Pure price action trading setups

[Satunya]

I based my tp on the april 28th candle which high shows 1.2183, this where I expect some consolidation and probably another small pull back with another opportunity to go long all the way to the april 11th candle at 123.32. This system is trend riding I took bits and pieces from Kathy Lien (kathy uses some indicators like adx and I don’t I find them useless), and some other ideas from other authors, it works for me, it’s simple price action that repeats over and over again on strong trends like this one. I’m just wondering, does your broker use Sidney open and NY Close for the daily candles?

Can you recommend any books or articles by Kathy Lien?

[smjdesign]

I based my tp on the april 28th candle which high shows 1.2183, this where I expect some consolidation and probably another small pull back with another opportunity to go long all the way to the april 11th candle at 123.32. This system is trend riding I took bits and pieces from Kathy Lien (kathy uses some indicators like adx and I don’t I find them useless), and some other ideas from other authors, it works for me, it’s simple price action that repeats over and over again on strong trends like this one. I’m just wondering, does your broker use Sidney open and NY Close for the daily candles?

Great, thanks - I just wanted to see if I was thinking correctly. I believe it uses NY open and NY close

[ecerejo]

Can you recommend any books or articles by Kathy Lien?

The one I read was “Day Trading and Swing Trading the Currency Market” which I’ve got from my local library.

[ecerejo]

Awesome trades Ecerejo,

I missed all those pips indeed. I was so skeptikal today. Don’t know why.

About Ej, I had a line at support 117.55 from weekly chart, on GJ at 140.00 from the weekly and 88.75 on UJ from weekly and others. But some reason I didn’t care these levels. As I mentioned I was very lazy last few days.

I hope I could catch some pips from these pairs later.

You can post charts and analysis here. So I could see something that not exposed to my eyes. (but a clear chart ) We have all different view. Please don’t think I’m a pro. I’m still newbie and still learning.

Any way Congratulations on your great pips.

Happy pipping.

I just got home and it’s already 10:30 PM, I wasn’t expecting to be this late, I just had a quick look at the trades and decided not to open new ones today, I decided to lock in 200 pips on EJ and 100 on the UJ hopefully it will go up and not hit my sl but if it does I will be ok with these trades. I will be more than happy to discuss this technique with you but like I said before I use a few Mas, mainly the 10 ema and the 20 sma, these are used as dynamic support and they work wonders on strong trends but are somewhat useless on nontrending markets so I use pure price action on these.

[salimvp]

I just got home and it’s already 10:30 PM, I wasn’t expecting to be this late, I just had a quick look at the trades and decided not to open new ones today, I decided to lock in 200 pips on EJ and 100 on the UJ hopefully it will go up and not hit my sl but if it does I will be ok with these trades. I will be more than happy to discuss this technique with you but like I said before I use a few Mas, mainly the 10 ema and the 20 sma, these are used as dynamic support and they work wonders on strong trends but are somewhat useless on nontrending markets so I use pure price action on these.

I consider confluences on any trades. Mainly using by Fibs. Whether it is Fibs or MA’s in a trending market when a pair retrace we can see or anticipate the pair move to the value area of MA’s or 38,50 or 61.8 fibs extension. I agree it will work. It is great confluence for a better signal. But the main is price action. Without a proper price action signal it won’t work.

I think we need an amendment to this thread rules You can proceed with your system. But it is good to be with the daily charts.

I’m looking forward to your posts.

[zakuthimdlethe]

No, Man…

Been not well last few days due to fever and cold. But we didn’t miss anything IMK.

Let’s analyse the chart.

EU, GU,AU and ZU showing different bias. EU yesterday break down below 1.3300 and pull backed. But failed to close just above the 1.3300 Support and psychological level. Same time GU went south and supported 1.6000 level. Both are in some strong territory.

What you think? Will it break down or go up? I’m not sure.

AU and NU is hovering no man’s land. AU in a serious consolidation of 60 pips range. The last three bar showing a Pin bars and it want to go up. But struggling. Same case happened in NU, it rather 100 pips range, last three candle is containing fridays bar.

I think A Strong breakout is due. It will move any way. I’m not sure so I’m sitting sideline.

---

Jpy pairs halted their uptrend friday and moved to south a little. About pin bar in JPY pairs, Those all pairs not showing ideal Pin bars. Only AUD/JPY and NZD/JPY showing ideal pin bars.

If we zoon to weekly we can find all pairs is some what supporting here and there. But That’s not a good signal.

Overall these pairs may head south. IMO. Let’s see.

My plan is going to sit on my hands. There is nothing clear for me. Better signal are coming.

Anyway I would like to see how yours analysis.

Happy pipping.

Im also not taking any swing this week.Nothing says trade me Mr Zaku…,If the set up doesn’t punch me Pacquaios opponent,then we better sit still for the sure thing.

[ecerejo]

I consider confluences on any trades. Mainly using by Fibs. Whether it is Fibs or MA’s in a trending market when a pair retrace we can see or anticipate the pair move to the value area of MA’s or 38,50 or 61.8 fibs extension. I agree it will work. It is great confluence for a better signal. But the main is price action. Without a proper price action signal it won’t work.

I think we need an amendment to this thread rules You can proceed with your system. But it is good to be with the daily charts.

I’m looking forward to your posts.

Ok I will do it over the this weekend, it’s not difficult to explain but it will take me probably couple of hours to do it, mainly preparing the charts, I will use an outside service to upload the charts so you can make them bigger when you click on them. Well I’ve got stopped out on the EJ but i’ve got 200 pips out of it, the uj is still on but I might decide to get out because as of now I see a doji being formed, I will wait until 3 or 4 pm and make my decision.

Meanwhile we’ve got 2bar being formed on the EU which could possibly turn into BE pattern, perhaps a good opportunity to go short on Monday. Also I see the GU approaching a key support level we have to wait for a signal for a long. We shall see. Have a good weekend.

[ecerejo]

For those of you that are still doubting the bullishness of all Japanese pairs should read this article by Matthew Weller. I think he’s right and this Monday evening (NY Time) we should have another opportunity to make a few pips on this pair.

[ecerejo]

Ride the Trend

Here we go, I’m not very good with tutorials but I will do my best explaining this very simple way of getting into a strong trend using daily charts only and I say only because this system works like a charm on daily charts. I have tried it on 4H charts but it’s not as reliable, not even close, so every example will be on daily charts.

This system shows a pattern that keeps repeating itself over and over again on strong trends like the ones we have right now on the Japanese pairs. It’s not a holy grail but I believe that has over 70% of success if done properly. The only drawback is it only has this kind of probability on strong trends and it should ONLY be used on strong trends.

The most difficult part for me is to decide when the trend has started for that reason I wait until the trend breaks the first major key level, I will explain how I define major key levels from just regular key levels on my first chart, for that is the first thing I do before deciding to trade. The other is momentum, this really tells me how powerful the trend is, you can measure the momentum by drawing a trend line and note the degree of the angle, the closer to the 90 degree the stronger it is.

For this we will use 3 emas, the 10, 20 and 50 emas (if you prefer sma that is fine also), we will watch how price reacts around these, they are used as dynamic support only and not as indicators, their crossings mean nothing.

Let’s look at the UJ chart, zoomed out.

Just by looking we can see that this is really a monster of a trend, it broke the first major key level at 84.20 and that is when I would of decided to trade using this system but I could of started earlier simply because of the momentum of the trend. Those key levels are major simply because that is where the market took a u-turn and started trending the other way.

Now look at the same chart zoomed in.

Take notice how well price respects the 10 EMA for the last 40 days, every time it retraced to this ema it bounced right back, this is a pattern that repeats itself over and over again in every strong trend.

Take a look at the GJ pair below:

We can see the same type of behavior (don’t look for perfections, there are no perfections in forex) with this pair, you will notice this on any pair trending like this. If you were to enter a trade every time price got around the 10 ema and put your stop loss just below the 20 ema, do you think you could have made very well pip wise? I think so. It doesn’t really matter if you get a pin or a bullish engolfing or whatever price just tends to respect this 10 ema in strong trends like these. Now there are a few techniques that I use to get the best price and also to increase my success rate with this which I will do my best to explain.

The following a few techniques that I use which I believe will make your trade to be a successful one.

1. When price retraces to the 10 ema I wait for price to break through it and then I want see price being rejected and come back to close above the 10 ema, if I see this I will trade this, you can either just enter at the close of the candle or try to get a better price by waiting for price to retrace again towards the low of the previous candle that just closed. I like the later better, I get more pips for my trade and it reduces my pip risk. For this part I use 1H charts and look for levels of support being formed and see where price may reach before it goes my way. I use fibs also, it all depends where price closes. At the very least I try to get in right on the 10 ema, using the 1H chart you will draw the 240 ema which is somewhat similar to the 10 ema on the daily chart, 10x24=240.

2. If price closes below the 10 ema then I wait for the next day candle: Two things can happen on the next day. If you get a green candle and closes above the 10 ema I will enter the trade either at the close or again wait to retrace back, if this scenario happens I will try to get in at the 50% fib level of that candle but again I pay close attention to price at the 1H level. If the opposite happens and price retraces more I wait for it to retrace through the 20 ema and see it being rejected there and if price comes back up and closes above the 20 ema I will enter the trade using the same techniques. The stop will be about 30 pips below the low of the candle that just closed. If price retraces below the 20 ema again I will wait for the next candle and use the same techniques used with the 10 ema.

3. These techniques are used all the way down to the 50 ema, if price continues to retrace well below the 50 ema there’s a good change that there will be a big pull back or even a trend change and we will stop using this system at this point.

Trade Example:

I’m actually in this trade right now and this how I entered the trade, we see that price retraced all the way through the 10 ema and soon after it got rejected creating some form of a pin bar. I entered the trade on the retrace almost to the pip, I did not wait for it, I placed the entry order right where the candle wick crossed the ema and luckily it triggered by a very thin hair. Eventually you will work out your own way of entering that will fit your style so feel free to try different stuff entering trades.

One small note, it is very important that you use software with Sidney Open and NY Close to avoid the weekend candles. Because oanda is not using Sidney open and NY close I use a demo to do my analysis so make sure you get a demo with Sidney open and NY close if your broker is not using these times.

I find my take profit targets by looking at key levels that exist between the major key levels.

Key level examples:

These levels exist between the major key levels, it is up to you in which one you think it will go before it retraces again back to the 10ema, remember you want at least 1:2 risk to reward ratio, I try to get at least 1:3 which is fairly atainable with this system. You can also just ride the trend and exit as soon as price starts trading under the 10 ema, I prefer to set targets instead but you should do whatever fits your style.

Happy trading.

Ed

[salimvp]

@ecerejo

Ride the Trend

Here we go, I’m not very good with tutorials but I will do my best explaining this very simple way of getting into a strong trend using daily charts only and I say only because this system works like a charm on daily charts. I have tried it on 4H charts but it’s not as reliable, not even close, so every example will be on daily charts.

This system shows a pattern that keeps repeating itself over and over again on strong trends like the ones we have right now on the Japanese pairs. It’s not a holy grail but I believe that has over 70% of success if done properly. The only drawback is it only has this kind of probability on strong trends and it should ONLY be used on strong trends.

The most difficult part for me is to decide when the trend has started for that reason I wait until the trend breaks the first major key level, I will explain how I define major key levels from just regular key levels on my first chart, for that is the first thing I do before deciding to trade. The other is momentum, this really tells me how powerful the trend is, you can measure the momentum by drawing a trend line and note the degree of the angle, the closer to the 90 degree the stronger it is.

For this we will use 3 emas, the 10, 20 and 50 emas (if you prefer sma that is fine also), we will watch how price reacts around these, they are used as dynamic support only and not as indicators, their crossings mean nothing.

Let’s look at the UJ chart, zoomed out.

Just by looking we can see that this is really a monster of a trend, it broke the first major key level at 84.20 and that is when I would of decided to trade using this system but I could of started earlier simply because of the momentum of the trend. Those key levels are major simply because that is where the market took a u-turn and started trending the other way.

Now look at the same chart zoomed in.

Take notice how well price respects the 10 EMA for the last 40 days, every time it retraced to this ema it bounced right back, this is a pattern that repeats itself over and over again in every strong trend.

Take a look at the GJ pair below:

We can see the same type of behavior (don’t look for perfections, there are no perfections in forex) with this pair, you will notice this on any pair trending like this. If you were to enter a trade every time price got around the 10 ema and put your stop loss just below the 20 ema, do you think you could have made very well pip wise? I think so. It doesn’t really matter if you get a pin or a bullish engolfing or whatever price just tends to respect this 10 ema in strong trends like these. Now there are a few techniques that I use to get the best price and also to increase my success rate with this which I will do my best to explain.

The following a few techniques that I use which I believe will make your trade to be a successful one.

1. When price retraces to the 10 ema I wait for price to break through it and then I want see price being rejected and come back to close above the 10 ema, if I see this I will trade this, you can either just enter at the close of the candle or try to get a better price by waiting for price to retrace again towards the low of the previous candle that just closed. I like the later better, I get more pips for my trade and it reduces my pip risk. For this part I use 1H charts and look for levels of support being formed and see where price may reach before it goes my way. I use fibs also, it all depends where price closes. At the very least I try to get in right on the 10 ema, using the 1H chart you will draw the 240 ema which is somewhat similar to the 10 ema on the daily chart, 10x24=240.

2. If price closes below the 10 ema then I wait for the next day candle: Two things can happen on the next day. If you get a green candle and closes above the 10 ema I will enter the trade either at the close or again wait to retrace back, if this scenario happens I will try to get in at the 50% fib level of that candle but again I pay close attention to price at the 1H level. If the opposite happens and price retraces more I wait for it to retrace through the 20 ema and see it being rejected there and if price comes back up and closes above the 20 ema I will enter the trade using the same techniques. The stop will be about 30 pips below the low of the candle that just closed. If price retraces below the 20 ema again I will wait for the next candle and use the same techniques used with the 10 ema.

3. These techniques are used all the way down to the 50 ema, if price continues to retrace well below the 50 ema there’s a good change that there will be a big pull back or even a trend change and we will stop using this system at this point.

Trade Example:

I’m actually in this trade right now and this how I entered the trade, we see that price retraced all the way through the 10 ema and soon after it got rejected creating some form of a pin bar. I entered the trade on the retrace almost to the pip, I did not wait for it, I placed the entry order right where the candle wick crossed the ema and luckily it triggered by a very thin hair. Eventually you will work out your own way of entering that will fit your style so feel free to try different stuff entering trades.

One small note, it is very important that you use software with Sidney Open and NY Close to avoid the weekend candles. Because oanda is not using Sidney open and NY close I use a demo to do my analysis so make sure you get a demo with Sidney open and NY close if your broker is not using these times.

I find my take profit targets by looking at key levels that exist between the major key levels.

Key level examples:

These levels exist between the major key levels, it is up to you in which one you think it will go before it retraces again back to the 10ema, remember you want at least 1:2 risk to reward ratio, I try to get at least 1:3 which is fairly atainable with this system. You can also just ride the trend and exit as soon as price starts trading under the 10 ema, I prefer to set targets instead but you should do whatever fits your style.

Happy trading.

Ed

Excellent post Eddy. Good analysis and much helpful. I will watch it on my charts. Let’s see how it work out.

Happy pipping.

[ecerejo]

OK, I think I’m gonna trade this pair today but I haven’t decided how to get in, we have a pinbar bouncing off the 20 SMA but has not been able to break the 10 EMA. Here’s what I might do, I might enter 10K at the 50% fib level of the pin bar with sl 10 pips below the 20ema and I might enter another 10K at 10 pips above the 10 ema, had the pinbar closed above the 10 ema then I would just enter everything as it retraced back to 10 ema. TP is at 90.20 for the first 10K will bring the other 50 pips above my entering price and let it run to 91.40. Wish me luck.
USD/JPY

[sharebazar]

Good luck man, your plan looks good.

[salimvp]

Good luck Ed,

Nice Pin bar at a good support level which is 88.40 and within the trend… Actually I missed the optimum entry level and it moved furhter. No price chasing here. I will wait for a better entry.

Happy pipping.

[zakuthimdlethe]

Good luck Ed,

Nice Pin bar at a good support level which is 88.40 and within the trend… Actually I missed the optimum entry level and it moved furhter. No price chasing here. I will wait for a better entry.

Happy pipping.

Sorry people.But i dont think that was a nice pin.We never know how will it pan out,but we do know that it is not tradable pin for us.

[salimvp]

@zakuthimdlethe

Sorry people.But i dont think that was a nice pin.We never know how will it pan out,but we do know that it is not tradable pin for us.

I would like to know about your analysis. I think it is a good setup within the trend. here my chart.

It’s common different people seeing same thing in different perspective.

[slipp3ryWhippit]

@salimvp

I would like to know about your analysis. I think it is a good setup within the trend. here my chart.

It’s common different people seeing same thing in different perspective.

I would also be interested,

I see price as topping, if I was trading that pinbar (which I wouldn’t in these circumstances) it woud be a range scalp play though the range needs another top point to be verified.

[ecerejo]

Sorry people.But i dont think that was a nice pin.We never know how will it pan out,but we do know that it is not tradable pin for us.

Hello zakuthimdethe,

I base my analysis on a trend riding system that I explain here, I put it up because Salimvp asked me too. The system works very nicely if you disciplined enough to follow it. I trade this system whenever I see a strong trend, but sometimes you go quite a few months without seeing a trend like this and so I trade just using regular price action like you and I like trading patterns like ascending triangles and descending triangles I find them very reliable also, I just don’t stick to one way of doing analysis and I think if you are going to make it on this business you better prepare yourself with workable systems for different types of markets. Every aspect of my analysis have to do with price action as I explained before to salimvp, price action is not just pinbars, bearish or bullish engolfing bars, inside bars and I have learned that this way of thinking will actually stop you from making great pips. If there is and ascending triangle on a chart and you decide to go long if the market breaks the top resistance area, is this price action analysis, of course it is because it is a pattern that keeps repeating itself, it has nothing do do with pin bars on any other candle formation. So I use different types of price action analysis. On this trade that I take it actually confluences with support also like salimvp mentioned so to me it is a very good setup, it couldn’t be better.

[bobmaninc]

@ecerejo

OK, I think I’m gonna trade this pair today but I haven’t decided how to get in, we have a pinbar bouncing off the 20 SMA but has not been able to break the 10 EMA. Here’s what I might do, I might enter 10K at the 50% fib level of the pin bar with sl 10 pips below the 20ema and I might enter another 10K at 10 pips above the 10 ema, had the pinbar closed above the 10 ema then I would just enter everything as it retraced back to 10 ema. TP is at 90.20 for the first 10K will bring the other 50 pips above my entering price and let it run to 91.40. Wish me luck.
USD/JPY

Entering on the 50% mark of the pin bars wick? You are starting to remind me of someone.

I do agree with slippy I would trade a range play. That does appear to be a valid support but it does also look like its getting very top heavy.

Happy pipping

[ecerejo]

Sorry people.But i dont think that was a nice pin.We never know how will it pan out,but we do know that it is not tradable pin for us.

Well, there are no perfections in forex and if you looking for perfections in this market it will again work against you. The fact is we never know how anything, that we see on a chart, is going to pan out, we deal in probabilities and nothing is guaranteed to pan out and so I really don’t understand your point by saying that we never know how the market is going to pan out because don’t matter what we do we can never know for sure.

[ecerejo]

Entering on the 50% mark of the pin bars wick? You are starting to remind me of someone.

I do agree with slippy I would trade a range play. That does appear to be a valid support but it does also look like its getting very top heavy.

Happy pipping

No, of the candle but I missed it by a hair and but I still got the one above the candle, that is the price you pay, sometimes, for trying to get the best price.

By the way have your read this postexplaining the way I trade a strong trend?