Simple, Powerful and Effective Price Action Trading Strategies

To start off this week's trading most of the pairs experienced light price movements. The more active moves were the Australian & New Zealand dollar.

On the Australian dollar, the market opened up much lower than Friday's close 'gapping down'. As soon as the market started ticking this week, the bulls started to reject the bearish move into the mean value and the candle closed much higher.

If we didn't have the interruption of the weekend, this candle would have closed as the typical 'pin bar' formation. The mean value has held as dynamic support on the AUDUSD, all the recent sell offs into the trend mean have been rejected by the bulls.

The buoyancy of the market above the mean is a good sign of trend stability and traders could use the gap rejection as a signal to get long. Just watch out for the overhead swing high, look for any strong bearish signals which may hinder bullish positions.

Just to review the bullish signals we spoke about on the AUDUSD, they matured nicely into profit as anticipated. Nothing beats trading quality price action signals with an existing trend.

Now the AUDUSD has slammed into a weekly resistance level, which generally are the main turning points of the market.

The bearish outside candle that formed here is a result of the aggressive weakness experienced as the market tested the weekly level. The bears pushed right into the New York close. What we are looking for is bearish continuation off this price action signal this session, a break of the low of the outside candle would be a good trigger for short positions.

Keep in mind that this is a countertrend setup which makes it have a higher risk profile, but if the lows are broken we are probably going to see some more aggressive bearish movement. The trend is still technically up, if the market moves lower this session and tests the mean value then it will need to hold as dynamic resistance for the trend to remain intact. If the mean is breached and the market closes lower again, then we could be looking at complete trend change.

Powerful bars those BUOEBs at weekly resistance. No better reason to take a countertrend trade

Hey Winston,

You're not wrong, it is hard to ignore any dominating reversal candlestick pattern at these weekly levels. This could be a game changer for the AUD.

To kick off this week I would like to share two charts.

The USDCHF has just broken into new lows last week, now we are waiting for a good opportunity to sell into this momentum. We are waiting for price to rally back into the old weekly support level that was just broken and form a sell signal as the price level is rejected. This would be a nice confirmation that the level is acting a swing level.

Also the GBPJPY chart has formed a double inside day setup on the close of last week's trading, one of my favourite setups.

These multiple inside day formations have the potential to create very explosive long term breakouts. Just recently there was an explosive double inside day breakout on AUDCAD which is still going strong.

Everyone on here seems to take themselves so seriously. Price action is definitely the best and simplest way to trade the markets. It clarifies everything without adding too many complicated indicators. Different indicators can work well for different markets and conditions. I have used Hilbert based oscillators on the E-mini S&P with success, but haven't found it to be as useful with the currency markets. Really, it's more important to spend time getting to know and understand the markets and price reacts to given conditions. From there developing a strategy should be an afterthought. Define your goals and develop a business plan and learn to execute your plan. There are a lot of traders and systems that one can learn from and some are higher quality than others, when the time is right, if you have the money, hiring a professional trader with a long track record of success can do wonders for your trading business. There is also some good software that can help you analyze which time frames and currency pairs are trending. But, ultimately, there are no black box strategies for success.


Happy Trading To All

Hi Partial2Pips,

thanks for your thoughts on price action trading, we do honestly believe it is one of the closest things you will get to the 'holy grail' in the Forex markets.

Looking at the EURNZD today, where the market is looking very top heavy. Price has recently rallied aggressively and 'gapped' away from the mean value on the daily chart. These large gaps can create good opportunities for mean reversion trades. The upper wicks on the daily candles already suggest that moves into higher prices are being rejected by the bears, a strong sign of bullish exhaustion here.

If the bearish momentum continues and manages to break the low's of the previous daily candle, then it will trigger a bearish breakout trap & reverse trade.

Just a follow up to yesterdays setup. The market has responded as anticipated and an aggressive 'snap back' to the mean has taken place.

These mean reversion trades are generally quite aggressive like this and are great for quickly driving trades into profit. Now the market is testing a support level which we will be watching for any bullish price action to manifest that may signal the level will hold firm and to exit this trade accordingly.

Considering how last session's candle closed as an aggressive bearish power candle, there is a good chance bearish continuation will flow on into this session and break the support level. If support breaks there is plenty of room for the trade to reach into much lower prices.

Here is a video of the EURNZD trade we've been talking about here if anyone is interested...

Today looking at a potential long term breakout on the USDJPY...

USDJPY is a market that we have been steering clear of most of the last part of this year. At the beginning of the year we had many bullish price action trading opportunities with the powerful trend that was present on the daily chart. But since then the market has been stuck in a long term consolidation pattern.

Last week, the market closed with a strong bullish rejection candle that closed outside of the squeeze pattern and we discussed in our war room weekly commentary to watch for further bullish signal to get us in on a potential breakout.

Last session the daily candle closed as a bullish rejection candle, signaling further upward movement is most likely. If the bullish momentum continues would could be looking at the next bullish trend extension on the Yen pairs. We will be continuing to look out for further bullish price action signals to jump in to the developing trend.

The AUDCHF market has rejected moves higher into a dominant resistance level on the daily chart. As resistance held strong here, the market closed as an aggressive bearish rejection candle with quite a large upper tail as the bears stepped in and denied this market the privilege of maintaining prices above the level. The large upper tail suggests price tried to break through the key level and created a breakout trap for the bulls. Price collapsed back below the resistance level closing lower than it's open price.


We can anticipate further bearish momentum off this setup. A retracement entry has already been triggered which I mess, so I guess we will have to wait for the next price action sell opportunity to manifest with the developing bearish momentum.

Hello DnB

just a quick note to express my thanks for your thread, I`m subscribed.

Thank you.

Mike

AUDCHF Weekly

As further visual help I have added a weekly chart to your daily AUDCHF.

It looks as if we had a Head & Shoulders structure completed, and now price seems to struggle with first VERY important resistance, as you show on the Daily chart in detail.

The interest % differential would favour long AUD, short CHF.

Best regards,

Mike

AUDCHF Daily.

I wait a bit ( similar to AUDUSD ), just to see if there is real bearish sellers strength.

edit : I see that green colours do not show up in the uploads, I will use others in future.

The continued weakness in the australian dollar is driving the AUDCHF into further profits. Shame I missed out on this one.

Not many signals floating aroudn at the moment on the charts, just hanging in there waiting for a lot of markets to test support and resistance levels. The GBPUSD is about to test it's range bottom, I've got a feeling the range is not going to hold and we may see a price breakdown of the range here.

Also looking at crude oil...

It would be really nice if a price action signal manifested here.

This week we've been starved of high quality signals as most markets have been hanging around in ‘unfavourable trade zones’. A lot of activity on the New Zealand dollar last session, a bearish rejection candle forming on the NZDUSD major at the New York close and the EURNZD chart also formed a rejection candle signaling higher prices.

EURNZD seems to be stepping upwards here off the recent support level and is now printing higher lows. A bullish rejection candle formed last session as moves lower were rejected aggressively. This bullish pin bar rejection candle signal could prompt a further bullish response from the market and potentially see the next move to the high side.

I just wanted to point out something interesting. A large breakout has occurred on the EURUSD market during the Asian trading hours. Large breakouts like this that happen during the Asian session generally don't work out, especially if none of the currencies are Asia based economies.

You can see that the move into high prices has been rejected as we are now trading in the London session and now approaching NY. This could be the catalyst we need for a breakout trap and reverse trade setup here.

Hallo DnB,

Have been having very nice set ups. However, something seems to be a problem with the browser because am not able to load them for your review and mayb sharing.

This thread is awesome. Keep up with the thread. Thanks!!

Thanks Libra, I am glad you like our methodology.

We're focusing on the USDCAD market for next week's trading...

At the close of trading this week there was a powerful price action event on the USDCAD major. The market tested the top of a longer term range and terminated, then rejected the move back into lower prices, creating a large bearish rejection candle at the end of the New York close on Friday.

This is a strong cue that we can anticipate further downward prices in the next week or two as the market is demonstrating that the range structure is holding here. We are looking for retracement entries here to be able to grab a nice entry price and tighten stops.

hi there, i was reading all the thread, very interesting. i use price action and i use more ema, but i like this very clean setup , saying that ema are just the mean price for our cross, and not just a supporto or resistance, i have to test if it is working ....and if i can filter trade in the right way.




as you can see i had setup a trade, but price has gone higher so now i will delete it, and wait to see what will happen tinight.
what i m wondering about DnB risk management....is which kind of strategy do you have to decide where to put sl and tp.

as you can see in my setup (a bearish one) i put the stop loss on the top of the shadow and entry just below the minimum, so that the minimum break is the confirmation of my trade. as far as the tp i have minimum 1:1 risk reward, but at tp i do not close all the trade, just 80%.
i d like to know how ever do you feel safe to keep open a trade at it's full lots to reach a R:R 1:3.
do you partly close the trade and let it run a minimum part? let me know , i want to subscribe in a few, couse it seems it worth!!

M