Video Transcript:
Hey everyone, it’s Dale here. Welcome to this video, where I’ll show you the strongest Volume Profile levels to trade this week. We are going to take a look at a couple of intraday trades as well as one swing trade. So, let’s get to it. Let’s first take a look at the USD/CHF chart. You’re looking at a 30-minute chart of USD/CHF, and as you can see, the market opened with a gap. Here is the gap, and I’ll show you how I like to trade gaps. First, obviously, there needs to be a gap. That’s the first rule. The second rule is that you take a look at the Volume Profile and how the volumes are distributed around the gap. You want to see something like this heavy volume zone around the gap because what the price often tends to do is make a pullback to the gap, close the gap, and react to the heavy volume zone around the gap. Right? So in this case, what I want to see is a pullback. I want to see this gap fully closed. That’s important. And then I’ll go short from there, from this heavy volume zone. Right? The sellers who were active here should become active here again and push the price downwards. By the way, those gaps rarely remain open for a long time. Usually, they get filled rather sooner than later. So my bet is maybe today, tomorrow, or maybe Wednesday, the gap should get filled, and we should get our short trade entry. All right. So this is the plan on USD/CHF. My level to go short from is at 0.7845.
Now, a very similar scenario is also on USD/JPY because here we also have a gap. So this is a 30-minute chart of USD/JPY, and here is our gap. Right, as you can see, it hasn’t been closed yet, so the level is still valid. This is the level. This is where the gap begins. It is at 159.15, and again, the same thing. I want to see the same thing as on USD/CHF. I want to see a pullback. I want to see the gap filled, and then I want to trade from the volumes. See, those are volumes close to a level. Ideally, I would love to see the volumes behind the gap. I would love to see the volumes here. But this is not too bad either. Okay, it still confirms this trade and this huge gap. So when the price makes the pullback, the sellers should become active and push the price downwards. Okay, this is how I trade the opening gaps. We don’t always have a gap like this when the market opens on Monday, but this time we do. So we better take advantage of it. All right. So this is my favorite strategy for trading gaps when the market opens like this. First, the gap needs to get filled, and then we trade from the heavy volume zone around the beginning of the gap. And that’s that, right? That’s the whole magic behind this.
Now let me switch over to my swing trading layout. This is it, my swing trading layout. I’m using the daily chart here for all my swing trades. And you’re looking at EUR/GBP. Now, here on the daily chart, you can see that recently there was a rather sharp rejection of higher prices. This is that sharp rejection, right? That means buyers were pushing the price up, then sellers took over and started to push the price down. So what I want to see when there is a strong rejection like this are a couple of things. The first thing, as usual, is that I want to see a significant volume cluster. In this case, this is the significant volume cluster, and I need to see this volume cluster around the place where the price turned. Okay. So this is our volume cluster, and when there is a rejection, I also like to see a fair value gap. We have our fair value gap here. It’s from Smart Money Concepts, and it adds strength to the level because it shows the aggressiveness of the sellers who are pushing the price downwards. This level, which I highlighted here at 0.8699, is the beginning of the fair value gap, right? Because this is a fair value gap. The beginning is here, and what I want to do is go short from there. So wait for a pullback. When the price hits this level, the beginning of the fair value gap, as well as the beginning of this heavy volume zone, then go short from there. Now remember, this is a swing trade, so you need to let the trade breathe. That means that you need to have your stop loss, for example, here. This is where I’ll have my stop, at the top of this swing point. And according to that, you need to have your take profit. So it needs to be at least a one-to-one risk-reward ratio. So somewhere here, that’s the take profit, ideally more. Okay. So yeah, that’s how I plan to go about this.
If you guys are interested in learning more about Volume Profile trading and getting your hands on my custom-made indicators, then head over to my website. It is at trader-dale.com. And if you click Trading Course and Tools, then you can get my trading education and custom-made indicators. All right, so thanks for watching the video, 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 a contest we had last time. The prize of the contest was my custom-made Volume Profile and VWAP indicators for the TradingView platform. And right now, on your screen, you see the name of the person who won the contest. So, congratulations to the winner. And what I’ll do next is hold another contest for next week. The only thing that you need to do to participate in this contest is leave a comment below this video, which I’ll publish on YouTube. And next week, I’ll randomly pick one person to win this set of custom-made indicators. So that’s about that. Thanks for watching the video, and I’ll be looking forward to seeing you next time. Until then, happy trading.
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