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Price Action and Trading Discussion

  • #2,341
  • Edited Oct 14, 2012 4:49am Oct 13, 2012 6:18am | Edited Oct 14, 2012 4:49am
Quoting jibjib210
How much risk are you playing with and what timeframe?
My main TF is 4H and risk below 3%. I also trade micro lots.

When I started to trade PA I was following the J16 thread; daily TF and quite big stops. DW also uses quite big stops but I never felt comfortable doing that, so I began to look for alternatives.

Now I dont trade anything, where I have to go over 40 pips SL and my usual is around 25-30. For that I have to find zones where there is a good chance that price will move rapidly away from it, so either I get the move I want or take the small loss cause it went the other way.
It rarely happens that my SL gets hit and then price moves my way - unless I enter to late of course (which is a no go by itself).

Have a look at supply and demand topics if you havent yet.
I also like this video series: http://www.thetradersguild.co.uk/htt...ction-trading/, its from the LJ thread.

wmd4x and his "Trading with deadly accuracy" is also good. Acctually, they are very good. You need to register on his site and then you'll gain access to the videos (the free ones). http://www.tradingwithdeadlyaccuracy.com/
He also used to have a 60min market outlook every sunday but I dont know if its still happening.

So those 2 approaches/threads were very suitable to what I was looking for and helped progress my trading.
Thoughts are things
  • #2,342
  • Oct 14, 2012 5:16am Oct 14, 2012 5:16am
Quoting jibjib210

How much risk are you playing with and what timeframe?

Since i play with a very small account size i risk the lowest lot size possible and try to take trades around a 50 pip SL which still accounts to about 5 percent of my account. I take my trades on the 4H bars but trade the daily chart. This can be frustrating at times as a 50 pip sl is not enough on the daily range.


Quoting Quezoy

daily TF and quite big stops. DW also uses quite big stops but I never felt comfortable doing that, so I began to look for alternatives.

Now I dont trade anything, where I have to go over 40...
Hi Guys,

I have discussed this topic about stop loss sizes and position sizing on a few occasions.

You should not let your stop loss size determine your trades as when you learn how to apply position sizing it does not matter how large your stop is your risk per trade will always be the same.

Therefore if you have a 150 pip stop or a 40 pip stop your risk will always remain constant. This is one aspect that you absolutely need to grasp, allowing you to place your stops in the best possible place and not in a place just because you need to have your stop 30 or 40 pips away from the current market price as that is all your risk will allow.

Ok so I would reccommend that you take a look at this site:

http://www.earnforex.com/position-size-calculator

So lets look at some examples.

Example 1:

USD account with an account size of $5000.
Risk % will be 2% (this can also be changed to a set dollar figure)
Stop loss will be 150 pips.
Currency pair is EURUSD

Hit calculate: and we need a .067 lot size to risk 2% of our account which will be $100.

Example 2:

USD account with an account size of $5000.
Risk % will be 2% (this can also be changed to a set dollar figure)
Stop loss will be 50 pips.
Currency pair is EURUSD

Hit calculate: and we need a .200 lot size to risk 2% of our account which will be $100.

By using this simple calculator we can determine our risk managment much better by having the position size correct to match the stop loss, allowing you to place your stop in the most logical place and not be too concerned about the size of the stop.

Notice how the dollar amount risked on each trade is exactly the same even though one trade has a stop loss 100 pips greater than the other.

We should not be taking our trades based on the fact that we need to have it at a certain level as our risk management parameters only allow a stop loss to be a certain size.

I hope this helps you understand the concept of position sizing in regards to stop loss placement.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: example 2.jpg Size: 66 KB
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,343
  • Oct 14, 2012 5:26am Oct 14, 2012 5:26am
Hey DW, I agree with you, but as I understand jib's problem its a case of not enough funds on the account.

For example, if you have 300$ and want to risk 2% trading E/U with a 80 pip SL - you cant do it, you cant even take the trade, cause you dont have the money.
You could risk only 0.7 micro units which most brokers do not offer.

I personally always use a position size calculator, but I just dont like big SL's. Its a personal thing. If I cant enter with a SL I find comfortable I will pass.
Thoughts are things
  • #2,344
  • Oct 14, 2012 5:31am Oct 14, 2012 5:31am
Quoting Quezoy
Hey DW, I agree with you, but as I understand jib's problem its a case of not enough funds on the account.

For example, if you have 300$ and want to risk 2% trading E/U with a 80 pip SL - you cant do it, you cant even take the trade, cause you dont have the money.
You could risk only 0.7 micro units which most brokers do not offer.

I personally always use a position size calculator, but I just dont like big SL's. Its a personal thing. If I cant enter with a SL I find comfortable I will pass.
Well yes indeed that will be an issue.

And yes you are absolutley correct in the being comfortable with your trade.

But im just trying to point out that the risk will be exactly the same regardless of the stop loss size.

But the personal comfort level plays an important part also in the psychological and emotional side of trading.
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,345
  • Oct 14, 2012 6:56am Oct 14, 2012 6:56am
Quoting DarkWolF
Well yes indeed that will be an issue.

And yes you are absolutley correct in the being comfortable with your trade.

But im just trying to point out that the risk will be exactly the same regardless of the stop loss size.

But the personal comfort level plays an important part also in the psychological and emotional side of trading.
I think you're right and most importantly regarding this issue with my little knowledge is to take each trade or to say every trade are different so look at each trade as they present themselve.
  • #2,346
  • Oct 14, 2012 10:51am Oct 14, 2012 10:51am
Quoting DarkWolF
Well yes indeed that will be an issue.

And yes you are absolutley correct in the being comfortable with your trade.

But im just trying to point out that the risk will be exactly the same regardless of the stop loss size.

But the personal comfort level plays an important part also in the psychological and emotional side of trading.
Hey DW i know you have already addressed this issue i remember asking you personally about this matter I am sorry to bring it up again but for me it is a matter of funds in an account.

Quezoy has a point there as if you only playing with a couple hundred bucks you have to be selective with your trades and cannot every setup because you cannot adjust your lot size. Due to the fact even when your trading the minimum lot size possible it still has big exposure on your account size.

I personally trade with 200 dollars now in Daily TF the SL are quite big in order for you to have a chance to catch a big move. 100 pips is average id say and with 0.01 lot size thats 10 dollars making it 5 percent risk already :S!
  • #2,347
  • Oct 14, 2012 3:36pm Oct 14, 2012 3:36pm
Quoting jibjib210
Hey DW i know you have already addressed this issue i remember asking you personally about this matter I am sorry to bring it up again but for me it is a matter of funds in an account.

Quezoy has a point there as if you only playing with a couple hundred bucks you have to be selective with your trades and cannot every setup because you cannot adjust your lot size. Due to the fact even when your trading the minimum lot size possible it still has big exposure on your account size.

I personally trade with 200 dollars now in Daily TF the SL are...
Hi JibJib,

Yes I see the dilema that you will be faced with. Unfortunately I think that there is probably no way around this, except like you say, being a little selective with your trades.
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,348
  • Oct 14, 2012 9:25pm Oct 14, 2012 9:25pm
hello there, jibjib and darkwolf,

the solution is quite easy actually: use OANDA. you can take trade for $1 if you like. yes, you are reading that correctly. they use units...units are basically highly fractionated lots. Here is more on units vs lots.




Quoting jibjib210
Hey DW i know you have already addressed this issue i remember asking you personally about this matter I am sorry to bring it up again but for me it is a matter of funds in an account.

Quezoy has a point there as if you only playing with a couple hundred bucks you have to be selective with your trades and cannot every setup because you cannot adjust your lot size. Due to the fact even when your trading the minimum lot size possible it still has big exposure on your account size.

I personally trade with 200 dollars now in Daily TF the SL are quite...

Quoting DarkWolF
Hi JibJib,

Yes I see the dilema that you will be faced with. Unfortunately I think that there is probably no way around this, except like you say, being a little selective with your trades.
" It may mean something. It may mean nothing at all "
  • #2,349
  • Oct 14, 2012 9:59pm Oct 14, 2012 9:59pm
Quoting DarkWolF
Price Action and Trading Discussion.

Price action, horizontal support and resistance, trend lines, round number areas and throw in some candle patterns also.

I welcome any general discussion in regards to trading and any thoughts around price action trading no matter what pair or combination of pairs that you may trade.

Charts with reasoning as to why you took the trade or are thinking of taking a trade would be appreciated.
I am also very interested on price action strategy. I don't use any technical indicator except a support and resistance indicator. I keep eyes on candlestick and also draw constant lines, trendline to make analysis.
  • #2,350
  • Oct 15, 2012 3:31am Oct 15, 2012 3:31am
Quoting Skynet
hello there, jibjib and darkwolf,

the solution is quite easy actually: use OANDA. you can take trade for $1 if you like. yes, you are reading that correctly. they use units...units are basically highly fractionated lots. Here is more on units vs lots.
The 2nd option is to refine your entries and thereby minimize your SL.
Its really not that difficult, its all about location. Even if you follow J16 where they use candlestick formations for entries on the D chart, they say: the trigger is a pinbar (or engulfing, or inside bar or...) but, it has to be at a certain location.
Acctually, its not about candlesticks at all, its all about location. Candlesticks are just a filter for noobs which get used to lessen overtrading and get them consciuos about location.

Find the location, enter when price is near it and you will surely be able to use a smaller SL.
Thoughts are things
  • #2,351
  • Oct 15, 2012 3:35am Oct 15, 2012 3:35am
Quoting shanewatson
I am also very interested on price action strategy. I don't use any technical indicator except a support and resistance indicator. I keep eyes on candlestick and also draw constant lines, trendline to make analysis.
Hi Shane,

I look forward to seeing some charts sometime soon.
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,352
  • Oct 15, 2012 3:38am Oct 15, 2012 3:38am
Quoting Quezoy


Find the location, enter when price is near it and you will surely be able to use a smaller SL.

Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,353
  • Oct 15, 2012 3:41am Oct 15, 2012 3:41am
Quoting Quezoy
I've had a few suboptimal trades in the last days, either a to late entry or a good ol' unnecessary trade.

Currently Im long E/A. I plan not to take patial profits, but to ride the wave up.
I have a good entry in line with the trend and I plan to squeeze it unill PA tells me to get out.
I always took partial profits, but Im begining to doubt that this is the better strategy.
Long on the same pair but from a daily chart.

I have been a bit slack with my images lately as just have been bloody busy with work and lots of things on socially etc.

I will try and get my a$# a bit more organised and get them up
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,354
  • Oct 15, 2012 3:42am Oct 15, 2012 3:42am
Am also considering another position on the EA on the 4 hourly chart but I will make that decision when the bars end as have a few im keeping an eye on.
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,355
  • Oct 15, 2012 4:25am Oct 15, 2012 4:25am
i agree totally, quezoy.

i already get a suitable pyramiding scheme going using m30 and h1 as entry time frames....i usually trade h4 and daily...i generally dont take trade below 1:3r/r from my h4 or daily TF.....ii only use m30 and h1 to further pyramid in the direction i have determined to be the trend from my h4 and daily trades. pyramiding into an already established trade trend position which tends to mean at least 1:2r/r additional pyramid(on m30 and h1).

What i am working on is solid r/r...right now, i can only nail just one and only one 1:6 to 1:10 risk/reward trade per week. Just one. This requires entry on m15 or m5 with setups chart on h4 or daily.

You can imagine the noise problem. trading is not easy.




Quoting Quezoy
The 2nd option is to refine your entries and thereby minimize your SL.
Its really not that difficult, its all about location. .......Find the location, enter when price is near it and you will surely be able to use a smaller SL.
" It may mean something. It may mean nothing at all "
  • #2,356
  • Oct 15, 2012 5:09am Oct 15, 2012 5:09am
Quoting Skynet

You can imagine the noise problem. trading is not easy.
No it certainly is not. Potentially too many people start to trade with the thought that it will be easy. I think many soon realise that this absolutely is not the case.

It can be made to look easy in hindsight but much tougher making the decisions live.
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,357
  • Oct 15, 2012 6:49am Oct 15, 2012 6:49am
Make or break for the E/A trade.
If price brakes the 50fib I'm very optimistic we'll reach at least the 1.282 high, probably go ever higher till 1.30.
Attached Image (click to enlarge)
Click to Enlarge Name: ea.png Size: 32 KB
Thoughts are things
  • #2,358
  • Oct 15, 2012 6:53am Oct 15, 2012 6:53am
Short USD/CHF.
Went for it at the TL & 100 SMA confluence.
Jib, SL is 33 pips, so you can see its doable.

Entry in the middle of the range aint that good, but we are technically still in a downtrend, since the high couldnt have been broken.
I'll monitor it closely and move my SL down quickly.
I want that last low taken out next.

People are waiting for retail sales data in 30 mins.
Attached Image (click to enlarge)
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Thoughts are things
  • #2,359
  • Oct 15, 2012 7:19am Oct 15, 2012 7:19am
Quoting Quezoy
Make or break for the E/A trade.
If price brakes the 50fib I'm very optimistic we'll reach at least the 1.282 high, probably go ever higher till 1.30.
Ya' I am still looking for it to go a bit higher, but as with all things trading anything can happen.
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
  • #2,360
  • Oct 15, 2012 7:20am Oct 15, 2012 7:20am
Quoting Quezoy
Short USD/CHF.
Went for it at the TL & 100 SMA confluence.
Jib, SL is 33 pips, so you can see its doable.


A good area on the chart too.
Twitter - DarkWolF@OzForexTrader - Facebook Page - link in post 1
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