Skip to main content

EUR/JPY: How to Combine Volume Profile and VWAP


Today, I would like to show you a nice confluence of two trading strategies on EUR/JPY.
The analysis I am going to do will be an intraday trade analysis and I will do it on a 60 Minute chart.

Volume Profile analysis

The thing which got me interested first in this chart was a tight rotation, which was followed by a rejection of higher prices and then an immediate sell-off.
The reason why it caught my eye was that a tight rotation followed by a sell-off is what I look for in my Volume Accumulation trading strategy.
What I also want to see with this strategy is heavy volumes traded in the rotation.
In this case, those volumes were really easy to spot because they show very nicely on the Weekly Volume Profile.
If this wasn’t as easily visible on the Weekly Volume Profile then I would use my Flexible Volume Profile to look just into this rotation area. However, in this case, there was no need for that.
Trader Dale - Free Book
So, what I think happened there was that sellers were accumulating their selling positions in the rotation area (blue rectangle). Then they rejected higher prices aggressively, and then they started the sell-off.
Now the price is slowly making it’s way upwards. If the price gets in the heavy volume area again, then those sellers who were accumulating their shorts there will want to defend this area. They will want to defend their short positions!
What I think will happen is that those sellers will start aggressively selling again and they will push the price downwards again.
This is why I think this will work as a resistance (around 116.62)
There doesn’t need to be another sell-off from there again, maybe just 15-20 pip reaction. But even if it is only this small reaction then it should be enough to take an intraday trade there and grab a quick profit.

Weekly VWAP confluence

What I also like about this resistance area is the Weekly VWAP, and mostly it’s First deviation (the grey line). The upper first deviation of this week hasn’t been tested yet and it is almost exactly at the resistance which I identified using the Volume Profile!
If the price touches this 1st deviation then I expect a selling reaction. And it does not need to be today. It can also be the next week…
This is the kind of trading signal I like to see most! When a Volume Profile strategy points to the same level as VWAP trading strategy then this creates the strongest trading levels.

I hope you guys liked this analysis, let me know what you think in the comments below!
Have a nice weekend, stay safe and happy trading!
-Dale

Comments

Post a Comment

Popular posts from this blog

Recent Trade Breakdown: Combining Price Action & Volume Profile for Smarter Trades

Video Transcript: Hello everyone, it’s Dale here. In this new video series, I want to break down my recent trades. The goal of this series is to show you how I use my Volume Profile trading setups every day in real market conditions, so you can learn from both my wins and my mistakes. If you find this helpful, don’t forget to hit the like and subscribe buttons. Let’s dive in. What you see before you is a screenshot from my session yesterday. It’s taken from the live trading room we held in the  Funded Trader Academy . During that session, a new setup was forming on the  AUD/USD . This is the  AUD/USD  on a 30-minute timeframe, and the new setup was forming right here. There was a resistance level forming around  0.6364 . The reason behind this setup was based on a couple of factors. The main reason was a Volume Profile setup. If you look here at what I’ve highlighted, this area represents a heavy volume zone, which the resistance level was based on. You can see ...
Post a Comment
Read more

🎯 Top Volume Profile Levels to Trade This Week – 11th November 2024

Do you want ME to help YOU with your trading? Learn my proven Volume Profile & Order Flow trading strategies! Get my proprietary indicators and start making progress. We even set the indicators up for you so you can hit the ground running TODAY! Start Learning to Trade Now! Video Transcript: Hello, everyone! It’s Dale here with a new weekly trading ideas video. What you see before you is the chart from NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. This is the chart of  EUR/USD  on the 30-minute timeframe. I am strongly short-biased on the Euro because I see a strong sell-off as a reaction to the election. This strong sell-off, combined with the fundamentals of the U.S. presidential election, suggests that I should focus more on shorts for this pair. This means I use the Volume Profile over the recent area to look for significant volume zones. If you examine how the volumes were distributed this past Friday, there are two significant volume ...
Post a Comment
Read more

Bitcoin is Dropping Hard! Here’s Where Smart Money Will Buy Again

Video Transcript: Hello everyone, it’s Dale here. In today’s video, I’d like to talk about Bitcoin. The reason is that Bitcoin has been dropping like crazy, and a lot of traders are wondering where Bitcoin will go and what to expect. If I look at the chart and use Volume Profile, I would say that it’s pretty straightforward because Volume Profile very clearly shows the strongest support and resistance levels. So, let’s take a look at the chart, and let me show you. What you see before you is the daily chart of Bitcoin. This is the big picture, and as you can see, from the all-time high here, Bitcoin experienced quite a significant sell-off and is currently dropping. Right now, I don’t really see any strong support that would stand in the way of this strong sell-off. Let me use Volume Profile and show you what could actually stop the sell-off of Bitcoin. All right, so what I’m going to do is apply Volume Profile over this whole area to see the volume distribution. As you can see, there ...
Post a Comment
Read more