Volume Profile Trading Ideas – 30th September 2024

Hello, everyone! It’s Dale here with a new weekly trading ideas video. What you see before you is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. The chart in front of you is Crude Oil futures, and it is set on a 30-minute time frame.

Here, I’d like to talk about a newly formed resistance at 69.66. If I use the Volume Profile over the recent selling activity in this downtrend zone, you can see a heavy volume zone that clearly stands out—this one. This indicates that sellers, who were pushing the price downward, paused here for a while and added their short positions before continuing to push the price lower. This heavy volume zone is important because sellers placed many of their short positions here, which is why I have marked it as a resistance level.

Now, this is not the only reason. First, if you look here, the price reacted very strongly to this zone in the past. That means it was a support level before, but when the price dropped below it, the support turned into resistance.

Another thing to note is the red zones on the chart, which are Fair Value Gaps. In a short trade scenario, I like to trade from the top of a Fair Value Gap, as seen here. A Fair Value Gap is a concept from Smart Money trading, where you need three candles (one, two, three), and there must be a gap between the low of the first candle and the high of the third one. You can see there are many gaps like this. I have an indicator that you can download for free from my website, Trader-Dale.com. If you click on “Videos” it will take you to a page where I explain more about these gaps. You can download the indicator by entering your name and email, and we’ll send it to you.

Let me go back to the chart. One more thing I want to highlight is that this level is exactly at 50% of the range. That’s another reason why this level is strong. The 50% of a dealing range is a concept from Smart Money trading that I apply to my strategy, and it has improved my win rate.

That’s it for Crude Oil. Let’s move on to the next trading idea, which will be on USD/JPY

On USD/JPY, you can see a huge Fair Value Gap. This is a 30-minute chart. As I mentioned before, in a short trade scenario, I like to trade from the top border of the gap, which is here. So, this is the resistance level. If the price comes to this level, there’s a good chance there will be a reaction. The level is at 1.4612, and it’s not just about the Fair Value Gap—there’s also a heavy volume zone here, which aligns with the Volume Profile setup.

When I see a strong rejection of higher prices like this, I look at how volumes were distributed. I want to see something like this: a significant zone around the place where the price actually turned. This is exactly what we have here, and the level is at the beginning of the heavy volume zone, which aligns perfectly with the top of the Fair Value Gap. These two setups reinforce each other, so now we just need to wait for a pullback. It doesn’t need to happen soon, but markets have good memory, and when the price reaches this zone, there’s a strong chance for a reaction.

Now, let’s go to the next idea, which will be on CAD/CHF

This is a 30-minute chart of CAD/CHF, and here I have two resistance zones, both based on the current downtrend. The first level is at 0.6241, and the second one is at 0.6260. If I draw the Volume Profile over this selling activity, you can see two heavy volume zones that stand out. These zones show where sellers were active in pushing the price downward, so we need to wait for pullbacks to these resistance levels.

An ideal scenario would be a pullback to the first resistance, followed by a reaction, and then a pullback to the second resistance with another reaction. Sellers who added to their short positions in these zones should defend them if the price returns, pushing it lower again. In addition to the heavy volume zones, there are also Fair Value Gaps at the top borders of these resistance zones. If we scroll back, we can see the price reacted to these zones in the past. While not exactly at these levels, there were a couple of reactions to the first and second levels. These zones acted as support before, but once the price broke through, they turned into resistance.

If you’re interested in learning more about Volume Profile, VWAP, or Order Flow trading, head over to my website, Trader-Dale.com. If you click on the “Trading Course and Tools” button, it will take you to a page where you can browse my trading education and custom tools. There, you’ll find the Volume Profile Pack, which teaches you everything about Volume Profile trading, and the Order Flow Pack, which focuses on day trading using Order Flow. Both packs come with my custom indicators, including Volume Profile, VWAP, and Order Flow. There’s also a discounted combo pack that includes both the Volume Profile and Order Flow packs.

Before I wrap up this video, I’d like to announce the winner of last week’s contest. The prize was my custom-made Volume Profile and VWAP indicators for the TradingView platform. The winner’s name is displayed on the screen now—congratulations!

I’ll also be running another contest this week. To participate, simply leave a comment below this video on YouTube, and next week, I’ll randomly pick one person to win this set of custom indicators.

That’s all for now. Thanks for watching, and I look forward to seeing you next time. Until then, happy trading!