pressure bar analysis. The video concludes with the speaker expressing hope that viewers found the content helpful and hints at more upcoming material.

34:05

Conclusion and Usage Recommendations

34:05

The speaker advises using the volume indicator in combination with volume price analysis for better results. They mention that applying the volume indicator alongside the VRSI can be done either together on the chart or split out, as demonstrated. The preferred method is to split it out for a cleaner view, although it occupies more workspace. The choice ultimately depends on personal preference.

34:33

The speaker concludes the session by thanking viewers for watching and saying goodbye, accompanied by music.