just watched the video and have to say, as always, explained so well. I’ve always thought you explain things in such an accessible way
It’s hitting a very long term (check monthly) trendline and .618 retracement of previous swing. It’s already tested the .618 twice. I think this is a very critical level we’re at.
Someone already mentioned the video which covers in detail the riskier entry, here is the link to a post I made that mentions the 4 different types of entries for a flag and how they rank from most to least risky.
Anyone else is in the GBPCHF trade? It’s been going for a while now and has been a fun ride! Almost stopped out yesterday and now today almost at TP.
This is a comment I made on the members interview I did a while back. One of the worst things that comes with trading is the emotional drain that can occur if you don’t keep yourself in check. You will become less emotional with trading as you become more experienced and understand price movement better but there are other than you can do to help become less emotional with trading and have less focus on the price charts. This is the worst for beginners but even experienced traders can get emotionally drained from trading, and that is just not healthy. It was too good not to share, I will also be posting a link to it in the Quick Navigation area.
How to reduce trading emotions: 301 Moved Permanently
I like that one quote, Cap. At the end, what I really want is to have more money in my bank account, not the adrenaline boost from the ups and downs of God-knows-what-really-happens-there-in market.
Krugman, would you by any chance be willing to post what currency pairs you view? For some of the newer traders like myself it may help us focus on pairs that show good price action instead of getting discouraged by trading the ones with noise and traffic.
I removed about 5 or so from my list in the last few days and have a few that could be going on the chopping block in the near future. For the most part if you have high volume and liquidity you will get decent trade setups on a normal basis. I have removed a few of my exotics and some of the CHF pairs. A few of the exotics have very good chart structure and have even higher volume than the some of the minors that are normally traded.
P.S. I will link this post to my quick nav. and update my list as I add or remove symbols.
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Not me…I saw this signal on the daily but didn’t fancy going for it because the range of the two bar reversal was a bit large and not enough RR before first resistance…
what signal did you use to enter this one Aaron?
Cheers,
(ignore the duplicate chart - don’t know how to get rid of it!)
I took the 2 bar reversal that you have posted. 1.4800 is an absolute solid support level and gave me good confidence in the setup. Normally wouldn’t taken it because of the 1:1 RR but the level was so clear cut I didn’t haven any reservations on taking it. RR aside, the PA candles themselves were great looking. They were quite a bit larger than the previous candles, which showed the strength of the bulls that they were able to almost completely recover the previous days huge loss. Also these candles were “down in” the support level I had marked which I knew would help put a good buffer between my entry and SL. If you zoom into the intra day candles you can see that price made a lower high, and then a higher lower which shows us price consolidating and winding up(pennant pattern). Price then broke out of that pattern to the upside, a win for the bulls. There were lots of places to enter here, break of the 2BR, retracement of the 2BR, break of the pennant pattern. All would have been ok to take, but the retracement would have given a solid 1:2 RR.
Removing duplicate pictures had me stumped for a long time also. The way to get rid of them is when you click “edit” on your post, on the next screen towards the middle/bottom of the page there is a button that says “manage attachments”, and you can then remove the duplicate.
Right now as a beginner I’m only trading pin bars, haven’t tackled 2 bars yet. But from looking at it, it looks like if you combine the 2 bars it’ll just about make a pin bar, is that correct logic? If so, is it traded the same as a pin bar as far as entries, stop losses and such?
Yes you can combine the 2 bars although I would suggest most people not to do that. Charts are price over time, and combining candles incorrectly can skew the actual price action picture. If you only combine the 2 bars but not the whole chart of candles then your skewing your chart because you are doubling up 2 periods of price data into 1 candle, but the rest of the candles on the chart are holding half of the price/time data compared to your combined candle. There are chart period convertors in MT4 that will let you combine the whole chart into bigger time frames like 2 day candlestick charts which is the right way to combine candles if you are going to do it. The other reason I don’t like combining them is because the pin bar has a set of rules that differ from 2BR, so the 2BR truly is its own unique signal. My suggestion for those just starting out is to trade each setup as they appear in the timeframe the setup occurred in.
Thanks Aaron, good to have you back on the thread 
Please could you post the pennant pattern you mentioned, not sure which you mean.
Thanks the education Krugman. Have you covered the rules of the 2BR yet? I checked the newbie thread and this one and wasn’t able to locate anything.
Hey Amy,
I think Aaron ment this pennant pattern which you can clearly see on the 4 hour chart or lower, which price broke out of to the upside as he mentioned. 
Cheers, diablo
Yes this one
Hi krugman25,
I saw in your post lot of time you mentioning things such as “Text book pin bar”, “Text book two bar reversal” , “Text book Pattern” etc.
Can you please let me know a good place to learn about text book definitions of Price action Candles and price action patterns you mentioned in the list titled [B]Things we DO use[/B]: in the first page of this thread.
I feel i should first learn the text book definitions of those.
Thank you !
Hey diablo, I hope this flag pays off as I’ve been in this at the 2br set a retracement and a break ( split lots equally) and if it weren’t for the fact of the BRN 1.4000 for support i would of just taking it in the chin and manually closed this trade.
All I can say is come on the bulls!!
Darth
Hey chanakam, great question here. When I use the term “text book” I am talking about a very high quality formation of a specific pattern or setup. Text book means the pattern clearly fits all of the requirements of that particular setup or pattern. Sometimes I will say to look for “clearly defined”, which is the same meaning as textbook. You will periodically get setups where traders will argue if a pinbar is valid or if a pair is trending or ranging. That’s usually comes from setups that are less than text book and are more subjective.
There can be a lot of different rules and definitions for the same setups and patterns since there isn’t a single authority that says what a characteristics a pattern should or shouldn’t have. The requirements I use for the patterns I trade are the ones I have found to be the least subjective and the most widely used in the trading community. I unfortunately don’t have all of those written down for reference, although I do cover some of the requirements for trading support and resistance areas in my articles. In this post I have added the rules for individual candle setups. These are rules that only involve the formation of the pattern and whether it has formed validly or not.
[B]Pin bar[/B]
*Real body must be no more than 1/3 of total candle size
*Real body must be in the top/bottom 1/3 of total body length
*Candle must close within previous candle OR proxy candle
*BONUS - Candlestick is as large or larger than previous candle/s
*BONUS - Candle closes within previous candle
*BONUS - Little to no wick on real body side of the candle
*BONUS - Real body closes as doji or strong in the pin bar formation
[B]Engulfing[/B]
*Full body(real body + wicks) of the engulfing candle must completely engulf the full body of the engulfed candle
*Engulfing candle real body must close within top or bottom 1/3 of the full length of the candle
*BONUS - Engulfing candle is as large or larger than previous candle/s
*BONUS - Little or no wick on engulfing/engulfed candle on the side of the candle that faces the direction to be traded
[B]Inside Bar[/B]
*Full body(real body + wicks) of the child candle must be completely inside the full body of the mother candle
*BONUS - Both child and mother are small compared to previous candle/s
*BONUS - Multiple child candles forming within mother candle(A.K.A. - Coiling Inside Bars)
*BONUS - Mother or child candle also form a pin bar shaped candle
[B]Morning/Evening Star[/B]
*2nd candle must not extend into more then 50% of the length of the 1st and 3rd candle
*2nd candle must close within either 1st or 3rd candle
*On the side of the candle for the direction of the trade, the real body of the 1st and 3rd candle must close within 1/3rd of the total length of the candle
BONUS - 2nd candle should form a doji or pin bar like shape
BONUS - 2nd candles wick opposite the 1st and 3rd candle is long
BONUS - On the side of the candles for the direction of the trade, the real body of the 1st and 3rd candle must close within 1/3rd of the total length of the candle
BONUS - 1st and 3rd candles are as large or larger than previous candle/s
[B]Two Bar[/B]
*2nd candle must close within 1/3 of the previous candle on the side of the candle that faces the direction of the trade
*BONUS - Engulfing candle is as large or larger than previous candle/s
*BONUS - Little or no wick on the side of the candles for the direction of the trade
For the full patterns I trade I use most of Thomas Bulkowski’s pattern rules - ThePatternSite.com
Remember these are all rules regarding the formation and validity of a pattern, this doesn’t include the many entry/stop loss/take profit rules that go with each individual pattern.
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