Skip to main content

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

Trader Dale - Free Book

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 massively adding to their short positions. Their intention was to reject the higher prices and push the price lower.
When the price reaches such an area (volume cluster) in the future again, then it is likely that those sellers will want to defend this area and push the price downwards again.
Below is a 60 Minute chart of NZD/CHF and a Weekly Volume Profile:

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
So, in this case, the strong resistance should be at one of those volume clusters I marked above.

Volume Cluster at 0.6000

Let’s now have a look some more into the first volume cluster.
In this case, I used 30 Minute chart and a Flexible Volume Profile to see more detail.
It shows that the heaviest volume peak (a local POC) in this volume cluster was at 0.6000 (btw. nice round number). From this place a strong sell-off started.
I think this is the place where the sellers were adding massively to their short positions before the aggressive selling activity started.
Because of this, I believe that the 0.6000 will work as a resistance in the future. I think that when the price hits this area again then the strong sellers there will become active once again and that they will start another selling activity. This selling activity would push the price downwards.
I like the first volume cluster (0.6000) more than the higher one because the strongest sell-off started from there. This is why I think the price is likely to react there.
I hope you guys liked today’s analysis. Let me know what you think in the comments below!
Happy trading!
-Dale

Comments

Post a Comment

Popular posts from this blog

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 i...
8 comments
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

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