The 1 minute chart for the GBP/USD delivered a masterclass of price manipulation by the insiders ahead of the BOE release at 9.30 this morning. At just after 9 am UK time the pair moved sharply lower with two wide spread down candles, but both on low and ultra low volume, a clear anomaly and one which was hard to miss. This was insider manipulation at its best and most elemental, sending the clearest possible signal the market was set to rally higher. The move higher was duly delivered following the release with Cable breaching the 1.50 level with momentum and continuing to move firmly higher to test the 1.5050 region at the time of writing.
Sadly, many traders will have been caught in a trap so easily set, and now either stopped out, or waterlogged in losing positions of increasing magnitude. But this is where the power of volume price analysis can step in and reveal the market’s true intent. The signal this morning could not have been any clearer, and on this occasion was so evident that taking a position ahead of the news was a low risk decision. Volume reveals all, and when price and volume are in agreement, then we can trade with confidence knowing the insiders and market makers are joining in the move. When anomalies occur, then the warning bell sounds, and when the market makers move price dramatically, with little or no associated volume as here, then the message is clear. Understand the trap being set, why it is being set, and the direction the market makers are plotting as their next move. All you need to do is join them, when you are ready, with confidence.
By Anna Coulling
Charts are from MT4 and the trading indicators from Quantum Trading.
Hi, Anna. Thank you so much for all of your insightful and educational posts!! I learn a tremendous amount from your real-time articles. They all make so much sense. I think that the one disconnect I continue to experience is that perhaps my trading and the charting platform I am using just doesn’t reflect the same volumes that you reference in your emails. In fact, it seems that the volumes I see in my platforms are totally opposite those that are reflected in your articles. Is it Ninja Trader or MT4 that you recommend? I’m not sure that I am able to switch my trading platform, but I would like to get a more accurate charting platform. The volumes that I see just don’t make any sense and certainly have no correlation to those shown in your articles. Thank you again for all of the articles you write. They are so helpful to me.
Andrea
Hi Andrea – many thanks for your very kind comments and you are more than welcome and delighted you find the posts useful and educational. With regard to the platforms, the one I used here was on MT4 and just using the standard up/down volume indicator which is free from all MT4 brokers. This does of course vary slightly and the one I am using here is from an Australian broker called Thinkforex. Many of my other posts are based on NinjaTrader using the Kinetick data feed either on the futures contracts or on the spot fx markets. This is a paid feed for live data and is the one recommended by NinjaTrader themselves. Volume as always is comparative and this can vary from one data feed to another, but these are the two I use primarily. I hope the above helps and if you do have any other questions please just drop me a line here – always happy to help further if I can – all best wishes and thanks again – Anna
A really great example of how VPN can give you the correct information. Thanks for this one Anna!
Hi Joel – many thanks and you’re welcome – and this is what I thought too:-) all best wishes – Anna
Hi Anna, I am also very grateful for you articles and books. They are the best educational resource I have found, and are invaluable to me. I experience the same issues as Andrea in terms of the disconnect in volumes. The two down candles just after 9am are accompanied with high volume. I noticed on the photo of the platform at the top of your article, the volume indicator is etched with “Quantum Tick Volume” in the left hand corner. Where as the indicator on my brokers site just states Volume. Could this be a reason for the mis-match in volume?
Thanks again!
Hi Andy – many thanks for your very kind comments which are much appreciated, and I’m delighted that you enjoy reading my market analysis and also my books. With regard to the volume I have checked the data here again and it is as reported on the screenshot, but this could possibly have been a glitch in the feed which does happen from time to time, particularly on the faster timeframe charts. Its just one of those things we have to be aware of when applying volume price analysis – in much the same way during holiday periods etc Technical glitches can and do happen occasionally and this may have been one of them! On this occasion it worked in our favour 🙂 With regard to the Quantum notation, no this is the same base data feed, but where the volumes are painted the same color as the price candle. This makes reading the volume much quicker as it often not easy to see which volume bar is associated with the price candle – the standard volumes indicator paints them red and green depending on whether the volume is higher or lower than the previous bar. This can be confusing when trying to match the volume bar to the price bar. The indicator also adds an average line to the volume indicator to give a measure of high medium or low – but the tick volume itself will be identical. You can find more details here: Quantum Trading – once again many thanks for your very kind and generous comments and if you do have any other questions please do drop me a line – technical glitches do happen and this could have been one of them:-) all best wishes – Anna
Hi Anna, On reading the comment above from Andrea, I too do not appear to have volumes which correspond to the ones you show in the GBP/USD example. In fact at the time of the move my volumes showed very high. I used MT4 free volumes indicator. I decide to open a demo at Thinkforex as you mentioned you were using but again the volumes showed high at this time. I notice that your chart says Quantum tick volume. Is this what I would need so that my volumes are accurate?
I am just about to reread your books again as each time I read them the more I learn and thankyou for your posts which I regularly look out for.
Thanks again Paula
Hi Paula – first of all many thanks for your very kind comments which are much appreciated and I am just so pleased to hear that you enjoy reading my books and find them helpful in your trading – so all I can say is thank you. With regard to the issue on the 1 minute chart, I have checked the data again here, and it is reporting as shown on the screenshot, so I think on this occasion we may have had a technical glitch which for some reason interrupted the data feed at that point – it can and does happen from time to time and on this occasion worked in our favor:-) Nevertheless, the principles explained in the post do apply market manipulation is a fact of life which we saw once again in this morning’s forex trading room with the release of the retail sales data. Regarding the volume and Quantum, no this is the same base data feed, but where the volume bars are painted to match the price action bar. So when you see an up candle, the volume is painted blue, and a down candle the volume bar is painted red – this helps to match the volume with the price candle more easily. It can be awkward with the standard volumes indicator as this paints the volume bar red or green depending on whether the volume is higher or lower than the previous. In addition the Quantum Tick Volume indicator also adds an average line to the chart to provide a guide as to whether volume is high medium or low – you can find on the indicator here : Quantum Trading I hope the above helps to answer your questions and thanks once again for your very kind comments – if I can help further please just drop me a line – always happy to help if I can – and on this occasion I think this may have been one of those glitches in data feeds which do happen from time to time – thanks once again and all best wishes – Anna