I think you’re right. It’s driving me INSANE! I completely missed out on yesterdays huge move up because it didn’t agree with bias and now I’m wondering if it’s not going to go against bias again and do a huge move downwards.
Hello Nikita. Thank you for this thread. I am learning a lot from it. I know you are trying to fade out from posting on it so it doesn’t get out of hand, but I have a question for you.
In your second to last post, where you showed a gu chart and pointed out the reversal candle, and stated you would enter at the close of that candle. I was wondering, what made you realize that the candle just before that one wasn’t the reversal candle? I’m not great with the names yet but I believe it’s called a doji.
I can see that if you would have considered that one the reversal and entered your trade with a stop at the bottom if the wick, the trade would have stopped out in the next hour. The hour that you did pick as the real reversal candle. So what was it that told you to wait? Was it that the previous candle was such a strong bear candle?
Thanks in advance
Not in a position today. I have a short order @ 1.3695, SL 1.3715, TP 1.3675. Just looking to capture the bounce off resistance at 1.3700 but it may never get there. In which case, oh well. 
I’m currently working with ICT’s recommended newbie regimen where I only work off of previous day/week SLs support and resistance with a 20 pip SL and TP for the next 4 weeks. It has really helped me slow down and look the basics.
Hehehe. 
I took a buy on the third hour with a SL of about 10 pips after two candles pulled back into the support area on EU H1 last night. I got out as soon as I covered for the loosing afternoon trade. Only to see it hit 90 pips after that.
Cant win every other day.
What goes on in our mind when we are taking the trade live and the reasons on hindsight can be so different.
I wait because I find that waiting saves me a lot in SL expenses often.
Especially when bias is ambiguous and correlation is not tallying up. In other words, its one notch above from not trading at all.
A good example was EU in the evening, or during the US session. GU was falling strongly. EU looked like its going to go down. It was going down. And I am thinking to myself that its a sell. .
And a friend I was chatting with said its going south. Was very tempted to sell EU. It helped a lot that I waited a little since I was not very sure of where prices were going to end up.
Then pull back happens, then the next candle shoots down and pulls back up again. So third candle does the same thing and I enter when it gave me a SL of about 15 or so pips.
Only sore thing about that trade was I cut it off as soon as I covered for the loss earlier in the afternoon. It could have been one of the better trades this week.
The entry that I took on GU, was not the best example of a trade. Too late of an entry, too high of a SL.
The EU trade was more solid. But then wasted it by not moving it to BE or TP at 30 something pips.
So I guess in answering your question without the benefit of hindsight, I think its just the question of waiting for enough reasons to decide that its going to be a long or a short.
Sometimes, the entry is very obvious. Sometimes its not.
Its always best to wait and if you miss a trade you are fine. Its not as bad as entering a bad one.
Thanks for the help, Nikita and villain! Much appreciated!
missed that great move.
Was chatting with a friend yesterday regarding this entire PA.
He brought up an interesting term for what we are doing.
BPC. Breakout Pullback Continuation.
Never seen that term before.
But it pretty much sums up lower TF trading.
Maybe it’s time you write a book nikita. Sounds like a good title to me haha.
Out of curiosity, what do you do on days like today that are extremely bullish, but yesterdays bias was bearish?
GU H1
This is an image I took after I got up and looked at the charts at around 2pm GMT +8.
So yesterday showed a candle like its going to do a reversal and do a pullback. This would have been the place you would have entered with a SL of about 10 to 12 pips.
The redline is around a previous S&R area. Now other than that one level, is there anything else to tell us that its a reversal?
Nothing. No pullback candles, nothing on H4, no confirmation of bias.
So what do you do? you wait for something else to tell you that its going to be a direction change. So barely 20 minutes into the wait, the candle goes back to being a bull and keeps shooting up.
Why didnt I enter? Because I have a cardinal rule that I rarely if ever break. Either I take my trade right at the bottom for a buy or right at the top for a sell or I dont trade at all. Entering in the middle only enlarges ur SL and makes ur trading a guestimation especially if it starts going against you.
So what is it that I am trying to point out?
Well we have had this common question asked one too many times in regards to bias.
Bias is a guide. Its not our entry for a trade. It just helps us decide on which way its going to go. It also plays a part in my money management. When bias is right and everything is perfect, I sometimes hit 20% risk on my trades. When things are not so rosy, i cut down my risk.
Whatever the bias is, we have to remember that before it happens on the higher TF, action starts in the smaller TF.
In our case, Bias is just that, bias. Our entry, we still look for in H1 with aid from H4 sometimes. If you dont see a valid set up or pattern or reason to enter a trade in H1, then there is no trade for us.
Its simple as that. We look for an entry with H1. Not with D TF Bias.
Many have asked, saying hey Friday was a sell, how come you bought on Monday?
Because I dint see a sell on Monday H1 TF. I still took a buy even though Friday was a sell because the signal to buy was strong. SL was very small. So why not take a very calculated small risk?
We still trade H1 TF. Even yesterday late American session, when I saw the pullbacks on H4, I still waited for a set up on H1 before shorting. So even bias is up, I still made some decent pips based on H1.
I hope this clears things up.
Thanks for the explanation Nikita. I think maybe it’s time to start re-reading this thread and see if certain things make more sense to me now and if I’ve missed anything along the way.
In almost all the discussions I have read about price action trading, someone makes the comment that all of a sudden they were looking at a chart and it just made sense. I am still waiting for that moment I guess. Thanks again for all the great info.
Just wanted to send you something, Nikita. Used to be customary in the US many generations ago to give your teacher an apple once in a while.
This I have to comment on.
What you have said is very true G7Pro. One day it just hit me. I saw something by luck or by chance or after looking at how the market moves for so long. It hit me and I knew this was different from all the previous “Aha!” moments because now it really made sense.
We are not use to trading from a candlestick chart. We are only used to very form fitting graphs such as linear or parabolic or sin or cos graphs. Our mind needs time to be able to see the rhythm of a price chart.
Now with that being said, I do admit that clarity from the charts is not something that is there all the time.
I flip the charts as I am writing this and I tell you honestly I dont know what its going to do next.
Will it range tomorrow? or shoot back down? to What level? Is it going to be a buy bias or a sell tomorrow?
At the moment, looking at this chart, I dont know.
Tomorrow, when I open the chart during Asian session, I most probably wont know. But I know between here and Friday, I will atleast have two moments where I get that “aha!” moment where I can see what its clearly going to do next.
I am at the moment trying to cross that bridge to totally trust those “Aha!” moment and let my trades really go as much as it can before TPing.
So there you go.
All traders cannot tell you for sure at any given time where will price be next precisely. But they all have these things they keep looking out for and when it comes together they know that its an opportunity. The rest of the time, they are just as lost as everyone else on whats going to happen next.
ddrankin, Thank you for the apple.
Good pipping to you guys.
Fellow PPA thread readers. Looking at the D TF for EU, GU, and AU, end of trading day for New York, it looks like a buy tomorrow.
Not sure how well pics will post but here goes:
AU and EU look like there will be seeing resistance based on recent past days if they continue up tomorrow. GU looks like it could go up a bit to me. FYI, I’m a newb so noone take this as a recommendation.
Is my observation good or is there anything I should be looking out for?
Thank you fellow traders.
Nikita, I’m not clear on how you suggest entry:
[B]4. Entry is based on H1
- easiest way to trade when direction is known is to enter when price crosses the opening of D TF candle. Hold for about 40 pips.[/B]
I take this to mean, if going long, wait to enter after the price has gone 40 pips above the daily opening price. If this is correct, I take it that it is to confirm direction?
Thank you.
That was written especially for those who are very new or absolutely confused at what is happening in a technical chart.
To illustrate it further, I include a cherry picked AU chart for all.
AU D TF
Yellow line marks the D Candle opening. Even todays entry has done 85 pips up after opening.
6 trading entries, one obvious loss day in between.
Keep in mind, in real life trading, things like margin call, Psychology and ofcause SLs will play an equally important role.
So that statement is for those who have just picked up trading to understand how a candle and bias works.
The toughest part of Forex is not getting exited as often that will cause us to look at the charts wrongly.
Haha so true. Been there done that.
The word i think your talking about is Scalling, where you add to or take from your position to increase wins/decrease loss. i havent used this much but seems like a good idea when used correctly.
i have also seen these posts about not using (bothering) with a SL… Although i believe that this is DANGEROUS thinking. the problem is that not using SL says that you can guarantee the price will go your way all or most of the time. this is truely IMPOSSIBLE. Reading “Trading in the zone”, Mark douglas. has shown this to me. one was talking about if you lose just wait for price to retrace the open. this sounds great, but what if your open is at the apex of a 8month downtrend for example. i wouldnt want to be holding a losing position for this long, and keep hoping, i also know from experience that if you dont at least have some sort of plan in place to take a loss that you’ll never do it on trade.
School of pips also mentions the importance of SL, and as traders we should be Capital preservers first and trade winners second.
I started this thread for those who are totally bewildered with the market. Sort of start from scratch with very little tradespeak and lingo. It was for those who are very new and couldnt get their heads around how prices move.
It was specially for those who use Indicators for entry and dont understand why they cannot make a buck.
So I set out very clear instructions that allowed a person to look at the market in a more systemic way and not chase prices around.
If we follow the thread from page one, I strongly advocate people to trade demo accounts until they can atleast make 10 to 15 trades in succession without loosing a single one on different days before switching to live accounts.
And as we went, I added things to it. We always talk about the same thing for a few pages before moving to the next.
We talked about Money management,
about how I calculate SL as a purse to spend and mine is 100 pips per given lot size and not calculate risk based on what I think the SL for this trade is.
how I try to compound after collecting about 60 pips per trade.
we then proceeded to talk about how prices move in waves of LL, HH, HL, LH. We talked about why and where we pick SL because of wave patterns etc etc etc.
Towards the end I talked about price levels and Support and Resistance areas and how Support broken and retested becomes resistance and vice versa and how we can take positions in these areas and pick SLs as the last part of trading.
Along the way I learned a thing or two also from other senior traders who have been kind enough to point out to my weak areas. Special thanks to Bobmanic who refined my H1 entries.
So its all there. The reason why the thread went the way it did is so that newbies start with the basics first and worry about the fine tuning as we go.
Its always been about keeping it simple and not adding too much to ones plate very early on. Step by step.
Its up to those who want to learn how to read prices to start from the beginning and finish the thread and to take it collectively.
That is the reason I wanted to keep this thread around 15 or 20 pages max. Imagine reading a how to trade this method thread that runs into 300 or 400 pages. It will take a person 2 years just to go through all that is being said in the thread.
But as we went and we all learned together, the page count has reached 54 at this juncture.
I still remember Tom82 asking me about the concept of just drawing a line at the candle opening and if it was a buy yesterday, just buy today when we see price crossing that line and going up and vice versa if it was a sell the previous day.
Those who have been trading profitably know what I meant by that. Newbies had a tough time processing that statement.
That is the reason why I started this thread as bare as I could, so we start with bias and learning how to read where prices have gone in the last few days and where it is going to go next. Then we looked at how to identify these turn around areas so we can be in early. Then it went to how we pick it on H1 TF based on candle patterns, then we continued to discuss about price waves and SL.
So its a learning process. Step by step. I still dont put in a SL at LL or HH. I usually punch in 50 pips or more arbitrarily when there is news or some threat of intervention etc etc or when I have to walk away from the laptop even for 15 or 20 minutes. Otherwise with bias, I hold. If it hits my 100 pip SL purse, then I either partial close, or get out with a loss etc etc. Most importantly, I talked about how to preserve capital somewhere in there. I remember that I talked about cutting off a trade if it has reached a point of our initial deposit amount. And how I increase the accounts seed money as it grows so that if we do have an incredibly bad run, we will always have an amount in the account to rebuild and not top up as we go.
So I hope the readers would read the entire thing from start to finish and not read half way through and decide that they can see all that I have to show and smack in 10 or 20% risk on a trade and say hey I followed your advice and without an SL I lost my account.
There is no room for those who are greedy or impatient in trading.