Video Transcript:
Hi 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. The chart is the EUR/USD on a 30-minute time frame, and I want to talk about a strong support level. You can see that support here—it is at 1.1439. There are a couple of reasons why this is a strong support. As usual, let me start with the Volume Profile. If you look at this area, it shows a strong trend, and when you apply the Volume Profile to this area, it reveals significant volume zones. There is this significant volume zone, then this one. The first one has already been tested—there was a reaction. Then there was the second one, which also got tested. So both have been tested. Then there’s the third one, which hasn’t been tested yet. If there is a pullback to this heavy volume zone, there should be a similar reaction, just like we saw here and here. The reason is that as buyers pushed the price upward, they were leaving heavy volumes in those areas. These represent places important to the buyers, because they were adding to their long positions there. They tend to defend those heavy volume zones, as seen in these earlier reactions. That’s why the price should also react to the third volume cluster. The buyers from here should defend it and push the price upward again.
Now, there’s another thing that adds strength to this level: a fair value gap, highlighted in green. This is the fair value gap, which comes from Smart Money Concepts. In a long trade scenario, I like to trade from the beginning of the fair value gap—which is exactly at our level. A third factor that reinforces this level is that it used to be a strong resistance in the past. You can see that the price was reacting to this zone many times before, which means it acted as resistance. When the price broke through that resistance, it turned into support. That’s another setup that strengthens this level. Now we just need to wait for that pullback, and if it happens, we’ll take it from there. The level is at 1.1439.
The next trading idea I want to talk about is on the AUD/USD. So let’s check it out. This is the AUD/USD on a 30-minute chart, and I want to talk about this resistance at 0.6510. This one is based on a significant rejection of higher prices. This is the rejection. A rejection means that the price moves in one direction, then suddenly turns and moves the other way. It needs to be sudden and aggressive. Within that rejection, somewhere around where the price turned, you should see a significant volume cluster—like this one. This is where the sellers started to jump in. They began adding to their short positions here and reversed the buying activity into selling. Those sellers should still be active here, and when the price returns to this level, they should defend it and push the price downward again.
So now we need to wait for the pullback. If it occurs, we take it from there. The level is at 0.6510. Oh, and by the way, there’s also a small fair value gap right here. That’s the fair value gap. In a short trade scenario, you want to trade from this area—the beginning of the fair value gap, which is exactly where the level is. So that’s the plan for AUD/USD.
Now let’s check out the next trading idea, and it will be on the USD/CAD. This is the USD/CAD, and I want to talk about this resistance, which formed on Friday. It is at 1.3613, and it’s based on significant volumes. You can look at it either this way—these heavy volumes—or by shifting the profile like this. In that case, we’re talking about this heavy volume zone, which begins right at our level. As you can see, a strong sell started from there. Also, by the way, there was a fair value gap highlighted in red. This is the beginning of the fair value gap, which also matches the beginning of the heavy volume zone. The heavy volume zone indicates a place where sellers were active, adding to their short positions. So, when the price reaches this area, sellers should defend it and push the price downward.
There was also a past reaction to this level, meaning it acted as a strong support. The price reacted to it strongly before, and now that the support has been broken, it has turned into resistance. So, we now have a level that combines three trading setups: first, the Volume Profile setup; second, the fair value gap; and third, the support-turned-resistance setup. All of them point to this level, so chances are that when the price gets there, we’ll see a reaction.
Now, if you guys are interested in learning more about Volume Profile trading, head over to my website: trader-dale.com. If you click the button that says “Trading Course and Tools” it will take you to a page where you can browse my trading education and custom-made trading tools. There’s the Volume Profile Pack, Order Flow Pack, VWAP Pack, and Smart Money Pack. You can get them separately there, or scroll down a bit and get them all together in one big discounted bundle—all four packs for $797.
Before I wrap up the video, I’d like to announce the winner of the contest we ran last time. The prize was my custom-made Volume Profile and VWAP indicators for the TradingView platform. Right now on your screen, you’ll see the name of the person who won. Congratulations to the winner! I’ll run another contest for next week. To participate, all you need to do is leave a comment below the video on YouTube. Next week, I’ll randomly pick one person to win the same set of custom-made indicators.
That’s all for today. Thanks for watching the video, and I’ll look forward to seeing you next time. Until then—happy trading!
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