Summary: The focus of this journal is to trade the Trend Volume Accumulation set-up I have adapted to trade CL, GC, & HG, from concepts I derived from Trader Dale’s book and his Volume Profile webinar. It is my hope that this journal will validate the overall profitability of the set-up. It should be noted, however, that the set-up, charts, and time-frame that I use here are modifications of Dale’s concepts, not intended to duplicate his trading style/methodology precisely.
References:
Trader Dale webinar: Trader Dale book:
Instruments: CL, GC, & HG
Platform: NT8 / NT7 used for backtesting
Indicators used:
NT8 Order Flow Volume Profile Tool (or comparable indicator such as Ninza.co flexible market profile tool)
NT8 Order Flow Volume Profile indicator
ParabolicSAR: used to trail runners for GC & HG
TSSuperTrend: used to trail runners for CL
EMA: simply a security blanket, not used for trade entries.
Trade Set-Up in a nutshell:
Identify/detect Trend.
Create volume profile for the trend using flexible market profile tool.
Note Point of Control (POC) level and validate.
POC level must be a pullback level that exceeds 28% of the total volume profile height.
Use Fibonacci Retracement tool, at a 28% level, to check if trade meets this criterion.
Note: 28% is not a fib number and is completely arbitrary.
Enter limit order at the POC level, front load by 1-tick, expecting a pullback to that level
Up Trend: Enter Long
Down Trend: Enter Short
If new HH or LL is formed, move volume profile range to new HH/LL point. Adjust trade entry accordingly if POC level changes due to new range.
Trade Parameters: Parameters shown below were derived from trail & error using 6-month back test data.
Backtesting:
Prior to trading this set-up on live environment, I used a backtest tool called Profit Finder by Indicator Warehouse to determine the viability and profitability of the set-up. Since I am familiar and have experience trading CL, GC, & HG, to decided to start with these three instruments.
A summary of my back test results are shown below, followed by more detailed reports showing other performance and statistical results.
Click here to review my backtest results:
Trade Illustrations/Examples:
CL example:
GC example:
HG example:
PLEASE: if you like my journal, give me a 'Thanks' vote using link below (FIO Journal Challenge - Nov 2018 Edition):