Video Transcript:
Hello everyone, it’s Dale here with a new weekly trading ideas video. Today we are going to look at three trading ideas. First on EUR/USD, then we’ll take a look at NZD/USD, and then on EUR/CAD. So let’s take a look at it.
What you see before you is the EUR/USD chart. It is a 30-minute time frame, and the platform is NinjaTrader 8 with my custom-made Volume Profile and VWAP indicators. What I want to talk about today is a support level at 1.1611. This level was formed on Tuesday last week and is based on this area of strong buying activity. If you look into this area with the Volume Profile, you’ll see that heavy volumes were formed here, and after that, strong buying activity occurred.
Now, the volumes were not super strong; they don’t stand out as much as I like them to. I think it’s better to look at it like this: in this small rotation, you can see the volumes better, and this rotation is actually what matters most because it was the last rotation before the strong buying activity. This is the place where the most important volumes formed, creating a volume cluster. Buyers were accumulating long positions here and then pushed the price aggressively upwards.
This volume cluster is not particularly strong, but it is at the base of this very aggressive buying activity, which makes it important. It’s not just about the strength or size of the volumes, but also the position of the volume cluster. What we have here are buyers accumulating their long positions and then pushing the price upwards. I believe this was triggered by some macro news, but that doesn’t really matter. What matters is the aggressive buying. You can also see a small fair value gap, another sign of aggressive buyers.
So, the level is at the beginning of this heavy volume zone. If the price makes a pullback—it doesn’t matter when, today, tomorrow, or next week—the level remains 1.1611. When the price hits this level, there’s a chance that the buyers will defend it and push the price upwards again. What adds strength to this level is the fair value gap highlighted in green. That comes from Smart Money Concepts. I like to trade from the beginning of a fair value gap, which is why the level is exactly at 1.1611.
Now let’s check out NZD/USD. This is a 30-minute chart of NZD/USD. What I want to show you here is a setup you can trade when the market is trending. For example, in this case, the market went into a strong selloff. When it does that, I like to use my Volume Profile over the trend area and look for significant volume clusters to trade pullbacks from.
A very important volume cluster is this one, and I’ll show you why. From this place, you can see that the downtrend continued aggressively, with a fair value gap highlighted in red. My level is at the beginning of that heavy volume cluster, at 0.5947. If the price reaches this place, there’s a high chance of a reaction, because sellers from this volume cluster who pushed the price down and added to their short positions will likely become active again and push the price lower.
So, the first reason behind this short level is the volume cluster. The second reason is the big fair value gap, which shows seller aggressiveness and adds strength to the level. The third reason is a setup called support becoming resistance. If you look here, you can see the price reacted to this level in the past, meaning it was a support. When the price broke below it, the support turned into resistance. This resistance is almost exactly at our level, within just a pip or two.
So we have three things confirming this strong resistance level: volume cluster, fair value gap, and support becoming resistance. That’s the kind of combo I like to trade. What we need to do now is wait for a pullback to 0.5947 and go short from there.
The last trading idea is on EUR/CAD. Here we have a similar scenario, only reversed. In this case, we have an uptrend. By the way, this is a 30-minute chart of EUR/CAD. In this uptrend, we have a significant volume cluster. It shows that buyers pushing the price upwards paused here, adding to their long positions before becoming more aggressive and driving the price even higher.
The beginning of this volume cluster is at 1.6122. That’s where my support level is. If there’s a pullback to that level, there’s a chance of a strong reaction because buyers from this cluster are likely to defend the area where they placed many of their longs. You can see that clearly on the Volume Profile.
If you look here, the price also reacted to this area before—not exactly at the level but in the general zone. That means it was a resistance, and when the price broke above it, the resistance turned into support. Even though it’s not exactly at the level, it still adds strength. So I believe both the volume cluster and the former resistance turning into support make this level at 1.6122 strong.
If you’re interested in learning more about Volume Profile trading, I recommend visiting my website at trader-dale.com. If you click the “Trading Course and Tools” button, it will take you to a page where you can check out my trading education and indicator packs: the Volume Profile Pack, the Flow Pack, the VWAP Pack, and the Smart Money Pack. You can get them separately or as a combo, which includes all of them together at a massively discounted price.
Before I wrap up the video, I’d like to announce the winner of the contest we had last time. The prize was my custom-made Volume Profile and VWAP indicators for the TradingView platform. The name of the winner is now on your screen, so congratulations!
I’ll also run another contest for next week. To participate, all you need to do is leave a comment below this video when I publish it on YouTube. Next week, I’ll randomly pick one person to win this set of custom-made indicators.
That’s all for today. Thanks for watching, and I look forward to seeing you next time. Until then, happy trading.
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