Price Action That Matters For Beginners

[B]Welcome![/B]

First of all, I want to say welcome! My name is Aaron Kruger, and I created this thread as a beginners course to my more advanced Price Action That Matters thread over in the “Free Forex Trading Systems” forum. I have seen the huge demand for advanced price action learning methods and learning material, so I stepped up to help fill that need. I realize that some of the members of my advanced thread may become overwhelmed by the advanced topics discussed, and this may actually hurt their trading instead of helping. I wanted to create an area that people can comfortable learn the basics of the price action method I teach, without becoming confused or overwhelmed. Ultimately, if you can’t be successful in the core aspects of price action, trying to implement the more advanced portions of the method will not be of any benefit.

[B]What price action trading is: [/B] Price action is simply what price is doing over time. When price moves into key support and resistance areas, it will sometimes create price action signals. These signals come in the form of pin bars, engulfing bars, double tops/bottom patterns and much more. When you combined these key support and resistance areas with price action signals they can create high quality trade setups. These setups can provide high reward scenarios with low risk. These low risk and high reward trades you can achieve through trading price action can help you become a consistently profitable trader.

[B]Conclusion:[/B] I want to make sure I am helping traders realize their maximum potential in the market, which starts at the foundational aspects of price action trading. I created this thread so that the boundaries of what is learned and discussed here will be only the foundational aspects of price action, and the core parts of my method. For traders who are just getting their feet wet in the world of price action trading, this is the place for you. If you find that you have mastered the topics discussed here and are consistently profitable, I would encourage you to graduated over to the “Price Action That Matters” thread.

[B]Price Action… :[/B] The first two words of this thread are “Price Action”. Price action is simply looking at the price movements of a given instrument over time. Every tick on a chart is price in action. Since price action is studying price movement on a chart, we can categorize two different types of price action signals: individual candles and patterns.

[B]Candles[/B] - Price action candles are individual candlestick formations that occur such as a pin bars or inside bars. These signal the trader to reversals or continuations in price.
[B]Patterns[/B] – Price action patterns don’t focus on the individual candles but rather the shape or pattern of a group of candles. These also signal potential reversals or continuations in price.

[B]…that Matters:[/B] Price action by itself generally doesn’t tell us much. But when price action occurs at key support/resistance levels, it can tell us key pieces of information about the likelihood of a reversal or continuation in price. Through my experience, I have found are a handful of key S/R areas that the market reacts strongly to. These include horizontal support and resistance lines, trend lines, channels, EMAs, Fibonacci retracements and volume. By learning and understanding everything that the market reacts to, you can know key areas to look for good PA candles/patterns to form, and also be aware of areas your trades might stall or reverse. You can choose to watch or ignore these key areas, but it doesn’t change the fact that the market is always reacting to them. What matters to us is whatever matters to the market, and causes reactions from the market. The list of S/R tools I use, I have found to be the ones that the market reacts strongest to.

[B]“Price Action That Matters For Beginners” Vs. “Price Action That Matters”:[/B]
The format of this thread will be more strict regarding PA topics discussed, to ensure it stays within the core aspects of price action trading. There will be noticeable differences between this thread and the other more advanced thread. Here we will stick to a single trade management method, a smaller set of price action signals, patterns, and S/R tools. I will not double post articles in both threads. If I feel an article is relevant to both threads I will post it in one, and link to it from the other.

[B]My Free Knowledge Model!: [/B]My model for teaching price action is very simple, create price action learning material and give it out to everyone for free. It is that simple! Many price action salesman will offer you the basics for free, but reserve the more advanced topics of price action for those willing to pay a premium. I am absolutely against these sales models, because most of what is sold can simple be found online for free. Most of what is hidden away for paying members are techniques and methods that have been around for decades and much of it can be found with some time spent Google searching. While I am not against charging a small fee for something truly unique and new, a very small percent of what these salesman are selling actually falls in that category. I believe many people pay such high prices for this information because there are very few free alternatives that offer high quality learning material. I am here to provide that alternative. My promise to you is that I will never charge for teaching price action.

[B]How I Got Started:[/B] I started my interest in trading about 12 years ago when I bought my first book on trading called “How to Make Money in Stocks” by William O’Neil. In the 12 years since I have consumed tons of information regarding trading patterns and reading candlestick charts. I started off trading stock options and eventually ran across a website promoting PA trading in Forex. Ever since then I trade only Forex and only using price action. I currently run a Forex price action website, Mainstreet to Millionaire.

[B]Please check out my YouTube Channel[/B]

[B]Rules and Quick Navigation:[/B] Before posting in the forum please visit post #2 and read through all of the rules for this thread. This well help ensure the thread remains valuable and targeted with what we teach here. Also check out post #3 where I have quick navigation links to important articles and videos that are posted here. This will help you quickly get up to speed and join in the price action discussions here. If you are a regular member, please continue to visit the Quick Navigation area as I will be updating it as new learning material is added.

[B]About Me:[/B]
If you would like to learn more about me please read the introduction post from my other thread.

[B]NOTE:[/B] If you want to get a hold of me, DO NOT call me. The only appropriate method for members to contact me is via babypips PM, Skype or e-mail.

[B]NOTE #2:[/B] I have tried to provide enough information of myself to help traders become familiar with who I am. If what I have already laid out is not enough then either move onto another thread or send your questions to me privately. I want a clean thread here dedicated to talking price action trading. Anything that falls outside of those boundaries are not allowed in this thread.
If you would like to see my my answers to these question please go here and here

[B]Introduce Yourself:[/B] It is a signature part of “Price Action That Matters” to introduce yourself by telling us your name or handle and saying “I am a…” and listing all of the hats and titles you wear in order from most and to least important. For example, My name is Aaron Kruger and I am Christian, husband, dad, programmer and Forex trader. If it is something you want to do, it is a fun way to join the price action community here. You are only a visitor once and after that we consider you part of the community. With all of that being said, let’s get to learning!

[B]Quick Navigation[/B] (links to key articles and discussions)

[B]Method Basics[/B]
Article - [I]“Step 1: Identifying a Trend”[/I]
Article - [I]“Step 2: Finding Key S/R Areas”[/I]
Article - [I]“Step 3:Watching for Price Action at Key S/R Levels”[/I]
Article - [I]“Part 1: Retracement Techniques”[/I]
Post - [I]“The 5 Star Rating System”[/I]

[B]Price Action Candles[/B]
Video - [I]“How to Identify Market Structure and What a Pinbar Is”[/I]
Video - [I]“Price Action Pin Bar Tutorial #2”[/I]

[B]Price Action Patterns[/B]

[B]Support/Resistance Tools[/B]

[B]Trade Management[/B]
Post - [I]“Take profit techniques”[/I]
Post - [I]“How to Move Your Stoploss”[/I]

[B]Money Management[/B]
Post - [I]“Fixed % Vs. Fixed $”[/I]
Post - [I]RR Calculation[/I]

[B]Trader Psychology[/B]

[B]Market Psychology[/B]
Video - [I]“Why Pin Bars Form”[/I]

[B]Trading Plans/Journals[/B]
Member Contribution - [I]“Sample Trading Plan: Template #1”[/I]
Member Contribution - [I]“Sample Trading Plan: Template #2”[/I]

[B]Notable Chart Analysis[/B]
Post - [I]“Pin Bar H3”[/I]

[B]Misc. Articles[/B]
Post - [I]“Why most Price Action Guru courses DO NOT work”[/I]

[B]Rules[/B]

The allowed topics of discussion here will be smaller and more concise than the other PA That Matters thread. These rules are here to ensure that the thread does not become a run away thread and lose it’s value as an education tool. The rules and guidelines laid out here will dictate both what is discussed and what chart setups are posted.

[B]Topics Discussed Here[/B]
[ol]
[li]Price Action Candles
[/li][li]Price Action Patterns
[/li][li]Finding Key Support/Resistance Areas
[/li][li]Managing Risk/Reward
[/li][li]Trade Management
[/li][li]Money Management Methods(Fixed $ and % Risk)
[/li][li]Trader Psychology
[/li][li]Market Psychology
[/li][li]
[/li][/ol]

[B]Things we DO use[/B]:

[B]Price Action Candles[/B](in no specific order):
*Pin Bar
*Engulfing Bar

[B]Price Action Patterns[/B](in no specific order):
*1-2-3 Reversal

[B]What Matters(S/R key areas)[/B] (in order of importance):
*Horizontal S/R
*Fibonacci (50% and up)

[B]Things we DON’T use[/B]:

[ol]
[li]News - we only keep our eye on major news events to track potential trade risks
[/li][li]Any S/R tools not listed here
[/li][li]Any price action candles and patterns not listed here
[/li][li]Pivot Points
[/li][li]Fibonacci levels below %50
[/li][li]Volume
[/li][li]
[/li][/ol]

[B]Other thread/method requirements[/B]

[B]Trade Requirements[/B]:
[ol]
[li]A valid price action signal must have formed, this provides the entry signal
[/li][li]These price action signals must have formed at key S/R level(s)
[/li][li]The trade must provide at minimum 1:1 RR, preferably 1:2 or higher
[/li][li]The signal must not have formed in a choppy or noisy area of price
[/li][li]At a minimum the candle must be the size of the previous candle, or fairly close
[/li][/ol]

[B]Chart Requirements[/B]:
[ol]
[li]Candlestick charts only
[/li][li]Must be New York close
[/li][li]Can only show thread approved PA candles, S/R tools.
[/li][li]
[/li][/ol]

[B]Trade Quality Measurement(The 5 star system)[/B]: As long as the trade requirements are met, the setup is now “tradable”. Not all trades that fall within the core requirements are of considered high quality though. I tend to filter out trades I deem as lower quality, and I may increase or decrease the amount of money I risk on a trade depending on its quality. It’s important to have a system of rating the quality of your trade. Here we will utilize a 5 star system. A 1 star trade merely falls into the core requirements but may have other poor qualities increasing the risk of the trade. A 5 star trade is one of highest quality, is a perfectly formed price action signal with great RR and very little resistance along the way. Although most trades will fall in the 1-3 star range. Remember that measuring the quality of a trade can be very subjective, so if you don’t agree with someones rating of a setup, you can respectfully ask them to expound on why they gave their setup a certain rating.

[B]Personal Trade Filters[/B]:
After I find a trade that meets my core requirements I then run it through my personal list of filters that are apart of my trading method. For you as a trader, your filters may include no counter trend trades, non approved PA signals, or avoiding NFP. You may also filter out trades that are too low in quality(I.E. 1-3 stars). There are many filters a person can use to make sure they are taking the highest quality trades with the best edge.

[B]Timeframes[/B]: H4 and up

[B]Approved Currency Pairs[/B]: Price action occurs on all financial instruments such as currency, precious metals, indices and stocks. I am not picky on what currencies I watch as they almost all produce good price action. I don’t try and get to know the currency or the news behind the currencies, I just want to be watching for price action signals at key PA levels. Finding price action generally takes less than a minute on any candlestick chart.

[B]Trade Posting Requirements[/B]: You are allowed and encouraged to post questions, join discussions, answer questions and post trade screenshots. When posting information about a trade you “must” have a chart showing the trade being discussed with stoploss, entry and take profit clearly labeled. You must also post your opinion of the quality of the trade using the 5 star rating method. This is for your benefit because it will help you begin viewing your trades as unique and of different quality. Others will also benefit from this because they can ask you why you are rating your trades a certain quality. This will help create healthy educational discussions about trade setups. You must also provide at a minimum, a simple list of pros and cons of the trade you are posting. Remember though, the more detailed your analysis is of the trade you are posting the better. Not only will writing the commentary help you learn, but thousands of others will also read your post and learn from it.

[B]Quick Navigation[/B] (links to key articles and discussions)

[B]Method Basics[/B]
Article - [I]“Step 1: Identifying a Trend”[/I]
Article - [I]“Step 2: Finding Key S/R Areas”[/I]

[B]Price Action Candles[/B]
Video - [I]“How to Identify Market Structure and What a Pinbar Is”[/I]

[B]Price Action Patterns[/B]

[B]Support/Resistance Tools[/B]

[B]Trade Management[/B]

[B]Money Management[/B]
Post - [I]“Fixed % Vs. Fixed $”[/I]

[B]Trader Psychology[/B]

[B]Market Psychology[/B]

[B]Trading Plans/Journals[/B]
Member Contribution - [I]“Sample Trading Plan: Template #1”[/I]
Member Contribution - [I]“Sample Trading Plan: Template #2”[/I]

Reserved

Thanks so much krug. I have always trusted you right from the begining and i hope to learn more from you.

Hey sympathy, I hop you are finding good value from the articles and learning material I have been laying out so far. I look forward to hearing success stories because of these threads.

Woooow ithis is a kind of thread was searching for … Whoever started this thread is awesome … Subscribed !!

My name is Ambrose Gbeti from Ghana, 27 years old single, i am currently A medical laboratory technologist. I have love for Forex Trading and i am constantly learning about FX just for me to be very good at it. I also found out that if PA will be very good strategy to implement in my trading . Once again thank you for this thread

Best Regards
Ambrose

Hey Heaveneze! Welcome to our PA community here. After seeing so many people frustrated about wanting to become better traders but not being able to afford the pricey membership fees that various price action teachers charge, so I decided to start doing everything I could to get high quality PA learning material on the web for free.

I also run a Forex website and have been designing iOS apps for traders/investors. I love trading Forex and seeing others succeed in their own trading career. I hope you find great value here and I look forward to talking price action here in the future.

[QUOTE=“krugman25;549662”]

Hey Heaveneze! Welcome to our PA community here. After seeing so many people frustrated about wanting to become better traders but not being able to afford the pricey membership fees that various price action teachers charge, so I decided to start doing everything I could to get high quality PA learning material on the web for free.

I also run a Forex website and have been designing iOS apps for traders/investors. I love trading Forex and seeing others succeed in their own trading career. I hope you find great value here and I look forward to talking price action here in the future.[/QUOTE]

Ofcourse i will definitely learn a lot from here … Dont wanna miss any update tho

I’m here to stay…

That’s assuming you can handle me in yet another thread of yours :slight_smile:

Cheers

Sorry eternal but I can’t have you positing in this thread also… haha, just kidding! You provide great value to the discussions we have over at the other thread and I know you will be a benefit here also. Thanks for being such a great contributor.

Hey everyone, I just posted a good article on fixed % vs. fixed $ money management methods, and using mathematics, which one may be the better one to choose. There is unfortunately a lot of misinformation out there about each money management model, and most of it isn’t based on math. At the end of the day all trading is, is mathematics. Both how your take trades, and how you expect your account size to grow. I think this is key for beginners because this will help determine if you blow out your account while learning, and how long you will keep your sanity during a losing streak. I added the link to the quick navigations page, but you can check out the post here [I]“Fixed % Vs. Fixed $”[/I]

I dont know how to use the quicklinks in these posts. It just leads me to several posts and cant get the corresponding subject in there. I am sorry , is there anything i am missing ?

[QUOTE=“Heaveneze;550083”]I dont know how to use the quicklinks in these posts. It just leads me to several posts and cant get the corresponding subject in there. I am sorry , is there anything i am missing ?[/QUOTE]

I’ll check the links to make sure they are correct. There are 3 types of links, post article and video. These are all in the form of baby pips posts , but some are actual comments to members(posts), some are articles I’ve written and posted, and some are learning videos that link to a specific YouTube video.

You need to wait for the page to load completely then it will jump to the correct post.

There is the post number in the url and your browser won’t be able to show it unless all the page has loaded


Just closed an AUDUSD trade for a RR of 1:2. Currently watching for pullbacks on a number of pairs.

My name is Willy, and to be very short here, I’m the Christian brother of the owner of this thread. :smiley:

Once again you continue to amuse me, Krugman. You really are passionate about Price Action, and at this rate, you’ll definitely accomplish the same level of Forex guru out there like Johnathon Fox, Nial Fuller, James 16, etc. sooner than later. In the mean time, you don’t have a plan to turn evil anytime soon and ask for $XXXX.XX and a kidney for advanced membership fee, do you?

I always like the basic material. Even when I’m teaching Physics at college, basic Physics sparks my passion more than advanced one. Even with my experiences in PA analysis, most of the time I’ll wait until I fully grasp your idea of 5-star trade setup to avoid getting into ‘the blind leading the blind’ syndrome. In the mean time, I’ll hang around and see what I can do to help, brother.

Wow wm247 what a write up! Another guru?

We are so lucky…

Pardon my exuberance.

Hi Krugman! I’m Michael, a newbie trader from Philippines…I really love PA and I just wanna say thanks for the free but very helpful PA tutorials, articles, video, etc. It really helps a lot…

FYI for everyone, Aaron is not like those salesmen gurus…he’s just a fellow trader with a forex knowledge and experience like a guru but with a good intention in helping other traders specially those with passion in PA and those newbies interested in PA…

Keep it up and God bless!!!..