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Simple, Powerful and Effective Price Action Trading Strategies

  • #481
  • Mar 26, 2015 10:48pm Mar 26, 2015 10:48pm
Yeah it's always nice when you see strong weekly signals to back up your daily trades.

Just some food for thought for the EURUSD to finish off this week... looks like resistance is holding and the market may sell off from this bearish rejection candle signal.

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The markets have been very churned up this week so traders should be extra vigilant with their trading decisions. It is hard to find good PA setups at the moment, and is probably going to be one of those 'hurry up and wait' weeks.

Looking at the EURUSD today - an inside day recently formed within some bullish market momentum. We're sitting right under some resistance here, but because price is now closing on the bullish side of the mean, and the mean value was starting to vector upwards - we were looking at a potential bullish breakout.

Now the situation has changed just by one candle, with the daily chart is communicating a different picture.

It's always tricky trying to anticipate price moves when the market is moving against a major trend. Is it a reversal, or just a temporary correction? I guess when in doubt stay out.

Resistance clearly held last session, there was a bearish breakout trap and reverse trade and essentially this is a sell signal. The candle closed as an Outside Day/ Thick Body Rejection Candle.

If the setup plays out, we could be looking at a re-test of the recent weekly swing low. I almost looks like this market wants to start ranging.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #482
  • Mar 29, 2015 8:51pm Mar 29, 2015 8:51pm
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Looking at the charts to kick off this trading week and noticed a bullish swing trade opportunity on the EURGBP while doing a weekly commentary video.

This setup looks ‘text-book perfect’ as old high now hold as new support. Price has demonstrated this by printing a bullish rejection candle after testing the swing level and rejecting lower prices from there.

Retracement entries are up for grabs after a gap down at the market open, but Monday price action is considered a little most unpredictable that the rest of the week – due to the weekend interruption.

If this bullish setup plays ball here, we could see this market push into new higher highs and extend the up-trending momentum. We can see the market is already dropping higher lows and higher highs were, which is a good sign.
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #483
  • Mar 30, 2015 9:15pm Mar 30, 2015 9:15pm
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Last week we looked at the EURAUD daily chart where a bearish rejection candle formed off a resistance level. The bearish rejection candle did have a strong anatomy, featuring a large bearish body. It also aligned itself with the overall weakness in the market.

Last week the market broke through the resistance level - taking out the bearish rejection candle highs. This is the data point we use to determine if the rejection candle trades are a failure.

In the War Room, we've been talking about the idea of trading failed setups like this. In this case a 'failed trade' position here (long) would be working out nicely, and we've been seeing this on a lot of failed setups. A breakout in the opposite direction is usually quite decent.

But for those who are on the sidelines - we're waiting for the old resistance level to be tested as new support. It's here we are standing by for a bullish price action signal to get us in with the developing bullish momentum.
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #484
  • Apr 6, 2015 8:25pm Apr 6, 2015 8:25pm
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In the previous commentary, we highlighted a bearish rejection candle that didn’t work out – despite how good it actually looked. A reminder that even the best looking setups can fail.

In TheForexGuy forums and in the War Room, we've been seriously exploring the possibility of the failed trade breakout method. The methodology is simple – if you look back through your charts, you will probably find good setups that didn’t work out the way you anticipated, actually produced a massive breakout .

This EURAUD trade setup highlights this scenario beautifully. A good looking bearish rejection candle didn’t work out as intended, and blew out through the stop loss… and kept going.

A reverse trade setup here, where you flip the switch over to a bullish trade position would have recouped losses, and produced positive returns.

There was also an opportunity for traders to get long here with conventional price action trading which was covered in our War Room ‘Chart of the Day Commentary’ – a double bullish rejection candle combo formed on the first bearish retracement, after the failed trade breakout.

Looking forward to exploring the reverse trade method further with other War Room Traders.

If you have any trade setups, or strategies you would like to share, please stop by our Forex trading Forums and share your thoughts with our community. Look forward to seeing you there.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #485
  • Apr 11, 2015 11:16pm Apr 11, 2015 11:16pm
Nice result on the EURUSD posted earlier...

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After the initial breakout trap & reverse trade, the market went back up and re-tested the resistance level. This probably would have freaked out a lot of traders short here, but for those who did exit, there was a second chance to get short again.

A second bearish rejection candle formed as the resistance was respected a second time. The second signal made our bearish bias here much stronger because both time the level was tested, we got a pretty heavy bearish response.

So the second signal pretty much took off the next day and continued selling off for the whole week. Even through we haven’t reached support yet, this trade has already offered some really nice pips for those to capitalized on the down move.


Looking at some short signals that could produce some good moves next week one some AUD pairs...

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See more Price Action Analysis: www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #486
  • Apr 13, 2015 12:42pm Apr 13, 2015 12:42pm
our Ausie trades playing out well ...eyes on 0.7230(auchf)
  • #487
  • Apr 15, 2015 6:41am Apr 15, 2015 6:41am
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Here is my observation on CADCHF yesterday's price printed an inside day candle the breakout may push the price up to the nearest swing level (0.7915)
  • #488
  • Apr 15, 2015 10:22pm Apr 15, 2015 10:22pm
Yes that market looks very buoyant above the mean value - and we could see an inside day breakout up to that level you highlighted. Good luck with that trade

Looking at the USDCAD also, big price event - daily range has been busted.

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USDCAD has been playing the back and forth ‘tennis match’ between two containment lines, the upper resistance and lower support of this daily range.
We’ve had a couple of good price action range signals which did produce nice returns as price bounced through the range cycles.

The recent test of the support level did offer a small bounce but in the end, the bears re-grouped and charged straight through that support level like a hot knife through butter – pushing the market outside the range boundaries.

Now we’ve seen the breakout, we’re looking for the re-test – which is basically the holy grail of swing trading. If the market does re-test this level, watch out for bearish reversal signals like a Rejection Candle or a Breakout Trap & Reverse move to form a Bearish Outside Candle.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #489
  • Apr 16, 2015 3:48am Apr 16, 2015 3:48am
I am watching the same level on USDCAD thanks for the update it makes my confidence in the level I am looking at to be stronger. I have a question though, based on the EURAUD you posted on April 7th I thought the entry should have been determined by the price action at the resistance flip to support. Am I missing something? Please show me the way
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  • #490
  • Apr 16, 2015 4:09am Apr 16, 2015 4:09am
You're mixing up two different posts.

That post you are talking about is putting an idea forward that failed trades could be used as a trade signal themselves. As you can see as the bearish signal failed, a large bullish move was born that could have been very lucrative. Obviously this is a work in progress at the moment.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #491
  • Apr 17, 2015 4:39am Apr 17, 2015 4:39am
Interestingly CADJPY had just broken out of its daily range, waiting for a retest of the resistance turn support level and then join the bullish train with respect to the price action
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  • #492
  • Apr 21, 2015 3:08am Apr 21, 2015 3:08am
Definitely Sepramfx,


There is a large bearish rejection candle sitting there now pointing towards lower prices. A mirror images of what's going on with the USDCAD right now.

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www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #493
  • Apr 23, 2015 6:28am Apr 23, 2015 6:28am
Anyone who watches the US stock index...

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Looking over at the big US stock index today – the S&P

I am eyeballing this bullish rejection candle that demonstrates price is respecting the rising trend line on the daily chart. I don’t use trend lines very often, I personally think they are overused by many, and traders easily turn their charts into something that looks like a star chart.

This trend line is very dominant on the daily chart and if you zoom out you will see what I mean. Price is clearly using the trend line as linear support which is squeezing price into an overhead resistance level – creating a price wedge.

Generally these ‘wedge breakout’ lead to violent breakouts and sometimes a setup like this occurs which can help you get in ahead of the move. I am not saying that the market is guaranteed to breakout higher here – just that we’ve got a strong bullish rejection candle denying moves into lower prices, and holding at the trend line support.

If we do see this signal play out and push price through that resistive containment line, we could potentially looking at a nice move up for the S&P.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #494
  • Apr 24, 2015 10:07am Apr 24, 2015 10:07am
Quoting snarlyjack
Hi Digf, Nice talking with you again! Hope your doing great! After years of trading, I think I have found the secret to it... It's all about reading price action and trading off of levels. The price action will give you the signals and the s & r will give you the levels. What your doing is mapping out the market. It's a super effective way to trade the market. Their is no 100% way to trade the market. Their is no holy grail. But this way of trading is as close as it get's. What a person needs to do is learn how to trade using price action...once...
Dear Snarlyjack

Is it possible to allow me to send you a private message ?. How do I do that ? I went to your profile but did not know how to do it ? Please forgive my ignorance . Thank you
  • #495
  • Apr 25, 2015 9:53pm Apr 25, 2015 9:53pm
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At the closed of last week this market dropped a nice beefy looking bearish rejection candle. The EURGBP daily chart is obviously moving downward, just recently taking out an important support level and now stepping through lower highs.

Myself, and some other War Room Traders have already taken a short position here earlier after a bearish breakout trap and reverse trigger. Big shout out to Vas in the war room for pointing out the signal.

After the setup triggered, the market went into a holding pattern under support and I was questioning whether we were going to see any bearish follow-through. But the bearish picked up the pace again and the EURGBP started moving lower.

Now another bearish rejection candle has formed aligned with the fresh downward movement. The 'thick bodied' bearish rejection candle demonstrates higher prices were rejected as price retraced into the mean value. A good sign the downtrend is intact and the market is ready to make it's next move lower.

Lets see how this one pans out over next weeks trading.
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #496
  • Apr 28, 2015 5:46am Apr 28, 2015 5:46am
Good day Dale Wood I always appreciate your way of reading the chart. I just notice a descending triangle on USDJPY Daily chart. The break out may be very aggressive. What is your take on this?
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  • #497
  • Apr 28, 2015 5:55am Apr 28, 2015 5:55am
I think yes there is going to be a very strong breakout once this price wedge consolidation is broken.

It's been a common pattern for the USDJPY in the last few years.

Price squeeze -> Breakout -> Price Squeeze -> Breakout

All have been to the high side, but I think there is going to be an aggressive bearish correction soon. Pure speculation though.

No strong indications yet to get short though. Trading inside the consolidation is pretty rough.
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #498
  • Apr 29, 2015 5:47am Apr 29, 2015 5:47am
Quoting DnBPriceAct
I think yes there is going to be a very strong breakout once this price wedge consolidation is broken. It's been a common pattern for the USDJPY in the last few years. Price squeeze -> Breakout -> Price Squeeze -> Breakout All have been to the high side, but I think there is going to be an aggressive bearish correction soon. Pure speculation though. No strong indications yet to get short though. Trading inside the consolidation is pretty rough.
I must confess to you DALE WOOD you have helped in clearing a whole lot of trading jargon moving in Brownian motion in my head. For three month now I have been consistent in my trade looking back at my trade history its really been lovely like never before. I see no reason why I should trade anything lower than Daily chart anymore. I begin to wonder what will happen by the time I join the WAR ROOM! I think it will extract the real trading genius in me. Thanks allot.
  • #499
  • May 3, 2015 6:34pm May 3, 2015 6:34pm
Quoting sepramfx
{quote} I must confess to you DALE WOOD you have helped in clearing a whole lot of trading jargon moving in Brownian motion in my head. For three month now I have been consistent in my trade looking back at my trade history its really been lovely like never before. I see no reason why I should trade anything lower than Daily chart anymore. I begin to wonder what will happen by the time I join the WAR ROOM! I think it will extract the real trading genius in me. Thanks allot.
Thanks very much mate, I am happy to hear about your success


At the close of last week the EURUSD left us with a hint of a potential mean reversion next week.

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EURUSD along with a few other major pairs exploded higher last week thanks to some USD weakness. Towards the end of the week, the USD started to build strength again causing big sell offs in pairs like GBPUSD & AUDUSD.

The EURUSD daily chart has been slow to respond to the USD weakness, maintaining buoyancy into the week close, compared to other pairs. The Friday candle however, did drop a bearish rejection candle at the week close. This could be an early warning signal to a potential mean reversion. The market is gaped away from the mean so there is definitely a high chance of one.

A break of the lows could be the trigger needed to fire off the correction, but just be mindful of failed Asia session breakouts.

For more information about my Forex strategies visit me at www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #500
  • May 4, 2015 5:14am May 4, 2015 5:14am
Thanks DALE WOOD although for now I drill myself to trading with the trend only but I do analyze a counter trend trade set up but is not all that I trade because I am trying to get firm hold of the rhythm.
But I noticed that sometimes you don't take a counter trend trade some time you take a counter trend trade called the mean reversion set up. My question now is how do I weigh the quality of the mean reversion to be taken from the one to be ignored?
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