Simple, Powerful and Effective Price Action Trading Strategies

There is a quite clear SR flip below at 128.500, with a ret. entry we could get between 1:2 - 1:3.
But I would like to know how you handle this kind of situations, where there is a good setup, but questionable RR?

Well we aren't directly trading into solid support level, there is a bit of room there, we like to trade with momentum and momentum is really good at breaking through levels, so that's what we anticipate.

However, some levels do hold and momentum dies out, this is were we would look for strong bullish signal against our trade off the support level and re evaluate the situation from there. A bullish signal may prompt us to move stops so if the bullish signal starts playing out then we're out with a small gain.

But like I said we are going in with the bearish momentum and anticipating that support levels are going to be broken.

http://i.imgur.com/3u6WZFR.png

Getting back to EUR/JPY, price did exactly as we anticipated.

Higher prices couldn't be maintained as bearish pressure held price down to have the daily candle close as a bearish rejection candle/inside bar combination.

From what we can see at the moment, we expect lower prices to come, but to be safe, we'd want the low of the candle prior to the bearish rejection candle/IB to be broken for confirmation that price is indeed breaking out downwards.

Unfortunately the bullish setup on the gold chart didn't work out.

Here is a chart that DnB put up....

The problem is we've had no real bullish response from these strong bullish signals, which is a shame. The tip off to today's bearish move was the failed asian breakout trap that occurred, DnB always emphasise that these asian session breakouts generally end up failing and collapse in on themselves.

What's actually happened now is this has turned into a bearish breakout trap and reverse setup, where a failed breakout in one direction is the catalyst for a true breakout in the opposite direction.

The trigger to go short is when the market busts out the opposite side of the previous candle on the daily chart. Considering these bullish signals seen no bullish response these last few days, if the low is broken then we could probably see a significant move downward.

Due to the surrounding effects of all the high impact news releases, such as major whipsaws, spikes, just generally making this a really ugly market, this isn't the type of trading enviroment we'd like to trade.

The NFP results are tomorrow, and these will most likely only make it worse.

In my opinion, I would leave these markets alone until things settle down next week and good signals develop.

http://i.imgur.com/ovEUgNx.png

Due to the currency markets being all sorts of messy this week, here's a little change of pace.

Bullish momentum continues to persevere as the S&P is pushed higher into uncharted territory.

The unusual and interesting bit is how the major currency markets such as EUR/USD, GBP/USD, AUD/USD, etc, are demonstrating a sell off. Usually, a strong market in the S&P encourages bullish speculation, with a "risk-on" sentiment.

Looking at a chart of the S&P, we can see that it was a bullish "power candle" which sent the index into all-time highs.

Assuming a further push higher after the NFP results, we can anticipate the currency market to follow, with the USD weakening.

Price Action Trading – what is it and how do we do it?

I often see here on Forex Factory Forum that the reply to how a particular trade may have been improved is watch the price action, or use the price action. Then when they ask, what is price action? Where can I learn about price action? There is no response.

You can watch the candles for years, all time frames and still not have a clue about price action! You can pay literally thousands of dollars for courses, systems & tutoring and still not be able to trade using price action.

So what to do? I now I have an answer for those new to Forex trading, or those struggling with the concept or understanding of price action.

Join DnB.

So, what do they offer?

I admit that I joined specifically to find out and can report here that the content is EXCELLENT.

For the absolute new to Forex, there is free, sensible content available on the home page than anywhere else that I know of.

Once a member, inside there is the main Price Action Protocol Trading Course. This is where you will learn about “price action trading”.

All the course content is described on the website, so no need for me to detail it here; suffice to say, you will not be disappointed.

Moving on from that, there is an excellent Weekly Market Commentary video which brings your focus to what and when we should be watching and trading.

The Chart of the Day is hugely popular and receives much attention when posted.

Discussion takes place in a Live Chat Room, where many of the experienced traders share their setups and offer timely advice.

More discussion is available on the Forum section, every pair has its own thread so quite easy to find the latest research of whatever pair you are thinking of trading.

And it is not plain Technical Analysis on the site; the fundamental side has the COT report analysed and the interpretation presented in summary form for those without the required time, focus or understanding of this report.

It doesn't cost all that much, probably no more than a bad trade or 2 maybe; it is only a once off payment, no ongoing monthly fees, so if you aren't making a fortune scalping the 1 minute charts, and it is time for you to seriously consider long term time frames, then this is the place to do it.

“When the student is ready the teacher will appear"

"Nope, I didn't say that." — The Buddha

http://i.imgur.com/qyL9ltz.png

To start off the week, we're going back to gold.

As one of the few major markets that hasn't been turned into a mess from last week's news events, gold has presented an interesting opportunity.

Looking at this market, we can see that price has made swing higher highs, and swing higher lows in the last few weeks. It is clear that the market is favouring bulls at the moment.

Last week, price began its correctional move phase, and retraced right onto a key support level. Price attempted to go lower, but the market respected this key level, and bullish players pushed price right back up, to form a bullish rejection candle. This occured after price already attempted a false break out downwards from an Inside Day, which is a strong hint.

This type of price action is the market's way of communicating to us that bearish moves aren't as desirable at the moment.

We should be keeping an eye out on the Daily chart to see if price attempts to break out after London session begins. A break of the high of the bullish rejection candle could be a strong hint that we could see further higher prices ahead.

Recap on gold.

Price didn't break the high of the bullish rejection candle setup after London session. Instead, price moved lower and now looks as if this market is heading downwards.

Because we didn't get the break of the high after London, no trade was triggered here.

We'll have to wait and see what this market presents later on.

http://i.imgur.com/Ff8BNtl.png

Trends are where the money is made, and trends are generally a bit hard to come across during Summer trading.

AUD/NZD ignores that and has been trending well as of late. Swing lower lows and swing lower highs being formed in succession in the past few weeks -- we can see that this is a bearish market.

During the weekend, there was a large gap upwards, which had the market open AUD/NZD to the trend mean value.

Price respected the trend mean value as it held as dynamic resistance, and pushed price right back downwards.

During the last trading session, price attempted to go higher, but couldn't maintain higher prices as bearish pressure pushed it right down to form a bearish rejection candle.

If price breaks the low of last session's bearish rejection candle, and by the time I posted this, it already has, then we could see more downwards movement to come.

Hi, would you be interested in this pin(maybe) at close coming off support?

It's a strong signal, but we prefer to target the trending markets.

The long wick off the lower end of the candle implies strong rejection, and it formed around a solid support area. I wouldn't be shocked to see this one be the start of a move upwards.

Good analysis, sir.

thank you ,I do hope you don't mind me posting here ,I am very eager to learn your way of trading and will certainly be purchasing your course in 3 weeks after I am off my holidays.Here's a chart of eurgbp.....inside bar at significant support,can you give me your thoughts please. Also I have seen some where you have a book out called " the price action protocol"...where can I find it ,would like to read on my hols

Tedge

We always wait for candles to close before we consider anything, so technically, it isn't an inside bar -yet-. However, based on the range of the previous candle, it's pretty much certain that it'd close as a daily inside bar.

It isn't the cleanest or prettiest market to trade, but it's an interesting setup. We would wait for the daily candle to close first and foremost, and then aim the catch the potential move upwards, if price breaks the high of the inside bar.

There's been some strong bearish moves recently, so this would be a more riskier setup.

We also have to be wary of any breakouts during Asia session, as it usually produces fake outs. We'd prefer to take breakouts much closer to London or New York session.

You can find the Price Action Protocol as part of the "War Room" membership package on DnBPriceAction's website. I included the URLs.

http://i39.tinypic.com/2j1o0v5.png

We can see that AUD/NZD is currently in a strong, definitive bearish trend that spans all from March-April.

In a strong bearish market like this, we'd only be looking for shorting opportunities to get back into the main trend. Trading against strong momentum like this is an unnecessary risk that we don't want to take.

In the last week or so, price experienced its correctional phase and pushed price upwards, right into a key resistance area.

Looking at yesterday's daily candle we can see that price attempted to push higher, but higher prices were not desirable by the market, and pushed price back downward to create a bearish rejection candle.

As the candle is quite small in range, we'd be looking for a break of the bearish rejection candle low during London/NY session for confirmation of bearish momentum in the market, because we're in a very quiet trading period at the moment.

The range of the candle is small, which is something that we have to keep in mind, as smaller signals are less reliable.

http://i.imgur.com/aNMUGYT.png

It's no secret that this particular market has been in a strong up trend for a short while now, which we can see dates from late June.

During the past few weeks the market has been consolidating sideways but still holding above the trend mean value. It's no surprise that the market has been quiet due to Summer trading, but with all the bullish rejection going on, we are being tipped off that the bulls may be ready to fire up again.

Every time price attempts to push downwards the market rejects the move, and the bulls quickly recover any short term losses. What's happened in the last two trading sessions is the market tried to push below the mean value, which triggered the bulls to step in and maintain those higher prices.

The bullish rejection candles have a higher close than their open, demonstrating stronger bullish activity for that day.

We'll be keeping an eye on this market and aim to see both bullish rejection candle highs broken, for further confirmation that we could be seeing more higher prices to come.

We are near all-time highs, and assuming price breaks the highest swing high area, we would be pushing into uncharted territory.

I personally haven't looked at the site promoted by this thread but I definitely like the information provided here and I say for anyone interested in learning how to trade well that they should take notice of what this guy says. Good luck and keep going DnB.

http://i.imgur.com/I11axQJ.png

Taking a look at EUR/JPY, we can tell that this market has been indecisive this year. Without a long, clear trend to follow, EUR/JPY looks lost.

The most recent attempt of a trend in this market is currently what we're looking at here at the moment. Bears have been pushing down market price for a few weeks now, creating a small series of LLs and LHs to established the current bearish trend.

In the past few days, strong bullish momentum pushed price right into a key resistance level. The bulls couldn't maintain this kind of momentum, and ultimately, the bears won this battle and pushed price back downwards to create a bearish rejection signal.

Because we're in a currently bearish market, we'd prefer to take short signals. We want to see the low of the bearish rejection candle setup broken during London/NY session, as that's usually when the best and most meaningful setups begin to take off, and we severely lower the risk of fakeouts that usually occur with breakouts during Asia session.

We'll be keeping an eye out to see how this develops.

http://i.imgur.com/BQ0RpMu.png

Gold is developing all the right conditions we like to see for a possible setup.

This market continues to push higher -- a trend that began a few months back, which was confirmed as the clear direction of where this market is heading, when a series of HHs and HLs were developed -- the dynamics of a strong trend.

We'd like to see price correct itself and retrace to a key support area which you can see marked up on the chart I posted. Assuming we get a correctional move downwards to test this key level, we'd want to see a clear imbalance of buyers/sellers, and have price pushed right back upwards to form a bullish signal. This would be a clear sign as this type of price action would be telling us that the market is ready to move back higher.

We'll be keeping an eye out on XAU/USD to see how things develop.

Hi Anastasius,

I had a look on your webpage, is your site offering the same content as N. Fuller's webpage is offering?
Looks very interesting.

Have a nice weekend,
Forex Lion