I think you’re bit to generous with your resistance level there, I think the key focal point in the market is a bit lower than that. Probably move your resistance level down to it touches the last two major swing highs there which you have marked in yellow. That’s a nice area to look for long signals after a retracement.
Look at a price action event that took place at the close of las’t weeks trading on the USDCAD…
At the close of trading this week there was a powerful price action event on the USDCAD major. The market tested the top of a longer term range and terminated, then rejected the move back into lower prices, creating a large bearish rejection candle at the end of the New York close on Friday.
This is a strong cue that we can anticipate further downward prices in the next week or two as the market is demonstrating that the range structure is holding here. We are looking for retracement entries here to be able to grab a nice entry price and tighten stops.
We get a lot of troubled traders suffering continued losses, and with some further investigation we found that an unhealthy amount of traders seem to be chasing breakouts, or really just chasing price around in general and throwing money into bad positions while on emotional highs. We wrote an article covering this issue, if you guys are interested you can read more about it here… [Stop chasing price, set traps instead. How to correctly enter a Forex trade](Stop chasing price, set traps instead. How to correctly enter a Forex trade)
Hello Dnb Price action could you please can you explain me some confusion please, I just mark 1234 no for easy understand there is lots of area resistance turn into support, 3 and 5 no resistance will be a support or not ? advice me please if not how to entre this trade?
You’re over analysing the situation and confusing yourself. I only try to mark the significant turning points on the chart, which in this case is the range top and bottom. All those levels within the range hold less value as they are really just swing point created from the stepping up and down of price action as it moves in a general direction. The 1, 4, 6 swing level holds some value, but really isn’t the major focus on the chart.
Price may sell off and hold at the 1, 4, 6 swing point and produce a strong bullish signal, where in this case would could consider exiting the short position. But over the long term scheme of things, the market has been ranging been the two levels I’ve marked.
That’s a good plan, but the USDCAD can produce very heavy retracements and often breach the high of the candle by a few pips. I suggest when trading the USDCAD that you use generous stops. Looks what happened the last time two times the market tested this level. There was a sell off, but there was also some heavy retracements.
You could wait for the market to retrace back up higher, set your order up at the 50% level so you catch bearish momentum as it dips back down (if it does). Extra care needs to be taken when trading this pair, also Monday’s price action can sometimes be erratic making it hard to trade Friday signals.
And it seems we got another pin bar on USDCAD, eh?
Vasude, DnB, if you were with a pending order on fridays pinbar, would you change your trading plan to mondays pinbar? Or do you access what signal is better and go from there?
In your experiences as a price action trader, what is a better entry and stop loss placement(for daily TF): 1 pip above/below high of candle pattern or a much bigger buffer say 5 to 10 pips? Thanks!
Thanks for the link vasude…what i actually want to know in particular is in this price action thread, do you guys place your entry and stop loss orders 1 pip + spread above or below the high/low of the trigger candle or a much bigger buffer say 5 or 10 pips plus the spread of the trigger candle? thnx!
Thanks for the link vasude…what i actually want to know in particular is in this price action thread, do you guys place your entry and stop loss orders 1 pip + spread above or below the high/low of the trigger candle or a much bigger buffer say 5 or 10 pips plus the spread of the trigger candle? thnx!
It doesn’t hurt to add a few points to your stop loss, especially with volatile pairs like the USDCAD where 100% retracements of candles are common.
Just looking at the GBPUSD today where the market is now testing it’s range top. This is a prime area for a bullish breakout trap to occur, any attempt here to break higher that fails would be considered a bearish signal. Watch to see how this New York candle closes on the daily chart, or watch 4 hour chart for candles that communicate an obvious breakout trap to the high side has occurred.
If a breakout does occur, it’s important to remember not to chase price but to wait for the market to maintain the higher prices above the range and confirm the old range top as a support level via a bullish price action signal.
When I do my trades, i have certain rules about my stop. it really depends on the price action signals that appear. For example, If I enter at the breakout on a pin bar on the daily time frame, my stop loss will go at the end of the tail of the pin bar. However, If I use the same signal and then look on say a 4 hour chart for my entry, my stop loss will be tighter. Also, when I place my stop, I generally look for a 2 to 1 or 3 to 1 risk. So to figure out your stops, it depends on your money management. If you want tighter stops, you can use a lower timeframe but you may miss out on profits. (this is why multiple timeframe analysis is important)
Bottom line up front: Stop loss placement is based off your money management and personal trading psychology.
Thanks awk3524…well i think it all depends on one’s preference…if you place a tighter buffer for stop/trigger(say 1 pip + spread of H/L of candle ), then you have a higher risk of getting stopped out on a false break or getting falsely triggered on entry. Whereas a bigger buffer for stop/trigger will lessen those false breaks…but sacrificing profit potential…so i think it really depends on each person’s preference…thanks!
I think it’s just better to remain consistent with your trading and try not to introduce other variables that might make things more complicated than they have to be. What ever way you decide you enter your trade, be consistent with it. I think adding spread to your entry or stop price (depending on what direction you trade) is good enough. If the trade is not going to play ball, then you’re simply stopped out and you just move on with your life lol, ie wait for the next trade opportunity.
