[QUOTE=dobro;182397]DaveP83 -
It looks to me as though M. is using daily pivot point with Rs & Ss plotted off the daily PP. I don’t see any traditional fibs as such.[/QUOTE
Thanks for the reply, I see that has neen done in some of the newer posts, but I was looking more at previous posts. Sorry I should have explained myself a little better.
You pretty much nailed it on the head. That’s one way I start trading. Other times I do not even use any trend lines at all, and literally trade off a naked chart.
That time is done usually when it’s an obvious move in price action, such as a 1-2-3 pattern. If you’re starting out in price action, that might be a set up you want to put some focus as it’s an easy way to read price action without the need for anything on the charts other than candlesticks.
Come to think of it, I just might post some charts later this week with this kind of set up.
“Come to think of it, I just might post some charts later this week with this kind of set up.”
Please do. I understand the principles involved but I just don’t see thesetup for placing a trade. Of course i do catch one now and then but not consistently. I either over analyze or under. You & M. have this down pat, that much I can see. d.
Since February 24, a typical 1-2-3 pattern has been setting up. In this particular instance, it’s looking to be the start of a trend reversal. From the 24th, price began to rise. We’ll designate point the 24th, as point 1.
Towards the middle of March, price started to decline. The high swing will be designated at point 2.
From there price retraced and turned upwards towards the end of March. We’ll designate the low swing as point 3.
We now have a 1-2-3 set up. To trade the 1-2-3 set up, we’ll wait for the candle to close above point 2. From there we will enter the trade at the break of that particular candle.
Our stop loss will be a close below point 3.
Profit target can either be the 1.618 fib extension from point 2 to point 1, or just wait to you visually see price stall and look as if it going to start reversing.
If you want a more aggressive entry, you can get into the trade as price moves past point 3.
One of my problems in analyzing PA is that sometimes I see too much. With the chart you posted I see an even longer term confirmation of your 1-2-3. Around Feb. 20th I see the start of a “W” formation; the 2nd bottom of the W was higher than the 1st and the last leg up was higher than the start of the formation, thus giving a double confirmation. Where I get into trouble is if these 2 PA indications differed from one another but I suppose taking the more recent one means it is the better of the 2. Any comments anyone? Thank you for the chart posting, a big help. d
Correct me if I’m wrong here, but wouldn’t the W formation here indicate a long position after a small pullback? So if I took a position long now, I would see a retrace and price would return back up staying clear of my stop loss.
Or you could wait for the retrace, and get on board and reap some extra pips outta the deal. So here, one doesn’t outweigh the other. They are telling a similar story. And that story is that price wants to rise.
There’s more price action suggesting this as well. And that’s price is already forming a higher high and there is an existing higher low.
No indicators or lines needed to be drawn or plotted to tell the story of this chart.
Thank You for your post mastergunner99
Just wondering with these 123 patterns are there any signs that make it stand out better or invaild (i.e used in trending markert etc). Because when I look at a chart I seem to see that sort of price movement all over the place???
Sorry for the very silly question
And here’s the results thus far in this trade. If someone would have taken the trade at the break of point 2 here in our 1-2-3 set up, they should find themselves a bit over 100 pips at the moment in floating profit.
Without question, the stop should be moved to break even at this point. And price looks to have been halted a bit by a line of resistance. Notice that big bearish candle from a few weeks ago? Price might have difficulty going through this.
Taking some profit at this point wouldn’t be a bad idea. Or you can just wait for it to fight through the resistance and continue it’s trend up.
Either way, this was a successful trade from a chart that that did not require any indicators. Not bad, eh?
It’s not a silly question at all. And yeah, the set up really is found all over the place. It can as little as three candles at times. However, I prefer to see at least three candles before each point. I want a nice movement.
It really takes getting used to. Playing around with it and seeing what type of look you like for your particular set up. For me, I prefer trading them on daily charts. But they are just as viable on 5min charts.
So practice is the best answer I can give you. Wish I could give you a better defined answer, but when it comes to price action, it all becomes a little subjective.
Even if 50% are losers, you still come out ahead, because the profits here generally exceed the losses.
Thank you for you reply. Ill start going through charts and mark out when I think I see this pattern, if price moves my direction than I guess ill know I’m one the right track maybe ill post charts just for a bit of a critic.
It may be helpful if you came across similar setup to post the chart (if you have the time) just as for more examples, even if its after the fact.
I’m starting to try and forget what I think I already know about forex and start from the beginning using price analysis . So if you don’t mind I may have more questions and if you have any other places of information or guidance I would love to hear it.
It may be a little bit different from what you expect from price action, but I trade pure price action using correlation.
And if you want to forget everything - try something a little different maybe?
Here’s another 1-2-3 set up.
Point 1 - March 2
Point 2 - March 17
Point 3 - March 25
I did take this trade yesterday when it crossed the low of point 2, but since price didn’t move much, I thought I would share today. Point 3 is the area I’ll consider getting out if the trade goes against me.
Take profit will be around 1.0370. There’s some support there, and that would be a sufficient amount of pips for me to nab when it reaches that point.
No indicators. All price action. Trading naked.
Following are setups that I found for Euro during this weekend. I don’t know what is in store at the open of next week. However, I thought i will share what i saw for your comments and suggestions. I looked at Euro and Cable. Lets have a look at euro first.
Euro has formed a double bottom (Middle white line). Price action also wicked off the bottom of candles indicating bulls are fighting back to push PA up. My plan is to enter the market open and buy euro. Stop and Target area are marked with white lines.
This is Euro 1h Line chart. I am seeing a “W” forming which throws more probability for trade going “UP”.
Switched to 15m Chart. Price was consistently forming higher highs and was in a tight range as shown by red and blue dots. Entry will be at the break of the Resistance (Red Dots) and the range.
Now for Cable.
A double bottom (Middle white line) formed and price action showed a tendency to move up throwing out a 3 candle Morning Star formation (a dragon fly doji in the middle) at the close of market. Entry at open of market. Stops and Exits are marked. If price action goes in our favor and makes a clean break above the trendline, i may trail my stops.
Cable 1 H line chart shows a formation of “W” at the close of market and the lows of “W” are “Higher”. Probable long trade on the cards. Lets see what holds for monday.
Regards,
Muthu.
Chennai.
India.
Very informative posts, thank you. Is there a link to the red/blue dot indicator? I suppose the dots are in lieu of manually/visually charting S/R lines and the pivot points then act as potential targets along with the dot indications. Please correct me if I’m wrong so other traders aren’t thrown off course. Thanks again, d.
p.s.: Hopefully in the coming week I can go through the complete thread again. Lots of good stuff.
Hi Dobro:
Welcome. Yes they act as visual indicators for resistance and support. They are dynamic and i use them to figure out support/resistance easily. The higher the number of dots, the more strong the support/resistance are. The indicator i am using is Pipholic SR. I am not sure if it is available for free. Try searching for it on the internet. A good friend of mine who bought it shared it with me with a promise of not letting it to be shared. I would love to share But I dont want to let my word down 
However, I must let you know these s/r dots are helping me a lot.
Regards,
Muthu.
