Volume Spread Analysis Course

Each course follows the same structure. A brief explanation of the concept followed by several tutorials from the live market. The idea is to make traders aware of the various tactics and create a better understanding of the daily/weekly analysis section.

Volume spread analysis  course

Volume and news are a powerful thing. And there are 2 giveaways about volume in proportion to candlestick size that will give us a loud a clear signal about the integrity of the move.

Firstly, if the price is rising on low volume the move cannot be real and prices are likely marked up by the market maker(MM). Therefore are subject to collapse or a retest of the covered price range.

Secondly, if the price has barely moved but volume is much higher than the closest candles then there is growing interest from smart money in the opposite direction.

We will use these two signals to our advantage. However, like any decent move in the FX market, we need a catalyst to push price around. Most of the time news are the catalyst and contrary to what most traders believe these announcements are opportunities for smart money to offload their holdings in large blocks from what they amassed in the accumulation phase.

Before we get to the charts there is 1 fact about news releases that is a scrupulous reality. Before data and news releases are announced they are passed on from the main source to the news wires. Stations receive data about 1hour to 45minutes prior to release, to accommodate their publishing process. Sometimes somehow data gets leaked and we see setups emerging prior to release, plotted by well-informed traders that are pre-positioning themselves for the feast.

Tutorial 1

Aud/Usd 4h chart. The Fed (federal reserve) interest rate decision is imminent and we have this clear setup appearing.

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Where price moved up and created a lower volume but bigger candle body than the most recent candle. This anomaly stands out and sends a clear message that better-informed traders are positioning in anticipation of a move lower.

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Almost as soon as the news hit the wire and the low of the last 4h candle gets breached we see this pair tanking.

Tutorial 2

Cad/Jpy 1h chart. EIA crude inventories are due and we have another clear signal.

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Price created a big bullish candle with increased volume but created another one right after it with higher volume but a significant smaller bearish candle.

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The low get’s breached on the back of the report and we see an instant reaction with a spike lower.

Tutorial 3

GBP/USD 1h chart. Britain’s referendum vote count is imminent yet another very clean-cut and obvious anomaly.

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The price surged up on very low volume creating a massive up candle only to get reversed by a smaller down candle on increased volume.

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As more votes came in the low of the last candle breached and price tanked.

Miad

If you’d like to understand the market better and trade with the flow while you are full time employed subscribe to us NOW! 

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