The Price Action

You are right mate.That,s what i meant and in future i will point such areas on my charts .

Agree with you 100%.We need a lot of time to master those two elements.

yeah, right, but how do you define your SL and TP? these two are almost the key factors determining your edge instead of your entry.

Hello charvo)That post was just about spotting defining the grade 1 setups and it wasn,t about the trade management.Hopefully soon in my upcomming posts i will post on the trade management with some charts and textual explanations.

The pull back seems to be headed to the 1.5220 region in the longer term.
In the short term, the h4 is already indicating a downtrend.

at least you have some sense, unlike loadsa other threaders !

Tahir,

I fully understand Your fascination with the PA Method.
I also understand Your compulsion to "save the traders" from "mistakes".

There is no better way to learn, than on Ones own mistakes!
Children do not, usually, listen to their parents until they experience the mistake by themselves!

If You want to teach other people, or present to them a Method, You should first Master
the Method, Yourself. What You are trying to tell, here, is basically true, however, You are not
explaining the basics of basics of PA. Perhaps You do not know or understand them, Yourself?

PA is not about any settings, it is about Price Action, that is all, Price Action, which means
the ability to read the chart, like reading a text on the internet, like reading this text, ie.

PA does not work better on any Timeframe, it works the same on every Timeframe.
The only difference is in the detailed information in the given Timeframe.
The lower the Timeframe, the more detailed the information.
Timeframe to work with is only the function of the trading style:
Scalp, DayTrading, ShortTerm, LongTerm, etc., the longer the term, the larger the Timeframe.

In order to truely understand what Price Action Trading is , one must first realize the origins.
Some very inteligent Japanese invented the Candlestick chart - Why, what for?
Why did this person want to see all levels? OHLC?
Because he wanted to see what the price was doing, and picture Price Action on a chart.

When you study the basic construct of the Candlestick, and think about it, you discover
that the most important elements are the Shadows, not the Body, but the Shadows.
Why? Because the Shadows actually show where the price Consolidated in the given Period.

The even more basic element for understanding PA is understanding the basic economics,
which means - how the Market works.
In economics there are two sides: debit & creditors
Which translates in Forex to: Buy & Sell
The Balance is always = 0.

If you understand that:
When you want to Buy at price X, there must be someone who will Sell to you at price X.
When you want to Sell at price Y, there must be someone who will Buy from you at price Y.
then you begin to understand Price Action.

That is where you start to understand, that the Market is always in a Consolidation State.

When the price is going UP, there are Buyers and Pending Sell Orders waiting at some level,
which others call S/R levels, but they actually are Consolidation Levels.

Trend is the journey the price is making from one Consolidation to another Consolidation.

This is what we are aiming to catch and exploit. That is where our Pips are.

Now, when we have understood what Consolidation is,
that it is in fact the End of a Trend and The Begining of a Trend, of the price journey,
we can start to think how to recognize these moments on the charts.

By definition, Price Consolidation is the Equilibrium of Buy and Sell Volumes in a given period of time.
The Clue here is "period of time".
On the smallest level Price Consolidation is a Doji Candle on a tick chart.
Then, any other Doji Candle, of course.
Price Consolidation is also 2 or more Candles of about the same hight.
Price Consolidation is also a series of Candles oscilating between 2 extreme levels, several Pips,to
even hundreds of Pips apart.

That is clear, but are those the only signals or rather messages about Price Consolidation?

The Engulfing Pattern, why is it so important?

You should be getting the idea by now, if you understand Price Consolidation!

Yes, the Engulfing Candle is showing us Breakout or Breakdown of the Price from
a Price Consolidation Zone. And Breakout or Breakdown of the Price from
a Price Consolidation Zone is showing us the building of a new Trend.

Thus, where is the Price Consolidation Zone?
It is the Candlestick preceeding the Engulfing Candle.
And it is the End of the Price Consolidation.

Where is the Begining of the Price Consolidation, then?
All we have to do, is turn the pattern around.
When we see a shorter opposite Candle after a longer Trend direction Candle,
this is the the Begining of the Price Consolidation.

Now comes the tricky part!

We know how the Price moves, we understand Price Action.
We understand, that Price Consolidation is where Trend Ends and Begins.
We see, that Breakout and Breakdown are indications of the new Trend direction.

The MOST IMPORTANT thing to realize at this moment is that:
The Price can always do 3 things, when in the Price Consolidation Zone:
1. Continue Consolidating,
2. Breakout and form a Bullish Trend,
3. Breakdown and form a BearishTrend.
It can be a new reversal trend or the continuation of the former trend.
We must free ourselves of judgment or speculation.
It is Price Action which tells us which direction the Price is Trending inside
the Price Consolidation Zone.

And this applies to every Timeframe and every Trading Style.

1. Find 2 Timeframes most suitable to Your trading style (ie. M30 and M5 for DT EURUSD).
2. Watch for begining Price Consolidation Zones - the potential End of Trend.
3. Use the Rectangle tool and draw the Zone as follows:
http://charts.mql5.com/1/166/eurusd-...salt-ltd-3.png
4. Switch the Timeframe to the lower one.
http://charts.mql5.com/1/166/eurusd-m5-fxsalt-ltd-2.png
5. Watch for entry moments on the retrace to the zone.
6. Simultanuesly watch another larger Timeframe, H1, H4, D1, to estimate the general Trend.
Go along the General Trend, not against.
7. Set Your SL Close, a couple of Pips above or below the High or Low values as seen on pics.
8. With TP you can either set Your own target, or follow until the next Price Consolidation Zone,
and then decide upon the same rule - the Engulfing Candlesticks and simple Trend recognition.

Important:
The signals from the larger Timeframe always come first!
So, if there is no Engulfing Candlestick in the opposite direction on the larger Timeframe,
do not count on trend reversal.
Rather see this as potential retrace in Trend continuation and look out for the next Price Consolidation Zone in accord with the larger Timeframe Trend.
Then, watch for Engulfing signals and Trend signals inside the Consolidation Zone.

The final decision and risk is on Your side.
Sometimes the market is completely unpredictable!

From here on, Tahir, You continue.

i aam long this at 14358..my stop also is now at this point..

I have just bought the EUUD.. and here is the picture .. 5 min chart and i bought it at 2940.. the reason why i bought this is because of the USDX.. i will post 15 min of this next..

this is the reason why i bought the EUUD,.. picture of USDX 15 min ant rectangle area were USDX is now which is number known as Cosmic Angle number .. note chart squaring out at this point

EUUD.. 1 min just closed for.. 20.. also got 15 out of Dragon.. of bed now.. so much for Cosmic angle numbers..

Danc, you seem to have missed the OP's post where he clearly stated that this thread was for H4 tf and higher.

Oh.. terribly sorry.. i promise i WONT post again.. VERY sorry hope i didnt offend any one........Thank you for pointing it out to me.. i was so looking forawrd to posting on this thred..gees got it wrong again..so much for the angel number

Tahir,

Thanks for starting this thread. Looking forward to its development. Fantastic post Dadas. Thanks to you also.

Price action trading is required an understanding and the skill to determine price behavior. Even though this system looks simple but without the good skill and experience this system can kill you. I'll keep this thread, thanks for shared

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best candlestick patterns

If you drive a car without proper learning and experience, it can kill you.
If you use a hammer without proper education and experience, it can kill your finger.
If you want to trade Forex without proper understanding, skills and experience, it will surely kill you!

this looks very nice, much is similar to what i personally do.

i would like to see more examples though. keep it up

Hi dadas) As i have already mentioned in this article in the markets there is not a single way to make money .If am sorry if by any means i offended you but this thread is just about my method of trading which is very simple and 5 year old can learn it.Offcourse i know what i am doing in this thread and i know my method.Sorry forgive my arrogance but my teachings will be more than enough to teach someone how to make consistent profits using this simple method for me that,s all what matter.And really the smaller the time frame the more reliable it is?On a 5 minute chart one candle is made after every 5 minutes,on a 15 minute chart its made after the 15 minutes and so on.The more data is stuffed in a candle the more reliable the support and resistance levels and the price action signals are going to be.Smaller timeframes may work good for you but for my method i use the confluence of the reliable S&R levels and PA signals and the whole price action story on my charts for making my setups the high probability ones.The S&R levels and the PA signals on the lower time frames are not reliable enough for me to make my trading decisions.Smaller timeframes are full of noise and uncertainity.From my expereince i can tell you the best trading can be done on 4 hour and above timeframe charts.I didn,t understand what you wrote about your method above because for me it,s a way more difficult.Secondly i know about the fundamentals and how this market works but i dont consider them using as price is telling me everything. The only thing i need on my charts is the simple line for marking my support and resistance levels and then wait for the price action to occur on that level which signals me to pull the trigger.Finally you can open your own thread if want to discuss your trading method but sorry to say that,s not what this thread is about.

Hi evilmeatball)That,s nice and then may be we can learn something from each other)Welcome aboard.

Hi danc) Please reread the rules of this thread.We will use 4 hour and above timeframes for discussions.And more thing please remove that moving average line from your chart as we just use the raw price.