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Video Transcript:
Hello everyone, it’s Dale here. In this video, I’ll show you the strongest Volume Profile levels to trade this week. We are going to take a look at a couple of intraday trading levels as well as a swing trading level. 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 the chart before you is GBP/USD. It is a 30-minute chart. In here, I want to show you a newly formed resistance. This one at 1.3390, which is based mostly on the opening gap. This is the opening gap. The market opened with a significant gap, and when it opens like this, what I want to see is a heavy volume zone before the gap. So what I want to see is a heavy volume zone like here, and it should be at the place where the gap begins. So here is the beginning of the opening gap, and as you can see, it nicely aligns with that heavy volume zone.
When you identify this, the next thing you want to do is wait for the pullback to that zone. In this case, the level is at 1.3390, and then enter the short like this. This heavy volume zone should work as a resistance. The price should react to it. In Forex, the gaps usually get filled rather sooner than later. So I expect that this trade could happen maybe today, maybe tomorrow. But if it doesn’t, I’ll wait. So I recommend waiting for that trade. Just wait for the pullback and take the short from there. This is my favorite setup to trade when the market opens with a gap.
Let me show you how it played out on AUD/USD. There was also an opening gap here, and there was also a heavy volume zone. This one. In this case, the price already filled the gap, reacted to that heavy volume zone, and this is how it looked. So this is the same thing as I want to happen on GBP/USD. Okay, so let me now go over to the next trading idea.
The next one is on USD/CAD. So this is USD/CAD. In here, I want to show you a resistance which formed on Friday. This is the resistance at 1.3647.
Let me show you what this is based on. So this is how the volumes were distributed throughout Friday, and here you can see that this is the place where most of the volumes were traded. From this rotation, where the volumes were accumulated, there was a strong sell-off. That tells me that this is a place where sellers were accumulating their short positions. Then they pushed the price downwards.
So what we want to do is trade from this heavy volume zone because it should act as a resistance. My level is exactly here. Not exactly at the beginning of the heavy volume zone, but at the beginning of a Fair Value Gap. It’s highlighted in red, as you can see here. This is the Fair Value Gap, and this is the beginning of that Fair Value Gap. Price likes to react to those. So this level is actually a confluence of the heavy volume zone and the Fair Value Gap.
Currently, I’m just waiting for the pullback. When the price hits this level, I’ll be short from there. The Fair Value Gap should hold it, and the heavy volume zone should hold it as well. This is a Volume Profile setup which I call the Volume Accumulation Setup because of the heavy volumes accumulated before this strong move. So this is how you trade this. Now we simply wait for that pullback.
Now let me switch over to my swing trading layout. This is it. My swing trading layout is always the daily time frame, so we are looking at the big picture. Here we are looking at the big picture of EUR/USD. In here, there is a significant heavy volume zone, and from this heavy volume zone a rather strong sell-off occurred. By the way, this heavy volume zone is also the place where the heaviest volumes were traded throughout the whole year. It’s the yearly Point of Control.
If you look at this Volume Profile, this is the yearly Volume Profile, and the heaviest volumes were traded here. This is the yearly Point of Control. Specifically this place right here. So anyways, that yearly Point of Control adds strength to that level. But the main thing here is this heavy volume zone which took place before this sell-off.
My level that I want to trade from is this one: 1.1765. This is the beginning of that heavy volume zone. Not only that, but you can also notice that the price reacted to this level in the past. That means that this level was a support because of this strong reaction. And now when the price broke past it and moved below it, this support turned into resistance. This is a Price Action setup. If you combine it with the Volume Profile setup, by that I mean this volume cluster, both of those setups point to the same level, 1.1765. That should work as a strong resistance.
We just need to be patient and wait for the pullback, and if it occurs, then take a short from there. Keep in mind that this is a swing trade, so we need to adjust the stop loss and take profit accordingly. The stop will need to be behind the heavy volume zone, so it will be here. It is at 1.1835, which is about 70 pips. The take profit should be at least with a risk-reward of one. So at least somewhere around here, ideally more than risk-reward one, but this is the minimum.
So this is the stop-loss, this is the minimal take-profit, and here is the trade entry.
Now, if you guys are interested in learning more about Volume Profile trading, then you want to head over to my website at trader-dale.com. If you click this button, “Trading Course and Tools” it will take you to this page. In here, you can check out my trading education and custom indicators. If you’re interested in Volume Profile trading, then the Volume Profile Pack is the right thing for you.
All right, thanks for watching the video. I’ll be looking forward to seeing 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 the next week. The only thing you need to do to participate is leave a comment below this video, which I’ll publish on YouTube. 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. I’ll be looking forward to seeing you next time. Until then, happy trading.
