Price action trading - Trade like the pros!

Great, I can showcase another way to enter in a different market type. Consolidation from tuesday's rally extended throughout the entire session yesterday. It picked up today, with euro and cable moving down. What followed was a retrace back to a supply area in the asian session, which is an opportunity for us to capitalize on the move down.

Same thing on Cable, but with choppier PA.

I missed the gbp jpy by 3 pips at 132.10, sad because i moved it from 132.07 to 132.10.

http://prntscr.com/cqh65o

When we're looking for entries, it is best to play it safe. Here's the thing, the area between the wick of the candle and the body is where the supply or demand is at. Most times it will reach the body. Now that we know how to pinpoint those areas, it is time to start narrowing down the area of likely reversal.

Also, once you've created your trade idea, zoom down to a smaller timeframe, which you have. Go to M15 also, check out the smaller picture.

Nice Thread WDays keep it up

Thank you for the support

Cable hit TP, +30

Some more insight on the method:

We don't want to be in every single trade on every single currency pair at any given moment. What we do is planned, strategic, surgical strikes. We enter, take our profit and leave.

It's simple math really. A couple of 30 pip trades, short and sweet, per week will yield 240 pips per month. At 2% risk, this can mean doubling our account equity every few months. Every 100 pips is roughly 10% to me

Depending on how confident I am at the time, I will use varying ranges as the background of my trade. Sometimes I will look for smaller ranges, which are safer, in case I notice that the trend is strong, I will zoom out and use a larger range.

In this case, the difference was pretty insignificant so I decided to play it safe.

Segmenting price into various ranges is very helpful, and I strongly advise doing it until our eyes get used to it.

EU short, entered inside the range as shown on the chart. I may close once it gets inside the highlighted area below.

Beautiful entry on gbp usd, I understand consolidation during Asian hours (in a pair with the trend?) and enter on smaller times frames after a small reversal in a S&D zone with fib.

Nice :-), you need a lot of confidence in your method to trade with such high leverage. Mine is much lower at the moment, trading almost without leverage.

That is a really interesting way of looking at the price, why are smaller ranges safer? ALso, do you modify your lot size when you trade higher TF with bigger TP?

If you think about it, price is always traded within a certain range. Sort of like russian puppets. When I set my SL and TP, I was looking at the small range, and I was worried price would not go beyond it, evidently I was wrong and it went another 70 pips lower than my exit, but it could have well reversed. That's why I said I played it safe

I trade intraday 99% of the time, every order I have, I try to close within the end of the day or even before or around 5 pm gmt. If I were to leave a position running, my risk parameters don't change, because my entry will have been based on what we're seeing in this thread and my stops would be tight enough. I rarely do that, though.

Why is my leverage high? My stop amounts for around 20 pips, which is my 2%. 5 times that, you get 100 pips and 10%

it's a good thing to have the confidence to use the leverage we have in fx

No matter how much confidence you have, it's never wise to overleverage. No more than 2% risk per trade!

Hello Wdays, I missed the GBP JPY today, but I took a USD CAD Buy after I saw price rocket from 1.3180 to 1.3150 in less then 2 hours;

Price was entering a zupply zone on the 4H : http://prntscr.com/cqnysp (just for info)

I drew the demand zone (green square) based on 1H price action: http://prntscr.com/cqny2g

Then I zoomed in on the 30 min chart to determine the entry, now I entered with Buy Limit and did not wait for price action confirmation. The blue line is were I think demand overcame supply, so I placed my limit 2 pips aboce, the low come in 1 pip below my BL, I was lucky here: http://prntscr.com/cqnzyj

So it's all positive, BUT the RR was not reallt good, a 20 pips stop here for a 30 pips profit.

At the moment price is re-entering supply zone , so I closed the trade, also we are nearing Asian tradin hours.

Zoomed out you can see price was entering a zupply zone, drew on 4H : http://prntscr.com/cqnysp

Dear "threadstarter" what is your name? ; )
I think I know more people even here in FF who trade similiar method.. ; ) but that is no matter.
I have a one simple question how do you know which one SR is ok? I understand "space" between SR and retracing price is very important but do you always search for SR and entry after asian session? search there for SR?
For example you open the charts in the morning and...? what is most important? daily->4h-> asian session ?
and last question, what is the entry confirmation?
Thank your reply in advance!

Perfect! You're getting the hangs of it )

Just one thing, that area you marked as supply on your H4 chart is not necessarily supply. This is what it should look like. And be careful, on USDCAD supply levels come from a daily chart on two occasions.

What's more, CAD is very much correlated with Oil. So often times you'll see it behaving in a more specific way in terms of breaking out, because of that correlation.

Hey I'm Alex.

It's possible, a lot of people trade the core of what I do, but you'll find this method is different in a lot of ways. Like for instance, our ability to predict future PA

To answer your questions, I will refer you back to my first post. We start by marking out areas of interest on our charts. Starting with the historical levels, because they are the easiest to spot. Have a look at any daily chart, and note the key reversal points (levels, at which price stopped in its tracks and turned the other way). We're interested in the bodies of the candles, so the close and open of the candles this specifically took place. When price runs to those places, we know something interesting will happen. Either it will be a reversal or momentum picking up due to all the orders piled up above and below such a level.
We then move onto most recent price action, and look for supply and demand areas, as shown in prior posts. Those areas will turn market direction around.

So now we've spotted key levels, areas with their respective supply and demand (sellers or buyers waiting to short or long the market), what do we do? We check to see if we can find similar traces on our correlated instruments. When it comes to EU and GU, we turn to the USDx. Now a thing to remember is, the correlation is inverse, meaning that when dollar rallies, euro and cable will decline and vice versa.
How do we know if a level will hold or break? Well if we see a level that is holding on the EU, but USDx has a clear path ahead, then it's likely the EU will break out. If we see a strong level or area on our USDx chart, and one on EU, then the likelihood of a reversal increases. If the dollar breaks the level, then so will EU/GU etc.

As far as what's most important, nothing is most or least important. Everything is important. Trading is a mix of good preparation (sound analysis before every session), patience and money management. Daily/H4 and the Asian session are two different things, one does not exclude the other. We prepare for our sessions using the higher timeframes, because we cannot tell what market makers want to achieve just by looking at the smaller timeframe charts (because they are essentially noise). We cannot hope to get a good entry, with a tight stop using just our high timeframe charts, so we need to go back and forth from high to low timeframe.

The asian session is usually a time where markets consolidate, the price action that follows the asian session (for me it's between frankfurt open and london open, or slightly after that) can give us a proper entry, which will most of the time be the high or low of the day. Ideally, we want to enter our shorts above the daily open and our longs below the daily open.

Our entry confirmation is our ability to properly assess if a market will be rallying or declining, simple as that When I have my bias, I am confident that I am right. I will therefore move into position during certain market phases (mostly when it is moving sideways, or accumulating as we saw in previous posts). I will then give it enough time to unfold.

+60 for the day over two positions, it's as simple as that.

So far, we've seen two types of entries. First one was the entry during consolidation with a bias based on sound analysis of the market. The second one was in a more dynamic market environment, when there is increased volatility, and consolidations don't last as long, where price will most often dip back into an area of supply or demand before resuming on its way. A few more left, hopefully we will see examples in the near future.