In today’s analysis, I will give you a quick guide on analyzing and trading stocks with Volume Profile.
I am going to focus on long-term investments, not day trading.
NIKE – Volume Profile analysis
What i really like about Volume Profile is it’s versatility. You can use it for almost any trading instrument and the best thing is that you always do it the same way. The strategy and setups are the same regardless of what you trade.
In this case I did my analysis on Daily chart (you can also do this on Weekly).
From July to August the price of Nike was in a rotation. The price created a flag and the rotation was becoming tighter and tighter.
The tighter the rotation becomes, the higher chances it will shoot aggressively up or down from there.
And this exactly this happened in the beginning of August. The tight price channel broke, and the price shot upwards, starting a new trend.
NIKE – Point Of Control (POC)
I used my Flexible Volume Profile to look inside the rotation area to see how the volumes were distributed there.
It showed that there were massive volumes traded in that rotation, and that the Point Of Control (place with the heaviest volumes traded) was at 98.00. This is an important information because this is the place where most of the trading took place.
I expect that the big trading institutions (banks, hedge funds, pension funds,…) were building up their massive Long positions there.
When they finished doing so, they started to push the price aggressively upwards into a new uptrend.
When the price makes it back and tests the POC at 98.00 I think that those big institutions will become active again and that they will drive the price upwards again.
POC is very important level for them because they have placed most of their positions there. They will defend it, and for this reason it should work as a strong Support.
So what now? Now we wait until the price comes back to 98.00. You can set a pending order there, so you don’t miss the trade entry when the price makes it to 98.00.
I hope you guys liked the article. Let me know what you think and if you are into trading stocks or if you prefer currencies, futures, or something else.
Happy trading!
-Dale
I am going to focus on long-term investments, not day trading.
NIKE – Volume Profile analysis
What i really like about Volume Profile is it’s versatility. You can use it for almost any trading instrument and the best thing is that you always do it the same way. The strategy and setups are the same regardless of what you trade.
In this case I did my analysis on Daily chart (you can also do this on Weekly).
From July to August the price of Nike was in a rotation. The price created a flag and the rotation was becoming tighter and tighter.
The tighter the rotation becomes, the higher chances it will shoot aggressively up or down from there.
And this exactly this happened in the beginning of August. The tight price channel broke, and the price shot upwards, starting a new trend.
NIKE – Point Of Control (POC)
I used my Flexible Volume Profile to look inside the rotation area to see how the volumes were distributed there.
It showed that there were massive volumes traded in that rotation, and that the Point Of Control (place with the heaviest volumes traded) was at 98.00. This is an important information because this is the place where most of the trading took place.
I expect that the big trading institutions (banks, hedge funds, pension funds,…) were building up their massive Long positions there.
When they finished doing so, they started to push the price aggressively upwards into a new uptrend.
When the price makes it back and tests the POC at 98.00 I think that those big institutions will become active again and that they will drive the price upwards again.
POC is very important level for them because they have placed most of their positions there. They will defend it, and for this reason it should work as a strong Support.
So what now? Now we wait until the price comes back to 98.00. You can set a pending order there, so you don’t miss the trade entry when the price makes it to 98.00.
I hope you guys liked the article. Let me know what you think and if you are into trading stocks or if you prefer currencies, futures, or something else.
Happy trading!
-Dale
📗 Volume Profile book (FREE download)
trader-dale.clickfunnels.com/freebook27017464
📺 Free Volume Profile Webinar
www.trader-dale.com/volume-profile-webinar-learn-how-to-trade-forex/
💬 Have questions?
contact@trader-dale.com
trader-dale.clickfunnels.com/freebook27017464
📺 Free Volume Profile Webinar
www.trader-dale.com/volume-profile-webinar-learn-how-to-trade-forex/
💬 Have questions?
contact@trader-dale.com
