Support and resistance in two different ways – using both price and volume and the VPOC NT8 indicator

Support and resistance are two of the most important concepts in trading, but not all support and resistance levels are created equal.In this video, we explore two different ways to identify them:

• Traditional price action combined with volume analysis
• The Volume Point of Control (VPOC) indicator in NinjaTrader 8 (NT8)

You’ll see exactly how each method works, when they line up beautifully, when they disagree, and how combining both can give you a much clearer picture of where the market is likely to react. Whether you’re a price action trader or love using volume-based tools like VPOC, this breakdown will help you sharpen your edge and spot higher-probability zones on your charts.Watch till the end for practical examples and tips on using both approaches together.

Support and resistance in two different ways – using both price and volume and the VPOC NT8 indicator

00:21

Overview of primary futures indices workspace

00:21

The workspace displays three primary futures indices: YM, ENQ, and ES, all June contracts. The top chart shows 1-minute intervals, while the lower chart shows 3-minute intervals, allowing a comparison of market movements across different timeframes. Typically, these indices can either move together or diverge. Currently, they are moving in tandem, reflecting similar trends across all three indices. Occasionally, variations occur, such as when technology stocks move differently from others.

01:27

Differences in futures indices structure

01:27

This segment explains the structural differences among three indices: YM, ENQ, and ES, highlighting that YM has 30 stocks, ENQ 100, and ES 500, with YM being price-weighted and the others market-cap weighted. It emphasizes that these indices are heavily influenced by a few major stocks, especially on ENQ and ES where five or six top companies can account for 35-40% of the index’s movement. This concentration makes trading these indices more straightforward since their overall direction closely follows the performance of these few key stocks. It also mentions tools like Trading View to track these major stocks within an index for better trading insights.

03:14

Introduction to accumulation and distribution indicator

03:14

The speaker explains a workspace setup that provides a perspective on volume and price analysis across different time frames. They focus on an accumulation and distribution indicator that automatically generates support and resistance levels based on how often they are tested from above or below. These levels adjust dynamically at the live edge of the market, making them highly relevant to current price action. The indicator visually thickens these lines as levels gain strength and allows filtering of major levels through adjustable settings, enhancing clarity and usability.

05:16

Using volume pointer control workspace

05:16

The speaker explains having control over chart indicators and highlights a workspace with volume pointer control focused on the NQ index. Multiple time frames are shown, ranging from 15 seconds to daily. They recommend the MNQ, a micro contract that is a tenth the size of the standard contract, as a good entry point for beginners interested in trading futures due to its smaller margin requirement despite the liquidity and volatility of the standard contracts.

06:23

The micro contracts, introduced by the CME about five or six years ago, aim to encourage more traders to enter the futures market by offering smaller, more manageable contract sizes. For example, the MNQ is one tenth the size of the NQ, and similarly, the MYM is a tenth the size of the YM, trading at lower increments. This makes futures trading more accessible by reducing the initial margin and commitment needed.

07:03

Micro futures contracts and margin requirements

07:03

The speaker explains the differences in trading costs and margin requirements between various futures contracts, highlighting that the MNQ trades at a tenth of the NQ’s price per point, making it more manageable with lower margin requirements. They also mention alternatives to pure futures trading, such as trading index proxies on platforms like MT4 and MT5, which require less margin and no pure futures account. Finally, the speaker shows their preferred time frame and mentions using a single indicator for trading analysis.

08:09

Volume point of control explained

08:09

The volume point of control (VPOC) indicator provides insight into support and resistance based on volume rather than just price. The histogram shows the total volume at different price levels, highlighting areas where price is likely to pause or react. The yellow dashed line marks the highest volume level at the moment, though this level can shift when a new price level accumulates more volume over time.

09:20

Currently, the VPOC on the 5-minute ENQ chart identifies the price level with the highest traded volume, which acts as a strong support or resistance zone. When the price approaches this level, it tends to pause and consolidate due to the concentration of existing buy and sell orders, including trapped positions from earlier trades and pending limit orders. This cluster creates a significant volume barrier.

10:21

Low volume nodes represent price levels with little trading activity, allowing the price to move quickly through these zones. Recognizing these nodes helps traders anticipate rapid price movements. It’s crucial to analyze volume profiles across multiple time frames because understanding the VPOC on slower charts explains why price congestion occurs on faster time frames. Ultimately, using VPOC on the daily chart helps predict how indices may react in the coming days.

11:24

Volume point control on daily chart significance

11:24

The speaker discusses the ongoing general uptrend despite a current bearish trend, highlighting a significant resistance level around 25,000 to 25,100 on the daily chart where price has historically congested with high volume. They emphasize that price is unlikely to break through this level quickly, expecting congestion and volume accumulation at this point. The volume point of control (VPO) shows areas of high and low volume, with price moving toward extremes where lower volume nodes allow faster price movement, and higher volume nodes indicate congestion and potential support or resistance.

12:51

As price oscillates around the high-volume area, volume begins to approach and may exceed the previous maximum volume level at the VPO, which would cause the VPO to adjust upward to this new level, marking a new base for price action. The VPO is explained as a straightforward yet crucial volume-price analysis tool that combines volume and price perspectives to identify support and resistance levels effectively.

13:53

The speaker introduces the VPA Essentials suite of tools, which includes indicators like the Volume Pointer Control (VPO), VWAP, and Volume Relative Strength Indicator (VRSI). These tools are available at quantumtrading.com with a current 20% discount. Purchasing the full package ensures access to all future indicator developments free of charge. The speaker briefly references revisiting a workspace shown in a previous session.

15:07

Renko optimizer and non-timebased charts momentum analysis

15:07

The speaker introduces the Renko chart optimizer, highlighting that Renko and tick charts are non-time-based and focus on momentum rather than time. They explain that this approach works across various markets, including stocks, futures, and forex. Using Intel (INTC) as an example, they emphasize the advantage of seeing momentum clearly on these charts.

16:18

The Renko chart uses bricks representing price increments, set automatically based on the instrument being traded. The example uses a brick size of 12 dollars for the stock, with the indicator adjusting the size depending on the market. The Renko tool guides users to switch to a time-based chart, such as 30 seconds, to calculate the optimal brick size, simplifying the setup process.

17:22

The Renko optimizer calculates an ideal brick size, which can vary during the trading day; currently, it suggests a 9-cent brick size for the stock. The chart converts candles to bricks, eliminating wicks to provide a clearer trend picture. Volume Price Analysis (VPA) is incorporated below the chart to interpret volume against price action, enhancing trade decisions. Additionally, a trend monitor tool assists traders by signaling trend strength and direction.

18:26

The trend dots and trend monitor tools work together to provide early and ongoing trend signals. Trend dots respond quickly to price changes near the action, while the trend monitor offers a more measured perspective. These tools change color and frequency to indicate trend pauses or continuations, helping traders stay aligned with market movements even during short-term fluctuations.

18:58

By adjusting the time frame to one minute, the trend monitor shows that despite short-term drops, the overall bullish trend remains intact on slower time frames. This slower perspective helps traders maintain confidence in the prevailing trend even when shorter-term charts show some weakness.

19:25

Trend monitor and trend dots indicators

19:25

The speaker explains the behavior of trends as they fluctuate between gray (indicating congestion) and colored states, signaling shifts between bullish and bearish momentum. They highlight how, on faster time frames, the trend is rotating from bullish to bearish, with red trend dots pushing down when prices decline and pushing up when prices rise. This rotation is evident on the nine-period chart but not yet on the 15-period chart, demonstrating the earlier signals visible on shorter time frames.

20:13

Volatility indicator and market maker impact

20:13

The speaker explains the volatility indicator, which signals either congestion or reversal when volatility appears. Volatility is a key tool used by market makers to trap traders by creating sudden market moves that trigger trader fear and impulsive reactions. This indicator provides real-time alerts, so traders don’t have to wait for a time interval to end before recognizing volatility.

21:41

The speaker describes how traders often get trapped by sudden price movements on faster timeframes, such as 15 or 30 seconds, mistaking them for breakouts and entering positions prematurely. These traders are usually stopped out as volatility traps them. The volatility indicator, based on average true range, identifies significant price moves outside the normal range, serving as a red flag for traders to be cautious.

22:38

The volatility indicator analyzes recent price action and volume to differentiate genuine market moves from traps. Market makers may cause volatility moves with or without high volume, and the volume patterns help traders assess the likelihood of being trapped. The speaker shows an example where volume does not align with the price move, indicating a probable trap rather than a genuine market shift.

23:40

Identifying trap moves using volume analysis

23:40

The speaker analyzes a volume anomaly in a candle chart, explaining that although the volume appears high, it is inconsistent with the price movement, indicating a trap move where market makers are not participating. This phenomenon traps day traders, especially in volatile stocks like Intel, and occurs across all time frames. The example shown involves a sudden upward price snap that leads to sideways movement and potential reversal, causing uncertainty and difficulty for traders who may get stopped out or exit prematurely. The segment concludes by noting that this concept is included in a broader trading package.
By Anna Coulling – creator of volume price analysis

By Anna Coulling – creator of volume price analysis