Forex Price Action

[Kasravi]

@bigcheefer30

Where would it make sense to logically position a horizontal S/R line for this pair (GBPCHF D1):

• @ 1.47000
• Or, at the top of the tail of the forming potential-PB

Hi Bigcheefer,

As you are pointing out on your chart price is in an up trend.
I just noticed Krugman pointed out the levels and I have the same on mine here.
Bear in mind that those areas contained lots of traffic in the past.Ideally you are either looking for a solid rejection or a pullback.

Cheers.

[krugman25]

I wanted to bring up the topic of S&R lines since they are a staple of price action trading and because there have been so many bad setups posted lately. The first point to be made is that support and resistance usually is not 1 price point, but rather a small range where market orders begin to shift(supply and demand shift). Sometime these bands are very small and sometimes they are fairly large. Regardless though you usually have 3 possible setups around those S&R bands.

The first setup is where the PA candles pierce up through the band and close completely above/beneath it. These are the best setups and are a component of an A+ setup. The best quality signal is when the PA candle/s pierce completely through the band and sometimes beyond before pulling completely back and closing below/above the band. The second possibility is the candle closing within the S&R band. This setup is riskier and really should only be played by someone who has been doing this a very long time and understands how to mitigate the extra risk. I personally don’t trade these at all. The third setup is definite a no go as it would have to break through the entire band where it may find multiple levels of resistance. At that point, depending on the trend, it may be time to begin looking to that level as pullbacks for support.

Thoughts and suggestions are welcome!

[Kasravi]

Thoughts and suggestions are welcome!

Hey Krugman,

Great post.
It’s certainly not a smart play trading into those zones.

Cheers.

[buster48]

yes good constructive post from Mr Krugman

[skysooner]

I have been with Jon a bit over a year. We definitely should wait until the candle is closed. However if I am bored temporarily at work, I will do a quick scout a few hours ahead to see what is likely (end of my work day is a bit hectic and that is when NY close happens), and I will note what needs to happen for a particular pair to work. This also becomes my intraday scouting mission too.

This one popped up on my radar screen. If it closed as it did now, it looks like a good trade from the high of a range. I haven’t dived deep enough into it yet though to make sure it meets all of my requirements. We will know in 2.5 hours.

Looks like it will close as slightly over the high of the previous candle, so it would be invalid. A close below 1.4700 would have been good too.

[Matthgm]

Looks like it will close as slightly over the high of the previous candle, so it would be invalid. A close below 1.4700 would have been good too.

It’s very tight. I haven’t moved from FXCM at the moment but with them its trading 2pts over previous high. If it does drop into the bar my targets would be: -

Entry: 14713
Stop: 14797
FTA (TP1): 14632
TP2: 14502

[B]EDIT: No Trade: Pin Bar invalid, closed outside previous bar[/B]

[buster48]

Looks like it will close as slightly over the high of the previous candle, so it would be invalid. A close below 1.4700 would have been good too.

there you go ,closed higher than the previous candle ,looks damned tempting though dosent it.

[bigcheefer30]

It’s very tight. I haven’t moved from FXCM at the moment but with them its trading 2pts over previous high. If it does drop into the bar my targets would be: -

Entry: 14713
Stop: 14797
FTA (TP1): 14632
TP2: 14502

Isn’t it dangerous trading right into the 1.47 level which price has been unable to close under for the last 32 hours?

[Matthgm]

there you go ,closed higher than the previous candle ,looks damned tempting though dosent it.

Hands are for sitting on tonight, I’ve learnt that the hard way!! Good luck any one who takes it, I’m trying hard to stay disciplined with trades few and far between at the moment. Back hunting again tomorrow!!

[Kasravi]

Hands are for sitting on tonight, I’ve learnt that the hard way!! Good luck any one who takes it, I’m trying hard to stay disciplined with trades few and far between at the moment. Back hunting again tomorrow!!

Couldn’t put it better Matt.

[buster48]

Couldn’t put it better Matt.

No ,of course your both right time to leave the computer away from temptation:16:

[wm247]

[B]EDIT: No Trade: Pin Bar invalid, closed outside previous bar[/B]

And thus we do not trade it. Invalid pinbar, or ‘Proxybar’ some seniors call it is a no go. No butts, and no iffs.

Tempting? Definitely! Even among veterans at FSO the discussion about Proxybar can heat up very fast. But that’s also what differentiate a great trader and a ‘merely good enough’ trader. Sometimes I feel like here we are not really training to become a Forex trader. A Forex sniper is the more appropriate term.

[wm247]

There is one more possibility that you can cover, krug.

What if the PA candle only partially or merely touches the band before pulling completely back and closing below/above the band? So it’s like your ‘Best Setup’, but make the PA even lower? What will you do if you encounter that kind of setup? It’s also very common, so I want to know what you will do in that situation.

Cheers!

@krugman25

I wanted to bring up the topic of S&R lines since they are a staple of price action trading and because there have been so many bad setups posted lately. The first point to be made is that support and resistance usually not 1 price point, but rather a small range where market orders begin to shift(supply and demand shift). Sometime these band are very small and sometimes they are fairly large. Regardless though you usually have 3 possible setups around those S&R bands.

The first setup is where the PA candles pierce up through the band and close completely above/beneath it. These are the best setups and are a component of an A+ setup. The best quality signal is when the PA candle/s pierce completely through the band and sometimes beyond before pulling completely back and closing below/above the band. The second possibility is the candle closing within the S&R band. This setup is riskier and really should only be played by someone who has been doing this a very long time and understands how to mitigate the extra risk. I personally don’t trade these at all. The third setup is definite a no go as it would have to break through the entire band where it may find multiple levels of resistance. At that point, depending on the trend, it may be time to begin looking to that level as pullbacks for support.

Thoughts and suggestions are welcome!

[krugman25]

[QUOTE=“wm247;530461”]There is one more possibility that you can cover, krug.

What if the PA candle only partially or merely touches the band before pulling completely back and closing below/above the band? So it’s like your ‘Best Setup’, but make the PA even lower? What will you do if you encounter that kind of setup? It’s also very common, so I want to know what you will do in that situation.

Cheers!

[/QUOTE]

For me the price action doesn’t have to poke all the way through the resistance level, but it has to at the very minimum the wick has the touch the resistance area. Otherwise risk is too high that price hasn’t finished its move.

[mselva]

Hi fellow traders:

I saw a lot of discussion about the PIN BAR on the daily GBPCFH chart. Beyond it was or not a valid PIN BAR, why you want to take that trade? It is not against the trend?

I will appreciate your comments since maybe I am seeing this wrong.

Best Regards,

[krugman25]

[QUOTE=“mselva;530508”]Hi fellow traders:

I saw a lot of discussion about the PIN BAR on the daily GBPCFH chart. Beyond it was or not a valid PIN BAR, why you want to take that trade? It is not against the trend?

I will appreciate your comments since maybe I am seeing this wrong.

Best Regards,
<img src=“301 Moved Permanently”/>[/QUOTE]

If counter trend trading is in your plan then it was worth keeping an eye on. For everyone else it would be worth watching to see if it pulls back to the last swing high and forms any obvious bullish PA.

[mselva]

One of the advice from this thread is newbies should avoid trade counter-trend. I think this is important to remember, since what I read was people ready to enter short if they have seen a valid PB around 1.4700 level. If not, my mistake.

Anyway, I want to encourage all of us that are learning to follow that advice and prefer the most conservative approach and set our killer zone at the support area in uptrend and in the resistance zone for downtrends.

Best Regards,

If counter trend trading is in your plan then it was worth keeping an eye on. For everyone else it would be worth watching to see if it pulls back to the last swing high and forms any obvious bullish PA.

[Piping_Hot]

Hi all,

I have a question regarding trend. When you look at below graph. How would you consider the trend ? Is it a downtrend that started back on the 12.04.2013 and therefore we are at a key swing high or do you consider it an uptrend that started on the 05.08.2013 and thus we would now rather wait for a pullback to go long with it ?

Thanks very much for your help.

Yves

[mattlewis]

Hey everyone, just started reading this thread (done the first 70 pages) and have the hang of the principals Johnathon has taught up until then.

I won’t be talking too much as this thread is massive, but wanted to ask what pairs most people are watching are (how many)?

I’m thinking with starting with the majors only:

EUR/USD
USD/JPY
GBP/USD
USD/CHH
USD/CAD
AUD/USD
NZD/USD

Thoughts on including some crosses as well?

Cheers,
Matt

[mselva]

Here a video from Jon. I was studying this by chance.
Hope it help you.
Regards,
Increase Your Win Rate by Forex Trend Trading | Trading Lesson - YouTube

@Piping_Hot

Hi all,

I have a question regarding trend. When you look at below graph. How would you consider the trend ? Is it a downtrend that started back on the 12.04.2013 and therefore we are at a key swing high or do you consider it an uptrend that started on the 05.08.2013 and thus we would now rather wait for a pullback to go long with it ?

Thanks very much for your help.

Yves