Price action momentum trading

Here is my trading "system"! Simple and effective. Hope you like it.

No Specific exit strategy. I exit my half lot at 1*Sl so that my trade becomes free. Then i let other half run with fast trailing of tight stop. I generally let PA guide me. if i see my side winning, i stay in longer. I also take profits when i reach may daily target of 40 pips. So i exit on variety of reasons.

No indicators. I used them and didnt like them. I find more indicators less reliable. It all becomes confusing hell.

Price action momentum trading


Background- I had been a successful trader in higher time frames (HTF, meaning 4h and above) using classical chart patterns like double top etc. However when I was forced to trade shorter time frames, I realized my earlier tricks don’t work anymore. I studied, learnt, tried and cried. Thankfully I found some success with dance ( http://www.forexfactory.com/showthread.php?t=224697 ) now active as choros ( http://www.forexfactory.com/showthread.php?t=236210 ) especially constrainment trades. But touch trades were a big pain for me. Either I missed them or lost money. I stayed awake whole nights and really wondered if short time frame trading was possible. But thankfully I didn’t give up. Then one day I read a post by kostas (http://www.forexfactory.com/kostas1 ) and I had my aha moment. Price action!! PA!! That’s all to the game. I have been successful since then. Since I benefited greatly from generous experience and guidance of others in FF I am here sharing my system. Let me warn you it sounds too simple to be true, but it indeed is.

Warning: This is work in progress. I am posting it only because of request from friends. Please give me time to make a better manual.

A war- any market is a war- A war between buyers and sellers; A war between bears and bulls. All a trader has to decide who is winning and then join in when winning army starts its attack. Unfortunately there are no straight winners in this war. Territories are being won and lost every minute. Every tick is a small victory for one army and loss for another. Then how does one decide who is winning? Territory! Whoever captures more territory PER ATTACK is winning. That’s easy. But the problem is that even a winning army is not always fighting. They consolidate, take rest and let losing army capture few posts. And then they march ahead recapturing all lost posts and some more. It’s important to be with winning army just when they start their attack. At other times. even supporters of winning army can become causalities. This is precisely what I do. I see who is winning and join their march when they start their attack. I stay outside when winning army is taking rest or when losing army is making small gains.

Territories- pips gained or lost per candle is key to finding out who is winning between buyers and sellers. If you see large bull candles bulls are winning. If you see large bear candles, bears are winning. If you see both none is winning- stay out. I just see large candles and join that force. It’s as simple as that. However, if you have been trading for some time you will recognize that large candles are in essence “impulsive moves”. But I don’t want to confuse anyone. Also by large candles, I mean “comparatively large candles”. Candles before a candle decide what’s large. Sometimes even candles after a candle will give clue that a candle was indeed large.

The march- It’s critical to join winners only when they are gaining grounds. At other times there maybe causalities even in winner camp. How do we know when winners are not resting but marching ahead? When they gain new grounds and push back losers army! Yes it’s simple. Lets not make it complicated

Summary- SO,

 

1. When I see large bullish/ bearish “momentum” bars, I decide to join that side.
2. Timing of joining is critical. I join only when I know my side is marching. When I am bullish I wait for price to go ABOVE previous candle high to enter. Breach of previous candle high is indication to me that bulls are fighting and not resting. Similarly when I want to sell, I wait for breach of previous candles low before joining the selling. This means my entries are always “stop loss” orders.
3. Entry points- I love to enter the war at critical battles. When I know loss of a particular battle is going to crush the opposition that’s time to join in. I look for critical boundaries between bulls and bears. When I know loss of a particular boundary is going to result is major gains for winners then I join.

My preferred entries-

A. Rejection bars: They show that winning arming is pushing losing army back. As always, entry is above (buy) or below (sell) the pattern not at-market.

B. Failed reversals: Early in the trend, market will often try to reverse the move. This happens because losing army fights hard initially and tries to reclaim territories. Failure of any such attempt will discourage losing army and results in gains for winners.

Entry points, SL : Stop loss entries are safest. It’s generally safe to place and SL entry order few ticks above/below setup patterns. Once entry is done, first stop loss can be placed in the other direction of setup candle. For examples, in a bearish rejection bar, place SL sell just below the low.

Rules:
1. Any time frame any currency.
2. Trading active moving markets only. Preferably NY and London session

Please be patient. More examples and explanations will follow. Here is a live example from today. EU 15 Min


Disclaimer: I am simple law abiding guy. I don’t want to be sued or to ever lose my honour. Please read this disclaimer carefully.

Financial fraud: This information is provided in, as-it-is condition absolutely free of cost and without any liability. I never trade anyone else’s money or manage funds. Please be alert of any financial fraud and inform moderators immediately if someone approaches you asking for money.

Liabilities: I am presenting my personal opinions. Any organization, including but not limited to my employer, or person, does not validate, endorse or supports information posted here. Everyone takes independent trading decisions. My employer or I or anyone else may or may not hold direct or indirect interests in securities or markets analysed here. These interests have no direct or indirect relation to contents of this thread and maybe in line with or contrary to what’ s advised here. No person or organization accepts any responsibility or liability for any favourable or unfavourable consequences arising out of direct or indirect use of martial presented here.

Trading risk:Investments in financial products are subject to market risk. Some financial products, such as currency exchange, are highly speculative and any investment should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This thread is an information site only. Accordingly, I make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person.

You should obtain individual financial advice based on your own particular circumstances before making an investment decision on the basis of information on this website. I recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility.

More, please...

Thank you for first reply mate. For now, my eyes are just too tired watching those charts. Too much action!! ... Appreciate first feedback. Will post more sure. my purpose here is to show everyone how we make simple things unnecessary complicated!

Congratulations for your first FF Thread

As Kostas does you are saving al lot of newbies accounts like mine, perhaps you can consider changing your nick from Survivor to Savior .

Happy trading

As I am learning Choros, I would love to read more of your posts.

Please do post more, as I am eager to learn more about your system as well.

I'm listening

I feel honored to be present at the start of what will surely be a great thread for us that follow Choros and FF community as well... This is a good time to congratulate you Survivor, on achieving what we all talk about in some stage of our trading careers...

"Make this or any system you trade your own"... I think you've done it here... cudos... to a great contributor in Choros and now a host at your own thread

I'm listening too, looks like a great method, easy to understand.
Thank you!

Count me in Buddy! I have subscribed.

Great method IMHO, like you said we tend to complicate things unnecessarily, i like your method, simplicity, but how complex can simplicity be, so ithink you have a lot to teach buddy, i am in!

Reading candle action and price action is as necessary as learning the A to Z alphabet in order to read and write.
This is what this simple trading style is all about.
Please do not complicate it with indicators. Thanks.

very cool, look forward to more post

Congrats Survivor!
Always helping and sharing.
Thank you!

Thank you everyone for encouragement friends.

Did i explain it properly? We look for a large candle(winning army) followed by smaller candles(losing army). We enter whenever price goes one tick above or below previous candle. Its as simple as that.

Konata i read your pm. The area you mark is not for beginners. initially lets concentrate on simple high probility trade. I will give tons of examples as we go ahead. that will help us all learn

USDCHF 1H... please ask questions. Please note that it's only for learning. its not right liquid time to trade. Funny things happen in early asia. better avoided.

EDIT: oops i am too sleepy. i missed that large blue bar at bottom. That shows good buying strength. let me update my chart

Nice .

And what are your recommendations to Take Profits?

Price action momentum trading

Are this trades correct buddy?

You are right there with me!!

GU looks ok to me. EU battle is evening out it seems. Could have waited for a break lower before selling. Thats how i play it.

Also note big bearish momentum earlier in chart.PAMT (Price action momentum) traders would have sold it much higher and would be having beer by now