Easy Price Action.
This method, I hope, will attract the newer traders to see that it is possible to trade by just using a bar that has the close near it ends, say within 20% of its h/l. The reason for this is if we simplify the 2 major price action (PA) bars - the PB (pin bar) and OB (outside bar) we will get a bar that closes near its ends - thus we can generalize and say that and end bar (hence forth referred to as EB) is bar that has properties of a PB and/or OB. It is a simplification but a nice one for starters. Once we have made this simplification all we do is look for such bars - EBs. Since the original PA based method is highly discretionary, I have simplified that method by creating some steps as below. The key is to spend time in determining the higher time frame -(daily TF) trend using the EB bar or any of the usual PA bars and then using the lower time frame EB for entry and exit. The inside bar (IB) is also very powerful in determining trend so once one gets comfortable with EBs, one can start incorporating the IB. So we start with the tenet that just looking for bars that close near the ends are good indication of the next bars trend.
1> Open a daily chart. Look for a bar that close near the top 20% or bottom 20% percent of that bar. Smaller the percentage, the lesser signals you will get. The accuracy does increase with lower % but if you make it too small then you will get very few signals or you may not get any signal at all ! The important thing is the principle - a bar that ends very close to its hi/lo is showing a lot of interest to move in that direction so we take that information and use it to enter the trade AFTER having confirmed the trend from the higher time frame.If you are using other ways of determining trend on the daily, then the EB will still serve for good entry and stop loss signals. You could make the percent smaller on the EB if you wish, especially if you want to go to lower TFs
2> Now wait for a 1hr EB.
3> Now enter only if/when the 1hr high/low is broken in the same direction as the daily. Add a buffer to the h/l. I add 5-10% of the 1hr bar's range. Also the ATR of the bar needs to be more than 100 period average. This tells us that we have a increase in momentum on this bar. The attached indicator takes care of the ATR too.
4> Stop loss below/above the 1hr bar. If 1hr bar does not have a good tail (more than 3% its range) than use the low of the previous bar (assuming we are going long). Indicator takes care of this condition too.
5> Take profit based on support, resistance, discretion etc.
Variations:
1. As one gains experience price action bars like outside bars, inside bars and pin bars may be used for step 1 ,2 and 3 .
Easy to test this strategy, indicator attached - indicator is just to help identify the bars that have close very near their ends.
It is also fairly easy to build an EA for this method.
Hopefully you will ask me questions and I will answer them so that we can take care of the finer details.
Please consider this work in progress.
Also I would like to take this chance to thank the folks of the James16 thread who showed me it is possible to trade this way.
Hope you enjoy it.
===============================================================================
This material in this thread are provided for educational purposes only.
Using this material is entirely at your own risk and you are responsible for any losses/profits you
may incur from using this material
===============================================================================
This method, I hope, will attract the newer traders to see that it is possible to trade by just using a bar that has the close near it ends, say within 20% of its h/l. The reason for this is if we simplify the 2 major price action (PA) bars - the PB (pin bar) and OB (outside bar) we will get a bar that closes near its ends - thus we can generalize and say that and end bar (hence forth referred to as EB) is bar that has properties of a PB and/or OB. It is a simplification but a nice one for starters. Once we have made this simplification all we do is look for such bars - EBs. Since the original PA based method is highly discretionary, I have simplified that method by creating some steps as below. The key is to spend time in determining the higher time frame -(daily TF) trend using the EB bar or any of the usual PA bars and then using the lower time frame EB for entry and exit. The inside bar (IB) is also very powerful in determining trend so once one gets comfortable with EBs, one can start incorporating the IB. So we start with the tenet that just looking for bars that close near the ends are good indication of the next bars trend.
1> Open a daily chart. Look for a bar that close near the top 20% or bottom 20% percent of that bar. Smaller the percentage, the lesser signals you will get. The accuracy does increase with lower % but if you make it too small then you will get very few signals or you may not get any signal at all ! The important thing is the principle - a bar that ends very close to its hi/lo is showing a lot of interest to move in that direction so we take that information and use it to enter the trade AFTER having confirmed the trend from the higher time frame.If you are using other ways of determining trend on the daily, then the EB will still serve for good entry and stop loss signals. You could make the percent smaller on the EB if you wish, especially if you want to go to lower TFs
2> Now wait for a 1hr EB.
3> Now enter only if/when the 1hr high/low is broken in the same direction as the daily. Add a buffer to the h/l. I add 5-10% of the 1hr bar's range. Also the ATR of the bar needs to be more than 100 period average. This tells us that we have a increase in momentum on this bar. The attached indicator takes care of the ATR too.
4> Stop loss below/above the 1hr bar. If 1hr bar does not have a good tail (more than 3% its range) than use the low of the previous bar (assuming we are going long). Indicator takes care of this condition too.
5> Take profit based on support, resistance, discretion etc.
Variations:
1. As one gains experience price action bars like outside bars, inside bars and pin bars may be used for step 1 ,2 and 3 .
Easy to test this strategy, indicator attached - indicator is just to help identify the bars that have close very near their ends.
It is also fairly easy to build an EA for this method.
Hopefully you will ask me questions and I will answer them so that we can take care of the finer details.
Please consider this work in progress.
Also I would like to take this chance to thank the folks of the James16 thread who showed me it is possible to trade this way.
Hope you enjoy it.
===============================================================================
This material in this thread are provided for educational purposes only.
Using this material is entirely at your own risk and you are responsible for any losses/profits you
may incur from using this material
===============================================================================
Attached File(s)
It is toooo eazee 
