Video Transcript:
Hello everyone, it’s Dale here. In this video, I’m going to show you the strongest Volume Profile levels to trade this week. We are going to take a look at two intraday levels and one swing trading level. So, let’s start with the intraday trades and take a look at the GBP/USD. What you see before you is the NinjaTrader 8 platform with my custom-made Volume Profile and VWAP indicators. And this is a 30-minute chart of the GBP/USD. What I want to talk about here is this newly formed resistance at 1.3307. Now let me explain why I think that this is a strong resistance. Okay, first let’s start by looking at what the price action is doing. We are looking at a downtrend here, and within that downtrend there is one rather significant area, and it is this area. The reason why I’m saying that it is a significant area is that it shows a strong rejection of higher prices. This is a strong rejection of higher prices, right? And it is something that identifies aggressive sellers, right? Because buyers are pushing the price up, but then sellers start to jump in and push the price downwards aggressively. Okay, so this is purely just price action. But what we want to do when we see something like this, a strong rejection, is to confirm that the big players were actually active here. And we do that with Volume Profile. You take the Volume Profile and look specifically into this area, into the area of the rejection. And what you want to see is something like this: a significant volume cluster. Okay, this is the place where the sellers started to jump in before pushing the price downwards. And as you can see, this red line, that resistance line that I have here, is at the beginning of that heavy volume cluster. So that’s why I have that resistance there. It is at the beginning of this volume cluster, which signifies aggressive sellers. Now, there’s also one additional reason why I have the level here. It’s highlighted in red, and it is a fair value gap from Smart Money Concepts. In a short trade scenario like this, I like to trade from the beginning of the fair value gap. So this is the whole fair value gap, and this is the beginning of it. So those are the two reasons why I think that this level is a strong resistance. One additional reason is that the price reacted here in the past very close to the level. That means it was a support in the past, and when the price broke past it, it turned into resistance. So right now, I’m just waiting, and when the price hits this level, I’m going to go short from there. So that’s the plan on the GBP/USD. Now let’s move on and take a look at the next trading idea, which is on EUR/CHF.
So here is a 30-minute chart of EUR/CHF. We have an uptrend, and within this uptrend there are two significant volume zones. You can see this on the Volume Profile on the left. That Volume Profile shows the volume distribution throughout the whole previous week, meaning this entire area. The most significant volume zones are this one and this one. Now, what I want to trade from is actually the lower one. The reason is that I believe the higher one has already been tested. Let me show you with the flexible Volume Profile. I believe that the volumes formed here got tested with this pullback, and this was actually the reaction to this heavy volume zone. So that’s why I’m not so interested in trading this heavy volume zone again. But the second heavy volume zone, this one, the second biggest one, hasn’t been tested. There hasn’t been a pullback like this one. So that’s why I think it’s still a good level to trade from, and that’s why I’m waiting for a pullback to this level. It is at 0.9128, and I’m going to go long from there. The reason is that this heavy volume zone represents a place where buyers were active, adding to their long positions as they were pushing the price up. That’s the logic behind this setup. So when the price reaches this level again, chances are that buyers will become active again and push the price upwards. You can also see this highlighted zone, which is a fair value gap. My level is at the beginning of that fair value gap. This is how I trade long scenarios the entry is at the beginning of the fair value gap. So that’s why my long is placed there. So those were the two intraday levels that I wanted to show you.
Now let me switch to my swing trading layout. What you see here is a daily chart of USD/CAD. It is a daily chart because when I’m trading swings, I’m always looking at the daily timeframe. This is the big picture. What I want to talk about here is this support level at 1.3754. The reasoning behind this level is that there was a strong push and a strong uptrend. If you take a look at this specific uptrend with Volume Profile, it shows a significant volume cluster here. This is the most important area in this whole uptrend because this is where a lot of buyers were stepping in and adding to their long positions as they were pushing the price up. So this is a significant volume cluster, and I want to trade from the beginning of it. That’s this blue line at 1.3754. So when there is a pullback, I’m looking to go long from there. That’s the Volume Profile setup, the most important setup behind this level. But there is also one additional setup that adds strength to this level. As you can see, the price made a rather sharp reaction to this level in the past. That means it was a resistance in the past, and when the price broke above it, it turned into a new support. That’s a classic price action setup. It’s an older one, but I like to combine it with Volume Profile setups like this one. So those are the reasons why I think the price should react there. Now we simply need to wait for the price to retrace back, and when it does, we go long from there.
Okay, so that’s that. I hope you found this useful. If you want to learn more about Volume Profile trading and get your hands on my custom-made Volume Profile indicators, then 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 custom-made indicator packs. Thanks for watching the video. I hope you liked it, and I’ll see you next time. Until then, happy trading.
Now, 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 winner. So congratulations to the winner. What I’ll do next is run another contest for next week. The only thing you need to do to participate is 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. So that’s about it. Thanks for watching, and I look forward to seeing you next time. Until then, happy trading.
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