Hey Trader,
Hawkeye "Red Top" Precedes Failed Ultra-High Buying Volume Candle
Welcome to another insightful, market analysis training session.
Today, we're diving into the intricate world of intraday NASDAQ trading, focusing on a vital yet often overlooked aspect: knowing how to "look left".
In this session, I'll illuminate the power of understanding volume and price action, and how mastering this relationship can significantly enhance your trading performance.
The Core of Successful Trading
At Hawkeye Traders, we emphasize the foundational importance of volume and price action. Regardless of what additional indicators or tools you use, if you don't grasp these two key elements, you're navigating the market with a blurred vision.
Volume and price action are the universal constants across all market conditions and time frames. They provide a clear, unadulterated view of the market's intentions, enabling you to anticipate potential movements accurately.
Volume and Price Action
Our methodology is not just about providing you with indicators; it's about teaching you to understand the relationship between volume and price action.
This knowledge is crucial for developing a robust trade plan and an effective risk management strategy. By focusing on these core elements, you can strip away the noise and distractions that often clutter trading charts.
In today's session, we analyzed the NASDAQ 100 Futures using a three-minute chart. This means each candle represents three minutes of market activity.
Our unique indicators, such as the paint bar and wide bar, play a critical role in interpreting market conditions.
The paint bar reflects the volume traded within each candle, while the wide bars signal significant volatility compared to prior bars, alerting traders to potential market shifts.
LIVE Intraday NASDAQ Analysis
At the opening bell of the US market (9:30 a.m. EST), we observed the highest volume traded so far during the Globex session. This moment was marked by a red volume radar dot and a wide bar, indicating significant market activity and potential volatility.
To make sense of this, we looked left—examining past price actions to gain insights into future movements. This approach is akin to reading a roadmap: the more you understand past movements, the better you can predict future directions.
We identified key resistance levels by marking prior session highs and analyzing the market's response at these points.
For instance, at 8:15 a.m. EST, we noted a "red top"—a newly appointed high on high selling volume. This indicator often signals a strong turning point.
By marking this candle and observing subsequent market behavior, we could anticipate potential resistance levels.
The Importance of High and Low Points
As the market progressed, we observed that despite strong buying volume at the opening bell, the market failed to surpass the prior high.
This inability to break through a resistance level, despite high buying volume, indicated that the buyers' momentum was weakening.
Consequently, this led to a lower high formation—a strong signal that the market might reverse direction.
Our analysis showed that this red top, combined with the lower high and significant selling volume, created a strong resistance area.
This informed our trading strategy, allowing us to anticipate a market downturn and prepare accordingly.
The Power of Disciplined Trading
This session underscored the importance of disciplined trading and the ability to recognize when not to trade.
By focusing on the relationship between volume and price action, you can develop a clear, confident approach to market analysis.
This foundation will help you avoid unnecessary trades and preserve your capital for more opportune moments.
Trading is not just about seizing every opportunity; it's about making informed, strategic decisions based on a solid understanding of market dynamics.
By mastering the art of knowing when not to trade, you can enhance your overall trading performance and achieve sustainable success in the market.
Stay focused, stay disciplined, and always prioritize understanding the fundamental relationships in the market.
Thank you for joining us today. We hope this analysis has provided you with valuable insights to refine your trading strategy. See you in the next training video!
Happy Trading,
Anthony Speciale
Speciale Analysis
About the Author:
Anthony Speciale is a seasoned market analyst with over 13 years of experience trading. Through his platform, Speciale Analysis, he offers in-depth market analysis, interpretation, and expectations designed to help all types of traders, at every skill levels reach their full potential.
Analysis, Interpretation and Expectations
Day, Swing and Position Timeframes
Daily LIVE Market and Orderflow Analysis
Comments