Price Action That Matters

[adamkhang]

[B]Why human nature works against profits[/B]

I wanted to leave a bit of trading wisdom from legendary trader Jesse Livermore.

[I]“The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.”[/I]

Human nature works against you as a trader, and works against your ability to make money in the market. Worst of that nature is a persons desire to keep losing trades open but cutting winning trades short. This is done because of hope and greed. They keep their losers open out of hope that the market will turn in their favor, and they cut their winners short out of greed, because they don’t want the market taking back their few percent of winnings. If you let your losers run and cut your winners short, the best you can hope for is a break even or slightly better than break even profit record. This is why I am a proponent of learning what price action really is, and using that to get the most out of your trades.

[B]Why most guru price action courses don’t work[/B]

Countless PA teaching websites make it seem like 3 or 4 candlestick setups is price action. To the contrary, everything price does is price action. Learning a handful of candlestick setups can help you get in the market, but you will have a hard time making “significant” profits if that’s the only thing you know or understand about the markets. I have personally done this many times and I know many of the readers here would agree that they have gotten out of trades at a set profit level, just to watch price continue to move and you missed out on 1-2 times profit you could have made by staying in. Obviously every trade isn’t like this, but imagine if you could do this in just 1 out of every 10 trades. That extra 10-20% every dozen trades really starts to add up.

I think a great disservice is being done with the easy price action teaching that is prominent. I would have to seriously question if anyone is making gains in the long term, using simple horizontal levels and 2-3 price action candle setups. That is similar to taking a checkers strategy and applying it to a game of chess. It reminds me of the sales pitches you see on infomercials where they sell a bottle of magical goo that can take scratches out of your car. We all know it takes a 2000$ job done by an auto body shop to fix a car, not a 20$ bottle of magic goo. I take to my hat off to those teachers out their that are honest about the markets and discussing the advanced market dynamics. If I wanted to, I could tell people that trading is simple and can be done successfully with a horizontal line a couple of candle setups, but that would simply be deceptive. Trading is dynamic, difficult and at times emotionally draining. Instead of hiding those facts so I can sell memberships, I want to say lets be honest about the markets up front and then spend our time mastering it! It’s very disheartening see unformed newbies laying down hundreds of dollars for a simple, easy and clean magical trading method, just to find out it doesn’t actually work because the real life markets aren’t simple, easy and clear. My approach may not make you feel warm and fuzzy, but I don’t want to make you feel cozy about the market, I want you to make money and if possible “serious money”.

I have been extremely happy to see people here stretching their wings and trying out some of these different trading methods and techniques. It’s not just that though, I can tell some people here are really starting to “get it”. They are going from a 1-2-3 step method, to actually understanding the fluidity of the market and adjusting their trades to the current market conditions. Learning a step by step method isn’t bad, but it is a handicapped approach to the market and will keep you from really mastering the market. I have been extremely surprised by the number of people who have said they never heard of some of the topics I have mentioned. These are people who have been following the mainstream gurus for a couple months to a couple years. This tells me there is a huge gap in what is being sold and what is reality. I have a big job ahead of me, but I am enjoying this journey and I look forward to continue surgically analyzing every aspect of the markets and mastering them.

it is condensed in my mind ! thanks Sir.

[darthfrancis]

Thanks for all of this info Aaron, a very informative read with lot’s for me to take on board. I’ve long been suspicious of Friday candles and no longer trade them, at least until I am back in considerable profit.

I really liked what you mentioned in your other post too - For me, if I don’t believe my trade can reach take profit before the news event I won’t open it. Likewise if my trade is halfway to take profit, I will either move my SL to BE or just close out the position for partial profit, because at that point any open position is gambling

This is something I will also adopt, sounds like a very sensible plan!!!

Hi BA, just wanted to way in on something. I also do not trade friday candle as they provide nothing but false info, So why would you start to trade them once you are profitable again? Just to lose more money once again? Trust me I’m suffering from a big loss (gambled with my account during a news spike)…(uber-noob) and now I stick to the plan for me that’s PA monday-thursday if that makes me profitable why would I risk trading friday when it is inherently misleading?

Count yourself lucky bro that your just down and not out.

Darth

[Mr_B_A_Barracus]

[QUOTE=“darthfrancis;577689”]

Hi BA, just wanted to way in on something. I also do not trade friday candle as they provide nothing but false info, So why would you start to trade them once you are profitable again? Just to lose more money once again? Trust me I’m suffering from a big loss (gambled with my account during a news spike)…(uber-noob) and now I stick to the plan for me that’s PA monday-thursday if that makes me profitable why would I risk trading friday when it is inherently misleading?

Count yourself lucky bro that your just down and not out.

Darth[/QUOTE]

Cheers Darth

That’s a good point, your right, I suppose it shouldn’t make any difference whether I’m in profit or not. Like you I only take new trades Monday to Thursday at the moment, I also don’t take any intraday signals on a Monday which have probably stung me the most in the past.

I’m sorry to hear about your account, what happened with the news spike? Did you experience slippage or were you trading without a stop loss?

[darthfrancis]

Cheers Darth

That’s a good point, your right, I suppose it shouldn’t make any difference whether I’m in profit or not. Like you I only take new trades Monday to Thursday at the moment, I also don’t take any intraday signals on a Monday which have probably stung me the most in the past.

I’m sorry to hear about your account, what happened with the news spike? Did you experience slippage or were you trading without a stop loss?

I was trading with bigger lots than i should of and chose the wrong direction and i though the spike had more to give but then retracted against me. Completely rookie move. if I chose the right the direction it would of made me 400% but it cost me 20% of my account. Either way it was gambling and a no no. My mentality behind it was i was hitting brick wall with my trades and braking even which got me frustrated, and in hindsight this was down to average setups which never payoff in the long run. Then after the big loss i then placed too much again on trades to try make back what a lost which then stopped out and i was down to -30%. So now I’m taking much more accurate setups which means less trades but I’m slowly making it back which may take me months but i WILL get there.

So you see 0% is better that -30%

Good luck to us both.

Darth

[Kasravi]

I was trading with bigger lots than i should of and chose the wrong direction and i though the spike had more to give but then retracted against me. Completely rookie move. if I chose the right the direction it would of made me 400% but it cost me 20% of my account. Either way [B]it was gambling and a no no[/B]. My mentality behind it was i was hitting brick wall with my trades and braking even which[B] got me frustrated[/B], and in hindsight this was down to average setups which never payoff in the long run. Then after the big loss i then [B]placed too much again[/B] on trades to try make back what a lost which then stopped out and i was down to -30%. So now I’m taking much more accurate setups which means less trades but I’m slowly making it back which may take me months but i WILL get there.

So you see 0% is better that -30%

Good luck to us both.

Darth

Wow and Wow again!

You learned soo much in such a short time span. I’m really astonished.
Usually folks learn one at a time like: not to revenge trade,not over risk on one trade, not to try catch every 1000pip
move but catch what you can or all time famous not trading because you think it goes down and enter for a R:R of 1:999!

You are sure on the right track it’s simple from here on. Don’t do any of those mistakes again and you will see your account
rise and shine!

Cheers

[Mr_B_A_Barracus]

[QUOTE=“darthfrancis;577734”]

I was trading with bigger lots than i should of and chose the wrong direction and i though the spike had more to give but then retracted against me. Completely rookie move. if I chose the right the direction it would of made me 400% but it cost me 20% of my account. Either way it was gambling and a no no. My mentality behind it was i was hitting brick wall with my trades and braking even which got me frustrated, and in hindsight this was down to average setups which never payoff in the long run. Then after the big loss i then placed too much again on trades to try make back what a lost which then stopped out and i was down to -30%. So now I’m taking much more accurate setups which means less trades but I’m slowly making it back which may take me months but i WILL get there.

So you see 0% is better that -30%

Good luck to us both.

Darth[/QUOTE]

Hey Darth

Im sorry to hear that, I am sure that we will both make that money back sticking with better set ups I’m sure. It sounds like you and I have a lot in common, I’ve also been pretty impatient lately and have been taking mediocre set ups but I’m now reigning it in. I’ve only had one trade this week, admittedly it bombed but I feel that I am being choosier than before and will now definitely stick to this plan. I’ve also got back into a few hobbies so that I am not sat watching MT4 all day which I find is also helping me, I just check my charts every 4 hours. Fortunately I changed my trading plan just before the losses kicked in which meant I lost less than I could have. I now only use half my usual lots if I’m risking anymore than 40 pips or if it was a counter trend (although right now I’m sticking with trading only with the trend).I also like to trade the occasional news spike but stick to only risking half of my usual lots for this too as it can be very volatile and anyone who does this will take losses. I was gutted yesterday as I traded the news spike for the NZDJPY, I’d chosen the correct direction and all was going well except I lost Internet connection! I came away with 7 pips when I could have made 50! I think I need a new Internet provider. As much as I like news trading, as you say, it’s much more of a gamble and Internet connection apparently is a must. It’s very risky and probably something I should avoid.

Good luck mate, I am sure you will soon get back on top…we both just need to be patient.

BA

[adamjn]

GBPUSD H4 Pin on upward trend line.

What do you guys think of this setup?

My analysis:

Volume very high
Massive lower wick showing clear rejection
Bullish close
On upward trend line
With trend
1:1 Risk:Reward

TP at recent swing high
SL Below Pin Wick

[adamjn]

Another trade I just took.

H1 Pin bar on GBPCHF

EDIT: At BE, getting “that feeling” that it could reverse

This pin bar is a 3/5 I think, it could have been bigger, but what made it stand out to me was the face that it is on a down ward trend line, and the volume was higher than the other bars.

Risk:reward was a bit over 1:1 which also made it look good

With trend
Sticks out from all other PA
On trend line
At support, turned resistance
Hugh volume
Decent R:R

[darthfrancis]

Wow and Wow again!

You learned soo much in such a short time span. I’m really astonished.
Usually folks learn one at a time like: not to revenge trade,not over risk on one trade, not to try catch every 1000pip
move but catch what you can or all time famous not trading because you think it goes down and enter for a R:R of 1:999!

You are sure on the right track it’s simple from here on. Don’t do any of those mistakes again and you will see your account
rise and shine!

Cheers

Thanks for the pep talk, hopefully it will sink in. Unfortunately i’ve made these mistakes before but not to this magnitude.

But I real do see the light made 2.5% this week and 370 pips which should of been double that but I’m still working on T/P levels and got stopped out.

Onwards and upwards boys.

Darth

[darthfrancis]

Hey Darth

Im sorry to hear that, I am sure that we will both make that money back sticking with better set ups I’m sure. It sounds like you and I have a lot in common, I’ve also been pretty impatient lately and have been taking mediocre set ups but I’m now reigning it in. I’ve only had one trade this week, admittedly it bombed but I feel that I am being choosier than before and will now definitely stick to this plan. I’ve also got back into a few hobbies so that I am not sat watching MT4 all day which I find is also helping me, I just check my charts every 4 hours. Fortunately I changed my trading plan just before the losses kicked in which meant I lost less than I could have. I now only use half my usual lots if I’m risking anymore than 40 pips or if it was a counter trend (although right now I’m sticking with trading only with the trend).I also like to trade the occasional news spike but stick to only risking half of my usual lots for this too as it can be very volatile and anyone who does this will take losses. I was gutted yesterday as I traded the news spike for the NZDJPY, I’d chosen the correct direction and all was going well except I lost Internet connection! I came away with 7 pips when I could have made 50! I think I need a new Internet provider. As much as I like news trading, as you say, it’s much more of a gamble and Internet connection apparently is a must. It’s very risky and probably something I should avoid.

Good luck mate, I am sure you will soon get back on top…we both just need to be patient.

BA

Yeah i used to be glued to the computer whenever and for as long I could, But now getting back into relaxing and my old past time xbox ;-). now I only really trade daily 90% and 4hr 10%, and only check the market on daily close which takes me 30 min.

One thing I’ve realised is that I’m getting better at market analysis but still need more practice on exit points. But that’s what this great thread is for. Support.

May the FX be with you. you shall be the Boba Fett to my vader.

Darth

[darthfrancis]

Just wanted to share an entry I made in my trading journal for my recent Silver trade…

"Silver as been on a big sell off. But finally hit KHL of 19.19. And formed a big BUEB on D1 and a kind a evening star(learn more on these)

So set pending at 50% fib retract of the bueb candle on d1.

So this has been a wild ride, price got as high as 20.47 1 pip away from my original T/P. so saw this as a sign to go longer and reset my SL to 20.58 then again to 20.50. I also readjusted my S/L to 50% profit gained. Thankful of this as price flip reversed very near to entry.

I’ve learnt that I must not be blinded by a profitable trade just because its winning it can easily go against, look for the PA as if you were looking to get in again even if its against your original bias. "

the last paragraph is what I wanted to share because its something I’m try to overcome and maybe some of you are too.

Darth

[wm247]

[B]Onwards and upwards[/B] boys.

Darth

[B]Excelsior!![/B]

[darthfrancis]

[B]Excelsior!![/B]

So behind that mask you call WM247 really your Stan Lee. I love your work!!!

[wm247]

So behind that mask you call WM247 really your Stan Lee. I love your work!!!

Nice to talk to you, true believer.

[darthfrancis]

New trade pb on the 4h gbpcad.

formed at sweet level of 1.7400 after price has broken past it and now retesting it. Going down pound!

Darth

[Mr_B_A_Barracus]

[QUOTE=“darthfrancis;577933”]<img src=“301 Moved Permanently”/>

New trade pb on the 4h gbpcad.

formed at sweet level of 1.7400 after price has broken past it and now retesting it. Going down pound!

Darth[/QUOTE]

Hey Darth

Looks like a nice pin bar, I passed on this just because the daily trend seems to be up. It may well play out but with my new trading plan I have to skip this. I missed a few nice set ups today but hey ho, there is one with my name on just waiting to form.

[Diablo1505]

Guys, i need your point of view on a trade i’ve been struggling with for 2 days and which has kept me sweating.

The trade is a counter trend trade on the EURCAD, 4 hour. I first saw that price was about to hit the rising top of the uppward channel which collides with a s/r level going back to 2005/2007 since there is no structure recently that could act as support or resistance.

I entered the trade on the 4 hour where we got a nice PA in form of an bearish engulfing bar. Thereafter we got a lot of inside bars indicating a shift in momentum so it looked good. Then price got close to my SL before going south. But once again the bulls took over and pushed price up, bears came in pushed it down forming a pin bar and we continued like that and also got a 2 bar reversal at the same s/r level. So i saw 3 bearish PA signals at the same level confirming my position and trade idea. But a few hours ago i got stopped out as the bulls once again pushed up the price.

Also on the 1 hour chart we can see that price respects the trend line pretty good.

My question to you. Is this something someone of you ever would have considered taking or is it just me getting obsessed with an trade idea?

Any comment and feedback is appreciated!

[Mr_B_A_Barracus]

[QUOTE=“Diablo1505;577945”]Guys, i need your point of view on a trade i’ve been struggling with for 2 days and which has kept me sweating.

The trade is a counter trend trade on the EURCAD, 4 hour. I first saw that price was about to hit the rising top of the uppward channel which collides with a s/r level going back to 2005/2007 since there is no structure recently that could act as support or resistance.

<img src=“301 Moved Permanently”/>

I entered the trade on the 4 hour where we got a nice PA in form of an bearish engulfing bar. Thereafter we got a lot of inside bars indicating a shift in momentum so it looked good. Then price got close to my SL before going south. But once again the bulls took over and pushed price up, bears came in pushed it down forming a pin bar and we continued like that and also got a 2 bar reversal at the same s/r level. So i saw 3 bearish PA signals at the same level confirming my position and trade idea. But a few hours ago i got stopped out as the bulls once again pushed up the price.

<img src=“301 Moved Permanently”/>

Also on the 1 hour chart we can see that price respects the trend line pretty good.

<img src=“301 Moved Permanently”/>

My question to you. Is this something someone of you ever would have considered taking or is it just me getting obsessed with an trade idea?

Any comment and feedback is appreciated! :)[/QUOTE]

It’s definitely something I would have considered when I was losing lots of pips and who knows may have even entered this one. This is one of the kind of opportunities that I notice I’ve been losing on mainly because its counter trend so I’m now trying to only trade with the trend unless I have a massive PA signal then I will consider entering with half my usual lot size. When we are looking for a trend reversal i think we need a larger PA signal to confirm it.

[Mr_B_A_Barracus]

[QUOTE=“Diablo1505;577945”]Guys, i need your point of view on a trade i’ve been struggling with for 2 days and which has kept me sweating.

The trade is a counter trend trade on the EURCAD, 4 hour. I first saw that price was about to hit the rising top of the uppward channel which collides with a s/r level going back to 2005/2007 since there is no structure recently that could act as support or resistance.

<img src=“301 Moved Permanently”/>

I entered the trade on the 4 hour where we got a nice PA in form of an bearish engulfing bar. Thereafter we got a lot of inside bars indicating a shift in momentum so it looked good. Then price got close to my SL before going south. But once again the bulls took over and pushed price up, bears came in pushed it down forming a pin bar and we continued like that and also got a 2 bar reversal at the same s/r level. So i saw 3 bearish PA signals at the same level confirming my position and trade idea. But a few hours ago i got stopped out as the bulls once again pushed up the price.

<img src=“301 Moved Permanently”/>

Also on the 1 hour chart we can see that price respects the trend line pretty good.

<img src=“301 Moved Permanently”/>

My question to you. Is this something someone of you ever would have considered taking or is it just me getting obsessed with an trade idea?

Any comment and feedback is appreciated! :)[/QUOTE]

Just to add to this, the Pinbar seems to be at a swing low and the beeb I would like to be larger, those things hate me!

[adamjn]

EDIT: BAD SETUP
Just noticed a few things, higher volume in the lows, neckline might be supporting price to continue higher, closed out at 2 pips profit.

NZDUSD H4 BEEB

I have been waiting on this for a few days now, finally it has reached my level, a downward trend line.

I spotted a Bearish engulfing bar on the H4 chart, here is my analysis on it.

At a solid level
Fully engulfs previous candle
With trend (Down)
Also looks like a head and shoulders with a wonky neckline
High volume on EB also

I entered a little late, actually missed the entry as I have been out, but got in about 5 pips late, so I am not too annoyed.

Tp will be at 0.81145, last major Swing Low

Here is the daily and H4 charts

Opinions more than welcome

H4

Daily