Volume & Market Profile
Volume Profile: The Insider's Guide to Trading
Volume Profile shows you how much traded at each price, not each minute, and Dale turns that into three mechanical entries you could trade tomorrow. The setups are real and the numbers are specific. The proof that they work is not in the book, and some of the rules are deliberately held back for his paid course.
The one idea
The volume bars at the bottom of a normal chart tell you how much traded in each minute or each hour. They do not tell you at what price it traded. Volume Profile turns that sideways. It stacks volume horizontally, so you see how much business got done at every single price level, and the fattest bar in the stack is the Point of Control: the price where the most money changed hands. Think of a bar at closing time. The time chart tells you how busy each hour was. The profile tells you which barstool everybody was fighting over.
The book's entire claim rests on what that fat spot means. A bank cannot buy a billion euros with one click without blowing the price up against itself, so it has to load in quietly, in a range, over hours or days. Dale argues the widest part of the profile is the fingerprint that leaves behind. Come back to that exact price later and those same buyers defend it, and the traders on the other side back off rather than fight them. That is the whole thesis, and it is stated as fact rather than tested.
Everything after that is execution. Three chart shapes flag where the big money was busy: a sideways range (they loaded up), a fast trend with one pause in the middle of it (they added), and a violent rejection wick (they slammed a door). You draw a profile over just that shape, find the single price where the histogram is fattest, draw a horizontal line, and wait. When price comes back to the line you take the trade on first touch, no confirmation, no candle pattern. The method fits on an index card. The other 150 pages are trade management, position sizing, news avoidance, psychology, and roughly forty annotated screenshots of the author's own forex trades.
What it actually teaches
Dale's daily routine, from opening the charts to closing the position, runs in a fixed order:
CLEAR THE CALENDAR AND THE TREND
Check an economic calendar and mark the times of high-impact releases, because you do not want a level triggered by a news spike. Then look at a 240-minute or daily chart for the big direction. In a strong uptrend take longs only, in a strong downtrend take shorts only, in a range take both. His reasoning: an intraday level is not strong enough to stop institutions who have been pushing one way for days. He drops this step for swing and long-term trades, arguing the wider stops absorb the noise.
MARK THE THREE SHAPES
On a 30-minute chart (he suggests 5-minute to 1-hour, and uses 30 himself) mark three things and nothing else: sideways price action areas, aggressive one-way moves, and strong rejections. No indicators. He is explicit that candlestick pattern names do not matter, because the pattern changes with the timeframe. What matters is whether the change of direction was fast and violent (strong) or slow and reluctant (weak).
PROFILE THE SHAPE, NOT THE DAY
This is the actual innovation and the thing he sells. Instead of a fixed one-day-equals-one-profile setting, you drag a profile over just the area you care about, so a two-hour accumulation range inside a day gets its own histogram. He calls it the Flexible Volume Profile and sold it as a paid NinjaTrader add-on. TradingView's free Fixed Range Volume Profile does the same job. Whatever the tool, you read off the exact price where the histogram is widest, to the pip: his worked example lands on 1.2336 on EUR/USD, and that number becomes the level.
VETO THE LEVEL BEFORE YOU TRUST IT
Three disqualifiers. First, a weak high or low sitting beyond your level: price is drawn to test through those, so a weak low under a long entry kills the trade. Second, a failed auction (a swing point where several candles clustered at the extreme instead of one clean spike) acts like a magnet in the same way. Third, whether the level was already used. His rule from the edition reviewed: if price came within 0 to 3 pips of the level and produced an 8 pip or larger reaction, the level is spent, discard it. He allows more latitude when the level is with the trend and less when it is against.
SIZE THE STOP AND TARGET OFF VOLATILITY
Put ATR on a daily chart with a 200 period, load 300 to 500 days, and read the average. His EUR/USD example gives 0.0085, which times 10,000 is 85 pips of average daily range. Intraday stop and target are 10 to 20 percent of that, so 8.5 to 17 pips. Swing trades run 50 to 400 percent of the daily range. He prefers a reward-to-risk close to 1:1 and argues against stretching targets, because a wider target mechanically lowers your hit rate and leaves you exposed longer. If the nearest volume shelf blocking your trade is closer than 10 percent of average daily range, skip the trade entirely.
ENTER ON FIRST TOUCH, MANAGE BY THE NUMBER
No confirmation. Limit or market order at the level, roughly 50/50 in his own trading. His personal settings in this edition: 10 pip target, 12 pip stop, on EUR/USD, AUD/USD, USD/CAD and USD/JPY, with a claimed 70 percent long-run strike rate. Move the stop to the reaction point at roughly 7 to 8 pips of open profit (7 against the trend, 7.5 flat, 7.5 to 8 with the trend). For swing trades he uses an alternative stop: you only exit when a daily candle closes past the level, backed by a catastrophic stop at 150 percent of the normal one. Flat all intraday positions before the weekend, always.
FLIP IF THE LEVEL IS IGNORED
If price blows straight through your level with no reaction at all and takes the stop, you wait for it to come back to that same price and trade the opposite direction. Broken support becomes resistance. The condition is that the level got no respect whatsoever: if price turned even 1 to 2 pips short of it, the level worked and there is no reversal trade. He is honest that the hard part is psychological, and suggests taking reversals at reduced size until you can flip your opinion in seconds.
What it looks like Monday morning
You stop drawing support and resistance at the obvious highs and lows and start drawing it where the volume actually piled up. That single change is the transferable part of this book, and it works whether or not you ever take one of his entries. Concretely: on any chart you already trade, drop a range-selected volume profile over the last big sideways patch, over the one pause inside the last strong trend leg, and over the last violent rejection wick. Mark the fattest price in each. Those three lines are your map for the week.
The second thing that changes is where you put the stop and the target, and this is the piece worth stealing even if you think the rest is thin. Stops go in the thin part of the profile, in the low-volume pocket behind the shelf, not at a round number and not at a fixed pip distance you picked because it felt right. Targets go a few pips in front of the next heavy volume shelf, not at a round number either, and if that shelf is too close to be worth the risk you pass on the trade. If you already have a system with decent entries and sloppy exits, that is the fix.
| Strike rate | Net per trade | Verdict |
|---|---|---|
| 70% (his claim) | +2.4 pips | Works, if the number is real |
| 65% | +1.3 pips | Thin |
| 60% | +0.2 pips | Effectively flat |
| 59.1% | 0.0 pips | Breakeven |
| 55% | -0.9 pips | Losing |
Costs push the breakeven hit rate from 54.5 percent up to about 59 percent, which the book never mentions.
My Profit Target is 10 pips, and my Stop-loss is 12 pips.Trader Dale, Volume Profile: The Insider's Guide to Trading
Where it fails
- The book tells you outright that some rules are only in the paid course. On the page where he explains his own entries he refers to rules "in the course for avoiding fast spikes into a level." Later, explaining how to judge whether a level is already spent, he says the daily level commentary in the members area is where you actually learn it. So the two judgment calls that decide whether you take a trade are, by his own admission, not fully in the book you paid for. The last eight pages are a sales page for the Lifetime Package plus four pages of course testimonials.
- Forty-odd trade examples and not one number that adds up to a track record. The Real Trades chapter is thirty pages of annotated screenshots. Nearly every one is a winner. The handful of losses appear only as the setup for a reversal trade that then won. There is no equity curve, no monthly result, no sample size, no losing streak, no drawdown figure, and no accounting for spread or commission. The claimed 70 percent strike rate is asserted once, in a sentence, with nothing behind it. For a method whose whole appeal is that it is mechanical and testable, that absence is not an oversight.
- The 10/12 pip rule is much thinner than it reads. Risk 12 to make 10 and you need to win 54.5 percent of the time just to break even before costs. Add a realistic 1 pip of round-trip cost on EUR/USD and the breakeven rate moves to about 59 percent. His 70 percent claim leaves roughly 2.4 pips of net expectancy per trade, which sounds fine until you notice that an 11-point slip in hit rate wipes it out entirely. The book never does this arithmetic, never mentions slippage on a 12 pip stop, and never stress-tests the number. He also notes a student found 20/20 worked better and shrugs it off as preference.
- The data setup he tells you to build was already breaking when the book shipped. He recommends opening a free FXCM demo account for a lifetime volume feed. FXCM was barred from serving US retail clients by the CFTC in February 2017, before this book was published, so a US reader cannot follow that instruction. The CQG trial he offers as the alternative is time-limited and email-bound. His NinjaTrader-only Flexible Volume Profile add-on is now duplicated for free by TradingView's Fixed Range Volume Profile and matched by Sierra Chart, ATAS and Bookmap. The concentration statistics he leans on (80 percent of currency volume through ten banks) also predate the rise of non-bank market makers like XTX, which has topped the same industry rankings the figure came from.
- The core premise cannot be falsified, and in forex it rests on the wrong kind of volume. A fat volume node tells you a lot of business happened there. It does not tell you whether that was an institution accumulating, an institution unloading, a hedger with no view, or two algorithms passing inventory back and forth. Dale reads every fat node as accumulation and never addresses the alternative. Worse, forex has no central exchange, so the "volume" here is one broker's tick count, a proxy for how often the price changed, not for how much money moved. He acknowledges this in one paragraph, calls the FXCM feed "precise enough," and then builds levels quoted to the single pip on top of it.
- The money management chapter produces a number most risk desks would fire you for. His worked example takes a 25 percent drawdown you claim you can stomach, divides by seven expected consecutive losses, and lands on 3.58 percent of the account per trade. He later gives 1 to 5 percent as the guideline, and separately insists you never reduce size during a drawdown and never stop trading after a bad run. Standard risk practice is a quarter to half that. Combined with a strategy that enters counter-move at a level with no confirmation, a beginner following the book literally can lose a quarter of the account without breaking a single stated rule.
- It borrows Market Profile's vocabulary and leaves the framework behind. The D, P and b shapes, the words balance and failed auction, and the whole auction metaphor come from Steidlmayer's Market Profile work that Dalton systematized in Mind Over Markets. Dale cites neither. He also drops everything that gave the framework teeth: no value area (the middle 70 percent of the distribution), no initial balance, no day types, no distinction between the day-timeframe crowd and longer-timeframe money. The tool genuinely differs (Market Profile counts time spent at a price, Volume Profile counts volume traded at a price), but the reasoning here is a hollowed-out version of Dalton's, not new material.
- It is a forex book that claims to be a market-agnostic one. He says repeatedly that the setups work on stocks, indexes, oil, crypto and futures on any timeframe. Every worked example in the book is a currency pair. The tick-data plumbing chapter is written for forex brokers. The pip-based stop and target rules do not translate to ES contracts or share prices without conversion he never provides. A futures or equity trader gets the concept and none of the calibration.
Who it is for
Buy it if
You already trade discretionary levels and your exits are sloppy. The stop-in-the-thin-part, target-in-front-of-the-shelf logic is the best thing here and transfers to any market and any entry method you already use. It also works as a fast, plain-English on-ramp if Dalton reads like a textbook and you want a picture of what a volume histogram is doing before you commit to the theory.
Skip it if
You want the real auction market framework. Read Dalton's Mind Over Markets instead, and read this second if at all: Dalton gives you the reasoning that Dale reduced to three shapes, and it holds up on futures and equities where this book does not. Skip it entirely if you are new and looking for a system to run, because the level-validation rules are explicitly in the paid course and the 3.58 percent risk math will hurt you.
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