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Video Transcript:
Hey everyone, it’s Dale here. In this video, I’ll show you the strongest Volume Profile levels to trade this week. Let’s get started. What you see before you is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. Today, I want to take a look at a couple of swing trades. That means we’ll be looking at the daily time frame. Let’s start with AUD/CAD. Here is a daily chart of AUD/CAD, and what I want to talk about is a newly formed support at 0.9795, this blue line. Let me show you the reasoning why I think that this is a strong support where the price will react. If you take a look just at the price action, you can see that the price was moving upwards, then there was this little rotation, and then the price continued to move up. If you use Volume Profile over this area, then you can see that in this rotation, massive volumes were traded. This is a sign that strong buyers were active here, and they were adding to their long positions as they were pushing the price upwards. The level that I have here is at the beginning of this heavy volume zone, and I think that if there is a pullback at some point in the future, then the buyers from here will want to defend this place. We can see on the Volume Profile that it’s clearly important for them because they placed so many trades there, and that’s why they’ll want to defend this place and push the price upwards from there. Okay, so this is why I think this is a strong level to trade from. Don’t forget, we are trading swing trades, so we need to set the stop-loss and take profit according to the daily chart. That means that you want to place the stop behind the heavy volume area, and I decided to place the stop here, below the low of this candle, which is also behind this heavy volume zone. Okay, so this will be the stop, and take profit needs to be at least with a risk-reward ratio of one. So it needs to be at least somewhere here, or actually a little bit higher. But, you know, I’ll try to get more out of this. But this is the minimum take profit because this is roughly a risk-reward ratio of one. Now, there’s one additional thing that I forgot to mention, and it’s a thing that adds strength to the level because it’s not based just on this volume cluster, but also on the first deviation of the yearly VWAP right here. So, as you can see, the deviation is very close to the level, at least at this moment. So if the pullback occurs soon, then the first deviation should still be close and should add strength to that level because when the price is trending, it likes to react to that first deviation. You can see it, for example, here or here, and hopefully here as well. All right, so that’s for AUD/CAD. The next one is on CAD/JPY. Let’s take a look at it.
Here is a daily chart of CAD/JPY, and the level that I want to talk about is a resistance, this one at 116.58. This resistance is based on this strong sell-off a couple of days ago. If you look into it with Volume Profile, then you can see that there were heavy volumes accumulated before that sell-off. That means sellers were present here, accumulating their shorts, and then they manipulated the price to move downwards. Right? But this heavy volume zone is still important because it shows a place where sellers were active and which they will most likely want to defend in the future. So when the price makes a pullback to this level, to the beginning of that heavy volume zone, it’s likely that there will be a reaction from those sellers. Right now, it’s not just about this Volume Profile heavy volume zone here, but it’s also about a huge Fair Value Gap. That’s from Smart Money Concepts. This is the Fair Value Gap, and I like to trade from the beginning of the Fair Value Gap. In this case, it is here. It exactly aligns with our level and that heavy volume zone. All right, so what we need to do now is just wait for the pullback, and if it occurs, then take it from there. Again, the stop needs to be behind the heavy volume zone, ideally behind or above a significant swing point. In this case, this is the significant swing point. So my stop will be here, and take profit needs to be taken according to that. So at least risk-reward one. So at least here, right? So that’s for CAD/JPY. Let me now switch to USD/JPY. Here, there’s another strong level, another strong resistance. It’s a bit similar to the previous one. It is this resistance at 159.49, and what we have here is a massive sell-off a couple of days ago. Before that, heavy volumes were traded. If you take a look at this whole rotation, then you can see that really heavy volumes were traded here. Actually, if you look at this profile on the left, then it shows that there was a yearly Point of Control here because this yearly Volume Profile shows how volumes were distributed throughout the whole year, and this is where the volumes were the heaviest. So that’s a yearly Point of Control, which aligns nicely with those volumes here. Also, the level aligns with a massive Fair Value Gap right here, which begins at this level. Right? One additional thing is the first deviation of the yearly VWAP. This gray line is very close to our level, and it adds strength to it. So if the price hits this level like this from below, we’ll have confirmation from the Volume Profile, from the yearly Volume Profile, from the first deviation of the yearly VWAP, and from the beginning of the Fair Value Gap. Everything is aligning perfectly and pointing to this level. That doesn’t mean that the level can’t fail. It can fail. But I like the level very much because a lot of confluences are there. A lot of signals, in other words. The stop will be here at 160.73, which is behind the heavy volume zone and at the top of this swing point, and take profit needs to be at least here. So we are trading with risk-reward one. Okay, that’s 158.26.
Now, if you guys are interested in learning more about Volume Profile trading, I recommend visiting my website. This is it, trader-dale.com. And if you click this button right there, then it will point you to my trading courses and custom-made trading tools. All right, so thanks for watching the video, and I’ll see you next time. Until then, happy trading. Now, before I wrap the video up, I’d like to announce the winner of a contest we had last time. The prize of the contest was my custom-made Volume Profile and VWAP indicators for the TradingView platform. Right now, on your screen, you can see the name of the person who won the contest. So congratulations to the winner. What I’ll do next is another contest for next week. The only thing that you need to do to participate in this contest is leave a comment below this video, which I’ll publish on YouTube, and next week, I’ll randomly pick one person to win this set of custom-made indicators. So that’s about that. Thanks for watching the video, and I’ll be looking forward to seeing you next time. Until then, happy trading.
