Video Transcript:
Hey everyone, it’s Dale here. In this video, I’ll show you the strongest Volume Profile levels to trade this week. We are going to take a look at USD/CAD, then USD/CHF, and then NZD/USD. So, let’s get to it.
What you see before you is USD/CAD. It is a 30-minute time frame, and the platform is NinjaTrader 8 with my custom-made Volume Profile and VWAP indicators. What I want to talk about here is this newly formed resistance, which formed on Friday. That resistance is at 1.4016. This is where I want to go short from.
The reason why I think that this should work as a strong resistance is this. Take a look at this area, and you can see that if you use the Volume Profile, you can see that heavy volumes were traded here. Afterwards, there was this steep sell-off. So, the way I read it is that sellers were accumulating their short positions in here, and then they pushed the price downwards during the NFP macro news.
Now, when the price makes it back to this level, if it makes it back to the level, I expect the sellers from here to become active again and to push the price downwards from this place again. You can also notice that there’s one small fair value gap in here and one huge fair value gap in here. When they are as close as those two, I look at it as if this were one big fair value gap. That’s from Smart Money Concepts, by the way.
In this bearish scenario, I like to trade from the beginning of that fair value gap, which is in here. As you can see, it also nicely corresponds with the beginning of the heavy volume zone. See, this is the beginning. This is the heavy volume zone, and here is the beginning of it. So, for those reasons, I think that this should work.
Right now, we just need to wait for the pullback, and if it occurs, then short from there, as the sellers who were active here are likely to be active again at the time of the pullback because they are likely to defend their short positions, which they placed there before. Okay, so that’s the short that I’m looking forward to trading from.
The next trading idea is on USD/CHF. So, let’s take a look at it. Here is a 30-minute chart of USD/CHF. The level that I want to show you is a resistance in here at 0.8099. This one is based on a Volume Profile setup that I call the Trend Setup.
I trade it when there’s a trend. For example, here there was a steep downtrend, and I want to see how volumes are distributed in that trend area. I want to see significant volume clusters like this one. This is a nice-looking volume cluster, clearly standing out.
Now, what does a volume cluster inside a downtrend mean? It means that the sellers who were pushing the price downwards were adding to their short positions in here. Afterwards, they continued to push the price even lower. When there’s a pullback to that volume cluster, I expect the sellers to become active again, defend this place where they were active before, and push the price downwards from there.
My level is at the beginning of that heavy volume zone. That’s how I usually do it. Also, it is at the beginning of a fair value gap. See, here is a big fair value gap. This whole area is a fair value gap. In this short-trade scenario, I trade from the beginning of the fair value gap, which is here. This is the beginning of the fair value gap, right? So, again, it nicely aligns with the Volume Profile setup here.
So, right now, we just need to wait for the pullback. When the price hits this level at 0.899, short from there. Okay.
Now let me move to NZD/USD. In here, I want to show you two levels, two supports. The first one is this one at 0.5843. Here is the second one, which is at 0.5810.
If you take a look at the trend here, this trend, then I’m going to be using the same setup as on USD/CHF. That’s the Trend Setup because I’ll be looking for significant volume clusters, right? I have this one and also this one. They quite clearly stand out.
Both of those heavy volume clusters represent places where buyers were active as they were pushing the price upwards. The buyers were adding to their long positions there at those volume clusters, right? So, when there’s a pullback to those volume clusters, I expect a reaction.
The ideal scenario would be a pullback to the first one, a reaction, then a pullback to the second one, and a reaction like this. It doesn’t really matter when the level gets hit. It could be this week, it could be next week, but when the level gets hit, I expect reactions like those, okay? Because the buyers from this zone and from this zone should defend their positions.
As with the previous trades, we also have fair value gaps here. In this case, those are bullish fair value gaps. One is in here, and it begins at our level right here. The second fair value gap is a smaller one, but still, it’s in here. Again, the beginning of the fair value gap is here at our level, okay?
By the way, there is a little confluence here adding strength to the second level, the lower level. Check this out. Look at how the price reacted to this level in the past. That means it was a resistance in the past, right? This level. Now, when the price blew past the level, it turned into a support. That’s an old Price Action setup that I like to use with my Volume Profile setups like this one. In this case, it points to the same support. That means that it adds strength to it.
Okay, so those are the reasons I’m looking to trade those two levels.
Now, if you guys are interested in learning more about Volume Profile trading, then head over to my website. It is at trader-dale.com. If you click this button, which says “Trading Course and Tools” it’ll bring you to a page where you can learn my strategy from A to Z, as well as get your hands on my custom-made Volume Profile, VWAP, and Order Flow indicators.
Oh, by the way, we are running this webinar here on Wednesday, a Smart Money webinar with David, our Smart Money expert. So, I’m really looking forward to the event. It’s this Wednesday, so sign up. It’s a free webinar. I’m sure you’ll love it.
All right, so thanks for watching the video, and I’ll 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. 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. 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.
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