What I currently consider for this thread as major events are rate changes and US NFP. Other reports do produce varying amount of volatility, but usually not enough to affect a trade unless you are scalping. Also deciding to close a trade during a major announcement is completely up to the trader. Keeping a trade open during a major news event is dependent upon the pair your are trading and how it correlates to a news event, the time frame of the trade, how close price is to your stop prior to the event. You can sometimes leave it alone, or widen your stop loss to account for temporary jump in thread. In effort to not make trading too cookie cutter, iâm letting the traders here decide what they can handle as risk, and am leaving that decision up to you guys. If you are uncomfortable with it, I would suggest closing the trade or possibly doing some demo testing to see how big news events affects your open trades.
Welcome James! You are obviously on the right track here but I canât agree that those should have been traded. You did have a little edge given the level that you traded at but the PA candle setup was not great at all. When you have a pinbar you really want it stick well out past the previous candle. This candle was âup inâ the previous candle and doesnât do much protruding. It sticks out just a tiny bit, which makes it valid, but for a higher quality setup you want to candle to be down and sticking out well past the previous candle/s. The second issue with it is that it is a fairly small candle compared to the previous selloff. I like to compare my PA candle to the previous 5-6 candles. This give me a good idea to the amount of strength behind the candle and whether it is a candle that formed from profit taking or a true price reversal candle. In this case it was an ok size compared to the previous 2 candles, but is about 1/4 of the size of the huge red selloff candle.
Looking for large and protruding pin bars is especially important after a huge selloff. To know why you need to understand what is happening behind the scenes to move price. When price collapses and you have a huge selloff, people will begin taking profit at logical levels. This profit taking will cause a temporary rise in price, and can look exactly like a pin bar. Profit taking can be followed up by a reversal, or price may bob around for a while before crashing lower for a second leg down. This type of price drop then profit taking cycle can repeat over and over for a long time before the actual trend changes, and taking those setups can really eat your lunch.
I also agree that your take profit should have been higher. It looks like you put a white horizontal line that lines up with the previous swing high and also a VBRN which would have been a good spot for TP.
Also you are trading intra-day which is far less forgiving when it comes to the quality of the PA setup.
You got away with it this time but I wouldnât make it a habit of taking those king of PA setups.
I will keep an order open as long as it hasnât traveled say more than half way to my marked TP. If it has gone past that point then the worry is that the PA setups has already played out and price is now reversing on it.
Something funny was going on this last couple of hours as the gaps are now omnipresent anywhere. What do you think, Cap?
I donât understand what you mean Willy, can you show a screenshot?
Just to make sure I understand, youâd keep it open even with a daily pin counter to my pending order direction, my order is to short and thereâs a small bullish pin bar? Thanks
Potential pin bar forming on AUDJPY daily and on USDCHF or EURCHF. Check them out.
Hi Mr Aaron.
Thank you for your advice. Good lesson. Hope I can learn more from you and everyone else. I have more trades using the pin-bar reversal that I would like to ask your opinion about. I will post screenshot here later.
I have some questions.
(1) When you say âintraday tradesâ, you mean using the 4H and 8H time-frame, am I right? Is using price action for 4H and 8H time-frame not viable?
(2) I have a bad habit. I donât like to hold trades overnight because I have this irrational fear of holding trades for too long and price may go against me overnight. I believe it has to do with my confidence level. How do I overcome this as a trader?
(2) How do I determine when my TP and SL is too high or low? What signals should I look out for?
Thank you!
James
Sorry to hear you were sick, but Iâm glad youâre feeling better now! btw, I sent you a couple of PMâs while you were away
James,
Intra-day trades are anything below the 1 day candle. Intra-day trading is certainly viable and I allow down to 30 minute candles to be traded here, but intra day candles require a much higher quality setup to be valid. For example a 3-4 star quality setup on the daily or weekly has less strict requirements than a 3-4 star setup on intra day. The reason is at low time frames you are subjecting your trade to a lot of noise and short term volatility that increases your trades chance of failure. You also have smaller stop losses which increases the chance of being whipsawed and stopped out. False signals also occur at a higher rate at the lower timeframes. Because of all of that you need a much more demanding setup to give you a solid edge.
To help overcome your fear you need to have solid confidence in your analysis. Once you have done your analysis and open your trade, there will only be 1 of 2 outcomes, either you get stopped out or you hit TP. You canât control the direction of the trade whether you are awake or asleep. Some people feel like watching the charts gives them control over the trade, but price will do what it will do, day or night. Next you need to realize you donât live and die by individual trades. If you feel like 1 trade is to much to handle or would devastate your account, then you are most likely over risking. Lower your risk% to an amount to where if you lost, it would have very little effect on your emotions. For you that may be .25 or .5% right now. Once you are confident in your analysis, realize price will move what it wills, and this is just 1 trade out of many thousands you will take, you should be able to open your trades and let them run as long as it takes to either get stopped out or take profit. Both intra-day and daily trades can take days or weeks to hit take profit areas and if you are closing them out each night then you are just throwing your money away in spread fees.
Your TP should always be set off of your major S/R levels which are found using the daily candlestick charts. Check out my quick navigation area on post #2 of this thread where I have articles on how to find various types of S/R levels.
Keep studying and practicing, you will get there in no time!
Thanks for the reminder Jason,
Price Action That Matters community members; DailyFX trade instructors Jeremy Wagner and Walker England will be hosting a free online seminar about price action trading. Anyone wanting to attend can go to the FXCM page of their Google+ Hangout on Thursday, February 6th at 2 PM New York Time to watch the live event.
If I have any more information on the free seminar I will post it here.
Also Jason let me know that FXCMâs MT4 platform now support NY charts which is huge for anyone that follows this thread or a number of other price action threads that require it.
Did anyone see anything sexy on the CADCHF 1hr today? I let Benedict watch it from his store cupboardâŚit was perfection!
Hi Aaron I went to the FXCM website, the webinar is not listed under events for February.
Is it possibly listed under a different page?
[QUOTE=âkrugman25;595481â] Thanks for the reminder Jason, Price Action That Matters community members; DailyFX trade instructors Jeremy Wagner and Walker England will be hosting a free online seminar about price action trading. Anyone wanting to attend can go to the FXCM page of their Google+ Hangout on Thursday, February 6th at 2 PM New York Time to watch the live event. If I have any more information on the free seminar I will post it here. Also Jason let me know that FXCMâs MT4 platform now support NY charts which is huge for anyone that follows this thread or a number of other price action threads that require it.[/QUOTE]
Great news with FXCM. Is there any special setting that we need to change support NY charts or is it the default?
Hi Romeo, the Price Action event will be held on FXCMâs Google+ page on Thursday, February 6th at 2pm EST.
Price action is one of the most important things you need to take into consideration while trading.
Itâs the last day of lunar year of Snake today. As we move into the year of Horse I wish all a profitable year of Horse, whether or not you celebrate Lunar New Year!
May your profits gallop forward like the Horse!
Traffic in Thailand went to hell last night in preparation for Chinese new year festival. Got so tired I didnât even wanna look at charts.
Happy new year to all who celebrate this day 