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Video Transcript:
Hello everyone, it’s Dale here. In this video, I want to talk about the strongest Volume Profile levels to trade this week. We’ll take a look at EUR/USD, GBP/USD, and also USD/CAD. So, let’s get to it.
Let’s start with EUR/USD. What you see before you is a 30-minute chart of EUR/USD on the NinjaTrader 8 platform. And what I want to show you here is a support level at 1.1696. The reasoning behind this support well, actually, there are a couple of reasons behind this support. The first reason is, as always, volumes. If you take a look at this area where the price was steeply going upwards, then you can notice that there is this significant volume cluster. I would say that this is the most significant volume cluster in this whole area. And that’s reason number one why I think the price should react there, because buyers were active here as they were pushing the price upwards in this area. So, this is a place where buyers were active, and I think that they will be active here in the future as well. We just need to wait for the pullback. When the price reaches this place, which is at 1.1696, I expect a reaction.
So, the first reason is volumes. The second reason is also volumes, and you need to look at the profile on the left. That’s the weekly Volume Profile, and it shows how volumes were distributed throughout the whole previous week. The place where the heaviest volumes were traded last week is called the weekly Point of Control, and it is here at our level. So, not only do we have this volume cluster here, but there is also this weekly Point of Control. Okay, it nicely aligns with our level. The third thing that I like about this level is that it is at the beginning of a Fair Value Gap. The Fair Value Gap is highlighted in green. This is the Fair Value Gap that’s from Smart Money Concepts. And here is the beginning of the Fair Value Gap. Okay, so that’s the third thing that adds strength to the level and the third reason why I think there will be a reaction. Okay, so that’s for EUR/USD.
The next pair I want to show you is GBP/USD, and you can see that the price action here is very similar to EUR/USD. Again, we are looking at a 30-minute chart of GBP/USD. And I want you to look at this uptrend area. What I’ll do next is use my Volume Profile over this area. And here is a volume cluster that stands out. Okay, this volume cluster represents a place where buyers were active as they were pushing the price up. And that means that when the price makes a pullback there, there should be a reaction. Okay? Because the buyers from here should become active again, defend their long positions, which they placed here, and push the price upwards from there.
The level is at 1.3520. So, right now, we just need to wait for the pullback and then take it from there. The reaction to the pullback should look, for example, somehow like this. There was also another volume cluster, and here was a reaction a pullback to that heavy volume cluster. Right? So, this is how it should look: volume cluster, pullback, reaction. The same here: volume cluster, pullback, reaction.
Now, again, in this case, it’s not just about the volume cluster, but also about the weekly Point of Control. Now, if you look at how the volumes were distributed on GBP/USD last week, then this area looks kind of weird. I wasn’t really able to make heads or tails of it. But what I did was switch the volume calculation to TPO, which was way clearer. Let me show you. This is how the TPO profile looked the previous week. And the TPO nicely shows the Point of Control. Again, it nicely aligns with our long level, the same as on EUR/USD. Only in this case, I needed to use that trick because when I used volumes, the data looked really weird. I don’t know why, but it looked weird. So, I just switched to TPO. That was way clearer. But, you know, in 99.9% of all cases, I just use volumes, not TPO, because volumes are more precise.
Anyway, this is the long level. And the third reason why I think this is a strong level is that there’s also a Fair Value Gap. The same thing as we had on EUR/USD, right? The beginning of the Fair Value Gap is here, exactly at our level. That’s the same as we had on EUR/USD. Okay. So, there are certain similarities between those two levels. Now, I’m just waiting with limit orders for the price to reach those levels, and then I’m going to trade from them. Okay, so that’s that.
Let me now switch to USD/CAD. Again, we are looking at a 30-minute chart of USD/CAD. Here, I want to talk about two levels. The first one is at 1.3610. The second one is at 1.3661. Both are based on this steep sell-off, which occurred on Thursday. And those levels are based on volume clusters this one and this one. Volume clusters represent places where big traders were active. In this case, because the price went downwards, it was sellers who were active here. And what you do is you just wait for the pullbacks. Trade from the volume clusters like this. Then wait for the pullback to the higher volume cluster and take the short like this. The logic is always the same. Heavy volumes are likely to be defended.
Okay, both of those volume clusters also have nice confluence with Fair Value Gaps. Here, the Fair Value Gap is highlighted in red. This is the lower Fair Value Gap, and the beginning is our level. And with the higher level, here is the Fair Value Gap, where the Fair Value Gap begins here at our level. All right. So, yeah, those are the reasons for the levels that I currently have right now. I’m just waiting for the pullbacks. I have limit orders so I don’t miss the trades, and I’m just waiting for the levels to get hit.
All right, so that’s that. I hope you guys liked it. If you want to learn more about Volume Profile trading and get your hands on my custom-made Volume Profile indicators, you’ll want to head over to my website, which is at trader-dale.com. And if you click this button right here, then here you can enroll in one of my courses and get my indicators. All right, so that’s about that. 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. And right now, on your screen, you see the name of the person who won the contest. So, congratulations to the winner. And 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.
