So enter @ break of the pattern?
I highly recommend we put that proâs and conâs list a requirement as necessary in this thread. The reason for that is here we want to emphasize the educational value of this thread, and so letâs groom a good trade habit from the very beginning. That policy will also discourage those who only come here simply for the âsignal serviceâ alone. Just like someone said it before, we are more than delighted to help any new member here, as long as the the new member has also shown his fairshare effort to do the âhomeworkâ first.
I like to think it just the way I discuss physics problems with my students, I will make it clear to everyone about my in-depth analysis so that my students can easily follow how and why I tackle the problem in a certain way. However, things are different when I only solve a physics problem myself, where I will skip a little here and there with lots of shortcuts that I am already familiar with. You are an engineer yourself, Krugman. Surely you have also experienced the difference of solving an engineering problem yourself and discussing how to solve engineering problem with your colleagues?
Aaron,
Hello. I have been trading PA Forex for about 18 months now. I started with PA only, from the beginning and no indicators, then tried some indicators to see what the heck they were all about which I am sure we all do. I know the only way to successfully trade Forex is to learn tried and true PA methods. Why? because these signals have been working for over 400 years.
Looking forward to learning more with PA. I am now beginning to have positive months. Been trying to trade the daily candles only and not over trading which is tough to do.
Hopefully this thread can be clean and simple. Looking forward to reading more of your posts. - Duke
There are two methods of entry, the break of the pattern and a retracement of the pattern. Morning/Evening stars tend to be fairly large(the good ones anyways), which makes retracements more valuable as far as RR goes. Retracement entries are more risky and should only be using in certain situations. If you are uncomfortable with retracement entries or donât know how to properly identify them and manage them then I highly suggest just using the break of the candlestick. Retracement is like jumping in from of a moving bus, entering on the break is like jumping on the back of a moving bus.
Youâve convinced me, Iâve made a note to add it to the rules post. Thanks Willy!
Agree, although I have a little difficulties to catch your analogy of jumping the bus. Or maybe itâs just me. 
Welcome to the community Duke! You are right, PA was around long before indicators. It truly is far superb to any other method of trading and I consider it the âHoly Grailâ of trading. Some traders do it better than others though.
You are doing it right in your first phase in learning PA which is sticking to daily and using simple horizontal S/R levels. This allows you to focus on how and why PA works, without getting overwhelmed with the details of each trade. But like any educational topic, we all must go from elementary level, to middle school, high school and then college level understanding of PA if we want to truly grasp the full dynamics of trading.
PA can be as simple and clean as you want it. Parts of PA are fairly rule based and simple to learn, some of it is more abstract and can be difficult to master. Just remember your goal of a trader is not to have âclean and tidyâ charts, your goal is to understand the market and capitalize off of that understanding. If our goal is âclean and tidyâ, then we really should be become maids or work for a cleaning service. I say that with humor, but in all honesty I donât learn a method because it offers clean charts, I learn a method because it works and is teaching the whole picture. I donât make money from clean charts, I make money from my edge. And my edge comes from understanding the whole story and all of the dynamics of the market. Iâm not picking on a specific person here, I have ran across countless sites that try and use clean charts as a selling point. If a line on my chart helps tips me off to key S/R areas or problem areas, then I want it on my chart!
With all that being said, there is zero problem if you want to trade with a smaller basket of tools. Many traders are comfortable with that and very successful also. I donât want to stick everyone in a small box here, there will be wiggle room. So you may see clean charts here, and charts that look busier. But whether if I have EMAs on my chart and you donât, we can still talk horizontal S/R because those principles remain the same no matter what extra tools I add to my charts. As long as we all follow the same rules and guidelines here, we will all learn a lot.
Haha, well when price is moving the direction of your entry, it is like the bus driver opening the door and letting you hop in and ride the momentum, which is inherently less risky. A retracement entry you are hoping price turns around before the bus rams you off the ledge, plummeting into your stoploss. But there are certain setups that reduce that risk in a way that the potential extra reward is greater than the risk. Retracement entries can become quite advanced, and there are many different techniques to doing them. Definitely not something you want to do willy nilly, haha.
USDZAR - D1 - Pinbar
Proâs
*could form above VBRN of 10.000 which is also a key PA S/R level
*Nicely shaped PB
Cons:
*swing back to S/R level not very clean, causing some traffic and noise to the left
*last swing high is fairly close
If pinbar closes about 10.000 I would give it a 3 out of 5 star quality rating, a trade worth considering.
can you please explain how do you trade an IB ? is it as continuation rather than reversal ? if it is as continuation what about fakey setups ?
( Sorry I just read your post 301 Moved Permanently and it answers my question at least partially)
also if possible a graph explaining why AUUSD was tradable for you would be great
thanks
Iâm getting ready to get back to work but wanting to leave the community with something a little new to chew on. Most mainstream PA teachers donât discuss volume with PA. So I hope to teach something here that is maybe a bit unkown in the world of PA. Combine volume with PA candlesticks and patterns can greatly assist the trader in understand what the market is actually doing and if a candle was an actual price rejection or just a take profit or low volatility move.
In itâs most simple form we can see the volume of a price action signal that formed and see how it compared to historical price movements. A high volume PA candle tells us there was a real fight going on between bulls and bears and the true price rejection occurred. It tells use many lots were exchanging hands during that candle. This is the best way to begin understanding PA. Again we donât trade any of the tools we use to analyze PA candles, we only trade the PA itself. The tools just help us understand the quality of the signal we have, and give us a more detailed picture of the market. PA signals can still be taken with low volume, but it is something to make mental note of before making a trade.
The graph I added was from a large 1 hour candle that formed yesterday on EURUSD. It formed at a VERY key S/R area as we had multiple overlapping S/R signals. We have horizontal, diagonal and daily 21EMA all very close together, and this candle formed right on top of that S/R area. You can see the fight that took place as retail traders began shorting the pair, thinking a major break lower was going to occur, and the big players jumped in and bought it right back up. Volume is another way to prove that not all pinbars are the same! Likewise no price action candle or pattern is exactly like another.
If there was casual take profit taking happening, or the market was causually rotating to fair value, we would expect volume to be lower.
Thanks Reddy,
Great to get at least one feedback but as it failed to generate any interest, I assume it was just rubbish setup, or maybe the analyse wasnât complete enough, we wonât know for sure.
Anyway, I am also in as it is my way to learn, being in makes the follow up a lot more efficient, otherwise, you would just forget about the potential setup and never know how it finally unfolds.
Cheers,
Yves
Hey Krugman, Iâd like to second that request for an explanation of how the AU/USD was a good inside bar trade. We use the same broker but my charts never showed an inside bar on any time frame D:
I feel like I should introduce myself since I spend quite alot of time in this forum and genuinely support Aaronâs ideologies.
Hi, Iâm Nazar and Iâm a son, a brother, a student and a trader. Iâm currently attending Ryerson University in Toronto, ON, Canada. Iâm studying accounting and finance with hopes of majoring in finance (Iâm in class right now :D). I originally began trading stocks using only fundamental analysis but eventually moved over to forex after trading stocks for about a year as it is a 24/5 market and I didnât have to commit much time to analysisâand have loved forex ever since. I took an interest in price action trading from the start and 10 months later, here I am. :). I frequently read Jonathanâs price action thread but was only really pushed to start posting after Aaron opened up this thread. I look forward to discussions with you guys.
Thanks 
Hi guys,
Please your opinions on the EURAUD D1 chart below.
Remark: candle has not closed yet, this is just for heads-up and educational purposes.
PRO:
- Pinbar at strong S/R, which has been touched several times last couple of months
CON:
- Size of PB not impressive and not sticking out
- FTA (noise) is pretty close @ 1.45
- Double top has formed previously
My final opinion: barely 2 stars, no trade.
You should also be aware of the spread on that pair, as it is an exotic pair.
(Then again, you should be conscious of the spread on any pair :P)
I agree with you, the size of that pin isnât much compared to the size of the previous few candles and generally isnât that impressive of a confirmation. As you mentioned, thereâs some noise right above that pin at 1.45 (psychological level) that traders should be conscious of as it may rebound and stop you out. However, with a double top, the bulls try to break that resistance twice but fail and some consider it a strong bullish setup as it is often said that the bulls donât fail the third time. But despite that, I still wouldnât take this trade.
Potentially a setup. Large bullish candle formed at resistance on USDCAD 4H. Several things can happen at this point. Thereâs still a few hours before the close of that candle, that resistance could be rejected and price could drop to form a bearish pin or you could get a 2BR. On the other side if it breaks that resistance, price could advance to the next major resistance (Psychological level 1.4) where we could get a potential setup or it can drop back down to test the new support aka previous resistance where we might also catch a nice setup.
Thoughts, opinions, comments ?
First thread I have read where volume was introduced with PA. I have been trying to incorporate my studies of Wyckoff into PA myself. I always have in the back of my mind that weakness appears in up bars, and strength in downbars.
Great thread so far krugman, please keep it up.
Hi Aaron,
Really i have to say these Wow .The Article (Identifying a trend - Page16 ) best explanation i ever read about trend ,CT ,etcâŚ
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Thank you from my heart.