What was the longest time you ever held a trade? Few hours? Days? Weeks? People often think that when you are a trader, you need to sit in front of your computer and take many trades per day. This is not necessarily true!
In this article, I would like to show you just how versatile trading with Volume Profile can be. I will demonstrate it on a trade which I took in February 2018 and closed yesterday, the 1st October 2019 (that’s over a 1.5 year). While the vast majority of my trading is short-term, this illustrates how you can also use volume profile to effectively swing trade and even position trade the forex market.
Trade Entry Description
This trade was a short on the EUR/USD. I published this trading idea on my website, long in advance, along with the logic behind it.
You can read the trade analysis in the article I published in the beginning of 2018 here: Long-term investing opportunity on EUR/USD.
The picture I used back then was this one:
It was pretty funny, because I got many messages from people saying that this was a crazy idea. They were saying that EUR/USD was in an uptrend, fundamentals were bad for USD and good for EUR, etc…
All this was true, but when you want to pick a reversal point, you need to go against the trend and against the majority, right? That’s the whole point of it.
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Trade Results and Recap
Essentially, I stuck to the trade plan. I entered short at 1.2483, with a Stop Loss at 1.3086. I took my first Take Profit when I had +700 pips, and my second Take Profit yesterday, with +1,600 pips. Here is how it looked like on the Monthly chart:
First Take Profit
The first Take Profit was a Volume-based Take Profit. If you look at the picture, you can see that there was a heavy volume cluster standing in the way of the trade (around 1.1730). This was potentially a very dangerous place, because the price could turn there if the sellers were not strong enough to push through. By that time, I already had almost +700 pips profit so I closed a portion of the trade here.
Then the price pushed slowly through the volume cluster and continued downwards. The whole movement was pretty slow, which is why patience is critical to trading success. Additionally, I was getting a positive swap every day which is another massive benefit to holding it longer-term!
After the price went through this volume cluster, there was no other support to stand in the way of further downside.
Second Take Profit
The next strong volume based support was a heavy volume cluster around 1.0700. This was an area where I originally wanted to close the trade (marked as “support 2” in the picture). In the end, I decided to close it a bit sooner, at 1.0880 (marked as “support”).
The reason was that the price was bouncing of this area in the past and it was a potentially strong support. With +1,600 pips in open profit, I did not want to risk going against it only to get few more pips out of the trade. That’s the reason I closed it a bit sooner than I had originally planned.
Let me show you this on the Weekly chart, as it has better visible than the Monthly:
*If you would like to learn more about this setup, then go here: Support Becoming a Resistance – Price Action Setup
I’ve included an actual screen shot to illustrate the actual order I placed.
You don't need to sit in front of the computer all the time to make money trading!
The main point of this trade description was to show you that you don’t need to sit in front of your computer every day and force trades. While there is nothing wrong with using Volume Profile to day trade, this illustrates a much less time consuming way for those learning to trade with a full-time job or other restrictions on their time!
For this reason I also publish Swing trade levels in my members area, and not just my intraday levels. In fact I strongly recommend starting with swings. They are easier to manage and they consume much less time.
P.S. I am using my custom made Volume Profile for all my analysis. You can get it here: Volume Profile Pack
P.P.S. Want my intraday trading analysis every day as well as swing trade analysis for 15 forex pairs every month? Then check out my Advanced Volume Profile Training Course and Members Forum for more information – Click Here to Start Learning Now