Hello and welcome
It is always great to have more people in this thread and share knowledge as we grow together
I don’t trade star setups yet since I am not very comfortable with them but it is actually a morning star as you said
I am sure Aaron and others will chime in but please, as per the rules thread, include some basic analysis as well as a rating for this setup in your opinion
Regards,
Sorry!
In the future I will do that as I will come with a trade, but for this situation I can not do it, because, as you said, I am also a stranger with the Stars Patterns. It is not a trade. I come with this situation for analyze only.
Regards!
Haha, no worries, I enjoy a good laugh! Once of the biggest things I like about this thread is that we can learn PA and still have a good time. If anyone ever goes overboard I will let them know, otherwise just enjoy yourself here.
Preferable continuation, but they can be traded as a reversal if at a very key level. The thing here is that you have a very major resistance overhead. The only practical thing would be to enter on a retracement of the pin be or else your RR is going to be far too low.
What described here I believe is the right thing to do. We now have conflicting candles in an area that is starting to build up traffic right at a major resistance. it’s best to just wait and see how this shakes one and play a retracement or continuation signal.
Hey Ron, first of all welcome to the community! There are really 3 main pillars to successful trading. A good method, trade management and trader psychology. I am going to continue to hit on those here on a regular basis. I hope this thread can help you out in all 3 of those areas. If you are seeing improved trading after being here then please let me know, that’s what makes all of this worth while. I look forward to discussing PA more with you in the future.
Welcome to the thread, we are glad to have you here.
What you just described for what you are going to post is going to make it very hard to correctly analyze the chart setups. The main aspect of what I teach here are all of the market dynamics that make up each trade. These dynamics include the timeframe of the trade, the volume of each candle, major/minor resistances found on various timeframes. Even when charts are posted here by members, I almost always look them up on my own brokers charts because there is usually much more of the price story missing. It may seem counter-intuitive of what you are trying to accomplish, nobody is going to be able to accurately analyze your charts without being able to look at all of those dynamics we teach here. I don’t want to be a kill-joy but I would ask if you are going to post them include the timeframe and ticker. It may give away the answer, but you have move word I will still give an honest opinion of the quality of the trade.
Welcome and thanks for coming here!
Welcome to the community! Can I ask, what specifically were you doing in IT? Johnathon has some great teaching over in his thread. I actually spent a long time over there as a contributor before starting this thread.
I probably would trade that as an engulfing bar as I want my price action pattern to stick out past all other candles in that swing low(I made an exception if it is on a trend line). It is a morning star, but is really sub par quality. its best to have the 2nd candle(the star) to have a longer lower wick, kind of like a pin bar. You also want to star to be towards the very bottom, but in this case since the 1st red bar had gapped down, the star is closer to the middle. It does pass the requirements, and may end up really taking off, quality wise it’s not the best. These are the hardest to find on the daily TF, every once in a while a really high quality one will for on the 1 or 4 hour chart. Because they can get to be really long in size, they are prime candidates for retracement entry.
Eternal did a great job explaining this, I just want to add a little. Like he said, entering the break with a standard SL is sometimes not the best setup. There are 2 ways to get a tighter SL and a better RR. One is still enter at the break but modify your SL so that it is sitting behind a previous candle wick or a major S/R line. The other way is to wait for price to retrace back up the wick of the candle, and set your enter right at a S/R level or previous candle wick. This way when price retraces back to the S/R level it will trigger your entry, get you in at a better price, and price usually turned back around and starts moving with the pinbar again. That method combined with plenty of room for TP can produce very high risk reward scenarios.
Thanks eternalnewb
this is what i always initially thought of
but this would be what you mean right? correct me if i am wrong =)
for the retrace, how would you work out where is the optimal point to set an entry? eg. 50% of candle? 50% of body? seeing the recent s/r?
Thanks!
ok. i understand krugman. was trying to make it as… how should i put it… neutral as possible based on PA? haha. did not want ppl referencing to their charts and telling me what they did… more of hoping to assess if i am looking at things right and if ppl here would agree and whats their point of view. But ok, i’ll do as you recommend^^
Thanks!
Many brokers off something called OCO(One-Cancels-Other) orders. Since each entry will have a different risk, if you are using proper money management, each entry will have a different amount of lots. Create an entry order for both the break and retracement, and set it to an OCO order. Then once one gets hit, you can cancel the other. If you broker doesn’t allow OCO you can usually get e-mail alerts when an order is triggered, so once you are alerted on an entry, just go and cancel the other one by hand.
I have been learning to trade for about a year… but so far haven’t been profitable. Then i came across PA. thought it fits my style as i have a job, and all i need to do is analyse the night before, and if things hold true, place the orders the next morning and let it go to work.
guilty as charged, i have tried to make the charts fit my criteria and loss more than won. that is something i have to overcome. but i also have some things to clarify.
USDJPY4H
USDSGD daily
USDCAD daily
GBPCHF
i hope the charts are clear… some might be too small…
all feedbacks are welcomed! and thanks for any advises!
hope to learn more from everyone here! and from my mistakes^^
I just responded but for some reason it didn’t post. I will try and remember everything I said.
The first thing I noticed was that it didn’t look like the pinbars on the first 3 charts had formed at a key level. It could be that I am missing too much candle information but from what I see they don’t look like key S/R levels. In price action, S/R levels tell you “where” to enter and the price action candles tell you “when” to enter. If the candles aren’t forming at a key level, then the pin bars don’t mean much. Most trading methods are built on properly identifying key S/R levels. The 4th chart looks to be at an important level but the candle is just barely touching the S/R line. In a really good setup the candle will be up in the S/R area with the wick breaking well through it. This not only gives your stop loss a better buffer but it also gives your trade more profit area and improves your RR. Just like in some of your charts, price did end up reversing but not until after you got stopped out. This is a common problem when taking setups that are too far away from the S/R area, or PA candle is too small.
There is also information we don’t know about, such as were these setups taken during a high risk event such as interest rate decisions or payroll reports. The charts were too small for me to be able to read the text in the upper left corner so I couldn’t tell what the time frame of the charts were. Time frame also plays a big role in potential trade risk. As you go down in time frame the riskier the trade becomes and the larger the candlestick required for a high quality setup.
The big thing I hit on here is looking at every dynamic of the market. Because there are a number of things that go into determining the overall risk and potential reward of the trade, I promote analyzing all of the dynamics of the trade, and seeing if it passes through your “trade filter”. This filter is different for each person but you essential are weeding out the poor quality setups and risking your money on only the highest quality setups. One of the areas we focus on here are learning what each of those market dynamics are so we can make educated decisions about our trades.
I also wanted to mention that win rate by itself doesn’t mean anything. People tend to get fixated on how often they are winning. Win rate only means something in the context of the risk reward of your trades. I think most traders would find my win rate quite unimpressive, on my good months I have a 50%, on the bad ones I have seen it get as low as 30%. That doesn’t mean anything until I apply my overall risk reward for my trades. The lowest I ever go is 1:2, my average RR is around 1:3 - 1:4, and every once in a while I land a 1:10 or higher. So in the context of the average RR I run, my break even point is usually around 25-35% win rate. If your RR is always a 1:1 your break even point is 50% win rate. And if you can only achieve a 2:1, your break even rate is 75% win rate.
I just realized I didn’t actually answer your question, although it is good to know about OCO orders when doing retracement entries.
There are some teaching out there that say a simple 50% retracement. Although I am against that because it’s really just a random number that the market does really care about. There are 3 key places to put your entry, the previous candles high/low, a major S/R level or a previous swing high/low. Most trades have at least 1 of these 3 ways of setting a retracement. If non of the 3 above areas are fit your trade, the last resort would be an arbitrary 50% retracement.
Thanks Krugman for your time! especially since it failed to load up your first response!
Appreciate it a lot! all the best to all! ^.^
It is interesting you saw a flag and I saw a mother and her 5 kids! Of course, Im not familiar with the flag pattern and can now see it after you pointed it out. After I got your message, I took my SL to a few pips above BE. I wanted to see how it played out. As luck would have it, it went right to the traffic zone and gave me my profit and reversed back below my entry point. All in the wee hours of the night too!
Regardless of the outcome here, I wish to learn from it.
Was I incorrect in identifying this as a mother-child pattern? If so, what disqualified it? Thanks!
yes this is indeed what I like to do when the RR is not great and I happen to have the opportunity to sit on the computer and watch the market
I have never a 100% idea on how much it will retrace but usually I try to aim for a minor s/r on a lower timeframe with a few pips buffer
sorry if I explained it wrong but this is what I do
