Video Transcript:
Hello everyone, it’s Dale here. Welcome to the new weekly trading ideas video. Today, we are going to cover three trading ideas. The first will be on the NQ, then we’ll cover a trading idea on the USD/JPY, and then on the GBP/USD. But before we jump into the trading ideas, just a very, very quick note about a sale that is about to end. The sale is regarding my trading education and custom trading tools. If you go to my website, trader-dale.com, and click the button “Trading Course and Tools” it will take you straight to the page with the sale. For the next two days, you can get my best educational and indicator packs. These are the Volume Profile Pack, Order Flow Pack, and the newest one, the Smart Money Pack. You can get them separately with a huge discount here, or if you scroll down a bit, you can get a massive discount by getting all four packs together for a discounted price. You can get all that until the end of the month. Alright, that’s about that—now let’s check out the charts.
Let’s start with the NQ. This is a 30-minute chart of the NQ (NASDAQ). By the way, this is the NinjaTrader 8 platform and my custom-made indicators—Volume Profile and VWAP indicators. What I want to talk about today is this support at 18,400. As you can see, there’s a gap above that support, and this is actually one of the reasons why this is a strong support. There’s the gap, and from there the price continues upwards. If you look at how the volumes were distributed before the gap, there is a significant volume zone—this one. This is actually a setup that I like very much and trade whenever possible. It’s a bit rare because gaps are not so common, but when I see a gap and behind that, a heavy volume zone, then yeah, this is something I definitely want to trade. This support is basically at the beginning of that heavy volume zone and also at the beginning of the gap. When the price makes a pullback—if the price makes a pullback, it doesn’t really matter when—but if it does, there’s a chance there will be a tendency to close the gap and then react to the first heavy volume zone behind the gap, which is this one. This is the beginning of that heavy volume zone. That’s why the support is right here, exactly where it is. Right now, I’ll just be waiting for that pullback with a limit order, and when the price hits this level, I’m going to go long. Chances are there would be a nice reaction, as the buyers from here will want to defend this place and push the price upwards again. Looking at the volumes, this looks like an important place for the buyers who were pushing the price upwards. The reason the level is below the gap is that, generally speaking, markets have a tendency to close gaps. So those are the reasons why I want to trade this.
Alright, that’s for the NQ. Let’s now check out the next trading idea. The next one will be on the USD/JPY. This is the USD/JPY, and I want to show you a support—this one—which formed at 142.98. If I show you how the volumes are distributed here, you can see that there was a pretty massive volume zone—this one. This heavy volume zone formed right before this very, very aggressive buying activity. This tells us that buyers were accumulating long positions here and then aggressively pushed the price upwards. Chances are that if there is a pullback, those buyers will become active again and push the price upwards from there. As you can see, there is also a fair value gap highlighted in green—that’s from Smart Money Concepts—and my level is at the beginning of the fair value gap. That’s where I like to trade from: the beginnings of fair value gaps. But I don’t trade fair value gaps blindly. I always want to see a heavy volume zone below the gap, like in this case.
Additionally, there’s one more thing that makes this level strong. If you look here, the price made a pretty solid reaction to that level in the past. It was a resistance because of the reaction, and that resistance turned into support when the price breached past it. So this is a price action setup adding strength to that level, which is primarily based on this heavy volume zone. Right now, we just need to wait for the pullback, and when the price reaches this place, go long from there.
That’s for the Japanese yen. Let’s now check out the British pound. This is a 30-minute chart of the GBP/USD, and the level I want to talk about is this resistance at 1.3372. For the last couple of days, not much has been happening on the British pound—it was just going sideways, not too much action here. But before that, there was this heavy volume accumulation followed by a strong sell-off. This tells me that sellers were active, accumulating their short positions, and then they pushed the price aggressively downwards. So we have a sign of sellers, and we know those sellers were active mostly in this area where we see the heavy volumes. By the way, this gray profile is a weekly profile showing volume distribution throughout the whole previous week. You can also use the flexible profile (that’s my custom-made indicator) to look only into the zone of this little rotation before the sell-off took place. But no matter how you look at it, it will always show you that there was a heavy volume zone formed at this price level. This tells us that sellers were active here, because of the sell-off afterward.
My level is right here. This is, by the way, the beginning of a fair value gap highlighted in red, because it is a bearish fair value gap, and it is also at the beginning of that heavy volume zone. That’s why I have the level here. Currently, I’m just waiting for a pullback, and when the price reaches this level, I’ll be waiting with a limit order and go short from there.
Now, before I wrap the video up, I’d like to announce the winner of a contest we had last time. The prize of the contest was my custom-made Volume Profile and VWAP indicators for the TradingView platform. Right now, on your screen, you see the name of the person who won the contest—congratulations to the winner! What I’ll do next is another contest for the next week. The only thing you need to do to participate is leave a comment below this video, which I’ll publish on YouTube. Next week, I’ll randomly pick one person to win this set of custom-made indicators.
That’s about that. Thanks for watching the video, and I’ll be looking forward to seeing you next time. Until then, happy trading!
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