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. We’ll talk about the AUD/USD, the USD/CAD, and also about the GBP/USD.
So let’s get to it. What you see before you is the 30-minute chart of the AUD/USD. The platform is NinjaTrader 8, and the indicators are my custom-made Volume Profile and VWAP indicators. What you can see here on the AUD/USD chart I would say the most prominent thing is this strong rejection of low prices. That means sellers were pushing the price aggressively downwards. Then there was a sudden reversal with this nice pin bar, and the price went up. So this is a sign of strong and aggressive buyers rejecting lower prices. Now, when you apply a Volume Profile to this place, it will show you where the buyers stepped in, and it was this place. You want to look for a significant volume cluster close to the low of that rejection. And this is the volume cluster which is telling us that buyers stepped in here and started to buy, reversing that selloff into buying activity and into this uptrend. At the beginning of that volume cluster, as you can see, is a level that I want to trade from. It is at 0.6923. If there’s a pullback to it at some point in the future, I expect the buyers who were active here in the past to become active again and push the price upwards from this place again. The setup this trade is based on is a Volume Profile setup called the rejection setup, because there is a rejection of lower prices. Additionally, there is also a fair value gap highlighted in green. Here is the beginning of the fair value gap. In a long trade scenario, I like to trade from the beginning of a fair value gap. As you can see, it is very close to my current level, so it also adds strength to that level. That’s the plan for the AUD/USD. Let’s now check out the next chart, which is the USD/CAD.
Since this place, there has been a rather strong selloff on the USD/CAD. By the way, you’re looking at a 30-minute chart here. What I want to do is trade this selloff, and I want to trade from here, from the beginning of that selloff. As you can see highlighted in red, there’s a fair value gap. Below that, there’s another fair value gap, and below that another one. If they are stacked like that, then I look at it as one big fair value gap beginning here. This is where I like to trade from the beginning of a fair value gap. The short level is at 1.3645. If there is a pullback to it at some point in the future, I expect a reaction there. Not just because there is the beginning of a fair value gap, but also if you look at volumes, this is the daily point of control right here. I should probably move the profile a little bit more to the right, like this, so it shows the whole day. Anyways, we have a daily point of control and a very significant heavy volume zone here. The point of control is a little bit below the level, but my level is at the beginning of the fair value gap. So I had to choose which level to trade from either the heavy volume cluster or the beginning of the fair value gap. In my experience, markets like to test the beginning of the fair value gap and fill it before making another move. That’s why my level is a little above that heavy volume zone. Normally, I would trade from the heavy volume zone, but here I think the market will want to test the beginning of the fair value gap and react from there. Even though the point of control and the beginning of the fair value gap don’t align exactly to the pip, I still count it as confluence and one strong resistance level. That’s the plan for the USD/CAD, and the next thing I’d like to show you is the GBP/USD.
Quite similarly to the AUD/USD, we have a strong rejection of lower prices on the GBP/USD. If I use the Volume Profile here the same way I did before and apply it here, you can see that this was a place where heavy volumes were traded. After that, the price made a pin bar and completely changed from a selloff into a new uptrend. This is an important place because it’s where buyers jumped in and reversed the price from a selloff into an uptrend. I want to trade from the beginning of that heavy volume zone. It is at 1.3532. As you can see highlighted in green, there’s also a fair value gap here. In a long trade scenario, I like to trade from the beginning of a fair value gap. This beginning of the fair value gap aligns nicely with the beginning of that heavy volume cluster. When there’s a pullback at some point in the future it doesn’t need to be today or even this week if there is a pullback to this level, I expect a reaction, as the buyers who stepped in here in the past will step in again in the future to defend this level, which is clearly important for them because they placed a lot of positions here, as you can see on the Volume Profile. They should step in and push the price upwards from that place. If you want to learn more about Volume Profile trading, head over to my website, which is trader-dale.com. If you click the Trading Course and Tools button, it will bring you to a page where you can browse my trading education and custom-made trading tools. Currently, we are running a special sale, which means you can get them with a huge discount. If you scroll down a bit, the discount is even bigger because there’s a special combo that includes all four packs together for only $697. That offer is valid until the 14th of February. Before I wrap up the video, 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. 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. To participate, just leave a comment below this video on YouTube, and next week I’ll randomly pick one person to win this set of custom-made indicators. Thanks for watching, and I look forward to seeing you next time. Until then, happy trading.
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