Video Transcript:
Hello everyone, it’s Dale here. In this video, I’ll show you the best volume profile levels to trade this week. Let’s take a look at it. What you see before you this is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. And the chart is a 30-minute chart of AUD/USD. In here, I want to show you a new resistance which formed earlier today. The resistance is here at 0.6977, and it is based on a combination of two trading setups. The first setup is a Volume Profile setup. Let me show you. When the price is trending like this, what I like to do is trade pullbacks to significant volume clusters. If I show you how the volumes are distributed here just today, you can see that there is a significant volume cluster formed within this part of the downtrend. The volume cluster represents a place where sellers were adding to their short positions, where they were active, and they often defend those zones when the price makes a pullback to them. So, when there’s a pullback to the beginning of that volume cluster, I expect a reaction. Okay, so this is the Volume Profile setup. But here’s a nice combo. It’s not just about the Volume Profile setup. If I zoom out a bit, then you can also notice that there was a strong rejection of this level in the past, right? So that means that this level worked as a support, and when the price went past it earlier today, that support turned into resistance. That’s an old price action setup that I like to combine with Volume Profile setups. Okay, because as you can see, this nicely aligns with the beginning of this volume cluster. So that’s why I think that there will be a reaction from 0.6977. Right now, I’m just waiting for the pullback and will go short from there. All right, so that’s for AUD/USD.
Now, I also have two levels on NZD/CHF and NZD/CAD. Let me show you. This is NZD/CHF. And those two levels which I’m going to show you are frankly a bit similar they follow the same logic. Let me show you. I’ll zoom out the chart like this, and the level that I want to show you here on NZD/CHF by the way, this is a 30-minute chart is a resistance at 0.4639.
Now, if you take a look at this Volume Profile here, then this is how the volumes are distributed throughout the whole previous week. Okay, this is a weekly profile. Basically, what happened here was that there was a rotation with heavy volumes formed in that rotation, followed by a breakout of that rotation. Heavy volumes formed here where sellers started to jump in and boom. This is an important place because this is where sellers started to step in. As you can see, they initiated this very strong sell-off here, right? So it’s clearly an important place for the sellers because they simply did not allow the price to continue upwards they changed the direction completely. If I show you with a flexible Volume Profile like this, then this is the heavy volume zone that I want to trade. So when there’s a pullback to it doesn’t matter when but if there’s a pullback to this level, to the beginning of that heavy volume zone where the sellers started to step in, then for me it will be a short from there. Okay? Because I think that the sellers will want to defend this place, which clearly is important for them. You can also notice a couple of fair value gaps here that’s from Smart Money Concepts. And when I combine it with Volume Profile, I like to trade from the beginning of the fair value gaps. The beginning of the fair value gap is here, almost exactly at our level just a couple of pips below it. So that’s another thing that adds strength to the level because we can clearly see how strong the sellers were here. So that’s NZD/CHF.
Now let me switch over to NZD/CAD, where it is very, very similar. Again, on NZD/CAD, we had a rotation. From there, the price went up, and this significant volume cluster formed. You can see that again on the weekly profile. Boom complete change of direction. So this heavy volume zone is important. Again, I’ll show you with the flexible Volume Profile how exactly that volume cluster looked here before the sell-off started. As you can see, it is very, very similar to NZD/CHF. In this case, I have the level at the beginning of a heavy volume zone here at 0.8730. Again, you can notice a couple of fair value gaps here beginning at our level. So when there is a pullback, I think that there is a solid chance that there will be a nice reaction from there, since the sellers who were active here should become active again and push the price downwards from there again.
Now, if you guys are interested in learning more about Volume Profile trading, then head over to my website at trader-dale.com. If you click “Trading Course and Tools” it will bring you to this page. Just scroll down a bit, and there you can browse my trading education and trading tools. Okay, so thanks for watching the video. I’ll see you next time. Until then, happy trading.
Now, 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. So congratulations to the winner. What I’ll do next is run another contest for the upcoming week. The only thing you need to do to participate is leave a comment below this video, which I’ll publish on YouTube. Next week, I’ll randomly pick one person to win this set of custom-made indicators. So that’s about it. Thanks for watching the video, and I’ll be looking forward to seeing you next time. Until then, happy trading.
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