Skip to main content

NZD/CAD: Swing Trade Analysis With Volume Profile and Price Action

 Trader Dale - Free Book

Hello guys,

in yesterday’s article, I was talking about a trading opportunity that occurred after a strong trend day. It was a day trading opportunity on AUD/CAD.

In today’s post I am going to show you exactly the same trading setup as yesterday, only on a higher time frame – on Daily chart. Such time frame is suitable mostly for swing trading (position trading).

What I want to demonstrate with this is the versatility of Volume Profile setups. You can use these setups for intraday trading as well as for swing trading. Setups remain the same, only time frame changes (and of course, your Take Profit and Stop Loss values should be adjusted too).

Let’s have a look at it then!

Volume Profile Analysis

There has been a strong downtrend since the start of March on NZD/CAD.

Within this downtrend, there were three places where the price stopped for a couple of days. In those places strong Sellers were adding to their Short positions.

You can see that nicely with my Flexible Volume Profile. Simply use the profile on the whole trend area, and the heavy volume areas will show up!

In today’s analysis I am going to focus on the lowest one – the one which is currently the closest.

This heavy volume area (=Volume Cluster) got formed around 0.8958. It is very likely that in this place strong institutional sellers were adding to their Short positions. Then they pushed the price downwards some more.

When there is pullback to this 0.8958 area again, then I expect those Sellers to start defending this zone. It is an important zone for them.

This is why I think it will work as a Resistance.

The setup used is called the “Trend Setup” – the same setup I used in yesterday day trading analysis.

NZD/CAD; Daily chart:

Do you want ME to help YOU with your trading?

Join one of my Volume Profile Educational courses and get my private trading levels, 15 hours of video content, my custom made Volume Profile indicators, and more!
Click Here

Price Action Analysis

What I like about the volume-based Resistance is that it nicely aligns with a Price Action Resistance.

If you check out the chart below, you will see that the price reacted to this zone in the past. The price bounced off it. This tells us that it was a Support in the past.

Now, when the price shot past that former Support, it became a Resistance. Yea – that’s exactly the same Price Action setup I showed you yesterday! Only yesterday, this was on 30 Minute time frame, and today I am using the same setup on a Daily time frame.

The setup stays only time frame changes.

The setup is called “Support→Resistance” and the main idea behind it is that when a Support gets breached, it then becomes a Resistance.

NZD/CAD; Daily chart:

It is the combo of those two setups (Volume Profile setup and Price Action setup) that makes this Resistance strong. I look for such setup combos with all my trades.

I hope you guys liked today’s swing trade analysis. Let me know what you think in the comments below!

Happy trading!

-Dale

Comments

Post a Comment

Popular posts from this blog

How To Trade The Point Of Control (POC)

DEFINITION: Point Of Control (= POC) is a price level at which the heaviest volumes were traded. The most important thing that the Volume Profile indicator shows is the POC. I dare say that if you used Volume Profile only for the purpose of identifying the POC, you would be a way better and trader then 99% of the retail traders. No matter what trading strategy you trade. Why do I say this? Why is POC so important? Point Of Control is so important because it shows the place where the most trading took place – where the biggest trading positions were accumulated. POC shows the BIG guys! Who accumulates those huge trading positions? The BIG guys – that’s the big financial institutions like hedge funds, pension funds, huge banks, etc… It is those BIG guys who move and manipulate the markets. It would be a huge advantage to know where they placed most of their positions, right? The good news is th
Post a Comment
Read more

Beginners Guide to Order Flow PART 1: What Is Order Flow?

DEFINITION: Order Flow is an advanced charting software which enables you to read all trading orders that are processed in the market. It helps to track the BIG financial institutions through the trades they make. Most people get confused when they open up a chart with Order Flow for the first time. There is no shame in that. Order Flow shows so many information and it is easy to get overwhelmed and confused if you don’t know what to look for! This Beginners Guide will teach you how to understand how Order Flow works and how you can use it in your trading! In this 1st part of the Order Flow Guide I will show you around the Order Flow interface. Footprints The Order Flow does not show standard candles, but it shows FOOTPRINTS . A footprint shows not only Open, High, Low, Close (as standard candles) but it also shows orders traded in that candle. Orders can be
Post a Comment
Read more

5 Character Traits of a Successful Trader – Tips & Tricks of the Pros!

 Maybe you are interested in trading, and you have taken the first step by researching on forex trading. You might also be currently trading but going through a tough time with your results in the markets and dealing with the recurrent autosuggestion, telling you how this journey might not be for you or you are not capable of achieving successes in this journey. It is essential to know that you are not alone in this feeling, and before you fall into the rabbit hole of depression, feeling like a failure in yet another skill you have chosen. Let me make it clear; the answer is YES, anyone can achieve success in trading , including you. It would only cost you a few character trait adjustments. Before we delve in, it is vital to point out that success in re
8 comments
Read more