GOLD: Volume Profile Analysis (6th June 2024)

Hello everyone, it’s Dale here with new day trading analysis. Today, I’d like to talk about gold. What you see before you is the NinjaTrader 8 platform with my custom volume profile and VWAP indicators. This is a Gold Futures chart on a 30-minute time frame. In today’s video, I’d like to discuss the overall situation with gold, which is in a downtrend here, a rotation zone here, and now it looks like there could be a breakout of that rotation zone and possibly the start of a new uptrend.

The breakout of this rotation is not clear yet because, first, the price needs to move above this point, the highest point of the rotation. The price needs to go past it and move above it, then we’ll know for sure that this is not a false breakout. What could happen is that this could be a false breakout, and the price could continue downwards, continuing the downtrend. So, we need to see the price move up again, rotate above the level, and maybe go higher, but we need to see some price action above that.

If we do see some price action above this level, then what comes into play is this support zone, which I drew here at 2375.5. This is based on a trend setup, but first, we need to be sure that there’s a trend, a new uptrend. If there is, then we can trade from this heavy volume zone from the beginning of it. This is the level where buyers were active, adding to their long positions and pushing the price higher. So, if this really is the start of an uptrend, those buyers are likely to defend their long positions, and if there’s a pullback, chances are there will be a reaction.

That’s the volume profile trend setup that comes into play when we know this is an uptrend and not just a false breakout. There is one more thing I like about this support: the price reacted sharply to this level, meaning it was a resistance that turned into support when the price breached it. This price action setup confirms the volume profile setup we have with these heavy volumes within the uptrend. These are the two reasons I like this level and why I would trade a long position from it.

But first, as I mentioned, I need to be sure this is not just a false breakout and that it is truly a trend because I am trading a trend setup with the volume profile. It’s crucial to be sure this is a trend, not just a false breakout. This huge buying candle occurred in the Asian session, and frankly, I don’t really trust candles formed in the Asian session. It would be better if this was formed during the European or the US session or the Euro-US overlap. We need to be careful; if we don’t see more buyers jumping in and accepting higher prices, this could just be a false breakout.

So, keep an eye on this and let’s see how it plays out. If you are interested in learning more about volume profile trading, head over to my website at trader-dale.com. If you click the button, it will take you to a page where you can check out my trading education and custom tools. The volume profile pack will teach you everything about volume profile trading and provide you with my custom volume profile indicators. Below that, there’s the order flow pack, which will teach you everything about order flow trading and provide you with my custom order flow and volume profile indicators. There’s also a combo where you can get both the volume profile and order flow pack at a discounted price.

That’s about it. Thanks for watching the video, and I look forward to seeing you next time. Until then, happy trading!