I have been trading for 8+ years, it took me many years of self teaching to piece all the components together to become a successful trader. For me trading is a vehicle through which you can discover and hone your strengths, expose and dissolve your weaknesses, becoming a better person in the process.
In this thread I will be discussing short term price action trading, focusing on the EURUSD 5 minute chart as well as touching on all the other components that are required to become a successful forex trader.
I don’t claim to know everything, I think that we are always learning and always growing as people and as traders so I will always be open minded and grounded to learning and growing myself.
Please interact, I will answer questions when I can.
[QUOTE=“vijaim;517744”]thanks :-)… why do you choose EURUSD… any reason?[/QUOTE]
The EURUSD had the tightest spreads, typically has the most volume going through it, so for short term trading it offers more consistent moves that are less volatile than other pairs like GBPUSD.
The spread makes a big difference when trading with tight stops like I do. You have to get near zero spreads.
In this video we will look at the price action from Friday 9th August 2013.
There were several volatile movements during the session with some deep retraces. Early in the session we see price make a counter-trend movement off a fib retracement level. Price is then formed by the market reacting and being squeezed between a short term trend-line and a support level.
your way of trading require very small spread to have consistent profit… my account is with 2 pips spread on EURUSD… what is the optimal spread required to try your strategy?..
Yes you are right you need to be using a broker that has very tight spreads, almost zero most of the time. I successfully trade this style but would not be able to paying 2 pips spread, no retail trader should be paying those type of spreads, it is just plain getting ripped off. See my blog for the broker I use, they are accessible for everyone and have zero spreads.
No not at all, there are several out there that provide close to zero spreads and low commission with only a small amount required to get started. The broker I use is one of them, test out a demo and see for yourself Forex Trading | The leading True ECN forex broker in Australia
I think that “Trading on Target” is one of the best books on trading psychology that I have read. It goes deep into all the issues that traders face and gives you practical tools to overcome them.
Here’s a nice price action based trade I took today on the GBPUSD 5 minute chart. You can see the short term trend is down based on the moving averages, however price has tested the 1.5620 area 4 times and has failed to break through, this shows the sellers are not willing to take price lower. Then a nice pin rejection bar forms off that area, open and close at the top of the candle with a big wick on it. Enter on the close of the candle with a 5 pip stop and looking for price to run back up to the previous highs for a 10 pip gain.
They are all exponential moving averages 8, 21 and 50
I use them to identify the short term trend and to give my eye a reference point for viewing the market
