Thanks Johnathon. Indeed it might likely have trouble at 85 due to some resistance and the .00 factor as well (assuming it breaks upwards and heads that way).
Well two ways to play it IMO. Play the immediate break of the res, that is once it closes over, jump in.
Or, the more conservative/prudent approach, see if after the close over, it pulls back and backtests the now support of 84/ neckline area.
Waiting for the pullback can of course mean missing the train if it doesn’t happen, that is a choice and preference of each trader and his/her style they have to make.
Either way, stop just under 84 like 83.75 or so or if more risk tolerant 83.50, TP1 = 85, take 50% off at TP1 and move stop to BE or even 84.50. Let the rest run moving stop up as it goes or stick a trailing stop on it. TP2 = 86 (H&S target), though looking at the chart it would likely start struggling in the 85.50 area and to me that would be a good spot to punt. With that in mind, I would likely take another 25% off at 85.50 and stick a tight trailing stop on the last 25%.
Overall its a nice 1:2 trade (or more with tighter stop), with the chance to go 1:3 or even 1:4.
Of course this is all just an initial trade plan, that might need adjusting on the way. For example with an EMA 8 on the chart, if price moves strong and stays above it I might try to keep as much capital as possible in the trade as long as possible like until a violation of that 8 occurs, then re-access.
As for ema’s I don’t use those either so I can’t comment on your method of using them.
I use Price Action only. No magic.
Here’s the way I would have to see it for me to trade. Below is the daily chart. I would need to see price break out and retrace. This retrace could happen on an intraday chart or daily chart.
Your right about this way you risk not getting in a trade but more often then not when we get these super important levels the market will eventually come back and test it. It could take 1 week or 6 months but the market normally will come back and test this very same level and give us a chance to make some money.
Also looking at the daily chart of the AUDUSD we can see price has been in a runaway up trend for the last few months. Price has now begun a retrace and I am looking for logical areas to rejoin in the existing trend. The below chart shows two areas I would like to see some obvious Price Action signals to get long.
Pretty killer setup formed earlier on the AUDJPY 4hr chart.
Price has had recent upward momentum on the 4hr chart and we had a nice pullback to support. Price then formed a Bullish Engulfing bar and has since moved higher into a first logical target. Please see charts.
This was a nice PA set-up Johnathon and one I took. As I am by nature a conservative trader I have taken some profit off the table at the First trouble area you have marked and moved my 2nd position up to break even. Simple yet effective stuff.
Very good system, I’ve been trading small lots to test this technique and had all positive trades, three total this week alone. I’ve tried loading charts with technicals, scalping and etc. I’ve had more success using price action. As a newbie in forex, I’ve been focusing on learning a technique, that simple but effective and I’ve found that using PA with trendlines. I normally trade the Asian session with 30 to 50 pip TP so my trades reach their TP before the US open. I focus more on a conservative approach in the interim until I gain more confidence. In closing, I know that your system works b/c of my recent results so I appreciate you taking the time to explain it to us.
Just try to keep it simple and not fall into the trap so may do of thinking the more you add indicators and analyse things the more you will know. This is not the case. All you need to know is in the price.
As for trading the Asian session if it is working for you keep it going but I like to stick to trading the UK/US sessions mainly when trading intra day of 1hr and 4hr time frames. The reason being is the Asian session has poor liquidity compared to the UK/US sessions and markets tend to be very quite until the UK opens.
When I enter daily setups like the setups above however I do mostly enter these during Asian session but as these are daily signals they cover all the sessions. In other words 1 candle is made up of all sessions combined.
Just wanted to drop in and recommend a good resource for those of you that are interested in price action. Some time ago i started watching Chris Capre’s free webinars on FXstreet. He has a very rule-based approach on
price action. I used to trade strictly based on supply/demand areas, but i found that it is quite restrictive, you dont get that many opportunities to trade. With price action, i`ve been trading a lor more lately, and the majority of my trades have been profitable. Definitely check his webinars on fxstreet.
just update the potential t setups above. Both broke lower and hit relevant first support areas before going higher.
NZDUSD is now back around Break Even but I suggest most would be out of this now after taking profit or part profit at the logical first area and then being stopped out at break even.
The USDSGD has produced a Pin on the daily chart. This is sitting right on recent support and price would need to break this lower to have any chance of creating some sought of movement lower… If price can’t break lower a test of recent highs could be on the cards…
Really enjoy your thoughts and explanations Johnathon. For a relative newbie, this has been one of the best and clearest description of trading I have come across
As I always say: Keep it simple. People try to over analyse everything. It really doesn’y have to be made hard once you have learnt basically how the markets move!
Hello Spongy, I don’t know whether your trying to ask if I am Nial Fuller? But I can assure you I am not. I am not sure but I don’t think he trades engulfing bars or 2 bar reversals? See below for reent 2 bar I was actually posting as you sent your mmsg.
All,
here is a setup I did not take as it was trading into way too much traffic for my liking however it worked out well all the same.
It was a 2 bar reversal or some call a 2 bar pin bar on the GBPUSD daily chart.
Price did go lower to the logical area of support before bouncing higher. I suggest anyone who traded this would have been watching that support area for take profit or move to break even.
Hi Johnaton!
It’s with very big interest I follow your thread… After learning about Japanise Candlestics and patterns they form, I decided, thats the way I want to trade… As you say, it’s the most complete information about whats going on in the markets. No need for additional indicators!
I am looking forward from learning from you!
thanks for your comments and I am glad to be helping! I love this stuff as you may well be able to tell!
If you want more information on how I trade and assess the markets you can check out my home page by clicking on my name and then “visit home page”. There are tons of free videos and articles etc.
