Video Transcript:
Hey everyone, it’s Dale here, and in this video, I’d like to show you the strongest Volume Profile levels to trade this week.
Before we jump into all this, I’d like to invite you to a live webinar that I’ll be hosting this Thursday, the 23rd, in cooperation with NinjaTrader. The webinar is going to be about Volume Profile and Order Flow trading. You can reserve your seat for this free webinar by clicking the link below this video on YouTube. Reserve your seat and enjoy the webinar. I’ll be looking forward to seeing you there.
Now, let’s get to the charts and check out AUD/USD. What you see before you is a 30-minute chart of AUD/USD, and here I want to talk about support at 0.6947. This is the support, and there are a couple of reasons why I like this level and why I think it is solid support to trade from.
Reason number one is that if you take a look at this uptrend area and then use the Volume Profile over that area like this, it will show you how the volumes were distributed there. There is a volume cluster here. It doesn’t really stand out too much, but there were some volumes traded there. What makes it strong is the combination.
Let me talk about the combination. We have the volume cluster here, and we also have a huge fair value gap. This is the fair value gap. That’s from Smart Money Concepts, and the beginning of the fair value gap is right here. This means that when the price hits this level, at the beginning of the fair value gap, there should be a reaction—not just because of the volumes, but also because this is the beginning of the fair value gap.
One more thing: check this out. The price made a rather strong reaction here in the past. That means this level worked as resistance. Then the price blew past the resistance, which means that the resistance turned into support.
We have a combination of the volume cluster, the fair value gap, and this resistance-to-support flip setup, and everything is pointing to this level. That’s why I think there should be a reaction. Right now, I’m just waiting for the pullback. When the price hits this level, I’ll go long from there.
Right now, let me switch over to USD/CAD. Here, I want to show you a resistance that I’m looking to trade from, and it is at 1.4129.
This red line is the resistance. Again, let me use the Flexible Volume Profile over this trend area. What stands out is this volume cluster. What a volume cluster like this represents in a trend is sellers adding to their short positions as they were pushing the price downwards. They were adding to their short positions here, right in this volume cluster. That’s what the volume cluster is telling us.
When the price reaches this level in the future, if it reaches it, there should be a reaction from there because the sellers from the volume cluster should become active again and push the price downwards from this area. This is a setup that I call the Trend Setup, and it goes like this.
But that’s not all. There is also another setup that confirms this level, and it is the fair value gap. In this case, it is highlighted here in red. It begins here and ends here. This whole area is the fair value gap. The beginning is here, at our level of 1.4129, because in a bearish scenario, this is where the fair value gap begins.
That’s another thing that adds strength to the level. As with the previous example, you can also notice that the price reacted to this level in the past. Previously, this was support, and when the price blew past that support, it turned into resistance.
That’s the same thing as with AUD/USD, only in this case, it is reversed. We have this combination. Now, we only need to see the pullback, and if there is a pullback, we can take the trade from there.
Now, let’s switch over to the next pair and the next trading idea, which will be on USD/CHF. What we have here is a 30-minute chart of USD/CHF, and here I want to show you this setup.
It’s a rejection because when the price goes aggressively up, then turns and goes aggressively down, that’s called a rejection. What you want to see within a pattern like this is a significant volume cluster, like this one, somewhere around the area where the price turned.
What the volume cluster is telling us is that sellers started to jump in here, in this area. That’s what we see on the Volume Profile. Active sellers were here, and they reversed the price from buying during this little uptrend to a very aggressive and steep sell-off.
What adds strength to that steep sell-off is this large fair value gap. You can see that this fair value gap begins here, exactly at the level of 0.8108. We have the volume cluster, and we have the fair value gap. When the price reaches this level, it is quite likely that there will be a reaction from there like this.
This is what I’m looking to trade here. Right now, I’m just waiting for the pullback, and if it occurs, I’ll jump in.
All right. If you guys are interested in learning more about Volume Profile trading and want to get your hands on my custom-made indicators, then you’ll want to go to my website, trader-dale.com. Click the button that says “Trading Courses and Tools” and there you’ll find everything you need.
Anyway, thanks so much for watching this video. I’ll be looking forward to seeing you next time, hopefully at the webinar this Thursday. Until then, happy trading.
Before I wrap up the video, I’d like to announce the winner of the contest we had last time. The prize was my custom-made Volume Profile and VWAP indicators for the TradingView platform. Right now, you can see the name of the person who won the contest on your screen. Congratulations to the winner.
Next, I’ll run another contest for the coming week. The only thing you need to do to participate is leave a comment below this video on YouTube. Next week, I’ll randomly select one person to win this set of custom-made indicators.
That’s about it. Thanks for watching the video. I’ll be looking forward to seeing you next time. Until then, happy trading.
Comments
Post a Comment