Price action swing trading
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Thread: Price action swing trading

  1. #1
    pipnailer is offline Newbie
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    Default Price action swing trading

    I've been trading for 4 years now and , i've come to these conclusions:

    1. Off all the strategies and systems i've used,nothing works
    better than price action basedsystems/strategies/
    approaches.

    2. It doesnt have to get complicated before it works. Keeping it
    simple is the real deal.

    3. The market is not as random as we've been made to believe.
    There are consistent patterns the market follows.

    4. Trading becomes easy only after u've put in the hard work
    required to master the business.

    5. There is no holy grail system or strategy. You are the holy
    grail look inwards and discover yourself. To discover
    yourself, you sure need divine help.

    6. Your mindset/psychology is more important than the strategy
    you use.

    7. Be disciplined and.......be greedy? [well, thats up to you and
    what you perceive to be the meaning of ''greedy''].

    The above assumptions are purely my personal assumptions based on my experience over my 4 years of trading. You are entitled to yours and i really dont care as long as you make money-thats the bottom line.

    I intend to use this thread to discuss not 1 but several approches to trading but based on price action. I hope this goes well and help improve someone's trading.
    dudest, SeanKim and asandeepivan like this.

  2. #2
    pipnailer is offline Newbie
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    Default Trend lines

    Trend line is one of the most powerful tool in forex trading. It's so amazing that atimes strong fundamentals even respect trendlines.

    It serves as support and resistance levels, also as a reliable indicator of trend change among other uses.

    Drawing a proper trendline [a wrongly drawn trendline can mar your trading] and following some observed rules are key to a sucessful use.

    Please find a write up on darawing tl attached here.

    Next we'll be exploring the use of tl on a live chart
    Attached Files Attached Files

  3. #3
    pippineedjut is offline Newbie
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    Quote Originally Posted by pipnailer View Post
    Drawing a proper trendline [a wrongly drawn trendline can mar your trading] and following some observed rules are key to a sucessful use.

    Please find a write up on darawing tl attached here.
    A useful little write up, thanks. It would also be good to see some illustrations of how the trend being broken actually looks, or the trend lines drawn on your highlighted points. Thanks again

  4. #4
    pipnailer is offline Newbie
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    Default UsdJpy

    Here's a live example on how we apply the Trend Line for taking trades... the third chart shows the Usd Jpy daily time frame..We see the trend line drawn as said in the little write up [ABCD points shown], and now we see price coming back up to test the TL days after...

    Also notice that price stalled for a while at the TL [yesterday's candle], showing its a resistant point.[ Please note that resistant point does not necessarily indicate that price will fall...Resistant points/zones can be broken..[such as is likely to happen here on the chart shown.

    Now, our TL shows us that we should be careful of going short and be on the sideline for price to decide what it wants to do...

    If today's candle closes above the TL, [the open is above the TL], then we say the TL is broken...[this also does not necessarily indicate a long position, but the balance is more towards a long position and aggressive traders will go long at this point].

    The less aggressive traders will do other things among which are.

    1. wait for price to travel up, then retrace..they pick their trades at the end
    of the retrace[using various tools to guessticulate the end of the
    retrace] ...a strategy known as BOP..brakeout and pull back.

    2. Go to a lower time frame and look for signals to go long....patterns,
    candle formations, Fib retracement, 123 reversal/continuation pattern,
    EMA cross over, etc.

    This brings us to the 2nd chart .....4hr time frame...

    As seen, price broke all the 3 TL's....inner, outer, long term TL.. Thus indicating a strong bullish run...now if the daily candle opens and close above the daily TL, we'll look to go long..and one of our criteria will be to watch or wait for a pull back of the recent up wave on the 4hr chart, and we'll be using the fib retracement tool and reversal candle formation to gauge our retracement and determine when to pull the trigger....

    The 1st chat shows the 1hr tf where i've pulled the fib retracement tool on the present long wave...might still go higher than it is now,which if it does i'll keep adjusting the fib tool...my aim here is to measure the retracement....

    I use the 1hr so as to get in a little bit earlier than i should on 4hr....

    Will keep explaining as action unfolds on this pair...
    At this point, I'll like to emphasise that while it is good to anticipate price movement and have a plan like we do now, it cannot be over emphasized that A trader should trade what he/she sees and not what he/she expects...

    Happy Pipping
    Attached Images Attached Images      
    Last edited by pipnailer; 09-17-2010 at 08:44 AM. Reason: chart arrangement

  5. #5
    DRA
    DRA is offline Superior Master Contributor and Member
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    This is basically how I trade along with another similar system. This week was great for trend line trading.
    To add to what you are saying, the break and test of a trendline often times forms a crown/H&S. The entry for these crowns are normally at the right tip(which will be a possible end to the retrace) rather than the neck line where most would enter.

  6. #6
    pipnailer is offline Newbie
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    Quote Originally Posted by cadarkitek View Post
    This is basically how I trade along with another similar system. This week was great for trend line trading.
    To add to what you are saying, the break and test of a trendline often times forms a crown/H&S. The entry for these crowns are normally at the right tip(which will be a possible end to the retrace) rather than the neck line where most would enter.
    yes cadarkitek.i will shed more light on the king's crown formation in subsequent posts..a powerful reversal pattern but often traded wrongly by most traders...

  7. #7
    pipnailer is offline Newbie
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    Default EurUsd

    This is what i see in EurUsd..before i go on, let me quickly say this...

    I give kudos to those that trade on short term trends..all the headache and high blood pressure they go thru is something i dread, and most times i really wonder why they choose to do so...

    The EU has been rallying for a while now and i get baffled when traders get jumpy and sweaty wondering when its going to stop..i simply point out the daily time frame to them and they go ''oh i see.....'' Let's see what is actually going on [my views really]


    On the weekly time frame, we see that price takes out the previous low giving us an emerging downtrend but is in its corrective stage [retracement], hence our bias will be to look for strong SHORT signals on the lower time frames.

    On the daily time frame, we see a bearish crown forming, we see price bounce off a trend line with a pin bar at 78.6 fib ABCD suggesting a dip to 1.2126 zone.

    On the 1hr time frame, price broke the trend line, took out the previous low, thus making a Lower Low which gives an emerging down trend and a bearish crown is forming in the process.

    ACTION PLAN
    Wait for price to retrace hopefully to the LS of the forming crown, then watch for candle formation and RSI agreeing to go short

    Then watch support and resistance levels to take profit/monitor trade accordingly

    keeping it so simple....
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  8. #8
    pipnailer is offline Newbie
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    Quote Originally Posted by pipnailer View Post
    This is what i see in EurUsd..before i go on, let me quickly say this...

    I give kudos to those that trade on short term trends..all the headache and high blood pressure they go thru is something i dread, and most times i really wonder why they choose to do so...

    The EU has been rallying for a while now and i get baffled when traders get jumpy and sweaty wondering when its going to stop..i simply point out the daily time frame to them and they go ''oh i see.....'' Let's see what is actually going on [my views really]


    On the weekly time frame, we see that price takes out the previous low giving us an emerging downtrend but is in its corrective stage [retracement], hence our bias will be to look for strong SHORT signals on the lower time frames.

    On the daily time frame, we see a bearish crown forming, we see price bounce off a trend line with a pin bar at 78.6 fib ABCD suggesting a dip to 1.2126 zone.

    On the 1hr time frame, price broke the trend line, took out the previous low, thus making a Lower Low which gives an emerging down trend and a bearish crown is forming in the process.

    ACTION PLAN
    Wait for price to retrace hopefully to the LS of the forming crown, then watch for candle formation and RSI agreeing to go short

    Then watch support and resistance levels to take profit/monitor trade accordingly

    keeping it so simple....
    As we can see price played out as expected and gave us some nice cool pips. if you missed out on this, dnt worry, price might retrace to form a bearish gartley in retest of entry point, and this will be a nice point to go short as well....see chart.

    I personally do not advice jumping into an ongoing trade if you missed the ideal entry point...Its better you wait for another opportunity to which in most cases is a retracement, to join the trade.

    The gartley will be complete at 1.3128

    stop loss will be at 1.3158 +20pips

    TP1 =1.2981

    RR=1:3
    Attached Images Attached Images  

  9. #9
    DRA
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    The gbpusd had a similar 1H entry after the retrace to the back side of the broken daily trendline stalled.

  10. #10
    pipnailer is offline Newbie
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    Default Usdjpy

    Let's look at some possible swing action here too.

    The counter TL on the weekly time frame seems set to retrace. This can be noticed on the daily timeframe which gave a bullish butterfly and price went up from there making higher highs, hence our bias is shifted to bullish run for now.

    However, we see that price fails to break the outer TL on the daily timeframe, hence we'll be weary of taking long positions for now till we are able to see price at least close above the outer Trend line [TL] better still give a break out [open and close above TL].

    It also may give a bounce and dip from here...... let's look at the 4hr tf for further clues.

    Here, price closed above the the outer TL quite ok, but we'll prefer to have it do so on the daily tf instead....

    If we have a bounce, price might dip to the next support zone @ 84.80 which is a 382 fib retracement.

    On the 1hr, we see price making a tweezer top and its stalling/hovering around tis zone all day..

    ACTION PLAN

    BIAS IS MORE BULLISH

    1. If price breaks daily TL, we go aggressively long.

    2. If price bounce off TL, we watch for retrcement to the S/R zone @ 84.80 to go long.

    3. Might as well trade the bearish bounce off TL if we get good signals for doing so on the daily tf.
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