Video Transcript:
Hey everyone, it’s Dale here. Welcome to this video where I want to walk you through my recent trade on EUR/USD. It was a swing trade, which means I was trading this on a daily chart, and I want to show you exactly how I traded it from A to Z and how I apply all the things that I teach in my other videos. So let’s check it out.
Here is a daily chart of EUR/USD, and the level that I was trading was a short level. It was based on a Volume Profile setup a setup that I call the trend setup. As you can see, there was a rather significant heavy volume zone formed right before this selloff. What price likes to do is react to significant volume clusters like this one. You can, for example, see it here this volume cluster right there. Price made a pullback to it and then a reaction. So the idea behind this short level was basically the same: wait for the pullback, and when the price reaches the beginning of this heavy volume cluster, go short from there.
Additionally, there was also a price action setup. The price reacted to this level in the past, which means it was a support before, and then it turned into a resistance because the support got breached and price went below it. As you can see, it nicely aligns with this volume cluster here. So we had two setups confirming this resistance level. That’s why I went short from there.
Regarding the trade setup, I placed the stop here. The reason was that it was behind this heavy volume cluster. So this was the stop-loss, this was the entry, and my take-profit was here. The reason for the take-profit was that there was a significant volume zone standing in the way of this short. This heavy volume cluster could cause the price to react and move up, so I wanted to quit the trade before reaching it. As you can also see, there was a yearly VWAP, this yellow line, which added another reason why the price could reverse there. That’s why I exited the trade at that level.
Now let me show you how the trade went. I entered the trade here, but then it went against me, and here the price hit my stop. Now, the way I trade my swing trades is that I do not exit when the price hits the standard stop. My actual stop is higher it’s what I call a catastrophic stop-loss. It is basically this distance plus 50%. If the price hits that catastrophic stop, then I exit. But if the price just wicks past the standard stop, like it did here to take out liquidity above the highs, I stay in the trade.
If a daily candle closed above this stop level, I would close the trade manually. But it didn’t it just wicked above and created a pin bar, which suggested that sellers might be stepping in. So I stayed patient and held the trade. Eventually, I exited as planned when the price reached the heavy volume zone and the VWAP.
So this is how the trade went. I think the most important takeaway here is the alternative stop-loss method. This has been very helpful for me over the years. It often happens that the price wicks past the stop to take out liquidity and then goes in your direction. That’s why I use this approach for swing trades. I don’t use it for intraday trades only for swings, because they move slower and give more time to manage.
The second important thing is take-profit placement. I always exit at the first barrier standing in the way, which in this case was the heavy volume cluster. That’s the key idea.
I hope this was useful for you. If you want to join us and trade alongside me every day, I publish these levels for all members in advance. This is from our back end this is the swing trading table, and the level I showed you was here, the short at 1768. I always provide levels in advance so members can prepare and place limit orders.
If you want to join us, visit trader-dale.com and click on “Trading Course and Tools” There you can access my courses and indicators.
Thanks for watching, and I’ll be looking forward to seeing you next time. Until then, happy trading.
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