Forex Price Action

[krugman25]

From what I gathered, ask chart is a modification you may or may not want when looking for signals… spread not only differs between broker, it even differs between times/days. You’re not seeing the real picture but rather a inconsistently-modified one.

Bid chart on the other hand is universal - everyone in the world will see the same chart (if their chart closes at the same time of course)

Just my humble newbie opinion

You hit it on the head. Peoples bid charts may differ slightly also because not all brokers use the same banks and methods to come up with their prices, but for the most part brokers will all be in very close agreement. The ask price is the price that a broker is willing to buy back from you. That means if your broker has a 100 pip spread and my broker has a 2 pip spread, on your chart your ask price will be 100 pips higher than your bid, and on my chart only 2 pips above. Our bid charts may be identical but our ask charts will look way different. This is why I use bid when looking for price action. I also use bid when buying and only use ask charts when short selling.

[cams75]

Trades shouldn’t be entered before the break of the signal, period. If you are entering before the break of the signal then don’t post your trade here because it will promote something that isn’t done in this thread. The reason is that a price action signal isn’t actually “validated” until the low or high of it has been broken.

Also, entering on a retrace will simply not end good in the long run. You are greatly increasing the chance of losing a trade, for such a small increase in profit. Any little extra profits you make will quickly be wiped out by all of the losing trades you will begin incurring. I posted my equity curve a while back, and it had a huge drawdown in the middle, for about 50 trades. The reason for the drawdown was entry before the break. Over half of those loses wouldn’t have occurred if I would have entered the break. Then you can see my profit skyrocket after the big drawdown period, which was after I decided only trading on the break of the PA.

There are advanced stop loss methods that can be used to lower your risk, and are much safer than entering a price action signal before it is validated.

Great Post, not to derail the thread but I have a quick question with placing pending orders awaiting break of a signal. When placing a pending order using the methods outlined in this thread am I correct in thinking that it is only ever Sell Stops and Buy Stops that I would use and not Limits?

Sorry for the newbie question.

[chisha]

Yes that’s correct.

Great Post, not to derail the thread but I have a quick question with placing pending orders awaiting break of a signal. When placing a pending order using the methods outlined in this thread am I correct in thinking that it is only ever Sell Stops and Buy Stops that I would use and not Limits?

Sorry for the newbie question.

[chisha]

Hey Yves,
I told you I’d attach a chart to show you how I’d manage the pin on CADCHF if I played it. I also shared my concerns about this pin (it didn’t close within the previous candle) and the big round number it’s sitting on. I’d lock in profits at the first support and let the rest of my position run until price reaches the final support level I’ve marked and then take my full position. Part of my contingency plan would be to take full profit at the 1st support if I have reason to believe price might reverse.

[ppchrispp]

You hit it on the head. Peoples bid charts may differ slightly also because not all brokers use the same banks and methods to come up with their prices, but for the most part brokers will all be in very close agreement. The ask price is the price that a broker is willing to buy back from you. That means if your broker has a 100 pip spread and my broker has a 2 pip spread, on your chart your ask price will be 100 pips higher than your bid, and on my chart only 2 pips above. Our bid charts may be identical but our ask charts will look way different. This is why I use bid when looking for price action. I also use bid when buying and only use ask charts when short selling.

If the ask price charts differ from broker to broker, why do we use it in short selling price action? Does it not make it inaccurate and therefore should not be used in price action at all?

I understand that we buy the ask price and short the bid price, however I am still confused about whether we should just use one chart for all price action or should we switch between bid/ask chart.

[Piping_Hot]

Thanks Chisha,

Very clear now !

Yves

[Piping_Hot]

On EURCAD daily

Is this an inside bar ? Or does the body of the inside candle have to be inside the body of the housing candle ?

If yes, then what do you think about this setup ? I would enter at 1.379. 1st TP at 1.389 2nd TP 1.407 and SL at 1.367

Thanks for your feedback !

Yves

[mselva]

Hi Piping Hot:
An Inside Bar is not a PA signal (in the method we are trying to learn).
It just said there is indecision in the market.
Good luck with the trade.
Best Regards,

@Piping_Hot

On EURCAD daily

Is this an inside bar ? Or does the body of the inside candle have to be inside the body of the housing candle ?

If yes, then what do you think about this setup ? I would enter at 1.379. 1st TP at 1.389 2nd TP 1.407 and SL at 1.367

Thanks for your feedback !

Yves

[krugman25]

--------

[wm247]

You hit it on the head. Peoples bid charts may differ slightly also because not all brokers use the same banks and methods to come up with their prices, but for the most part brokers will all be in very close agreement. The ask price is the price that a broker is willing to buy back from you. That means if your broker has a 100 pip spread and my broker has a 2 pip spread, on your chart your ask price will be 100 pips higher than your bid, and on my chart only 2 pips above. Our bid charts may be identical but our ask charts will look way different. This is why I use bid when looking for price action. I also use bid when buying and only use ask charts when short selling.

If the ask price charts differ from broker to broker, why do we use it in short selling price action? Does it not make it inaccurate and therefore should not be used in price action at all?

I understand that we buy the ask price and short the bid price, however I am still confused about whether we should just use one chart for all price action or should we switch between bid/ask chart.

Agree with ppchrispp for this one. I still fail to see why we need to read different price chart at all, even if you prefer Ask chart for shortselling. What’s the point if the other brokers will see different chart from yours?

Also, what kind of sick broker offering 100 pip spreads when the others conveniently offer 2 pip spreads for the same pair? (although I understand you just want to make your points obvious here, but still…)

[ansunirmal]

cadchf daily pin …

[krugman25]

Agree with ppchrispp for this one. I still fail to see why we need to read different price chart at all, even if you prefer Ask chart for shortselling. What’s the point if the other brokers will see different chart from yours?

Also, what kind of sick broker offering 100 pip spreads when the others conveniently offer 2 pip spreads for the same pair? (although I understand you just want to make your points obvious here, but still…)

This is being way “overthunk”. The point is one chart is basically the bank feed(An Average of the dozen or so banks your broker uses to find its sale price) and the other is the bank feed plus the brokers spread. Both are used when buying or short selling, to help you properly set your stops and limits. But when it comes to using a chart for price action signals, you want the chart showing just the bank feed, and not the bank feed PLUS the spread. That’s my final word on the topic.

[bigcheefer30]

[QUOTE=“ansunirmal;529087”]<img src=“301 Moved Permanently”/>
cadchf daily pin …[/QUOTE]

This has been discussed a few posts ago…some of us feel this isn’t a valid pb because it didn’t open and close within previous candle thus rendering this trade a no go.

[abc2005]

@PIPOFF

Aud/usd 4hr

pin forming @ resistance.(some time until candle close.):57:

this is not a pinbar , pinbar should big and obvious , it’s a mini pinbar and not powerful enough

[wm247]

Disagree with your first statement. Technically speaking, that IS a pinbar. However, I agree with your last statement that “it’s a mini pinbar and not powerful enough”.

this is not a pinbar , pinbar should big and obvious , it’s a mini pinbar and not powerful enough

[pedramslhr]

This is being way “overthunk”. The point is one chart is basically the bank feed(An Average of the dozen or so banks your broker uses to find its sale price) and the other is the bank feed plus the brokers spread. Both are used when buying or short selling, to help you properly set your stops and limits. But when it comes to using a chart for price action signals, you want the chart showing just the bank feed, and not the bank feed PLUS the spread. That’s my final word on the topic.

Hello Krugman,
would you please post screens of your charts in bid and ask mode?

[Piping_Hot]

Hi Piping Hot:
An Inside Bar is not a PA signal (in the method we are trying to learn).
It just said there is indecision in the market.
Good luck with the trade.
Best Regards,

Ok, sorry to mess it up then. I saw an article on FSO about inside bars so I thought it could be discussed here as well.

I am not taking this trade as I am already on a CAD trade but it was just for the sake of learning.

Thanks,

Yves

[Kasravi]

Hello Krugman,
would you please post screens of your charts in bid and ask mode?

Hi Pedram,

I am by no means talking on behalf of Krugman, but I think we have been trading on the same DEFAULT charts and should continue so, stop fiddling about mate.
I mentioned a few pages earlier that Krugman is a smart fella and he has got brilliant ideas,but as he mentioned he doesn’t want to discuss ask/bid charts any further anyway. I reckon we shall all leave it to that.

Cheers.

[Kasravi]

Ok, sorry to mess it up then. I saw an article on FSO about inside bars so I thought it could be discussed here as well.

I am not taking this trade as I am already on a CAD trade but it was just for the sake of learning.

Thanks,

Yves

Hi Pipin,

Indeed, IBs are discussed on FSO,but as you read yourself and Msleva mentioned, it is an indecision.

Essentially the market gives you a break,time for a coffee/pizza/sleep/go BE/rack of ribs/ and take some profits given you have an open position.

Cheers.

[fahedksa]

Hello All,
Still learning and practicing .I open short today on EURUSD 4H . Because retrace from Resistance and BEEB candle
Attached chart
Am i right here or miss something ?
Thanks

Update:
I think i was mistaken enter short EURUSD. Why? Last push up have higher high and higher low so its now become new Uptrend and then after cross the resistance i have to wait retrace and PA signal to go long.
Comments please.