A P.A.T - Advance Price Action Trading

Entry is based on the distributing price action on lower time periods seen below.

The last areas of supply is where I have my sell orders placed.

Possible shakeouts happen in situations like this so I’m keeping a tight stop and a close eye.

With that being said, it feels like I’m just talking to a space… are any traders interested in discussion or commentary?

It would be great to get some sign of life in here.

Following, good stuff. I love reading up on how other traders use SD.

I will read it more carefully a bit later when I get more time.

Great to have you here.

1 Like

Thank you. I’ll keep sharing more, glad to see some life in here

1 Like

In my analysis I use lines more than anything to get some sort of “perspective” in a way.

I notice that over the past few posts, the time periods i posted aren’t practical for the daytrader while generally this system works for any trading personality.

Below I’ll show you how although this is a trade setup that is yet to unfold. We’ll take it as a case study

Case study 1 - EURJPY

Notice how in the image below all you see is just a boring price range that you typically can just take a hard pass on it when turning on your charts?

Now see this.

Now here we have a price accumulation range. Bulls have won the battle and we’re waiting on a test of the breakout.

Possible areas of demand are within the range, below or just above the resistance line price broke out of.

I can take questions, suggestions on how to get other traders interacting over here etc.

I use a similar approach except my range is from MN to H1 charts. I only go lower timeframes very rarely. I put down my thoughts on the EUR/JPY about 3 weeks back on a BP news thread as folls:

Close up of scr shot:

I haven’t read up on or apply any VSA/Wyckoff like methods yet to my analysis. So I’m not familiar with the concept of supply and demand in this context yet.

1 Like

I’ll share how you can apply Wyckoff, most importantly supply and demand analysis below.

Firstly, like your screenshot already shows us; The Daily Demand was marked as follows

2 Likes

Where does VSA/Wyckoff come in? was your question.

Firstly, I don’t use volume when analysing price action in forex compared to most Wyckoff analysts because aside from the fact that it’s virtually impossible to get accurate volume in forex, everything I need interpreted is in the candles, but that’s my opinion only.

When price comes into contact with the demand zone we had marked on the daily timeperiod above, we open our charts to lower time periods in order for us to observe if price is being absorbed or accumulated as it gets in the zone. This isn’t something we’d be able to tell from the daily chart perspective.

Here’s a lower time period I used;
H1 - EURJPY

We see here some stopping action as price comes in after strong bearish candles - this would be our preliminary support level, the first sign of demand coming in.

It is here, where sellers take profit or a good amount of demand absorbs any selling pressure.

The second sign is the shortening of the selling thrust. Notice how strong the bearish candles were before the preliminary support, now see how short the selling is from preliminary support to the new low - this is the seller’s climax. These two points (preliminary support and selling climax), form the borders - support & resistance levels of the potential trading range.

The accumulation schematic shown below tells us that, there’s some substantial demand coming into the market - let’s get ready for a potential change in the downtrend.

Accumulation Schematic diagram on EURJPY

This is how Wyckoff would label the supply and demand forces in the relatively equilibrium price range, our job is to find high quality entries in areas of such potential.

The important levels I would take note of in the labelled charts are; the springboard and sos (sign of strength). My entry was based on the spring.

A question would be, how do you know it’s a spring especially since the formation looks something close to a continued downtrend until the candle closes? Which would be an excellent question.

Lower time periods assist with understanding if in fact there is a shortening of the downward thrust. (1) Wicks coming from the bottom are a great sign selling is met with strong demand absorbing their every effort. (2) Failure for price to follow through after attempting a continued downtrend also means that a spring is forming. Typically, this looks like a “stop hunt” then contracts back into the range.

Entry is established when price expands to the springboard (stop hunting), once the candle closes - you place a protective stop below the candle.

As price contracts into the range, you’ll watch for demand control over price in order to be sure that this battle is close to being won by buyers. A good signal is price breaking the upper bound of the trading range as a sign of strength (sos).

We already know that when we have a breakout, there’s high chances of a retest of this break (resistance becoming support). This would be our lps - last point of support, where we can establish a second position long.

I am not sure if this covers your question, but I’m glad I was able to write it up for anyone who’s lurking and might find useful.

Basically, this is how I executed the above shared; GBPJPY, GBPUSD from the recent turning point (see the weekly/daily chart), CADJPY and EURJPY (this very trade)

3 Likes

Any recommended books to better understand the concepts?

Currently I’m going into EURCHF.

Monthly Chart; Demand area

Books on Wyckoff teach you to analyse both price action along with VSA. You then need to apply your own logic like I did with pairing it along with supply/dem but you can see Trades About To Happen by David Weis and his website. Henry O Pruden’s work and publications as well

1 Like

Yesterday I noticed price reached the bottom of the zone, so I started observing price action in lower time periods, here’s what I found.

EURCHF M30 accumulation;

I left an order, slightly above the resistance line break, my stop below the swing - given the bigger picture zone.

Just some added evidence this was an accumulation accompanied by a spring

EURCHF M15

This is current running diary; 1:1 profit closed, allowing the trade to mature from here.

EURCHF M30 Updated

EURCHF ended up a loser although 1:1 was taken so overall it was a net zero trade. Although there is accumulation on <H1 going on. Keeping a close eye.

Currently, there’s a million dollar setup on GBPJPY. Price is retracing into the daily timeperiod demand zone as seen below

GBPJPY DAILY RBR;

1 Like

We’ve had a great reaction from the bulls on H4 already. A strong bullish pin bar close, traders like @Pinbar1993 & @Alg626 would find such quite compelling

GBPJPY H4

2 Likes

You know me so well…lol

Yes, nice big rejection of price. Looks like it might have been a fake out to the sellers.

Only concern that it’s been in a downtrend the last two months. I would take some profit earlier and move my stop up.

Also moved up pretty good from the last pin off this zone and few days ago.

1 Like

Yea, there was a huge sell off at the open of the US session on all the JP pairs.

2 Likes