Pure Price Action Trading

Took a short trade on eurusd, bearish bar broke out of the range, showing some momentum, the bar closed below the lower BB, sold below the trigger bar, waiting for targets, will manage trade accordingly.



Short usdjpy, bullish bar broke out of the range, but looking at the previous price action, momentum has been down, sold above the trigger bar.

Attached Image (click to enlarge)

Bought Cadjpy using the trend following BB strategy, green arrow shows the recent momentum was up, so i will only be looking to buy when a bearish bar closes below the BB or buying when bullish bar closes above the BB. Red arrow shows the trigger bar. I still have long gbpjpy (at BE), short aussie, eurusd (at BE) and usdjpy, so 5 trades open.

selling eurjpy at 134.30, trigger bar closed at 9am UKtime, recent momentum is down thats why I am selling...first target is just around the recent lows

Trade trigger this morning, price a few pips away from the first target
Reason for trade: Using the BB trend following strategy, recent momentum has been down as shown by green arrow, Price retraced and a bullish bar closed above the upper BB, sell limit placed at a few pips above trigger bar (shown by the red arrow).

First target has been reached on short eurusd, gbpjpy has been stopped out at BE, short usdjpy and Aussie are still open, price hasn't moved in my favour to manage the trades. So currently I have 4 trades open..the new trade (eurjpy) has been moved to BE.

I have 5 trades open as shown by the charts posted previously...short eurjpy looking good, 2nd target has been reached ...short aussie still not looking good, but SL hasn't been hit...short usdjpy still in the negative, but Sl hasn't been hit...long Cadjpy reached 1st target, SL at BE...short eurusd looking good, 1st target reached, SL at BE, 2nd target not far. Targets reached add up to 2% gain. Some followers emailed asking if I will be selling something on this strategy...and the answer is No, the reason I am showing this strategy is because there is a chap I showed how to trade with this method and now he is selling/mentoring charging...and i think its not right because i showed him for free....So i have decided to show it publicly so that he won't be able to sell it.
This is a very profitable strategy and yu will see it for yourself as we take live trades...you don't need to be sitting on your desk all day because its traded on hourly...you could try it on other timeframes, but yu have to do your own backtesting and forward testing, because i haven't tried it on any HT.
Green arrow shows where trade was taken and red arrows shows profit targets.





Short Aussie, still moving against us, but SL hasn't been reached, mental SL is just above red line



Chart below is short usdjpy, still moving against us, but SL level hasn't been reached, mental SL just above the highs.

Trade updates before NFP, short eurjpy, eurusd looking good, 2nd target on eurusd was finally reached….long cadjpy not doing much still at BE…short aussie and usdjpy still not in our favour. Profits taken so far on the trades is 3%….SL for these last two trades have been reduced to 0.5% risk, so exposed risk on the two trades is 1%.

Attached Image (click to enlarge)

Attached Image (click to enlarge)

Attached Image (click to enlarge)

Attached Image (click to enlarge)

The two shorts on eurusd and eurjpy followed through after NFP, so we are still good, both have reached 2nd targets...aussie short now looking good, SL at BE...usdjpy short has been stopped out at a minor loss of 0.5%...so total gain.

Total Gain this week = 2.5%

HOLDING LONG & SHORT POSITION ON SAME PAIR

Trend following means finding a trend and following it, it sounds simple, but its a difficult philosophy to follow especially for new and some inexperienced traders. One of my followers on the blog asked me if i hold a long and short position in the same currency. Yes i do, but its not hedging as some traders could think. The reason i hold long and short is because as a trend follower i don't know when a new trend begins, and i dont know when a trend ends...and no one does. Look at the chart below...Hypothetically, lets say i am short a currency pair and i am in the money, i don't want to relinquish my position as yet because i don't know how far price will go down. And now lets say i have a buy signal...i will still take that buy signal, and still maintain my short position....the reason i take the long is because i don't know if its the start of a new trend...so i don't want to miss that opportunity if it was a start of a new trend. Looking at the chart, i maintained my short position which then followed through and made me more gains...but i have also taken advantage of the small move up which might have reached my partial profits. You can see how i could have made money in the same currency pair, selling and buying.
Imagine if i had not bought (because i was short biased) and that move up was the trend of the year for that currency, i could have missed a big move for being biased.

Note: Watching Usdcad, looking good for a buy when the current hourly bar closes below BB, will send chart, when I place the trade.

CATCHING THE BIG TRENDS

No new trades yet, but we still continue to track those 3 open trades we had from last week. As you see from the charts below, we are now placed in a very good position, we are now taking advantage of the trend, we have no risk now because we have taken partial profits and some profits have been locked in. The 2 short (eurjpy and eurusd) reached 3rd targets, giving us 4% gain...eurusd 4th target is not far as you can see from the chart. Aussie short looking ok, it has reached 1st target, giving us 0.5% gain. So now worst case scenario is that the market comes back and stops me out for a gain of +7%, but if price keeps going down, the gain is infinite. So as a trend trader, I always know how much I will lose, but don't know how much I will gain, I let the market decide. I only set profit targets for a few lots and then the other lots are let to run, I think trying to set profit targets on all your trades limits you from taking advantage of the trend.
Gain on the 3 trades so far = 7%
All trades are in profit 1500+ pips,

BB TREND FOLLOWING STRATEGY

I am looking at eurusd and usdcad, hourly bars closing above and below BB respectively. We have been short eurusd and now there is an opportunity to add more positions, already we have made about 3% on the eurusd short, so if we add a position with only 0.5-1% risk, we have a cushion already from banked profits. Thats what trend following is about, taking advantage of the long term trend.
Eurusd trade 1. Trend is down so we are only selling
2. Bullish bar closes above BB (trigger bar)
3. Place sell limit above trigger bar

Usdcad trade 1. Trend is up so we are only buying
2. Bearish bar closes below BB (trigger bar)
3. Place buy limit below trigger bar

Thats how simple it is to trade the BB trend following strategy, just the three steps.

Taken the two trades posted earlier, long usdcad and short eurusd...i also managed to catch gbpusd short, 1st and 2nd target reached. Usdcad will be moved to BE quickly because i didn't like the quick move down...shows that sellers were more aggressive than i would have liked if i had to stay long. Another trade i might take is short YM

gbpusd trade.
1. Trend going down, so we only sell
2. bullish bar closes above BB (trigger bar shown by small green arrow)
3. Sell limit placed above trigger bar

As traders we know that we can't predict how far the market will move. So traders who buy because the market is oversold and sell because the market is overbought are trying to play the game of predicting how far price will move. These traders will find it difficult to make significant gains in their trading. If price is moving down, isn't it just easier to sell and go with the market sentiment, than try to outsmart price. I am glad to have made a change in the way some people trade...there are a couple of followers who have been sending me emails with their trades. They have been making very good gains since they started trading with the trend. You have seen some of my trades here they are all trend following and yu have noticed how profitable they have been. With trend following yu might have small losses, but i rarely have my full SL order hit because i manage my trades as the market moves in my favour. I take partial profits and let the rest run because i don't know how far the market will go, so i want to be in the trade for as long as it is moving in my favour. I know how much i will lose, but i don't know how much i will gain, because i let the market predict that.
Please guys and gals, stop looking for fancy trading strategies, stop buying fancy EAs, most of them are only sold by people who have failed in their trading. I don't know any trader who have made money with fancy EAs...but i know a lot of traders who had made millions by trend following...grab Michael Covels book on trend following and yu see all the big successful traders who only traded trend following strategies. For all the traders who are struggling and some who are breaking even, or making small gains, i kindly ask you to try Trend following and you will notice a significant difference in your P&L.

SIMPLE WAY TO TRADE

Simple way to trade is to buy when price is moving up and sell when price is going down. But why do traders look for fancy complicated trading strategies, maybe because they want to look intelligent and impress others. In trading you don't get paid for being intelligent, but you get paid by taking profitable trades. Managing your risk and letting your profits run is the recipe to successful trading.

Who made more gains here?, traders who sell because the market was overbought, or traders who kept buying pullbacks....who would have done the hard work? who would have done the easy work, who would have been in more pain, who would have been in less pain?. Which of these traders would you aspire to be? I bet you there are some stubborn traders who kept selling and kept adding to their losing trades....and now they can't live to trade another day...coz they have blown their hard earned capital. Whilst a trader who kept it simple by buying pullback is growing an account steadily. STOP and THINK what type of trader you want the be.

SIMPLY FOLLOWING THE TREND

Remember we have shorts on eurjpy, eurusd, since few week ago...we managed to add another short on eurusd yesterday and the trade have already reached our first target gaining 0.5%. We also took a long on usdcad, 1 st target has been reached. Other trades are short euraud, 1st target reached..short YM as well as we pointed out in the last few posts. Charts shown below....all these have managed to produce a 3% gain, bringing out total gain to 10%.
Who is using more effort, the seller in a down trend or the buyer in a down trend...who is the fool...who is more stressed...who keeps hoping...

No new trades so far this week, we still have trades from previous weeks which are short eurusd, eurjpy, euraud, aussie, gbpusd...long usdcad. You will notice that some of these trades will be held for many weeks/months, as long as they are moving in our direction. The trade that i think might be held longer than the others is eurusd, because we were short from 1.1280...we have taken partial profits and we still have some lots with SL at BE. Watch how we trend follow...SIMPLE but not EASY.
I will only update if there is a change in the open trades or if i have a new trade. Any questions don't hesitate to post in the comment section.

Hello,


I see your first posts here had Minor R/S lines and your chart was zoomed out. My question is why did you stop using them?

I haven't stopped using it, some people found it to be too discretionary, thats why i introduced the BB start which is more mechanical and easy to follow. I have multiple accounts so i trade a few methods, but they are all trend following. Hope i have answered your question.

Hello again,

Thank you for your answer.
I've red most of your blog and I have to say that this is amazing what your are doing. For years.
I am going to spend next days to study your entries in your blog.

Can I ask you some questions during the read?
Do you prefer communication on FF or on your blog?

Thanks, you can communicate on either the blog or here i don't mind. Hope you guys were not quote on the wrong side with the move after the FOMC meeting. Have a great weekend, back again next to rinse and repeat.