🎯 Trade of the Week | Volume Profile + 2 Price Action Confirmations

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Video Transcript:

Hey everyone, it’s Dale here. In this video, I want to show you the most interesting trade of my week. This time, it was a swing trade on USD/CHF. So, let’s check it out.

Here you can see the TradingView platform and the Daily chart of USD/CHF. I’m using the Daily chart for all my swing trades. And what caught my eye here initially was this strong uptrend on USD/CHF. Now, when I saw this candle—this was the FOMC candle formed during the FOMC on Wednesday—I knew that I wanted to participate in this uptrend and look for a significant place to go long from.

So, what I did was I used the Flexible Volume Profile, or in TradingView it’s called the Fixed Range Volume Profile. And what I did was look at how the volumes were distributed in this uptrend area. What I do is look for significant volume clusters within the trend and then trade pullbacks to them.

So, the closest volume cluster here was this one, and it was formed in this area. Right? When you see a volume cluster in an uptrend like this, then it signifies a place where buyers were adding to their long positions as they were pushing the price upwards. Right?

So, what I do is place my trade at the beginning of such a volume cluster. In this case, my level was at the beginning of the volume cluster, and it was here. This is where I went long from.

It was not only that. It was not only the Volume Profile setup. It was also a Price Action setup. And I call this setup a Resistance-to-Support flip. In this case, as the price reacted very strongly to this level in the past, we can see that there was a strong resistance, right? Let me just extend my level a bit like this. See? Resistance at our level. Almost at our level. And that means that when the price blew past that resistance here, that resistance turned into support. Right?

This is the Resistance-to-Support flip setup. It’s a Price Action setup. It’s not my setup. It’s an old setup, and I really like to combine this with a Volume Profile setup like this one.

Now, in addition to those two setups, there was also a rather huge Fair Value Gap. The Fair Value Gap is here. See? This is a Fair Value Gap, and it begins right here because this is a bullish Fair Value Gap. It begins here.

So, we have three setups confirming this level. We have the volume cluster, we have the Resistance-to-Support flip setup, and we have the Fair Value Gap. All three are pointing to this level.

So, I waited for the pullback. When the price hit this level, I entered with a limit order, went long, and almost immediately there was a reaction.

And let me now talk about the stop-loss and take-profit placement. Let me start with the stop-loss. My rule number one for placing stop-losses is that you need to place the stop behind a heavy volume barrier. The heavy volume barrier in this case was this heavy volume barrier. So, I placed the stop behind it here.

And my rule regarding take profit is that the take profit needs to be at least a 1:1 risk-reward ratio, ideally before a heavy volume barrier. In this case, I just used the 1:1 risk-reward take profit because I wanted to be out of the trade before significant macro news. And the take profit was here because this is where the 1:1 risk-reward ratio was.

The macro news that I wanted to avoid is actually coming up in a couple of minutes, and it’s the rate decision on the Swiss franc. Let me show you on Forex Factory because, for some reason, TradingView doesn’t show this macro news.

See? This is the news: Swiss National Bank Policy Rate. That’s the strongest news affecting the strength of the Swiss franc, and I wanted to be out of this trade before that.

So, I didn’t really want to play the hero and try to take a huge take profit out of this. I just wanted to take the 1:1 risk-reward take profit, which is the minimum take profit that I always take, and be out of the trade quickly before the macro news hits because nobody can tell what can happen during the macro news.

The market could go crazy. It could go like this, for example, and completely reverse. So, it’s better just to quit before the news and be done with the trade.

That’s what I did. This is how it ended up for me, and I’m quite happy with the result.

So, yeah, that’s how the trade went from A to Z. I hope that it was helpful for you guys. Let me know in the comments if you were also able to spot this trade and if you were able to trade it.

And yeah, thanks for watching, and see you around.