I have to say something that is driving me nuts not in this thread but all over the net with many price action traders.
As traders we need to be getting in at value areas. What does this mean? it means we should buy low and sell high, Or sell high and buy low. Pretty simple right? Apparently not.
What we don’t want to do is try and get into the market once the move has been made or in other words short from the bottom or buy at the top.
WE NEED TO ENTER AT VALUE AREAS… We can not expect to being consistently profitable if we are entering at areas that no1 else is.
This means that if buy high and try to sell higher the chance that price hits resistance and turns is very high. The same if you buy from a swing low and try to sell lower.
When you enter from value areas example: Buy from swing low and exit at swing high, we do two things: 1: We give our trade somewehere to trade into i,e: space and 2: We increase our chance of having a winning trade.
I have said this many many times and I keep repeating it because a) I care and b) you don’t have a shot in hell of making money time and time again if you are entering trades from areas that are not value.
So I will give some example…
The first is of a pin bar. Notice this bearish engulfing bar the trader is trying to sell low (from swing low) and then trying to buy back lower. As I said above the chances of this hitting support and going high (stopping trader out) are high…
Now for the second example I am going to give the very revent trade most traded around here on the EURGBP. this was also a Bearish engulfing bar. Now notice here price was at a swing high? We were selling high and buying back low. We were entering at value! This gave us space to trade into!
If anyone doesn’t understand this please post your questions please… I would much rather explain something over and over again until someone got it than to not to and people lose money trading bad setups from rubbish areas.
Lastly I have to say of course these setups will occasionally work!!! But they will not over time. You will be whipped and smashed. Whilst you may get away with a few trades from bad areas trust me when I say you can’t get away with entering from rubbish areas forever. The market will get you! So stop now and start entering from value!
Very lastly, especially watch out for pins that form at the incorrect swing low or high i,e: a bullish pin from swing high rather than low. The are actually inverted pins and signals to go the other way. These east new Price Action traders up. You have no reason to be caught out now.
Safe trading to all,
Johnathon
but we talking about PA Johnathon method so yes the price can go down now but this is too risky - better wait for strong support level and enter long - of course if i understend enought his method.
Read Johny last post: “now is not the time to be going low to low or high to high”.