Skip to main content

An Invisible Trading Opportunity: Volume Profile and Order Flow Trade Analysis

 Trader Dale - Free Book

Hello guys,

in today’s analysis, I would like to talk about a trade I had yesterday on USD/JPY (futures symbol: 6J 03-21).

This trade was particularly interesting because this trading opportunity would be COMPLETELY HIDDEN from everyone who does not use Volume Profile or Order Flow.

Let me start from the beginning…

There was a day trading support on JPY Futures (6J 03-21) around 0.0094935. I was talking about my intention of trading this in my Members area in my Daily Levels Commentary video.

This trading level was based on a Volume Profile setup called the “Trend Setup“.

Volume Profile – Trend Setup

The main idea behind this setup was that the price was going upwards and that there were heavy volumes (Volume Cluster) created within this up-move.

Such a Volume Cluster indicates that Buyers were adding to their Long positions there.

To trade this setup, you simply wait for a pullback and go Long from this area. The reason the price should go up again is that Buyers should defend this zone (it is important for them) and push the price upwards again.

You can learn more about my Volume Profile setups for example in this webinar:

Volume Profile Setups (WEBINAR RECORDING)

This trading opportunity was completely invisible for everyone who does not use Volume Profile. That’s why I like trading with Volume Profile so much!

Check the Support out on the JPY Futures (6J 03-21); 30 Minute chart below:

Order Flow

I was shooting my members Daily video, when there was the rotation before the level got hit. In this video, I said that I wanted to see some confirmation of this trade on Order Flow software.

And this brings us to the Order Flow webinar which I had a couple of days ago. One of the
“confirmation setups” I showed at the webinar was a “Divergence between Price and Delta”.

If you don’t know what “Delta” or “Price and Delta Divergence” means, then I suggest you check out the webinar recording here:

ORDER FLOW: Trading Setups (WEBINAR)

In this trade yesterday, there was one of the craziest and biggest divergences I ever saw.

The price was dropping but Buyers were entering their Longs like crazy!

Check it out on this 30 Minute Order Flow chart:

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!

Price vs. Cumulative Delta (DIVERGENCE)

Let’s have a look into a more detailed chart, which shows 1 Minute Price versus 1 Minute Cumulative Delta (this is where I mostly look for divergences).

Below, you can see what happened when the price hit the Support zone:

The Price went below my trade entry, but Cumulative Delta was rising like crazy and it was literally shouting at me: BUYERS, BUYERS, BUYERS!!!

This was a very strong confirmation that the Price would most likely turn upwards – strong Buyers were making their move there. This is exactly what you want to see. This is what trade entry confirmation is all about!

Now, if the price was just rotating below my Long entry without this Delta confirmation, then I would be pretty nervous. I would most likely try to quit the trade around Break Even. BUT because there was this massive divergence, I was pretty confident and almost certain that the price will rise dramatically.

That’s exactly what happened. Check it out on the chart below:

An Invisible Trading Opportunity

What I like about this the most is that this trade was completely invisible to everybody who does not follow volumes.

Trade entry was based just on volumes. Then when the price hit the Support, we used Order Flow to see what was going on. People without Order Flow or Delta would not see it! They would just see the price shooting past their level without much of a reaction.

See the difference? That’s exactly what I was talking about at the Order Flow webinar!

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

Happy trading!

-Dale

P.S. At the end of the webinar I made a special offer for those who would like to get my Order Flow software as well as my Order Flow training course.

This special offer is a 40% discount and you can get it until the end of February 2021 HERE

Comments

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...

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...

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...