Video Transcript:
Hello everyone, it’s Dale here. In this video, I’ll show you the strongest volume profile levels to trade this week. Many markets opened with a gap, and today I want to show you how to trade in this situation. So what you see before you is the NinjaTrader 8 platform with my custom-made volume profile and VWAP indicators. This is a 30-minute chart of EUR/USD. As you can see, the euro opened with a massive gap.
The way I like to trade when the market opens with a gap is like this. What I want to look for is a heavy volume zone formed before the gap. So this is the gap, and I want to see heavy volumes before the gap. And that’s exactly what we see here on EUR/USD—those heavy volumes. So the setup is that you wait for the price to reach the beginning of that heavy volume zone, and from there, there should be a reaction. Right? So first, the price closes the gap, and second, it reacts to the beginning of that heavy volume zone. Okay? It’s my favorite setup to trade when the market opens with a gap, and the win rate of this setup is very high. But the problem is that the market doesn’t open that often with a gap, especially not currencies, which I focus on mostly. Okay, so this is a rare setup, but when I see it, I really like to trade it. So this is how this setup looks on EUR/USD. The short level is at 1.1726.
Now let me show you the same setup, but this time it will be on USD/CAD. So this is a 30-minute chart of USD/CAD. As you can see, the price is currently closing the gap. This is the gap. So I hope that this video reaches you before this level gets hit. But at least you’ll be able to see whether, in this case, the setup worked out or not. Anyways, the setup is the same, only this time it is reversed because this is USD/CAD, and you know, it’s reversed compared to EUR/USD. In this case, it is a long trade scenario. So we have an opening gap, and behind the gap, we have a significant volume cluster. You can see it using the volume profile right here. This is the volume cluster. Okay. And again, we want to trade from the beginning of the volume cluster in a long trade scenario. It is here. Okay. It is at 1.3837. So when the price reaches this level, there should be a reaction like this. Okay. This is how this setup works. It’s rather simple and quite effective.
Now let me show you how this looks on USD/JPY, because here we also have the same scenario. Again, we have a 30-minute chart, and we have this opening gap. Behind the gap, there needs to be a heavy volume zone, which there is right here—this volume cluster. Okay, a heavy volume zone that stands out like here. So again, the setup is the same. The price first needs to fill the gap. When it does, it hits that heavy volume zone, and you trade from there. Ideally, that heavy volume zone should be at the place where the gap starts. Okay? Like here. This is the beginning of the gap and, at the same time, the beginning of that heavy volume zone.
So what you need to do is wait for the pullback. Gaps tend to get filled sooner rather than later, so my guess is that most of the gaps will get filled today or tomorrow. If they don’t, you can obviously trade this setup even for the rest of the week. It’s fine. So yeah, just wait for the pullback, and when the price hits this level, you want to go long from there. Okay. In this case, there’s also a nice confluence of price action because the price made this reaction and this reaction to this level in the past. That means that this level worked as resistance in the past. Now, when the price moved past that resistance level, the same level turned into support. Okay, it’s a price action setup—an old one—which in this case very nicely aligns with this volume profile setup. So this points me to this level, to this support at 159.31. When the price hits this level, I’ll go long from there.
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 on “Trading Course and Tools” you can browse my trading education and custom-made tools. Okay, so 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 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 next 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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