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DAX: Swing Trade Analysis With Volume Profile And Price Action


Trader Dale - Free Book

Hello guys,

in today’s post, I am going to look into the German index DAX. There I am going to show you a swing trade idea which you can best see on a 4 Hour or Daily chart.

DAX is in a long-term uptrend. It has been like that for more than a year actually. For this reason, I am only interested in Long trades. So, I look for strong Supports.

How do I look for them? Using Volume Profile, of course 🙂

DAX – Volume Profile Analysis

When there is a trend I use my Flexible Volume Profile indicator over the trend and I want to see significant volume areas. Those are places where (in an uptrend) strong Buyers were adding to their Long positions.

Why are those places important? They are important because the Buyers who placed their Longs there will want to defend those zones – their Long orders. If the price goes past those zones, the Buyers will be in red numbers. Obviously, they don’t want that. So they will defend those zones.

Defend how? With Market Orders. They will use aggressive Market Orders to push the price up again. With enough Market Orders, they are able to manipulate the price to turn and go up again.

This is why heavy volume zones that got created within an uptrend are strong Supports.

Such a zone is nicely visible on the 4 Hour DAX chart:

This Support zone is around 14.500 – 14.600. This is where the volumes were really significant and where the reaction is most likely to happen.

This setup is one of my favorite Volume Profile setups and it is called the “Trend Setup“.

One More Support On DAX

Maybe you’ve noticed that there is also one more heavy volume area at the bottom of the chart.

This is also a super important Support! I wrote about this one in an article around a month ago. You can check it out here:

DAX – swing trading support around 13.900 – 14.000

I hope you guys liked today’s analysis. Let me know what you think in the comments below!

Happy trading,

-Dale

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