Price Action, Candlesticks, and the Story They Tell

[DnB_Price_Action]

It would be nice to see a retrace, then a sell signal off the break out area @ 1.0244. That is the sort of level I would watch as a sell zone, all I need is to see is confirmation the 1.0244 area will hold as new resistance. Just have to sit back and wait to see what happens with price action next week. I just checked the economic calendar and there is a fair bit of AUD releases coming out early next week. Not that I follow the news at all, but it is a good heads up that the AUD will be pretty active.

Congrats on your NFP scalp though

[trizone13]

EURCAD, bullish rejection off weekly support, this could lead to a nice move higher here…

I think I mentioned a 4 hour setup here earlier, well there was a very convincing 4hour bullish rejection candle on the 4 hour chart as well. But I usually like to wait for it to grow into a daily signal.

Hey DnB,

With the strong bullish pin bar made, how would you play this one as although we have a strong support below, a round number 1.3000, we do have the short term trend down (although it is looking more of a range) and you have your ema’s above so the move higher could be limited? This is a good example because you have conflicting signals due to your mean values above (ema).

[DnB_Price_Action]

trizone , you’re a fountain of never ending questions

First thing to do is look at the market conditions, zoom out a bit or switch to the weekly chart, and you can see that market is not trending, just ranging/consolidating about this support level. When the market is not trending the Ema’s lose their value as dynamic support and resistance.

So with no trend momentum, it makes the trade a bit more high risk, because we can’t tick the ‘trading with the trend’ box on our trade check list. What we can tick is strong weekly level and a perfect candlestick formation. I only posted this setup because the support we are looking at is very very significant.

The candle range is 120 pip, that’s a little too much for me. I would look to tighten my stop loss.

Before I go any further, without trying to sound like a sales pitch. It’s no secret now we have a course for sale on a website, I didn’t start the tread to try sell it or anything, this was just a bit of fun, I’ve gotten a few heated emails from people that brought the course and now see me posting in the thread, they are upset because I am giving free info away which they just paid for , which is understandable. So I just want to try keep the thread on a level which doesn’t pee anyone off.

But in this case Ill just briefly explain a method you can use you help you get in on a trade at a good price, it’s not hard stuff to work out so I’ll get the ball rollin’ for you, hopefully I don’t get anymore hate mail.

So like I said, 120 pip stop is a bit too much. I want to tighten my stop loss, so the risk/return potential of the trade is more appetizing. You can do this by entering via a retracement of the signal candle, whether you draw your fib lines over the candlestick and enter on the 38.2/50/61.8 retrace levels. Maybe enter on a retrace to the nearest s/r level etc etc. Point is there is often a retracement of the candle before the trade takes off, so take advantage of it, then you can just place your stop under the low of the candle and boom you’ve just tightened your stop significantly.

However the safest way to enter is on the breakout of the candle, and the safest place for your stop is on the other side of the setup.

I didn’t take this trade personally I’ve already got others going. But you can see how you could of gotten in at a better price by entering in on the retracement, that’s how I would of entered. This setup is definitely is interesting and I’ll be watching it closely. If a bullish trend gets born out of this, then I’ll just wait for a buy signal further up the road

[trizone13]

trizone , you’re a fountain of never ending questions

Haha, that’s the way I’m built

I quite understand what you are saying about your students and to how much you can reveal here without giving it all away for free… that being said you do understand by starting this thread on a free forum you would have to give quite a bit away in the first place… lol.

Yes, as I said it is more like ranging then trending so if prices agrees we should see it go hit the top of the range. I do remember somewhere you writing about your favorite setups being failure of breakouts… I suppose you can’t go into that now? :51:

[DnB_Price_Action]

favorite setups being failure of breakouts… I suppose you can’t go into that now?

Yeah Ill go into that for you, I prefer to wait for that type of setup to present itself first so I can’t talk about it as it happens. But just picture an important S/R level on a chart which price is buzzing around, all of a sudden there is a breakout of this level and price accelerates through it. Then the smart money jump in, push price the opposite way and the candle closes back on the original side of the S/R level. This leaves behind a candle with a tail that sticks through the major S/R level.

Let me try find a link of an example…

you can view a post I did one on the EURUSD >here< not long ago

[Ang101]

Hi Dnb

You confusing me here. Just give me the signals, lol

[DnB_Price_Action]

You confusing me here. Just give me the signals, lol

Haha, sorry Ang,

I can’t just give out signals I’ll have men in suits knocking on my door asking questions. I am just providing educational based conversation so that you guys can spot your own signals. When I spot thing I like on the charts, I will post them here and talk about them with your guys.

[Ang101]

Dont worry bout (MEN IN BLACK) they all from mars anyway! :18:

[DnB_Price_Action]

Only 6.5 hours till the market re-opens. I know you’re all excited… I never hated weekends so much until I become a trader. It’s just soo boring

[bobmaninc]

Well this teaches me to bend my rules. Markets open and my broker is having technical issues. So my plattform will not open. Guess it was a good thing I tightened up that stop just before market close. Anyone know the price of AU. As it seems my mt4 demo is not working either. Unless price opened at the same price it closed and has not moved at all. Damn the carma has come back to bite me lol.

[Pipiness]

Hi there

Bummer !!

E-signal has it ranging around 1.0130

Well this teaches me to bend my rules. Markets open and my broker is having technical issues. So my plattform will not open. Guess it was a good thing I tightened up that stop just before market close. Anyone know the price of AU. As it seems my mt4 demo is not working either. Unless price opened at the same price it closed and has not moved at all. Damn the carma has come back to bite me lol.

[bobmaninc]

thanks I got it up a running a few minutes ago. gap in my favor +151 pips so far

[DnB_Price_Action]

WOW

Massive 70 pip gap down on EU, what died over the weekend?

Don’t worry Bob AU gapped down in your favor and is continuing to die

[TankWolf]

Greek and French elections is what is causing the markets concern this morning. The anti-bailout parties in Greece look like they just got 60% of the vote and if they were to form a coalition government, it would seem more likely for a Greece exit from the Euro.

[trizone13]

Yeah Ill go into that for you, I prefer to wait for that type of setup to present itself first so I can’t talk about it as it happens. But just picture an important S/R level on a chart which price is buzzing around, all of a sudden there is a breakout of this level and price accelerates through it. Then the smart money jump in, push price the opposite way and the candle closes back on the original side of the S/R level. This leaves behind a candle with a tail that sticks through the major S/R level.

Let me try find a link of an example…

you can view a post I did one on the EURUSD >here< not long ago

Hey DnB,

Thanks for explaining the false breakout scenario another thing to look out for now on my charts, although I think a false breakout with good price action will be the ones I will look out for.

[DnB_Price_Action]

Yeah most of the false breaks leave behind an obvious price action signal, just looking at how price is so far away from the mean value on most of the charts, wouldn’t be surprised so see a correctional move back to the EMA’s soon.

Look at the EURGBP right now, this is what a false breakout looks like to em. The candle hasn’t closed yet I am just using it as an example…

Price takes the path of least resistance right, if the remaining bears have gotten sucked into this breakout which failed, what resistance is there left to stop the bulls from driving price up once all these bears get shaken out of the market?

[trizone13]

Good example in the making DnB, you had this example scripted out right… lol… and gaps are made in the market to be filled… well most of the times.

[d-pip]

DnB, I’ve been quietly following your thread and really like the straightforward logical method you’re presenting, good stuff, thanks!

My broker’s daily candle opens are different than yours, I even get an extra candle on Sunday. But aside from that, am I seeing a possible GBP/USD long opportunity coming into play? A break north of the 1.6215 area?

Again, thanks for your time and effort.

[dnagolf]

i’m looking at USDSGD
there is a bearish rejecting,
the trend is down,
i’d like to enter at the retracement,

what do you think?

[Pips_Ahoy]

i’m looking at USDSGD
there is a bearish rejecting,
the trend is down,
i’d like to enter at the retracement,

just closed my charts after shorting usdsgd shortly after 5pm est on the daily and read this post order will not be triggered until a few pips below the pinbar low

i’m still a newbie so i haven’t gotten into placing multiple orders/taking part profit etc. just taking one position at a time for now