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Simple, Powerful and Effective Price Action Trading Strategies

  • #401
  • Jan 2, 2015 7:52pm Jan 2, 2015 7:52pm
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Happy New Year Traders!

This is the first price action setup for 2015 - a market we've been watching closely, the AUDNZD daily chart.

We've been putting up a few posts in the War Room and have been talking about it a lot in the commentary, focusing on the all time low monthly support level that has been breached.

Now the market is testing this old support level as new resistance by rejecting moves higher into it.

Last session we got a small bearish rejection candle, where the upper tails demonstrated the bearish reaction to the only monthly support.

Because the candle is small in range - it would be better to only consider taking breakout trades with any bearish momentum that may develop next week.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #402
  • Jan 2, 2015 8:06pm Jan 2, 2015 8:06pm
Best Wishes for 2015, Excellent Thread.
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #403
  • Jan 4, 2015 7:43pm Jan 4, 2015 7:43pm
The previous AUDNZD trade idea has been invalided - Price didn't break the low but broke the high instead. We will have to monitor this market for any further sell signals this week. Keep in mind the market is in new territory - trading in all time lows here. This could be a bearish trap and the market is ready to spring higher from these "uncharted waters".

Just follow the price action.

Today a surprise on the majors, like the EURUSD...

Attached Image (click to enlarge)
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We’re just emerging into 2015 and the markets are already lighting up with some unexpected volatility.

During the brief market hours last week after the New Years break, the EURUSD experienced an intense sell off – which some of the other major pairs also shared. During this week’s market open, the EURUSD opened with a negative gap and continued to sell off during the very early asian session.
The sell off rammed into a weekly support level – which the bulls were quick to defend.

Given that the market is now gapped away from its mean on the daily and weekly chart – we’re most likely to see a bullish mean reversion occur here, especially with weekly support obstructing further moves lower.

This could be a major turning point for the EURUSD here and kick off some good bullish follow through to usher us into 2015. For those with the appropriate risk appetite – there is already a 4 hour counter trend buy signal off weekly support.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #404
  • Jan 7, 2015 9:54pm Jan 7, 2015 9:54pm
I agree with billytt. This is an Excellent thread. Keep up the good work. You are a gem. God bless you abundantly.
  • #405
  • Jan 7, 2015 11:40pm Jan 7, 2015 11:40pm
Thanks for those kind words. Just like everyone here, I am passionate about Forex trading and probably will be until I die

Just to update on the EURUSD weekly support situation...

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No bullish follow through from that initial 'gap rejection' at the market open this week - All daily candles closing below their open price. Without any solid buy signal there was nothing to do here except watch the sellers take out this level.

I haven't been able to find anything of high quality this week to trade - the market is still coming back to life after the holidays. I think the initial volatility injection after New Years might have over excited traders to get involved in the market a bit early.

EURUSD still too far from the mean to consider shorting in my opinion - too high of a risk of being caught up in a mean reversion. Better to sell after retraces.

Hopefully something develops in the coming trading sessions.
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #406
  • Jan 12, 2015 7:15am Jan 12, 2015 7:15am
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Click to Enlarge Name: audusd asia fakeout.jpg Size: 94 KB


An excited start to this week’s trading on the AUDUSD daily chart.

Some initial follow through from last week’s bullish momentum caused an early asian session breakout. War Room traders know these type of early breakouts can be trouble – and indeed it was.

The initial thrust up trapped unsuspecting breakout traders into a nasty long position as the breakout collapsed back in on itself. Now the busier London session is open – we’re seeing the fakeout cave in deeper to lower prices.

This is much more upbeat than your typical Monday price action. Watching to see how the daily candle closes here – hoping for a bearish rejection candle to be waiting here at the end of day close to consider short positions.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #407
  • Jan 15, 2015 10:24pm Jan 15, 2015 10:24pm
Quote
The initial thrust up trapped unsuspecting breakout traders into a nasty long position as the breakout collapsed back in on itself. Now the busier London session is open – we’re seeing the fakeout cave in deeper to lower prices.

This is much more upbeat than your typical Monday price action. Watching to see how the daily candle closes here – hoping for a bearish rejection candle to be waiting here at the end of day close to consider short positions.

Unfortunately the AUDUSD asia breakout trap didn't follow through enough to hit a good target. There was plenty of chances to get out at break even - especially after the counter trade bullish rejection candle formed. But I have to admit, I seen this one through and my protective stop got hit.

Some traders may be shocked that I am writing about losing positions, but Forex trading is not about winning all the time - it's about becoming an expert risk manager. There is no need to shy away from a losing trade.

As a 'risk manager', I did the right thing by using a stop loss - which a lot of traders don't.

Here a few price action trade ideas that have popped up this session...


GBPUSD INSIDE DAY

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Inside day with a bearish close formed under a weekly level holding as resistance. If price breaks the low we could see the next move into lower prices.


AUDNZD BEARISH REJECTION

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AUDNZD daily chart closed as a bearish rejection candle with a heavy bearish close in the body. The rejection signal is also coming off a weekly level which we could see lower prices develop off.


USDCAD BULLISH REJECTION OFF TREND MEAN VALUE

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A bullish rejection formed as lower prices were rejected as the market re-tested the trend mean value. The uptrend looks nice and stable here, no signs it's giving up yet. The mean value is always the optimal area to enter trend positions.


For more price action signals and a bit of discussion of the recent SNB peg removal event, check out our latest article:

NEW ARTICLE: PRICE ACTION SIGNALS & EVENTS TO KICK OFF THIS YEAR
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #408
  • Jan 22, 2015 12:16am Jan 22, 2015 12:16am
AUDNZD didn't work out, which was surprising considering the quality of the signal. Now AUDNZD has busted higher - looking for any bullish signals that develop there with the emerging upward momentum.

Quote
A bullish rejection formed on USDCAD as lower prices were rejected as the market re-tested the trend mean value. The uptrend looks nice and stable here, no signs it's giving up yet. The mean value is always the optimal area to enter trend positions.

The USDCAD trade worked out nicely...

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Nice bullish response from this rejection candle here. Couldn't trade it as I am in the middle of brokers here - but I've lined up a nice deal with a UK broker.

The market is overextended from the mean here, so a mean reversion could be imminent. Anyone still long here on USDCAD might want to keep that in mind and consider taking profits soon.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #409
  • Jan 23, 2015 3:43am Jan 23, 2015 3:43am
Attached Image (click to enlarge)
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Looking at some interesting price action on the daily chart here of the AUDCAD. The market has rallied up aggressively this month and reached a major turning point on the chart.

Now because the market is a little over stretched and slammed into a proven resistance level - we're seeing tell tail signs price may be ready to turn around here.

There are some large upper tails on the daily candles that demonstrate price trying to break higher past resistance - but ultimately failing, closing back below. These failed breakout are a big bearish signature, and we've also got a bearish rejection candle that has already broken it's low this session.

Watch the price action here and see how it plays out, but I think we're going to see some lower prices develop off this setup.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #410
  • Jan 27, 2015 10:42pm Jan 27, 2015 10:42pm
Very nice thread.
Thanks DnBPriceAct for all the information. =)

appreciate
  • #411
  • Jan 28, 2015 8:31pm Jan 28, 2015 8:31pm
Attached Image (click to enlarge)
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The Australian Dollar showed significant weakness last session when some critical levels were tested. The AUDJPY daily chart demonstrates the rejection of a previous swing low as it held as new resistance. At the new york close, we got a bearish rejection candle, which also closed much lower than the open price – giving the setup some more bearish weight.

War Room member Erebus reported that the RBA is expected to also lower their interest rates, which will be negative for the Australian Dollar. So with technical and fundamental factors pointing towards further AUD weakness, we could see lower prices develop off this setup this session.

www.theforexguy.com
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #412
  • Jan 28, 2015 10:59pm Jan 28, 2015 10:59pm
Love your website and love this thread.. superb price action analysis ! keep it up !
  • #413
  • Jan 29, 2015 3:19am Jan 29, 2015 3:19am
Quoting DnBPriceAct
{image} The Australian Dollar showed significant weakness last session when some critical levels were tested. The AUDJPY daily chart demonstrates the rejection of a previous swing low as it held as new resistance. At the new york close, we got a bearish rejection candle, which also closed much lower than the open price – giving the setup some more bearish weight. War Room member Erebus reported that the RBA is expected to also lower their interest rates, which will be negative for the Australian Dollar. So with technical and fundamental factors...

Hi DnB;

I've learnt a lot from reading your thread and website.

I now Trade mainly the Daily TF occasionally the H4.

I was watching the setup you've posted here the only problem with it, for me, Trading the Daily TF is the size of the SL.

The only way I can see to trade this effectively would be from the lower TFs.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 29th Jan 15 AUD:JPY D1 Chart.png Size: 98 KB
Click to Enlarge Name: 29th Jan 15 AUD:JPY H4 Chart.png Size: 89 KB
Click to Enlarge Name: 29th Jan 15 AUD:JPY H1 Chart.png Size: 86 KB
  • #414
  • Jan 29, 2015 6:37am Jan 29, 2015 6:37am
Hi Stevepatt,
Sorry off topic. That is a lovely template you have there. Is this on MT4? Do you mind sharing it with us?
Thanks in advance.
  • #415
  • Feb 3, 2015 9:49pm Feb 3, 2015 9:49pm
Quote
I was watching the setup you've posted here the only problem with it, for me, Trading the Daily TF is the size of the SL.

The only way I can see to trade this effectively would be from the lower TFs.

Hey Steve - that's not true. Check out this article that I wrote...

http://www.theforexguy.com/forex-dai...busting-myths/
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #416
  • Feb 3, 2015 9:51pm Feb 3, 2015 9:51pm
Following up on that AUDJPY swing trade...

Attached Image (click to enlarge)
Click to Enlarge Name: audjpy counter trend.jpg Size: 115 KB


The bearish rejection candle off the swing level worked out nicely as lower prices fell out of this price action setup. These 'breakout and re-test' around important levels on the daily chart generally work out very nicely.

A big 'red flag' has formed for anyone who is still holding short positions here as a very large, counter-trend bullish rejection candle formed off a weekly support area.

When these large reversal candles form off weekly support, it's generally something you want to take seriously. Due to the large anatomy of this bullish rejection candle, and the significance of this level, we will most likely see a bullish move out of this setup. Whether it's just a short term correction, or the bottom of a large upward move is something we can't answer. But traders looking to get in for the 'long haul' should just play the setup candle-by-candle.

Also check my post on the recent AUDUSD price action

BIG MOVES ON AUDUSD AS IT COMES ALIVE – EXPLOSIVE PRICE ACTION TRADING
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #417
  • Feb 3, 2015 10:02pm Feb 3, 2015 10:02pm
Hi DnBPriceact,

I am glad to see others share my love for price action. I totally agree with your analysis, with one precision. Watch out last daily low at 91,7 that was broken back by that powerful daily dragonfly candle. A retest would be the perfect place to enter long on a good signal.
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  • #418
  • Feb 4, 2015 1:46am Feb 4, 2015 1:46am
Quoting DnBPriceAct
Following up on that AUDJPY swing trade... {image} The bearish rejection candle off the swing level worked out nicely as lower prices fell out of this price action setup. These 'breakout and re-test' around important levels on the daily chart generally work out very nicely. A big 'red flag' has formed for anyone who is still holding short positions here as a very large, counter-trend bullish rejection candle formed off a weekly support area. When these large reversal candles form off weekly support, it's generally something you want to take seriously....

Hi DnB;

I don't want to rain on your parade but if you had zoomed out a little bit there is a Daily/Weekly Rejection Candle, 16th Oct. 14, if I had entered at a Break of the Daily Rejection Candle, 28th Jan. 15, there wasn't enough room to get at least 1:1 R:R before hitting the Daily/Weekly Rejection Level from 16th Oct. 14.

The only way, I could see, to get a good R:R, before hitting this Daily/Weekly Level, was by entering on a Lower Time Frame.
Attached Image (click to enlarge)
Click to Enlarge Name: 4th feb 15 AUD:JPY D1 Chart.png Size: 124 KB
  • #419
  • Feb 4, 2015 2:03am Feb 4, 2015 2:03am
You're right, this one was hard get good returns on because it didn't offer any retracement entry. I am just pointing out that it was a good signal and did see good follow through movement, but without the retracement entry up for grabs, the risk reward potential was restricted, depending on how you played it.
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies
  • #420
  • Feb 4, 2015 2:24am Feb 4, 2015 2:24am
Quoting DnBPriceAct
You're right, this one was hard get good returns on because it didn't offer any retracement entry. I am just pointing out that it was a good signal and did see good follow through movement, but without the retracement entry up for grabs, the risk reward potential was restricted, depending on how you played it.

Hi DnB;

Thanks for the response, I've learned a lot from the thread and the Free content on your website.
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