Video Transcript:
Hello everyone, it’s Dale here with a new weekly trading ideas video. Today we are going to take a look at three trading pairs. First will be the Canadian dollar. Then we will take a look at the Swiss franc. And then we will take a look at the USD/CAD. Let’s check them out.
The first one is USD/CAD. What we have before you is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. And this is a 30-minute chart of USD/CAD. Right now on the screen, you can already see the resistance level that I want to talk about. It is this one at 1.3879. If you look at the Volume Profile, the gray one, it represents the volume distribution from the whole previous week. That means from this period, it has the shape of a capital letter D. That means it’s a D-shaped profile. When there’s a D-shaped profile, I like to trade from the areas like this one at the top. Then, if there is a significant volume zone at the bottom, I like to trade from those because the price tends to return to the center of the D-shaped profile. So the level that I have here is based on the volume. On the weekly profile you can see it, and I can also use my flexible Volume Profile to show you. You’ll see the level there as well. It is this volume cluster.
The reason those volumes are important is that the price was rising to this area but then sellers stepped in and started to sell aggressively here. You can see how strong the selloff was, and there was also a fair value gap right here. A fair value gap is a sign of aggressive sellers as well. This is where they started to sell aggressively and enter their short positions. I can tell because I can see it on the Volume Profile. This volume cluster represents where they sold and eventually turned the price from an uptrend into a downtrend. So right now, I’m waiting for a pullback. If there’s a pullback to this level, then chances are there will be a reaction because the sellers from here are likely to become active again, defend this place which is clearly important for them, and push the price downwards.
By the way, I had a nice trade here on Friday. It was based on this volume cluster right here. I was trading from the beginning of it. It was also the beginning of a fair value gap. So it was a short from this place. But that’s a different strategy. That’s a setup called the Trend Setup. Anyway, this level is spent. Today I wanted to focus on this level which hasn’t been spent yet.
All right, so that’s USD/CAD. Now let’s take a look at USD/CHF. Here we have USD/CHF, and frankly it’s a bit similar to USD/CAD. If I show you on the Volume Profile, we have a significant volume zone from which strong trend activity started. By the way, I should use the profile like this because I’m more interested in volumes in this little rotation rather than volumes further away. I’m always more interested in volumes before the strong trend starts. In this case, it would be this volume zone. Now the volumes are visible quite clearly. This is the beginning of that heavy volume zone at 0.7992. If there is a pullback to it, I think the sellers will become active again, defend this place, and push the price downwards from there.
The logic behind this trade is very similar to USD/CAD. In this case, this heavy volume zone represents a place where sellers were active and where they were accumulating their short positions before they manipulated the price to shoot downwards. Again, I’m just waiting for that pullback. When it occurs, I’m going to jump in with a limit order and trade it.
All right, so that’s USD/CHF. And the next trading idea that I wanted to share with you is AUD/CAD. Here you can see that there’s a strong trend. By the way, this is a 30-minute chart of AUD/CAD, my favorite time frame for intraday trading analysis. Here we have a strong trend, and when there’s a trend like this I like to jump in at pullbacks, especially at places where significant volumes were traded. If I use the Volume Profile, for example, for the last area of that uptrend, it will always point you to this important heavy volume zone which formed here in this rotation.
What the Volume Profile and the chart are telling us is that buyers were pushing the price up, then they paused for a bit, and then started to add to their long positions before continuing to push the price even higher. This is an important place for buyers because they placed a lot of their long positions here. So when there’s a pullback to this level in the future, it is very likely there will be a reaction because the buyers from here will want to defend this place which is clearly important for them. That’s why the price should go up from here. The level is 0.9170. The reason I have the level exactly here is because there’s a fair value gap highlighted in green. I like to trade from the beginning of a fair value gap, and that’s this level.
Now, something very similar happened on NZD/CAD. Let me show you. There was also an uptrend, also a significant volume zone within the uptrend right here. The price already made a pullback to it and there already was a reaction. This is how it is supposed to look. Heavy volume accumulation inside a trend, then a pullback to it, and a reaction. This is what I’m looking for.
Now, if you are interested in learning more about Volume Profile trading and in getting your hands on my custom-made indicators, then head over to my website at Trader-Dale.com. If you click the Trading Course and Tools button, it will take you to the page where you can check out my trading education and custom-made indicators. There’s the Volume Profile Pack, Order Flow Pack, VWAP Pack, and Smart Money Pack. You can get them separately, or if you scroll down a bit, you can get all of them together in one discounted bundle.
Before I wrap the video up, I’d like to announce the winner of the contest we had last time. The prize was my custom-made Volume Profile and VWAP indicators for the TradingView platform. Right now on your screen, you see the name of the person who won. Congratulations to the winner. I’ll do another contest for next week. The only thing you need to do to participate is leave a comment below this video on YouTube. Next week, I’ll randomly pick one person to win this set of custom-made indicators.
That’s about it. Thanks for watching the video, and I’ll be looking forward to seeing you next time. Until then, happy trading.
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