Trader Dale Volume Profile
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<strong>Volume</strong> <strong>Profile</strong><br />
<strong>Volume</strong> Setup #2: Trend setup<br />
I trade the Trend setup when there is a strong trend. The strong trend indicates that one side<br />
of the market – buyers or sellers is much more aggressive than the other. In an uptrend, strong<br />
and aggressive buyers are pushing the price upwards. In a downtrend, strong and aggressive<br />
sellers are pushing the price downwards.<br />
If you look at the volumes accumulated within the trend area, you will notice that the <strong>Volume</strong><br />
<strong>Profile</strong> is pretty thin. That's because there usually aren‘t that many volumes accumulated in<br />
trends. The reason for that is that the price is moving too fast for the institutions to build up<br />
their positions there.<br />
However, there are usually places within the trend, where the price stopped moving rapidly<br />
for a while, slowed down, and the market participants were able to add some into their<br />
positions. Such action creates a “volume cluster“ within the trend. It is important that the<br />
volume cluster is created within the trend and that the trend continues after that. This way<br />
we can assume, that the volumes created within the volume clusters were volumes that the<br />
aggressive market participants were adding to their current positions.<br />
Key Points:<br />
<strong>Volume</strong> cluster created within a strong<br />
uptrend indicates that buyers were adding<br />
to their long positions in this volume<br />
cluster.<br />
<strong>Volume</strong> cluster created within a strong<br />
downtrend indicates that sellers were<br />
adding to their short positions in this<br />
volume cluster<br />
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