Price Action and Trading Discussion

Hey DW, Congrats on the wedding (in a few weeks), hope both of you have a great time together., good luck mate

Dan

Hi Dan,

Thanks mate. Lets hope no luck is needed

Hi DW

I know your probably really busy, but if you get a spare min could you have a look at this 5min EU trade that I took which failed (again). It was a break and retest of the asian + previous day resistance, pullback and price action but again price went in the opposite direction. I continue to be taking loosing trades one after the other and i'm wondering if i'm missing/doing something very wrong.



Thanks
Dan

Hi Dan,

Trading can and will be very frustrating.

The only thing on the chart that may have made me a little cautious of that particular bar would be the trading into the RN, as the bar closed pretty much right on it. Now does that mean that I would not have taken it if I was actually trading it, maybe not. Potentially I would have entered on it and taken a loss.

The next move down pretty much stops on the highs and give a move back up to the RN area. You would need the discipline to have a BE in at the RN in case of reversal from it or to TP at the RN giving you a small TP target but that is still all good.

The next rejection of the RN area and just below previous highs is probably a trade that I would have taken but would have resulted in a loss. With the market going sideways I probably would have entered on that.

Trading can be very difficult and will at times test your emotions and patience. When I first started trading I struggled with getting my head around everything also, made some bad decisions payed the price and rode the emotional wave that comes with it. It is something that you can only learn from making mistakes and trading the charts.

The one key thing to remember, if there is any doubt in the position simply dont take the trade. A day of no trades taken is better than a day of losing trades and without doubt the market will always be there to dish up more opportunities.

You must remember that losing trades will always be a part of every traders life. They are a cost of doing business and any traders who says they dont take any losing trades or losing days sometimes even weeks I would be highly suspicious of.

Treat your trading like a business, take it seriously, know your plan, follow your plan. If you take a loss move on the next trade, do not let yourself become emotional about the result. Obviously a sound business cant run on too many losses therefore trading on demo to perfect what you do is the best plan of attack. Record everthing you do, screenshots, keep a diary whatever works for you, then look back on what you did right and what you did wrong, this can help with your mindset towards the whole process.

Trading will take time, sometimes years to perfect and even then you will always learn more. Do not expect too much too quick.

Most importantly of all always practice good risk management. This will allow you to stay in the game even if you do take a string of losses.

If you are struggling with the 5 min charts, potentially have a look at trading the longer term being daily, 4 hourly and hourly. The principles are exactly the same. By doing so this it will give you much more time to analyze the chart before putting your position in. Obviously this take a lot more patience as the potential positions become less the higher the time frame you trade.

With higher time frames obviously your stops will be wider, simply reduce your position sizing to match your risk management and all is good. You can still absolutely make good pips and good returns from trading the longer term charts but you must develop a lot more patience. Do not even look at the 5 min charts as that will tempt you to trade them.

EU daily.

Hi DW,

Thanks for taking the time to reply to my question with such detail, I really appreciate it. I've now moved up to trading the 15m chart and i'll see how that goes for a while. One thing I wanted to ask is, on those daily resistance levels you have got, are you looking to play a short as a rejection of those levels or wait for the break and continuation. This is something I get confused about, when I have my levels Im not sure if I should be playing a continuation or rejection.

Thanks
Dan

Hi Dan,

No problems at all.

Well to maybe make the situation a little worse for your, potentially you could trade both. If there is a rejection at resistance where is it likely to go back to before stalling ? Potentially the top of the congestion area. That is when a continuation move could come into play. I would say as long as price is making higher highs and lower lows then I would be inclined to say I would be looking for longs. But a good PA signal from resistance is definately an option.

Just taking a look on the 4 hourly charts, half an hour late for the start of the bar though. Not much really grabbing my attention. GBPNZD and EURAUD could have some potential to head lower.

GBPNZD short triggered on 4 hourly @ 1.89670

Due to this one being triggered EURAUD is taken out of the equation for now.

Hi mate, thanks for the reply. Do you mean higher highs and higher lows ? you would be looking for longs.

So do you think were in an uptrend then ?

Cheers
Dan

Hmmmmm ya that oops

Well the trend is definately still down this move up may potentially just be a correction, I guess only time will tell that.

All we can do is trade what we are seeing on the charts at the time. Overall trend is still down, short term trend at the moment is leaning to the bullish side. If the break of the congested area can hold that may only give that upwards momentum more strength

Its the sideways markets that will usually shake most traders about as most area always looking for that "big trend"

So when it is ranging and those looking to trade breakouts and trend moves will simply get whipsawed around. This is where damage is done to accounts.

You need to develop the ability to range trade also, as in my opinion I would say that the market spends much more time moving sideways than it does trending.

It will move one way, then consolodate then move again then consolodate.

3 phases to the market. Trend, Range, and Congestion.

All of these will call for different approaches to how you trade and most importantly stop loss and TP placement.

There is no room for GREED in trading and the quicker you can get that emotion out of your trading the better off you will be. Use the obvious levels to take profit and then move on to the next one. If not taking profit use BE at the very least if attempting to capture a move and trail it.

Target achieved.

nice trade DW

on that particular trade did you wait for the 2 candles after the green PB to close after entering ? Any reason why you did not enter on the break of the PB ?

Cheers
Dan

Hi Dan,

Well there is a couple of reasons as to why I didnt trade the break of the pinbar. First of all I was not at the charts at that point in time as I am basically only doing the first 4 hourly close after the LO.

Secondly the pattern I was looking at (although it is not exact to the pattern in the true sense of it) is an evening star pattern.

I find that Evening Star patterns on longer term charts can be quite reliable, it just means that you will be getting in one candle later than simply trading the break of a doji candle.

So we had one indecision, a small pin, another indecision and then the down bar that goes deep into the previous up bar. That was my reasoning for this entry.

Hi guys,

Was a bit busy tonight so only just getting to look at the charts now.

Looking at EURNZD on this particular trade, have a pending order set, im sure you can work out my reasoning for this by the image.

Looking for a short trade in the direction of the overall trend.

Pending order now closed without being triggered.

Looks like the first key resistance area on the EU daily held firm for now.

yep, was just looking at EU daily aswell.

Im thinking a break and retest below the low of that boxed area would be good for a short following the overall major trend ...what do you think. Anything else you looking at in particular to EU ?

Cheers
Dan

Hi Dan,

Yes it could be a key area to keep an eye on.

Well the attached image shows some lines that I drew on the 5 min chart 2 days ago and have not moved them. Interesting to look at it now and see how price has reacted at those levels.