Price Action, Candlesticks, and the Story They Tell

Another one AUD USD

With EMA’s , Pin Bar/ Bearish Candle


Cheers
HA

Where do you put a SL? above PB or above previous day High?

It should be above the pin Bar (The long wick after the body worries me (bottom wick)) … The SL should be above the PIN bar. Entry should be late around 50% or previous day high. Other thing to consider is that its falling over weekend. So two trades which I posted earlier and this will be third one. Too much capital exposure is also not good. But yes will try this in Demo and see how the strategy works out ?

DnB (or Hemantarora, you seem to be skilled in DnB method), could you clarify, how much historic data should be used to plot SR lines in your method? In some other tread it’s recommended to use 2 year history on a daily chart. Is it same in your school of thought, or would you advice some other amount of data?
Thank you in advance for reply:) Good luck!

I only recommend using the recent price action to plot levels (daily chart). You only really need to market levels that the market is currently reacting with. In trends you mark the swing levels and ranging markets you mark out the range top and bottom.

Marking S/R is something simple that traders get and turn it into some sort of challenging concept that’s up there with Einstein’s formula of general relativity. It shouldn’t be like that, just mark the levels that have been acting as the turning points in the market.

It’s also a good Idea to plot out and recent major levels that are obvious on the weekly market as these guys are often the bump stops for moves on the daily chart and can see price turn right around.

I too am watching the AUDUSD bearish rejection candle.


This setup isn’t perfect, the market movement seems pretty flat at the moment, it’s almost like the bearish momentum is dieing. Hopefully we see some bearish movement kick off again off the back of this bearish rejection event.

Hi Sergei,

As DnB already mentioned about marking the charts. I also generally follow the same rule and learnt it from different forums but yes as you mentioned everybody has different method and people do make it a very difficult task.

If you think its difficult to put it on candle stick chart , Just change the chart to line chart and you will see the turning points easily. But remember once you have done that and changed the chart back to candle stick you might need to adjust the S&R. Slowly it will be very easy for you to mark the lines. I must say it gets confusing sometimes in choppy market.

Mate I am no skilled in any method but yes learning for sure… I have learnt from other forum and DnB forum. DnB method looks promising too. If it works, this PA method have potential to give more returns and good trades.

Cheers
HA

Thank you for answer, DnB! I appreciate your advice. So I’ll just use a several months on a daily and several years on a weekly, this sounds promising:)

AUD/USD ended good, btw!

Hi Sergei,

As DnB already mentioned about marking the charts. I also generally follow the same rule and learnt it from different forums but yes as you mentioned everybody has different method and people do make it a very difficult task.

If you think its difficult to put it on candle stick chart , Just change the chart to line chart and you will see the turning points easily. But remember once you have done that and changed the chart back to candle stick you might need to adjust the S&R. Slowly it will be very easy for you to mark the lines. I must say it gets confusing sometimes in choppy market.

Mate I am no skilled in any method but yes learning for sure… I have learnt from other forum and DnB forum. DnB method looks promising too. If it works, this PA method have potential to give more returns and good trades.

Cheers
HA

Thanks for tips, FTC! I always hated, when the market provides opportunity to plot several equally relevant (but mutually-exclusive) levels at the same place, so I don’t know, which one will be chosen by a majority of traders on Earth! Now I just don’t place a level there at all, and striving to look for signals only at obvious areas, which doomed to get attention of every trader in a world.

PS After using new rules of SR plotting (2 months on Daily, 1 year on Weekly) I’ve found these two types of level very often completely match lol
So I’ll use 2 years (not 1) on weekly, since it’ll make no sense to mark same levels twice hmm…

A bit in delay, but finally I took it. I know I could have got in the market after the confirm the pin bar worked, but was in a range since many days already, so I’ve waited the breakout of the support.
I got in the market with a pending order and just after some hours I’ve put my stop loss, ( mostly for safety cause I was going out of home) but was clear that the day was bearish.
Now following some Dnb words which I liked a lot regarding the mean price, I’m looking at the current price and is quite far for the mean price: also, last time AUDCAD touched this level was 3 years ago. Guess it won’t go much lower than now, but I’m just supposing, hope in your comments.
I didn’t use any money managment as I was just focusing on the signal and waiting for the breakout ( I’m just studying for now ) but I’d like to ask what risk reward should have used in a chart like this one? the closer support was 3 years ago. Should have taken it to set up my risk reward and put my take profit there( part of it )?


You can always trail BreakEven manually, i.e. BE -> 1:1 BE -> 1:1.5 BE -> 1:2 BE etc. BTW is was a wise thing not to enter on the break of PB low, as it clearly would hit a SL then, hehe:35:

A wise stop lost would have been a large one, and many traders would pass on that unless your a longterm trader that can handle a large draw down.

I am also watching AUDCAD as a significant price action event has occurred…


The week closed underneath a weekly support level here. The Friday close was pretty aggressive, so what Ill be watching for now is price to maintain itself under this level next week, because this could very well be a classic bear trap but it doesn’t look like it.

If price holds under support Ill be waiting for the market to retest the breakout level, and confirm it as new resistance by dropping a bearish signal we can use as a trading opportunity.

I am not a fan of trailing stops, they only really work in aggressively moving markets but normally they knock you out too early on small retracements.

I see you guys were discussing risk/reward, you may be interested in this article we just posted Understanding risk reward.

That’s actually captivating reading, thanks DnB!


Just watching the Gold market, today a breakout during the Asian session failed and we seen price collapse back downward.

Looking to enter short if the bearish momentum steam rolls through Friday’s low.

CADCHF seems to be no good at the moment and it seems thats its going to South side. The rejection candle couldnt hold much . Most likely the way the rejection candle was.


also the weekly is showing bearish pa signal

Thanks Pips Ahoy,

How can somebody miss this pinbar :frowning:


Do anybody follow the rule if the higher timeframe is in downtren , the lower timeframe should only be looked for Sell / Bearish

Its also sitting on support .90740 , if that breaks and closes below , it will void the bullish pattern for sure

I always go by what the daily’s direction is and follow it down on other t/f.

Just have to face the facts here and realize that the markets are flat at the moment. None the trades have any price action follow through, the market just drifts sideways.

We’ve gotta avoid pulling the trigger in these quiet periods unless we are damm sure about the trade. It’s these times traders just pile in the orders out of frustration and continuously get stopped out in the consolidation.

Just like a surfer at the beach, they aren’t going to waste their time in calm surf conditions, they need the waves to ride, just like we need trend momentum to make money.

Hi ALL,

How about the trade below EUR/USD ? Rejecting the bearish push on Dynamic Support and bulls taking control again


I did this last night and up by around 100 pips . Waiting for 1.3200 so that I can close some positions and let the trade run either via trailing stop or moving it manually.

Cheers