Market Flow And Price Action Strategy

I am here to offer a strategy that if traded properly would always keep you in the right side of the market. This strategy is a trend trading system that offers high probability win. The best part of it is that this system is very simple and I would do my best to post charts and videos in this thread to further deepen your understanding of how to apply it. The key to winning with this system is consistency in apply the step by step processes that constitute the method involved.

Since we are always going to be trading in the direction of the trend, we are sure to always be at the right side of the market.

One interesting fact about this unique system is that it helps you determine the direction of the trend which is one of the prime factors you must consider as a trader. Inability to determine the trend is one of the reasons most traders are not consistent in following their trading system because most time they trade against the market.

Once you have been able to determine the direction of the trend and you have no challenge with that, the next thing you must consider in your arsenal of trading knowledge is how to accurately determine your entry. This is where many traders find forex trading tough. Knowing where to place your trade is very important, just as knowing how to determine the direction of the trend is very crucial to success in any particular trade set up. If you can successful master this concept of trade entry, then you are on your way to becoming a successful trader.

One thing you must also put into consideration is how to manage your trade until you eventually exit the market. Trade management is something you must consider because, until you exit your trade, you cannot claim that your trade set up is going to be a winner even when the trade is successfully moving in your favour.

The reason is this; market may eventually move against you and hit your stop loss.

What I am saying in other words is that, knowing where to place your stop loss and your profit target matter so much. If you do this properly, this would mark the difference between a streak of winning trades and a streak of losing trades.

So if you want to always be in the winning side of the market, you must develop a system that always put you in a situation whereby you are always at a great advantage with the market.

If proper trade management is factored into your trading system, then you will certainly overcome the challenges I discussed above because proper trade management would ensure that you always cut your losses and make your profit run. Also your stop loss is small compare to your profit target. One of the formula of a successful trading style is small loss big profit.

These three major factors; that is Trend determination, Trade entry and Trade management are all factored into the MARKET FLOW trading system.

In each step of the live trade set ups I would be posting, I will be describing how to determine the trend direction, trade entry and trade management. This would enable us to fully take advantage of these factors as enshrined in this winning system.

Trade entry, stop loss and trade management with this system is straight forward. The easier a system, the better it is applying it for maximum profit. This strategy completely falls into the category of simple systems that yield maximum gain.

PAIRS I TRADE
Personally, I trade the major pairs such as GBPUSD, EURUSD, USDCHF, NZDUSD, AUDUSD, GOLD, EURJPY, USDJPY.

There are four major components that make up this trading system. These components are very common but when used properly, it offers a combination of codes that unlocks the profitable side of the forex market. These components are:

Trendlines
Fractal(Market) Flow
Support and Resistance and
Candle Stick Patterns

Since most of you are already familiar with these individual components, I would just discuss briefly about them and then proceed to explaining more about the Market Flow trading system.

SUPPORT AND RESISTANCE
The subjects of support and resistance are two of the most high discussed concepts of technical analysis and the reason for this is not far fetch. They are very important because price tends to react around that zone and so they are important levels most trade focus their attention on during the course of trading.

If you want to be successful with technical analysis, then it is quite expedient to factor in support and resistance into your trading method as this would guide you in trading safely.

What is support and resistance?
Support and Resistance can be defined as points or areas in the market where price experiences repeated upward or downward pressure. For example, when price approaches a region of support, buying pressure tend to set into the market and if this pressure is strong enough, it would prevent the price from going lower.
The opposite is true in the case of resistance.


Once a support level is broken, it tends to become resistance and when a resistance level is broken it tends to become support.
See the chart below for proper understanding of what I mean.


Trendlines
Trendlines are diagonal lines draw from left to right connecting two swing points.
There are two major types of trendline and they are:
The downward trendline and
The Upward trendline.
In the Downward trendline, the diagonal line which also serves as a resistance line is drawn by connecting a Swing high and the most recent LOWER swing high. Or it can be draw by connecting a lower swing high to a most recent lower swing high. This represents the fact that the market is bearish.


In the Upward trend line, the diagonal line which also serves support is drawn connecting a swing low, to a most recent higher swing low. Or a higher swing low to a most recent higher swing low. In this case, the market tends to be bullish.


We would be making use of trendlines in this strategy to determine where to place our entry on the 1H time frame.

Market Flow
Is a simple way of accessing the market using only price.
Market flow is defined by fractal swing highs and fractal swing lows.
A swing high (fractal high) is any point in a chart that have at least two lower highs before it and at least two lower highs after it.
A swing low (fractal low) is any point in a chart that have at least to high lows before it and two higher lows after it.
We will be making use the fractal indicator to find our swing high and our swing lows.
Market flow is said to be up when price is making higher swing highs.
Market flow is said to be down when price keeps making lower highs.


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Market flow direction changes when price breaks a fractal high or a fractal low.
I will do well to explain all these using a chart.


Hi Ochuko.
This is how I trade.You have just detailed all of what I research.
I will be watching you (this thread).
I do have more stats than this though. I would love to compare notes with you sometime.
Can you give us more info about yourself? Sorry. It just looks like you’ve been around awhile. (since 2007?) (but not many posts)
I’ll be watching.

Mike

Hi Mike, I joined this forum around 2007, but started trading actively around 2009. I have had my own share of the bad side of the bad and that was due to inexperience then. As I continued to trade and learn how to master the market, I started experiencing the good side of the market. The main tools I use to trade the market is price action and fractals. Of course fractal flow is a component of price action and so by extension I trade purely PRICE ACTION.

So far I have had ecellent results with this system and it’s my desire that you experience outstanding performance if you plan to trade with this system. I would highly appreciate your contribution to this thread.

I will be making using of 5 types of candle stick patterns and they are:
Pin bar
Inside Bar
Engulfing bar
Dark cloud/Piercing line and
Railway track
I would be using the pin as example in this post because that is what I use more often with this strategy.


Notice how price reacted around the trendline


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[B]THE MARKET FLOW TRADING STRATEGY[/B]
The first thing we do is called [I]top down analysis.[/I]
And our top down analysis involves the use of two time frames. In this case, it is the daily time frame and the hourly timeframe.
The first step in this strategy is to go to the daily time frame and determine the direction of the market flow. I have discus how to determine the market flow above. You may also refer to this video to learn more about how to determine the direction of market flow. Having determined where market flow is heading,
next, we zoom down to the hourly time frame and look out for our entry around the hourly S/R or trendline.
Like I discussed earlier, in this strategy we would be making use of candle stick pattern to accurately determine our entry.

These are my trade commentaries based on the market flow strategy. This strategy is based on determining market flow change on daily time frame and looking for entry signals on hourly time frame. Based on this, I will be posting analysis on two time frame per pair. That is the daily and potential entry area on hourly. Just to remind you, we would be looking for candle stick patterns(e.g Pin bar, engulfing bar, harami, piercing line/dark cloud cover and railway track) around the area that was circled on the Hourly time frame. If no candle stick pattern, we ignore that pair and move to others.
Also note the direction of the line to determine the trade type; bullish or bearish. If price breaks above a fractal on daily time frame, we would be look for a bullish set up on the hourly time frame. If price breaks below a fractal, we would be looking out for a bearish trade set up on the 1 hour time frame. I hope this is clear? If you have any question(s), kindly, post it here so that I can do well to respond.

Eurusd




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Hello Ochuko,

I’m interested in this subject. I’m mostly a silent reader and also have subscribed this topic, can you please not resize/reduce the chart so we can see it more clearly?

Thank you

Interesting. I’ll be following this thread :slight_smile: