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, and this is a 30-minute chart of the AUD/USD. I want to talk about a resistance which formed here, and it is at 0.6565. Now, the reasoning behind this strong resistance is this: if you look here in this area and use the Volume Profile, you can see that there are pretty heavy volumes formed here, right? And from this zone—and this is important—a strong sell-off started. This is telling us that the sellers who were active here were actually sellers accumulating their short positions, and then they pushed the price downwards. So this is apparently a strong level for sellers, and in the future, those sellers are likely to defend it. That’s why I have the level here. The exact placement of the level is right here because this is also the beginning of a huge fair value gap—that’s this zone highlighted in red. The fair value gap is a concept from smart money trading. And in a short trade scenario, I like to trade from the beginning of the fair value gap, which is right here, exactly at 0.6565.
As you can see, it nicely aligns with the heavy volume zone and the start of this aggressive sell-off, telling us about those aggressive sellers being here. So what we need to do now is just wait for the pullback, and when the price hits this level, take a short from there. If you look at the weekly Volume Profile here, you can see that from the weekly perspective, this is also a pretty important level, as we have those massive volumes here on the weekly profile—and that’s also something that adds strength to this level. Right? So that’s that short on the AUD/USD.
Now let’s check out the next trading idea, and it will be on the EUR/GBP. This is the EUR/GBP 30-minute chart, and I want to talk about a newly formed support which formed on Friday. This is the support, and it is at 0.8643. If you look at the candles, then you can see that there was a sort of rejection of lower prices. The price was dropping, but then there was this rotation. Buyers took over, reversed, and pushed the price upwards. So this is a sign of strong and aggressive buyers. And what we want to see within such a rejection is a heavy volume zone, because a heavy volume zone shows you the place where the buyers who reversed the price were active. As you can see, it is this place, and it is a strong support area. So it is very likely that the price will react here.
My level is at 0.8643, and it is here because this is the beginning of a fair value gap—it’s highlighted in green. There are a couple of fair value gaps, but if they are close to each other, then I look at them as one big fair value gap. I like to trade from the beginning of the fair value gap, which is here. And as you can see, it nicely corresponds with the heavy volume zone. So when the price makes a pullback—if it makes a pullback to this place—then it is likely there’ll be a reaction from buyers here, and the price will go upwards from here. So what we need to do now is just wait, and if there is that pullback, then go long from there.
Just be careful because on Thursday there’s strong macro news on the EUR/USD. So you don’t want to be trading during that macro news, right? I’m talking about the Main Refinancing Rate and also the Monetary Policy Statement, and then the following ECB press conference. This is major macro news, so you definitely want to be careful around that. So that’s about the EUR/GBP.
Now what I want to do is switch to my swing trading layout. This is it. And I want to talk about a level which is on the GBP/USD. As you can see, this is a daily chart. The daily chart is my favorite for swing trading. What I have here is the yearly VWAP and also the yearly Volume Profile—that’s this volume profile right here. But what I’m going to show you is a level based mostly on the flexible Volume Profile, which is this one. That’s the profile you can move around the chart and use to look into specific areas. In this case, I’m interested in this specific area—in this rejection of higher prices—because a rejection of higher prices like this is telling me that sellers stepped in and started to sell.
And I want to see the place where the sellers were building up their short positions, and the place where they rejected the higher prices. So if you look at the profile, then there’s a heavy volume zone very close to the level where the price actually turned from uptrend to downtrend. So this is exactly what I want to see and what I want to trade. My short level is at 1.3700. This is more or less the beginning of that heavy volume cluster. And again, that heavy volume cluster is telling me that sellers stepped in here, started to sell, and then they reversed the price. So if the price makes a pullback to this level, then chances are that sellers from here will become active again and they’ll want to push the price downwards from here again. All right?
So what we need to do now is just wait. And if there’s that pullback, then go short from there. And with those swing levels, I don’t really mind waiting a couple of weeks, months, or even a year for a level to get hit. I don’t really mind. Those levels are very strong levels to trade from, and markets have great memory. So, as I was saying, I don’t mind waiting. But when the price hits this level, I’ll have a pending limit order here, and I’ll go short from there.
Now keep in mind that this is a swing trade, so you also need to use an appropriate stop-loss and take-profit. You need to let the trade breathe. So what I’m going to do is use a stop-loss which will be right here at the top of this swing point, which is exactly 92 pips. Right? And regarding the take-profit—it needs to be at least a 1:1 risk-reward ratio. So if my stop is here, then take-profit needs to be at least here. I usually try to get more out of the trade, so the take-profit will be at least here, but ideally a little bit lower. Right now, I’m not able to tell exactly, because I still need to see how the price approaches the level, and then I need to see how the volumes are distributed here. Then I’ll place the take-profit according to the volumes. But the thing that stays fixed is the stop-loss—it will be here—and the minimum take-profit will be here. So it is at least a 1:1 risk-reward ratio trade.
All right. Now, if you guys are interested in learning more about Volume Profile trading, then head over to my website—it’s trader-dale.com. And if you click the “Trading Course and Tools” button, it will send you to this page. Currently, I’m running a special sale on my best educational and indicator packs. As you can see here, it will be ending by the end of the month. Until then, you can get a discount on the Volume Profile Pack, Order Flow Pack, VWAP Pack, and Smart Money Pack. You can get them separately here, or if you scroll down a bit, there’s a very special deal for you where you can get all four together for only $697.
Now, before I wrap the video up, I’d like to announce the winner of a contest we held last time. The prize was my custom-made Volume Profile and VWAP indicators for the TradingView platform. And right now, on your screen, you see the name of the person who won the contest. So congratulations to the winner! What I’ll do next is run another contest for next week. The only thing you need to do to participate is leave a comment below this video, which I’ll publish on YouTube. And next week, I’ll randomly pick one person to win this set of custom-made indicators.
So 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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