Hey spongy,
we chat about most everything Price Action. Yes we have a live setups forum where we discuss live setups.
I don’t wan’t to turn this in here into that though, and I would prefer to concentrate on people learning in here and to be honest creating something without the usual rubbish that you find all over the net!
1am my time here and I am pooped. Now off to bed.
Safe trading all,
Johnathon
I dont mean to be a pain in the bum but I find it really hard to see your candles or the setups on your charts. I am not asking you to change your colours or anything like that but could you possibly either zoom in on 1 chart that shows the setup or (even better) make the candles bold with the colour. For example fully green and fully red. Okay if not, just as I said I can’t really see what you are trying to explain.
Thank you.
Night,
Johnathon
Hi Spongybob,
Unfortunately, i can’t see your chart or levels clearly…
Could you please save the chart as a picture ( File > Save As Picture ) and re-attach?
Thanks
Hey spongy,
jast lastly talking about IB. Using that NZDUSD 4hr as an example of just hour tricky they can be to play. Okay so most traders play Ib the stock standard way of taking the break and then placing the stop the other side. Although price did go lower on the NZDUSD a trader who potentially played the trade would have been stopped when price faked them out. This was the point I was trying to make earlier. They can be really dangerous when not played correctly. Don’t get me wrong they also can be awesome but I would much rather people start to learn to play the other PA before trying to implement IB. Even though the trader in this example picked the corrcet direction they still would have lost.
Anyways,
I am def off to bed,
Johnathon
Sorry guys, lets see if this is better.
About IB, I personally place stops above the swing high, not the IB bar.
Hi all,
I’ve been following this thread and finally have some questions to resolve before I dive in more.
First of all, pertaining to trend. How do you go about identifying a trend and how strong it is? I’ve seen people say you go up a level and see the direction over a period of time/number of candles. For example, if i am looking at 1D timeframe then I go up to 1W and use that level to spot a trend. I also see people say just use 1D and identify the trend by seeing the direction over a certain number of candles (let’s say 25 previous candles).
Also, is it best to use a line I draw myself(subjective) as a trend or some EMA/indicator that is more “objective” so that it can be more in line with what other traders might use?
Lastly, with regard to engulfing candles. Is there a cut and dry definition of an engulfing candle or it depends on who is giving the opinion? I believe I’ve seen people say that the body of the engulfing candle should swallow the previous candle including the highs and lows. I’ve also seen that the candle just needs to swallow the body of the previous candle. Are both true but the one that swallows all is a stronger signal?
These questions are necessarily for Johnathon so any guidance is greatly appreciated.
EJ
Trend is simply the passage of higher swing highs & higher swing lows in a bullish ascent & the passage of lower swing lows & lower swing highs in a bearish descent on whichever timeframe you’re observing your data from.
Opinions are divided as to how many swings are required to confirm a trend, but in order for a fresh trend to be considered genuine, the previous swing would need to be taken out followed by a further swing high & low (going up) & vice versa (going down) in the new direction.
One method of determining the strength of a trend is by measuring the depth of any overlap between the impulse (or primary) wave & the correction (or secondary) swing.
As an example here’s a 4 hour chart of the nzd/jpy.
The view that the op has given is an accurate description of what an outside bar represents.
Try not to reinvent wheels or add layers of confusion when studying & absorbing information. It is what it is, same as inside bars or tweezer bars etc.
Don’t lose focus of what he’s delivering in the context of the technical geography. These candles are being shown & advised to be traded at very specific technical area’s of the price chart. I would suggest you fovus more on where these candles are setting up rather than attempting to dissect the structure of the candle.
Spongybob if it’s Ok I will take this question. Seeing what Johnathon was posting on here I will admit I have joined his site. It’s very good, an extension of what is on these threads.
The forum is good and seems pretty ego free which is a big plus where I’m concerned.
As he says nobody is trying to reinvent the wheel just put it together into one cohesive package with his particular slant on it.
The reason I mention this is he sent me an e-mail last night (I was asleep at the time) and as he saw me contributing to this thread again he asked if I could keep an eye on it as he is sometimes very busy and doesn’t always have the time to answer people straight away.
Please note I am NOT here to promote anything but more to help him keep this thread going as I am now familiar with the style of PA he likes to trade. Of course he has more experience than me but I will try and answer questions where I can and help people out. I really believe in the principles of Price Action trading and have been trading this style for about 2 years myself.
as you can probably see from when I joined babypips I have been interested in Forex for a number of years and then about half way through my travels stumbled upon Price Action and have been a convert ever since as it was the first style of trading which allowed me to consistently profit over time.
I think it is the best and easiest way to trade and it’s great to see new people joining this thread and asking questions. Hopefully we can keep it going and show people the power of PA!
Sounds like you know a thing or 2 about PA yourself? Hope to se you on this thread on a consistent basis and we can discuss some PA trades as they come up.
Thanks Bryce,
yes I wanted all to know Bryce is a Senior trader of mine. I mainly wanted people to know this because he knows what he is talking about and when I can’t answer in here and he does for me please listen to him as he knows what he is talking about.
Johnathon
Thanks Spongy,
looks much better. Thank you!
Okay so this is a super common question and I understand why.
Okay so I DO NOT use ema’s or any indicators as we can simply look at price to determine what it has been doing.
So when looking for trend we need to first keep it simple and secondly think about how losing we are looking to be in the trade. I see some people looking to trade the daily chart and trade swing for 2 -5 days but yet they zoom the chart out and have a look at what the price is doing trend wise for the last 5 years. Who cares?
If we are looking for short swing we need to be trading with the short/medium term trend, taking our profit and exiting.
So here is an example. Below is a chart of the NZDUSD 1 day. The 1st chart shows the short term to medium term trend. This clearly shows price making higher highs and lower lows or in other words an uptrend. Now it is this amount of time when need to worry about as we will be looking to trade swings “within” the uptrend.
The second chart is the same pair but zoomed out. Now you would say it is choppy to down but ho cares as we are not looking to trade for this length of time!
The last thing I want to say is an uptrend is marked by higher highs and lower lows and vice versa for a downtrend. A very comon reversal pattern to look for when the trend changes is the 1,2,3 reversal. Either do a google search or wait a while and I will do an article for you.
Hope this helps and good to have you on board,
Johnathon
Nice post and welcome,
Johnathon
Howdy all
This is where I totally agree with Johnathon about IB that would fail. Its in no mans land
Which are for you the “standard” entry and stop loss for the engulfing bar according to John’s rules?
Standard entry is at the break. As a rule he doesn’t take retrace entries.
As a rule.
Sometimes he does but that is an advanced technique and sometimes it is discussed on certain trades, however for the purposes of this thread I think we should keep it at the standard break.
And usually the stop is at the high or low of the bar. Again this can be tweaked in some cases we will do this, but again this is more if you are a reasonably experienced PA trader.
I know for this thread Johnathon is more keen to look at relevant S&R zones and what PA signals we look for to trade them.
He tends to discuss stops, entry and trade management more in his own forum which I guess is fair enough.
Johnathon, may I have your email addy? Or should I get it from your site?
I will leave my Spongybob and real name so you know its me.
Sure thing Spongy,
yes, you can reach me direct at <[email protected]>
Look forward to talking to you,
Johnathon
Hey Jonathon I’ve been keeping up with this thread pretty well and I must say, you seem to know what you are doing. What are your thoughts on the PA happening on the GBP/USD and EUR/USD WEEKLY time frames at the moment? I’ve never traded the high TF’s like the weekly and monthly (I generally stick with the 4H and daily), but like the thought of it.
GBPUSD approaching support area at 1.5660, watch out for PA at that area to long.
Having said that, we had a high of 1.5930 then a lower high of 1.5880, if 1.5660 doesnt hold we could have a large drop to next support area of 1.5400.
Thanks Johnathon, I actually quiet like this chart setup with while and black. :35:
