[B][U]Forex Price Action Thread Guide | Quick Links[/U][/B]
[U][B]
The level comes first![/B][/U]
[B]# S/R concepts and how to mark S/Rs on charts[/B]
> Keeping it simple - drawing only the two lines closest to price
> Ex:: How far back to zoom out when marking S/R
> Article :: PA Holy Grail - Support and Resistance
> Importance of marking levels from Daily timeframe (even for lower timeframe trades) #1
> Importance of marking levels from Daily timeframe (even for lower timeframe trades) #2
> Use of Fibonacci Retracement levels
> Clues given by price failing to close above/below a given area
> Importance of marking levels from Daily timeframe (even for lower timeframe trades) #3
> Mark S/Rs on Daily but manage trades on the timeframe you found the setup on #1
> Mark S/Rs on Daily but manage trades on the timeframe you found the setup on #2
> Connection between price gaps and S/R
> Using BRNs and VBRNs to help mark S/Rs
> Tips on marking S/R when price is where it’s not been before
> What is a Key Horizontal Level (KHL)?
> Video :: The Secrets Traders Can Learn From Candlesticks & Price Action
> Do S/R’s really exist?
[B]# Trading from correct SWING points (correct VALUE areas)[/B]
> We need to trade AWAY from key areas, not INTO them
> Correct sequence :: BUY @ SUPPORT, and SELL @ RESISTANCE
> Correct sequence :: BUY @ SWING LOW, and SELL @ SWING HIGH
> Article :: PA that Sucks Traders In
> Why we need to enter at correct value (swing) areas
> We are only concerned with the short-term momentum ( the 1-2-3 pattern )
> How to identify correct swing points
> Identifying an uptrend and a downtrend ( movements of highs and lows )
> Ex: EB’s are correct and incorrect swing points
> Waiting for price to move to your key levels
> FX pairs RANGE more than TREND
> Using Fibonacci Retracements correctly when identifying swing points
> Brief explananation on the 1-2-3 pattern
> Buy low and Sell high
> Example: Drawing correct support & resistance levels
> Ex: Setup formation at swing points and how it affects space available for the trade to move
> Ex:: Reversal patterns need to form at the correct swing point
> Ex: Need to trade away from levels, not into them
> Ex: Need to trade at correct swing points
> Ex:: Trading reversal signals from correct swing points (engulfing bar)
> Ex: Trading reversal signals from correct swing points (pinbar)
> Ex: Trading from incorrect swings means trading into trouble
> Ex: Setups formed at swing high and swing low
> Ex: Identifying swing point for a reversal trade
[B]# Psychological Levels ( RNs, BRNs, VBRNs )[/B]
> Factoring in psychological levels when setting entries
> BRNs are every 500pips
> Psychological levels are part and parcel of key horizontal zones
> Ex: VBRNs, BRNs and RNs
[U][B]2. Then comes the Price Action setup![/B][/U]
[B]# Overview of the types of setups we trade[/B]
> Summary 1: The Pinbar, The EB and The 2-Bar Reversal
> Summary 2: The Pinbar, The EB and The 2-Bar Reversal
> Summary 3: The Pinbar, The EB and The 2-Bar Reversal
> We do not trade the INDECISION BAR (IB) - we only use it to help read the PA Story
> We do not trade the INVERSE PINBAR aka HANGING MAN - we only use it to help read the PA Story
[B]# The Engulfing Bar (EB, BUEB, BEEB)[/B]
> The EB: Concepts reference #1
> The EB: Concepts reference #2
> Illustration :: Valid vs Invalid Engulfing Bars
> The EB must fully engulf the previous candle
> The EB needs to close strong ( in the last 1/3rd of the candle )
> Example :: The EB needs to close strong ( in the last 1/3rd of the candle )
> Example: EURUSD H1 BEEB
> Ex: EURJPY H4 BEEB at BRN
> Ex: EURGBP H4 BEEB
> Ex: EURAUD H4 BEEB
> Ex: USDCHF D1 BEEB
> Ex: AUDJPY H4 BEEB
> Ex: NZDJPY H4 BUEB
> Ex: BEEB and BUEB
> Ex: USDJPY H4 BUEB
> Ex: EURNZD D1 BUEB
> Ex: AUDUSD D1 Counter-trend BEEB
> Ex: AUDSGD D1 Counter-trend BEEB
> Video :: Live Trade - EURUSD H1 BEEB
12 Likes
Thread Guide Continued…
5. Broker and Charting Info
# Providers of 5-DAY New-York Close Charts
–> MT4 : Pepperstone, GoMarkets, AxiTrader, HotForex, TradingView.com , FXDD, FXpro, Traders Way, FXCM TS2
–> MT5 : RoboForex, GoMarkets, InstaForex, LiteForex
–> Indices/Futures : AxiTrader, GoMarkets, HotForex, InstaForex
Note: You can have a different broker where you place your trades. The above recommendations are purely for CHARTING platform.
# Tips on posting up clear charts
–> Tip #1: MT4 Save Picture + Paint.NET
–> Tip #2: JING Screen Capture
–> Tip #3: THREAD RULE: Remove ALL indicators ( MAs, Oscillators, etc ) and Trendlines from your chart!!
6. Daily Routine, Pairs Watchlist, Trading Plans & Journalling
# Daily Routine
–> Very quick to scan through charts when the levels have been marked in advance
–> Simply flick through charts to see whether any PA has formed at your levels
–> Times of the day one can check charts (corresponding to market sessions)
–> Looking for PA at other timeframes from Daily levels
–> Breakdown of daily approach
–> Video :: Daily Routine (+ other goodies)
# Pairs Watchlist
–> Most avoid EURCHF as it is heavily manipulated by the Swiss National Bank (SNB)
–> I watch all majors, all crosses, indices, oil & metals & a few exotics
–> Any instrument with HIGH LIQUIDITY is game for trading (e.g corn, soya, wheat futures)
–> I watch about 35 pairs and the major Indices
–> PA works the same with Indices as with Forex pairs
–> Best intra-day setups are during London / NY overlap (lots of liquidity)
–> Bigger markets and pairs are easier to trade (more stable)
# Trading Plans & Journals
–> Article :: Why You Need a Trading Journal - Example Included
–> Insightful post on Trade Journalling
–> A member’s excellent trading plan #1
–> A member’s excellent trading plan #2
–> A member’s excellent trading plan #3
–> A member’s excellent trading plan #4
–> A member’s excellent trading journal #1
–> A member’s excellent trading journal #2
–> We are all individuals with different trading plans that contain slightly different rules depending on what suits our personalities
7. Glossary
PA = Price Action
KHL = key horizontal level
SR = support and resistance
BE = break even (Place stop at entry price)
TP = take profit
FSA = first support area
FRA= first resistance area
BEEB = bearish engulfing bar
BUEB = bullish engulfing bar
2BR = 2 Bar Reversal
PB = pin bar
FTA = first trouble area
IB = inside bar
RN = round number, e.g 1.2400 for AUDNZD
BRN = big round number, e.g 1.6000 for GBPUSD
VBRN = very big round number, e.g 1.0000 for USDCAD
CT = counter trend
SL = stop loss
RR = Risk Reward
Fib = Fibonacci
SL = Stop Loss
H4 = four hour chart
H1 = one hour chart
D1 = daily chart
TF = time frame
4 Likes
bhops
January 8, 2012, 5:53am
10
Hi Johnathon,
I do like the PA signals you are advocating. I first found PA trading over here on Babypips but for one reason or another threads on pure PA trading just seemed to die out.
Here is a nice BUEB I am looking at on the NZD/CAD Daily. It has happened at a nice level but I really like to trade pullbacks and this hasn’t quite pulled back enough for me. I will keep an eye on it though.
I’ll chuck a few more up as I see them.
Here is a live pin bar trade played on the daily chart of the GBPUSD. The daily time frame is by far my favorite time frame. Price action can be traded and applied on any time frame, however I would highly suggest traders start with the daily time frame and once profitable then begin working their way down from there and not the other way around. So often traders start from the 5 minute time frame and work up to the daily time frame and this is often why they don’t find much success. Once you are profitable you can start moving down time frames and as long as you remain profitable and keep moving down to as low as you like. The key is making profits and the daily time frame is a great time frame to do that on.
Safe trading,
Johnathon Fox
5 Likes
bhops
January 8, 2012, 4:21pm
12
Here’s one for discussion. I will be looking for some Price Action in the highlighted zone on the EUR/CAD. This pair is strongly Bearish and I’m hoping for a nice pullback to the area highlighted before seeing some nice Price Action to get short.
1 Like
Heads up on very solid level traders should watch for potential Price Action setups.
Chart is 4hr EURUSD.
Of late the trend has been down in a strong way so trading with this momentum and looking for shorts is definitely preferred to longs!!
1 Like
Two areas to look out for:
1 Like
bhops
January 9, 2012, 3:47am
15
Price on many of the Euro pairs does look to be starting to rotate back. I shall keep my eyes peeled.
Aussie 12 Hr Pin. With the recent up move and at support.
Will be interesting to see how this plays out if it breaks higher as their is a little resistance close by over head.
bhops
January 9, 2012, 10:50pm
17
Did you end up taking this trade?
Yes I was entered long when it broke higher.
I will recap when I take profit or get taken out at BE.
1 Like
Hey all just to recap this live trade I posted in here. Price has now shot higher and I have taken 50% profit and moved remainder to break even. This trade is a great example of how powerful Price Action trading can be when played from the right areas and manage corrcetly.
Safe trading to all,
Johnathon Fox
2 Likes
Your very much welcome. As I get more time I will post more and more,
Johnathon
Well, i do price action mixed with fundamentals.
Regards.
Really nice pin formed on the EURUSD 4hr timeframe. Apsolute A+ setup.
With the trend, at a pullback to 50% level of last swing and then nice pin bar reversal.
Very nice!
2 Likes
bhops
January 13, 2012, 11:01pm
24
Hey Johnathon a really nice example of Price Action at work and with a minimum of indicators! I love clean charts.
The Euro pairs had some nice pullbacks last night and I played a similar set-up to the one you’ve posted but on the EUR/NZD.
Trading with the dominant trend price eventually pulled back to a relevant swing zone that I have highlighted on the Daily.
I scrolled down to the 4 hour charts (which is about as low as I personally like to go) and a Bearish Engulfing bar was able to trigger me into the trade. One Price Action signal like this per week can make you a rich man!
Looking forward to swapping more PA ideas with you as we go along.
7 Likes