Pure price action

[Fx_Igumz]

PURE PRICE ACTION

Price Action is based on price reaction on Support/Resistance, Trendline, Channel using good candle reversal and continuation pattern for decision making. Price Action set up revolves around dynamic swing points(Low and High) drawn on a strong Support/Resistance, Trendline and Channel
Price Action strategy is very simple and easy to use when it comes to trade analysis.It is not complicated like some other trading strategies as it does not involve the use of too many inductors Action set up produces its entry points, exit points, take profit etc.
Now for you to actually understand what Pure Price Action is all about, I have mentioned some important tools above that one need to understand before trading any market using Price Action strategy to generate good profit. The tools are as follows;

1. Support
2. Resistance
3. Trendline
4. Channel
5. Candle Reversal pattern
6. Candle Continuation pattern

The proper understanding of the above tools will give you a good insight on how to use Price Action to leverage in the any market of your choice. The good thing about Price Action strategy is that it works in any market using any time frame of your choice.It works very well for Scalper, Intra-day Trader, Swing Traders and Position Traders. Now let take a looking at the above tools on how to identify it.

SUPPORT: As the name implies it support the bullish trend when price have moved in a bearish direction hitting the swing low when the bear do not have much strength to pull the price in a downward direction. Look out for a candle reversal pattern(do not worry cos I will explain that in details) then draw a horizontal line at the swing low to represent the Support.

RESISTANCE: It is the horizontal line that is drawn at the swing high of any pair when a the bull have no strength to rally in an upward direction. Look out for a candle reversal patterns then draw a horizontal line call the Resistance line.
The image below shows the Support/Resistance line.

TRENDLINE: Price moves in horizontal and diagonal pattern. When price shows a diagonal patterns Trendline are used to spot out the reversal pattern as price bounced off from already drawn Trendline. If price are moving in horizonal pattern the tools mentioned above Support/Resistance are use to find possible trade set up. The image below shows the image of a trendline.

CHANNEL: This is a form of Trendline that has upper and lower trendlines. When the two comes into place on a chart it is called a Channel. Price move from the Lower to Upper Channel or vice visa.

CANDLE REVERSAL AND CONTINUATION PATTERNS: When the Support/Resistance, Trendline and Channel are established depending on the direction of the trend patterns.The next thing to look out for is the candle reversal and continuation patterns as price reacts from Support/Resistance, Trendline and Channel. In my my price action trading strategy, I only consider five (5) Candle reversal and continuation patterns out of about twenty eight (28) candles patterns. The five candle patterns are as follows;

1. Pinabar
2. Railway Track
3. Outside Bar
4. Inside Bar
5. Doji (Spinning Top)
   The images below shows the five candle patterns that occurs as any swing low or swing high on any time frame in any market.
   
   
   
   

The last candle pattern from the image is not Dogi but Doji
I will post the next article the next day.

[Fx_Igumz]

EXAMPLES OF TRADE ANALYSIS USING PRICE ACTION SET UP
Trade set up based on Pure Price Action works in all the time frames as such we will be looking at Monthly time frame of EURUSD pairs

EURUSD MONTHLY CHART
The charts below is EURUSD Monthly time frame showing the tools described above

When you look at the chart image above, I numbered it for easy explanations

Number 1.
Price moved in a bearish direction to hit the Support which closed as a bearish candle but at the time the bearish candle closed there was no pattern. A good Price Action trader will wait for the following month candle to close before taking any trade decision. Then the following month the candle closed as a bullish candle at the support. When you combine the two candles (the Bearish and the bullish) it formed a Bullish Inside Bar. This was the reason the price experienced a bullish trend from where I marked number 1

Number 2 from the image above
As price moved in a bullish direction price hit the monthly Resistance producing a very long bullish candle.Since price is at the Resistance, a good Price Action trader will wait for the next month candle to open and close before taking any trade. The following month a bearish candle formed. Combining the two candles for the two months it formed a candle reversal pattern called Bearish Inside Bar. The was the reason price moved in a bearish trend.

Number 3 from the image above
When at the Price Action set up at number 3 you will observed that price moved in a new level.The first set up is called Bearish Pinbar that I marked number 6. If one have placed a sell pending order(which I will explain before I finished writing this article) you will observe that it would not have triggered. so the following month the price moved higher but the time the bull candle was very small. In the following month as the candle closes it formed a massive bearish candle. Now combining the small bearish and the massive bearish candle formed what we call Bearish Outside Bar. You will aggree with me that the bearish trend was as a result of the bearish Outside Bar.

Number 4 from the image above
At number 4, you will observe that as price hit the Monthly support it closed with a candle reversal pattern called Bullish Pinbar. This is the reason price moved in a bullish direction.Whenever you are trading any market using Price Action strategy always wait for the candle of any time frame you are trading close completely before you start looking for the name of the candle pattern.

Number 5 from the image above.
The Pattern formed at number 5 is call Bullish Dogi (Spinning Top). I don’t trade such type of Spinning Top becuse of the excessive long wick. But in any case it is good candle reversal pattern that must be consider when using Price Action strategy to trade any market.

Number 7 from the image above
The number 7 set up is also a very good candle reversal pattern called Bearish Pinabr. As price moved in a new high it formed a pattern that looks like a pinbar but it does not have the full characteristics of a normal pinbar that is why I did not highlight it but price pulled back to retest the resistance forming the normal Pinbar. From there you could see how the price rallied for complete three months without stop in a bearish trend.

Number 8 from the image above
Number 8 set up is called Bullish continuation pattern. Price breakout from the Resistance then formed a good candle continuation pattern called Bullish Pinbar Continuation pattern. Whenever price breakout from Support or Resistance do not be in a hurry to trigger your position but wait for price to react at the Support or resistance to either form candle reversal or candle continuation patterns. The five candle patterns I listed above can be reversal or continuation pattern. Like in this example it is call a continuation pattern but in example number 4 set up it is called a candle reversal pattern. The name is Pinbar.

Number 9 from the image above
Set up number 10 formed a good bullish set up as price hit monthly Resistance to form bullish Pinbar Continuation pattern. When trading any set up using Pinbar it is important to note that if the pinbar have no body the better. It moves the price the more.There are two Pinbar at the same position this is a very good sign of continuation pattern and if found on a support it is a very good reversal patterns.

Number 10 from the image above
I have explained the set up at number 10 when I explain set up number 3. It is the same set up called Bearish Outside Bar

Number 11 from the image above
Number 11 set up is called Bullish Pinbar continuation pattern as price breakout from monthly Resistance. I have equally explained it when I wrote on set up number 8. The little difference is that set up number 11 shows a pullback to retest the the Resistance forming support with a Pinbar pattern.

I will make another image of monthly chart of GBPUSD to let you know that since price Action is applicable in EURUSD monthly time frame that it work very well in GBPUSD time frame and in other time frames.
Below is the monthly time frame of GBPUSD showing similar set up that was I explained in detail in EURUSD monthly time frame

[Fx_Igumz]

If you have any question fee free to contact me for explanation

[Fx_Igumz]

Below chart shows the Price Action set up on GBPUSD weekly time frame

[wm247]

Great information. Thanks for sharing this, mate!

[Heaveneze]

Hello , all i can say is you have done well to open this thread on PA . I am a newbie trying to build my strategy solely on PA with no indicators whatsoever. I have subscribed to your thread also your FB feeds. Cant wait to learn something new from you. After all, we are all here to learn from one another.

Best Regards,
Ambrose, Ghana

[Fx_Igumz]

Below is GBPUSD daily time frame showing Price Action set up using the above tools mentioned above

All the set up on the above chart are gotten from the six tools that made up Price Action and the full explanation are on the EURUSD monthly chart above. Irrespective of the time frame the application and explanations are the same.

We can now look at the same Price Action set up on GBPUSD four Hours(H4) Time Frame Below

We can also see the same Price Action set up of GBPUSD at one Hour Time Frame below

I will stop at one hour time frame. In the next article I will show you candle patterns that cannot be trade when they form. They have the same shape with the patterns mentioned above. I will tell you the reasons why you should avoid them.
I observed that so many traders find it difficult to look for these patterns so I have an Indicator that will help you to scan the candle patterns. Please watch my Video

[Fx_Igumz]

Below is GBPUSD daily time frame showing Price Action set up using the above tools mentioned above

All the set up on the above chart are gotten from the six tools that made up Price Action and the full explanation are on the EURUSD monthly chart above. Irrespective of the time frame the application and explanations are the same.

We can now look at the same Price Action set up on GBPUSD four Hours(H4) Time Frame Below

We can also see the same Price Action set up of GBPUSD at one Hour Time Frame below

I will stop at one hour time frame. In the next article I will show you candle patterns that cannot be trade when they form. They have the same shape with the patterns mentioned above. I will tell you the reasons why you should avoid them.
I observed that so many traders find it difficult to look for these patterns so I have an Indicator that will help you to scan the candle patterns. Please watch my Video

[kneesup]

Thanks for sharing - Looks very similar to PAST (a strategy I really like) in terms of how you identify entries on the higher time-frame - Nice one

[Fx_Igumz]

@kneesup

Thanks for sharing - Looks very similar to PAST (a strategy I really like) in terms of how you identify entries on the higher time-frame - Nice one

I will address your question but before then these are thing you should find out on the 5 set up I pointed out in the thread

1. PINBAR

2. RAILWAY TRACK

3. OUTSIDE BAR

4. INSIDE BAR

5. DOJI (SPINNING TOP)

Set up is not a problem any more to so many traders but Entry Point is more difficult when set up have being established. It is difficult because there are so many ways to carry it out. which includes the following;

1. Instant Execution
2. Pending Order which includes
   (a.) Sell and Buy Stop
   (b.) Sell and Buy limit

Then one have finally chosen any of the above the battle did not end there cos that will not gives you good profit. The timing is also very important. Do not forget the Time Frame we are using as example here. So at what time do you think that the position should be placed?

When you have chosen the time to place the position. You need to move a step further to choose the Time frame were you will place the position. Is it going to be the Time Frame were the set up was generated? If no were do you think is the appropriate Time Frame to use for the Entry point call the Trigger?

When the Above points have being choose, the battle did not still end there that is why I said initially that Entry point is one of the most difficult part of trading. Now after the above step what follows? The next questions are as follows;

1. Should the Trigger be released when the pair is in a Range?
2. Should the Trigger be released when the pair is moving higher highs?
3. Should the Trigger be released when the pair is moving lower lows?

After the above points do you look at the fundamental news release timetable? If yes do you place the trade before the news or after the news? If it is before the news what time before the news or if after the news what time after the news?

When the above step have being chosen, when do you now think that the position can be cancel if it did not trigger?

The answer to the above questions will help you become a profitable trader.

[khanahesan1985]

Very good explanation sir … :35:

[fxmusa]

we need more please share all

[FXIGUMZ]

we need more please share all

I Will continue posting.
It is time consuming

[FXIGUMZ]

Pay attention to the chart below.

DOLLAR INDEX MONTHLY CHART

DOLLAR INDEX WEEKLY CHART

DOLLAR INDEX DAILY CHART

DOLLAR INDEX H4 CHART

[FXIGUMZ]

TRADE SET UP FOR NOVEMBER 8,2013

Non Farm Payroll will be released 08/11/2013, therefore pay attention to the figure when it is out.
Technically, I have six(6) good pairs below that you can consider trading because of the set up it formed.

1. Dollar Index

2. EURUSD

3. USDCHF

4. CADCHF

5. EURNZD

6. NZDCHF

Do not trigger your buy or sell button but use a good strategy for entry
Thank you
:53:

[CuriousBoy]

Thank you!

[FXIGUMZ]

Please, note that the above set up are still valid

[FXIGUMZ]

@FXIGUMZ

TRADE SET UP FOR NOVEMBER 8,2013

Non Farm Payroll will be released 08/11/2013, therefore pay attention to the figure when it is out.
Technically, I have six(6) good pairs below that you can consider trading because of the set up it formed.

1. Dollar Index

2. EURUSD

3. USDCHF

4. CADCHF

5. EURNZD

6. NZDCHF

Do not trigger your buy or sell button but use a good strategy for entry
Thank you
:53:

Please note that the above set up are still valid

[FXIGUMZ]

did you miss these set up?

1. Chfjpy daily chart.

eurjpy daily chart

[FXIGUMZ]

CONTINUATION CANDLE PATTERN

When trading any Market using Pure Price Action strategy two things must come to mind when trying to place position. It is either you are starting a new trend from Support/Resistance,Trendline and Channel when candle reversal patterns are formed or you want to place position in already existing trend.
This write up will address the second one. That is joining a moving trend. Whenever you miss a reversal do not jump into the trade hoping that it will continue to trend in that direction. The thing to do at that point in time is to wait for the price at the next Resistance for price to hit. When price hit the Resistance how do you identify that it is a continuation pattern? The candle that hit the Resistance will always break-out from the Resistance line forming a very big candle with wide spread.If you observe that happen wait for the next candle to open and close. It will form a very small candle at the Resistance showing either a doji or a pinbar. The candle can be one or three different candle that will retest the Resistance line forming a good candle continuation pattern.

The image below you will you to understand the explanation above