CAD/JPY: Volume Profile & Price Action Analysis

Today, I will do an intraday analysis of CAD/JPY. There are quite a lot of interesting things to point out here!

There was a strong trend movement on CAD/JPY yesterday. If you are reading my Market Commentary articles from time to time, then you know that I like to look for significant “volume clusters” within such trends.

Trend analysis with Volume Profile

What I do is that I use my Flexible Volume Profile and I stretch it over the whole trend area. Then I look for places with heavy volumes within the trend (= volume clusters).

In this case, there was a strong volume cluster created around the middle of the trend movement.

A volume cluster in an uptrend tells us, that the buyers who were pushing the price upwards into the trend were adding to their long positions there – at the volume cluster.

How does this information help us? It helps us because when the price makes it back into this volume cluster area again, the buyers who entered their long positions there are likely to become active and to push the price upwards again.

This is why such a volume cluster represents strong support. In this case, the support is around 79.73.

CAD/JPY; 30 Minute chart:

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Price Action setup

There is also another piece of information that confirms this 79.73 support.

It is a simple Price Action setup which tells us that a breached resistance becomes a support. This is, in fact, my favorite Price Action setup.

As you can see from the picture below, the price already reacted to this 79.73 zone in the past. It worked as a resistance.

Now, when the price went through this resistance, it became a support.

CAD/JPY; 30 Minute chart:

A significant Volume Accumulation area

Another significant area on CAD/JPY is the place from which the new uptrend started.

Strong trends usually start from a rotation and in this case, it was also like that. The reason for this is that the big trading institutions need to get ready for a big move.

They don’t enter their positions like you and me with one click. They need to accumulate their massive positions without being noticed. The best place for this is in a rotation.

When the price makes is back into an area where they accumulated their longs, those big guys are likely to defend their longs. They do that by pushing the price upwards. That’s what makes this area (79.46) a strong support.

An ideal way to identify such an area is to use my Flexible Volume Profile to look for the volume accumulations within rotations which were followed by a trend.

I call this a “Volume Accumulation setup” and you can learn more about it in my Volume Profile book, which you can download for FREE by clicking the banner below:

Weekly Point of Control (POC)

Apart from the Volume Accumulation setup, there is also one more thing confirming this 79.46 support.

It is the Point of Control (POC) of the Week. A Weekly POC is best visible on a Fixed Weekly Volume Profile (you can get this as a part of any educational pack from HERE).

It shows where the heaviest volumes were traded throughout the whole week. In this case, it nicely aligns with our support at 79.46 as the support lies EXACTLY at the Weekly POC.

Whenever you see a strong trend starting from a Weekly Point of Control, you should pay attention to it. Such POC often works as an important place which the big trading institutions keep an eye on.

The reason is that this is usually the place where they entered most of their trading positions.

CAD/JPY, 60 Minute chart with Weekly Volume Profile:

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

Happy trading!

-Dale

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EUR/USD: Volume Profile & Price Action Analysis

In my yesterday’s analysis, I talked about combining Volume Profile (the Trend Setup) with Price Action (Support→Resistance Setup) to create a powerful two setup combo.

If you missed it then you can read it here:

Volume Profile & Price Action Setup Combo

Today, I will show you a very similar example, because practice makes perfect.

This one is on my favorite trading instrument EUR/USD.

Volume Accumulation Setup

There was a very nice and tight price rotation yesterday. From that rotation, a strong buying activity started. This buying activity resulted in an aggressive 100 pip movement.

This strong up move indicates that there was some serious buying going on inside that rotation. Buyers were entering long positions there slowly and without being noticed.

After they had entered their longs, they started pushing the price upwards – which snowballed and resulted in a strong uptrend.

For me, the most important thing here is to know, where the buyers entered most of their longs.

I used my Flexible Volume Profile to look inside that rotation area. As you can see from the picture below, the heaviest volumes got accumulated at 1.1443.

When the price reaches this area again at some point in the future, I expect that the buyers from this area will become active again and that they will push the price upwards from there again. This is why I think the 1.1443 will work as strong support.

I call this the Volume Accumulation Setup and you can learn more about it for example in this recording of my webinar about trading with Volume Profile:

Volume Profile Webinar

EUR/USD, 30 Minute chart:

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Price Action

Apart from the volume-based setup, there is also the same setup I talked about in my yesterday’s article – the Resistance → Support setup (CLICK TO LEARN MORE)

As you can see from the picture below, the price reacted very nicely tho this 1.1443 area in the past. There were several reactions and every time the price bounced off this level. It worked as a strong resistance.

Now, when this resistance got breached, it became a support.

This is an old Price Action setup, and one of the few I like to use. I rarely trade it as a standalone setup but I really like to trade it when it is in confluence with Volume Profile, like in this case.

EUR/USD, 60 Minute chart:

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

Happy trading,

-Dale

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Volume Profile & Price Action Setup Combo

In today’s trade analysis, I would like to show you my most favorite combination of two trading setups. It is a combination of a Volume Profile setup and Price Action setup.

Let me first talk about the volume-based setup.

Trend setup (Volume Profile setup)

The AUD/JPY went into a strong buying activity yesterday and the price continued to move upwards since then.

When there is an uptrend like this, then what interests me the most is how the volumes were distributed inside that uptrend.

The easiest way how to find out is to use my Flexible Volume Profile tool and move it over the whole uptrend area.

In this case, my Volume Profile revealed a significant volume cluster around the middle of the uptrend.

It is pretty likely that buyers who drove the price upwards were adding to their long positions there. It is a significant zone for them because it is the entry point of a lot of their positions.

For this reason, if the price makes it back into this area again, those buyers will want to defend their long positions.

They will do that by placing aggressive long Market orders and they will try to push the price upwards again.

That’s why I think this area (75.28) is likely to work as a strong day trading support zone.

AUD/JPY; 30 Minute chart:

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Resistance → Support (Price Action Setup)

The second piece to my favorite setup combo is a Price Action setup which says, that a breached resistance becomes a new support.

As you can see in the chart below, the AUD/JPY already reacted to the 75.28 zone in the past. This level worked as a strong resistance.

Then, when the price went through this level today, the resistance became a support.

It is as easy as that! If you would like to learn more about how to trade with this simple setup, you can do so here:

Support→Resistance Price Action strategy EXPLAINED

Below is AUD/JPY; 60 Minute chart:

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Want to learn more?

As you can see, there are two trading setups which both confirm the strong support around 75.28 area.

The first setup is called the Trend Setup and it is based on volumes, and the second setup is called Resistance→Support setup and it is based on Price Action.

You can learn more about both those setups in my FREE Volume Profile book which you can download by clicking the banner below.

Happy trading!

-Dale

EUR/USD: Day Trading Volume Profile and Price Action Analysis

In my yesterday’s article, I did an intraday trading analysis of EUR/CAD. You can check it out here if you missed it:

EUR/CAD: A Complete Volume Profile, Price Action, and VWAP analysis

Today’s example will be a bit similar as there will also be Price Action and Volume Profile confluences.

EUR/USD – Recent development

Let’s get to it and have a look at what happened on the EUR/USD yesterday.

The most important thing on EUR/USD yesterday was a strong buying activity/uptrend which started in the EU session.

When there is an uptrend like this, I am always interested in how the volumes were distributed within the trend area.

Volume Clusters

What I look for are significant and nicely visible Volume Clusters.

In this case, there was a nice Volume Cluster created in the middle of yesterday’s uptrend.

A Volume Cluster which is created within an uptrend tells us, that there were buyers adding to their Long positions there. Those are the volumes we see in the Volume Cluster.

From that place the buyers pushed the price further up.

What happens when there is a pullback to this Volume Cluster area at some point in the future?

There is a solid chance that the buyers who entered their Longs there will become active again and they will defend this area.

As a result, that should push the price upwards again (it will work as a Support).

Check it out in the 30 Minute EUR/USD chart below:

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Price Action setup

There is also one more thing I wanted to show you about this Support. It is the same Price Action setup I talked about in my article yesterday.

The basic logic behind this setup is that a breached Resistance becomes a Support (and vice versa).

The picture below shows the same chart, only with 60 Minute time frame and it’s little bit zoomed out.

What I marked there for you are two strong selling reactions to the 1.1376 area I spoke of earlier.

Those two reactions tell us that this area worked as a strong Resistance in the past. For this reason, when this Resistance got breached yesterday, it became a Support.

This is quite an old (but working) Price Action setup which I like to use.

So, all in all we have volume-based Support (based on Trend Setup), and at the same area also a Price Action setup.

I really like a combination of those two setups. Trades based on this combo have a really good chance of success!

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

Happy trading!

-Dale

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EUR/CAD: A Complete Volume Profile, Price Action, and VWAP analysis

Today, I will do a day trading analysis of EUR/CAD using Volume Profile, Price Action, and VWAP.

I usually start doing my intraday trading analysis using only a simple 30 Minute Price Action chart.

The things that I look for first, are rotation areas (sideways price channels) and strong trends.

Today, I saw both on EUR/CAD. There was a rotation and from that rotation a strong uptrend started.

Volume Profile analysis

Now it is a time to use Volume Profile to see how the volumes were distributed there.

As you can see from the picture below, I stretched my Flexible Volume Profile over the whole rotation area (and also through a part of the trend, but that is not really important).

The Volume Profile showed me how the volumes were distributed there. This way I was immediately able to tell that there were massive volumes traded in that rotation area.

The most important thing in such a heavy volume zone is always the Point Of Control (POC).

POC is the place where the heaviest volumes were traded = the peak.

In this example, there was a rotation followed by an uptrend. This means that buyers were entering their Long positions in that rotation (creating those  heavy volumes we see on Volume Profile).

Then those buyers started an aggressive buying activity (using Market orders) and they pushed the price upwards (into the uptrend).

When the price makes it back into the heavy volume zone again (sometime in the future), I expect that those buyers who were building up their Long positions there will become active again and that they will push the price upwards from there again.

That’s why I think the POC at 1.5369 is a strong support.

Price Action analysis

Another thing to notice is visible when you zoom out the chart a bit and use higher time frame (I used 60 Minute).

It shows that the price was reacting really nicely to this 1.5369 area before. Whenever the price reached this area, it bounced off it. It worked as a strong Resistance.

Now, when the price went through this Resistance, the Resistance turned into a new Support.

This is my favorite Price Action setup. You can read more about it in this article:

PRICE ACTION: Support becoming a Resistance (and vice versa)

This Price Action setup gives me a nice confirmation of the Volume-based setup I talked about earlier.

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VWAP analysis

There is also one more bonus to all this. It is visible on the VWAP indicator.

Below is the same 60 Minute chart, but this time let’s have a look at the VWAP.

My most favorite VWAP for intraday trading is the Weekly VWAP and its Deviations (the “grey lines”).

Those “grey lines” work as Supports and Resistances on their own. Currently, the lower 1st Deviation is almost at the support I talked about (1.5369 area).

This means that also the VWAP indicator tells us that there is a support in that 1.5369 area.

If you would like to learn more about VWAP trading setups, you can do so here:

VWAP Trading Setups

Below is the 60 Minute chart with the 1st VWAP Deviation:

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Conclusion

As you can see, we found a trading level which is confirmed by three completely different trading strategies/tools.

The 1.5369 Support showed on Volume Profile, on Price Action, and also on VWAP. That’s how I like it. The more confluences, the better!

Can this level fail? Sure it can! Even if we had all the confluences we could think of it could still fail. The market could change its sentiment dramatically and the price could just shoot past this support without any reaction. Things like this do happen.

There is no strategy that would work 100%, but doing a proper analysis like this one, using multiple confluences with different trading approaches/indicators makes the chance of a successful trade higher.

That’s what trading is all about. Having the probability on your side means having an edge. This edge helps you being consistently profitable in the long run.

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

Happy trading,

-Dale

NZD/CAD: Volume Profile Swing Trade Analysis

Today, I will do a swing trading analysis of NZD/CAD.

For my swing trading, I prefer to use the Daily time frame, so today’s analysis will be on the Daily.

NZD/CAD has formed a new uptrend. Within this uptrend there are two significant volume zones. In this article, I will talk about the first one which was formed around 0.8769 level.

Volume Profile analysis

The reason, why this zone is significant for me is that there is my “Trend setup“.

As the price was progressing upwards aggressively, it stopped for almost a month and there was a tight price rotation.

From that rotation, the price went upwards again and it has been rising since the start of this month.

When I used my Flexible Volume Profile and looked into that uptrend, I saw that there were massive volumes accumulated in that rotation which took place in June.

From that rotation, the price continued upwards again. This means that buyers were adding to their long positions there (in that rotation) and then they started pushing the price upwards again (with aggressive Market orders).

When there is a pullback to this area again (0.8769), I think that those buyers will defend their long positions and that they will try and push the price upwards again.

That’s why I think this 0.8769 area will work as a strong support.

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Price Action analysis

There is also a nice Price Action confirmation of this zone. If you look at the picture, you can see that the price made two strong reactions of this area in the past. I marked them in the picture as well.

These rejections tell us, that this area worked as a strong Resistance. When the resistance got breached a few days ago, then it became a Support.

This is an old (but good) Price Action setup I like to look for. You can learn more about it here:

Support→Resistance: Price Action Setup

In this case, this setup supports the volume-based “Trend Setup“.

VWAP analysis

There is also one more thing to this puzzle. It is a nice confluence with VWAP.

For my swing trade analysis, I use the Yearly VWAP and its 1st deviations. Simply put, these deviations (grey lines) represent supports and resistances.

Currently the 1st deviation is below the 0.8769 support, but if the price stays above the level for a few more days, then the deviation is likely to move upwards (towards the 0.8769 support).

If the 1st deviation is around this support when the price makes a pullback there (to 0.8769), then it will be another confirmation of the level.

A third one! We would have the Volume-based setup, Price Action Setup, and VWAP setup.

That’s how I like to trade – with confluences like these! The more confluences, the better!

You can learn more about VWAP in this Beginners guide here:

Beginners Guide to VWAP

I hope you guys liked today’s analysis!

Let me know what you think in the comments below.

Happy trading,

-Dale

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CAD/JPY: Volume Profile Analysis

Price Action Analysis

Today, I will do an intraday analysis of CAD/JPY.

What caught my eye when I went through the charts in the morning, was that there was a rotation from which strong buying activity started.

This usually means that there were buyers entering their long positions in that rotation. After they have entered their longs, they started aggressive buying to push the price upwards – to make money on the longs which they placed in the rotation.

I am always interested when I see Price Action like this.

*I call this a Volume Accumulation setup and you can learn more about it here: Volume Profile Setups

Volume Profile Analysis

My next step was that I used my Flexible Volume Profile to look at how the volumes were distributed yesterday.

The heaviest volumes were in the rotation area, and the heaviest volume peak (where most of the trades got placed) was around 76.38.

This is where the buyers placed most of their longs. This is a support they will want to defend.

So, if the price makes a pullback to this area I think that those buyers will be defending their longs and they will start aggressive buying again to push the price upwards again.

Weekly POC

A nice addition to all that is that this support is also a Weekly POC (Point Of Control). This means that the heaviest volumes were traded at this price level this week!

You can see that on a 60 Minute chart with a Weekly Volume Profile below:

Volume Cluster at 76.56

As the price was moving upwards, more buyers were jumping in to make money on that up-move.

Most of them jumped in around 76.56. You can see that on the Flexible Volume Profile – there is a significant volume cluster around the 76.56 area.

When the price makes it back to this area again, it is pretty likely that those buyers will want to defend their longs which they placed in that Volume Cluster (76.56 area).

In order to do that they will need to start buying again – aggressive buying! This should drive the price upwards again and this is what makes this level a strong support.

Resistance → Support

There is also one nice confluence to the Volume Cluster. If you look at the picture above, you can see that the 76.56 level also worked as a resistance in the past. The price got rejected there aggressively.

The price went through this resistance yesterday, and it turned into a support. This is an old but pretty effective Price Action setup which I really like to see in a combination with the Volume Cluster – like in this case.

You can learn more about this setup here:

Resistance → Support (Price Action Setup)

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

Stay safe and happy trading!

-Dale

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A Setup as Simple as ABCD

Today, I would like to show you one of my favorite Price Action trading setups called AB=CD Setup.

You can use this setup both for intraday and for swing trading.

In this post, I will show you the AB=CD setup on a Daily chart, which I use for my swing trade analysis.

How does the strategy work?

The AB=CD setup is based on the market psychology and on the fact that the price does not usually move without corrections (pullbacks).

I think I best explain this with a picture.

*Example is on AUD/CAD; Daily chart:

How to use it? Exact steps:

First you need to find significant swing points. I will call them A and B. Then you need to see a correction which goes at least to 50% of distance from A to B.

In this example, the distance from A to B is 319 pips. So, C must be a swing point, at least 160 above B.

You can use standard Fibonacci tool to measure the distances.

After identifying C, you need to look for D.

D is the same distance from C as A is from B. In this case 319 pips.

So, what you do is that you simply move the Fibonacci tool you already have in your chart so it begins in the point C.

Important thing is that you just move the fibo. DON’T CHANGE THE DISTANCE it measures (the 319 pip distance).

This will point you to the point D, which will mark your resistance.

Below is the same chart, with Fibonacci shifted so it shows C and D.

The reason this setup is called AB=CD is because the distance from A to B are the same as distance from C to D.

D marks the support you can go long from.

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Current situation on AUD/CAD

What you saw in the previous example was a scenario that already happened the last year.

Lets now have a look at a current price development on the same trading instrument (AUD/CAD; Daily chart).

Currently, there is again the wave-like movement and thus we can use the AB=CD method.

This time I draw everything into one chart. Again, distance from AB=CD.

The point D marks a support (at 0.8804). When the price reaches it, there will be a high probability, that the price will turn there and go at least temporarily upwards.

Trading AB=CD as a standalone strategy

You can trade this setup as a standalone strategy but I personally prefer to have some more confluences with other strategies which would confirm the support/resistance levels this AB=CD method shows.

It would be best if there was some significant volume area created around the point D in the past.

In this case there is nothing like this because AUD/CAD is at it’s 10 year lows.

Still, the AB=CD setup on a Daily chart is a strong signal and I think we can expect a reaction there.

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Want to learn more about AB=CD setup?

You can learn more about this setup in the new Video Course which is included in the Learning Pack. You can get it here:

Dale’s Volume Profile Education

Happy trading!

-Dale