Video Transcript:
Hey everyone, it’s Dale here. In this video, I’ll show you the strongest Volume Profile levels to trade this week. Before we get started, there’s one thing I wanted to tell you. Last week, I ran a live webinar in cooperation with NinjaTrader. If you haven’t seen the webinar, you can find the recording on my website. The website is trader-dale.com. Click “Videos” here, and you’ll find the recording of the webinar. Check it out. It’s about Volume Profile and Order Flow.
Now, let’s get to it. Let’s go to the trading ideas. First, let’s talk about USD/JPY. You’re looking at the 30-minute chart of USD/JPY. These indicators here are my custom-made Volume Profile and VWAP indicators. On this 30-minute chart, I wanted to talk about two levels. Unfortunately, one has already been tested. It was this long level, and the second one is this long level. Even though the first one has already been tested, let me at least tell you very quickly what the reasoning behind the trade entry was.
The main idea behind this trade was that USD/JPY is in a strong uptrend, and I’m looking for volume clusters from which to trade pullbacks. Here was the latest part of the uptrend. I looked into that uptrend with the Volume Profile and identified this significant volume cluster here. My level was at the beginning of it, right here. A few moments ago, there was a spike move, and the level was tested. There has already been a reaction, so the level is now spent. Don’t trade it anymore. The take-profit is a couple of pips above the place where the price currently is. It’s at the beginning of this small low-volume zone that formed during today’s Asian session. There are only a couple more pips to go, so hopefully, there will be a profit from this.
Now, regarding the second long level that I want to show you here, this one hasn’t been tested yet, so it’s still good to go. It is this long level at 163.12. Now, let me show you the reasoning behind this level. I need to move the Flexible Profile a little. You can either look at the whole uptrend area like this. As you can see, this is the heavy-volume zone that definitely stands out here. You can also look only at the latest part of this rotation after this huge rejection of lower prices, and it will also point you to this heavy-volume zone.
It doesn’t really matter how you use the profile because people are often confused about whether to use it like this, like this, or like this. The level stands out no matter how you use the profile. Anyway, we have that heavy-volume zone here—a massive heavy-volume zone from which a strong, steep uptrend starts. What the heavy-volume zone is telling us is that buyers were building their long positions here, and then they manipulated the price to shoot upwards.
Along the way, they formed this fair value gap, as well as this fair value gap, which also adds strength to the level because they are stacked. When fair value gaps are stacked like this, I look at them as one large fair value gap that begins here. That’s our level at 163.12. At the same time, this is the beginning of the heavy-volume zone. So, we have a nice confluence there.
Now, I’m just waiting for a pullback, like the pullback we saw here. Then, I want to see the price move further downwards, hit this level, and at the first touch, I’m going to go long. All right, so that’s the plan for USD/JPY. But first, hopefully, I’ll be able to take the profit here from that first long. So, that’s it for USD/JPY.
Let’s now move forward and take a look at USD/CHF. Again, we are looking at the 30-minute time frame. This time, it is USD/CHF, and I have a support level that I want to trade. It is this one. The level is at 0.8125, and it is clearly visible even when you look at the cumulative profile from the previous week. This is what the volumes looked like during the previous week.
As you can see, there are a couple of heavy-volume zones that stand out, and the one I want to trade from is this one. Every heavy-volume zone means that there was significant trading activity there. Since the price is moving upwards, it means that the heavy-volume zone represents a place where buyers were active and adding to their long positions. Those buyers should then defend those positions.
What we have here is the level. I placed it at the beginning of the fair value gap that you see highlighted in green. That is the fair value gap, and it begins right here. In a bullish scenario, I like to trade from the beginning of the fair value gap, like here—from this place. That’s why I placed the level there. It also corresponds with the heavy-volume zone.
By the way, you can also use the Flexible Volume Profile, not just the Weekly Profile. The Flexible Volume Profile is the one that you can move around like this. You can also identify the heavy-volume zone with that. So, we have the heavy-volume zone in an uptrend, and we have the fair value gap to help us place the exact level, which is here at 0.8125.
Now, we just need to see a pullback. When the price hits this level, I think the buyers who were adding to their long positions here will want to defend this area because it was clearly important to them in the past. They should push the price upwards from there again. All right, so that’s the plan for USD/CHF.
Let’s now move on to the swing-trading layout because the next trade that I want to show you is on the daily chart. This means that we’ll be talking about a swing trade, and it is on the daily chart of EUR/JPY. There is a level that I’ve been waiting for for some time now. Let me show you.
There was this heavy-volume zone formed here, and this level is at the beginning of the heavy-volume zone, as well as at the beginning of this massive fair value gap. This is the fair value gap. In a bearish scenario, this is the beginning of the fair value gap, and that’s what I want to trade. I want to trade the beginning of the fair value gap, as well as the beginning of the heavy-volume zone.
I was waiting for a pullback, and right now, the price has finally hit that level at 186.67. Now, I’m hoping for a reaction. I think the price could go back into that rotation and quite possibly return to the Point of Control of that rotation, which is here. I think this could be a good place for a take-profit.
I’ve already entered the trade, but I think there might still be a chance for you guys to jump in if the price decides to test the level again because there still hasn’t been a significant reaction. If you get the chance to jump in, you can still do so because the reaction hasn’t happened yet. You can still jump in if you get the chance and then go short from there.
I think the sellers who were building up their short positions here, which you can see on the Volume Profile because of the heavy volumes, are likely to push the price downwards from there. Again, one thing to be careful about is the macro news because, on Friday, we have the Bank of Japan policy rate decision. You can see it here on the Forex Factory page. The Bank of Japan policy rate decision is very strong macro news that will affect the strength of the Japanese yen.
Since this is EUR/JPY, you want to be careful, and you should exit the trade before the news. No matter where the price is, simply exit the trade before the news. Okay, so that’s the short trade on EUR/JPY.
Now, if you guys are interested in learning more about Volume Profile, I have a special deal for you. It’s a webinar sale. Since we had that webinar, I offered a discount on my indicators and educational packs. If you go back to my website and click the “Trading Courses and Tools” button, then scroll down a little, you can get my packs at a discounted price here.
To get an even better and bigger discount, scroll even further down. Until the end of the month, you can get all four packs for only $697. This is the cheapest I’ve ever sold them. So, until the end of the month, you can get the packs here.
All right, so that’s about it. Thanks for watching the video, and I’ll see you next time. Until then, happy trading.
Now, before I wrap up the video, I’d like to announce the winner of the contest we had last time. The prize in the contest was my custom-made Volume Profile and VWAP indicators for the TradingView platform. Right now, on your screen, you can see the name of the person who won the contest. Congratulations to the winner.
Next, I’ll run another contest for the coming week. The only thing you need to do to participate in this contest is leave a comment below this video, which I’ll publish on YouTube. Next week, I’ll randomly select one person to win this set of custom-made indicators.
So, that’s about it. Thanks for watching the video. I’m looking forward to seeing you next time. Until then, happy trading.
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