Hello guys,
todayâs day trading analysis will be on CHF/JPY!
If you look only at Price Action, then you can see that there was an uptrend the whole previous week.
Now, it seems that the uptrend is at least temporarily over. How can you tell? If you look at the Weekly Volume Profile, then you can see that this weekâs profile has a shape of a letter âbâ.
âb-shapedâ Volume Profile
The âb-shapedâ profile tells us, that Sellers rejected the higher prices and that the âfair valueâ is not rising anymore.
If you see the âb-shapedâ profile after an uptrend, then it tells you that the uptrend is over. At least temporarily.
Volume Profile: Trend Setup
The trend may be over, but the strong Buyers who were driving this uptrend upwards and adding to their Longs there are probably not completely gone!
They will want to defend the areas where they placed the most of their Longs.
Such areas are called the âVolume Clustersâ. You can see them on the Volume Profile from the previous week â when the price was in a Trend.
In those Volume Clusters (those little bumps on the profile) Buyers were adding to their Longs when they were pushing the price upwards. Those are the most important places in the uptrend, because heavy institutional trading activity took place in there.
When the price makes it back to those Volume Clusters then it is likely that those institutional Buyers will want to defend those areas â they have placed a lot of their trading positions there.
This is why those Volume Clusters should work as strong Supports.
The closest strong Volume Cluster on CHF/JPY (that hasnât been tested yet) is around 119.02. When the price comes to this area again, I expect the Buyers to defend it and to push the price upwards from there again = it should work as a strong Support.
I call this setup the âTrend Setupâ.
I hope you guys liked todayâs analysis! Let me know what you think in the comments below!
Happy trading,
-Dale
todayâs day trading analysis will be on CHF/JPY!
If you look only at Price Action, then you can see that there was an uptrend the whole previous week.
Now, it seems that the uptrend is at least temporarily over. How can you tell? If you look at the Weekly Volume Profile, then you can see that this weekâs profile has a shape of a letter âbâ.
âb-shapedâ Volume Profile
The âb-shapedâ profile tells us, that Sellers rejected the higher prices and that the âfair valueâ is not rising anymore.
If you see the âb-shapedâ profile after an uptrend, then it tells you that the uptrend is over. At least temporarily.
Volume Profile: Trend Setup
The trend may be over, but the strong Buyers who were driving this uptrend upwards and adding to their Longs there are probably not completely gone!
They will want to defend the areas where they placed the most of their Longs.
Such areas are called the âVolume Clustersâ. You can see them on the Volume Profile from the previous week â when the price was in a Trend.
In those Volume Clusters (those little bumps on the profile) Buyers were adding to their Longs when they were pushing the price upwards. Those are the most important places in the uptrend, because heavy institutional trading activity took place in there.
When the price makes it back to those Volume Clusters then it is likely that those institutional Buyers will want to defend those areas â they have placed a lot of their trading positions there.
This is why those Volume Clusters should work as strong Supports.
The closest strong Volume Cluster on CHF/JPY (that hasnât been tested yet) is around 119.02. When the price comes to this area again, I expect the Buyers to defend it and to push the price upwards from there again = it should work as a strong Support.
I call this setup the âTrend Setupâ.
I hope you guys liked todayâs analysis! Let me know what you think in the comments below!
Happy trading,
-Dale
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trader-dale.clickfunnels.com/freebook27017464
ðš Free Volume Profile Webinar
www.trader-dale.com/volume-profile-webinar-learn-how-to-trade-forex/
ðŽ Have questions?
contact@trader-dale.com