Forex Price Action

Johnathon
I am afraid I am lost on this part. I thought the swing low which acts as a support in the past has become a resistance when the pin bar is formed yesterday. From the chart, I don’t know how to see where buyers would look to buy.

If I am bullish on this EURGBP, probably I would wait for price to come towards 0.815 (where it reaches support and lower portion of the channel) before buying it.

Okay, my personal rule is to only trade reversal candles as reversals. So when I trade a Pin Bar I am always looking to pick a reversal in price. This means that if I am looking to pick price to go short it has had to have been trading higher. This way when I go short I am trading from a swing high. This does two things. It make me not sell straight into trouble and I am also selling high and buying low.

When we trade reversals from the incorrect swings we will always be selling into trouble as they will be sitting on a support or resistance area.

So the EURGBP for me is formed at a swing low and because of this a no trade. Okay that being said I am NOT saying it will not go lower. That I am def not saying. As we said it is with trend and bounced of resistance level I am simply saying I only place trades where the edge is overwhelmingly in my favour.

An example of what I am talking about is chart I put below. Do you see how the pin below is from a swing high and selling high and buying back low? And because of this not selling straight into trouble. If you look at chart I put up about EURGBP price is selling straight into trouble. And it always will be when you sell from a swing low.

Does this make sense?

Now lastly a DO NOT change orders or take trade of because of what I have said! I only post like this knowing that people will not change their trade ideas. If they do I will have to stop as it is not trade advice but rather something to think of next time.

Good luck,

Johnathon


Hello All,
Any comments on AUDJPY (pin on daily)?
It is a bit small.
Thanks

Johnathon
Thanks for the quick reply. It is enlightening as I have never considered this in my selection criteria for trades.

Unfortunately, I am not fully enlightened yet. Will sit down and digest this again.

Thank you!

AU hitting an interesting resistance level at 1.03848

U guys may wish to monitor closely for price action to enter into short position. Too bad, I am stepping out soon. Never seem to have any luck with this pair. Sign…

Hi bitizhu,

I believe you’re talking about the pinbar below.
Actually, this is also under the category of discussion that ywboo3 and Johnathon have been having.

The catch is: the pinbar has not formed at SWING LOW; if, say, the body of the pinbar was at the support line, with the tail stretching out downwards, and it had closed within a previous candle, that in my opinion would have been a valid setup.

As Johnathon said, trading this kind of pin (like the one below) would be trading right into an S/R zone. It may work out a couple of times but in the long run will punish you more than it rewards.

Took me some time to get it too :slight_smile: and sometimes i forget and begin to get excited, then realize it’s a fake (or have someone point it out to me). Johnathon’s written a pretty good article about PA that sucks traders in, check it out here: Price Action That Sucks Traders In… | Forex School Online

Bottom line: SHORT from RESISTANCE (swing high) and LONG from SUPPORT (swing low)

Cheers!


Thank you very much, Dudest!
Makes lot of sense. I was attracted by the Support and did not pay attention to the Resistance above.
I was lucky, managed to move the SL to BE.
Will read the article…
Safe trading to All

Hi friends,
I’ve a question about swing high/low,
And try to ma,e it with an example:
Look at audusd right now, 4H,
(i cannot upload image coz i’m with the ipad and i’m not yet able doing this),
Now it is forming a beeb,
Yes, we wait till the close of candle, but the question is:
If this candle close as a beeb, is correct to say that it is at a swingh high?

Yes that is correct.

Hi Dnagolf!
Would not you be worried that on the Daily was a PB from the Support?
And on my opinion BEEB is not so nice, because of the upper wick.
Any comments from our colleagues?

Hi bitizhu,
The pin you pointed out, is at a spport, but in a very strong down trendand it’s near 1.4000, BRN and recent resistance area,
So, i think that IF it close as beeb, i’ll consider to trade her breakout short.

This will be my last post for a few days as travelling.

For me looking at the daily chart I would only short if price was a little higher from a more important and logical area.


Safe trading all,

Johnathon

bitizhu I think Dudest covered this very well (nice post dudest) but there is one thing you can answer straight away that almost automatically cancels out the trade (for me at least).

As soon as you mention it is small, before anything else then we have a major problem. As Price Action traders one of the first things we need to check off the list is that is LARGE PA

Once you can recognize that the PA is quite small it already has a fairly significant tick against it. Dudest has pretty well covered the rest.

For what it is worth here are the [I]FIRST 3 things[/I] that have to have a tick on my trading plan before I can even [I]consider[/I] taking a trade.

  1. Is price at a significant S&R level?
  2. Is there LARGE PA?
  3. Is it at a swing high or swing low?

Unless I get [B][I]all 3 ticks[/I][/B] there then I don’t go on to the next stage, which is to look at trade management, is it with the trend or counter-trend, how many lots etc. At this point it is a ‘no’ trade.

Safe trading everybody.

Yep and at the same time if someone knows themself it’s small they already know they shouldn’t take it. They would be just convincing themselves.

I agree with you john, when you say to look at the daily,
But i’ve marked a level little lower,
Look at todays max, 1.0394, how many times it reacted in the past,
From last year around end of april, so if daily close with a pin i surely short it!

Hi Jonathan, sorry to interject, and I agree with you conceptually of course, but are we talking about the AUD/JPY Daily bar from Tuesday this week? 24th April? I think that that is the one that others are discussing, but is it really that small? It looks about normal to me, some are larger, sure, but many are smaller. Or am I missing something? Sorry to butt in and take things down a blind alley, just feel I must be missing something.

Thanks,

ST

No. Not talking about the setup. I am talking about someone saying Price Action is small and then asking about it. I was then simply stating if someone already thinks a particular trade has a downside then it can’t be A+. If it can’t be A+ they should not be trading it and if they do they have convinced themselves to make a trade even though they could see faults with it.

Yeah Simon I think he is. Actually if you like at some of those Bearish candles since mid-march they look kinda big compared to that PB discussed. And if you actually look at some of the PB’s they have crushed on the way down they have been very similar in size to the one now in question.

To halt such a strong bearish move like we are in currently I would want to see a PB of a similar size of the bearish candle on the 10th of April.


Cool, I get that, thanks for clarifying. I obviously agree with you about needing certainty in trade selection, was not quibbling that.

Okay, thank you for clarifying that, I get the idea, just still don’t agree that the bar is that small - it’s 115 pips or something, I trade this Pair a lot and they come much smaller than that - most of the strong move up since late November has been through similar-sized bars; I know that we have had a sell off recently, this Pair doesn’t much like the 88.0 (ish!) level so that is no surprise, but Price treble bottomed on the 240, few other Support factors kicked in, so to me we’re currently sitting in mid-range congestion rather than necessarily looking at a continuing fall… but I’m digressing, I just wanted to check that I was following the discussion and not missing the whole point, we don’t need to agree on what constitutes a small bar lol. Thank you for the prompt response.

ST

No worries, I do see where you are coming from and I will trade 115 pip PB’s myself on occasion but when looking at this set-up where we trading against what I think is some fairly aggressive mid to short-term momentum I would like to see something of a larger size to compel me to go long against this strong Bearishness.

That and it is not trading from a strict swing low. But each to their own.