Trader Dale Volume Profile

Price Action
Sideways price action area
One of the biggest differences between retail traders (that's us)
and institutions is the amount of the trading capital that we
manage. Institutions have extreme amounts of capital, and
because of this, they have a problem that we will never have. The
problem is simply in having too much money. If they want to
open a large trade unnoticed, they need a lot of time to enter
their position. They intend to do it slowly, unnoticed, so nobody
realizes what they are doing. If they succeed, they can enter their
large position without alerting other market participants and
without moving the price too much.
If for example a large institution like Citi bank started buying vast
A sideways price
action is a place
where big
institutions are
getting ready for
action.
amounts of the EUR quickly and aggressively, it would start a lot of excitement and the trend.
In this case, the trend wouldn't be their friend because they would not be able to fully enter
their large trading position. At least not for the prices they would like.
For this reason, institutions need a lot of time to enter their big positions unnoticed. They try
to appear as small investors who are randomly placing a lot of relatively small positions in the
market.
The only way they can slowly and discreetly accumulate their positions is in sideways price
action. There they can hide their activity perfectly.
So, next time you see a sideways price action channel – don’t assume that it is boring and that
nothing is going on there. You would be most likely wrong. A sideways price action is a place
where big institutions are getting ready for action. That’s why it is so important and why it is
among the first things I look for when I analyze any chart.
Below, you can see a price chart where I marked all significant sideways price action areas.
16