AUD/CAD: Volume Profile Analysis (+ NQ Trade Recap)

Hello everyone, it’s Dale here with new day trading analysis. What you see before you is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. First of all, I’d like to talk about a trade—actually, a prediction of a trade—which I sent to you yesterday. It was a prediction on the NQ. I hope you guys saw that video because the level, which was based on those volumes, got hit, and this was the reaction to that level. If you saw the video, hopefully, you were able to trade this and take a nice profit from this level. This level is now spent, so I won’t be trading it anymore as the reaction has already occurred.

Now, let’s check out another trading idea. The next one will be on the AUD/CAD. This is the 30-minute chart of the AUD/CAD, and here, there are two newly formed supports. These supports were formed yesterday—one at 0.9133 and the other at 0.9114

When there’s a strong trend like this, you want to use the flexible Volume Profile over that trend area to look for significant volume zones to trade from. In this case, in this uptrend zone, there were three significant volume zones. The first one has already been tested because those volumes were traded here, then there was a pullback, the volumes got tested, and the price moved upward from there. So, this level is spent. However, there are two more: this one and this one, and those heavy volume zones haven’t been tested yet, so they are still good to trade.

As you can see, my levels are always at the beginning of the heavy volume cluster. That’s the place from which I prefer to trade because, in my experience, there’s the greatest chance of a successful reaction from the beginning of those heavy volume zones. The ideal scenario would be a pullback to the first support and a reaction, and then a pullback to the second support and another reaction.

Now, let me talk a little more about this heavy volume zone and the support based on it because there are more factors that add strength to the level. If you look here, the price reacted very nicely to this level in the past, which means it was a resistance before. When the price broke past that resistance, it became a support. So, we have a nice confluence of two trading setups here: the Volume Profile setup and the price action setup.

Also, at this moment, we have the first deviation (the gray line here) very close to our level, which adds strength. However, at the time of the pullback, I think the first deviation of the VWAP will continue to move upward, so it probably won’t be around that level, but I don’t mind because we still have the volume cluster and the price action setup here.

Now, that’s for the first long level and all the confluences supporting it. Also, if you’re familiar with Smart Money Concepts, there’s a fair value gap (FVG) right here. This FVG adds further strength to the level. When there’s an FVG in an uptrend, I like to trade from the bottom of the gap, which, as you can see, aligns with our level.

Now let’s check out the lower level. If I use the flexible Volume Profile over this entire area, you can see that the heaviest volumes from this zone are exactly at our level. That adds strength to the level. Another thing is that we also have another fair value gap here (based on Smart Money Concepts), with the bottom of the gap right at our level, further reinforcing it.

All we need to do now is wait for those pullbacks, and hopefully, they come soon. If they occur, we can take those trades. It doesn’t need to be today—it could be tomorrow or even next week. It doesn’t really matter because markets have very good memory. We just need to wait, and at the time of the pullback, we take that trade at the first touch, when the price touches the level for the first time.

Now, if you’re interested in learning more about Volume Profile, VWAP or Order Flow trading, head over to my website at Trader-Dale.com. If you click the “Trading Course and Tools” button, it will take you to the page where you can browse my trading education and custom-made trading indicators. Here, you’ll find the Volume Profile pack, which will teach you everything about Volume Profile trading and provide you with my custom-made Volume Profile indicator. Below that, there’s the Order Flow pack, which focuses on day trading with Order Flow and also provides my Volume Profile and Order Flow indicators. If you’re interested in getting both at a discounted price, you can get them together for $697.

Thanks for watching the video. I hope you found it helpful, and I look forward to seeing you next time. Until then, happy trading!