Video Transcript:
Hello everyone, it’s Dale here. In this video, I’m going to show you the best Volume Profile levels to trade this week. We’ll take a look at the indices and then also at some levels to trade on Forex. So, let’s get to it. What you see before you here is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. And this is a 30-minute chart of the ES. On the ES, I want to talk about a strong resistance which formed on Thursday. It is this resistance and it is at 6,763.
Now let me show you the reasoning behind this resistance. If you grab the Volume Profile the Flexible Volume Profile, that’s the profile you can move around like this to look into specific areas in the chart and if you use it like this to select this strong selloff, then it shows a significant volume zone right here at the beginning of this strong selling activity. And this is telling us that sellers were active here. They were building up their short positions here and then they initiated this strong selling activity. And this strong heavy-volume zone is still important for them because they placed a lot of their short positions there, right? And the level that I have here that resistance is at the beginning of that heavy-volume zone. Right? So if the price comes to that level, it’s likely that the sellers from here will want to defend that place and push the price downwards from there again. Those guys that placed those heavy volumes there. So that’s the first and most important thing behind this level.
Another important thing here, another setup here, is a Fair Value Gap. It’s highlighted in red. That’s the Fair Value Gap from Smart Money Concepts. In the short-trade scenario, I like to trade from the beginning of the Fair Value Gap like this. This is the beginning of the bearish Fair Value Gap. And as you can see, it aligns with our level, which is at the beginning of the heavy-volume zone. Right? So we have two setups, one confirming the other, and that makes that level even stronger. So as I was saying, right now we just need to wait for that pullback, and when the price hits this level, go short from there.
All right. Now we have a very, very similar level on the NQ, so let me show you. This is NQ. It’s very closely correlated to the ES. And here you can observe more or less the same thing. We have a strong selloff this is the selloff and a heavy-volume zone at the start of that selloff. So again, this heavy-volume zone represents a place where sellers were active, building up their short positions before pushing the price into this selloff. Right? Again, the level is at the beginning of that heavy-volume zone. In this case, the resistance is at 25,155.
That’s the resistance. And again, we have a Fair Value Gap. Let me highlight it like this: Fair Value Gap. And the beginning of the Fair Value Gap is right here. So again, we have a heavy-volume zone, we have a Fair Value Gap, and both of those are the reason why I want to go short from there. So currently, we just need to wait for that pullback, and when the price hits this level, then go short from there.
As I was saying, the ES and NQ are correlated. So if both of those pullbacks to that resistance occur at the same time on the NQ as well as on the ES then I’m going to use just half of my position to lower the risk. Because it’s very likely that if this trade gets triggered at the same time on both ES and NQ, it’s very likely both are going to be a winner or both are going to be a loser. So I don’t want to have too much of a risk here. That’s why I’m going to halve my position if this gets hit at the same time.
All right. What I want to do next is show you a strong level on the British Pound. But before that, just a very quick note I don’t want you to miss this because we are running the biggest sale of the year. It is the Black Friday Sale on my website. Let me show you real quick and then we’ll get back to that strong level on the British Pound.
So, if you go to my website, which is trader-dale.com, and click this button “Trading Course and Tools” then it will bring you to this page where you can browse my trading education and custom-made indicators. Until the end of the month, you can get these for a discounted price. It is the Volume Profile Pack, Order Flow Pack, VWAP Pack, and Smart Money Pack. You can get them separately here, or scroll down a bit, and at the bottom of this page you can get all four packs together in one massively discounted bundle. You can get this until the end of the month.
Okay, let me now go back to the charts and let’s take a look at the British Pound. This is a 30-minute chart of the GBP/USD. And here I want to talk about a strong support which formed on Friday. The support is right here at 1.351.
It is based on a Volume Profile setup which is called the Rejection Setup, this being the rejection. It is a rejection of lower prices because the price was dropping quickly and then suddenly turned and went up again very quickly. Within such a rejection, there needs to be a significant volume cluster that would represent a place where buyers stepped in. We have this volume cluster and this volume cluster. Now I’m inclined to trade this lower volume cluster, even though the volumes are not as heavy as in here. The reason is that the lower volume cluster also aligns with a Fair Value Gap this Fair Value Gap. It is a bullish Fair Value Gap right here, and this is the beginning of the Fair Value Gap, the beginning of the bullish Fair Value Gap. And when there is a bullish Fair Value Gap, I like to trade from the beginning of it.
So we have that Fair Value Gap, the beginning of it here. At the same level, we have the beginning of the heavy volume cluster here. And I’m waiting for a pullback, and when the price hits this level, I’m going to go long from there. The buyers from here who reversed the price in this rejection should become active here again because this clearly is an important level for them. And those guys should push the price upwards again.
By the way, let me show you one more thing here a trade which I’ve just entered on the EUR/USD. By the time this video gets to you, it’s probably going to be over. But I’ve just entered a short on the EUR/USD right here at 1.1533. Let’s see how it goes. It is based on a heavy-volume zone this heavy-volume zone and it is based on the selloff which took place afterwards, after that heavy-volume zone got formed. Right now we have a pullback, so the price should react like this.
I had a very similar setup last week and it was in here. There was this heavy-volume cluster followed by this selloff. I was trading from the beginning of that heavy-volume cluster, and there was also the beginning of a Fair Value Gap. I was trading from here it was a nice short, nice winner and I’m hoping for something like this to happen in here as well. All right, let’s see how it goes.
Now, before I wrap the video up, I’d like to announce the winner of the contest we had last time. The prize of the contest 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 in this contest 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. And until then, happy trading.
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