Forex Price Action

Did you get the Paypal payment I made to you a bit earlier for sales? Hahaha

1 Like

Dear Friends,
bla-bla-bla,

How about getting back to the PA topic???

Johnathon,
Would you consider that the NZDUSD is exhausted in the up trend?

Safe trading!

Hello Bitizhu,

good to see you posting. Two days ago when we saw that rejection candle I thought the chance for a decent pullback was looking likely. This Pin however has failed to break lower and price is once again testing the recent highs.

The problem price will have trading back lower is all the traffic it will encounter on its way back down.

Now what is important is the box that price is stuck in at the moment. Notice how we have had rejection candles in this box both ways that touch the top and bottom of the box almost to the pip? It is to early to say anything until we have a clear break of this box. Once this happens we will normally break out hard and fast and then price will retrace and test again. It is here will will get our entry.

It is much easier to explain on a chart. So if price break the box higher we would look for price to rotate back lower and for us to get long and if it breaks lower for price to come back up and test lows to get short. make sense?


Hey guys

Like my new chart post, see you learn about how to post charts too. :18:


Thanks for those kind words Prabhakar.

Words like that make all the time worth it!

Johnathon

Hey guys,
I’ve read in another blog (Nial’s blog i think) that to place the S/R levels on a daily chart we need to zoom in on no more than 6 months of candles…How many candles do you use to place your levels on a daily chart?

I am unsure as to whether you are asking this question to me however I am going to answer it because I DO NOT want anyone to think that they have to start looking at no more than 6 month of candles to mark support and resistance.

The first 2 examples of charts I will use is are both daily charts. I want to show people what price is. I am constantly explainging to people that price is telling us a story and it is our job to put it together.

Support and resistance shows us on a chart where buyers and seller have come in. These level go back as far as our charts can go. Zoom your charts out as apsolutely far as they can go and you will notice support and resistance levels have been suported and rejected for years and years. What I am saying is these levels repeat themselves over and over again!

First chart: EURUSD zoomed out as far as it can go. 07 and 08 represent 2007 and 2008. Error. On the chart it should say resistance and not support. I made a mistake.


Second chart is EURUSD daily chart and the level I zoom charts out to look for S/R. Note I have over 2 years of info on this chart. If I didn’t I would miss very obvious levels like the level price has rejected 2 days ago.


Last chart is the weekly chart of the EURUSD showing 6 months of information. Obviously I cannot mark S/R on here.


Johnathon

1 Like

Thanks so much for the answer. I’m asking this just because if i use 3 or more years of data (on a daily chart) to mark support/resistance, i do have so many levels to deal with, and i almost never rich the 1:1 R/R because there is always a S/R in between… So I’d have to discard some of them and i never know which one to delete from my chart because all of them are IMPORTANT LEVELS.
Somewhere i’ve read that the most recent levels are more important than the olders at least for the short-medium terms trading we are looking for…
The second thing is if we watch at the same period of data, there is more possibility that we ALL mark almost exactely the same levels and we don’t have to think about the importance of that specifical S/R.

Just to clarify my thought i’ve marked down the S/R of EUR/USD of the past 4-5 years…
Almost every level has a retest of 2-3-4 times so i have to consider every level as important as the others… How can i know which one to delete?

Hope this make sense


Heya just quickly before I answer your question, are those purple lines (about 30) normally how many you would have? and they are your S/R?

No, i normally have less lines, but i refer to 6 months to 1 year of daily candles…

Hmmm okay. Well how many do you normally have?

See the post I asnwered you previously. The middle chart is the chart I use to mark my lines. I use that much info.

I will answer your question tomoz morning my time as 1am here and going to bed.

On another note I have now just take part profit on the two recent daily trades on GBPCAD and AUDCHF. To see the setup I traded here which were a bullish engulfing bar and bearish pin bar please see previous posts. See charts:

AUDCHF


GBPCAD

Night all,

Johnathon

Good night…
Anyway i normally work with 2 lines on any chart

  • the resistance above the current price
  • the support below the current price

I draw other lines as soon as the price brake the S or the R…

I look for 2 things when i have to draw a S/R:
1- I wanna see the price reaction in the past at that level
2- I wanna see the retest of that level

Nothing more… I assume that the more the retests the more the IMPORTANCE of that level

Cheers

Hi Johnathon,

Thank you for opening a Price Action thread here at babypips. Your trading experiences and valuable comments are highly appreciated. It is a goldmine to all of us who desire to learn true PA. Good luck and more power to your Forex Online School. :32:

elPips

Hi guys,

Was checking EURCAD daily chart and saw the kind of pattern we’ve been talking about (downtrend -> reverse_to_test -> downtrend). Seeing no obvious PA on the daily, i quickly popped into the weekly, and…(see below), seems like a BEEB (though the candle has NOT YET CLOSED!)

What do you guys think?

Daily:


Weekly:


Cheers

Hey dudest

Yip, thats a BEEB alright! Now check out your stop and potential profit target, RR is no good in my opinion

Hi Ang101 :slight_smile:
Thanks for the feedback!

With respect to RR, what Johnathon said earlier comes to mind:
–> “…but I know this setup is from a very solid area and the price action is very large and obvious I will take it…”
–> And: if you’re consistently profitable ( more trades won than lost), you need smaller RR.

Well, anything can happen in forex, and nobody knows what exactly would happen, but this is how this newbie sees it may go:

-> My S/R line is at: 1.34499
-> I would put the stop at just above the previous weeks’ highs: 1.32538
-> Entry at the low of the weekly BEEB: now at 1.30265
-> First support area (read: take profit ) at around: 1.29707
-> Second support area (read: take profit) at around: 1.27950


Let’s see if it comes to pass in the following week(s)…

Hi guys!

How about these setups on Silver (XAGUSD daily & weekly), what do you guys think?

Daily:


Weekly:


Cheers

Hello Dudest,

Yes it is a BEEB and also great level marked on tge daily chart. Well done mate. However, swing points! Swing points. We want to go long from a swing low and short from a swing high. We need space to trade into.

If we don’t do this we are trading right into the most recent and important support or resistance area.

Okay so on the weekly chart of the EURCAD you are looking to go short from a swing low. This should be going short from a swing high. Because you are doing this you are trading into the most recent support area. Or price is sitting right on it.


Ok the other point is the longer the time frame generally the more important the support or resistance. For example it is fine to mark you S/R on a daily and weekly chart and then look for PA on a 4hr or 1hr chart. You should not mark support on a lower time frame and then go looking for PA on a higher chart as the S/R is not as important. For example, you have marked your levels on a daily chart and then gone to weekly to look for PA at that level. I would def recommend marking all your levels of the daily except for the longer charts your are going to trade. For example mark you S/R on a daily and use these for trading daily,4h and 1hr charts but when trading weekly mark your S/R on weekly. Make sense?

Another thing I want to talk about is something that is called Big Round Numbers (BRN). These are major psychological levels in the markets such as (in this market) 1.2500, 1.300, 1.3500 etc etc. These levels can act as support and resistance a surprising amount of times. The reason these work is because people tend to set orders and take profit at these levels. People either round of to the round number or like Dudest has done, they shave a pip of either side if the BRN (Dudest planned take profit). Notice that price hasn’t been able to break the BRN of 1.300 in this market yet? For this to go lower a clean break will be needed.


Lastly I do think this will probably go lower in the coming weeks. I am actually looking to sell another euro pair next week. That doesn’t mean for me this is tradeable as because of the reasons stated above it is not. As I always say it is the trading habits you get in. So yes you could get away with this trade if it drops lower but over time you will not and you will lose more than you will win. We must only take the best setup and part of that is taking them from good areas. And then not being sucked in and kicking ourselves when price does go the way we thought and we are not in the trade.he next five times the trade will go onto lose and so what if you got away with this and have a win occasionally, the other five will get you!

Safe trading,

Johnathon

2 Likes

Thank you elPips and welcome to the thread.

I look forward to reading your posts!

Johnathon

What does everyone think of the following two setups?
I would like some comments instead of me giving them all the time…

Gold weekly chart


EURUSD weekly chart


1 Like