Video Transcript:
Hello everyone, it’s Dale here with a new video from the trade-of-the-week series. In this series, I want to show you how my real trading goes and how I apply all the things that I teach you in my courses. That means trade entries, stop-loss placement, take-profit placement, position management everything applied in real trading. So today we are going to take a look at a trade that I took on USD/JPY last week. Let’s check it out.
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 USD/JPY. The trade that I want to talk about was based on a Volume Profile setup which pointed me to this support right here. The Volume Profile setup went like this: there was an uptrend on USD/JPY, and within that uptrend there was a significant volume zone. When there’s a trend and a significant volume zone inside that trend, it usually tells you and shows you a place where buyers were active adding to their long positions as they pushed the price higher. So this heavy volume zone represents that place where buyers were active.
As you can see, my level is at the beginning of that heavy volume zone. But not only that it’s also based on a couple more things, not just the Volume Profile setup. It’s also based on the fact that there was a fair value gap right here. That’s from Smart Money Concepts. And in a long-trade scenario, I like to trade from the beginning of a fair value gap, which is here. This is the beginning of the fair value gap. That’s our level.
So that’s the second thing we have the Volume Profile setup and the fair value gap. And the third reason for the trade entry was VWAP. This yellow line here is the weekly VWAP. At the time of the pullback, when the price reached this level, the weekly VWAP was very close to our level. So it was another confirmation of the strength of that level.
All right. So we have Volume Profile, fair value gap, and VWAP all pointing me to this level. That’s why I went long from there. As you can see, it was a rather successful trade entry.
Let me now talk about the stop-loss and take-profit placement because those are also very important it’s not just about trade entries. The way I place my stop loss is I place it behind a heavy volume zone. In this case, we had the heavy volume zone here, and the stop went behind it. I had the stop exactly here, below the wick of this candle, which was the low of this little rotation where the volumes were formed. But the important thing is that the stop is behind the heavy volume zone.
Now, regarding take-profit placement, you want to place the take-profit in an area where the price is likely to turn. Because I went long from here, I was looking for a resistance standing in the way of this long trade. There were a couple of things here. The first reason why I quit my trade here this was my take-profit was that the price reacted here in the past. This was a support because the price made that reaction, and when the price broke below the support, it turned into a new resistance. So that’s reason number one price-action setup telling me that the price should reverse from here.
The second reason is the first deviation of VWAP the grey line. The price likes to react to it. Here the price hit it from below, which gave another reason for the price to turn from here.
Another thing was that there was a massive heavy volume zone. Those volumes represent a strong resistance. So we had an area full of resistances, and that’s why I decided to quit the trade there because I expected the price to react to those resistances and go down, which it eventually did.
So you want to quit your trade before it reaches significant resistance or multiple resistances as in this example. Right here was the take-profit, here was the stop, and this was the trade entry.
Those are all the reasons why I entered the trade and why I managed it the way I did. By the way, this level and all the levels that I trade are not just levels that I pick randomly from the chart. These are levels that I actually publish to members of our trading course so they can trade them alongside me.
Let me show you real quick. This is our members’ area and this is the prediction the levels that I posted for that day. As you can see, here was that level on the Japanese yen: 154.35. Here it is 154.35. That’s the long from the prediction table that I post for members every day.
If you want to join us, you are very welcome to do so. Just go to my website, trader-dale.com, and there you can enroll in one of my trading courses. All right, that’s about that. Thanks for watching the video. I’ll be looking forward to seeing you next time, and until then happy trading.
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