Video Transcript:
Hey everyone, it’s Dale here, and in this video, I want to show you a little walkthrough of a trade that I had this week. This trade was based on a prediction that I sent you last Monday. You can find it on my website. I’ll go full screen and show you. This was the prediction. It was a short trade on AUD/USD from this level. Let me go to the TradingView chart and show you how this trade played out.
The prediction was that the price would hit this volume cluster here. The price would pull back to it and react like this. That was the whole idea behind this trade. Since the trade has already played out, I want to show you how it ended up and how I went about trading it.
Here is the TradingView platform that I used for the trade prediction. Here is the same chart, and it is a daily chart of AUD/USD. Let me go full screen. As I already said in that video, this trade was based on a heavy volume zone, this one, which formed within this downtrend. This is a setup that I trade when there’s a trend like this one. I trade pullbacks to significant volume clusters. So, the idea behind this trade was to wait for the pullback and, when the price reached the beginning of that volume cluster, which was here at 0.7006, go short from there. As you can see, the price hit the level and immediately reacted to it. So, the trade entry was quite precise.
Let me now talk about the stop-loss and take-profit placement. The stop-loss always needs to go behind a significant barrier. In most cases, the significant barrier is the heavy volume zone that the level is based on. So, in this case, this was the barrier, and I placed the stop behind it. I already mentioned that in the video I sent you previously, but this is the logic behind the stop-loss placement. It needs to be behind a barrier because the barrier should protect the trade. This whole zone is the barrier because there was that heavy volume cluster here. That’s the barrier, and the price should not go past it. If it does, then there’s no way of telling where it will stop next. Probably at the next volume cluster, which is this one. But once the price goes past this barrier, there’s no point in staying in that trade.
Anyway, I went short from this place. As far as the take-profit is concerned, in the video I sent you, I mentioned that I want to trade with a risk-to-reward ratio of at least 1. That would mean having the take-profit somewhere in here. But I always try to get more out of my trades. What I do is place my take-profit at the first barrier standing in the way. So, when the price actually hit this level and I went short, I was thinking about where the first barrier standing in the way was. In this case, it was the first deviation of the yearly VWAP. As you can see on this screen, there’s the VWAP line. That’s the yellow line here. This yellow line is the yearly VWAP, and those two gray lines are the first deviations of that yearly VWAP.
When the price moves sideways between those two gray lines, it tends to react to them. That’s why I exited the trade here, at the point where the price hit that first deviation of the VWAP line, that gray line, because I thought there was a risk that the price might react there, just as it eventually did here. So, that was the first barrier standing in the way. As you can see, the trade also had a nice risk-to-reward ratio. That’s what I would say is ideal for what I aim for in the long run with all my swing trades. The sweet spot for all my swing trades is a risk-to-reward ratio of around 1.5 to 2. That’s the sweet spot. The minimum, as I was saying, is a risk-to-reward ratio of 1, but that’s just the minimum. I usually try to get more out of it.
So, yeah, this is how the prediction played out. I hope you guys were also able to catch this one. It was a rather quick and painless trade. I hope you guys found the predictions and these kinds of videos useful.
By the way, if you want to join us and trade alongside me, and if you want to get my levels every day, then you should visit my website at Trader-Dale.com. If you click the button that says “Trading Course and Tools” it will take you to a page where you can join us. Currently, we are running a special Halloween Sale. That means you can join one of our educational and indicator packs at a discounted price. If you scroll down a bit, you’ll find a special Halloween deal at the bottom of the page, where you can get all the packs and all the indicators—everything I have—at a discounted price until the end of the month.
All right, that’s about it. Thanks for watching the video, and I’ll see you around. Until then, happy trading!
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