🎯 Trade of the Week | Targeting Liquidity for Take Profit

Hello everyone, it’s Dale here. In this video, I’ll show you my best trade of the week. I’ll do a complete walkthrough from A to Z, exactly how the trade went, including stop-loss placement, take-profit placement, position management, everything. Let’s get to it. This is a daily chart of the EUR/GBP, and the platform is TradingView. So, let me first start with the reasoning behind this trade and why I actually took this trade. Okay. So what I saw here on this daily chart was, first, this rather strong sell-off on the EUR/GBP. So what I’ve done is I used the profile here, the volume profile, to look into the volumes and how the volumes were distributed there. What I saw here at the beginning of the move was a heavy volume zone, and that means that sellers were accumulating their short positions here, and afterwards, they pushed the price downwards from there. So I was really interested in trading this heavy volume zone. I thought that the sellers would defend it. So that was the first thing, I would say, the most important thing, because for me, the volumes are always the most important thing. Then I also noticed that the price was reacting here to this level in the past a couple of times. See all those reactions, all those reactions? That means that this area was a strong support because the price was reacting to it in the past. Right? So it was a strong support, and when the support gets breached, that means that it turns into a resistance. So this support turned into a resistance when the price broke past that support. Okay, as you can see, it nicely aligns with the place where the heavy volume area begins. Now, one more thing that I like to look for is fair value gaps here on this daily chart. There was a rather huge fair value gap in here. That’s from Smart Money Concepts. And I like to trade from the beginning of a fair value gap. In this case, because this is a bearish scenario, this was the beginning of the fair value gap. Right? So, all three setups align: the beginning of a heavy volume zone, which is beginning roughly in here, then there is the support-resistance flip, and also the beginning of the fair value gap. Three things aligning around this level. So I thought that the sellers would defend this level and that there’s a good chance that the price will react there. So what I did next was I was waiting for the price to reach this level again. This is where the price hit that level for the first time. This is where I entered the short. I entered at the first touch. Now let’s talk about stop-loss placement and take-profit placement. What I like to do is I like to place my stop behind a heavy volume zone. In this case, I was considering this heavy volume zone, and I placed the stop behind it. So this is where I placed the stop for my trade, behind the heavy volume zone, because the heavy volume zone should represent a barrier. The price shouldn’t really go past that barrier, right? So that’s why the stop is behind that barrier, behind the heavy volume zone. So that’s the stop. Now let’s talk about the take-profit. My number one rule is that take profit needs to be at least risk-reward one, but ideally more. So I’m looking at the chart past the place where the risk-reward one is and searching for a place where to take the profit. In this case, what I noticed is, as the price was rising here towards the level, I noticed that there were a lot of those little swing lows here, and usually when you have a swing low, there’s a big liquidity below it. And when the swing lows are close like those, I call it a stop-loss cluster because a lot of people have their stop-loss orders below such swing lows, right? When those are close to each other like those, I call it a stop-loss cluster. And what I always say to my members is, the price is attracted to liquidity and to those stop-loss clusters. And it’s likely that if the price comes close to such a stop-loss cluster, it will make a quick, sudden move and go past the stop-loss clusters quickly, taking the stop-loss orders here, taking out that liquidity. And I was counting on this in this case, and that’s why I placed the take-profit at the low of the lowest swing low here. This is basically the end of the stop-loss cluster, the lowest swing low of all those swing lows which I drew here. So this was the reasoning behind the take-profit. Right? So this is how I had this trade set up. But there was one quite problematic thing about that trade. The thing was that, at first, the price started to react here. There was the reaction. But then there was macro news. It was an ECB rate decision, which is the strongest news affecting the strength of the euro. And since this is EUR/GBP, I needed to quit the trade before the news just to make sure the market doesn’t go crazy after the macro news, right? So, I had to quit my trade a little bit early. I had to quit the trade here before the news. But then the news was over. That was this volatile candle, and I managed to jump in again. I call this re-entry. I do this re-entry thing only if I’m able to jump in again for the same price or for a better price. Right? In this case, because I quit here and the price went up, I actually was able to re-enter for a better price here, right? Because I was selling for a higher price, which is good. So, I re-entered here. That means that I went short again. The same position, the same stop-loss placement, the same take-profit placement, the same setting. So, I entered the short here. The price went up for a bit and then, boom, taking out all those stop-loss clusters, taking out this whole stop-loss cluster, and then here was the take-profit. So, this is how the trade went for me. A couple of takeaways from all this. First thing that’s quite important is the combo of the three trading setups because I’m always looking for combos. Not just one setup, but a combo of a couple of setups pointing to one trading level. That’s one thing. And the other important thing is, I would say, the take-profit placement. Place it behind such a stop-loss cluster. And maybe one more thing regarding the position management is you always want to quit before strong macro news and then, if possible, re-enter, but only if you get a chance to jump in for the same price or for a better price. All right. So this is how it all went. By the way, this level was published for all members of our trading course. Everyone was able to trade this alongside me. Let me show you real quick. So this is our backend. Here is where I published the swing levels. Just yesterday, I was publishing a new update here. So here is the exact table with the levels, take-profit placement, stop-loss placement, everything, all the swings that I’m trading.

So all the members can trade those alongside me. If you guys want to join us, you are very welcome to do so. Just visit my website. It is at trader-dale.com. If you click this button, trading course and tools, then it will bring you to a page where you can browse my trading education and custom-made indicators. Currently, we are running a special Halloween sale. That means that you can get all four packs, the Volume Profile Pack, Early Flow Pack, VWAP Pack, and Smart Money Pack, all four packs together for a discounted price of $697. That’s the discounted price until the end of the month. Anyways, thanks for watching the video. I hope you guys found it useful. I’ll be looking forward to seeing you next time in some next video. And until then, happy trading.