Swing Trading with Volume Profile: The ULTIMATE Guide

Hey everyone, it’s Dale here. Most traders do swing trading backwards. They start with a trend line, a candle pattern, or some random indicator, and then they hope that the market will react. But think about it. Why would the market, especially the big institutions that actually move it, care about your trend line or some random indicator on your chart? Well, they don’t. They don’t care. That’s why I like to trade with something more objective, and that is volume. Volume shows us where the big players built their positions, and those are the areas that I like to trade from.

Swing trading is actually where I first started to see my real edge and some consistency in trading. Even today, after more than 15 years, it is still one of my favorite ways of trading. The reason is simple. It is slower, cleaner, and much less stressful than staring at small time frames all day. You can check your charts once per day, place your limit orders, and let the market come to your levels.

In this webinar, I’ll show you my full swing trading process from A to Z. We’ll cover how to set up your charts, which platforms and tools you can use, how to find the strongest heavy volume zones, and how to trade my three main setups. I’ll also show you how I use confluences like Fair Value Gaps and support-to-resistance flips to make those levels stronger. Then we’ll go into stop-loss, take-profit, risk-reward ratio, position management, missed trades, correlated trades, macro news, the most common mistakes, and more. We’ll cover it all, don’t worry.

So, this is not just one clean example and then good luck, off you go. No, this is the full process, including the details that actually matter when you trade this live. So, let’s get to it, and let’s start with a little quiz so you guys can see where you are right now.

Okay, so let’s take a look at this chart. I have one simple question for you. Where would you enter a long trade? Would you enter from this support, or would you enter from this support? Where do you think would be the best entry for a long trade? A or B?

Now, looking at this price action chart doesn’t help too much, does it? But let me help you a bit. Let me show you the Volume Profile. Let’s take a look at the volumes now. Which level is better now? Level A or level B? Well, level B has this massive heavy volume zone behind it. So, the right answer is to go long from level B. See, there was a pullback to level B, the price reacted to this heavy volume zone, and boom, it went upwards.

Now, here is another question for you. This time, it is going to be a bit more difficult because we have three levels, three resistance levels. My question is the same. Where would you enter your trade? In this case, a short trade. Would you enter short from level A, level B, or level C? Which one is the best short trade entry?

Again, let me help you by adding Volume Profile to the chart. This is how it looks. So, which one? Well, this one was a bit tricky because there are actually two good levels to trade from. If you take a look at the Volume Profile, we have a heavy volume zone here, as well as a heavy volume zone here. So, actually, let me show you the result. We had a reaction to level C, as well as a reaction to level A. Level B doesn’t have any heavy volume zone there, and the price doesn’t really react to that level. So, level B is wrong, but levels A and C were good trade entries.

All right, so that was just a little quiz to get started and to show you what we’ll cover later in this webinar. At this point, I’d like to tell you why swing trading is my favorite way of trading and why I think it should be your favorite way of trading as well. Swing trading is great because it is slow-paced trading. You can check your charts once per day. You have plenty of time for rational decision-making and thinking. You don’t need to make any rushed decisions. So, yes, I really like this trading approach.

You can also do this alongside a job, which I think is a great advantage for many people who would like to start becoming a professional trader or full-time trader, but for some reason, they can’t just leave their job and focus completely on being a full-time trader. That is a risky thing to do. But you can do swing trading alongside your job and see how it works for you because it is not time-consuming. So, yes, you can easily trade swing trades while keeping your current job.

What I also like about swing trading is that it is a set-and-forget method. You just place limit orders and then wait. At least that’s how I do it. You don’t need to sit at the computer all the time. Just leave the limits and see how they play out.

Also, there is one edge that intraday traders and scalpers don’t really have, and that edge is that the daily charts or weekly charts, simply put, the higher time frames we will work with, have less noise than the lower time frames. This means cleaner signals and cleaner setups. Less noise. And what comes hand in hand with that is that those higher time frames are harder to manipulate. That’s important. The higher the time frame, the harder it is to manipulate because the more money you need to manipulate it. You need less money to manipulate a one-minute chart, but you need way more money to manipulate a chart that is, let’s say, a daily chart or a weekly chart. For that reason, there is less noise, less manipulation, and the levels and setups work better. This is why I love swing trading so much.

Now, before we go into all the setups and all the details, we need to start with this. We need to start with the trading platform and the Volume Profile indicator. I don’t want to overwhelm you, so I’m just going to talk about two options.

The first option is getting TradingView and getting their Essential plan. That is the cheapest option they offer, and in that option, you already have their Volume Profile. The one I recommend using is called the Fixed Range Volume Profile. It’s a Volume Profile that you can move around and use to look into specific areas, and that will be very important for the setups I’m going to show you later. So, if you are going with this option, then you want to use their Fixed Range Volume Profile. By the way, the data you’re going to need is already included in that Essential plan. So, if you guys are familiar with TradingView, this is, I would say, the easiest way to get started.

However, the recommended way, and the way I do it, is that I use NinjaTrader and the free platform. They have a paid version and a free version, and the free one has all the functions you are going to need. So, just go for the free platform. I’m using the free platform as well, and I’m using my own custom-made Flexible Volume Profile indicator. I would say it is better than the one TradingView has. It is less clunky and more precise, but I’ll leave the choice to you. You can use whatever Volume Profile you want. I just wanted to say that I’m using my own. Regarding the data, I’m using FXCM data. It’s free data. I connect it to NinjaTrader 8, and it is all good and reliable. There are also a couple of other options. I just listed them here at the bottom if you want to explore more, but I don’t want to spend too much time on this here.

Okay, so that’s that. Let me now talk about the strategy. First, I just want to tell you what the basics of the strategy are, what the common thing among the setups is, and then we’ll dive a little more into the details. The basic strategy of how I trade swing trades with Volume Profile is that I essentially trade pullbacks to heavy volume zones that have not yet been tested, and I do this on the daily chart.

So, if you look at this example, you can see that there was a heavy volume zone. By the way, this is a daily chart. There is that heavy volume zone. The price moves away from it, makes a pullback to it, and this is where I enter my trade. I enter short. This is a very, very simplified way to do this, but it is the core of my setups.

The reason I use Volume Profile like this is because Volume Profile reveals where big money accumulated their positions. These are big money and big players. And those heavy volume zones that Volume Profile reveals act as powerful support and resistance. We’ll work with this through the whole webinar. This is important. Heavy volumes are strong supports and resistances. We’ll not only use this for our trade entries, but also for stop-loss placement, take-profit placement, and more.

So, let’s get to it. Let’s talk about the first setup, and the setup is called the Volume Accumulation Setup. When do you trade this? You trade the Volume Accumulation Setup when you see a zone where the price consolidated and accumulated large volumes. In this area on this chart, it is this rotation where those heavy volumes were formed. You need the Flexible Volume Profile, a profile that you can move around to look into specific areas like this. You always want to see rotation where heavy volumes were formed, and that means that big institutions were active there. They were buying or selling there.

At this point, we are not able to tell whether they were buying or selling. But when you see this strong impulse starting from that heavy volume zone, then you know that sellers were building up their short positions here, and then they pushed the price downwards. The setup goes like this. After the price leaves the accumulation zone, it often returns to retest it. So, often there is a pullback to that heavy volume zone. When the price reaches that heavy volume zone, and for me, it is the beginning of the heavy volume zone, this is your entry point. This is a short trade scenario, and that means that you go short from there.

Why does this work? This setup works because large players defend those heavy volume zones where they were active before. When the price returns to those heavy volume zones, the big players from those zones become active again and push the price away from that heavy volume zone. This is why it works.

One key rule to trade this is that you only trade untested zones. That means that you only trade the first tests. Once there is a first test, like in this place, the level is suspended. So, if there was another pullback or another test, you don’t trade that. Only trade the first test. That’s the Volume Accumulation Setup.

Now let me show you a couple of examples of this. Here we have a rotation where heavy volumes were accumulated. By the way, we are looking at daily charts. All those examples are daily charts. This is how I trade all my swings, on the daily chart, the big picture. That’s important. So, anyways, we have the rotation here with heavy volumes. We know that big players were active here. At this point, we don’t know if those were buyers or sellers, but when there is that breakout and the price moves downwards, then we know it was sellers. So, we want to look for shorts, and we want to look for shorts from the beginning of that heavy volume zone, which is here. This is a resistance. When you see this form, you can already place a limit order at this level, and it is a limit to go short from. When the price reaches this place, you go short. First touch, you go short. That’s it. This is a short trade scenario for the Volume Accumulation Setup.

Now, let’s take a look at the long trade scenario of the same setup. Here we have this rotation and massive volumes accumulated here. You want to trade from the beginning of that heavy volume zone. In a long trade scenario, it is here. So, this is your long. Now you just need to wait. You wait for the pullback. When the price hits this level, you go long from there.

What is important for me to see is that the heavy volume zone and the rotation where those heavy volumes were formed are followed by aggressive activity, aggressive initiation activity by either buyers or sellers. What you see here is just perfect. You can really see those buyers pushing the price very aggressively upwards. That adds strength to the level. The bigger the aggressiveness of those buyers, the better the level. It doesn’t matter if this is triggered by macro news, a change in market sentiment, or whatever. The important thing is that we see that aggressive move. Ideally, there are Fair Value Gaps in that move, but we’ll get to Fair Value Gaps later. Right now, let’s just focus on spotting the setups.

Here is a third example of the Volume Accumulation Setup. This is a short trade scenario because we have a heavy volume zone here, followed by this sell-off. Because of this sell-off, we know that we’ll be looking for shorts, and we are going to be looking for shorts from the beginning of this heavy volume zone. So, this will be that resistance we want to trade from. Once the price hits that resistance, it is a short from there. First touch. So, that’s the Volume Accumulation Setup, the first of the three setups I’m going to talk about.

The second setup is called the Trend Setup. It’s called the Trend Setup because you trade it when there is a trend. When do you trade this? You trade it in a trending market where the price makes higher highs and higher lows, like, for example, here. The way the setup works is that you wait for the price to pull back from the trend direction to an untested heavy volume cluster. Take a look at this volume cluster. This is the most significant volume cluster in that trend area, and you want to see a pullback to the beginning of it, which is here. This is your support. So, you wait for the pullback, and when the price hits this support, you go long. This is a long trade scenario. This is exactly how it is supposed to look. Again, daily chart. Don’t forget, all of these are daily charts. Don’t switch time frames. Just daily chart.

So, this is how the long trade scenario looks. The reason why this works is that the heavy volume zones in that trend area, like this one, reveal where big players were adding to their positions as they were pushing the price upwards. When the price makes a pullback to those heavy volume zones, this is where the buyers or sellers defend their positions and push the price in the trend direction again. In this case, it is a long trade scenario, so it is buyers defending their positions and pushing the price upwards again because this was an important zone for them. This heavy volume zone was important for them. That’s why they were building up their long positions there, and that’s why they are defending it now.

The key rule is to only trade in the direction of the trend. In this case, we have an uptrend, so you’ll be looking for long trades. And only trade the first test. If there was a second pullback to this level, no trade. Only from here. This is the first test, the first time the price tests the heavy volume zone. That’s the Trend Setup.

What follows are a couple of examples of this. Here is a long trade scenario of the Trend Setup. Here we have a trend and a Flexible Volume Profile that shows how the volumes were distributed in that trend. This is where you see how important it is to have that Flexible Volume Profile, which you can move around and use to look into specific areas. With this setup, you only want to see how the volumes are distributed within the trend area. You are not really interested in how the volumes are anywhere else, just the trend area. You want to see the volume clusters formed within the trend. That’s why you are not using daily profiles, weekly profiles, or monthly profiles. You are using the Flexible Profile, which you can move around and use to look into that specific trend area.

So, what it reveals here are essentially three significant volume zones or volume clusters. This one, this one, and this one. The first one is not really a good signal. Normally, you would trade the pullback from here and take the long from this place, but this is a trade I would not take because the price immediately, after the volumes were formed here, returned back to the level. I need a bigger pullback. I need the price to stay above the level for a longer time to make sure that the higher prices were accepted. So, this pullback was just too quick. I would not trade this. But take a look at the second volume cluster. This one is good. This is the pullback. This is the first test of the beginning of that heavy volume cluster, and it is long from there. Regarding the third one, this one is also good to go, but we don’t have that test on this screen. Still, it is also a good level to go long from. You just place a limit order and wait until this level gets hit.

Here is a short trade scenario of the Trend Setup. We have a rather swift and aggressive sell-off here, so we know sellers are in control and pushing the price downwards. There is a place that stands out, and in this place, sellers were active quite a lot. They were adding to their short positions as they were pushing the price downwards. So, this is an important place for the sellers, and it is very likely that they’ll want to defend this place in the future. So, when you see a volume cluster in a downtrend like this, you draw a line to the beginning of that heavy volume zone and wait for a pullback. This is the first test. This is where you go short from. When the price hits this level, you go short from there.

Now, the last of the three setups is the Rejection Setup. You want to trade this setup when the price makes a significant rejection or reversal and leaves a strong volume cluster near the place where it turned. Let me show you on this picture here. We need a significant rejection like this one. It really needs to stand out. When you open a chart, you need to spot the rejection in a couple of seconds. It needs to grab your attention. So, it needs to stand out. That’s the first step. Strong rejection.

What you see here is a rejection of higher prices because strong sellers defended higher prices here. That’s the first thing. The second thing is that you need to see a significant volume cluster within that rejection, and it needs to be somewhere close to the place where the price turned. The volume cluster in this case is this one.

The way this setup goes is that you want to see the price make a pullback into the rejection zone and hit the volume cluster. When it does, then you enter your trade. Because this is a short trade scenario, you go short from there, from the beginning of that volume cluster. That’s your level.

The reason why this works is that the rejection candle is a place where large players were defending in the past. Large players were defending this place. You can tell because buyers were pushing the price up, but then sellers stepped in. Those are the heavy volumes. Then they reversed the price and started to sell and push the price downwards. So, large players were defending this place. It is clearly important for them, and they are likely to defend it again here. That’s why you go short, because they are likely to defend this place again.

The key rule, and I’ve already mentioned this, but let me repeat it, is that the rejection must be clearly visible and decisive. Not just any rejection on the chart. It really needs to stand out. A weak rejection is not a valid signal. If you guys are not sure whether the rejection you see on the chart is good or bad, or whether it is strong enough or not, just skip it. I would say this setup is the hardest one of the three because sometimes it can be a bit ambiguous and hard to tell whether the rejection is good or not. So, if you are not sure about the strength and significance of the rejection, skip the trade and focus on the next one.

Now let me give you a couple of examples here. What you see on this chart, again, a daily chart, is a rejection of higher prices where buyers were pushing the price upwards aggressively. Then sellers stepped in, and you can see that on the Volume Profile here. The sellers started to push downwards. So, this is a strong rejection with a significant heavy volume cluster near the place where the price turned. Perfect setup.

What you want to do is mark the beginning of that high-volume cluster. That’s this level. That’s the most important level in the rejection. It’s not the high of the rejection. It’s this place, the beginning of the heavy volume zone, because this is where the big players started to be active. Now, when the price makes a pullback, this is where you go short.

Now let’s move on to another example. This one is a long trade scenario. If you take a look at this chart, we actually have two rather significant rejections. We have this massive rejection, and then there is this one, also a strong rejection. Not as significant, not as strong, but it also stands out and looks rather significant on this chart. But if you guys remember, there are a couple of rules for the rejection, and the most important rule is that there needs to be a heavy volume zone in it.

If you take a look at this rejection and this gray profile here on the left, it doesn’t show any significant heavy volume zone here, at least not in the place where the price turned. For example, somewhere here or here. Nothing like that. So, we don’t see that clear signal. We can’t trade this. But if you take a look at this rejection, then there is a significant volume zone right here. We don’t have a heavy volume zone like this here. We don’t. That’s why we can’t trade this. But we can trade this because here we can clearly see where buyers stepped in. Sellers were pushing the price downwards, buyers stepped in, started to buy, those volumes were traded here, and boom, the price went up. Important place for buyers. So, you want to trade from the beginning of that heavy volume zone, which is here. When you see this, you can place a limit order and then you wait. In this case, you would wait for about two months, but it’s worth the wait because, as you can see, there was a beautiful reaction exactly to the level. So, this is the long trade scenario of the Rejection Setup.

Now, what I like to do is a little summary of the setups so we can take a look at them on one screen. Maybe you guys can grab a screenshot if you want. We covered the Volume Accumulation Setup. It goes like this. You need to see a rotation where heavy volumes were formed, followed by strong trend activity like this one. Then you wait for a pullback and trade from the beginning of that heavy volume zone. That’s the Volume Accumulation Setup.

Then there was the Trend Setup, where you need to see a clear trend, and you need to use the Flexible Profile to identify significant volume clusters within the trend, like this one. Since this is an uptrend, you’ll be looking for longs, and you want to see a pullback to the beginning of that heavy volume zone and go long from there. That’s the Trend Setup.

The last one was the Rejection Setup, where you need to see a significant rejection, and there needs to be a significant volume cluster close to the place where the price turned. You enter from the beginning of the volume zone. In this case, this would be your resistance. Wait for a pullback and trade from there.

Now, those three setups I showed you are good to trade as they are. You can trade them as standalone setups. But to make them even better, you can use confluences. A confluence is where multiple independent setups confirm the same price level. The more confluences, the stronger the level.

Here is a list of setups I use with those three Volume Profile setups, and I use those as confluences or combos. I use Fair Value Gaps from Smart Money Concepts. I use the support/resistance flip setup, which is a very old price action setup. Then I use the Point of Control, and I also use VWAP and its first deviations. In this webinar, I want to focus on confluences by Fair Value Gap and this price action setup called support/resistance flip.

What I should also mention here is that I rarely take a trade if there is no additional confluence. I always look for at least one. So, let’s jump right into it and let me explain the confluences on a couple of examples.

What you see here, and let’s start with the Volume Profile setups we already talked about, is a Trend Setup. There is a trend, again, on a daily chart, and in that trend, we see a significant volume cluster, this one. Normally, we would just mark the beginning of that heavy volume cluster, wait for a pullback, and go short from there. But since we are focusing on confluences now, we want more than just this one Volume Profile setup. We want more setups to confirm this.

What we have here is a Fair Value Gap, which is from Smart Money Concepts. The Fair Value Gap is here. Let me just delete this and draw it again. The Fair Value Gap is this whole zone. It is a bearish Fair Value Gap. I don’t really want to go too much into detail about what a Fair Value Gap is. I’ll drop a link below this video that will lead you to another video that is just about trading Fair Value Gaps. But just to explain this really quickly, a Fair Value Gap is a formation of three candles. For example, this one, one, two, three. In a bearish scenario, there needs to be a gap between the low of the first candle and the high of the third candle. If there is a gap between those, if they don’t overlap, then it is called a Fair Value Gap. In a bearish scenario like this one, it is a sign of aggressive sellers. The way I like to trade this is from the beginning of the Fair Value Gap, which in this case is here. This is the beginning of the bearish Fair Value Gap, so it is short from there.

There is also another setup that confirms this Volume Profile level. The setup is called support/resistance flip. It is not my setup. It is an old setup, but it works. I really love it when combined with Volume Profile. This is how it works. Take a look here. This is where the price reacted really strongly in the past. Let me mark this level on the chart because it was strong support. I’m saying this is strong support because of that reaction here. When the price blew past the support, when the support got breached and the price started to move below it, that’s where the support turned into resistance. So, from here, it is resistance. That’s why it is called support/resistance flip, because support got breached and turned into resistance.

Now, take a look at it. What we have here is a heavy volume zone, with the beginning of the heavy volume zone being here. We have the Fair Value Gap, where the beginning of it is here as well. And we have that support/resistance flip setup also pointing to the same level. So, we have a combo of three setups: Volume Profile setup, Fair Value Gap, and support/resistance flip. This is exactly the confluence I’m looking for. Three independent setups are telling me that I should go short from here, and that’s exactly how you trade the confluences. I always look for at least one.

Now let me show you a couple more examples. Here we have a Trend Setup. This is a trend, and here is a significant volume cluster within the trend. Additionally, we also have a Fair Value Gap. In this case, we have a bullish Fair Value Gap. We have this candle. That’s the first candle. This is the second candle, and this is the third candle. In a bullish scenario, or in a bullish Fair Value Gap, the high of the first candle and the low of the third candle should not overlap. If they don’t overlap, then it is a Fair Value Gap. Since this is a bullish Fair Value Gap, it begins here. This is where I like to trade from.

So, we have the volume cluster, we have the Fair Value Gap, and also support/resistance flip. In this case, we have this sharp rejection of higher prices telling us that this level was a strong resistance in the past because of that sharp reaction here. When the price blew past that, that resistance turned into new support. As you can see, everything aligns perfectly. Support/resistance flip setup, beginning of the Fair Value Gap, and beginning of that heavy volume zone. Well, not exactly. The beginning of the heavy volume zone is a little bit higher, but I still count it as a confluence. If it is like this, I prefer to trade not from the beginning of the heavy volume cluster, but from the beginning of the Fair Value Gap. So, let me just delete all of this and show you where my trade entry would be. Exactly here. Because this is the beginning of the Fair Value Gap. This is the long trade entry. Boom. Here is the reaction. Nice combo, isn’t it? Always look for those.

Now, here is another one. We have a Volume Accumulation Setup because we have a rotation with heavy volumes accumulated here. The price moves away from that rotation, makes a breakout, shoots downwards, telling us that sellers were active here, and telling us that we should look for shorts. So, we wait for a pullback. If you were trading just this Volume Profile setup, it would be short from here. But we should talk about the confluences first.

What we have here is a Fair Value Gap, and this is a bearish Fair Value Gap. That means you should be looking for shorts from this level. This is where the bearish Fair Value Gap begins. Those are the candles. The Fair Value Gap is based on this one. That’s the first one. This is the second one. And here is the third one. We also have that support/resistance flip here. The price reacted here, and that means that it was strong support in the past. When the price blew past that support, it turned into resistance. So, all the setups are again pointing to this level. In real trading, sometimes it will not be this clear. They might be a bit away from each other. But if it’s just a couple of pips, then it’s still good. I still count situations like those as confluences. In this case, it aligns perfectly and points us to go short from here.

Now, let me show you one more combo or confluence. Here is a strong rejection of higher prices. You use the Volume Profile to look into the rejection, to see how the volumes are distributed there. You want to identify something like this, a significant volume cluster. You trade from the beginning of it. That means pullback and short from there. The confluence here is a Fair Value Gap. I haven’t told you yet, but I actually trade only the rejections that have Fair Value Gaps in them. If you take a look at this rejection, there is a Fair Value Gap here, and it begins at this level. So, we have the volume cluster beginning here, as well as the Fair Value Gap also beginning here. If they were a bit apart from each other, in most cases I would trade from the beginning of the Fair Value Gap, not from the beginning of the volume. So, short from there. If you want to improve the win rate of your Rejection Setup, only take the ones that include Fair Value Gaps in them, like here. You want to see the heavy volumes and then the Fair Value Gap because this shows you the aggression, and it increases the chance that there will be aggressive sellers here.

At this point, I have a little surprise gift for you. If you stayed until this point, then you can get this book. I’ll send you the physical copy. If you guys are from the US, just fill in the form, which I’ll provide below the video, and I’ll send you this physical copy of my Volume Profile book. I’ll even cover the shipping. No strings attached. Just get the book. Let me know how you like it in the comments below the video, or send me an email. I’m sure you’ll like it.

So, let’s move on and talk about take-profit placement and stop-loss placement because the setups are one thing. That’s just the trade entry, and that’s just part of it. Take profit and stop-loss could be the place where a losing strategy turns into a winning strategy.

Let’s talk about the take profit first. There is one very important rule to remember about placing your take profit, and the rule is that you always want to place the take profit before a barrier, at its start. That barrier is most commonly a heavy volume zone. Let me show you on this example to make it clear.

We have a Trend Setup with a heavy volume zone here. That means that you wait for a pullback, and this is a resistance where you go short from. Now you should think about where to place your profit. As we said, you want to place the take profit at the beginning of a barrier, the barrier being a heavy volume zone. So, you want to use the Flexible Volume Profile to look into the area where the price made the pullback toward the level you are trading. You look into this area and you want to see how volumes were distributed there. In this case, the Volume Profile reveals a heavy volume zone here. You want to quit your short trade before the price fully enters that barrier because the barrier could reverse the price and completely ruin your trade. There is that risk, and you don’t want to risk it because you have already made your money here. So, the logical thing to do is to quit the trade at the beginning of the barrier, which is here. This should be your take profit, right here at the beginning of that heavy volume zone.

What counts as a barrier? In most cases, it could be a heavy volume zone, but it can also be a strong price action level or VWAP. In most cases, for me, it is a heavy volume zone. And yes, we already mentioned this: quit before the first barrier. If there are multiple barriers on the way, then exit at the first one. It’s risky to try to ride through it. So, that’s the take-profit placement. Take profit goes before a barrier.

Now, stop-loss placement. The main rule is that the stop goes behind a barrier, at its far edge, because the barrier protects you. It is your shield. We have the same example here, and now I want to demonstrate how you want to place the stop. We have this Trend Setup here, this heavy volume cluster. We have this pullback to this level, short from there. Now we know that the take profit will be here. Let’s talk about the stop-loss placement. As I mentioned, the stop needs to be behind a barrier, and the barrier is this whole heavy volume zone. So, if I do a little drawing here, this whole area is the barrier, and the stop should go behind it, which is here.

What I like to do, if I get a chance, is that if there is a little swing point close to the end of the barrier, I actually place my stop there. If there is no little swing point like this, then just place the stop at the far edge of the barrier, and you should be fine. What counts as a barrier? In most cases, it’s going to be a heavy volume zone. An important thing to mention here is that if the barrier fails, then the trade is over. There is not really any point hoping that the price will turn because the barrier is here to protect you. If it fails, then who knows where the price will go? So, there is no need to risk more money if the barrier is breached. Quit your trade.

Now let me give you an example here, and let’s talk about the stop-loss and the take profit as well. Here we have a Trend Setup, again on the daily chart. All of these charts are daily charts. Here is a significant volume cluster within the downtrend, so you’ll be looking to trade short from here. The first thing I’m always interested in is where I place my stop. In this case, the barrier is that heavy volume zone here. This is the barrier, and you want to place the stop behind the barrier. In this case, we also have this little swing point, so I would place the stop here. Regarding the take profit, you want to place it at the beginning of the first barrier standing in the way. So, you want to look into this area to see how volumes were distributed there when the price was reaching your short level. You can see that there is this volume cluster standing in the way, and the take profit should go before the price fully reaches into that heavy volume cluster. So, the take profit should be here because there is a risk that the price might react to that heavy volume zone and do this. In this case, it overshot the beginning of the heavy volume zone, so theoretically, you could have taken the profit lower, but it’s risky. The way I do it is that I quit at the beginning of the volume cluster or at the beginning of the heavy volume zone, which is here. So, the stop-loss goes behind a barrier, and the take profit goes before a barrier. This is how this trade would ideally look.

Now, let’s talk about another one. Again, we have a Trend Setup. By the way, the Trend Setup is the most common setup you will see, so that’s why most of the examples here are Trend Setups. This is the trend, and this is a significant volume cluster within the trend. So, you simply trade from the beginning of it, or the way I would trade this, I would trade from the beginning of this Fair Value Gap. I would take the long from here, and regarding the stop, it needs to be behind this barrier. We also have this little swing point here, so I would place the stop here. So, it is not only behind this heavy volume barrier, but also behind this little swing point. That adds something extra to it. That’s the stop.

Regarding the take profit, you want to see how the volumes are distributed in this area where the price was going toward your support, and we have this volume cluster here. The way I would place the take profit is at the beginning of the volume cluster, just to make sure that the price won’t react there and my trade won’t be ruined. So, this is the setting of this trade.

Now let me show you one last example of this, and then we’ll move on. Here we have a Volume Accumulation Setup. We have this heavy volume zone followed by this sell-off. So, I’ll mark this resistance, and it is short from there. Regarding the stop-loss, you should consider this whole area as the barrier because this is where the heavy volumes were traded, and you want to place the stop behind that. So, I would place the stop here. Regarding the take profit, take a look at this area. This is where the price was reaching toward the short level. You want to see how volumes were distributed there. Here is your barrier, the first barrier standing in the way, and the beginning of it should be your take profit. That’s how it’s done.

Well, to be completely frank, this is not exactly how I do it because I use a little different method, which I’m going to mention now. It’s called the alternative stop-loss method. I use this for all my swing trades, and I also ask all my students to use this method as well because it has simply proven to work and have better results.

Let me show you. It’s all about the stop-loss placement. Take a look at this example here. We have this heavy volume zone followed by this sell-off here. So, you would want to trade from the beginning of that heavy volume zone. That means somewhere here would be a short. The stop-loss would be behind the barrier, and the barrier is this heavy volume zone. Normally, the stop would be somewhere here.

But what I do, and what this alternative stop-loss method is all about, is that if a candle just wicks past my stop-loss like here, I don’t close the trade. I only close the trade if the daily candle closes above the stop-loss line. But if it just wicks through a little bit, like here, I still remain in the trade. That means that in my platform, I actually don’t have the stop-loss here. I just have a line there that I watch. If the daily candle closes past it, I close the trade manually. That’s why I check the charts every evening. But if it just wicks through like this, maybe collecting some liquidity above those highs or just making some false breakout, then it enables me to stay in a good trade without being kicked out of it. It happened so many times that I was kicked out of a perfect trade. That’s why I changed this approach to the alternative stop-loss approach.

But you need to be safe, and that’s why you need to have a catastrophic stop-loss. So, I have a hard stop called the catastrophic stop-loss, and it is 50% above the normal stop-loss. Let’s say that this is 100 pips. If this is 100 pips, then my catastrophic stop-loss is 150 pips. If the price touches the catastrophic stop-loss, I’m out. This is the stop that I have in my platform. It’s a hard stop-loss. It’s there to prevent me from taking massive losses. So, this is the alternative stop-loss method. As you can see, in this case, it would save my trade and turn a loser into a winner. That’s why I use it.

Here is a scenario where it actually fails. Here we have a heavy volume zone, and I would enter probably from this place because this is the beginning of a Fair Value Gap. So, I would go short from there. But the important thing is the stop-loss placement. In this case, I would place the stop behind the heavy volume barrier. I would place it at the top of this little swing point. This would be my stop. The catastrophic stop would be somewhere here. In this case, the daily candle closed above the stop-loss line. That means that when I see this, I terminate the trade. I quit. The trade is over. So, in this case, the alternative stop-loss didn’t really help, and I quit the trade here at the daily close with a loss.

This is how it works. If you start using the alternative method, you’ll see that it will save your trades many times, and you’ll have better performance than with using the standard stop. If you are not into using the alternative stop-loss, no problem. Just keep using the standard stop-loss. I just wanted to mention the alternative version that I prefer and that I use, and which I hope all my students are using.

Now, many people don’t realize this, but you can also improve your trading quite a lot by using the right risk-reward ratio. That’s what I want to cover now. The minimum risk-reward ratio that I recommend is risk-reward ratio one. That means that the risk equals the gain. That’s the minimum I recommend, not only for swing trades, but also for intraday trades as well. The sweet spot I found, and this is my sweet spot for swing trading, is a risk-reward ratio somewhere between 1.5 and 2. That’s my personal preference. I’m not forcing you into this, but this is what I like. This is more or less where I aim with my swing trades.

If you guys want to use a higher risk-reward ratio, then you need to be aware of the negative things about higher risk-reward ratios. It is nerve-racking. It really is. If you trade with a high risk-reward ratio for a longer time, you’ll know that there will be many trades that looked perfect at the start, but because you held the trade for too long, they failed. Maybe there was some macro news or a change of sentiment, and a good-looking trade ended up in a loss. So, you need to be okay with having a lower win rate. Your trades will be vulnerable to macro news events because the longer you hold the trade, the bigger the chance that there will be some unexpected news, a change of sentiment, or something that will completely change the course of action, and the price will turn and ruin your trade.

So, I’m not really into higher risk-reward ratios. But the truth is that a lot of people from our Funded Trader Academy, and also our mentors, are using high risk-reward ratios, at least like 5, 8, or 10. For me, that’s insane. But those guys are able to pull it off. They are trading with a high risk-reward ratio, and they are all profitable. But for me, this is just too much. If you want to trade like me, if you want to use the same approach as I do, then I recommend this. A higher risk-reward ratio is fine, but you need to be okay with a lower win rate, and you need to be able to follow the rules 100%. Otherwise, it will just ruin you. So, that’s my take on the high risk-reward ratio.

Let’s now talk about how to go about the risk-reward ratio and how to implement it into this strategy. First, you find the entry level and identify where the stop-loss goes. Let’s take a look at this example here. We have a Rejection Setup here. We have a significant volume cluster here, and that means that you will want to go long from this place. So, that’s where we identify the entry level.

The second thing is to identify the stop level. In this case, it’s rather simple. When there is a rejection, I just place the stop below the rejection, exactly at the low of the rejection. It is below this heavy volume cluster, so it is behind the barrier. It meets the requirement for that, and it is also below this swing point. So, this would be the stop.

What you do next is draw a line at the minimum take profit. That’s the risk-reward ratio one. This is how I do it. I just draw the line on my chart so I know where the minimum take profit should be. But then I want to get more out of the trade, ideally somewhere around 1.5 to 2. And you want to quit your trade before a barrier. That’s the rule, if you remember from the take-profit placement. So, take a look at this profile here. It shows a barrier here, and you want to quit the trade before the price fully goes into that barrier. You want to quit the trade at the beginning of the barrier, which is here. This is the minimum take profit. This is the ideal take profit, and this is how I would go about trading this. I would go long from here and take the profit here. As you can see, this is more or less risk-reward two, which is ideal. That’s where I’m aiming.

Let me show you another example. Here we have a Trend Setup because we have a heavy volume cluster within a trend. That means long from here. The stop will go behind the barrier, ideally below the swing point. So, I’ll place the stop here, and then I’ll mark the minimum take profit, where there is the risk-reward ratio one. I always mark that on my chart so I know where the minimum is.

Then I’ll look into how the volumes were distributed before the price reached my long level. On this chart, what stands out is this volume cluster. This is the first barrier standing in the way. It’s quite distant, isn’t it? But it is the first barrier standing in the way, and this represents the ideal take profit. If I had the balls for it, I would go long from here and quit the trade here. This is pretty much the maximum I would be able to hold, because this is maybe a risk-reward of three. So, yes, that’s the ideal take profit. Here is the minimum take profit. But I always try to get the ideal take profit and exit the trade before the first barrier. If there is nothing really standing in the way, then I’m usually able to hold the trade until the first barrier.

By the way, there is another example here. I almost missed that. We have a significant volume cluster here. That means you can trade a pullback to it. Go long from there. In this case, the stop would be here, which is below the swing point and behind the heavy volume barrier. What we have here is this volume cluster standing in the way, so the take profit would be here. In this case, it’s more or less risk-reward one. This is the minimum take profit as well as the ideal take profit.

One last example. Here we have a Rejection Setup. This is a rejection of higher prices. There is a significant volume cluster here. That means that we want to trade from the beginning of it, roughly from here, and go short from there. When you trade the Rejection Setup, you just place the stop at the top of it, at the top of the rejection, like here. Regarding the take profit, the minimum take profit should be here. That’s the take profit where you have the risk-reward ratio one, but the ideal take profit is lower. It is at the beginning of the heavy volume zone. This is the ideal take profit. As you can see, it is roughly a risk-reward ratio of two, maybe 2.5, which is great, and the reaction is fast. Two days, boom, boom, you have your profit. So, that’s the risk-reward ratio. Don’t forget the main rule. It needs to be at least one. Ideally, around 1.5 to 2. That’s my sweet spot.

Now, what sometimes happens, and this is a pain, but I need to show you because sooner or later you will encounter this, is that sometimes there will be a barrier before your risk-reward ratio one take profit, which means before your minimum take profit. Take a look at this picture here. We have a Trend Setup with heavy volumes here. That means you go long from this place. The stop-loss will go here. If you take a look at the volumes, then you see that there is a heavy volume barrier standing in the way. The beginning of the heavy volume barrier is here. That means that your take profit should be here, before the barrier. That sucks because this is not risk-reward one. This is a negative risk-reward ratio. You don’t want that.

There is no perfect way to go about this, but there are three ways. The first thing to do, and it is the safest way, is not fun, but it is the safest way: skip the trade. If the risk-reward is negative, if a barrier is standing in the way, just don’t trade it. The second option is to go for the risk-reward ratio one and accept the barrier risk. You can go for risk-reward one, or actually, you can go for the next barrier standing in the way, which would be this one. But the thing is that you need to accept the risk that the price might turn when it hits the first barrier. This is a risky thing to do, but I kind of tend to do it like this myself quite often. Maybe more often than I should, but I use this option. I do. Not only this one, but quite often I use it. So, I just hope that the price will not be stopped by the first barrier, and then I go for risk-reward one or for the second barrier standing in the way. You just need to be okay with that and accept the risk.

The third option is to move the take profit to the start of the barrier. That means if you entered your trade here, then you just take the profit here. In this case, I wouldn’t really do this. But maybe if the heavy volume cluster was a little bit further away and the take profit was, let’s say, maybe here, then I would accept the fact that I’m trading with a negative risk-reward ratio. From time to time, you can do this. If there is a really strong barrier standing in the way and you are almost sure that the price will react there, then you don’t want to use the second option, which is accepting the risk. You don’t want to accept the risk when the barrier is too strong. But you can go for the third option and trade with a negative risk-reward ratio and just take the profit before the barrier. In this case, it would be here, a massively negative risk-reward ratio, which would suck, I know, but it’s better than taking a loser. So, you have those three options. I’m not saying that any of them is better than the others. I use all three of them, and every time, I just hope I made the better choice.

What I want to talk about now is managing your trade. The first thing I need to talk about is risk per trade. You guys wouldn’t believe how many people I’ve seen mess up their trading equity just by having the wrong risk per trade. The thing is that what people like to do is trade with the same number of lots. Let’s say they are used to trading with one lot or two lots. It doesn’t matter if they are trading a trade that has a 50-pip stop-loss and take profit, a 100-pip stop-loss and take profit, or a 200-pip stop-loss and take profit. They are just trading with one lot. So, if you look at the results, there could be one massive loser. Then there could be five very small winners, but they don’t even cover the one massive loser. Then there could be a couple of normal trades, and then maybe one massive winner and one massive loser. Even if the trader has, let’s say, 10 winning trades and five losing trades, if the five losing trades are bigger than the winners, then the win rate doesn’t really help too much.

What I’m trying to say here is that you want to have the same risk per every trade. What I recommend to my students, and I recommend this to most of them, is to risk 2% of your equity on every swing trade. If you have bigger capital or a bigger account, then you want to use a smaller percentage, maybe 1%. If you have a small account and you need to grow it fast, then you need to risk more, let’s say 4% or 5% per trade. But I would say the sweet spot for most of our members is 2% risk per trade for every trade. No matter how much you like the trade, no matter how big the stop-loss and take profit are, 2% for every trade. That means that every trade will have a different size.

Yes, I know it’s a pain to calculate that every time. For that, I have this little tool here. You can download it using the link below this video. It’s a free tool for the MetaTrader 4 platform, and it calculates the size for your trades automatically. You just set your stop-loss, take profit, how much you want to risk, and then it will tell you how big the position should be. It’s all automated. It’s super simple. One or two clicks, and you are all set. I really recommend giving this a go. It cost me a lot of time, effort, and money to develop this, but it’s a very good tool. I don’t think there is anything else on the market like this. Not with all the functions, anyways. So, give it a try. It’s free. No strings attached. Just download it, use it, and let me know how you like it.

But back to the topic. The most important thing is to keep risk consistent across every single trade. No guessing, no adjusting based on how confident you feel about the trade. Just keep the risk consistent.

Now let’s talk about correlated trades and managing your risk exposure. Many markets often move simultaneously due to one catalyst. It could be a macro event, a risk-on/risk-off shift, or a change of sentiment. I’m pretty sure you’ve seen it. Maybe the markets were going nowhere, and suddenly everything started to move in one direction. Maybe there was some strong news affecting the strength of the US dollar. But since the US dollar is part of many forex pairs, all the majors, then all the majors started to move because the US dollar started to move. If you are in many trades at the same time and this happens, you have a problem because you have excessive risk exposure.

Let’s say that you are in three trades. You are long on EUR/USD, you are long on AUD/USD, and you are short on USD/JPY. Now, if the US dollar starts to strengthen, what happens is that this position starts to lose money. This position also starts to lose money, and this position also starts to lose money because if the US dollar strengthens, EUR/USD will move down, AUD/USD will go down as well, and USD/JPY will go up. So, you are losing on three trades, and all that is caused just by the strengthening of the US dollar. Three trades depend on just one thing, and that’s whether the US dollar will continue strengthening or not. That’s excessive risk exposure.

Imagine you are risking 2% on each trade, but you have three of them. So, you are risking 6% just on whether the US dollar will continue strengthening or not. That’s very risky. When you have correlated trades like those, they are all likely to win or lose together. Either three losers or three winners. That’s just too much risk. So, if you have three or more correlated trades open, you want to reduce each to half the risk. If you are trading with 2% risk, then adjust the size to just 1% risk. This way, if you lose, you won’t lose 6%, but only 3%, which is not as terrible as 6%. This keeps the risk manageable. I know this doesn’t seem like a fun thing to do, but it is necessary. Otherwise, your equity will suffer from this because sooner or later, you will encounter a situation where you are in three or four correlated trades. If you don’t lower your trade size, this is going to be a problem.

Another thing I’d like to cover is securing your trade. In other words, moving your stop-loss. The way I do my swing trading is that I try as much as I can to let my trades breathe. I always remind myself that these are swing trades. They need time. They need to breathe. You guys don’t want to micromanage your swing trades. Let them breathe.

The way I do this is that if my risk-reward ratio is around one, then I don’t move my stop. I let the trade play out, and it is either a winner or a loser, but I don’t adjust my stop-loss. So, if I enter a trade from this volume cluster here, if I enter a short from here, I just place my stop here and take profit, let’s say, here. If I’m trading with risk-reward one, I place the take profit here, and I just let it play out. I don’t adjust the stop. I just let it play out. I’m patient, and it is either a winner or a loser. Nothing in between.

If I’m trading with a higher risk-reward ratio, then when the price reaches risk-reward one, I move the stop-loss to the nearest reaction point. A reaction point is the place where the price reacted to the level, the highest point of the reaction. In a short trade scenario, that’s the highest point of the reaction, not breakeven. Because if you secure your position to breakeven, what happens quite often, more often than I would like, is that the price returns to the entry level to collect liquidity. If you take a look at this example, this volume cluster here, this short level here, then you go short from there. But before taking the profit, if your profit was, let’s say, here, the price returns back to your entry level to collect more liquidity and then makes the final reaction. If you secure your stop to breakeven, this would kick you out. So, I’m not securing to breakeven. I’m securing to the reaction point, which in this short trade scenario is this. This is the highest point of the reaction. So, if I’m to secure my position from here, then I move it to this place, and that’s it. This is my initial stop-loss, and this is where I move it.

Again, if you trade with risk-reward one, leave the trade as it is. Don’t move the stop-loss. Just let it be. It will be either a winner or a loser. I know this might sound a bit simplistic, but remember, this is swing trading. You don’t want to make this complicated. You want to check your charts once per day and be done with it. That’s why it is that simple. But don’t worry, it doesn’t need to be complex. I’ve been trading swings like this for over a decade. It works. It doesn’t need to be complex to work.

Another thing I want to mention is managing a missed trade. A missed trade doesn’t mean that you forgot to place a trade and then you start chasing it. A missed trade is when you have a level, for example here, if you are trading this rejection and this volume cluster here, then you would have a short level here. You would have a limit order here. A missed trade is when the price gets close to the level and makes a reaction. If this happens, you discard the trade. Don’t trade it again. I count this as a test of the level.

What matters when deciding whether you discard the level or not are two things. The first thing is how close the reaction was to the level. That means how many pips the price went toward your level before turning the other way. The second important thing is how significant it was. How significant was this reaction? If the reaction was significant, if it was big, then you want to discard the level. If the reaction came very close to your level, you also want to discard your level.

But sometimes it will look like this. You’ll have the short level, and the price will come close to the level and do something like this. This is not a tested level. Even though the price was close, there was not a significant reaction. If the price just rotates toward your level, making those little waves, then don’t discard the trade. Discard the trade only if there is a clear and big reaction to it. Now, this takes some experience. It’s not a thing where I could give you exact advice on how to do this, but if you keep track of those two things, how close the reaction was and how significant the reaction was, you should be fine. If the price is close to the level and makes a big reaction, that’s a no-brainer. You just discard the level. If it is close to the level but doesn’t make a significant reaction, you might want to still take the trade and trade the bigger reaction. But the important thing is to never chase missed trades. If you miss a trade, just forget about it. There will always be another setup. You wouldn’t believe how many trades, how many perfect trades, I’ve missed. Intraday trades, swing trades, investments. I would say probably thousands of them.

Now let’s talk about macro news and the trading rules around macro news because macro news is a big part of trading. Almost every day, there is big macro news. So, how do we go about this? If there is standard red news, and by red news, I mean high-impact news, if you go to Forex Factory, then it will be marked in red. Those are the red news, or in other words, high-impact news. If there is this red news, I just trade through it. I trade through all high-impact news. But to every rule, there is an exception. The exception is what I call monster news. Monster news are news events directly affecting the rates of currencies. So, it is the FOMC or rate decision news, or minimum bid rate. The reason is that these can create massive and unpredictable moves.

If you take a look at this screenshot, then the monster news here is the official cash rate on the New Zealand dollar. So, I would trade through all of those red news, but not through the official cash rate. I mean, you need to have a position that has the New Zealand dollar in it to be afraid of this. If you are trading EUR/USD, then you don’t care about news on the New Zealand dollar. But if you are trading, let’s say, NZD/CAD, then yes, you should be afraid of this news and adjust accordingly.

What I do when there is monster news is that I pause my limit orders. That means you withdraw the limit orders, you just discard the limit orders, and then after the news has passed, you place those limit orders back on the chart. What I use is the Trade Manager tool. That’s the one I showed you before. It has this clever feature, and I don’t think any other software on the internet has this. What it does is it automatically withdraws all your limit orders before macro news. Then, after macro news, it places those limit orders back on your chart. So, you do this automatically. You don’t need to care about macro news.

Now, if you are in a trade and monster news is going to hit the market, then you want to quit the trade. Quit the trade before the macro news hits. A couple of minutes is fine. Even a couple of hours is fine because this is swing trading, so we don’t need to stress about it too much. Just quit the trade before the monster news, and it is possible to re-enter afterwards.

That’s what I want to cover here. How do you go about re-entering the trade? After a macro news event, re-entry is possible under specific conditions. The conditions are that you only re-enter if you can get the same price or better than your exit price. I should probably show you on this picture here with a little demonstration. Here is a heavy volume zone and strong uptrend. That means this is the Volume Accumulation Setup. Let’s imagine you entered your trade here, and let’s say that this is the macro news day. What you want to do is quit your trade before the macro news. So, let’s say you quit your trade here. Now there is the macro news. That’s this candle. You are not trading through that. Now you would like to re-enter the trade. If the macro news doesn’t cause too much volatility, and if a strong trend doesn’t start, then you can re-enter the trade.

Ideally, the macro news just goes a little up, a little down, and does nothing. After the macro news, you are able to jump in again at the same price where you quit the trade. That would be here. That’s the ideal situation. Well, not ideal. Ideal is when you are able to jump in for a better price. That means, for example, somewhere here. That’s a better price because you quit here and then re-enter here. So, you can re-enter here. But if the price after macro news is here, you don’t re-enter because at this point, you would be chasing the market. You would be entering the trade for a worse price than where you exited it. I hope this makes sense. Essentially, you just want to re-enter at the same price or better. Don’t chase the market. If the macro news hits the market and the price starts to run, then forget about chasing it and focus on the next trade.

By the way, if the macro news hits your stop, then there is no re-entry. If your stop is here, and macro news does boom and hits your stop, no re-entering the trade. The trade is over.

At this point, I’d like to do a little summary of the trade management section. We talked about risk. You want to risk the same amount on all trades, no matter how much you like each trade. Then we talked about correlated trades. If you have three or more correlated trades at the same time, you want to lower your trade size to 50%. We talked about securing your stop-loss, where you want to move your stop-loss to the reaction point, not to breakeven. And you want to do this once the price reaches risk-reward one. We also talked about missed trades. If the price turns close to your level and makes a strong reaction, then you discard the trade. The last thing from this section was macro news, where the main message is that you can trade through standard macro news. Yes, sometimes it will be a bit nerve-racking and a bit volatile, but it’s okay. I’ve been trading this for years. You only want to pause or close before the monster news, such as FOMC or rate decision news.

All right, maybe at this point, you guys might want to grab a screenshot of this so you don’t forget all those rules. All of them are very important, so make sure to follow them.

All right, guys. At this point, I want to see what you learned, whether you paid attention, and whether you learned something. So, let’s do a little quiz where you should apply the things you learned in this webinar. Let’s take a look at this picture and tell me where your stop-loss and take profit would be from a trade beginning here. This is a long, and I want you to tell me where the stop-loss is and where the take profit is. The stop should be here. This is the stop because it is behind the heavy volume zone and also below this little swing point. This is where I would personally place the stop. Regarding the take profit, it should be before this barrier because this could potentially be a place where the price could react. So, this is the take profit. Let me show you how it played out.

Now, another question. This time it’s going to be a bit harder because I want you to tell me where your entry is, where the stop-loss is, and where the take profit is. Let’s start with the trade entry. The trade entry should be based on this heavy volume cluster, maybe even based on this Fair Value Gap here. I would personally place it exactly here because this is the beginning of the gap. By the way, there is also a support/resistance flip setup. So, it’s a nice combo marking this resistance. The stop should be behind the heavy volume zone. This is the heavy volume zone. I would also place the stop at this little swing point, which also adds a bit of strength to the stop. So, this should be the stop. Regarding the take profit, it should be at the first barrier, or precisely at the beginning of the first barrier. This is the first barrier standing in the way, which means this is where the take profit should be. Let me now show you how this played out.

Okay, one more. Here I want you to tell me where your trade entry is, where your stop-loss is, and where your take profit is. This is tricky. The trade entry should be based on this volume cluster. It should be somewhere here. The stop-loss should go behind the heavy volume zone, ideally also below a swing point. So, I would place the stop here. Now the tricky part is the take profit. As you can see, there is a barrier standing in the way. That’s why I was saying this was tricky. So, what do you do in a situation like this? Option number one, don’t trade this. Option number two, accept the risk, take the trade, and either quit at risk-reward one or at the next barrier. I would personally go for the next barrier. I would personally choose this take profit. Or the third option is to quit your long here before it reaches the barrier. But in this case, it doesn’t really make sense to risk all this just to get this. So, I wouldn’t really choose this option in this particular example. Those are the options. Let me show you how this played out. This is the result. I hope that your answers were more or less correct. As you guys can see, sometimes it’s not so easy, and it’s really the details that can make the difference.

If you guys want to go deeper into this, learn more about Volume Profile trading, and learn my strategy from A to Z, exactly how I trade it, not just the swings, but also intraday trades, then what I recommend is getting this Volume Profile course, which is available on my website. It includes a 15-hour video course on my Volume Profile trading. It also includes my custom-made indicators for NinjaTrader, TradingView, and MetaTrader. Also, my trading levels, swing and intraday levels. You’ll be getting those updated daily so you know exactly what I am trading. It also includes express setup and lifetime support. That means that we’ll set up everything for you, like the platform, data feed, indicators, and workspaces. We’ll help you with any questions you might have. We simply prepare everything for you so you can just jump into learning how to trade this instead of setting everything up yourself. If you want to learn what other members have to say about this service, you can check out the Trustpilot website. We have quite a lot of reviews there, so you can read what our members have to say.

All right, so that’s that. But this is not the end of the webinar. What I want to cover next are some common questions. I get these over and over again, and they are very good questions. So, let me cover them.

Question number one: can I use Order Flow for trade entry confirmation? And we are still talking about swing trades. The short answer is no. Don’t use Order Flow for swing trades. Order Flow works well for intraday confirmation, but if you are trading swings, then the support and resistance zones are just too wide. If you are searching in those wide zones with Order Flow for some kind of confirmation, you’ll get many signals. Most of them will be just intraday signals. Most of them will be just noise, and it won’t help you at all. So, don’t use Order Flow for confirming swing trading entries.

Another question: should I wait for entry confirmation? The short answer is no. You can enter at first touch with a limit order. No need for any confirmation, no Order Flow, no price action patterns, nothing. Just use limit orders. When the price hits them for the first time, enter your trade. This not only simplifies swing trading, but it also removes decision-making and emotional hesitation around the entry. This is actually a big thing. Also, it saves screen time. If you are trading swings, you want to check the charts once per day for a couple of minutes and be done with it. It saves time. So, don’t worry that this won’t work without confirmations. It will.

Another question is: what instruments can I trade with this system? The short answer is that you can trade any market because the logic is universal. Big trading institutions have an insane amount of capital, and they need to allocate it into the market. We can see that with Volume Profile. It doesn’t matter if it’s indices, stocks, or forex. The logic is the same. Volume Profile is universal. That’s what I love about it so much. This works even better on higher time frames where manipulation is harder. That’s why I trade swings on the daily chart, because the higher the time frame, the harder the manipulation. I trade mainly forex major pairs and crosses. I trade around 15 pairs.

Another question: do I trade against a spike move? The short answer is yes, I do trade through spike moves. A spike move is when the price moves aggressively against your level. If you take a look at this picture here, then there is a heavy volume zone marking a support. But before that, there is this steep sell-off. That’s the spike. People often ask me whether I go long against a spike like this. I do. I don’t cherry-pick which setups to take based on entry price action. The reason is that those heavy volume zones are very strong support and resistance zones, and they can stop even a sharp spike move like this one, as you can see on this picture. Boom. So, even though it is a bit scary to enter your trade against a spike like this, don’t worry. I’ve been doing this for years. It works. Just leave your limit orders. Don’t look at the charts all the time. Trust the strategy. The important thing here is that skipping setups based on fear of spikes won’t improve your results. It won’t. Trust me on that.

Another question I get is: should I hold trades through the weekend? The answer is, if you are trading just swings, then yes. If you are an intraday trader, then no. Intraday traders need to quit their trades before the weekend. But for swing traders, it’s quite okay to hold trades during the weekend. The reason is that for swing trading, the stop-loss and take-profit levels are typically hundreds of pips apart. If there is an opening gap on Monday, let’s say a 20-pip or 30-pip opening gap, for intraday traders that’s terrible, even devastating. But for swing traders who have their stop-loss 200 pips away and take profit 200 pips away, it doesn’t really make any difference. So, don’t close your trades for the weekend. Just let the trade play out. Standard opening gaps don’t represent significant risk.

Another good question I get is: for how long is a volume level valid? The short answer is that it is valid for years. Markets have excellent memory. I’ve seen this so many times. I had a strong Volume Profile level, and I was waiting even for years. I was publishing those levels, for example, on my website, and people were commenting that this level couldn’t hold because it was five years old. It did, almost to the pip. So yes, markets have great memory. If there is a strong heavy volume zone, especially on those higher time frames like the daily charts, markets will remember it. Even after five years, they’ll remember it and react to it. You’ll be surprised how clear, strong, and precise that reaction can be. I’ve seen this so many times. So, don’t worry. Leave your limit orders, let them be, and let the trades play out, even after a long time period.

Another question is: how long do I hold a trade? The short answer is indefinitely. The main problem is swap, which is the overnight financing fee. Swaps can be positive or negative, and the negative swap is usually higher than the positive one. That’s where the broker makes money. But I always hold my swings regardless of the cost of the swap. So, you just need to be okay with paying swap. Sometimes it’s positive, sometimes it’s negative. Yes, it’s easier to hold a trade for a long time if the swap is positive, but I do hold trades even with a negative swap. The swap size varies by broker. If you have a good broker, then it won’t be that terrible. If you have a scammer broker, then yes, they’ll try to make as much as they can on the swaps, and this will bleed you out. So, if you guys want to use a high-quality broker even for swings, I’m using IC Markets. If you want to check them out, I’ll drop a link below this video.

Here’s the last question. Do I need futures, which is centralized data, to trade currencies? The answer is no. Retail forex data is sufficient. Remember, we are talking about swing trades. It is true that centralized data, which is futures data, is more precise, but this is only meaningful for scalpers or intraday traders. For swing trading on higher time frames like we are doing here, this small data discrepancy plays no role. So, you can use forex data, for example, from the FXCM provider, which is free data, by the way. It’s perfectly sufficient.

Since I started Trader Dale and started doing courses, mentoring, and training, I’ve met thousands of students, and I’ve seen a couple of mistakes repeat over and over again. At this point, I’d like to talk about them so you guys can learn from the mistakes of others and avoid making them.

The first mistake is trading the Point of Control instead of the beginning of the volume cluster. This is actually not a terrible mistake, but the reactions are better if you are trading from the border of the heavy volume zone rather than from the Point of Control or local Point of Control.

The second mistake is trading every single volume cluster. You guys want to be selective. Ideally, you want to use those combos or confluences that I showed you. Don’t force trades.

The third mistake is setting a stop-loss that is too tight. If you are trading swings, you need to give the trade some room to breathe.

Another mistake is chasing missed trades. If the trade is gone, let it go.

Number five is ignoring macro news events. You always want to check the calendar for the monster news. If there is monster news like FOMC or rate decision news, quit your trades before the news.

Another mistake is having too many correlated positions open at the same time. You want to use the 50% rule to decrease your position size when you are overexposed to risk, like we talked about.

Another thing is unnecessarily switching to lower time frames during a trade. I know it is tempting to enter a trade and then try to micromanage it, let’s say on a 30-minute chart or a five-minute chart. You want to see how it is going, maybe help the trade a bit more. But don’t do that. If you do your analysis on a daily chart, then manage the trade on the daily chart as well, and stick to the daily chart. Don’t switch to faster time frames. Don’t do that. Just stick to the daily chart and don’t be tempted to micromanage the trade on faster time frames.

Another mistake is securing the trade by moving the stop-loss too soon. Let the trade breathe.

The next mistake is expecting five trades or high risk-reward ratio trades every time. If you guys are using higher risk-reward ratios, like five or more, you need to be okay with the fact that there will be a lot of losers. The win rate will be quite small. Don’t expect to have many winners with a high risk-reward ratio. This is simply not possible. This is math. This is probability. There’s not much you can do about it. You need to be okay with that.

The last mistake is trading the second and third test of a level as if it were the first touch. In other words, you only want to trade the first touch.

I hope you guys liked the webinar. If you want to dig deeper, I have two next best steps for you. First, if you guys are from the US, get the book. I’ll send it for free. I’ll even cover the shipping. Just fill in the form below, and I’ll send it over. Second, if you are serious about trading, then I recommend getting the full course and custom indicators, which are available on my website. So, thanks for watching, and I’ll see you next time. Until then, happy trading.