How I Trade Volume Profile In The ASIAN Session

Summary

In this video, the trader debunks the myth that there's no edge in trading during the Asian session. Using a volume profile strategy, the trader walks through a successful trade setup, emphasizing the importance of confluence levels and using real data to make informed decisions. They explain how volume nodes, fair value points, and previous day’s value levels help build a confident position. Despite closing early on some contracts, the trader made over $3,300. The video also highlights the significance of volume profile trading across any session, offering a free playlist and resources for deeper learning.

Takeaways

• 😀 The Asian session offers trading opportunities, especially when using volume profile analysis.
• 😀 The previous day's value levels are essential for providing context in the market, helping traders understand the short-term sentiment.
• 😀 When price fails below fair value (previous day's point of control), it signals bearish sentiment and potential continuation to the downside.
• 😀 Volume profile provides insight into where price is likely to react, with high-volume nodes acting as support or resistance.
• 😀 A trade setup should be built with multiple confluences, ideally two to three, to improve the accuracy and confidence in the trade.
• 😀 When price moves away from a fair value level, traders look for logical levels, like high-volume nodes, to enter a trade with a favorable risk-to-reward ratio.
• 😀 For managing risk, a stop loss should be placed behind a high-volume node, offering protection if the market moves against the position.
• 😀 The first target for a trade is often the value area low of the developing session, which can be a quick target within 20 minutes.
• 😀 Closing a position early, even if it feels like the trade could have run further, can be a good risk management tactic when price begins to show signs of reversal.
• 😀 Volume profile trading allows for an edge in any session, as it is based on real transactions and provides clear context for market behavior.
• 😀 The combination of shifting value levels, broken support turning into resistance, and retesting key nodes creates an optimal environment for making high-confidence trades.

Q & A

What is the primary trading session discussed in the video?

The primary trading session discussed is the Asian session, which the trader uses as their main session for trades.

Why does the trader believe there's an edge in trading the Asian session?

The trader believes there's an edge in trading the Asian session because of the use of volume profile, which helps identify logical levels to base trading decisions on, regardless of session speed.

What role does the volume profile play in the trader's strategy?

The volume profile is used to identify key areas of support and resistance, track market sentiment, and provide context for trading decisions, such as when value levels shift or when price reacts to specific nodes.

What are the 'previous day value levels' and how do they help in the trading strategy?

The previous day value levels refer to the price levels derived from the regular trading hours of the previous day. They serve as a reference to understand market context, and help guide decisions during the Asian session. The trader uses them to gauge sentiment and locate potential trade setups.

How does price action at the previous day's point of control affect the trader's decisions?

If price fails to hold above or below the previous day's point of control, it signals a bearish or bullish sentiment, guiding the trader's decision to either look for continuation plays or adjust their strategy.

What does the trader look for when identifying a good trade setup?

The trader looks for multiple confluences—at least two to three factors that align, such as price reactions at volume nodes, shifts in fair value, and breaks of support or resistance. These confluences build confidence in the trade.

Why is the high volume node important in the trader's setup?

A high volume node acts as a key level of support or resistance. When price is on the right side of this node, it can cushion price movements, helping to protect the trader’s position and providing a good place to set stop losses.

How does the trader manage risk in this trade?

The trader manages risk by placing a stop loss behind a high volume node, ensuring that the position is protected if the market moves against them. They also set a daily risk limit of $3,000 on A-rank trades.

Why did the trader close their runner contracts early in the trade?

The trader closed their runner contracts early because price briefly moved above the point of control, leading to concerns that the market might reverse. This is a cautious approach to secure profits before any potential reversal.

What were the final results of the trade?

The trade ended with a profit of just over $3,300, with the trader securing profits on most of the position and exiting the remaining contracts as the price showed signs of reversal.