finnforex daily price action method

Hi everyone!

In this thread I will show you how I intrerpret Forex daily price action by showing some real trades made with real money. I also tell why I took the trade and how it worked.

I use no indicators or fundamentals or news, just raw price and my eye.

Sorry my english is not so fluent, but hopefully somewhat understandable.


I don't recommend anyone to trade anything that way or give any tips. So please don't blame me if the information doesn't work for you or fit your style.

The first trade is USDJPY long (see picture).

open 18.1.2012 @ 76,694
stoploss @ 76,54
close 19.1.2012 @ 77,121
Reward/Risk=2,8

And now full explanation why I took that trade.

There is strong support made by pinbar 8.12.2011 @ 77,121. That support broke through 30.12.2011. Then support became resistance. That resistance tested successfully first time 5.1.2012 by closing under the line. That line is target for the long trade as second test.

There is bullish pinbar formed 17.1.2012 when price rejected support level @ 76,567. Note that its importat to get signal candle's close at the side of trade.

Long open trade level is half way of the pinbar.

Stoploss is placed 5 pips under pinbar low. Thats because you have to allow market to kiss pinbar low without being stopped out.

Reward/Risk criterion has to be over 2:1 to trade to be worth taking.

Have a nice day and see you soon.

finnforex

Hi finnforex!

Very interesting thread!
... I wait for more

Keep on posting!

Hi everyone!

GBPCHF short

open 9.1.2012 @ 1,47518
stoploss @ 1,47978
target @ 1,4507
Reward/Risk=5,3

Explanation step by step:

GBPCHF broke an important resistance 12.12.2011. Then resistance tested first time succesfully 19.12.2011. Markets advanced to previous high but didn't manage to make new high. After that support tested again forming Sideways price action by two nearly equal highs and lows.

Market tested resistance third time but didn't close above resistance 2 (see picture). Next day GBPCHF formed a good looking bearish pinbar closing below both resistances 1 and 2.

Pinbar was good, because:
-nose was greater than two times body
-nose shoots out from preceding candles
-nose makes new higs above resistances 1 and 2
-pinbar close was under both resistances 1 and 2

Because of sideways action, good target for the trade is at sideways support. I didn't target for sideways exact low because there are overlapping candle wicks, whose define rather support range than exact support line.

Stoploss is 5 pips above pinbar high.

There are several options where to open trade after pinbar:
-50% of pinbar
-previous bar's high called "eye"
-body's high i.e. open price at that candle.

Reward/Risk is 5,3 from body high. From eye it was about 7. I decided that it was better to get into trade and not try to take maximum and miss the opportunity.

Have a nice day and see you soon!

finnforex