Video Transcript:
Hello, everyone! It’s Dale here with a new weekly trading ideas video. What you see before you is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. Let’s jump into the first trading idea, which is on EUR/USD.
This is a 30-minute chart of EUR/USD, and as you can see, there’s a significant opening gap. The gap is also present on all the major currency pairs. The reason for this gap is most likely related to news you can read on Forex Factory. Here’s the headline: it’s mostly about the pick of the U.S. Treasury Secretary reassuring the bond market.
For us as traders, the exact reason for the gap is not as important as identifying trading opportunities. Let’s go back to the chart and analyze the situation.
What I expect is that the gaps on all the major currency pairs will get closed rather soon, as this is typical behavior in Forex. Initially, I had a short level marked here and wanted to go short from this area. However, I held off because of the gap.
Now, the second short I have on EUR/USD is based on this heavy volume zone. From this area of heavy volume, there was a sharp and strong selloff, indicating that sellers were actively building short positions here before pushing the price downward. This makes it a solid level to trade from. The level is at 1.0532, and I anticipate that sellers from this area will defend it if the price pulls back.
Additionally, the price has reacted to this area in the past, meaning it was previously a support level that has now turned into resistance. This strengthens the level further. Lastly, there’s a Fair Value Gap (FVG) from smart money trading concepts, highlighted in red, which begins precisely at this level.
So, my plan is to wait for a pullback to this level and look for short opportunities from there. Until the gap gets closed, I’m avoiding any long trades on EUR/USD.
Let’s move on to the next trading idea, which is on GBP/USD. The situation here is very similar to EUR/USD. This is a 30-minute chart, and we also see an opening gap. The price opened above my short level, so I refrained from entering a trade. Now, the price is moving above the gap, and my expectation is that the gap will be closed soon.
The short level I’m watching is at 1.2635. Using the Volume Profile over the rotation before the strong selloff, we can see heavy volumes were formed. This suggests that sellers were building short positions here before pushing the price down. They are likely to defend this level if the price pulls back.
Looking at the price action, this area also acted as support in the past, which has now turned into resistance. Additionally, there’s a Fair Value Gap that begins exactly at our level, further strengthening it.
Finally, if we analyze the weekly Volume Profile, the Point of Control (POC) for the previous week is also at this level. This means it was the most traded price level of the week, adding even more confluence. These combined factors make this level a strong candidate for a short trade.
Now let’s move to USD/JPY. On this 30-minute chart, we see another gap. Following the gap, there was a strong reaction, with heavy volumes forming in this rejection area. These heavy volumes suggest that buyers became active here, building long positions to push the price upward.
My long level is at 153.70, at the beginning of this heavy volume zone. There’s also a bullish Fair Value Gap at this level, adding strength to the trade idea. Ideally, I’d like to see the price pull back to this level and then trade the move upwards.
The optimal scenario would involve the gap being closed after the pullback, allowing us to ride the long from this level to close the gap. If the gap closes before the pullback, I’ll still consider the trade, but my profit target will be more conservative.
Let me quickly mention that I’m running a Black Friday sale on my website, Trader-Dale.com. If you click the banner on the homepage, you’ll find a special offer on my most popular educational packs.
You can get the Volume Profile Pack, which teaches everything about Volume Profile trading, and the Order Flow Pack, focused on day trading with Order Flow. Both packs include all the indicators you’ll need. If you scroll to the bottom of the page, you’ll see a special discounted bundle for just $497, but this offer is only available until the end of the month.
Before wrapping up, I’d like to announce the winner of our previous contest! The prize was my custom-made Volume Profile and VWAP indicators for the TradingView platform. Congratulations to the winner! You can see their name on the screen now.
For this week, I’m hosting another contest. To participate, simply leave a comment below this video (published on YouTube), and next week I’ll randomly select a winner to receive this set of custom indicators.
Thanks for watching! I’ll see you in the next video. Until then, happy trading!
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