Price Action, Pro, And Ichi Trading with 2ndskiesforex

The video which covered frequency & rhythm is:

Forex Price Action Webinar with FXstreet.com – Chris Capre

Are mt4 indicators provided in the course that cover this instead of having to use a calculator?

Thanks

The video is 79 minutes, do you have the time you are talking about?

At 18:15 he starts to talk about frequency. It's actually quite an interesting video.

OK. I'll check it out.

But one of your questions was about indicators. He doesn't sell indicators but does shareif he has what you are asking about. For instance in his Pro course, he has a strategy he developed and did share the indicator. Me personally, I am moving away from MT4.

Btw he has a webinar shortly.

Hello Tradewiser,

I was recently notified about this thread which am happy is going on, but noticed your question and wanted to respond.

Yes, this is a good idea and am working on this. Am working with my programmers to either implement this for MT4, or possibly into a specific trading platform I am building with a team, so definitely an option. Also considering doing it with a FXTrek Intellicharts which is a specific charting package I use.

But great idea as I have been thinking the same thing so when we release this, I will definitely make a notification of this.

Learning how to read these frequencies becomes a highly effective tool for trading price action so hopefully can release it soon.

Kind Regards,
Chris Capre
2ndSkiesForex.com

Hola my friend...

There you go. If you have any more questions, fire away.

Thanks for your reply Chris.

I was just looking at the details of your Advanced Price Action Course on your website and you mention that it includes "quantitative data". What do you mean by that? Is the data updated?

Thanks

Hello Tradewiser,

In regards to your question, quantitative data would be statistical data on various price action formations. We've tested them based on a set of rules over the last 10yrs.

So when trading specific price action patterns, you know exactly how that pattern tests out on each pair and time frame. This allows you to trade with greater precision and understanding of your edge.

We give the exact entry, stop and limit to the pip for each pattern and how to trade them using the stats - so this is what I mean when I say quantitative data.

In terms of the data being updated - yes, we update it every year. The data set is large enough so once a year is more than sufficient.

Hopefully that answers your questions.

Should you have more, feel free to check out the price action course page here or ask via this thread.

Kind Regards,
Chris

Very good article...

http://2ndskiesforex.com/strategies-...u-should-know/


Many people will talk about their Risk-Reward ratios such as it’s important to have 2:1, 3:1, or whatever to one ratio, but this is just the tip of the iceberg of risk-management and leaves you uninformed and un-empowered. You can actually have a 3:1 Reward-Risk ratio and lose all the money in your account. You can also have a 1:1 Reward-Risk ratio and make money day in day out.

.

Impulsive and Corrective Price Action

I wanted to write an article about he base model from which I trade price action. I have written on the basic components for my working theory of price action which you can find here, I will build upon this by talking about impulsive and corrective price action moves.

If I had to look at price action as a structure, it would be a pyramid, with the base being how price action is a reflection of order flow (particularly executed transactions). The next part (or level above) from that base would be understanding price action through the lens of impulsive vs. corrective moves.

I will briefly describe what impulsive and corrective moves are, giving the key characteristics of each type of move. Then I will discuss what they generally communicate from an order flow perspective. After this I will talk about what is the general pattern they will form, and how you can use this for your trading.

What Is An Impulsive Move?
An impulsive move is one whereby the market moves quite strongly or heavily in on direction, covering a great distance in a short period of time. These moves tell you when the imbalance between the buyers and sellers is really strong and there is heavy participation from the institutional side.

Logically, more money can be made during these impulsive moves, as they cover more points or pips in less time. They are generally more volatile, and thus provide us with great opportunities to get more R (reward) with less risk since the market will stretch more easily in one direction. But no matter what, we want to be trading with these moves as much as possible, not against them.

Three Characteristics
Impulsive moves tend to have three characteristics common amongst all of them. These three can help clue you in to when an impulsive move is starting, or in play. They are;
1) Large Candles (bodies)
2) Mostly of one color (blue/bullish, or red/bearish)
3) Closes towards highs/lows of the move

Let’s examine all three points.

1) Large Candles communicate to us there is strong participation and order flow behind this particular candle. Strong imbalances during a candle will translate into larger candles than the norm. When you see large candles forming consistently in one direction, they indicate strong order flow behind them from the institutional side. Since the larger players are behind them, they give us a clue of the direction we want to take, essentially surfing the waves they (institutional) are creating. Take a look at an example below.

Image 1.1 – EURUSD 1hr Chart


Notice how in this chart, the candles that stand out the most are the red ones, particularly the ones towards the top left? They are the largest in this entire series, communicating strong order flow behind them.

In fact, if you look at candles 1-8, all but the blue doji in the middle are solid in size. Yet candles 9-17 are all contained within the highs and the lows of last 2-3 candles in this down leg, communicating weak order flow and participation behind them.

As a whole, impulsive moves tend to have large candles (bodies and wicks) behind them.

2) Mostly of One Color – this ingredient is also common amongst impulsive moves as it communicates something critical to us – time. More specifically, how the bulls or bears were able to maintain control of the price action over time.

In the chart above from image 1.1, you will notice in the down leg, there is only 1 blue candle, meaning for 8 out of 9hrs, the bears had complete control of the market (almost one full trading session).

By maintaining control over time, the market is communicating who is the more dominant side because they are not allowing the other to take control of a candle for that time period. The greater the imbalance is between the bulls and bears over time, the greater the dominance is from either the bull or bear side of the market.

It is important to look at price action not just based on structure of the candles, which is one dimensional. Price doesn’t just move in a vacuum, it moves in time, and HOW price moves over time can communicate a lot of information to us as traders.

3) Closes Towards the Highs/Lows of the Move – If you think about it, when the market is in a strong trending move, let’s say using a 4hr chart, and the candle that closed in the direction of the trend (in this case uptrend) has a very small wick, thus a strong close towards the highs, what does that communicate?

It should communicate that there is very little profit taking from the players behind that candle. If they were worried going into the close of that candle about an upcoming resistance level holding, or perhaps the bears may take control of the market, they would likely close their position, or take profits right before the candle closed.

But when you have a strong close with a very small wick, this usually indicates very little profit taking, thus a confidence the move will likely continue. This is highly useful to us as traders, and will be common amongst impulsive moves like in the chart below.

Image 1.2 GBPUSD 4hr Chart



Starting with the top left of the chart using candles 1-4, the price action moves in a sideways corrective fashion until candle 5, which if you notice, increases in size tremendously (rule #1 of impulsive moves). From here, price continues on selling for the next 9 candles, 10 total in a row, or 40hrs of selling (rule #2 of impulsive moves).

But looking at the candle closes, you can see most of them are towards the lows, showing very little profit taking along the way, thus suggesting likely continuation.

Only until candle 11 do we get a strong rejection, and from here price then moves sideways in a corrective fashion until candle 16. But what happens at candle 17? The candle expands (rule #1) telling us the trend will likely continue.

So these are three examples of the common characteristics of impulsive price action moves.

What About Corrective Moves?

The good thing about corrective moves is they are easy to spot, since they have the inverse characteristics of impulsive moves. Meaning, they tend to have;
1) Smaller Candles
2) Greater mix between red/blue or bull/bear candles
3) Closes more towards the middle with larger wicks

Thus, if you apply the logic of impulsive moves, you can easily understand and identify corrective moves.

How Do They Relate to Each Other?
Generally, impulsive and corrective moves tend to have a common pattern or dance with each other. The general pattern that tends to play out between them is the following;

1) Impulsive moves about 75% of the time are followed by corrective moves. These corrective moves can either be horizontal, slightly against the impulsive move, or even slightly in the same direction, but they denote a change in the order flow and participation.

2) 75% of the time, these corrective moves are followed by impulsive moves in the same direction as the original impulsive move. Why?

Because those who are in control, rarely give up control unless encountering a strong counter-trend force. Even then, they usually make a second attempt to take out a recent swing high or low before giving up.

Only when they fail a second time will they usually exit the market, either waiting for a new chance to get in on a pullback, or reset completely. This is why V-Bottoms are quite rare and only form about 10% of the time. Usually there is a 2nd bottom, which is could be a LL (lower low), HL (higher low) or a similar low.

3) This series between the impulsive vs. corrective moves will generally continue until the market encounters a counter-trend impulsive move, which usually translates to an equal or greater force on the opposing side of the market. Very similar to Newton’s Laws of Motion about an object in motion will stay in motion until acted upon another object with equal or greater force.

Let’s look at an example below.

Image 1.3 AUDUSD 4hr Chart


Glancing at the chart above starting with the bottom left at move A, you can see how it was an impulsive move, followed by a corrective move (B). This series continued until…it hit a counter-trend impulsive move in G. It was only until here did the bulls finally relent control as the opposing bears took control of the price action with the bulls likely taking profit or exiting all together, especially after the low point from move D was taken out. Ironically, what followed move G, was a corrective move after, followed by the bears continuing the down-leg.

In Summary
This is just an introduction to how I approach price action, but it is highly effective for many things, such as;
-finding the right direction
-staying in the trend
-spotting great pullback opportunities to get back in with trend
-knowing when the market will continue and when the market is likely to reverse
-how to find some of the more profitable moves in the market (impulsive)
-knowing who is in control of the market
and more…

There are many other facets and subtleties to trading impulsive and corrective price action, but this is a good introduction to my base theory and model for trading price action. If you can learn to spot the impulsive and corrective moves in the market, they can greatly enhance the odds of your trades along with helping you spot key characteristics in the markets.

To learn more about trading impulsive and corrective price action, visit my website at 2ndSkiesForex and check out my price action course whereby I teach you how to trade impulsive and corrective price action.

Forex Price Action Setups - AUD/USD Pin Bar Off Key Support - June 26th


AUDUSD
After ending last week with a strong sell-off, the pair finally found some footing today after forming a piercing pattern to create a short term bottom, followed by a pin bar just a few hours ago off a key support and role reversal level at 1.0009. This is after 16hrs of straight buying, so short term there are some buyers underpinning this pair. The Aussie will need to clear the short term resistance at 1.0075 before bringing in new buyers and releasing some of the downside pressure. From here, it should make its way up to 1.0130 before encountering sellers who may wish to form a LH from the recent swing highs at 1.0230 so watch for price action triggers here.



Global Market Commentary:
Stocks as a whole treaded water with modest gains in the US while the Euro fell to its 2week lows vs. the USD, mostly due to a decent rise in the US Home Prices. Keep in mind, most of the US home buying is from foreign investors (read Chinese & Brazilians) so this does not say much about the greenback economy.

Risk was thus on for the day with Gold dropping to $1572 while the DOW gained about 32pts.

The main things to note in Europe are the Pain in Spain with yields increasing, and now Cyprus entering the frey of countries to ask for a bailout (expect others soon - likely Italy if no Eurobonds deal is had). Frau Merkel is putting the kabbash on the shared total debt liability (which is just a plan to make Germany foot the bill for almost everyone in Europe) with her statement amounting to her saying 'Nein' towards this plan. Keep in mind Egan Jones just downgraded Germany from AA- to A+ which does not help the EZ crisis. The longer Merkel continues this mantra of 'Nein', the more tension will be placed on Italy and we shall see if they are next to request a bailout with Italian yields becoming quite untenable.

Upcoming Economic Announcements:

CNY Leading Index 00.00GMT20.00EST
GBP BBA Loans for House Purchase08.30GMT04.30EST
EUR German Consumer Price Index -12.00GMT08.00EST
USD Durable Goods Orders 12.30GMT08.30EST
USD Pending Home Sales (YoY)14.00GMT10.0EST

AUDUSD
After bouncing and continuing higher from the pin bar we mentioned yesterday, the 1hr chart on the Aussie looks like the bulls are squeezing out the bears trying to take out the short term resistance at 1.0089. Although the bounce off the oversold lows the other day has the presence of being more corrective than impulsive, the short term picture although timid favors more upside.

We just climbed for 3hrs in a row and the 20ema continues to underpin this pair on pullbacks, with no close below it since yesterday. The recent doji right above the prior close highs at 1.0076 looks like the final presence of the bears being pushed out, thus we are favoring an upside break by early Tokyo trading. Upside targets are 1.0110 and 1.0130 while protection below the 20ema. A breakdown here would need to take out 1.0045 which would suggest more unwinding.



Global Market Commentary:
Global stocks rose solidly as US durable goods and pending home sales surprised to the upside favorably giving a short term positive note to chew on. The Euro continues to be pressured as it appears another country might be asking for a bailout soon (Slovenia - shortly after Cyprus just did).

European leaders are still at a stalemate with Monti threatening if he doesn't get his Eurobonds (read he needs them to bailout Italy's €1T of debt) while Frau Merkel continues with the Nein Mantra also pushing aside calls from Spain for action as well. This trader doubts the Euro Summit will achieve anything meaningful or substantial and when this doesn't the Euro will be under more pressure.

The DOW gained 92pts or .74% while Crude finally rose above the $80 figure.

FYI a lot of economic announcements tomorrow so expect some strong volatility.

Upcoming Economic Announcements:

AUD HIA New Home Sales (MoM)01.00GMT21.00EST
NZD NBNZ Business Confidence01.00GMT21.00EST
EUR German Jun Unemployment Data01.30GMT21.30EST
GBP Nationwide House Prices n.s.a. 06.00GMT02.00EST
GBP Gross Domestic Product (YoY)08.30GMT04.30EST
EUR Euro-Zone Business Climate 09.00GMT05.00EST
USD Gross Domestic Product 12.30GMT08.30EST

Hey Guys...

This is one I took. The levels were obvious to trade from, This paticuliar trade was a combination of a HLR, inside bar, and Pbar which all are in 2ndskies courses . Nice rejection off the 20 ema worked great in conjunction with these trades. I haven't had much time to trade anything lower than the H4 recently, but this H1 I noticed the levels, they were to good not to take. It was a big news day but that seemed not to matter with these strats.

I should also point out, that if you read what Chris posted above about Impulsive/Corrective moves, this would be an easy entry.

Hi Chris,

Just reading your response from another person on the 2ndskies website, it appears the ichimoku systems have a minimum RR ratio of 2.8:1 with a minimum accuracy rate of 57% across all systems and time frames right?

Just to add another question, how many pairs/systems are geared to trading daily time frame in the ichimoku course since currently for me, only the daily is what I can trade? Since I am already a member in PA course, ichimoku may be a good addition in the future.

Thanks

Hello Pipexplorer,

Good question. There are two of the seven systems geared towards the daily time frame, although we are adding more with the ichimoku time theory, wave theory and price theory so more coming soon.

Being a current member, when you are ready, let me know as you get a discount.

Kind regards
Chris

Thanks

So is my understanding of the RR and accuracy correct (as I mentioned in my last post)? Because it is very impressive.