Video Transcript:
Hello everyone, it’s Dale here with a new weekly trading ideas video. Today we are going to cover trades on the EUR/USD, then the AUD/USD, and also on the GBP/USD. So let’s check them out. What you see before you is the chart of EUR/USD on the 30-minute time frame. This is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. What I want to talk about here is a support at 1.1596. The support is here, and let me now tell you why I think this should be a strong support and why the price should react to it.
If you look just at the price action in this area, you can see that the price made a rather strong rejection of lower prices—the rejection being the price going down aggressively and then turning and going aggressively up. That means buyers stepped in and reversed the price, right? They started to buy everything the sellers had to sell, and they turned the sell-off into buying activity. When you see a strong rejection like this, what you want to see inside the rejection is a significant volume cluster. For that, you want to use the Volume Profile. Ideally, the flexible Volume Profile that I have looks like this. Or you can go to TradingView, where they have something called the Fixed Range Volume Profile. You can use that as well. The functionality is more or less the same. I would say mine is superior because theirs is a bit clunky, but you can use either one.
Anyways, we have a strong rejection of lower prices, and within that rejection we can clearly spot the place where buyers started to buy aggressively. It is this place—you can see it on the Volume Profile because heavy volumes were huge here. So this is the place where buyers were active, and it is a very important place for them because they placed a lot of orders here. As you can see, my level is at the beginning of this heavy volume zone, because I think that when the price reaches this place in the future, the buyers from here will likely become active again and want to defend it. We can clearly see on the Volume Profile that this place was important for them. So we just need to wait for the pullback now, and when the price reaches this place, then go long from there. By the way, this place is also quite nicely visible on the weekly Volume Profile. As you can see, it is right here—this is the heavy volume zone. Since it also stands out on the weekly Volume Profile, that means the level is important from the bigger perspective, which adds strength to it. So that’s the long level on the EUR/USD.
Now let’s go to the AUD/USD. This is a 30-minute chart of the AUD/USD. What we have here is also a rather strong rejection of lower prices. This is the rejection of lower prices. The next thing we want to see there is a volume bump somewhere within that rejection. It should be close to the place where the price turned, somewhere in here. Let me use the Volume Profile. It doesn’t really matter if you use it like this or like this—the volumes you are interested in are in this area, and as you can see the Volume Profile clearly shows them. This is the volume cluster. It is not as strong as the previous one you saw on the EUR/USD, but I would still say it is a significant volume cluster, especially because it formed within such a strong and sharp rejection.
Again, the strategy is the same: you identify the volume cluster, and at the beginning of the volume cluster, that’s where the support is. In this case on the AUD/USD, it is at 0.6493. Again, the setup is the same: you wait for the pullback, and if the price reaches this level in the future, then enter your trade. It is a long from here. What I also like to see when there’s a rejection like this is a fair value gap. The fair value gap is highlighted in green here. This is the fair value gap. Above it, there’s another one. A fair value gap shows aggression of buyers, and I like to see that sign of aggressive buyers within the rejection because it shows strength behind the move. In this case we do have that fair value gap here and here, which is ideal. Let me switch back to the EUR/USD: there was also a fair value gap.
Anyways, that was for the AUD/USD. Now let’s check out the GBP/USD. On the GBP/USD we also have a sort of rejection. This is a 30-minute chart of the GBP/USD. If you look at it like this, this was the rejection. You can either look at it as a rejection, or you can just take a look with the Volume Profile and see this little rotation which was followed by aggressive buying activity. In either case, what we have is a significant volume cluster that formed before the price changed direction, from downtrend to uptrend. At the bottom of it we have this volume cluster which shows the place where buyers were jumping in, entering long positions before pushing the price up. This is an important place for the buyers because they placed many long positions here. That’s why I have my long level here at 1.3367.
As you can see, there’s also a fair value gap here. The reason I have the level exactly here and not at the beginning of that volume cluster is because this is the beginning of the fair value gap. I like to place my levels at the beginning of a fair value gap. Also, I wanted to place it a little bit lower rather than at the beginning of the volume cluster because my stop for this trade will be rather big—it will be here. This will be the stop loss. If the level was higher, then the stop loss would be too large. So I’m planning to enter the trade here and place the stop here. It might be that the price will want to react to this volume cluster as well, which is why I want to have a wider stop. This is how I plan to trade it. Again, we just need to wait for the price to make a pullback, and if it does, then go long from there.
If you guys are interested in learning more about Volume Profile trading and want to get your hands on my custom-made indicators, visit my website at trader-dale.com. If you click “Trading Course and Tools” it will take you to this page. Scroll down a bit and you can browse my educational and indicator packs. This is the Volume Profile Pack, Order Flow Pack, VWAP Pack, and Smart Money Pack. There are videos where you can see what’s included in each pack. You can get them separately here, or scroll down some more to find the Combo Pack, which includes all four packs together for a discounted price.
Before I wrap up the video, I’d like to announce the winner of the contest we had last time. The prize of the contest 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 the contest. Congratulations to the winner! What I’ll do next is run another contest for next week. To participate, all you need to do is leave a comment below this video, which I’ll publish on YouTube. Next week I’ll randomly pick one person to win this set of custom-made indicators.
That’s all for now. Thanks for watching the video, and I’ll be looking forward to seeing you next time. Until then, happy trading.
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