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🎯Trade of the Week | How to Exit a Trade at the Right Time with Volume Profile


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Video Transcript:

Hello everyone, it’s Dale here with a new Trade of the Week video. Today I’d like to talk about a trade I took last week on USD/CAD. I want to show you this trade specifically because it demonstrates that it’s not only important to have a good trade entry, but also to have the right take-profit. This can mean the difference between a winner and a loser. So let’s check out the chart and the trade.

What you see before you is a 30-minute chart of USD/CAD. The level I was trading last week was a short from here. This was the resistance line, and the reason behind this level was the heavy volume zone that was followed by strong selling activity. This heavy volume zone represented a place where sellers were building up their short positions before they pushed the price downwards in this very aggressive downtrend. It was very important that there was such a strong downtrend because it showed the strength of the sellers.

It’s also important that there were a couple of fair value gaps within this strong selloff, and this confirmed to me that this should be a strong resistance and that sellers would defend it. That’s why I went short from this place. By the way, I made this prediction public—I sent it to you through email and also published it on TradingView in advance. When the price hit that level, the reaction was spot on, and the price went down.

Now, what’s very important here is the take-profit placement. What I like to do is place my take-profit before a significant barrier. In this case, the barrier was this heavy volume zone. Heavy volume zones often work as support and resistance zones. That’s why I like to trade from them—not just for trade entries, but also for trade exits. My trade exit was at the beginning of this heavy volume zone right here. This is where I took my profit, because I was afraid the price would react to this heavy volume zone. Heavy volume zones represent strong support and resistance—in this case, possible support.

This was especially true because the heavy volume zone was followed by a bullish fair value gap, which added strength to the zone. So I was concerned the price might turn here. Eventually, the price overshot that support a bit but then did react there. This shows how important it is not just to have a good trade entry but also a good trade exit. My number one rule for trade exits is: always take profit before the price reaches a significant barrier. Since I trade with Volume Profile, for me that barrier is a significant volume zone.

My rule for stop-loss placement is to put the stop behind a significant barrier. In this case, the barrier was this heavy volume zone, and my stop was placed behind it. So this was the stop, this was the trade entry, and right here was the take-profit.

That’s about it. If you’d like to join me and other prop firm traders in the live trading room, where we trade and comment on trades like this every day, you can get in touch by going to my website, Trader-Dale.com. If you click on “FTA” there, it will take you to the Funded Trader Academy page. On that page you can read more about the academy, see the mentors, and if you’re interested, you can book a call with us. We’ll walk you through the service, and then you can decide whether or not it’s right for you.

All right, thanks for watching the video. I’ll see you next time. Until then, happy trading.

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