Hey guys, interesting close on the daily candles after market open, Looks like risk appetite is coming back into play, I want to share a couple of things I spotted on the charts that I blogged about. Ill post up the charts but just have a link to the blog post so I don’t have to re-write everything here.
So another false break on EURUSD…
A strong looking bullish rejection candle off support…
AUDNZD Rejection a support level in a nice uptrend…
DnB, I’ve been quietly following your thread and really like the straightforward logical method you’re presenting, good stuff, thanks!
Much appreciated, it’s good fun!
i’m looking at USDSGD
there is a bearish rejecting,
the trend is down,
i’d like to enter at the retracement,
Well, I didn’t have USDSGD loaded up on my watch list, I might have to keep an eye on this pair as it seems to be growing in popularity. Yeah that is a nice signal, I can see a key resistance level there, that rejection candle has a nice bearish close in it, definitely looks like it wants to go down. Similar setup on the USDCHF, I didn’t post it because it is just the inverse of the EURUSD setup.
Hello,
I have few doubts about this setup
Do u consider this as a valid pin bar after huge gap and with no preceding candle ?
I see a resistance at 1.3100 and also that level being a round number. Wil it be a ideal RR to go long on the break of the pinbar ?
Do u consider mathematically calculated S&R’s using previoud month’s hogh low and close to be valid or the one’s we spot on the chart ?
Thnq
DnB has mentioned it a couple of times in previous posts. “The 2 EMAs on the chart are the 10 & 20 day EMA’s”
Hey sesshoumaru, Not to offend, but you should check the thread from the first page so as to get the answers for such questions. Thread gets bombarded with maximum of questions like these which have been already answered.
btw the answer to your question is on the first page, Post #10.
Hey Traders,
For all of you guys that are watching the EURUSD trade here is a bit of an update.
I consider the setup valid until the lows are wiped out, we might see some consolidation before the setup takes off. However the last daily candle closed under the support level which is of concern. This the added risk you have playing with non trending markets. Today’s candle will probably be the deal breaker for this setup.
- Do u consider this as a valid pin bar after huge gap and with no preceding candle ?
Yes, the gap doesn’t really come into the equation for me when I am looking at this setup. Yeah the gap is there and everyone says ‘the gap must be filled’ but I’ve seen many gaps left open for weeks before they get filled.
- I see a resistance at 1.3100 and also that level being a round number. Wil it be a ideal RR to go long on the break of the pinbar ?
Firstly, I don’t really get into round numbers. They don’t really impress me that much, sure they are easy to work with in your head, I don’t really see round numbers causing that much of a big impact on the charts to warrant using them. That’s just my own opinion I am not telling anyone not to use them if they already are.
Second the 1.3100 resistance you pointed out, I personally don’t find significant, I attached the chart on how I picture the situation on EURUSD at the moment, you can see how price just cuts through the 1.3100 level like a hot knife through butter. This is from the daily chart point of view which is what I like to work with.
- Do u consider mathematically calculated S&R’s using previoud month’s hogh low and close to be valid or the one’s we spot on the chart ?
I don’t really think a mathematical equation is going to be able to plot S/R levels accurately, S/R levels are dynamic in nature which means they are always changing as time moves on. Using too much historical data might throw it all out. I am happy just to plot them on the chart myself 
This silver trade we talked about last week has now hit a 300% return target, It really pays off trading with trending markets with price action. The trend is ya friend
Hey DnB,
Has this trade triggered for longs?
Nice trade on the Silver 
dnb,
in regards to the silver trade, can you explain what candlestick formation you are trading here, how to spot it and what the markings on the candlesticks mean? also, what is a 300% target?
thanks in advance
Hey Pips Ahoy,
Correct me if I’m wrong here DnB, the candlestick formation was the inside bar, the blue vertical line on the candlesticks is just an indicator to mark inside bar candlesticks on mt4. The little red horizontal line beneath the candlestick is the entry point and the little blue horizontal line above the candlestick is the stop loss entry. 300% target is really 1:3 risk/reward… so for example if we were risking 50 pips here which is our stop loss, with a 1:3 r/r we would target 150 pips (or 300%). As for spotting them I will let DnB explain it to you.
Hope this helps.
I know is a silly question, but… How much can we expect in terms of monthly returns trading with this? I’m aware this can vary from trader to trader, so what I really mean is what is your experience?
Thanks and sorry for asking.
thank you trizone13!
the inside bar is the final piece of the puzzle between this thread and the other price action thread started by forex school online. in that thread we have learned of four possible price action candle formations including pin bars, two bars, engulfing bars and inside bars. with his method though he advises the newbies not to trade inside bars as they are more tricky and admitted the last time he traded one himself was six months ago. so there hasn’t been any information given really on this fourth price action formation yet
thanks again and thanks to dnb for starting this thread. it is a nice alternative to the other thread and it is good to learn from a different perspective about a very similar strategy. the other, other price action thread by nikitafx also looks tempting but seems more complicated than this method
I know is a silly question, but… How much can we expect in terms of monthly returns trading with this? I’m aware this can vary from trader to trader, so what I really mean is what is your experience?
Well that depends really on market conditions. But if you risked 2% on your trades and aimed for 1:3 (6% return) and you just took one successful trade each week. Then that’s a 24% return for the month.
we have learned of four possible price action candle formations including pin bars, two bars, engulfing bars and inside bars.
I trade rejection candles (otherwise called pin bars, hammers), inside bars, outside bars, 2 bar rejections and indecision candles. I also trade sometimes consolidation wedge breakouts, but usually there is a candlestick formation to work off there. I don’t find inside bars to be complicated, you see inside bars all over the charts, the inside bars in trending markets, close the mean value work best.
Unfortunately, this EU setup is a failure. Although the candle formation was excellent and we were working with a strong support level, this is just a reminder nothing is 100 certain in the markets that’s why we practice good money management. Also this was against strong momentum, if traders took the safe entry approach and waiting for a break of the high, then they wouldn’t have been triggered in yet.
Looking at this rejection candle on GBPUSD guys. Obvious rejection of a daily swing point , obvious bullish trend here and also we are tucked in nice and close to the mean value area.
The only con. of this setup is that I would have liked to have seen the body close a bit less bearish. A bullish close on the candle would of made this setup text book perfect.
me too was looking at this one,
so you think it would be more safe, enter at the breakout of the high?
so you think it would be more safe, enter at the breakout of the high?
That is always the safer approach, at least then you have the confirmation from bullish momentum. Those that are really sure about the setup can enter on retracement.
Hey traders,
Since we have got a price action discussion going now, I wanted to share with everyone on baby pips a new price action signal that I am working on but just haven’t yet perfected yet. I was hoping to get see what other had to say about my idea…
This candlestick signal (which I have not thought of a name as of yet, let’s call it the [B]momentum candle[/B] for now) is used to take advantage of aggressively moving markets. The candle will have a large defined body with none – small wicks protruding from each end.
I know what you’re all thinking, damm this guy is good with Photoshop.
So as you can see the candle must signify severe bullishness or bearishness for the day with an aggressive close.
[B]Entry[/B]
My entry rule idea is to take the break of the high or the low, depending on the candle direction, this way entering with momentum. However I would like to see a retrace for the day, breakouts during the early Asia session are not valid.
[B]
The stop loss rules[/B]
As explained in the entry conditions, we want to see a retrace of the day first. So we wait for price to retrace then turn back around to break the candle high or low. This is where our stop placement comes in, we place the stop loss above or below the high or low that was made on the current day. Let me work some more Photoshop magic.
So, we are not going to be interested in the setups that take off from the open straight away. I find they provide a high risk of failure.
Target:
to play it safe lets aim for 2x what we risk so we have a nice clean 1:2 trade.
[B]Final Note:[/B]
This setup is something I am working with on the Daily charts only. This is a work in progress and I invite all traders to experiment with every aspect of it. If you want to try it on the lower time frames there is no reason why you can’t. I just find the daily candles more reliable.
Post your findings, thoughts, recommendations & questions.
i will make note and try this now thank you dnb!
after seeing the aggressive movements this week i was wondering how to take advantage but all i could do was watch the show. many of the pairs were moving too fast with very steep incline and no retracing to be able to know how and where to get in with the usual price action method
a question: if we are entering after a retrace of the current days candle, are we entering mid-day before it closes? if we wait for the current candle to close then we will miss our entry then?
I think optimal entry time would be a few hours before / after London open. Too early during Asia is no good, I don’t see a problem with getting triggered in around NY time though,
A another rule should be added where if the current candle retraces too far up or down the momentum candle then it voids the setup of being valid. For example; If the current candles crosses over the 50% line of the momentum candle then the setup gets invalidated.
Hey DnB,
I like this new pattern “momentum candle”… will keep an eye out for these now. Perhaps you could give us a few examples of these candles on the charts.