Video Transcript:
Hello everyone, it’s Dale here. Today’s day trading analysis is going to be a bit different because usually what I do is call trades in advance and talk about future support and resistance zones. However, today I’d like to discuss a trade I already had with members of my trading course. It was a trade from a resistance on the AUD/USD pair. The resistance was at 0.6741. By the way, you’re looking at a 30-minute chart of the AUD/USD.
Let me talk about the reasoning behind this trade, managing the position, and taking the profit. First, let’s discuss the reasoning behind the trade. There were a couple of reasons. The first reason was a volume profile setup. As you can see, there’s a downtrend, and within that downtrend, this is how the volumes were distributed. There was a heavy volume zone, a heavy volume cluster, within this selling activity. This was the beginning of that heavy volume zone. This is a typical volume profile trend setup that I like to trade. When there is a trend, I trade pullbacks to those heavy volume clusters, like in this case. There’s a trend with a heavy volume cluster, you wait for a pullback, and short from there.
But this trade wasn’t just about this volume cluster. There was a confluence of two more things. The first additional factor is the weekly volume profile from the previous week, which showed how the volumes were distributed throughout the whole previous week. The area where the heaviest volumes were traded was the weekly point of control, and it was at our level, at that heavy volume cluster. So, not only did we have the volume cluster here, but also the weekly point of control from the previous week.
When the price first tested the point of control, it didn’t really respect it and went past it. However, that doesn’t mean the weekly point of control is not a strong zone; it only shows us the determination of sellers. You can trade the weekly point of control from the other side, like here, short from here. That’s why I’m saying that this weekly point of control was still relevant and added strength to our level.
The next thing that added strength to the level was a VWAP setup. If you remember, recently I had a VWAP webinar where I showed you how to anchor the VWAP and trade using the anchored VWAP. Let me zoom in a bit. If I use the flexible profile here again, you can see that there was a heavy volume zone at the start of this trend activity. As I taught in that webinar, you want to anchor the VWAP at the end of that little rotation where heavy volumes were accumulated and at the same time at the start of the trend. In this case, you anchor the VWAP here. Let me delete all that. You can anchor it to this bearish candle or the next one; it doesn’t matter too much as it doesn’t change how the anchored VWAP looks here. As you can see, the price reacted very nicely to it at first, then again here, and then right here. So, we have the weekly point of control, the volume cluster, and the price touching that anchored VWAP. All these three signals were telling me to go short from here. These are the combos I like to trade because I rarely trade just one setup; I want to see multiple setups aligning.
That was the reasoning behind the trade entry. As you can see, the price respected that level very nicely. Now, let me show you the reasoning behind the take profit. There was a sharp reversal, and another thing I taught in the webinar is to anchor the VWAP at strong swing points or reversal points. If you anchor the VWAP to this bullish candle that marks the low of that swing point, it shows a strong support level. The price reacted to that support here. When the price was dropping, it was approaching that anchored VWAP support, which is risky because you don’t want to hold a short trade against that support. So, you exit the trade where the price hits that VWAP-based support. As you can see, the price reacted to that anchored VWAP very similarly to here. This was the reaction.
So, this is how the trade went. I hope you liked the analysis and didn’t mind that I wasn’t calling trades in advance in this video. I hope you found it useful anyway. If you want to learn more about volume profile, VWAP trading, or order flow trading, head over to my website, trader-dale.com. If you click on “Trading Course and Tools,” it will take you to a special page where you can get my best educational and indicator products discounted because I’m running an Independence Day sale. You can get the Volume Profile Pack and the Order Flow Pack with a massive discount. The Volume Profile Pack will teach you everything about volume profile trading, and the Order Flow Pack will teach you everything about day trading with order flow. If you’re interested in getting both packs, you can scroll down a bit and get them together here. That’s our Independence Day sale.
Thanks for watching the video, and I look forward to seeing you next time. Until then, happy trading!
Comments
Post a Comment