Forex Price Action

Hello and welcome,

notice how you are doing what most retailers do and selling from a low? This is something I talk about most weeks in here as it seams this is the first thing people tend to forget for some reason.

Pin Bar’s are reversal signals not continuations. To go short you need to pick price to reverse with a Pin. This means price must go up and then form a Pin Bar. You will the be picking price to reverse to go lower. Here you are selling from a low. The first chart I have attached shows how you should trade in a down trend and also hwo you should trade from a high to go short instead of a low.

The trend in this pair is up and I am not one to fight the trend in most cases and it is the same here. I will be looking to go long. I will be looking for price to fall lower into the area I have marked on the second chart and then for bullish PA to go long.

Pin From High with Trend


CADCHF 4HR CHART


Safe trading,

Johnathon

Hi Johnathon,

See chart for the counter trend setup with pin bar. The setup never trigger for the next two days and they are all within the H/L range of the pin bar. My question is usually how many bars do you consider before the setup is invalid.


Regards,
Toyogo

Thanks Steve, after looking into these charts further I’ve convinced myself its not a good setup. No strong PA or signals apparent.

One thing to keep in mind, August can be a poor month for trading with a big chunk of northern hemisphere (Europe and US) on holidays which can result in a low volatility and lack of setups. Best thing to do might be to do nothing!

Hi peeps,

Watching…


Yep, same setup I posted 1 day ago and still waiting for it, hope it gives a very good PA signal! :wink:

Richard

Thank you for the very detailed explaination Johnathon!

I will wait on this and see what happens…

Keep in mind I was not giving specific advice on this trade. I was simply giving advice for future trades and what you need to do. Or more importantly what to stay away from.

Because I answer and explain this questions every week I have now written an article that I will be able to refer people to in the future. I will put this article up on Sunday.

Johnathon

Hello!

Lets wait and see what turns out…

CAD/JPY D1


Richard

I see your point, but from 3 June, price has been heading up. I’ll personally be looking for price to head north of this level, then re-test with bullish price action to enter. I know we dont really look at fundamentals, but the CAD looks a stronger bet in the long term.

Happy for critique here!

Andy

Hei there!

Thanks for your opinion Andy.

For me it’s kinda ranging and the overall trend is bearish if u zoom out a bit more, so let’s see, what happens! :wink:

Richard

Hi hbres,
What I had found to be one of the most confusing things to understand, on the beginning, (and hopefully it will make things clearer to some other starters) was a thought “it’s easy for them to say now: you should have taken this bearish pinbar from the swing high” when they have all the future price action (after the PB) in front of them, it’s easy to identify swing high. Like on Jonathon’s 1st chart.

I knew it as well and it was dead simple when analysing past price behaviour from few months earlier (backtesting on any pair) it was pretty obvious when seeing all that action which has happened after any PB had occurred that it was that swing point or retracement I should be acting at.

But it looks different (from a newbie point of view) if there is nothing after the PB:


Ho do they know where price will go?
The point is - they don’t. What they do is they try to identify price levels where the price hit some resistance / support in the past (image below) and they wait for the same thing to happen now - to give you a signal of struggle at this particular level AND if it happens that the price shows you a PA signal (PB, EB, 2BR) at this level, the odds of correctly estimating price behaviour greatly increases; and they are simply using this to their advantage.

The moment it clicked for me was when I started drawing S/R lines on my daily charts from month/two months ago (backtest) AND scrolling the chart by one day (one candle) to see how price behaves around my S/R zones giving me from time to time a PA signal to enter the market.

I was simply assuming that the level the price had struggled once, will act in the same way now and might become a swing point (to buy from low or sell from high) with hopefully a PA signal that I understand and know how to act on. I hope I don’t have to stress how important is having those levels pre-marked and waiting for price to get to them, not the other way round, or playing with the trend (at least for newbies like me).


I’m still new to PA trading, learning all the time, currently on BE after trading for last 4 weeks on demo…
Now, it might not be your issue, but the situation reminded me my own beginnings and I thought somebody else could find it helpful. Don’t treat it personal.

Hi Toyo, this could help: http://forums.babypips.com/free-forex-trading-systems/42378-forex-price-action-105.html#post343285

Fil.

1 Like

In a way, I agree, zooming out on the weekly we have hit a HUGE support level from back in Oct 2010. I have talked myself out of so many trades by zooming out it’s not funny any more (but has stopped me losing money, albeit demo atm). I’m left nursing a 1/4 of a USD/CAD short trade from a few weeks ago that will stop me out at a profit for that remaining 1/4, or continue to run. (I’m not yet a member of FSO, so don’t know the recommendations are.)

However, and it is a big however, I’m inclined to believe that we need to be trading a ‘shorter’ trend, I say in quotes because I don’t really know. If our projection to stay in a trade is say 10 periods (for me days) then why would we look for more than 20 periods previous?

Richard, I really am just learning this (my true learning after 2 years of chasing wacky indicators) so bear with me please.

Cheers

Andy

A+ Setup?

Comment Pls!!

AUD/NZD Daily :slight_smile:


I’m learning as well. Was dealing and wasting my time on those crap indicators as well before I found this thread, so I understand u.

Safe trading,
Richard

Hei!

Was looking at it as well, but here is the thing I don’t like:

AUD/NZD D1


-> it has formed in no-mans land.

Here I zoomed in and the red marked area is where I would like to see a valid PA signal.

AUD/NZD D1


P.S. Correct me if I’m wrong about the levels.

Hope this helps,
Richard

Well spotted fars, this has been the subject of a bit of debate in the forum, you have the same levels marked as me and I do agree with you it seems to have formed in no mans land for me as I can’t see any obvious support the bueb is rejecting, and also the levels we have marked seem the most obvious sr areas above and below price which I will be looking to trade from.

Thanks Steve

Edit : These are just my views I would like to add, I could be wrong!

hi Fars,

that’s what i’m concerned also. but if you zoom out, you could actually see levels that follow it as a S&R in the past.

the thing is, i might just be trying to convince myself that this is an A+ setup.

but the BUEB isso tempting as it formed at a swing low and i think i’m gonna set a pending order on this trade.

let’s see how it’s gonna play out. woot woot


I’m not saying it won’t work out, it’s just the level u have drawn isn’t convincing enough for me to take the trade there.

But good luck to you! :wink:

Richard

Nice to see someone with the same view here! :slight_smile:

Hey for those of you who are bored - AUDJPY 30 min to go long…