Thursday, March 30, 2017

GBP/USD Volume Profile and "Big Round Numbers"

Using the Composite/Volume Profile on GBP/USD. High Volume Nodes (HVNs) and Low Volume Nodes (LVNs) and "big round numbers" (e.g. 1.2400, 1.2600, etc.) acting as good trading levels.

Tuesday, March 28, 2017

Updated Candle Profile and Composite Profile

Just uploaded updates to these 2 indicators. This is a cosmetic update, which has improved the graphics for the "Real buy/sell volume" mode.

The "Real buy/sell volume" mode, uses FXCM's "Directional Real Volume" indicator to create volume profile of buy and sell volumes, and it also computes the "delta" (as buy volume - sell volume).

The "Directional Real Volume" indicator is available from FXCM Apps. Unfortunately, FXCM only provide this "real volume" data for high liquidity major forex pairs.

Note: Candle Profile and Composite Profile work for any instrument, but in the absence of "real volume" data, only tick volume or TPO can be profiled.

Candle Profile shows the volume distribution on each candle, e.g. for each D1 candles...

Composite Profile shows the volume distribution over longer periods, e.g. for last 20 days...

More information can be found here and here.

Mastering Your Trading Psychology w/Dr. Brett Steenbarger

Tuesday, March 21, 2017

High Volume Nodes (HVN's) act as price magnets

High Volume Nodes (HVN's) are areas where lots of trading has taken place, price will often continue to trade in a choppy fashion around these areas. Previous areas of high volume can act as price "magnets" when the price revisits the level after some time.

In the following chart I have created a volume profile of last 10 weeks. Today's increase inflation data from UK has sent GBP/USD higher, and it reached out to this prominent HVN. It also broke through an LVN, which might provide support in the future (i.e. the rule "prior resistance becomes support").

However, BREXIT and "Article 50" is going to be big issue next week (UK triggering formal leaving EU process on 29th March), so I expect a lot of volatility over the next few days.

More information on the Composite Profile indicator can be found here.

Took a couple of nice trades on the GBP/USD today using this HVN, and the LVN above it.

Friday, March 17, 2017

Low Volume Nodes (LVNs) for Support / Resistance

Low Volume Nodes (LVN's) are areas where little trading has taken place, usually where price was rejected, or price moved through the area quickly. These can often provide a good objective source of support/resistance levels.

In the following chart of GBP/USD (H1) I've created a 20-day price profile using the Composite Profile indicator, and it's automatically showing LVNs, many of which have been good support/resistance levels.

GBP/USD is currently at an LVN now, that I expect to provide some resistance, and I've already taken 3 scalp trades in this area, for a total of 15 pips so far.

More information on the Composite Profile indicator can be found here.

And some time later, my last trade bags a nice return.