Stop Losing Profits! Master Take Profit & Stop Loss Placement

Hello everyone, it’s Dale here with a new video from the Recent Trade Series. In this video, I’d like to take a closer look at two trades—one on the Australian Dollar and the second on the Canadian Dollar. I took these trades yesterday, and I think they beautifully demonstrate how important it is to properly place your take profit and stop loss.

Actually, I was shooting a video yesterday about this—maybe you saw it—and today, I’m going to follow up with two more examples. So yeah, let’s check the trades out.

What you see on your screen now is a 30-minute chart of the AUD/USD pair. The trade I took here yesterday was based on this heavy volume zone right here. This was a heavy volume zone that formed within an uptrend, meaning it represents a place where buyers were active as they pushed the price upward. My long entry was here, and the stop loss was placed here. The reason for this stop loss placement was that it was positioned behind the heavy volume zone, which is important. You always want to place your stop loss behind a heavy volume zone. This is the heavy volume zone, and the stop loss is below it, right? Also, it’s below the wick of this candle, so that’s why the stop loss was placed there.

If you remember from the video I showed yesterday, I stressed that the stop loss always needs to go behind a heavy volume zone or a barrier, and this was the barrier. So, that’s the stop-loss placement.

As you can see, initially, the price went against me. This is where I entered the long position, and the price moved against me, but it did not hit the stop loss. It reacted to the barrier—this being the barrier—and eventually turned, pushing the price upward.

Now, regarding the take profit, if you remember yesterday, I talked about an important rule for take-profit placement: you want to take your profit at the beginning of a heavy volume zone. What I did here was analyze how volumes were distributed in the area where the price was approaching my level. In this area, there was a significant heavy volume zone. This was the beginning of that heavy volume zone, and this is where I placed my take profit.

As you can see, proper stop-loss and take-profit placement were crucial in this trade. The price hit that resistance level, which was based on volume, and then turned downward. If I had placed my stop loss too tight or if my take profit had been slightly higher, this could have easily turned into a losing trade. But it was a winner only because of the correct stop-loss and take-profit placement.

That was the trade on AUD/USD. Now, let me switch over to USD/CAD, where I took the second trade. Let me first show you what the trade was based on, and then we’ll discuss stop-loss and take-profit placement.

This is the 30-minute chart of USD/CAD. Looking at this strong selling activity, there was a significant volume cluster within it. Similar to the AUD/USD trade, this volume cluster represents a place where sellers were active, adding to their short positions. My short entry was here.

There was also a nice confluence with a weekly VWAP in this area (this is the yellow line), which created a strong combination of two trading setups. When the price hit that level, I entered a short trade. My stop loss was placed here, and you probably know why by now—it was placed behind the heavy volume zone. The heavy volume zone acts as a barrier, and the price should not move past it. If it does, it’s best to exit the trade.

So, the stop loss was here, and the take profit was based on volume—using the same approach as I did in the AUD/USD trade. I looked at the area where the price was heading and used the Volume Profile to analyze volume distribution. This was a significant volume zone, and the rule is to exit the trade before the price reaches the heavy volume zone. So, I placed my take profit at the beginning of that heavy volume zone.

As you can see, later, the price reacted to this heavy volume zone, as I anticipated, and moved upward. I’m really glad I exited the trade at that point. Again, if I hadn’t placed the take profit correctly, this could have easily turned into a losing trade—but it didn’t.

So, this is how I place my stop loss and take profit. The rules are pretty simple, and you just need to apply them consistently. It really is as simple as that.

By the way, the levels I’m showing you aren’t cherry-picked trades. These are levels that I publish daily for members of our trading course. You can see them here—this was yesterday’s prediction. Everyone in the members’ area could have traded these levels alongside me. This was the level on AUD/USD, and this was the level on USD/CAD.

If you want to join us and trade with us every day, visit our website at Trader-Dale.com. Click the “Trading Course and Tools” button, and it will take you to a page where you can browse my trading education and custom-made trading indicators.

There’s the Volume Profile Pack, which focuses on Volume Profile trading, the Order Flow Pack, which focuses on day trading with Order Flow, and the VWAP Pack. If you scroll down, you’ll see a discounted bundle where you can get all three packs together.

If you’d like to trade alongside me and other prop traders in a live trading room every day, I recommend visiting this page—FTA stands for Funded Trader Academy. Here, you can book a one-on-one call, where we’ll walk you through the service, and you can decide whether it’s the right fit for you.

I hope you guys enjoyed the video and found it useful. I’ll be looking forward to seeing you next time. Until then—happy trading!