Price Action, Candlesticks, and the Story They Tell

vasude · August 15, 2012, 11:16am

DnB_Price_Action:

@vasude,

I understand what you’re saying there completely. But you’re missing one key ingredient and that’s to trade WITH a trending market, in hindsight that setup looks great, but if you asked if I would go long on that one at the time I would of said no.

Why?

Because look to the right of the inside bar, the market had been falling downward, Price was closing on the bearish side of the EMAs and the EMAs were pointing down, so I would of not been looking to buy into that one, there had been too much bearish movement if you know what I mean. Yeah good point there was nice support there, if there was a strong bullish rejection candle off that support level maybe, but not an inside bar, especially with it and the candle before having long upper tails. I prefer to trade Inside Bars with a moving trend, to use them as reversal signals can get tricky, in my opinion.

thanks for your advice…

Shellsnail · August 15, 2012, 2:24pm

Hi everyone, I am new to this forum and I started trading forex recently. I have always been using price action in my analysis and I can see how this system really works! Hope to learn lots from you guys

Dnagolf, it seems that you are absolutely right with the 50EMA. DnB what do you think about his suggestion?

Shellsnail · August 15, 2012, 3:47pm

A Bullish Rejection Candle forming on the AUD/USD.

Any opinion on this? Thanks.

McBong1 · August 15, 2012, 4:31pm

@Shellsnail

I am quite new but I’m in. Reasons:

Uptrend
Bullish rejection candle
Two major support lines:
- EMA 20
- Former resistance and consolidation

MC Bong

dnagolf · August 15, 2012, 5:09pm

im looking closely at GBPAUD, bearish rejection, 20 ema, and beatiful ancient support, turned resistance

michael_ji · August 15, 2012, 5:45pm

[B] im looking closely at GBPAUD, bearish rejection, 20 ema, and beatiful ancient support, turned resistance[/B]

Hi dnagolf,
If you don’t mind me saying its best to always post a chart if discussing a set up then we are all on the same page…plus NY close charts are preferred.Its easy to do and very helpful.

Will take at look at this pair…thanks!

dnagolf · August 15, 2012, 6:16pm

ok,
this is the resistance/support

c663c761f50dd52951e4c0f5b28f7497.png

and this is todays close

5f181a3c9b0bc13af9a567cf006375dc.png

michael_ji · August 15, 2012, 7:15pm

Thanks!
It does look like a classic set-up in many ways and as well as bouncing off R its bouncing off a Big Round Number but l am quite wary. Partly gut feeling but mainly because the weekly chart looks quite bullish.It could be forming a base in a weekly channel and be ready to push back up. l may be over analysing and it may well fall and form a double bottom or it could push higher before falling. But l am hesitant despite the fact it looks good in many ways, so l have to stay out.
Just my thoughts of course!

Shellsnail · August 15, 2012, 9:31pm

Here’s another two set-ups that I noticed, seem like high probability to me, and sort of confirms the previous one since EUR/AUD and AUD/USD & AUD/JPY have somewhat of an inverse relationship.

** Meant to say bullish rejection!

Thanks for the feedback McBong1!

Evermore_F · August 15, 2012, 9:48pm

Hi shellsnail,

Your charts are too crowded. I can’t see them clearly.

highspeculation · August 16, 2012, 2:53am

Hi Guys,

$GBPAUD 4hr chart shows a double bar and also a bounce off a major trend line.

I am still very new at this so if DNB or anybody else more experienced can comment and provide crtitque I would appreciate it.

vasude · August 16, 2012, 2:59am

anyway u took the trade ,in current euro is weak,the pair rejected support and ema rejection.

highspeculation · August 16, 2012, 3:02am

So is that good? Does the trade stack up?

vasude · August 16, 2012, 3:11am

yes ,possible is nice entry and with small pinbar an rejection and expecting some big move.

highspeculation · August 16, 2012, 3:20am

Thanks for feedback Vasude.

Hopefully it will work out.

Cheers.

Tom

michael_ji · August 16, 2012, 5:23am

Guys, just to say that this thread is for DAILY charts unless there is a very special reason to post a 4hr. Its just that there are SO many intra-day threads that its great to have just a quieter DAILY thread where we all can smell the roses as we trade!

vasude · August 16, 2012, 5:43am

yes ya,discussed setup is in daily chart,no other timeframes

michael_ji · August 16, 2012, 6:10am

Thanks for your understanding - appreciated.

vasude · August 16, 2012, 8:31am

hi dnb,
in cadchf pair on aug 7 after newyork close a inside bar is formed,is it a good signal to enter on that trade.can u comment on that.

DnB_Price_Action · August 16, 2012, 10:00am

hi DnB,
i’ve noticed many times adding a 50 ema could help a lot,
let me explain with a recent example:
eurgbp obviously daily chart,
during a good retracement, price spotted an indecision candle, stopped by the 50 ema,
next day an inside bar and then price retook the trend:

I like this out of the box style thinking, your ideas and tweaks are very welcome. The only thing I would have to say is I wouldn’t of originally considered the 50 EMA because it’s a bit too long term and also it starts to load up the chart with clutter. But I am still interested to see how you go with it.

I haven’t had a chance to comment today, so here is my late entry…

All those traders who took the AU setup well done, I thought that was a good setup and I did quickly blog about it, also yes CADCHF was a nice setup however as I am writing this post I see the CADCHF & EURCAD trades have moved against me. Looks like a news spike from some USD news that just has been released… great lol

The EURAUD Outside bar was nice, but I would of liked to have seen that one break it’s low, reason being that market, if you look carefully, has actually stopped moving down and really only been ranging sideways. No lowers highs and lower lows.

This spike from the news is giving me cancer >: ( I had stack of trades going, the frustrations of a Forex Trader.