Forex Price Action

Strongly agreed with what John said. This is exactly what happened to me last time.

I was too eager to win back the money I lost, and I ended up forcing trades and losing more and more.

It’s human nature and I took quite a while to overcome it. Now I become a more matured trader and I do not get emotional when I have losing trades. I’m willing to let it go and wait for another setups to come. Now I trade far lesser than before where I have <10 trades a month. It helps to reduce volatility on my account and generate more consistent result each month.

Anyone see signals for entry this evening? Becouse I didnt... :? Before 2 days I opened my first real account but first trade wasnt good, I lost 80$ from 500… (maybe I shoudn`t entry sunday to monday) now I wait some good signal to make up the ballance… Any ideas for this evening, or soon? Im waiting EUR/USD for pullback an PA signal, but this will be I think thursday or friday

I can see that you risked about 16% on one particular trade ($80/$500) which I think is highly [B]overrisked[/B]. It will create huge tense on your emotion and It will likely lead you to revenge trading. I suggest you to reconsider/restudy your money management plan by risking lesser % on your account. For me, I never risk more then 3% of my acccount size on a trade. This helps alot in reducing volatility and drawdown on account.

Hope it helps and good luck in your trading.

Anyone also look at EURGBP daily?
Please give me some input for this one. thanks
EJ


EJ, Same level. Also looking at your buy 1 entry but not sure if there is going to be such a big pullback.

AUDJPY looking interesting too and coming down to support around the 92.40/92.50 region. Still need some kind pof PA to get in. I like these with trend trades :slight_smile:

Good morning all guys, I’m trying to learn all the teachings of the SUPER MASTER Johnaton (:59:)… watching his free videos and readings his articles and this topic.
English is not my mother language, so I can easily have misunderstood some things, especially in videos. I’m sorry since now for my bad english and… hey guys, be patient with me :8:
I’m trading PA with different results since 2 years, so I have some basis on PA. The hardest thing for me to learn is to anticipate swings High/Low BEFORE they happen and not AFTER.
I wanna show you an example I’ve found on J videos:


J said, if I understanded well, that the 1st BUEB is not a trade because is not formed at a swing low and the 2 is a good BUEB to take. Why?
My definition of SWING LOW: Is a candle with, at least, 2 candles before and 2 candles after it, both with higher lows (fractal)
For me the 1st is forming at the end of a retracement and is a fractal, so, in my opinion, the 1st is exactely like the 2nd and both are swing lows.
What am I missing?
Which is the difference between the two?
How can I know I’m trading a swing low WHEN IS FORMING and not AFTER?

Many thanks to all guys especially to John…

Yep looks solid area to get long on daily to me…

Firstly do you realise why we trade from swing points? We need to enter at value areas and trading from the corrects swing points not only allows us to enter at value, it ensure we are not entering straight back into a swing point of S/R. The other main reason is because the price action signals we use in here are reversal signals. This means that to go long we need to be picking price to reverse from a swing low back to a high. Once again this ensures we are not entering into key levels of support or resistance.

If for example we enter a bullish Pin Bar from a swing high instead of a swing low, we will be entering picking price to go from a high and then to continue higher, rather than from a low to go to a high. We would not be entering from a value area, we would not be picking price to reverse, and we would be entering back into the swing resistance. The best way to explain this with chart below:


We cannot simply class a swing as 2 candles. If we have 2 inside bars price has not really moved and will be in the same place…

These are very easy to spot in real time. You simply just need to take into account what I said above. Are you trading and picking price to reverse or continue? Are you entering from value or looking for price to continue?

The next thing you need to think about is why we enter at value. Yes the first two reasons are so we are not entering straight into swing high and low support or resistance and also so we are picking price to reverse but there is another reason and it is so we are not being entered at rubbish areas where the flow of the market is taking profit and exiting and we are entering.

It is very common for traders to enter from areas that are either very high to go long or very low to go short. in other words instead of buying low and selling high, they will buy high and hope to sell higher. The problem with this is often they will be put on the wrong side. The chart below explains this; (forgive quick drawing).


Lastly your english is great. I admire all those that speak another language. I know we have a lot in here. i struggle with just the one at times and i will always cut some slack for those speaking in another language.

Safe trading,

Johnathon

Thank you, both, you and John, you are right I have to be more patience and I shoud decrease the risk. I think humens are learning from they mistakes, I think I edifying from this case, I hope next time to emerge

Thaks again :slight_smile:

Oh, I almost forgot, we shoudn`t open position on friday and sunday after midnight right even we have signal?

Is this also A+ setup?
anyone took this trade?


EJ

thanks Johnathon for your quick response. I really appreciate to hear from you

EJ

Hey, from this level you should look long but pin bar must be inversely

Cheers

How about this setup on Silver H4?
the PB is a little bit small compare to other candle, and it is not with the trend. Still hope some input from others here.
I really like to learn.
thanks
EJ


There you have your two reasons to not trade. :35:

I was thinking the price break the support and will continue to drop.

But however, lesson learned, it means this is not A+ setup.
Thanks machal

EJ

How about shorting gbp jpy H1. Looks like price rejected the daily level.

That chart looks beautiful. Strong downtrend, that’s for sure. But why do you think about going short? Following the trend?

“Vi veri universum vivus vici.”

take a look on daily, see the TREND, I wouldnt risk it.

Have seen that and changed my mind.

daily trend doesn’t matter, think how many trends there are on the 1hr during the course of a daily trend. a small pullback on the daily could be a perfect and significant trend on the hourly.

This is about taking trades from intraday charts (lower than 1-day) as they are skewed in terms of covering positions before the weekend and low liquidity right after the weekend. It’s OK according to this method to trade from 1-day and longer charts on Fridays/Mondays although you need to be aware that some brokers will have much higher spreads during these periods (late_Friday-through_the_weekend-early_Mondays)!

It looks like you were fairly beginning with this method, Varnuunas (apologies if I’m incorrect). Why not to start with 1-day charts instead of 1-hour ones?

Fil.

I think it’s a good idea to risk a small % because he’s a beginner.

But when he will have more experience and he will estimate more correctly what is his probability of win and how much does he win in average (the reward:risk ratio) he can risk a bigger %.

For instance, let’s say the probability to win is 0.7 and the reward:risk ratio is 1:1. Let’s say you want to risk 10%.
If you use this calculator (change the loss level to 100%)
Risk of Ruin and Drawdown Calculation Tool | Au.Tra.Sy blog - Automated trading System
you will find the risk of ruin is only 0,02%

Moreovor that calculator assumes you always risk the same amount. For instance if you have $500 you always risk $50.
If you risk a % of your account instead of a fixed amount you can risk even more.

The maximum % you can risk in order to have risk of ruin close to 0 can be determined using the kelly criterion.

The KC is f = (bp - q) / b
where b is the payout in b:1 format, p is the chance to win, q is the chance to lose

Now I will determine the KC for my example. 0.7 probability to win , 1:1 payoff
f = 70% - 30% = 40%

Of course KC is too agressive, and while the risk of ruin is close to 0 there is a big chance you will lose a lot of your account if you use it. I prefer to use a fraction of Kelly. For instance if KC is 40% I may risk 15%. If the probability to win estimated and the payoff are not far from reality I don’t overrisk if I risk 15%.

From what I understand the strategies that you use (A+ trades) are high probability trades. I think you will not win as much as you can if you only risk 3% using these high probability trades.

The hard part I think is to estimate the probability to win and how big is your payoff in average.