NZD/CAD: Volume Profile And Price Action Analysis

Hello guys,

in today’s day trading analysis I will focus on NZD/CAD.

The thing that caught my eye was a very long rotation from which strong trend activity started.

This basically tells us, that BIG trading institutions were building up their Long positions within the rotation, and then they manipulated the price to go upwards.

How BIG Trading Institutions Trade

You know, those BIG trading institutions need time to enter their trades. It’s not like you and me, who simply press the “Buy Now” button. The reason is that they are BIG and they need time to enter their trades.

Why do they need time? Because if they simply started massive buying activity, they would move the market upwards, and then they would need to Buy for higher prices.

For this reason, they need to enter their trades slowly and unnoticed. Only then they can start manipulating the price to go their way (in this case, it’s upwards).

That’s why I like to look for a rotation followed by a trend.

Volume Profile Analysis

What I do next is I use my Volume Profile to look into the rotation area. I am interested in the size of the volumes were in this area and how those volumes were distributed.

In this case, the volume distribution is especially important. What you can see from the picture below is that the rotation on NZD/CAD was actually a Weekly POC (Point Of Control). This means the the heaviest volumes from the previous week got accumulated there.

This is very important information as it makes the 0.8667 the most important price level on the NZD/CAD chart right now! And you bet the BIG boys (institutions) know about this one and they will react to it!

NZD/CAD; 60 Minute chart with Weekly Volume Profile:

Since we now know that there were strong institutional Buyers entering their Longs in the rotation around 0.8667, we can predict what will happen in the future.

When the price makes it back into the heavy volume area (Weekly POC) around 0.8667, then the strong Buyers will want to defend this place.

They placed lots of their trading positions there and for this reason, this area is very important for them. They will be actively defending it!

And this is what makes it a strong Support!

The setup I used here is called the “Volume Accumulation Setup

I hope you guys liked my analysis! Let me know what you think in the comments below!

Happy trading,


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