Table of Contents
A foreword to the book by Anna Coulling
A brief overview and introduction to the broad concepts of volume price analysis.
In this first section of the book we start with the daily timeframe for spot currency pairs.
All of these use the NinjaTrader platform, and regardless of whether you are in intraday trader or a longer term swing or trend trader, the daily chart is an excellent one for context based on the previous day’s price action and volume. Comparing volume is more straightforward here as we have no session crossover issues to address, and so we are always comparing like with like. However, we do have to remember the seasonal aspect of volume, and take account of any public holidays, which will always be reflected in the associated volume.
In the second section of the book we move to consider the hourly timeframe. We stay with the spot market, but have changed platforms to MT4. Here we are now dealing with the issue of the session crossover and so must always consider comparing volume with like volume in the associated session. In other words, London with London and not London with the Far East and Asia session. Volumes do vary dramatically from one session to another, and here I explain how to consider the hourly chart and once again to compare like with like across the sessions.
In this section we stay with the MT4 platform and spot forex examples for the 15 minute timeframe. But again we do still have to be careful when moving from one session to another, from the Far East and Asia, to London and then into the US. At each stage we have to pause the wait for the candles and volume to build. That said, we can also compare these over a longer period on the chart, and so compare a new session with a previous session from the day before.
In this section we stay with the MT4 platform and spot forex examples for the 5 minute timeframe. Again we have to be careful here in the crossover from one session to another, from the Far East and Asia, to London and then into the US. At each stage we have to pause the wait for the candles and volume to build. That said, we can also compare these over a longer period on the chart, and so compare a new session with a previous session from the day before.
In this section we move back to the slower timeframe of the four hour chart, and again the MT4 platform. This can be a tricky timeframe, as once more we have to make sure we compare like with like in terms of volume across the various sessions, but in some ways this is easier here, as we have several sessions on one chart.
In the final section we move to a different instrument and platform and consider examples from the world of currency futures, by using the NinjaTrader platform once more. Here we are considering volume from the aspect of the big operators. But volume is volume, and as you will see from these examples across various timeframes, is equally powerful for a very different instrument. Volume here is the ‘true’ volume of futures contracts traded through the central exchange, but if you compare this with the proxy volume of the spot forex world, you will be surprised at how closely the two correlate.