Video Transcript:
Hello everyone, it’s Dale here with a new video from the trade of the week series. The goal of this series is to show you how I apply the things that I show you in other videos, like the strategy and the take-profit and stop-loss placement, in real trades that I actually take. And today I want to show you a trade which I took last week on GBP/USD, because this was a really very, very beautiful trade. So let me show you how it went. The reason why I’m saying that this was beautiful is that there were a couple of trading setups, and they aligned very neatly together, showing a very strong resistance. So let me show you the setups. The first setup here was a volume profile setup. What you see here is a 30-minute chart of GBP/USD, and the volume profile setup goes like this: you need to see a rotation like this one, or a bigger rotation like this one, followed by a very strong trend like this trend. That trend should start from that rotation, right? Then there needs to be a heavy volume zone in that rotation area. So I use my flexible volume profile like this to look into the rotation zone to identify the heavy volume area. This one here is the important heavy volume zone. You can also use the volume profile like this over the whole area, over this whole rotation area, and it still shows this heavy volume spike here. So what the chart is telling us is that we had a heavy volume zone from which a strong trend started. In this case, it was a downtrend. So it looks like sellers were active here, building up their short positions, and afterwards they pushed the price downwards. This is a volume profile setup which I call the volume accumulation setup. It is one of my favorite volume profile setups. And the way to trade this is you simply draw a line at the beginning of that heavy volume cluster, like this one this blue line here, this being the volume cluster. Then you wait for the pullback, and when the price hits that level and makes a first touch here, you enter the trade. In this case, this is a short trade scenario. So in this case, there was a short. This was the reason number one for this short trade.
Now, reason number two is that there was a weekly point of control. If you look at this gray profile on the left, it shows how volumes were distributed throughout the whole week. And at that time, this was the weekly point of control. So the heaviest volumes throughout the whole week this being the whole week were traded here, right at this level. So not only was there the volume profile setup, but also the weekly point of control. At the same time, there was also another thing, and it is the first deviation of the weekly VWAP. Weekly VWAP is this yellow line, and the gray lines this one and this one those are the deviations, and price likes to react to them. And if you look at this deviation right here, then the price went towards it, overshot the heavy volume zone just a little bit, hitting that first deviation of the VWAP, and from there there was that reaction. So at this point here, we had three trading setups. We had the volume accumulation setup, we had the weekly point of control, and we had the first deviation of the VWAP aligning in this area. So what I did, I went short from this place. This was the beginning of the heavy volume zone. It was a rather quick trade; the reaction was very swift. And let me show you how I placed the stop and take profit for this trade.
When there is a rotation like this one, then what I want to do is usually place my stop above the heavy volume zone. Also, I like to place my stop at the top of little swing points like this one. So in this case, the stop was right here. This line was the stop. It should be behind the heavy volume zone because the heavy volume zone represents a barrier. The price shouldn’t go past it, so that’s why the stop is behind it. So that was the stop loss right here. And regarding the take-profit, what I do is I place my take-profit in heavy volume zones. So I look into the area where the price was approaching my short level this being the area where the price was approaching that short level. And if I use the volume profile here in that area, then you can see that there is a significant volume cluster right here, this one. And volumes usually work as support or resistance zones. That’s why I wanted to quit the trade there. Let me delete all that. I wanted to quit the trade here at the beginning of that heavy volume cluster, because there was a chance that this volume cluster would work as support and the price would go upwards from it and change direction. So that’s why I wanted to quit the trade there. Also, another thing here was that there was the weekly VWAP, this yellow line, and generally speaking the VWAP line is a very good place for a take-profit as well. So what we had here was the heavy volume zone and the VWAP, and they aligned more or less in this area. So that’s why the take-profit was here. This was the short trade entry, this was the take-profit right here, and as you can see, in the end the price really did react to that heavy volume zone and to the VWAP. Eventually it turned and went upwards. So I think it was a good call to quit the trade right here at that volume cluster.
As you can see, I’m applying all those things that I teach in my other videos regarding the trade entry, the take-profit placement, and stop-loss placement. I apply everything that I teach there, and this is how the markets react to it. By the way, this level which I showed you, I published that level in advance for members of our trading course. Let me show you. This is our members area. This is where I publish my levels in advance every day. This is that prediction from that day where the level got hit right here. This is the level 1.3117. See, it was GBP/USD and it was a short. So 1.3117 right here.
That’s this level. So all the members had a chance to trade this one alongside me. If you want to join us, you are very welcome to do so. Just go to my website; it is at trader-dale.com. And if you click Trading Course and Tools, then on this page you can browse my trading education and indicator tools. There are four main packs: Volume Profile Pack, Order Flow Pack, VWAP Pack, and Smart Money Pack. You can get them separately here, or scroll down a bit and get them all together all four packs together in one big bundle which is quite significantly discounted. So that’s about that. I hope you guys found the video useful, and I’ll be looking forward to seeing you next time. And until then, happy trading.
Comments
Post a Comment