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AUD/JPY: Volume Profile & VWAP Analysis


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Video Transcript:

Hello everyone, it’s Dale here with new day trading analysis. What you see before you is the NinjaTrader 8 platform with my custom-made volume profile and VWAP indicators. This is an AUD/JPY 30-minute chart, and I’d like to talk about this support here. It is at 106.2 and is based on a weekly point of control, which is in here. Let me draw the flexible volume profile over this area so it’s better visible. If I stretch it like this, then the heaviest volumes throughout this current week are at this price level, exactly where this support level is.

What happened here was that heavy volumes were traded in this rotation, and then the price went upwards from there, which means buyers were active here, building up long positions and then manipulating the price upwards. This heavy volume zone is a very important zone for buyers, and if there’s a pullback to it at some point in the future, chances are that the buyers from there will become active again and push the price up from there again. This zone is very important because this is the weekly point of control, and the heaviest volumes throughout this current week are traded there, making it a very strong level. Apart from that, you can also see that the first deviation of VWAP is here, this gray line. If, at the time of the pullback, it is still around, it will add strength to the level. But even if it isn’t, the level will still be strong because this is simply the weekly point of control, and the price tends to react to those very nicely.

Now I want you to notice one more thing here, and it’s the reactions to the first deviation, to this one first deviation of VWAP. Right here, this is how you can trade when there’s a trend like here. You want the price to be above the first deviation, above this gray line, and you want to trade pullbacks to it. Those pullbacks to the first VWAP deviations are both valid trades here. As you can see, the price is reacting to the first deviation very nicely. Similarly, it was reacting to that first deviation the previous week. As you can see here, the price was trending, moving above the first deviation of the weekly VWAP, and it was reacting very nicely here as well. So if you have the VWAP indicator, you can trade trends like this using the first deviation. It’s actually pretty easy to do. What I like is to combine that with other trading setups, but even if you trade just this trend setup using the first deviation, it will provide you with very nice trading signals.

Now, if you guys are interested in learning more about volume profile or VWAP trading, head over to my website at trader-dale.com. If you click on Trading Course and Tools, it will take you to this page where you can browse my trading education and trading indicators. The newest one, the brand new one, is the VWAP pack, which will teach you everything about VWAP trading and provide you with essential VWAP and anchored VWAP indicators. If you are interested in volume profile trading, then the volume profile pack is the right one for you. If you are interested in day trading with order flow, then check this out. There are videos you can watch that will show you everything that’s included in more detail. If you are interested in getting all three packs in one discounted bundle, you can get it at the bottom of this page.

Alright, so that’s about it. Thanks for watching the video, and I’ll be looking forward to seeing you next time. Until then, happy trading!

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