EUR/AUD: Volume Profile and Price Action Analysis

Hello guys,

today, I would like to have a closer look at EUR/AUD.

There has been an interesting development as the trend completely changed from downtrend to uptrend. Also, the change of trends was quite rapid. There was a strong sell-off, and then just after a few hours of rotation a strong buying activity took place.

When there is such an aggressive change of a trend, then I am always interested in the volume distribution within the strong rejection area. I am most interested in the volumes that got traded right before the change of trend occurred. For this, I use my custom-made Volume Profile tool.

One of the handy features my Volume Profile has is that you can use it to look into specific areas in the chart which you are interested in. Just like the rejection here.

EUR/AUD; 30 Minute chart:

As you can see in the picture above, I used the Volume Profile to look into the rejection – into the area where the trend changed. That’s the most important zone.

The Volume Profile revealed a significant volume zone – a volume cluster that got formed just before the trend changed.

Significant Volume Cluster

What does this volume cluster tell us? It tells us, that at this place heavy volumes were traded. Buyers were buying everything the Sellers had to sell. They were buying aggressively and when the Sellers ran out of fuel, the price shot upwards. Strong institutional Buyers pushed it there – it’s those guys that changed the trend.

When the price makes it back into this rejection zone again at some point in the future then we can expect those strong institutional Buyers to defend this zone again.

This zone is clearly important for them since they were buying there as crazy before.

So, when the price makes it back to the volume cluster zone starting at 1.6021, those Buyers should start aggressive buying activity (using Market Orders) and push the price upwards again.

This should make the zone around the volume cluster a strong day trading Support.

The Volume Profile setup I used here is called the “Rejection Setup” and you can learn more about how to trade it in my Volume Profile Trading Course.

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

Happy trading,

-Dale

Prediction → Result

P.S. Did you take that trade based on the analysis from Monday? This one:

Volume Profile Trading Ideas – 27th September 2021

Here is the Prediction from the analysis and Result:

Comments

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...

Trader Dale - Volume Profile Trading Blog

Search This Blog