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Video Transcript:
Hello everyone, it’s Dale here.
Welcome to this video where I’ll show you the strongest Volume Profile levels
to trade this week. Today we are going to cover some swing trades, which means
that we’ll be looking at the daily chart. So let’s get to it. What you see
before you is the NinjaTrader 8 platform with my custom-made Volume Profile and
VWAP indicators. And this is a daily chart of EUR/USD. There’s been
quite a steep move on the euro recently, and what I want to do is trade this
move. I want to trade a heavy volume zone which got formed in that steep move.
And that heavy volume zone is this one. This heavy volume bump you can see here
on this daily chart represents a place where buyers were active, adding to long
positions as they were pushing the price up. So that’s the first thing we have that heavy volume zone here. The level
that I want to trade is at the beginning of that heavy volume zone. It is at 1.1751.
The idea behind this is that once the price drops to this level, the buyers who
were active here should become active again and push the price upwards from
there again. Right? So that’s the Volume Profile setup right here on this
strong trend. Now apart from this heavy volume cluster, there’s also a yearly
Point of Control. If I zoom out a bit to show you how the volumes are
distributed over the whole previous year, you can see that on this yearly
Volume Profile, the heaviest volumes were right here. This is the yearly Point
of Control, right? And notice where our level is right here. This is our long level. You can
see it sits at the yearly Point of Control, which increases the strength of
that level and also increases the chance that there’ll be a successful
reaction. Okay, so that’s the swing long on EUR/USD. By the way, with those
swings, you also need to use a wider stop and a wider take profit, right? Those
are not intraday trades. So that’s why my stop is in here behind that heavy
volume cluster, and it is roughly 80 pips. All right, so that’s for the euro.
Let me now go and show you my trading
idea on GBP/USD. On the British pound, there was also a very strong up
move recently, and again I wanted to trade this. So what I’m going to show you
here is how the volumes were distributed before that up move, and I want to
show you this heavy volume zone. As you can see, my long level is right here at
the beginning of this heavy volume zone and also at the beginning of this
little fair value gap, which is right here. There’s a little fair value gap in
here which is followed by a bigger fair
value gap here. If those are close to each other like these two, then I
look at them as one big fair value gap, and my level is at the beginning of it.
Okay, that’s what adds strength to the level. The logic is the same. We need to
wait for the pullback to this heavy volume zone and to that level, and there
should be a reaction as the buyers who were active here before should become
active again and defend this place, which is clearly important for them because
it was important for them in the past. So that’s why the price should go up
from there. Now, apart from all this, there’s also this little price action
setup confirming this level. Take a look here and also here at how the price
reacted to this level in the past. That means that it was a resistance, and
when the price broke past that resistance, it turned into support. So all those
setups nicely align and point us to this level. That’s why I think the price
will react there. Now we just need to be patient and wait for that pullback.
The next thing that I wanted to show
you is on USD/JPY. We had quite a strong sell-off recently, and before
that sell-off occurred, there was this heavy volume zone formed in this little
rotation. This place represents an area where sellers were active, adding to
their short positions before they manipulated the price and pushed it
downwards. Now if there is a pullback, then I think there’ll be a reaction from
this level, which is the beginning of this heavy volume zone. The level itself
is at 157.88. When there’s a pullback, I expect a reaction like this. You can
also notice that there is a huge fair value gap this being the fair value gap and the level is almost at the beginning of
it. It is a little bit lower because I don’t want to miss it in case the price
doesn’t fully fill the gap and only hits that heavy volume zone and reacts from
there. All right, so that’s the plan on USD/JPY. By the way, all those charts
are daily charts because we are talking about swing trades, which take longer,
and that’s why I’m doing the analysis and the trading itself on the daily
chart.
Now let me show you one more little
thing a nice bonus resistance on USD/CAD
based on this heavy volume cluster. This blue line is that resistance. The
price already hit it and made a reaction there. So I’m not sure if you guys
will be able to jump into this trade again. But if you get the chance if, for example, today the price goes up and
hits this level then it is still a good
resistance. If you manage to jump in, it is still a good resistance to trade
because we have that heavy volume zone here. Also, the price made this huge
reaction here, so that’s a former support which turned into resistance, and
there is also a big fair value gap right here. This area is the fair value gap,
and the level is the beginning of that fair value gap. So there are a couple of
nice confluences all pointing to this level. That’s why I’m saying this is a
short resistance and a nice resistance to trade.
All right. Now, if you want to join
us and get your hands on my trading education and also custom-made indicators,
visit my website. It is trader-dale.com.
If you click “Trading
Course and Tools” there, it will bring you to this page where you can
browse my trading education and custom-made indicators. You can get those four
packs separately or scroll down a bit and get a combo which includes all four
of them. Before I wrap the video up, I’d like to announce the winner of the
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. Congratulations
to the winner. Next, I’ll run another contest for the coming week. The only
thing you need to do to participate is leave a comment below this video on
YouTube. Next week, I’ll randomly pick one person to win this set of
custom-made indicators. That’s it. Thanks for watching, and I’ll be looking
forward to seeing you next time. Until then, happy trading.
