Video Transcript:
Hello everyone, it’s Dale here. Welcome to this video where I’ll show you the strongest Volume Profile levels to trade this week. Today we are going to cover some swing trades, which means that we’ll be looking at the daily chart. So let’s get to it. What you see before you is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. And this is a daily chart of EUR/USD. There’s been quite a steep move on the euro recently, and what I want to do is trade this move. I want to trade a heavy volume zone which got formed in that steep move. And that heavy volume zone is this one. This heavy volume bump you can see here on this daily chart represents a place where buyers were active, adding to long positions as they were pushing the price up. So that’s the first thing we have that heavy volume zone here. The level that I want to trade is at the beginning of that heavy volume zone. It is at 1.1751. The idea behind this is that once the price drops to this level, the buyers who were active here should become active again and push the price upwards from there again. Right? So that’s the Volume Profile setup right here on this strong trend. Now apart from this heavy volume cluster, there’s also a yearly Point of Control. If I zoom out a bit to show you how the volumes are distributed over the whole previous year, you can see that on this yearly Volume Profile, the heaviest volumes were right here. This is the yearly Point of Control, right? And notice where our level is right here. This is our long level. You can see it sits at the yearly Point of Control, which increases the strength of that level and also increases the chance that there’ll be a successful reaction. Okay, so that’s the swing long on EUR/USD. By the way, with those swings, you also need to use a wider stop and a wider take profit, right? Those are not intraday trades. So that’s why my stop is in here behind that heavy volume cluster, and it is roughly 80 pips. All right, so that’s for the euro.
Let me now go and show you my trading idea on GBP/USD. On the British pound, there was also a very strong up move recently, and again I wanted to trade this. So what I’m going to show you here is how the volumes were distributed before that up move, and I want to show you this heavy volume zone. As you can see, my long level is right here at the beginning of this heavy volume zone and also at the beginning of this little fair value gap, which is right here. There’s a little fair value gap in here which is followed by a bigger fair value gap here. If those are close to each other like these two, then I look at them as one big fair value gap, and my level is at the beginning of it. Okay, that’s what adds strength to the level. The logic is the same. We need to wait for the pullback to this heavy volume zone and to that level, and there should be a reaction as the buyers who were active here before should become active again and defend this place, which is clearly important for them because it was important for them in the past. So that’s why the price should go up from there. Now, apart from all this, there’s also this little price action setup confirming this level. Take a look here and also here at how the price reacted to this level in the past. That means that it was a resistance, and when the price broke past that resistance, it turned into support. So all those setups nicely align and point us to this level. That’s why I think the price will react there. Now we just need to be patient and wait for that pullback.
The next thing that I wanted to show you is on USD/JPY. We had quite a strong sell-off recently, and before that sell-off occurred, there was this heavy volume zone formed in this little rotation. This place represents an area where sellers were active, adding to their short positions before they manipulated the price and pushed it downwards. Now if there is a pullback, then I think there’ll be a reaction from this level, which is the beginning of this heavy volume zone. The level itself is at 157.88. When there’s a pullback, I expect a reaction like this. You can also notice that there is a huge fair value gap this being the fair value gap and the level is almost at the beginning of it. It is a little bit lower because I don’t want to miss it in case the price doesn’t fully fill the gap and only hits that heavy volume zone and reacts from there. All right, so that’s the plan on USD/JPY. By the way, all those charts are daily charts because we are talking about swing trades, which take longer, and that’s why I’m doing the analysis and the trading itself on the daily chart.
Now let me show you one more little thing a nice bonus resistance on USD/CAD based on this heavy volume cluster. This blue line is that resistance. The price already hit it and made a reaction there. So I’m not sure if you guys will be able to jump into this trade again. But if you get the chance if, for example, today the price goes up and hits this level then it is still a good resistance. If you manage to jump in, it is still a good resistance to trade because we have that heavy volume zone here. Also, the price made this huge reaction here, so that’s a former support which turned into resistance, and there is also a big fair value gap right here. This area is the fair value gap, and the level is the beginning of that fair value gap. So there are a couple of nice confluences all pointing to this level. That’s why I’m saying this is a short resistance and a nice resistance to trade.
All right. Now, if you want to join us and get your hands on my trading education and also custom-made indicators, visit my website. It is trader-dale.com. If you click “Trading Course and Tools” there, it will bring you to this page where you can browse my trading education and custom-made indicators. You can get those four packs separately or scroll down a bit and get a combo which includes all four of them. 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. Right now on your screen, you can see the name of the person who won the contest. Congratulations to the winner. Next, I’ll run another contest for the coming 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. Thanks for watching, and I’ll be looking forward to seeing you next time. Until then, happy trading.
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