Volume Profile Mastery: The Setup I Fell in Love With After a Decade of Trading, Explained

Guys, it’s Dale here. In this video, I want to show you my all-time favorite trading setup. As you might know, I trade using Volume Profile, VWAP, Order Flow, and Price Action. But if I had to pick just one thing for you to learn, this would be it. Let me first do a quick drawing of the setup, and then I’ll show you examples on live charts and explain all the details and tricks, so you can start using this right away.

Let’s begin with the bullish scenario. Here’s what you need to see on the chart. By the way, this setup works with all time frames and trading instruments. I personally prefer a 30-minute time frame and Forex, but you can use it with anything you want. The bullish scenario goes like this: you need to see a strong trend, and within that trend, you need to identify a significant heavy volume zone. Let’s say the heavy volume zone appears somewhere in the middle of the trend. You also need to see that the price reacted to this level in the past — something like this.

This tells us that the level acted as resistance before because the price reacted there. Later, the price moved past that resistance level, forming the heavy volume zone (also called a volume cluster). Now, the same level that was once resistance becomes support when the price breaks through it. So, you wait for the price to pull back to this level. Once it does, you go long (buy) when the price touches the new support level.

To summarize, the bullish setup has two conditions: a heavy volume zone forms within the trend, and the price previously reacted to this level, confirming that it was once a resistance. When the resistance turns into support, you take the trade.

Now let’s move on to the bearish scenario. It’s essentially the same setup, just reversed. For the bearish scenario, you need to see a strong downtrend with heavy volumes forming within that trend. Let’s say the heavy volume zone forms somewhere in the downtrend. You also need to see that the price reacted to this level in the past. In this case, the level initially acted as support since the price reacted there before. When the price breaks through that support, forming a heavy volume cluster, the support level turns into resistance. You wait for the price to pull back to this new resistance level. When it does, you go short (sell).

Let me show you a couple of examples on a real chart to make everything clearer. In the first example, you can see a strong downtrend, and within it, a significant heavy volume zone. It’s important to use a flexible Volume Profile to focus on specific areas of the chart. I developed this profile, and you can get it on my website. Using a flexible profile lets you analyze just the trend area, filtering out unnecessary volumes. If you used daily or weekly profiles, you’d see additional volumes that don’t relate to the trend zone.

Back to the example: you have the downtrend with a volume cluster. The price previously reacted to this level, confirming it was once support. After the price broke through the support, it turned into resistance. I prefer to place the level at the beginning of the heavy volume zone. You just wait for a pullback, and once the price hits the resistance, you go short.

Here’s another example with an uptrend and a heavy volume zone within it. Using the flexible Volume Profile, I identified a volume cluster that aligns with a level where the price reacted twice before. Multiple reactions give more confidence in the setup. This tells us that the level was resistance in the past. After the price moved past it, the resistance became support. You wait for a pullback and go long from the new support level. Sometimes, the volume cluster may not look particularly strong, but if it aligns with previous price reactions, it becomes a valid trade level. When you see this type of confluence—combining Volume Profile and Price Action setups—you can trade without waiting for further confirmation.

It’s also essential to understand that we are dealing with zones, not exact levels. For example, even if the price overshoots or stops slightly before a marked level, the trade remains valid as long as the zone holds. Once a support or resistance level has been tested, I avoid trading from it again. If the level is “spent,” you need to find a new one to trade from.

In another example, there’s a downtrend with a heavy volume cluster. The price reacted to the cluster’s level in the past, confirming it was support. Sellers then pushed through that support, forming resistance. I always like to see aggressive continuation after the volume cluster forms, as it shows the market’s determination to push in the trend direction. This also gives you more confidence when trading the pullback.

I hope you found this video helpful and that the setup is easy to understand. I encourage you to give it a try! If you’d like to get my custom-made Volume Profile or other trading indicators, visit my website at Trader-Dale.com. Click on the “Trading Course and Tools” button to browse my trading education materials and custom indicators.

Right now, I’m running a special Halloween sale, where you can get my education and indicators at a massive discount. The Volume Profile Pack focuses on volume profile trading, the Order Flow Pack is designed for day trading with order flow, and the VWAP Pack covers everything you need to master VWAP trading. There’s also a combo package where you can get all three packs at a heavily discounted price.

Thanks for watching, and I’ll see you in the next video. Until then, happy trading!