MY 2 setups on AUD/JPY

31 janv. 2020

In situation like this, I search for new Supports where the price could stop and turn it’s direction.

I search for those new Supports using the Volume Profile tool.

What you see in the picture are two heavy volume areas. First around 72.15, and the second around 71.40.

Rejection Setup (Support #1)
The first Support is based on a Rejection Setup.

There was a strong rejection of lower prices. Buyers took over, and pushed the price upwards.

There was a heavy volume cluster created within the rejection. In this area, the buyers who turned the price aggressively upwards, placed most of their buying positions.

This will be the place the buyers will defend when the price makes it into this area again (around 72.15). This means it is likely to work as a Support.

Volume Accumulation Setup (Support #2)
The second Support (71.40) is based on the Volume Accumulation Setup.

There was a rotation which was followed by strong buying activity (marked with the black arrow).

In this rotation, buyers were accumulating their buying positions. When they were done with this, they aggressively pushed the price upwards. The Volume cluster I marked in the yellow-blue rectangle is the place, where they placed most of their positions (volumes were the heaviest there).

When the price makes it back to this area again, then those buyers are likely to become active again and try to push the price upwards again. This means this area should work as a Support.

Now we wait
So what now? Now we wait. It is that simple.

BTW this is why I really like to trade with Volume Profile this way – I do a market analysis, find strong Support/Resistance zones, and then wait until the price comes to those zones. Only then I trade.

This method is highly efficient and I don’t need to spend too much time watching the charts all day long, waiting for a trade-entry signal.

I hope you guys like this!

Have a GREAT weekend and I will see you on Monday with a new Weekly Trading Ideas video!

Happy trading!

-Dale