NZD/CAD: Swing Trade Analysis With Volume Profile and Price Action

Hello guys,

in yesterday’s article, I was talking about a trading opportunity that occurred after a strong trend day. It was a day trading opportunity on AUD/CAD.

In today’s post I am going to show you exactly the same trading setup as yesterday, only on a higher time frame – on Daily chart. Such time frame is suitable mostly for swing trading (position trading).

What I want to demonstrate with this is the versatility of Volume Profile setups. You can use these setups for intraday trading as well as for swing trading. Setups remain the same, only time frame changes (and of course, your Take Profit and Stop Loss values should be adjusted too).

Let’s have a look at it then!

Volume Profile Analysis

There has been a strong downtrend since the start of March on NZD/CAD.

Within this downtrend, there were three places where the price stopped for a couple of days. In those places strong Sellers were adding to their Short positions.

You can see that nicely with my Flexible Volume Profile. Simply use the profile on the whole trend area, and the heavy volume areas will show up!

In today’s analysis I am going to focus on the lowest one – the one which is currently the closest.

This heavy volume area (=Volume Cluster) got formed around 0.8958. It is very likely that in this place strong institutional sellers were adding to their Short positions. Then they pushed the price downwards some more.

When there is pullback to this 0.8958 area again, then I expect those Sellers to start defending this zone. It is an important zone for them.

This is why I think it will work as a Resistance.

The setup used is called the “Trend Setup” – the same setup I used in yesterday day trading analysis.

NZD/CAD; Daily chart:

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Price Action Analysis

What I like about the volume-based Resistance is that it nicely aligns with a Price Action Resistance.

If you check out the chart below, you will see that the price reacted to this zone in the past. The price bounced off it. This tells us that it was a Support in the past.

Now, when the price shot past that former Support, it became a Resistance. Yea – that’s exactly the same Price Action setup I showed you yesterday! Only yesterday, this was on 30 Minute time frame, and today I am using the same setup on a Daily time frame.

The setup stays only time frame changes.

The setup is called “Support→Resistance” and the main idea behind it is that when a Support gets breached, it then becomes a Resistance.

NZD/CAD; Daily chart:

It is the combo of those two setups (Volume Profile setup and Price Action setup) that makes this Resistance strong. I look for such setup combos with all my trades.

I hope you guys liked today’s swing trade analysis. Let me know what you think in the comments below!

Happy trading!

-Dale

4 Comments

    1. Trader Dale

      Thank you Moses! Unfortunately not, it’s only for PC.
      On PC, I got versions for Meta Trader 4, Ninja Trader 7, and Ninja Trader 8.

  1. Ondrej

    Hallo Dale,
    i was checking this situation too. But what do you think about support at 0.8765? It was POC of the Balance area fro last year? Actually I had prepared long in this area and it seems to react nicely. What is your opinion in this?

    1. Trader Dale

      Hello, sorry for a late reply. I had a Long little bit higher (8820). Based on the Trend Setup. The price went through it but now it seems it might be reacting…

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