Video Transcript:
Hello everyone, it’s Dale here. In this video, I’ll show you the strongest volume profile levels to trade this week. We’ll take a look at an intraday trade on NQ, and we’ll also look at a couple of swing trading ideas. So, let’s get to it. What you see before you is an NQ chart, and we are looking at a 30-minute time frame. What I want to talk about here is this resistance, this one which is at 30120.
The reasoning behind this resistance is that there’s a volume profile setup that I like to trade, and the volume profile setup is called the Volume Accumulation Setup. First, you need to see rotation, which is followed by strong trend activity, ideally very aggressive trend activity like this one, for example, right? Because we see that sellers really took the initiative here and started to sell aggressively. You also want to see heavy volumes in that little rotation before the trend activity. Heavy volumes like these, because this is telling you that the sellers were accumulating their short positions, and afterwards, they pushed the price downwards. Right? So, you need to see the volumes as well, and then you trade from the beginning of the heavy volume zone, which is in here. Now, the reason I placed the level exactly here is because this is also the beginning of a huge fair value gap. The fair value gap is in here. It’s from Smart Money Concepts. In a bearish scenario like this one, I like to trade from the beginning of the fair value gap, which is in here, right? This is the beginning of a bearish fair value gap. As you can see, it also nicely aligns with the beginning of the volume cluster. So, right now, I’m just waiting for the price to make it back to this level, and then it will be a short from there because I think that sellers from here will want to defend this place again and push the price downwards again. Okay, so that’s the short on NQ. The level is at 30,120.
Now, let me switch over to my swing trading layout and show you those swing trading ideas.
All right, so here we go. What you’re looking at is my swing trading layout, which means that we are looking at a daily chart, and this is a daily chart of GBP/USD. So, here is a resistance at 1.3390, and I want to talk about this one. It is based on the same setup as I showed you on NQ, which means the Volume Accumulation Setup. So, just a little recap of the setup, right? You need to see rotation followed by strong trend activity like this one. In this case, we also have the fair value gap here. This is the fair value gap, beginning right at our level, which adds strength to the level. But back to the volume profile setup, we have that rotation followed by the trend, and then we need to make sure that there were heavy volumes in that rotation. Right? In this case, we do see the volumes here, and that means that sellers were active here, and after they accumulated their shorts, they pushed the price downwards. Right? And we will be trading from the beginning of that heavy volume zone at 1.3390.
Because this is a swing trade, we need to set the stop-loss and take profit according to that. So, I’m placing the stop-loss here at the top of this high. Rule number one for stop-loss placement with swing trades is that you place it behind a heavy volume zone like this one. And then, if possible, place it at the top of a swing high or swing low. In this case, a swing high. All right? Like in here. And take profit needs to go at least to a risk-reward ratio of one. So, take profit somewhere in here, but ideally more. This is the minimal take profit. Okay, so that’s the trade I’m looking to trade on GBP/USD. Right now, I’m just waiting for the pullback. It doesn’t really matter when it happens, but if that happens, then I’m going to go short from there. So, that’s it for GBP/USD.
The next one I want to talk about is on USD/JPY. So, on USD/JPY, there’s a bit different setup because there is a setup which I use when there’s a trend. This is a trend, and when there’s a trend, I use the volume profile like this to look into the volume distribution within the trend. And I want to trade pullbacks to heavy volume clusters like this one. This is a significant volume cluster. The reason why I want to trade from the volume clusters is because, in a trend, they represent places where buyers or sellers who are pushing the trend were accumulating their volumes and adding to their positions. Right? Like in this place. And I like to trade from the beginning of the heavy volume cluster. In this case, I’m looking to trade from this level, which is at 160.70. As you can see, it is at the beginning of the heavy volume zone, and I want to see a pullback to that level and go long from there.
Now, the volume cluster here is not the only reason behind this level. There are also two more reasons behind it. The first reason is, let me just extend this line a bit. As you can see, there was a massive reaction to this level in the past. That means that it was a resistance, right? Because of that reaction here. Now, because the price went past that resistance, the resistance turned into a support, right? That’s a price action setup that I like to combine with this volume profile setup here. So, that’s the second reason why I like to trade this level. And the third reason that I like is that there is this small fair value gap. It would be better if the fair value gap was bigger, but we have at least something, right? And in a bullish scenario, this is the beginning of the fair value gap. I like to trade from there, right? So, we have the volume profile setup. That’s the most important thing. Then we have the price action setup, that resistance-support flip, and then we have the fair value gap, all pointing to this level.
Now, as far as stop-loss and take profit placement is concerned, the stop-loss will go here at 159.72. It is behind the heavy volume zone, and take profit should be at least a risk-reward ratio of one. So, at least somewhere in here. Okay. And now we just wait for the pullback, and when the price hits this level, we go long from there.
If you guys are interested in learning more about volume profile trading, then head over to my website. It is at trader-dale.com. And if you click this button, then there you can browse my trading education, trading courses, and custom-made indicators.
All right, so thanks for watching the video. 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 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.
Comments
Post a Comment