Video Transcript:
Last week, I hosted a webinar and promised that I would answer all the questions you sent in. There were more than 50 questions, and they were really good ones. A few of them covered similar topics, so I condensed them into 31 questions, which I am going to answer now.
By the way, if you have not seen the webinar yet, I recommend watching it first. You will find the link below this video. During the webinar, I also offered a free paperback book as a gift. You can claim your copy using the link below. I also announced a special webinar discount on my trading education and custom-made tools. You can find it on my website, but it is only available until the end of the month.
All right, let us now take a look at the questions. What you see here is the full list of questions divided into sections. I will answer them one by one, so if you are only interested in certain topics, this should make it easier for you to navigate through the video. All right, let us get to it.
Q-No1: What does Volume Profile actually show?
Ans: The question was about what Volume Profile actually represents: whether it shows the volumes inside each individual candle or combines the volume from all candles within the selected range. I am going to demonstrate this using this picture. Volume Profile shows the volumes from all the candles within the profile’s range. This Volume Profile shows how the volumes were distributed across all those candles. Below it is the standard volume indicator, which shows how large the volume was inside each candle. For example, this candle had this amount of volume traded, and so on. Compared with the standard volume indicator, which shows volume over time, Volume Profile shows how volume is distributed throughout the entire selected area.
Q-No2: What time frame do you use for Volume Profile and for entries?
Ans: For Volume Profile, I always use the 30-minute time frame, and for my entries, I use the 5-minute time frame. I use the 30-minute time frame for Volume Profile so I can see the big picture and identify the major levels. Then, I use the 5-minute time frame on the footprint chart to time my entries because that is where I need to see the details. That is why I have it set up this way.
Q-No3: How do you choose the Volume Profile range?
Ans: The question was how to choose the range of the Volume Profile, how far back you should go, and whether you should profile the previous day, the current live session, or each individual session. Here is how I do it. I use a flexible Volume Profile that I move around, and I apply it to areas that interest me. It is not a daily, weekly, or session profile. I only look at specific areas. The range does not need to start yesterday or at the beginning of the week. It could include levels from a couple of days ago or even untested levels that are a month old. The important thing is that they are levels I want to trade. For example, this level formed about two weeks ago, but this heavy-volume zone has still not been tested. The price has not reached it yet, so it is still a zone I want to trade. I only look at specific untested areas on the chart, such as areas within a trend or places where the price made a strong rejection. That is why I use the flexible Volume Profile: I can move it around. By the way, the flexible Volume Profile is my custom-made tool, and you can get it on my website.
Q-No4: Can older Volume Profile levels be used for day trading?
Ans: Yes, absolutely. I like trading older levels, and I still trade them even if they are a couple of weeks old. I would say the threshold is around one month. If I were to trade levels older than one month, they would need to be very strong levels, such as a weekly Point of Control.
Q-No5: How do the price chart and Order Flow chart work together?
Ans: The way I do this is that I look at the Volume Profile chart first, identify significant heavy-volume zones, and then move to the 5-minute footprint chart, where I time the entry. The question also asked whether the heavy-volume price areas in Order Flow are the same as the Point of Control shown by Volume Profile tools. Not really. Volume Profile shows the Point of Control, where the volume was the heaviest within the entire selected area. In this case, it is the area I highlighted. That is the Point of Control of this specific Volume Profile. Footprints also have a Point of Control. Every footprint has its own high-volume node, which you can also call a Point of Control. Those are the heavy-volume zones shown in brackets. However, a high-volume node in a footprint is different from the Point of Control of a Volume Profile because Volume Profile covers a larger range.
Q-No6: What does Delta actually tell you?
Ans: Delta is the difference between aggressive buyers and aggressive sellers. In each footprint, you can see the Delta below the footprint. If the Delta is negative, it means aggressive sellers were dominating that specific footprint. I covered this in more detail during the webinar, but if you want a webinar specifically about Delta, you can follow the link below this video. There is a complete webinar about trading with Delta, so you can check it out for more information.
Q-No7: What do the red and green cell colors mean?
Ans: The question also asked whether the colors and their shades are based on relative volume intensity or fixed volume thresholds. Let me start with the first part. Red cells mean that sellers were in control, while green cells mean that buyers were in control in those specific areas. Sometimes the shades are darker. For example, the shades in this entire area are darker because heavier volume was traded there. To answer the second part of the question, the shades are relative to what you see on the chart. They are not based on a fixed threshold. For example, it is not set so that any area with 200 contracts or more automatically appears in a darker shade. Instead, the software compares the volume with the other footprints and their typical volume. I would say this is more helpful than setting a fixed threshold because the appropriate threshold would be different for every trading instrument. That is what my software does.
Q-No8: Can a trade still fail after Order Flow confirmation?
Ans: Yes, it can still fail. I have seen many trades fail after a beautiful confirmation. This is trading. You have an edge, and you trade that edge, which gives you a certain probability of winning. However, it does not mean you will win every trade. Even if a trade is confirmed by Order Flow and looks perfect, it can still fail. As a trader, you need to be okay with that. Another part of the question was what Order Flow confirmation actually adds to the setup. Order Flow adds two things: confirmation and timing. Confirmation helps you decide whether to enter a trade. For example, if you are unsure about a level, if the market approaches it in a spike, if you are trading against the trend, or if you are unsure whether the level has already been properly tested, you can use Order Flow to confirm whether to enter or skip the trade when the price reaches the level. Order Flow is also useful for timing your entry. It tells you not only whether to enter, but also exactly when to enter. For those two reasons, I like using Order Flow in addition to my Volume Profile setups.
Q-No9: What platform and software do you use for Order Flow?
Ans: I use the NinjaTrader 8 platform. I use its free version. NinjaTrader also has a paid version, but you do not really need it because the free version has all the features you need. I use my custom-made Order Flow software. If you want to use it, it is available on my website, trader-dale.com.
Q-No10: Does your Order Flow software work on TradingView?
Ans: My indicator is only available for the NinjaTrader 8 platform. I think NinjaTrader is far superior to TradingView for this purpose. TradingView has its own Order Flow indicators, so if you prefer the TradingView platform, you can use those, but you need a TradingView subscription. One thing I would like to add is that you can use the indicator on one platform and execute your trades elsewhere with your broker. For example, I do my analysis in NinjaTrader 8 with my custom-made indicators, and then I execute my trades through cTrader.
Q-No11: What market data is required for Order Flow?
Ans: CME data is required, and it is available on the NinjaTrader website. You only need Level I data. Level II data is not necessary because it shows pending orders, while Order Flow does not work with pending orders. It shows actual executed trades, and that information is included in Level I data.
Q-No12: Can you use NinjaTrader and Order Flow on a Mac?
Ans: Unfortunately, not directly. NinjaTrader 8 is not supported on macOS. You need to use a virtual machine, such as Parallels.
Q-No13: How can we get help setting up a NinjaTrader demo account?
Ans: I made a video in which I show you how to set up the data connection and get data for only four dollars per month. I will put the link below this video, so check it out. I think it should help. If you are looking for complete setup support and you are a member of one of our trading courses, our members receive support. We install everything for you, including the platform, the data connection, and the indicators. We also give you my workspaces so you can have exactly the same setup I use in my trading, and we help you with anything else you need. If you are our member, we do everything for you so you can hit the ground running.
Q-No14: Does it work the same on ES and MES, or NQ and MNQ?
Ans: The full question was whether the Order Flow and Volume Profile values are the same on ES and Micro E-mini S&P 500 futures, or on NQ and Micro E-mini Nasdaq-100 futures, and whether the same strategy can be applied to both full-size and micro futures contracts. You can apply the strategy to both. The instruments are almost the same, but you need to keep in mind that they are still different instruments. For example, the volume values for ES and MES will be different because they are not the same instrument. I recommend analyzing volume on ES and NQ because they are larger markets with more volume. They are the main markets, and you can then execute your trades on the micro contracts if you prefer. Your primary analysis should be done on ES and NQ.
Q-No15: Does this strategy work on other markets?
Ans: You can apply this strategy to any market because it is universal. We track the large players using Volume Profile and Order Flow. You only need a liquid market with bid and ask data. Keep in mind that different markets have different volume and behavior, but the core strategy is the same, and the logic applies to all markets. I also received a question specifically about Bitcoin. You can use this approach on Bitcoin as well, but you need to use Bitcoin futures so you have bid and ask data.
Q-No16: Can Volume Profile and Order Flow be used on Forex?
Ans: Volume Profile can be used on Forex very easily, so there is no problem with that. Order Flow is a little more complicated because Forex does not provide true bid and ask data. However, it is still possible, especially with my software. I made a special webinar about using Order Flow on Forex, and I will put the recording below this video. Click the link to see how you can trade Forex with Order Flow.
Q-No17: Can you automate this strategy?
Ans: I tried automating several parts of the strategy, but I did not get good results. It was difficult to define all the rules properly, including the market context and how to define a heavy-volume zone shown by Volume Profile. Many parts are very difficult to define, and putting everything together would make a mess of it. You might be able to code it somehow, but I am quite sure it would not work as it should. I do not think it is possible to automate this approach effectively. It is not a simple EMA crossover.
Q-No18: Can Volume Profile and Order Flow determine the trend?
Ans: Volume Profile and Order Flow are not typically indicators you would use to identify or determine a trend. Volume Profile can help to some extent if you follow P-shaped profiles, which show buyers, and B-shaped profiles, which show sellers. If you want to learn about the shapes of Volume Profiles and what they show, I have a separate video, and I will put the link below this video. To determine a trend, I use price action and VWAP. Volume Profile and Order Flow are better for reading the market context, judging the strength of buyers versus sellers, and identifying support and resistance zones. That is where the strength of Volume Profile and Order Flow lies. In my opinion, price action and VWAP are better for identifying the trend.
Q-No19: How do you combine Smart Money Concepts with Volume Profile?
Ans: I use only a few elements of Smart Money Concepts in my approach. I use Fair Value Gaps, Inverse Fair Value Gaps, and a few liquidity concepts. That is all I need. I do not combine more Smart Money Concepts with my approach.
Q-No20: Which trading session is best for this strategy?
Ans: I would say that all sessions are fine. I personally trade the European session, the U.S. session, and the overlap between the European and U.S. sessions. I do not trade the Asian session this way because I am asleep during it. When I trade the Asian session, I simply set limit orders and trade without Order Flow confirmation. I wait for the price to reach the level, enter with a limit order, set the take-profit and stop-loss, and leave it. It is either a win or a loss.
Q-No21: How do you place the stop-loss and take-profit?
Ans: This is a large topic that I did not have time to cover during the webinar, and I do not want to cover it fully here because it does not really belong in this video. However, I will give you the two main rules I follow. The take-profit needs to be placed before the price reaches a heavy-volume barrier because that barrier could turn the price. You want to exit the trade before it reaches the barrier. The stop-loss needs to be placed behind a heavy-volume barrier because the barrier protects the trade. For example, if I were to go short from this heavy-volume zone, I would place my stop-loss behind the zone. The take-profit should offer a risk-to-reward ratio of at least 1:1, but it also needs to be placed before the next barrier. At this point, I do not know exactly where that barrier will be because the price has not reached the resistance level yet. I need to see how the price approaches the level. If a heavy-volume zone forms here, I will place the take-profit just before it. You can use either Volume Profile or Order Flow for this; the logic is the same. If you want to learn this in more detail, it is covered in my Order Flow course, which is available on my website. The Order Flow Pack includes my strategy from A to Z, including stop-loss and take-profit placement, the software, and everything else you need.
Q-No22: How many trades do you take per day?
Ans: On average, I take two or three trades per day. Obviously, there are days when I take no trades, and there are busier days. However, the average is around two or three trades. I am usually at the computer throughout the week, from Monday to Friday, with some breaks, but I am available almost every day. That is the average.
Q-No23: What is your win rate?
Ans: My win rate has been 66% over the long run, based on the last couple of years. That is for Volume Profile levels without Order Flow confirmation. Interestingly, this win rate also applies to my swing trading, not only to my intraday trading.
Q-No24: What is the average risk-to-reward ratio?
Ans: My average risk-to-reward ratio is 1.3:1. However, I aim for 1.5:1 to 2:1. That is the sweet spot I target. Sometimes I have to take trades with a 1:1 risk-to-reward ratio, which brings the average down to 1.3:1. One rule I follow is that the risk-to-reward ratio must be at least 1:1 and ideally higher.
Q-No25: Are the physical books for U.S. residents only?
Ans: Yes, that is correct. I can only ship the physical books for free within the United States. If you are in the United States, click the link below, and I will send you the book. You can choose the Volume Profile book, the Order Flow book, or the VWAP book. I will also cover the shipping, so everything is free. You only need to be a U.S. resident. If you are outside the United States, go to my website, trader-dale.com, and scroll down the homepage. You can get a free e-book about Order Flow, Volume Profile, or VWAP there.
Q-No26: Can your trading sessions or mentorship be completed during the Asian session?
Ans: Unfortunately, no. We are based in Europe and the United States, so we are active during those sessions. However, we record everything. All sessions are recorded, so you can replay them later. Everything is available in our members’ area.
Q-No27: Is there a deal on the Funded Trader Academy?
Ans: The Funded Trader Academy is a different product that I did not discuss during this webinar. It is where we teach traders how to become funded traders and how to remain funded. The discount I offered during the webinar does not apply to the Funded Trader Academy. However, if you schedule a call through the website, I am quite sure we can work something out and offer you a discount on the Funded Trader Academy as well.
Q-No28: Do you have anyone in support who speaks French?
Ans: Unfortunately, no. We mainly speak English, but the language we use is quite simple, and you can also use translation tools. I think you will manage. We also help you set everything up, so you do not need to speak much English because we do everything for you. Nowadays, it is much easier to communicate in other languages. If you buy one of the courses or packs I offer and you are not satisfied, or you find that you cannot follow the material, ask for a refund within 14 days, and we will process it. No questions asked, so you do not need to worry.
Q-No29: Do you need to buy the Volume Profile Pack to use Order Flow?
Ans: No. To use my custom-made Volume Profile together with Order Flow, you only need to purchase the Order Flow Pack because it includes both the Order Flow software and my custom-made Volume Profile indicators. You can use them exactly as I showed you during the webinar. However, I recommend scrolling farther down the page to the Combo Pack, where you can get all four packs together for $697 until the end of the month.
Q-No30: What is the duration of the online training?
Ans: The courses included in our packs are online and self-paced, so you can study them at your own pace. The Combo Pack contains more than 40 hours of video material. You can check the details on the website. If you open the Volume Profile course, Order Flow course, VWAP course, or Smart Money course, you can see the length of the videos. Together, the courses include more than 40 hours of training.
Q-No31: Do you get daily trading levels with the Order Flow Package or only with the Volume Profile Package?
Ans: I provide my day-trading and swing-trading levels to our members. These are the levels I plan to trade that day. However, they are available only to members of the Volume Profile Pack, not the Order Flow Pack. As I mentioned, I recommend getting the Combo Pack at the bottom of the page. It includes all the packs, including access to the daily and swing-trading levels.
All right, guys, that is about it. Thanks again for all the great questions. Do not forget to order the physical copy of the book as a free gift for attending the webinar. Also, do not forget that we are running a special sale until the end of the month. Thanks for watching, and I will see you around.
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