Price Action That Matters

[B]Welcome to Price Action That Matters![/B]

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Quick Navigation (links to key articles and discussions)

Method Basics
Article - [I]“Step 1: Identifying a Trend”[/I]
Article - [I]“Step 2: Finding Key S/R Areas”[/I]
Article - [I]“Step 3:Watching for Price Action at Key S/R Levels”[/I]
Article - [I]“Part 1: Retracement Techniques”[/I]
Post - [I]“The 5 Star Rating System”[/I]
Post - [I]“Pairs I trade”[/I]
Post - [I]“Trading Rules For Pinbar, Engulfing bar, Inside Bar, Morning/Evening Star, 2 Bar Patterns”[/I]

Price Action Candles
Video - [I]“How to Identify Market Structure and What a Pin Bar Is”[/I]
Video - [I]“Price Action Pin Bar Tutorial #2”[/I]

Price Action Patterns
Video - [I]“Price Action Flag Pattern Tutorial”[/I]
Post - [I]“Bearish Flag (Entry/SL Techniques)”[/I]
Post - [I]“Broadening Top”[/I]

Support/Resistance
Post - [I]“Noise On the Charts”[/I]
Post - [I]“What Time Frame To Apply EMA’s”[/I]

Trade Management
Post - [I]“Warning Signals DURING a Trade”[/I]
Post - [I]“Take profit techniques”[/I]
Post - [I]“How to Move Your Stoploss”[/I]

Money Management
Post - [I]“Fixed % Vs. Fixed $”[/I]
Post - [I]RR Calculation[/I]

Trader Psychology
Post - [I]“Reduce Emotional Drain From Trading”[/I]

Market Psychology
Video - [I]“Why Pin Bars Form”[/I]

Trading Plans/Journals
Member Contribution - [I]“Sample Trading Plan: Template #1”[/I]
Member Contribution - [I]“Sample Trading Plan: Template #2”[/I]

Notable Chart Analysis
Post - [I]“Pin Bar H3”[/I]

4-5 Star Chart Setups
Post - [I]“USDSEK - Double Bottom Retest + Inside Bar False Break - 4 Star”[/I]
Post - [I]“CADCHF - Rising Wedge Pattern - 4.5 Star”[/I]
Post - [I]“GBPCAD -Multiple Pin Bars - 4 Star”[/I]

3 Star Chart Setups
Post - [I]“NZDJPY - Resistance Turned Support Pin Bar - 3.5 Star”[/I]
Post - [I]“GBPCHF - 2 Bar Reversal - 3 Star”[/I]

Misc. Articles
Post - [I]“Why most Price Action Guru courses DO NOT work”[/I]
Post - [I]“What To Do When You Are Losing”[/I]
Post - [I]“Times When PA Trading and Retracements Don’t Work”[/I]
Post - [I]“The Affect Of News On Price”[/I]
Post - [I]“When Price Stalls Right Before TP”[/I]
Post - [I]“To Trade Or Not To Trade During News”[/I]

FXCM FAQs
Post - [I]“Removing 20 symbol limit”[/I]

Upcoming Articles:

Part 2 of Retracement Entry Techniques
Trading Inside Bars
Trade Management

Rules

I want to make sure this doesn’t become a run-away thread and lose its value as an educational tool in price action trading, so I want to lay out a few rules and try to focus on the most important aspects of price action. I will also try and create a standard set of terminology to use for the sake of keeping the thread as uniform and easy to read as possible. The rules of the thread will continue to develop and grow as things unfold here. To make it simple, if it isn’t in the approved list, then we won’t discuss it. If you think something should be added to the approved list, then please private message me about it and I will decide if it should be added.

Topics Discussed Here
[ol]
[li]Price Action Candles
[/li][li]Price Action Patterns
[/li][li]Finding Key Support/Resistance Areas
[/li][li]Volume Analysis
[/li][li]Managing Risk/Reward
[/li][li]Stop Loss, Entry, Profit Techniques
[/li][li]Trade Management(Pyramiding Into/Out of Trades or Holding Flat)
[/li][li]Money Management Methods(Fixed $ and % Risk)
[/li][li]Trader Psychology
[/li][li]Market Psychology
[/li][li]
[/li][/ol]

Things we DO use:

Price Action Candles(in no specific order):
*Pin Bar
*Hammer
*Inside Bar
*Engulfing Bar
*Two Bar Reversal
*Morning Star/Evening Star

Price Action Patterns(in no specific order):
*1-2-3 Reversal
*Bull/Bear Flags
*Ascending/Descending Triangles
*Ascending/Descending Channels
*Double Tops/Bottoms
*Triple Tops/Bottoms
*Bull/Bear Rectangles
*Rising/Falling Wedges
*Pennants

What Matters(S/R key areas) (in order of importance):
*Horizontal S/R
*Diagonal S/R (same as a trend line)
*Channels
*Fibonacci (50% and up)
*EMAs(8, 21)

Things we DON’T use:

[ol]
[li]News - we only keep our eye on major news events to track potential trade risks
[/li][li]Indicators(other than specific EMAs) as they don’t provide any extra benefit to trading price
[/li][li]Any price action candles and patterns not listed here
[/li][li]Pivot Points
[/li][li]Fibonacci levels below %50
[/li][li]
[/li][/ol]

Other thread/method requirements

Trade Requirements:
[ol]
[li]A valid price action signal must have formed, this provides the entry signal
[/li][li]These price action signals must have formed at key S/R level(s)
[/li][li]The trade must provide at minimum 1:1 RR, preferably 1:2 or higher
[/li][li]The signal must not have formed in a choppy or noisy area of price
[/li][li]At a minimum the candle must be the size of the previous candle, or fairly close
[/li][/ol]

Chart Requirements:
[ol]
[li]Candlestick charts only
[/li][li]Must be New York close
[/li][li]Can only show thread approved PA candles, S/R tools and volume.
[/li][li]
[/li][/ol]

Trade Quality Measurement(The 5 star system): As long as the trade requirements are met, the setup is now “tradable”. Not all trades that fall within the core requirements are of considered high quality though. I tend to filter out trades I deem as lower quality, and I may increase or decrease the amount of money I risk on a trade depending on its quality. It’s important to have a system of rating the quality of your trade. Here we will utilize a 5 star system. A 1 star trade merely falls into the core requirements but may have other poor qualities increasing the risk of the trade. A 5 star trade is one of highest quality, is a perfectly formed price action signal with great RR and very little resistance along the way. Although most trades will fall in the 1-3 star range. Remember that measuring the quality of a trade can be very subjective, so if you don’t agree with someones rating of a setup, you can respectfully ask them to expound on why they gave their setup a certain rating.


Personal Trade Filters:
After I find a trade that meets my core requirements I then run it through my personal list of filters that are apart of my trading method. For you as a trader, your filters may include no counter trend trades, no inside bars, or avoiding NFP. You may also filter out trades that are too low in quality(I.E. 1-3 stars). There are many filters a person can use to make sure they are taking the highest quality trades with the best edge. Here we will teach you about all of the dynamics of a trade and then you can make an educated decision on how you want to filter your trades.

Timeframes: 30 minutes and up

Approved Currency Pairs: Price action occurs on all financial instruments such as currency, precious metals, indices and stocks. I am not picky on what currencies I watch as they almost all produce good price action. I don’t try and get to know the currency or the news behind the currencies, I just want to be watching for price action signals at key PA levels. Finding price action generally takes less than a minute on any candlestick chart.

Trade Posting Requirements: You are allowed and encouraged to post questions, join discussions, answer questions and post trade screenshots. When posting information about a trade you “must” have a chart showing the trade being discussed with stoploss, entry and take profit clearly labeled. You must also post your opinion of the quality of the trade using the 5 star rating method. This is for your benefit because it will help you begin viewing your trades as unique and of different quality. Others will also benefit from this because they can ask you why you are rating your trades a certain quality. This will help create healthy educational discussions about trade setups. You must also provide at a minimum, a simple list of pros and cons of the trade you are posting. Remember though, the more detailed your analysis is of the trade you are posting the better. Not only will writing the commentary help you learn, but thousands of others will also read your post and learn from it.

5 Likes

Wow how encompassing and fantastic this thread sounds :smiley: I can’t wait to see what comes of it.
-I’ve heard a lot of people use the 50 EMA as dynamic S/R, but can you explain why you use the other moving averages?
-What TF’s do you trade and why?

cool, I’m impressed. I’m a Christian, husband, dad, mentor, manager, trader, in that order - mentor barely deserves to be in there because I have so little to teach, but I have tackled other peoples’ problems with them a few times…

As a trader, I have tried it all… I love entropy and chaos theory and the way it can describe creation, so technical trading and fractals etc was my first shot. I failed because the market is too complex, as is the human condition (greed / fear, etc). I have started to realize price action (especially in analyzing the daily candles) is an accurate description of the psychology of the larger population, and it all falls into place. I did pay to sign up for dnb forex price action but every discussion helps to understand, so I hope this thread will go far.

Whenever you help someone, at worst you learn about what you’re doing and at best some good comes of it for both of you. I’ll be following this thread with interest.

Your the first poster, congrats! Welcome to the thread. I think it will become a great hub for people wanting to learn price action. The 21, 50 and 100 EMAs I believe are the most widely used and the market often reacts to these levels. EMAs themselves are just ways for people to measure to strength and direction of a currency compared to what it has done historically, but enough traders use them and trade off of them that they really can become key areas of S/R in there own right. The 21 EMA is mostly a short term EMA, and really shines in a strong trending pair. It can help you jump the momentum at the best price. The 50 and 100 EMA are more longer term EMAs that a longer term traders tend to watch. Again this is proven by how often price reacts to these levels.

I stick to trading H1 and higher although I can’t remember the last time I took a H1 trade, primarily H4 and D1. To understand why I believe 1 hour is the lowest you should go you first have to know what is moving price at any given moment, which could be news stories, day traders, EAs, banks, large corporations converting money, etc. There really are a ton of things that move the price around. Going lower in TF is like taking a magnifying glass and amplifying the effects of all of the little things that move price. Everything I just listed is noise, and as PA traders we don’t care about any if that. We are watching for areas where the overall supply/demand is shifting among investors. We receive those signals from false breaks that occurs at key levels. The key support and resistance levels tell us historically where the market supply and demand has shifted, and the price action false break give us the actual signal that momentum is shifting. By zooming out of the market we are smoothing out the noise and seeing supply and demand at its purest. An 8 hour candle encompasses a whole trading session and tells us how price started and ended in a given session, a daily signal gives us a better idea of the price story as all of the worlds major markets have weighed in on the price in that candle. At the end of the day we don’t care if corn crops are down in South Africa, or if Apple converted 5 billion USD to CHF, or the jitter from a million EAs auto trading, all of this will kill your account because all of these little noisy things will stop you out. We just want that pure price action and to be trading with those shifts in supply and demand.

Hey Steve, it sounds like you are already starting down that journey of learning price action. For some people it is the first thing they ever learn and for others it’s a long road of indicators and systems. I hope this thread can become a good source of learning PA for you. I do think there are some great “pay for” methods out there, but they are few and far between. I hope it is worth the money. Overall I have found very little that pay for systems/methods offer than I wasn’t able to find on my own doing some google searching. My ultimate goal is that free sources of price action education become more common, such as this thread and the blog I run.

1 Like

Hey Kurugman,

I have always admired your intellect on PA. And willingness to give newbies your wisdom. I have been into forex for little more than 6 month now and luckily happen to start with PA after finishing babypips school.

Being a pupil of PA. I would like to get the knowledge it doesn’t matter which teacher it come from. My ultimate goal in forex journey is to understand PA and then trade whichever PA way I will be comfortable with.

Furthermore, I would suggest you keep a few reserved post at the beginning of the thread so in the future if this thread takes off there is somewhere where you can post important information.

Hail PA. :slight_smile:
Cheers,

Wow. Nice to see that you have your own thread. I am the follower of Mr. J thread and always hope to learn more new things.

I personally did use morning/ evening star . And hope to learn more about flag pattern here.

[QUOTE=“boynep;546227”]Hey Kurugman, I have always admired your intellect on PA. And willingness to give newbies your wisdom. I have been into forex for little more than 6 month now and luckily happen to start with PA after finishing babypips school. Being a pupil of PA. I would like to get the knowledge it doesn’t matter which teacher it come from. My ultimate goal in forex journey is to understand PA and then trade whichever PA way I will be comfortable with. Furthermore, I would suggest you keep a few reserved post at the beginning of the thread so in the future if this thread takes off there is somewhere where you can post important information. Hail PA. :slight_smile: Cheers,[/QUOTE]

Hey Boynep, it’s good to see you here! There is no doubt that PA is all you will ever need to know to become a successful trader. While it is fairly easy to learn, it takes a lifetime to master. I like to believe that I am just getting started in this journey, and have plenty of room to grow and perfect my trading. With your experience in PA I think you could could provide a lot of value here. I hope to see you around more.

I was going to try and create a 3rd post and reserve it for when the thread grows but by the time I finished the first two posts people already started commenting, haha. Oh well, I have my first post for introductory and my second for rules and guidelines.

[QUOTE=“shane;546231”]Wow. Nice to see that you have your own thread. I am the follower of Mr. J thread and always hope to learn more new things. I personally did use morning/ evening star . And hope to learn more about flag pattern here.[/QUOTE]

Shane thanks for stopping by. Johnathon has a great thing going over their and it is a beast of a thread but I felt it was to restrictive, both in the method he teaches and the fact the tread is only the absolute basics. I will get a feeling for things here once the thread starts moving but I think we can strike a good balance for both beginners and the more experienced traders.

I love the morning/evening star setups, especially at the lower timeframes(1H and 4H). The high and tight flag is my favorite pattern and helped me achieve a 1:18 RR for a profit of 95% a few months back. That high RR only happened because two high and tight flags formed during the trade and signaled me to not only keep the trade open but helped me to decide to pyramid into more positions. I closed the trade with twice the positions than when I entered, and my account had almost double in 4 days. It was price action at its best!

[B]Quick Navigation[/B] (links to key articles and discussions)

[B]Method Basics[/B]
Article - [I]“Step 1: Identifying a Trend”[/I]
Article - [I]“Step 2: Finding Key S/R Areas”[/I]

[B]Price Action Candles[/B]
Video - [I]“How to Identify Market Structure and What a Pinbar Is”[/I]

[B]Price Action Patterns[/B]
Trade Setup - [I]“Bearish Flag (Entry/SL Techniques)”[/I]

[B]Support/Resistance Tools[/B]

[B]Volume Analysis[/B]

[B]Stop Loss, Entry, Profit Techniques[/B]

[B]Trade Management[/B]
Post - [I]“Warning Signals DURING a Trade”[/I]

[B]Money Management[/B]
Post - [I]“Fixed % Vs. Fixed $”[/I]

[B]Trader Psychology[/B]

[B]Market Psychology[/B]

[B]Trading Plans/Journals[/B]
Member Contribution - [I]“Sample Trading Plan: Template #1”[/I]
Member Contribution - [I]“Sample Trading Plan: Template #2”[/I]

Reserved

Reserved

My name is Willy, and I want to state that I am a Christian, son, physicist, science educator, stock investor and Forex trader.

As a Christian brother, allow me to congratulate the beginning of your own thread, Aaron! I know you really have it in you, and once you mentioned that you had even earned higher income from your trading than your own daily job, I agree that you really should consider doing this full-time as a professional trader yourself.

I’m a very practical man myself, and I will have no problem to incorporate something new to my trading / investing strategy if it suits my personality and strategy. I also run my own blog about investing and trading, and I could tell you here that some of my own strategy are not something that I openly discuss at ‘the other thread’.

I’m looking forward to reading more about this magnificent thread, Aaron. But of course, you can always simply call me wm247 and I’ll call you krugman25, just like old time. :slight_smile:

PS: You should revise the name “William O’Neal” into “William O’Neil” in your very first post. Maybe you confuse the name with the basketball player “Shaquille O’Neal”. :wink:

Hello everyone

Another Christian, husband, father, manager, photographer, trader here

I am just moving into my 10th week of trading I know that’s nothing but I have been lucky to start directly with PA, never used any indicator or anything. Started a trading log/journal from day 1 but still need to build a solid trading plan and start making money :slight_smile:

I have a confession to make, I was never able to trade a demo account, I tried when I started and switched to live under 5 days, then tried to go back to demo a couple of weeks back (after suffering from big losses) and got back to live just a few days later.

I am just trading with much smaller amounts now but as long as it is real money it is keeping me interested.

I was always impressed by krugman25’s help and knowledge in others threads and I am really happy that you decided to start your own and I hope I am welcomed around here.

Here to a lot of success and some great trading.

Cheers

Hi Aaron,

I am joining as well. I see everyone did a bit of introduction of himself so I will follow the rule. I am a husband and a father of 3 lovely kids. I am not really a Christian so to say but it doesn’t mean I don’t have some sort of belief in something bigger and more powerful than us. Professionally speaking, I am an office worker with business development skills and particularly analytical skills. That makes me an Excel and Database expert. I believe they are good skills to become a trader and that is why I am trying hard. I am very sensible to psychology and personal development and I am very fond of physical exercise. My goal is to run a marathon in around 3 hours. I believe all this exercise thing is bringing a lot of good to my trading.

I have wished for this to happen and you have made it. I also felt frustrated with the restrictions of other threads as I definitely think that many aspects like the ones mentioned above help you become a successful trader.

I think PA salesmen free thread can be a good thing but also can harm beginners as they are basically being played with as they are being showed a bit of what can make them successful but while making sure they won’t succeed until they join the paid part. I still believe that some of the salesmen are giving more of themselves than other and I won’t be the one who makes open critics in here for the sake of fairness to my first PA mentor which I will still follow in addition to here.

All the best of luck to you Aaron and I will try to give back to the thread as much as I am taking away as I always do in other threads.

Yves

1 Like

Hi everyone

Im the quiet one in the corner who learns but hardly posts. Sounds good what you trying to achieve.

All the best

1 Like

Hey everyone, I was just getting ready to crawl into bed and I noticed all of the great comments I’ve gotten in the past couple hours. I can already sense the comradery and community that is already forming here and we are all going to benefit from it. It means a lot to me that you guys want to be a part of this PA thread and value what I have to teach and offer. It truly means a lot! I want to respond to each persons post, which I plan on doing tomorrow. Over here in the US its 1AM. Everyone that has read my previous posts know that I have a major passion for price action, and strive for excellence in trading. I hope that in a few weeks and months down the road everyone can say they are better traders because of this thread. Have a great rest of your weekends! Sunday is going to kick off a great week of trading.

Hi Krugman,

A husband, IT specialist (networking and security area) and father of a lovely dog here :wink: Couple of weeks ago I stumbled upon Mr J’s thread and learned some great stuff over there. Your posts always made sense to me and I will definitely join your thread. Am looking forward to learn/discuss about the topics you described in your intro, especially the PA patterns. I’m sure your thread will be of added value and can co-exist next to other threads.

All the best and good luck!

Hi Aaron glad to see you on this tread as I feel the same as you ,while Mr J has shown some good basic stuff its far to restrictive ,lets rock and roll guys.