Today, I am going to do an intraday analysis of EUR/CAD. I will use Volume Profile, VWAP and Price Action to do that.
What I want to show you is how you can use all those together to find strong confluences. What do I mean by a confluence? A confluence means a place where more signals from different trading indicators meet and point to a strong trading level.
Volume Accumulation Setup
The first thing I am going to talk about is a 30 Minute chart (EUR/CAD). What immediately caught my eye was a rotation from which a strong buying activity started. This is what I call the Volume Accumulation setup.
What I did was that I used my Volume Profile tool to see how the volumes were distributed there. As you can see in the picture below, there were heavy volumes created in the rotation. From this rotation a buying activity (an uptrend) started.
This tells me that buyers were entering their longs slowly and unnoticed in that rotation. When they were done with the volume accumulation, they started pushing the price aggressively upwards.
What is the most important place for those buyers? It is the place where they placed most of their positions. This is where the Volume Profile is the thickest – at 1.5462. This is a strong level they will most likely defend in the future (support).
Price Action
A small bonus to all that is that there were also two very nice reactions to this level in the past. I highlighted those reactions in orange. Such reactions mean that this level worked as a support in the past – therefore, it was an important level. This adds one more little confluence to the whole picture.
Don’t risk too much!
One important thing to wrap this up. Don’t risk too much on one single trade. No matter how many confluences, no matter how strong the level appears. No trading strategy has 100% win rate and there is always a risk of taking a losing trade. Losing trades are part of this business.
You should be extra careful especially now when there is news coming up very often and the overall market volatility has risen dramatically.
I hope you guys liked today’s analysis. Let me know what you think in the comments below!
Stay safe and happy trading!
-Dale
What I want to show you is how you can use all those together to find strong confluences. What do I mean by a confluence? A confluence means a place where more signals from different trading indicators meet and point to a strong trading level.
Volume Accumulation Setup
The first thing I am going to talk about is a 30 Minute chart (EUR/CAD). What immediately caught my eye was a rotation from which a strong buying activity started. This is what I call the Volume Accumulation setup.
What I did was that I used my Volume Profile tool to see how the volumes were distributed there. As you can see in the picture below, there were heavy volumes created in the rotation. From this rotation a buying activity (an uptrend) started.
This tells me that buyers were entering their longs slowly and unnoticed in that rotation. When they were done with the volume accumulation, they started pushing the price aggressively upwards.
What is the most important place for those buyers? It is the place where they placed most of their positions. This is where the Volume Profile is the thickest – at 1.5462. This is a strong level they will most likely defend in the future (support).
Price Action
A small bonus to all that is that there were also two very nice reactions to this level in the past. I highlighted those reactions in orange. Such reactions mean that this level worked as a support in the past – therefore, it was an important level. This adds one more little confluence to the whole picture.
Don’t risk too much!
One important thing to wrap this up. Don’t risk too much on one single trade. No matter how many confluences, no matter how strong the level appears. No trading strategy has 100% win rate and there is always a risk of taking a losing trade. Losing trades are part of this business.
You should be extra careful especially now when there is news coming up very often and the overall market volatility has risen dramatically.
I hope you guys liked today’s analysis. Let me know what you think in the comments below!
Stay safe and happy trading!
-Dale
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