Trading reversals require your stop loss to be set wider to allow for the congestion phase to develop before the trend begins. So this is not for everyone, but if you have the patience, the pay off is greater as you are getting into the trend before it begins so the payout is greater. It's all about risk and returns.
https://youtu.be/AQqakclQlq4...
https://youtu.be/jXM8xgVjiB8
Mean Reversion in Currency Markets Explained
Mean reversion is a key concept in forex trading. It states that currency prices tend to return to their historical average (or "mean") after significant deviations. Extremes are temporary. Markets correct toward equilibrium. This makes mean reversion powerful in currencies—especially in ranging conditions.
Why Mean Reversion Works in Forex
Forex is relational. Currencies trade in pairs. Balance pulls prices back. No single currency dominates forever. Central banks and arbitrage maintain fair value. Most pairs spend ~70% of time ranging, not trending. This creates frequent reversion opportunities.
Volume price analysis (VPA) spots them—low volume at extremes signals fading conviction. High opposing volume confirms the turn.
How Mean Reversion Manifests
Overbought/Oversold: Currency too strong (top rankings)—sellers emerge. Price corrects lower.
Oversold: Too weak—buyers step in. Rally follows.
Relational Balance: USD extreme vs EUR—pair reverts as fundamentals align.
Quantum currency strength indicator ranks extremes live. This flags reversion setups early.
Trading Mean Reversion with VPA
Strategies:
Fade Extremes: Sell overbought, buy oversold on volume rejection.
...
https://www.youtube.com/watch?v=C0dvepyVirs
Understanding how markets relate to one another can help both traders and investors. Volume price analysis and our Quantum tools make this a lot easier and in this video we consider how moves in the Japanese yen were a precursor to yesterday's dramatic market sell-off.
Trading with Intermarket Analysis
Intermarket analysis is a powerful approach for traders. It studies relationships between asset classes: stocks, bonds, commodities, and currencies. These markets are interconnected. Moves in one influence others. Understanding this reveals broader sentiment. Volume price analysis (VPA) confirms conviction across markets.
Core Intermarket Relationships
Key links drive trading insights:
Bonds and Stocks: Bond prices fall (yields rise) in risk-on—equities rally. Yields drop in risk-off—stocks weaken.
USD and Commodities: Strong USD pressures gold/oil lower (priced in dollars). Weak USD boosts them.
Oil and Commodity Currencies: High oil lifts CAD (Canada exporter). Low oil weakens it.
Gold and Safe-Havens: Risk-off surges gold and JPY/CHF.
Equities and Risk Currencies: Stocks up favors AUD/NZD.
These correlations shift but persist long-term.
Why...
https://www.youtube.com/watch?v=dTKvytVb4f8
Volume price analysis can be applied to all markets and time frames and when combined with the Quantum indicators. In this video we first looked at market sentiment through the prism of the Japanese yen and whether the open of the London session would continue the positive vibe Asia Pac or whether a reversal would be on the cards....
https://www.youtube.com/watch?v=cUc-6BRnceQ
The advantage of using non time based charts such as tick and Renko is that they allow us to gauge the momentum and participation levels at any given time. This video is an excerpt from this morning's forex webinar we saw this in action on the aud/jpy....
