[QUOTE=âkrugman25;573824â]I found a really good daily setup that I do plan on setting entry orders for, I will be posting full analysis shortly.[/QUOTE]
Hi Aaron
Looking forward to hearing about it, my charts looked pretty dead tonight so very intrigued.
I debated posting this because I donât want to people to be blindly taking trades because me or someone else deems them as high quality. At the same time I think posting trades before they happen helps build credibility and confidence in those following this method and style of trading. I have already posted a handful of live trades that have almost all played out for profit, so I am confident in the method and my abilities to find highly probable setups. Again I balance that with people blinding treating this like a signal service. I only post about 1 out of 10 live trades I see or take, so these live analysis I post are by no means the only setups I find and take. I want to make very clear that you should always follow up others analysis/suggestions with your own analysis. Take time and consider your trade before pulling that trigger. With that being said lets get into it.
I browsed over all of the daily candles and nothing really jumped out at me except for this pair. Itâs important to note that is a trade doesnât âjump outâ at you, then it probably isnât worth taking. If you find yourself spending a lot of time looking at the trade to figure out if it is worth taking, chances are you are that the trade isnât worth taking and all you are doing is trying to convince yourself that it is a trade worthy of your capital. One way to know if you do this is often times after entering the trade, you will shortly after began doubting the quality of the trade or if the trade fails you will come to the conclusion that it wasnât actually that great of a trade to take to begin with. Sometimes the best position to take is on the sideline, where you wonât be throwing money into the black hole of poor quality trades.
When I saw this trade 2 things really jumped out at me. One was the false break/hammer candle that formed on the retest of the Adam/Eve double bottom that broke out a few weeks back. These retests of pattern breakouts alone can be highly probable setups to take. Often times when a double bottom, head and shoulders, or other pattern breaks out, it will retest the breakout level before proceeding higher. We see that taking place in this trade. We also have another candlestick setup that by itself is highly probable, which is a false breakout of coiling inside bars. We have a retest of a double bottom and a false breakout of coiling IBâs that by themselves are worth of trading, both happening at the same time. The third thing to note is that we did have volume confirmation of this false break that showed us actual volume behind the false break and retest that helps solidify that there may be a short squeeze happening and the market may be behind a move to go higher. I believe that combining pattern trading with price action candlestick trading can make for a very powerful trading method. This setup here is just one example of how I personally trade price action, and I believe makes it many degrees better than most of what you will run across today in the world of PA teaching.
This isnât a 5 star for a couple reasons. One is that this chart is somewhat messy. It is a bit harder to find key levels and is easy to go overkill on support/resistance level. Although this is an exotic pair so we can expect a little more noise and mess out of the charts. Also the double bottom pattern isnât the best quality in both form and volume. Because this is an exotic pair, price/spread can get crazy adding to the overall risk of being stopped out. Other than those reasons I cannot find much else to complain about. I do plan on personally taking this trade. I wonât be posting entry level, SL placement or TP levels or trading management techniques if I get triggered into the trade, and if so once all of the positions are closed.
Please note the volatility of the spread on this pair. Whenever taking an exotic trade always check the average and high end of the spread. If you take the trade you want to try and get in around itâs average price, to ensure you arenât overpaying on spread, and you want your stops to account for the highest spread spikes seen on the pair. For this trade the average is around 20 pips, lower if you get in on the US session, and it often sees spikes of 200-250 pips. Donât get stopped out because of a 5 second spread spike.
Thanks for posting this Aaron, a very interesting trade and in depth analysis. This is a new technique for me so I will sit this one out and observe it from the side lines hoping to learn more. I think itâs really helpful to observe live trades for better or worse so this is great. I wont add any of my own analysis just because this isnât something I would have spotted but will look forward to seeing it play out.
I donât have this pair but this does look like a nice trade. Along with what was already said, the previous 2 bars show super low volume compared to the rest of the PA. The small pinbar push down was off low volume and the HUGE wide spread down bar with low volume just only shows that strong sell pressure isnât present.
BIG PA coupled BIG VOLUME produces BIG MOVES. Just something I have written down that helps me out. I personally would have taken it.
I had been seriously considering taking this pinbar setup even before Krugman posted it. The pinbar size and the horizontal level and the volume spike look okay, but what worries me is that the pinbar looks trapped in a well-defined box.
You canât have coiling inside bars without a well defined box. The difference is if you have a bunch of candles just randomly poking around that is the box you are describing, which is a bad thing. Here we have a clear coiling of inside bars with a high volume false break. You need to be able to distinguish to two as they have completely different implications on a trade.
If it was just an inside bar false break or a double bottom breakout retest, I would have given it 3-3.5 stars, but on this setup we have multiple long patterns that are in confluence. Also coiling inside bars are a stronger variation of the single IB setup which helps improve the quality rating.
Sorry for answering a post that is addressed to Krugman but I think I can clarify it a bit for you until he answers himself. Yes, they look a bit different but only slightly. I personally think it is only because wmâs chart is more compressed vertically than krugmans chart. And if he uses another broker which I think he does there may be some small fluctuations due to that also. But if you would take wmâs chart and stretch it out vertically I think it would almost look exactly like krugmans.
hey thanks for your help. but if u look at the bar just beside the pin bar which defines todayâs trade, they r completely different. one is a bullish bar and the other is a bullish continuation pin bar.
Dontâ worry about that, bizzaro. Mine looks different because itâs not the same with Krugmanâs broker. The standard on this thread is to use Krugmanâs, though. And that is FXCM. We can still use another broker if you want to, and I wonât worry too much about little differences.
Yes, I would like to hit on both inside bars and their variations but also on boxing and noise. It depends on what resources you learn from online but some hit very heavily on it and some hardly mention it at all. Depending on what resources you cut your teeth on when you first learned PA, will likely determine what you focus on as a trader. Very small inside bar setups where you have a mother candle with many children can be like gold mines. They both show a tight compression of prices and allow for great low risk high reward setups. This is different from a bunch of candle stuck in a small range not forming any meaningful price action. Even then, I donât consider noising and boxing as a risk unless I think it will apply some sort of significant resistance to my trade, or has in the past.
We will need a more in-depth article for that. Any plan to do that anytime soon, Captain? Since this is part of your signature move, itâll be nice to learn about it from your particular school of thought.
Thought i would share another trade i just entered with you. Or to be correct it is not a new position for me, rather an increase of my position size.
If you remember i am still in my AUD/CAD weekly trade which has retraced a bit over the last few days. But today price closed in on a interesting area where the trend- and horizontal line collide. I just happened to log on when that happened on the hourly chart and we got a nice PA that showed a rejection of that level on the hourly chart (pin bar). Even though it was a small pin bar i entered on the retracement increasing my position size in this pair with an additional 0.5% risk. The second bar after my entry confirmed the signal and showed another rejection.
The only thing that worries me a bit is the news for the AUD coming out in less than 4 hours. We will see if i have to regret this entry. Maybe i will my stop to break even before the news. Have not decided on that yet.
I checked out the pair on my charts and nothing really stood out as significant price action, or a clear direction. I am curious what volatility the news today will bring to the pair. I donât mind trading high quality price action setups during news, with the exception of rate decisions.
Thank you for your honest feedback Aaron. I appreciate it. I appologize if i posted a trade that encourages anyone to see this as a very good or strong setup.
In this particular case and the reason for me to monitor this particular level was the actual confluence zone of the trend line and horizontal line which was very interesting for me and even though the pinbar on the 1 hour chart not was very big it still was a pin bar at a very interesting level. Well, iâll soon see if i was wrong in my analyzis. Feel free to delete my post if it does not fit into this thread, i donât mind.
