Video Transcript:
Hello everyone, it’s Dale here. Welcome to this video, where I’ll show you the best volume profile levels to trade this week. What I’d like to start with is a recap of levels from the previous week, from the previous video. So let’s start with the trade from the prediction on the euro. What you see here is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. This is the EUR/USD chart on the 30-minute time frame. The level we had last time was right here. This level was based on a volume cluster formed within this downtrend. I took a short from this place, and even though there was a smaller reaction initially, the price then went straight past the level and I got stopped out. So I took a loss on this trade. What I did later was take a reversal trade. That’s what I always do when price shoots past my level with no or very little reaction. The reversal means that I waited for a pullback to the same level, only this time I didn’t go short, I went long. This is how I made my money back from this loss.
A very similar scenario happened on the trade on the British pound, which was also from the prediction in the previous week’s video. That trade on the GBP/USD was a short based on this volume cluster. This was the resistance, and I went short from there. Unfortunately, this was again a losing trade. I got stopped out, then I waited for the pullback and went long from there. Again, this was a reversal trade. In the end, I was able to make my money back with this long trade from the exact same level. All right, so that’s about the trades from the previous prediction.
Today, I’d like to focus more on swing trades. What I’ll do now is switch over to my swing trading workspace, which is a workspace where I work with the daily time frame. Today I’d like to talk about three swing trading ideas, all on the daily time frame. The first one is on EUR/GBP. This new resistance that formed is based on this volume cluster formed within the downtrend area. My resistance is this line right here, at 0.8709. So that’s the short from 0.8709. Currently, I’m waiting for the pullback. When the price hits this level, I expect that the sellers who accumulated those shorts, those heavy volumes here, will become active again and push the price down from this level. What also adds strength to this level is that there was a reaction in the past, not exactly at the level but close to it. In the past, this general area worked as support, and now when the price broke through it, that support turned into resistance. That’s a price action setup which aligns nicely with this volume cluster. Keep in mind that when you are trading long-term or swing trades, you need to place your stop and take profit according to the time frame. In this case, this is the short trade entry, the stop is at the high of this candle, and the risk-reward needs to be at least one. The take profit should be at least here, ideally even lower. That’s what I want to trade on EUR/GBP.
Let’s now take a look at another swing trading idea. The next one is on AUD/CAD. This is a daily chart of AUD/CAD, and what caught my attention was this strong buying activity, which looks like a breakout from a very long rotation. If you take the flexible Volume Profile and use it like this, it points to this heavy volume zone that occurred right before the breakout. We have a heavy volume zone, and from there the price broke out with a huge fair value gap. This is the first fair value gap, and above that there is another fair value gap. If they are on top of each other, I look at it as one big fair value gap, and I like to trade from the beginning of it, which is exactly at 0.92. At the same time, this is also more or less the beginning of that heavy volume zone. Right now, I just want to see a pullback to that level and then go long from there, from the beginning of the fair value gap and the beginning of that heavy volume zone. This heavy volume zone represents a place where buyers were adding to their long positions before the breakout. That’s why I want to trade from there, because thfaie buyers should defend this place in the future. Since we are talking about swing trades, we need to let the trade breathe. The stop will be below this wick of the candle, the lowest wick of this small rotation. The stop will be here, and again I like to trade with a risk-reward ratio of at least one or better, so the take profit needs to be at least somewhere in here or even higher. That’s for AUD/CAD.
The next one is AUD/JPY. I’ll zoom in a bit. This long level is a support at 103.10, and it is based on these heavy volumes. As you can see, those volumes occurred in a rejection of lower prices. This is the rejection, and this is the place where buyers stepped in. They started buying aggressively in heavy volumes, and then this uptrend started with a big fair value gap right here. As you can see, my level is at the beginning of the fair value gap. That’s where I prefer to trade from. Right now, I’m just waiting for the pullback. When the price reaches the beginning of the fair value gap, it will be a long from there, at 103.10. As you can see on my chart, my stop is at 102.31, and the take profit will be at least here. This is a risk-reward ratio of one, with take profit at 103.89. Right now, we just need to wait for the pullback. It doesn’t really matter if it takes a week, two weeks, or a month. Markets have great memories, so I’ll just wait. I have limit orders placed here, and the same goes for all the other trades. I’ll just wait until the limits get filled, and then I’ll enter the trades.
If you’re interested in learning more about Volume Profile trading and getting your hands on my custom-made Volume Profile and other indicators, head over to my website at trader-dale.com. If you click the button that says Trading Course and Tools, it will take you to a page where you can browse my trading education and indicators. You can get separate packs, the Volume Profile, Order Flow, VWAP pack, and Smart Money pack, or you can scroll down and find a combo that includes all four packs together.
Before I wrap this video up, 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. On your screen, you can see the name of the person who won the contest, so congratulations to the winner. I’ll do another contest next week. The only thing you need to do to participate is leave a comment below this video on YouTube. Next week, I’ll randomly pick one person to win this set of custom-made indicators. That’s it for today. Thanks for watching, and I’m looking forward to seeing you next time. Until then, happy trading.
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