Forex Price Action

Against such a strong up-trend! Would prefer to see price break through higher and look to get long on pull back to old resistance/new support level.

Please take all that rubbish of your charts. Your chart is a big mess and hiding the most important thing “Price”!

I wanted to post about your use of the Fibo. You are really stretching how it should be used. Like all things Forex the fibo should be used as simply as possible and when people have to stretch to make it work, it should not be on the chart. The fib should be used from the most recent swing points to another. Once retraces have happened in between the fibo becomes much much less likely to work.

The other thing is for traders out there who are newer to price action, they should not be using the fibo at all. Until price is learn to be read and traded, the fibo will just confused.

We only want to use the Fibo as another point of confluence and not as a singular tool to find support or resistance. If a setup formed at a fib number but has nothing else in it’s favor such as S/R then it is not a high probability trade. We need to find more than just a fibo or more than just a random candle setup at a fibo level.

Safe trading,

Johnathon

Hi guys!

I was just wondering if you would have taken this trade? Is it considered as a retracement? Or do I have my S/R line drawn on the wrong area?


Thank you for your help! :slight_smile:

A ton of people will take it but I don’t think it is a deep enough retractment, the next level down would be perfect. That level on a 4 hour with good PA would be ok (I think)

Hi all!

Here’s a chart of GBPCHF H4:


Few more minutes til candle closes, is this a valid pin bar? :slight_smile:

Thanks again!

yes it was a good set-up

Is there a PA signal? - Yes (Bullish Pin Bar)
Does the PA signal stand out? - Yes
Is the trade with the trend - YES (Buy signal on an up trend)
Is it occurring at Support / Resistance - YES
Is the PA signal occurring from a retrace of the trend? - YES (occurring after a pullback from a up trend)

The only thing that would have made me hesitate is that the Support line was defined so far back in time.

Would like to hear what Jonathan says about the support area.

Russ

Thanks for your insight, Russ!

No problem. Not saying I’m right either but just my interpretation. Like I said, the SR level was set way back in time but it should still be valid. I don’t think it could be called a Major SR level though. One thing I didn’t mention that was pointed out is that the pull back was not very far. I don’t know what the rule of thumb is on that but I understand needing room for the trade to develop before hitting resistance.

Here is a post I found a few minutes ago. I think most of us would benefit from reading it again.

http://forums.babypips.com/free-forex-trading-systems/42378-forex-price-action-117.html#post345588

Russ

Nice thanks for the link, cleared things up for me.

Johnathon, I am new to posting to this thread, but I have read up to about the first 100 pages. I am still having problems designating support and resistance lines. My question is from your example above, why is the area at 1.30645 not considered support? It seems to have a lot of common points. How do you distinguish an area such as that from the area you marked. When I try to put in my lines I always seem to have “too many”.

Also is it better to go off of bar highs and lows, or opens and closes, or which ever has the most common areas? So far this has been the hardest part for me to grasp.

Thank you for all of the work you and the others have put into this thread so far, it has been great to follow and has given me a little bit of hope that I might find something that actually works.


Hey guys! I don’t know what to think about this one… It formed a pinbar on previous support/resistance but right ahead we got another support for price. What do you guys think about it?

Hi Jonathon,

I would just like to ask if we take trades on double pinbars (although first pinbar isn’t exactly one, since it didn’t close within the candle before it; but let’s just say it did and is a valid pinbar)? And then the second pinbar closed excatly like how it is in the picture. Do we take it? Also let’s pretend the trouble area (red arrow) doesn’t exist. Cause from what I understand, PA has to stick out, and if I’m correct with what I am seeing this pinbar wouldn’t be sticking out from the rest since it is close to the pinbar before it. But nevertheless still a valid pinbar.

I guess my question is, if ever this pinbar closes this way, is this considered still as sticking out and would we have traded it? Thanks.

Would like to hear from Johnathon as well but I think that IF the first pin bar was valid and there wasn’t a trouble area (meaning it is at a good swing high) then you would still be trading the first pin bar regardless of the second. However you would not be in the trade yet as the low of the first pin bar has not been broken and would not have triggered an entry.

Russ

Hi grock

Here you go, enjoy!

Price Action Holy Grail - Support and Resistance

Looking now on MT4 I guess there was nothing wrong with this trade… I feel bad because I didn’t jump in! The pair is GBPCHF H4.


Thanks Spongybob, I have read that article and it makes a lot of sense, but I guess my question is more how do you pick which level is more appropriate than another area. I was hoping I could gleen something out of his or anybodys answer in that particular situation. When I look at it, it seems that the 1.30545 level could be a very relivant level. I was wondering why it is not.

I don’t have charts in front of me but I think you are referring to the level which is very near to the current PA level on the chart. I think it isn’t considered because if the price only pulled back to that point there would not be enough room for the trade and it would not be entered. You must always think to have room for the trade to move a good amount before hitting any resistance/support.

Russ

Hello,

a couple of things to remember. When marking our levels we are looking for the two most important levels that we would trade from. These are one below and one above. These levels are to be key levels that we could expect price to hold at or reject.

Now something that a ton of people do not realise with marking support and resistance is how much info we can gain from price closing above or below a key area which then flows on to how we mark a level. Many are unsure whether to mark up the tops of candles or the close areas and this is where a bit of experience and chart time come in but I can try and help all the same.

If we have a resistance level that price goes to and pops through before falling back lower and closing below, we can learn that the resistance level is still holding. Now if price goes up and closes out then it is broken. A lot is riding on the close. Why? Because many times order will push the market through only to make a false break of that level and close back through it. The example I will give of this is the EURUSD chart and the VBRN of 1.300. Notice how many times price moves up and pops through to test the VBRN before closing back below. We can see that this level was holding and so marking the top of the candles does not apply. Clearly the VBRN is the important level as the market could not break through. This is where many would go wrong in marking their level. We need to think about price as a whole chart and what others are doing. Then we can see that price did break through and close above at which point the VBRN level was broken. Now if price retrace back to the VBRN I will be looking for it to hold as new support.

EURUSD DAILY CHART WITH VBRN


Safe trading,

Johnathon

thanks Mr.Johnathon…earlier i am also having the same doubt…but as i thoroughly reading ur and others post i got it…

any how …once again thanks for ur nice explanation…