Skip to main content

AUD/JPY: Trading In A Trend – Volume Profile Analysis

 

Hello guys,

today’s day trading analysis will be on the AUD/JPY.

There was a pretty strong downtrend a couple of days ago on the AUD/JPY. This is something I am always interested about because a trend usually means that the big guys (big trading institutions) are moving and manipulating the market.

I am always interested the most in how the volumes were distributed within the trend, because volumes = the BIG guys.

What I do is I use my Flexible Volume Profile to look into the trend and I look for significant Volume Clusters.

Look for Volume Clusters

Volume Clusters are the little bumps on the profile. They show where heavy volumes were traded – and thus the activity of the BIG guys.

Right now, there is a significant Volume Cluster around 81.10.

I think that the BIG institutions who were driving this downtrend were adding to their Short positions there.

This zone is now important for them, because they placed their trades there.

This is an important information because when the price makes it back into this zone again, those BIG guys will want to defend this zone.

Defend = manipulate the price downwards from there again. And that’s what makes this a strong Resistance.

This setup is called the “Volume Profile – TREND SETUP“

AUD/JPY; 30 Minute chart:

Already “Tested” Volume Clusters

As you have probably noticed, the Volume Cluster around 81.10 is not the only one there.

There are also two significant Volume Clusters below it.

The difference between the 81.10 and the two Volume Clusters below is that the lower Volume Clusters got already “tested”.

The price has already made a pullback to them and there were already reactions.

For this reason, I consider those Volume Clusters “spent”.

The closest significant Volume Cluster that hasn’t been tested yet is the one around 81.10

AUD/JPY; 30 Minute chart:

I hope you guys liked my analysis! Let me know what you think in the comments below!

Happy trading,

-Dale

Comments

Post a Comment

Popular posts from this blog

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

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

NZD/CHF – How To Trade The “b-Shaped” Profile

Today’s intraday analysis will be on  NZD/CHF  and I will start by talking about the structure of the  Weekly Volume Profile . Weekly Volume Profile structure In the previous week, there was a  “b – shaped” Volume Profile histogram formed. b – shaped histogram means that the shape of the histogram  looks like the letter “b”. It says that the market sees the value at the bottom half of the profile while rejecting the upper half. If you look at the picture below, you can see that there was a  rotation  (Monday, Tuesday), then strong  buying activity  (Wednesday), and then an immediate  rejection and a sell-off  (Thursday). Then again a  rotation  on Friday. One of the most important things to notice in a b – shaped profile is a  volume cluster created in the rejection area. In this case, there were two of them. Such a  volume cluster  indicates a place where the  sellers were...
Post a Comment
Read more