Trade Breakdown: USD/JPY Short Trade + TP/SL Placement

Hello, everyone! It’s Dale here. Welcome to the next video from the Recent Trades series. In this video, I want to go over a trade I took yesterday on USD/JPY. This trade was based mostly on a Volume Profile setup, so let’s check out the chart, and I’ll walk you through how the trade played out.

This is the USD/JPY chart on a 30-minute time frame. Here, you can see this short level, which was based on a Volume Profile setup. Let me show you. If I use the Volume Profile over this area of recent activity, you can see that there’s a heavy volume zone that stands out. This setup is what I call the Trend Setup, and I trade it when there’s a trend—like here. As you can see, my level is at the beginning of that heavy volume zone.

From this place, there was an aggressive sell-off—boom, boom, boom! The market went into a strong downtrend, which indicated that strong and aggressive sellers were present and had placed most of their short positions here. So, the beginning of the heavy volume zone was the level to go short from.

I was just waiting for the pullback, and when the price hit this level, I went short. This trade happened during the Asian session, so I was asleep at the time. I trade using limit orders—at least when there’s no major macro news. This time, there was no significant red news event, so I used limit orders. I entered the trade when the price hit this level.

Now, let me talk about the stop-loss and take-profit placement, as I think they were particularly important in this trade. Let me draw the short level again. This was the short position, and in this case, there were basically two options for placing the stop-loss. One option was to place it at the top of this candle, but in my opinion, that was quite far. So instead, I placed my stop-loss a little lower, right here, because there was a low volume zone.

If you look at the Volume Profile and the volume distribution, you’ll see that this area had low volumes. That meant the key resistance barrier was this zone, and I placed my stop-loss behind it. The end of this barrier was the low volume zone, marking the end of the resistance. So, this whole area was a resistance zone, and the stop-loss was placed behind it.

Regarding the take-profit, I placed it in a heavy volume zone. If I move the Volume Profile like this, you can see that there was a heavy volume zone right here. You always want to place your take-profit before the price reaches a heavy volume zone. In this case, my take-profit was here. It didn’t get filled at this point, but it did here. The reason for this take-profit placement was the presence of the heavy volume zone.

The main rule for placing stop-loss and take-profit levels is:

• For stop-loss, you want to place it behind a heavy volume zone—like I did here.
• For take-profit, you want to place it before a heavy volume zone—like in this case.

This is because price tends to react to heavy volume zones, and you want to exit your trade before it reaches such a zone, as it could reverse the price direction.

So that was the trade! Everyone who’s a member of our trading course could have taken this trade because I share my day trading levels in our members’ forum. You can see it here in the members’ area, where I publish my day trading levels daily. The short level on USD/JPY was posted two days ago—at 149.28.

If I go back to the chart, you can see the level right here—149.28. If you want to join us and trade with me every day like this, just visit my website, Trader-Dale.com. Click on Trading Course & Tools, and it will take you to a page where you can browse my trading education and custom-made trading tools. At the bottom of that page, you can get all three main packs together at a discounted price.

And if you want to trade live every day with me and other prop firm traders, I recommend clicking the FTA button—it stands for Funded Trader Academy. On this page, you can book a one-on-one call with us. We’ll walk you through the service, and you can decide whether or not it’s the right fit for you.

That’s all for now! I hope you liked the video. Let me know what you think in the comments, and I look forward to seeing you next time. Until then, happy trading!