Q/A: VWAP Trading Strategies Webinar

There were quite a lot of questions during my latest webinar dedicated to VWAP. You can read those questions and my answers here.

If you missed the webinar or if you would like to watch it again, then here is the recording:

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DATA

Q: What is the source of volume data on forex?

A: Forex is decentralized and this means we will never have the full and complete picture like if we were trading stocks, futures,… (these are centralized). The best way to get good volume data is to get it from a big data provider. Like for example the FXCM. NinjaTrader uses this data provider as the default for their forex data feed.

Using data from a big data provider gives us a pretty big sample of the market. I compare those forex volumes to future currencies (centralized) every day and I must say that their forex data is VERY CLOSE to the futures data. In most cases identical. This way I know I can depend on it.

Q: Are forex volumes reliable?

A: Quite surprisingly yes! If you have a good data feed like FXCM or Kinetick.

Q: Whose volume data is used in FOREX trading for the VWAP indicator?

A: I use FXCM data feed or Kinetick data feed. Both provided by NinjaTrader as a standard data feed in their NT8 platform.

Q: Do you use Tick data?

A: My software can use Tick data but it is not necessary. You can use for example 5-10 second data. The result you will see will be the same only it won’t need so much computer power.

SETTINGS

Q: Can I set the VWAP on a different basis – say a rolling 2hrs?

A: Sorry, my VWAP does not have this function. It was built the way I personally prefer to use it in my trading.

Q: How long do you wait for VWAP to develop when day trading?

A: 5 hours.

Q: That means if using Daily and trading intraday waiting the first 5 hours of trading, you have to discount almost the entire regular trading session each day.  No?

A: Yes, but these 5 hours are in the very calm Asian session, where I would not want to trade with VWAP anyways. For this reason it doesn’t bother me too much. Also, you can trade using the VWAP lines from previous day (dotted lines in my VWAP software).

Q: I cannot find the VWAP on the indicators of Ninja Trader. How can we add it to the chart?

A: VWAP is not a standard indicator you would find in NT8 trading platform. You can purchase this indicator or get it as a free gift if you enroll in my Elite Pack here: https://www.trader-dale.com/volume-profile-forex-trading-course/

Q: Must the computer be left on overnight for longer-term VWAPs to develop?

A: No need for that. My indicator will pull the historical data automatically.

Q: Does the time start overnight?

A: VWAP starts to calculate at the market open.

Q: My understanding is that VWAP uses the cumulative volume at price for its calculation, hence it will display same value on chart regardless of time frame or type of chart use eg. tick chart, renko, candle etc. Is this correct? 

A: Yes, you are right it will display the same values no matter what type of chart (or time frame) you use.

Q: Can I use VWAP with Renko charts?

A: Yes, you can use it with any kind of charts.

TIME FRAME

Q: What time frame is recommended for VWAP?

A: A cool thing about VWAP is that it is not dependent on time frame. It will look the same no matter if you use it for example on 15 Minute chart or on 60 Minute chart. My favorite setting is 30 Minute chart for Daily VWAP, 60 Minute chart for a Weekly VWAP, and a Daily chart for a Yearly VWAP.

Q: Do you only use 30 and 60 minute candles?

A: Yes, I use only 30 and 60 minute candles (for my intraday analysis). For me the most important thing is VOLUMES, and those don’t change with time frame.

Q: When the trades are in 2 Minute time frame, what is the recommendation of the market waiting?

A: I suppose you want to use the Daily VWAP for this. So, for the Daily VWAP it is 5 hours. This does not actually depend on the time frame you use (whether it is 2 Minute, 15 Minute or 60 Minute, …). What is important that you use Daily VWAP. This is what determines your “waiting period”.

Q: Can I use this setup in a 2 minutes chart?

A: Absolutely!

 Q: Why not have the calculations be continuous rather than break each day or each week? So for Daily settings use the past 24 hours of data, for a week the past 7 days of data etc.

A: The continuous would cause that for example the VWAP and deviations get really far from the current price and you would not have too many trading opportunities. What I want to reflect is the current situation.

TAKE PROFIT & STOP LOSS

Q: Where do you have your Stop Loss?

A: There are two ways I prefer to use to set my SL. First is a simple Fixed SL. This is around 10-20% of average daily volatility (measured by the standard ATR indicator). For example, if EUR/USD had average daily volatility 100 pips, then SL would be 10-20 pips.

The other way to determine your SL is to place it in a low volume area. You can learn about this approach in my Swing Trading webinar (you can apply this approach to intraday trading too):

https://www.trader-dale.com/swing-trading-with-volume-profile-webinar-learn-to-trade/

Q: Do you trail on a smaller time frame?

A: You can have a fixed Take Profit (fixed amount of pips) or you can take your profit at VWAP line. A third way is to take profit just a few pips before the price hits a heavy volume area standing in the way. I was talking about this in my Swing Trading webinar (you can apply this approach to intraday trading too):

https://www.trader-dale.com/swing-trading-with-volume-profile-webinar-learn-to-trade/

Trailing is also an option (I don’t do it though). Especially with the VWAP Trend Setup.

Q: Can I use the 2nd std deviation as a Take Profit in your VWAP Trend Setup?

A: You, can do it like this or you can use any of the methods I mentioned in my previous answer. Neither of them is better or worse. It is mostly a matter or what you prefer to use. For me personally it is a volume-based Take Profit.

OTHER

Q: What’s the difference between Dale’s and NT’s indicator?

A: I am not sure if NT VWAP can also be set as a Daily, Weekly, Monthly and Yearly. This important setting allows you to adjust your VWAP to your trading style (intraday, swing, long-term investing, …). My VWAP also comes with its own Video Course where I show you in detail how to use it. Also the price of my indicators is lower than NT license.

Q: Can you talk about when big money activity is hidden by off exchanges like Dark Pools?

A: When big money is traded in a Dark Pool, then it does not show in the data feed we use to do our trading analysis. I don’t think there is an easy way for a retail trader like us to track Dark Pool activity. In my trading career, I have never really felt like I am missing something by not being able to get Dark Pool data and volumes though…

Q: Does the Volume Profile and VWAP both work with NT7? I am still using 7.

A: My VWAP is only for NT8. I have Volume Profile for NT7 and I can give you that before you upgrade to NT8 (just shoot me an email to contact@trader-dale.com).

Q: Is the program CPU usage intensive?

A: It does not need too much CPU power. I runs smoothly even on older laptops.

Q: How do you determine breakout from these levels?

A: I don’t trade breakouts. I never really liked them nor did I found any edge in them.

Q: Do you just trade the currencies? Forex or currency futures on the exchange?

A: I trade currencies and some futures markets as well (ES, CL,…). But not as much as forex.

Q: What are the two Volume Profiles on your charts?

A: I use two types of Volume Profiles.

First, a Fixed Volume Profile (I use Fixed Daily and Weekly profiles for intraday trading, and Fixed Yearly Volume Profile for Swing Trading).

The second is the Flexible Volume Profile. I use this to look into specific areas in my charts. I use it for intraday trading as well as for swing trading.

You can learn more about those Volume Profiles here:

Q: Do these indicators (Volume and VWAP) only work with NT?

A: I currently don’t have VWAP for MT4 (but I plan to look into this and have it coded). Then I will probably give it for free to people who have already purchased the NT8 VWAP from me.

I have Volume Profile for MT4. You can check it out here:

That’s it guys! Thanks so much for your questions. I hope you liked the webinar!

If you have any more questions you can shoot me a message to contact@trader-dale.com.

Happy trading!

-Dale

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Q/A: Volume Profile Pack For NinjaTrader 8

Features

Licensing

How can I get the Volume Profile Pack?

Can I get a FREE trial before I buy?

  • Yes, there is a free 5-day trial. Simply install the Volume Profile Pack and it will work for free for 5 days (with all functions available).

In the volume and license profile guide, you mention that you require the Machine ID. Does that mean it would only work on that machine?

  • Yes, each machine ID is unique, and the profile only works on the computer (s) that I authorize. If you have more than one computer, I can also authorize them (for free).

What do I do if I want to operate using more than one machine?

  • Send me the machine ID of the other computer that you want to authorize and I also authorize it (for free).

What happens if I change my computer?

  • When you change your computer or update it, you have to send me the new machine ID so that I can authorize your computer again (free of charge).

How to Start

I bought the volume profile package, what do I do next?

  • First you have to install the NinjaTrader 8 software . You can get it for free here: https://ninjatrader.com/
  • Then you have to install the Volume Profile Pack . The installation file can be downloaded here: TD’s Volume Profile Installer
  • Once the installation is complete you have to send me the machine ID by email that I will then use to authorize your computer to use the TD volume profile pack.  To find the Machine ID, go to the control panel of NinjaTrader and press Help → About … (Help → About …)

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  • Then I will authorize your computer to use the TD volume profile pack. This will take a few minutes or a few hours, but typically no more than one business day. I will let you know by email when your computer is ready to use the TD Volume Profile Pack.

Data

  • Do I need CME futures data for NinjaTrader to accurately pick my levels? My concern here is what additional costs will I need to consider?

    • You don’t need futures data! Even though forex is not a centralized exchange, forex data from a big broker (for example FXCM) is surprisingly accurate, and you can rely on them in your analysis. This is why there is no additional cost. You can get FXCM free data feed here: FXCM free data feed. You can also try futures data and compare. There is a free demo (email bound, time-limited) here: CQG futures – free demo.

    How can you rely on FX volume seeing there is no central exchange. Won’t different brokers show different volumes?

    • You are right; different forex brokers show different volumes because the forex market isn’t centralized. Best thing to do is to use big forex broker (for example FXCM). Big brokers usually have quite reliable and accurate volume data. I use FXCM forex data, and I must say that when I compare this data to futures data (CME), it is very close.

    I noticed that the FXCM data is a trial limited to 30 days so I am not sure what happens after this period. 

    • You can get an unlimited demo here: (demo) of data without FXCM limitations .
    • For some users it doesn’t work and the data trial is limited. Here is a guide how to renew the datafeed for free (the video refers to NinjaTrader 7, but the process is very similar to NinjaTrader 8)

I downloaded the NinjaTrader8 platform and it opened without my entering the username and password. I clicked on File and then on Connect, but it did not show FXCM as one of the options. So how do I connect with the FXCM data source?

  • Go to this page:  (demo) without limitations of FXCM data and register there to obtain the data (free and without time limitations). After that you will receive your credentials. Then go to the platform of NinjaTrader 8 and click on Connections-configure and there you can add FXCM data and complete the username and password included in the email you received. After that you will be able to connect with the data.

My FXCM data expired after the 30-day trial period. What I can do?

  • Some users have this problem. I suggest that you request a new FXCM data using this link:  (demo) data without limitations of FXCM
  • You probably need to use a different email address
  • After you have received your new username and password, go to your NinjaTrader 8 platform and click on:  Connectionsconfigure and there you can change your FXCM data configuration. Complete the username + password included in the email you received. After that you will be able to connect to the data again.

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Other Platforms / Brokers

Does this indicator work on a standard MT4 platform?

  • The Volume Profile Pack works only with NinjaTrader 8. The standard MT4 platform does not have tick volume data (which are the most accurate).

Can I still use my broker and my MT4 platform?

  • Yes you can! You only have to do your analysis in NinjaTrader 8. Then you can execute your trades on your MT4 platform or with any other broker or trading platform that you like.

Do I need to use an additional broker that NinjaTrader recognizes to be able to continue?

  • You do not need an additional broker. Just do your analysis with NinjaTrader 8 (free), and then execute your trades with your current broker, as you usually do.

If you have any questions, please send an email to contact@trader-dale.com and I’ll be happy to help. I will also answer the new questions we receive in this Q/A section.

All the best in your trading!

-Dale

Q/A: TD’s Flexible Volume Profile

I received a lot of very good questions regarding my new Flexible Volume Profile. I took the most common questions and created a question and answer post, with the most common questions answered in detail below. You will also find many answers to your questions in the video 8-minute video listed below.

LICENSING

How do I get the profile?

In your volume profile and licensing guide, you state that you require the Machine ID. Does this mean it will only work on this machine?

  • Yes, every Machine ID is unique, and the profile will only work on the computer (s) I authorize for you. If you have more then one computer, I will authorize them as well (for free).

What to do if I want to operate on more than one machine?

  • You send me Machine ID of another computer you want to authorize. I will authorize this one as well (for free).

What happens when we replace our computer?

  • When you replace or upgrade your computer, you need to send me the new machine ID so I can authorize your computer again (for free).

If I am no longer a member of your Pro Forex Course, will the profile still work?

  • Yes. The license for the profile is a lifetime license. When you buy the profile, it is yours forever, no matter if you are a still member or not.

GETTING STARTED

I bought the Flexible Volume Profile. What do I do next?

  • Follow steps in those two videos:

DATA

Do I need CME futures data for NinjaTrader to accurately pick my levels? My concern here is what additional costs will I need to consider?

  • You don’t need futures data! Even though forex is not a centralized exchange, forex data from a big broker (for example FXCM) is surprisingly accurate, and you can rely on them in your analysis. This is why there is no additional cost. You can get FXCM free data feed here: FXCM free data feed. You can also try futures data and compare. There is a free demo (email bound, time-limited) here: CQG futures – free demo.

How can you rely on FX volume seeing there is no central exchange. Won’t different brokers show different volumes?

  • You are right; different forex brokers show different volumes because the forex market isn’t centralized. Best thing to do is to use big forex broker (for example FXCM). Big brokers usually have quite reliable and accurate volume data. I use FXCM forex data, and I must say that when I compare this data to futures data (CME), it is very close.

I noticed that the FXCM data is a trial limited to 30 days so I am not sure what happens after this period. 

  • You can get an unlimited demo here: Unlimited FXCM data (demo).
  • For some users it doesn’t work and the data trial is limited. Here is a guide how to renew the datafeed for free:

I downloaded NinjaTrader 7 platform, and it opened up without me entering the username and password. I clicked on File and then Connect, but I did not have FXCM as one of the options. So how do I connect to the FXCM data-feed?

  • Go to this page: Unlimited FXCM data (demo) and register there to get the data (free and not time-limited). After that, you will receive your credentials. Then you go to your NinjaTrader platform and click: ToolsAccount Connections and there you can add FXCM data. After that you should be able to connect through it.

OTHER PLATFORMS/BROKERS

Will this indicator work on a standard  MT4 platform?

  • TD’s Flexible Volume Profile works only with NinjaTrader 7. The standard MT4 platform doesn’t have tick volume data (the most precise data).

Can I keep my current broker & MT4 platform?

  • Yes, you can! You only need to do your analysis on NinjaTrader 7. Then you can execute your trades on your  MT4 platform or with any other broker and trading platform you like.

Do I need an additional broker that NinjaTrader recognizes to continue?

  • You don’t need any additional broker. You simply do your analysis with NinjaTrader 7 (for free), and then you execute your trades with your current broker. Just like you are used to.

If you guys have any questions, please shoot me an email to contact@trader-dale.com and I will be glad to help you. I will also answer the new questions I receive in this Q/A section.

If you would like to get my custom made Flexible Volume Profile and to learn to trade with it on a daily basis, the best way to do it is to join me in my private trading course where you will learn & trade with me every day.

Do you have plans to support NinjaTrader 8? Does it work on NinjaTrader 8?

  • Current version works only with NinjaTrader 7, but we are currently developing a brand new Flexible Profile for NinjaTrader 8. Owners of NinjaTrader 7 version will receive the new NinjaTrader 8 version as a free gift.

 

Happy trading!

-Dale