hi
I’ve been reading an old post fe o.k. m Johnathan Fox about pure price action and now I want to try to put the advice to action.
can anyone point me to an active discussion where I could post questions and get further advice… or best to start a new thread.
thanks
datam.
Just ask away bro. We’ll be happy to answer.
hi _bob
appreciate it mate.
ok first of many then 
so with this pair I have these observations:
target price around 149.90
sl: 147.10
how does that analysis sound.
So the first thing I did was zoom out to the weekly to get some context
I note two things.
Agree. A linear regression channel confirms this. But more importantly, resistance is set back at the same support level pre brexit vote. To me this is a significant level. Unless the motherland can come up with a special brexit deal the price might not break though this level. Zooming down
Candlestick analysis and patterns are not price action studies. They are a whole different field of study sold by clever marketers to sex up price action. Do not pay any attention to them. Look at content.
I think has needs to be replaced by is retracing and bouncing. I think of support and resistance as zones as below
You have correctly identified a resistance zone but will it become a support level. Great potental and a classic example. Would you enter now. Probably not. You need confirmation. That may very well come today.
Zooming down to the hourly
Looks like 148.550 is the magic number. If the price breaks above that I believe your analysis to enter a long will be confirmed. But don’t forget the fakey. They occur on all timeframes
If not go short and go hard. Best of luck bro.
hey _bob,
Thanks for taking time out to reply, really appreciate it.
datam.
can you expand on this point please. Reading price action posts, an engulfing bar is a valid price action signal…or have I go it it wrong.
Top detailed advice from _bob, datam.
I would expand the discussion a little by looking at your choice of this pair for a long trade over any other. I have 7 out of 7 GBP-based pairs in bullish formation, and 6 out of 7 JPY-based pairs showing as bearish (though EUR/GBP and NZD/JPY are questionable). So on this basis these are currently the most bullish and most bearish currencies on the table respectively, making GBP/JPY a top candidate for a buy.
Sure, you can be buying GBP even if you would be long on the only bullish GBP pair, but its high risk going against the flow.
Meanwhile, are there any more bullish pairs? CAD/CHF, CAD/JPY, EUR/CHF and EUR/JPY could be worth a look.
hi tommor,
thanks for your input. I’m by no means a trader, just someone trying to learn price action trading to begin with. I like how you compare other pairs in currency pair I was looking at. interesting approach that I didn’t consider before.
the next one I saw is this
so with this I deduce that
)marked TP and SL points
comments please.
datam
I think there’s a good argument for playing GBP/USD either direction so I’m not looking to enter. Based on recent performance I’d say a long trade here has a slight edge.
I don’t rate H4 as significant as I trade long-term only so I would never have seen this pattern and it doesn’t look like a classic bearish engulfing candlestick. The body of the bearish candle should overlaps the upper and lower limits of the body of the preceding candle.
One thing you’ll learn as your trading career progresses that forex education/training is full of scam marketers wanting to sell you their wares. They’ll “blur” different trading styles together to make them more sexy and exotic to the client. Why, because we humans like sexy and exoctic things.
To the purist PA trader we understand that there are only two bits of information provided by our broker to us. Price and time. This “price action” is the same action that makes all time frames. 1min, 1 hr, 1 day… Japanese candlesticks are but a chart type (indicator) that captures open price, close price, the high and the low during a set time frame. However they do not indicate what price action occurred during that time frame. Therefore on their own or in combination they have no special powers that forecast price movement. For every “engulfing” bar that “works” I can find you one that doesn’t. It’s all about content. And you don’t need candlesticks to see this content. Line charts, bar chart, renko charts, point and figure charts are all valid charting methods that display content. But a point and figure chart is not sexy!
As you saw in my post I looked at a higher timeframe then a lower (multi-timeframe analysis) to deliver this content. No reference to candles whatsoever. Personally I would recommend you read the works of Sam Seiden over Johnno.
Now, I’ll play my get out of jail free card. Does that mean you should forget about candlesticks patterns? No. We all see the charts from a different perspective. If you can relate to these “patterns” then go for it. However my opinion is you are better of zooming into higher and lower timeframes to deliver content.
Great contribution Bob. It also helps me to learn how to read trading chart! Thanks again.
Actually I must disagree. Candlestick patterns indicate far more than the H/L/O/C. They indicate the psychology behind the move. Almost a glimpse at what the other trader is thinking.
Take the engulfing pattern for example, by itself out of context with the market they do not mean much. However, if you look at an engulfing pattern at S/R or at the bottom of a retracement it means everything.
In these cases the engulfing pattern is a sign that other traders are rejecting this level with strength. Rarely ever will this type of rejection at a level indicate anytjing other than a tradable move.
Hey N, I normally love to poke holes in people analysis, because they are usually wrong, hahahahah. But in this case, _bob is right on the money, now add a bit of Fundys, like what news there is relating to this pair, and you have a basic “system”. Right now, this pair has a High degree of volatility, good for short term trades, not so good for swings. Also do not forget USD fed Notes at 2:00 pm est. The 411 in this fed release may be already baked into the market, but maybe not. So there is just a bit of Fundy for you.
The Ever Tryin To Help VIPER
PS What is this ad about sending money to africa, first genetically modified beef, now this, I think someone needs a new Al Gore Rhythm. How bout an ad “for cheaper than dirt”, “track of the wolf”," free collection of R.P. Feynman’s lectures for signing up now", or “tunnel rams at rock bottom prices” Sheesh
Like with all indicators/price action components there is neither a “right” nor a “wrong” answer to them. They are all just tools that can help us in our decision-making by indicating what might be about to happen next.
We cannot say that candlestick patterns do mean something but we can say that they can indicate something.
For example an engulfing candle might appear on a 1 hour chart and indicate a near-term market action but it will not even appear on a daily bar chart including that same one hour of trading.
It is the same with S/R lines. They might indicate a turn, but eventually they do not.
The important thing is always to understand why something might be indicating something and in what context (e.g. what timeframe). Engulfing. dojis, morning stars, aliens from planet X, whatever, one has to understand what it is maybe telling us and use that in making a decision or not. We are not the slave to the indicator/PA, rather they are servants to us in whatever context we decide to apply them.
Labels mean nothing.
I sort of agree. Context and market structure are huge parts of the total picture. I would not think of entering or exiting a trade based on a candlestick pattern alone. You have to consider larger time frame market bias, volume if you have it and even to some extent time and fundamentals.
[quote=“Traderjohnsblog, post:15, topic:116816”]
You have to consider larger time frame market bias, volume if you have it and even to some extent time and fundamentals.[/quote]
This all makes sense.
Although I am not too sure that one always needs to refer to the bigger picture from a higher TF.
A 15m trader may well be in and out of their trade(s) before a long term trader even notices the blip on their radar.
The context here is knowing what we are expecting from the trade. A short term trader would probably not fare too well if they always look for a 150 pip profit! In my own short -term trades I often trade both with and against the main trend but only when the potential gain is reasonable (yes, I do personally always identify the longer term trend) and I only look for the pip move that is typical for the TF concerned.
Analysis, context, realism, results. 
ok so are most people saying that in their experiences, simple price action trading does not work. that other means to determine the direction have to be used. Like _bob with his different TF approach to look at possible direction.
I was hoping that my journey would be ‘simply’ learning to read price action on uncluttered charts to look for signals… to begin with at least.
appreciate all the comments.
I don’t think that is quite the right conclusion here, datam.
We are talking primarily about candlestick patterns within a PA setup.
But I think it is true that, like candlesticks, PA in terms of lines and patterns is also an art rather than a science. In many cases PA lines can even be self-fulfilling in the short term simply because so many traders are “trained” to look for the same things.
PA lines and patterns, as well as other indicators like MA’s, only provide some kind of reference points and visual structure to a chart to help in analysing where and when price might move next. But price movement is not chained to some extrapolation of what has gone before, it can do whatever it likes next dependent on market pressures. It might move as anticipated or it might not, And if it does, will it move far enough to offer a profit.
It is all about probabiities and managing your risk exposures to ensure that you end up making more than you lose - because winning and losing are both intrinsic elements of trading - not just getting the direction right!
looks like there’s a range of ideas and opinions…which is good and bad
good: gives me an insight in to other options
bad: confuses the he’ll out of me!
so for all you established traders, how did you start your journey to enlightenment…
I started by losing £15000 on buying shares in a firm called MArconi - around 20 years ago, and thinking “bloody hell, If im going to do this I better know something about it !” AT Xmas I got nearly 3 weeks off and borrowed every book on investing they had in the library. After reading them all way into the wee small hours every day, I knew one thing - None of these people had the slightest idea what it was all about !
I then decided that Indices were less risky than shares and spent the next year spread betting the DOW - getting close to wiping out a 5k account and took a year off work to research and learn and refinanced the account to do so. By this time the internet was starting up but “micro brokers” were no,t so minimum bet on the Dow was £2 a point and daily volatility somewhere around 350 points on occasion. I was trading slightly positive, but spreads were killing me. (That is a big problem with frequent retail trades) so watch the frequency and quality of your trades. Then I picked a point 2 hours before the exact bottom of the huge retracement that happened around then to go short and held it to a loss of £1700 (850 points). At that point I stopped and took theemissus on a three week holidaty to the Carribean ! (cheaper).
When I came back I reviewed all my trades and found that my stops were to cock - “Short stops” “Short stops” “Trailing stops” etc etc are the prevailing cry (from the brokers) get you stopped out all the time - choose the RIGHT place for your stops and remember they WILL “Run the stops” - Get in early when the stops are still short, but have vey good reasons for doing so. I have only been in Forex 2 weeks or so and am hoping the huge volume will prevent this “Stop running” to some extent. I am still paper trading it to “Get the feel”
To be profitable on the Dow I needed to trade only the very best opportunities, with 20 odd point spreads. so £200-£300+ stop losses. On the forex we can trade £10 positions and have apparently 2 pip spreads ! 
“DIP YER BREAD IN, Say Nowt & Don’t buy a Prgramme” Says I 
[Edit - fortunately I was also gambling on buying houses at the same time - which paid off - IN SPADES ! - so it’s also a good idea to have some kind of hedge ! ]
