Video Transcript:
Hey everyone, it’s Dale here. Welcome to the next video in the Trade of the Week series. In these videos, I show you my best trades from the week. Well, not necessarily the best trades, but I would say the most interesting ones.
Today, I want to talk about a trade I took on EUR/USD yesterday. What you see before you is a 30-minute chart of EUR/USD, and what I was trading here was a support level. Let me show you the reasoning behind this support real quick.
I was trading this heavy volume zone, which formed within this rotation area because I saw that after those heavy volumes were accumulated, there was massive buying activity. It started with a huge Fair Value Gap here that’s from Smart Money Concepts and then continued even higher from there.
So I thought those volumes were probably buyers building up their long positions in this rotation before pushing the price upwards. This is a Volume Profile setup that I call the Volume Accumulation Setup because volumes got accumulated here.
The way I trade this is by waiting for a pullback until the price reaches back into that heavy volume zone. My level was exactly at the beginning of the Fair Value Gap. So this was the long trade. As you can see, it aligned with the volumes.
Usually, I place my entry at the beginning of the heavy volume zone. In this case, it would have been roughly here, but I placed it slightly lower because this was the beginning of the Fair Value Gap. In a long trade scenario, I like to trade from the beginning of a Fair Value Gap, so that’s why I placed the trade there.
I hoped price would reach it and not react earlier at the beginning of the heavy volume zone—which, as you can see, it did. The price reached the beginning of the Fair Value Gap, the gap got filled, I got filled as well, and I went long from there.
So that was the long trade entry. The first setup was the Volume Accumulation Setup. The second setup confirming the trade was the Fair Value Gap from Smart Money Concepts.
Regarding the stop-loss and take-profit placement, the stop for this trade was here. The reason was that it needed to be behind the heavy volume zone. So it needed to be behind this whole area. I also like to place my stops below significant swing points like this one. That’s why the stop was here.
This was the trade entry. Regarding the take-profit, it needs to be at least Risk-Reward 1, but I always try to get more from my trades. I like placing my take-profit at the beginning of a barrier.
So I searched for the closest barrier standing in the way of this trade, and in this case it was quite simple because the barrier was clearly visible with Volume Profile—this heavy volume zone right here.
That was the barrier, and I wanted to quit the trade before the price reached it. I was afraid the price might react there. In the end, it didn’t react to this barrier it reacted higher but I still follow the same rule almost all the time: exit at the first barrier.
So I exited the trade here. This was the take-profit. As you can see, the take-profit almost aligned with the VWAP line. This yellow line is the weekly VWAP, which also often acts as a good place for taking profits. So my take-profit and the VWAP were very close.
Those were the reasons why I exited there.
That was my Trade of the Week. I really liked how quick the reaction was, how precisely the level worked, and I also liked that there was a very clear place for the stop-loss and a clear place for the take-profit. I’d say this was a very clean trade.
By the way, I publish these levels for our members so they can trade them alongside me every day. If you want to join us, visit my website at trader-dale.com. Click the button there and you can browse my complete trading courses and custom-made indicators.
Thanks for watching. I hope you liked the video, and I’ll be looking forward to seeing you next time. Until then, happy trading.
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