Tag: Forex price action

Categories
Forex Daily Topic Forex Price Action

The H1-15M Charts Combination Trading: Watch Out for Signal Candle’s Attributes

Reversal candle’s attributes play a significant role in driving the price towards the trend. An Inside Bar is considered to be the weakest reversal candlestick. However, in combination trading, even an Inside Bar may create good momentum as a reversal candle. In today’s lesson, we are going to demonstrate an example of that.

Reversal candle’s attributes play a significant role in driving the price towards the trend. An Inside Bar is considered to be the weakest reversal candlestick. However, in combination trading, even an Inside Bar may create good momentum as a reversal candle. In today’s lesson, we are going to demonstrate an example of that.

Reversal candle’s attributes play a significant role in driving the price towards the trend. An Inside Bar is considered to be the weakest reversal candlestick. However, in combination trading, even an Inside Bar may create good momentum as a reversal candle. In today’s lesson, we are going to demonstrate an example of that.

This is an H1 chart. The chart shows that the price heads towards the South with good bearish momentum. The price has a bounce at a level of support and makes a bullish correction. The sellers are to wait for a bearish breakout at the lowest low of the wave.

The chart produces a bearish reversal candle that comes out as a bearish engulfing candle. The last candle comes out as a bearish candle as well. However, it has a long lower shadow.

The chart makes a breakout at the lowest low of the wave. The last candle comes out as a bullish engulfing candle, which is a strong bullish reversal candle. However, the sellers may still keep their hope. If the breakout level produces a bearish reversal candle, they are right on the track.

This is what the H1-15M combination traders are waiting for. It produces a bearish reversal candle. Now they have to wait for a 15 M bearish candle to go short in the pair. It is time for the combination traders to flip over to the 15M chart.

This is how the 15M chart looks. The sellers are to wait for the price to produce a bearish candle closing below the last 15M candle. Let us wait and see what the price does. Let us proceed to the next chart.

The last candle comes out as a bearish candle without having any lower shadow.

The sellers would love to see a candle like this every time as a signal candle.  The combination traders may trigger a short entry right after the last candle closes. Let us find out how the entry goes.

This is the H1 chart again. The price heads towards the South with extreme bearish momentum. The last candle comes out as a doji candle. The price hits 1R within two candles. Those who love letting their winners run, they may close their entry right after the last candle closes.

If we notice, the bearish reversal candle at the breakout level comes out as an Inside Bar. However, it creates a strong bearish momentum. It is because the 15M signal candle comes out as a strong bearish continuation candle. Thus, combination traders may focus more on the signal candle. Signal candle’s attributes are more important than the reversal candle’s attributes as far as chart combination trading is concerned.

 

Categories
Forex Price Action

One Minute Down, Next Minute Up

The Double Bottom is one of the strongest bullish reversal patterns. When the price gets its second bounce at the same level and makes a breakout at the last swing high, the pattern it produces is called the double bottom. In today’s lesson, we are going to demonstrate an example of a double bottom in the H1 chart. At the end of the wave, an interesting thing happens. Let us proceed and find out how the double bottom offers entry and what that interesting thing is.

The Double Bottom is one of the strongest bullish reversal patterns. When the price gets its second bounce at the same level and makes a breakout at the last swing high, the pattern it produces is called the double bottom. In today’s lesson, we are going to demonstrate an example of a double bottom in the H1 chart. At the end of the wave, an interesting thing happens. Let us proceed and find out how the double bottom offers entry and what that interesting thing is.

The Double Bottom is one of the strongest bullish reversal patterns. When the price gets its second bounce at the same level and makes a breakout at the last swing high, the pattern it produces is called the double bottom. In today’s lesson, we are going to demonstrate an example of a double bottom in the H1 chart. At the end of the wave, an interesting thing happens. Let us proceed and find out how the double bottom offers entry and what that interesting thing is.

This is an H1 chart. The chart shows that the price has its second bounce and produces a bullish engulfing candle. Since the same level of support produces a bullish engulfing candle at the second bounce, it is going to have a strong impact on the market if it makes a breakout at the last swing high.

Here is the level of resistance, which the buyers are going to wait for a breakout to go long in the pair upon breakout confirmation. The price reacted at the drawn level earlier as well. Thus, this has been a significant level. The last rejection signifies it more.

Look at the next candle. The candle comes out as a bullish Marubozu candle. The candle closes well above the level where the price had a rejection earlier. Some buyers may want to trigger a long entry right after the last candle closes. Some buyers may wait for the breakout confirmation to go long in the pair.

The next candle comes out as a spinning top with a tiny bullish body. The price closes above the last candle’s highest high. It confirms the breakout. The buyers may trigger a long entry right after the last candle closes since they have the breakout confirmation.

See how the price heads towards the North with good bullish momentum. The price hits 1R within one candle. The last candle suggests that the price may continue its move towards the North. Let us see what happens next.

The chart produces a bearish inside bar. It suggests that the price is still bullish. If the next candle comes out as a bullish engulfing candle, the price may resume its journey towards the North with good bullish momentum. However, many buyers may come out with their profit and wait for the next bullish reversal candle to go long.

The price gets choppy within two horizontal levels. The last candle comes out as a bearish engulfing candle. Do you notice anything interesting here? Yes, the chart produces a Double Top this time, and it produces a bearish engulfing candle at the second rejection. The sellers may want to go short if the price makes a breakout at the last lowest low. This is how things change in the Forex market. It is interesting, is not it?

Categories
Forex Price Action

Make Full Use of a Strong Reversal Candle

An engulfing candle makes a strong statement about the price reversal. The longer the body, the stronger the statement is. In today’s article, we are going to demonstrate an example of the daily-H4 chart combination trading, where the daily chart produces a bearish engulfing candle with a long bearish body. We find out what it has to offer to the sellers in the end.

An engulfing candle makes a strong statement about the price reversal. The longer the body, the stronger the statement is. In today’s article, we are going to demonstrate an example of the daily-H4 chart combination trading, where the daily chart produces a bearish engulfing candle with a long bearish body. We find out what it has to offer to the sellers in the end.

An engulfing candle makes a strong statement about the price reversal. The longer the body, the stronger the statement is. In today’s article, we are going to demonstrate an example of the daily-H4 chart combination trading, where the daily chart produces a bearish engulfing candle with a long bearish body. We find out what it has to offer to the sellers in the end.

The chart shows that the price produces a bearish engulfing candle having a tiny lower spike. The body of the candle is a long one closing well below the last bullish candle. This is one good-looking bearish engulfing candle. Since it is the daily chart, the daily-H4 chart combination traders may flip over to the H4 chart to look for short entries.

The above figure shows the H4 chart. We can see that the last candle comes out as a bullish inside bar. It means the price in the H4 chart may consolidate. The sellers are going to wait to get a bearish reversal candle to go short in the pair.

The last candle comes out as a bearish engulfing candle closing well below consolidation support. The sellers may trigger a short entry right after the last candle closes by setting stop-loss above consolidation resistance and by setting take profit with 1R. Let us now find out how the entry goes.

The next two candles come out as bearish candles. However, the price does not head towards the South as expected. Moreover, the last candle comes out as a doji candle having a long upper shadow. The sellers are to wait for the price to hit the target. The last candle does not convey a good message to the sellers.

Here it comes. The last candle hits the target of 1R. The reversal candle in the daily chart is a very strong one. Do the sellers get anything extra out of it? Let us proceed to the next chart to see what the price does in the chart.

The price makes a long bearish move. It heads towards the South upon having consolidation. The sellers can make a handful of pips by eying in the chart. One of the reasons may be the bearish reversal candle in the daily chart. As far as a candlestick pattern is concerned, an engulfing candle is the most reliable reversal pattern. When you get an engulfing candle like the one we have seen here, it does have a lot to offer. Okay, here is a question. What do you see in the H4 chart here? Yes, the last candle comes out as a strong bullish engulfing candle. This has a lot to offer to the H4-H1 chart combination traders. Therefore, if you are an H4-H1 combination trader, flip over to the H1 chart and make full use of it.

Categories
Forex Price Action

Chart Combination Trading: Even an Inside Bar Has a Lot to Offer

An Inside Bar is considered the weakest reversal candle as far as candlestick trading is concerned. However, in today’s article, we find out the significance of a daily Inside Bar in the daily-H4 chart combination trading. Let us get started.

An Inside Bar is considered the weakest reversal candle as far as candlestick trading is concerned. However, in today’s article, we find out the significance of a daily Inside Bar in the daily-H4 chart combination trading. Let us get started.

An Inside Bar is considered the weakest reversal candle as far as candlestick trading is concerned. However, in today’s article, we find out the significance of a daily Inside Bar in the daily-H4 chart combination trading. Let us get started.

This is the daily chart. The chart shows that the last candle comes out as a bearish Inside Bar. The daily chart traders may still think that the chart is bullish biased. However, the daily-H4 chart combination traders are to flip over to the H4 chart and look for short entries since it is a bearish reversal candle after all.

The H4 chart looks to be tailor-made for the sellers. The chart produces a double top, and the price breaches the neckline. The last candle comes out as a doji candle. The price may consolidate now.

The chart produces another bearish candle closing within the same resistance. Then, it creates a bullish engulfing candle. Let us draw two lines here. The level of support looks very evident. However, the level of resistance still has a lot to prove.

The level of resistance produces a bearish reversal candle. To be precise, it creates a bearish engulfing candle, closing below the level of resistance. The sellers may trigger entry right after the last candle closes by setting stop-loss above the level of resistance and by setting take profit with 1R.

The price heads towards the South in the next candle as well. It seems that the sellers may not have to wait too long to achieve their target. Let us proceed to the following chart to find out how it goes.

As expected, the next candle comes out as another bearish candle. This time it has even a longer body. Look at the last candle. The candle comes out as a bullish inside bar. Technically, the chart is still bearish biased. Do not forget that for the H4-H1 chart combination trading, they may have to flip over to the H1 chart to go long in the pair. This is what we have just demonstrated in the daily-H4 chart combination trading.

To sum up the lesson, an Inside Bar may not be a strong reversal signal in the chart. For the chart combination traders, it is a bit different. As long as it is a reversal candle does not matter how weak it is. The combination traders may flip over to the counterpart and wait for consolidation and a signal candle to trigger entry.

Categories
Forex Price Action

Mark Significant Levels and Watch out Price Action around Them

In today’s lesson, we are going to demonstrate an example of the H4-H1 chart combination trading where the breakout takes place, but the traders have to be sensible to spot out the breakout. Let us get started.

In today’s lesson, we are going to demonstrate an example of the H4-H1 chart combination trading where the breakout takes place, but the traders have to be sensible to spot out the breakout. Let us get started.

In today’s lesson, we are going to demonstrate an example of the H4-H1 chart combination trading where the breakout takes place, but the traders have to be sensible to spot out the breakout. Let us get started.

This is an H4 chart. The chart shows that the price heads towards the North upon having its second bounce at the level of support. Look at the last candle. The candle comes out as a bullish engulfing candle since it closes well above the body of the last candle. Can you spot something out here?

The candle closes well above the level where the price had a rejection earlier. The price reacted around the same level before producing the last candle. If we draw a level by using the significant level, which has been working as the level of resistance, we see that the last candle breaches the level. This means the piercing may be considered a breakout. Let us now flip over to the H1 chart.

This is how the H1 chart looks. The chart shows that the last candle comes out as a Spinning Top. The H4-H1 buyers are to wait for the price to consolidate and to get a bullish reversal candle to go long in the pair. Let us wait and see what the price does.

The chart produces a bearish engulfing candle closing within the breakout level. Look at the last candle. The last candle came out as a long bullish engulfing candle. The buyers may get huge confidence about the earlier H4 breakout and trigger a long entry right after the last candle closes. Let us now find out how the entry goes.

The price heads towards the North with good bullish momentum. The last candle comes out as a bearish Inside Bar. This action suggests that the Bull may continue its run. It is a bearish reversal candle (the weakest one). Thus, the buyers may consider closing their entry. In the end, this comes out as an excellent trade setup.

If we concentrate on the breakout, it is to be found out by the traders. Without drawing the horizontal line, it would be difficult to found that out. Thus, mark the points that are significant and keep looking at our charts. It would help you find out breakout and make the trading decision easily. Some breakouts may not seem like a breakout without drawing lines on the chart. Thus, pick your drawing tool to mark significant levels with horizontal lines/trend lines/channels on your trading chart and watch out how the price reacts around them.

Categories
Forex Price Action

The Trend in a Bigger Frame is Traders’ True Friend

There is a saying in financial trading “Trend is traders’ friend.” Without any doubt, this is true. In a chart combination trading, a bigger timeframe’s trend plays an important role and helps traders a lot to go with an entry in its counterpart. Let us have a look through an example of how it works.

There is a saying in financial trading “Trend is traders’ friend.” Without any doubt, this is true. In a chart combination trading, a bigger timeframe’s trend plays an important role and helps traders a lot to go with an entry in its counterpart. Let us have a look through an example of how it works.

There is a saying in financial trading “Trend is traders’ friend.” Without any doubt, this is true. In a chart combination trading, a bigger timeframe’s trend plays an important role and helps traders a lot to go with an entry in its counterpart. Let us have a look through an example of how it works.

This is a daily chart. The chart shows that the price heads towards the North at a moderate pace. The last candle comes out as a bullish candle closing well above consolidation resistance. It means the daily traders may start eyeing to go long in the pair.  The daily-H4 combination traders may flip over to the H4 chart for the price to consolidate and produce a long signal.

This is the flipped H4 chart. The chart shows that the last candle comes out as a bullish candle with an upper shadow. The buyers are to wait for the price to consolidate now.

The price consolidates and produces a bullish candle breaching consolidation resistance. Here is a thing. The consolidation range is shallow. The consolidation range plays a significant role in determining the next move’s length. The length of consolidation here does not suggest that the next move will be a big one. The daily-H4 combination traders may trigger a long entry by setting stop loss below consolidation support and by setting take profit with 1R. Let us proceed to the next chart.

The price hits the target of 1R by the next candle. Concentrate on the last candle. The candle comes out as a bullish Marubozu candle. It suggests that the price may head towards the North further. Let us find out how far it goes.

The price heads towards the North with three more candles. This means it travels almost three times more length than the combination traders have anticipated. Can you guess what may be the reason for this?

The daily chart is in a strong bullish trend. The last daily candle breaches through consolidation resistance and makes a strong statement about its bullishness. That may have attracted the daily buyers to go long in the pair as well. This brings extra liquidity and helps the price head towards the North with extreme pressure. This happens most of the time in combination trading. If the bigger chart makes a breakout and has a solid trend, the price seems to head towards the trend’s direction at a good pace in the minor chart. The combination traders may keep this in their mind and make full use of this.

Categories
Forex Price Action

When the Same Chart Offers a Better Trade Setup

In today’s lesson, we are going to demonstrate an example of an H4 chart offering two entries. The first one does not create enough bullish momentum right after the breakout, but the second one does. Let us now get started.

In today’s lesson, we are going to demonstrate an example of an H4 chart offering two entries. The first one does not create enough bullish momentum right after the breakout, but the second one does. Let us now get started.

In today’s lesson, we are going to demonstrate an example of an H4 chart offering two entries. The first one does not create enough bullish momentum right after the breakout, but the second one does. Let us now get started.

The chart shows that after being bearish for a long while, the chart produces two bullish candles consecutively. The H4 traders may keep their eyes on the daily chart to get a daily bullish reversal. Then, consolidation followed by an H4 bullish reversal candle would be the signal to go long in the pair.

The price starts having a bearish correction. The buyers are to wait for a bullish reversal candle first to go look for a long opportunity. The price is at a significant level, where it reacted earlier several times. The reversal candle might be around the corner.

Yes, the chart produces a bullish Inside bar. It is not a strong bullish reversal candle, but it is a sign that the price may get bullish soon, considering other factors. Let us proceed to the next chart.

The next candle comes out as a bullish candle with a long bullish body having a tiny upper shadow. The buyers may trigger a long entry right after the candle closes by setting stop loss below consolidation support and by setting take profit with 1R.

The next candle comes out as a bearish inside bar. The buyers usually would love to see the price head towards the trend’s direction after triggering entry. It does not happen here. However, it does not look too bad.

What a surprise! The chart offers one more entry. Look at the last candle, which comes out as a bullish engulfing candle closing well above consolidation resistance. Some buyers may trigger another entry. Yes, it is a debatable issue whether traders should take multiple entries in the same pair. At least, if traders miss the first chance, they may consider taking entry here. Let us find out what the price does next.

The price heads towards the North with good bullish momentum. It hits the buyers’ target with ease. On the second occasion, the bullish engulfing candle forming right at consolidation support makes the pair very bullish. On the first occasion, the price does not get that bullish after the signal candle. On any day, the second signal is better than the first one. Some traders do not like taking multiple entries, which is fair enough. If a trader does not mind taking multiple entries, he may as well consider taking entry if it is a better trade setup than the last one with relatively a smaller lot than his usual trading lot.

 

Categories
Forex Price-Action Strategies

Do not Forget to Check the Daily Chart

In today’s lesson, we demonstrate an example of an H4 chart and try to evaluate its price movement after breakouts. The chart shows that the price makes three breakouts altogether. The first two breakouts do not create that much momentum towards the breakout, but the last one does. We try to find out the reason behind it.

In today’s lesson, we demonstrate an example of an H4 chart and try to evaluate its price movement after breakouts. The chart shows that the price makes three breakouts altogether. The first two breakouts do not create that much momentum towards the breakout, but the last one does. We try to find out the reason behind it.

In today’s lesson, we demonstrate an example of an H4 chart and try to evaluate its price movement after breakouts. The chart shows that the price makes three breakouts altogether. The first two breakouts do not create that much momentum towards the breakout, but the last one does. We try to find out the reason behind it.

This is an H4 chart. The chart shows that the price makes a bullish move and consolidates. It seems that the price has found its support since it has already produced a bullish engulfing candle. The buyers may go long in the pair above consolidation resistance.

The chart shows that consolidation resistance is a strong level of resistance where the price gets rejection several times. Since it is an H4 chart, three times rejections, on the same level, means that it is a daily level of resistance. Thus, an H4 breakout may not create that much momentum all the time.

The chart shows that the price after making a breakout consolidates for a long time again. It is because of the daily resistance factor. The daily candle confirms the breakout. Thus, the price in the H4 chart consolidates. Look at the last candle. This comes out as a bullish candle breaching consolidation resistance. Let us find out what happens next.

The last H4 bearish inside bar is the last candle of the day. It means the daily candle comes out as a bullish candle after the daily breakout, breakout confirmation, and daily reversal candle.

The price consolidates with one more candle to start the next trading day. A bullish reversal candle may push the price towards the North with good bullish momentum. Since the chart now belongs to the H4 traders as well.

Here it is. The chart produces a bullish engulfing candle closing well above consolidation resistance. The length of consolidation is shallow. However, the bullish reversal candle looks to be a perfect signal candle.

There she goes. The price heads towards the North with extreme bullish momentum. The last candle suggests that the price may continue its bullish journey. Let’s look at the last move. The price does not consolidate with enough depth, but it makes a strong bullish move. On the other hand, on the first two occasions, it consolidates well, but its breakout does not create good momentum. It is because, on the first two occasions, there is a daily resistance factor. The level of daily resistance makes the H4 traders wait for more. Once the price makes a breakout on the daily chart, it heads towards the breakout direction with good momentum. The H4 traders are to check the daily chart before taking entry. This is one more reason to check that one thoroughly.

Categories
Forex Price Action

Some to Take and Some to Skip

In today’s lesson, we are going to demonstrate an example of an H4 chart, which seems to be offering several entries. However, a trader has to be very calculative before taking an entry. Some entries are there to be taken, and some are there not to be taken. We would try to find out why we shall skip taking some entries. Let us get started.

In today’s lesson, we are going to demonstrate an example of an H4 chart, which seems to be offering several entries. However, a trader has to be very calculative before taking an entry. Some entries are there to be taken, and some are there not to be taken. We would try to find out why we shall skip taking some entries. Let us get started.

In today’s lesson, we are going to demonstrate an example of an H4 chart, which seems to be offering several entries. However, a trader has to be very calculative before taking an entry. Some entries are there to be taken, and some are there not to be taken. We would try to find out why we shall skip taking some entries. Let us get started.

This is an H4 chart. The chart shows that the price makes a strong bullish move and consolidates for a long time. The last candle comes out as a bullish candle breaching consolidation resistance. It usually a scenario of taking a long entry. Before taking an entry, we must calculate whether the price consolidates for more than a day or not. Over here, the price consolidates more than a day. It means the level of resistance becomes daily resistance. The breakout is not for the H4-daily combination traders to trigger a long entry.

The chart shows that the price heads towards the North. The buyers may wait for the price to consolidate and get a bullish reversal candle to go long in the pair. They must keep their eyes on the pair.

The chart produces a bearish inside bar. It may consolidate more and make a deeper consolidation. This is what the buyers are to hope for. Let us find out what the price does here.

The chart shows that the price consolidates for five candles altogether. The last bullish candle is the last H4 candle of that day. It means if the chart produces the next candle as a bullish engulfing candle, the buyers will have an opportunity to go long in the pair. Otherwise, they are to wait longer.

The last candle comes out as a bullish engulfing candle breaching consolidation resistance. The buyers may trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R.

The price consolidates again and produces a bullish engulfing candle. It seems the bull is going to dominate in the pair for a long time since it finds another level of support. When price trends like that, traders add more positions, and the price keeps trending relatively for a longer time.

Here it is. The price hits the target of 1R. They buyers grab some green pips. Yes, they wait for the price to hit the target. Some traders may take a partial profit out of it and let the rest of the trade run to grab more pips.

In this lesson, we have demonstrated that traders may take the second entry and skip the first one because of the daily resistance factor. Traders must calculate these things before taking entry.

Categories
Forex Elliott Wave

Advanced Applications in Wave Analysis – Part 4 of 4

Introduction

Introduction

Introduction

In the previous educational article, we presented the contracting triangles and the restricting group. In this last part of our four-part series, we’ll show the non-restrictive contracting triangles and the expanding triangles with its variations. 

Non-Restrictive Triangles

This sub-group of triangles is characterized by locates in any other part of the wave cycle, not exclusively in waves 4 or B. The knowledge of this type of triangles could be useful to the wave analyst in the study of complex corrective patterns. This type of triangles tends to be produced at the end of complex corrections. Frequently, non-restrictive triangles tend to be more simple to identify than restrictive triangles.

  • Wave A. This segment tends to be the most volatile in terms of price at the time of the triangle. According to the alternation principle, if wave A is violent and takes a small portion of its completion, wave B will be slower and complex than wave A.
  • Wave E. In this scenario, the last segment of a non-restrictive contracting triangle, tends to develop a non-restrictive triangle. In other words, wave E could make a triangle inside a triangle of the upper degree. From the different types of non-restrictive triangles, the horizontal triangle tends to be the most common in the real market. The following list exposes the parts where the non-restrictive triangle.
    • Wave E in a horizontal triangle.
    • Last movement of a complex correction as a double or triple corrective pattern.
    • The fifth wave of an impulsive terminal structure.
    • The wave X of a complex correction.

Expanding Triangles

The expanding triangle tends to cheat the wave analyst more than the contracting triangle. This situation occurs because when the price moves in a volatile session, it tends to create a false breakout and quickly resuming its original trend.

The main characteristics of an expanding triangle are:

  • Wave A or wave B will be the shortest wave of the triangle.
  • Wave E tends to develop an explosive movement, higher in terms of price and time than the other waves.
  • In the same way that in contracting triangles, a contracting triangle can produce in wave E, in an expanding triangle, it can construct an expanding triangle.
  • The next movement of the triangle, which could correspond to wave C or 5, should not retrace the advance of wave E entirely.
  • The expanding triangle usually does not follow any Fibonacci relationship.
  • Expanding triangles normally occurs after a powerful movement such as an extended wave or an extended wave C. 

Restrictive Expanding Triangles

The restrictive expanding triangle tends to be placed in waves 4 and B. If the expanding triangle locates in wave B, the triangle belongs to a flat pattern. The rules applied to this group of expanding triangles are as follows:

  1. Waves A and E will be related through a 161.8%, being the wave E the largest segment.
  2. Wave A or B must be the shortest segment of the triangle.
  3. Only wave B or D can fail to try to surpass the previous wave.

Horizontal Expanding Triangle. The characteristics of this pattern are as follows:

  1. Wave A is the shortest segment of the triangle.
  2. Each leg after wave A will be larger than the previous segment.
  3. Wave E should be the most volatile, complex, and longer terms of time than the other waves.
  4. Wave E tends to be 161.8% of wave A.

Irregular Expanding Triangle. This variation of the expanding triangle is the most common to find in the real market. The main characteristic of this variation is that every time that wave B try to surpass to wave A fails in its advance. Wave E and A are show a 161.8% relationship, being wave E the longest segment.

Continuous Expanding Triangle. This type of restrictive expanding triangle is the second most common pattern to find in the real market. The continuous triangle characterizes by failing when this tries to surpass the end of wave C. If wave D fails, the pattern could show a slight bullish or bearish bias. Finally, waves A and E will be related in a 261.8%, being wave E the longest segment.

Non-Restrictive Expanding Triangles

The non-restrictive expanding triangle pattern follows the same conditions as restrictive expanding triangles. Its main characteristics are as follows:

  • Usually, they don’t have any Fibonacci relationship in their internal segments. The only relationship could be found on waves A and E, where wave E length could be 261.8% of wave A length.
  • The apex of the expanding triangle occurs before the triangle. If the apex occurs between 20% and the start of the expanding triangle, the formation should be non-restrictive.

Conclusions

In this educational article, corresponding to the last part of our four-part series covering the triangle pattern, we presented in the first section, the Non-Restrictive Contracting triangle. This group of contracting triangles tends to appear at the end of complex corrections, or the end of an impulsive terminal structure.

The second section corresponds to the expanding triangles, which are characterized by tricking the different market participants, who tend to think that the market has reversed and, after its last volatile movement corresponding to wave E, they discovered that the market in fact is resuming its previous trend.

Suggested Readings

  • Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).

 

Categories
Forex Price Action

Significance of Having the Belief in Your Analysis

In today’s lesson, we are going to demonstrate an example of H1-15 combination trading. The price trends from the level of 61.8%. Usually, when the price trends from the level of 61.8%, it does not take that long to make a breakout. However, in this example, we will demonstrate that it may sometimes take longer than our expectations. Let us get started.

In today’s lesson, we are going to demonstrate an example of H1-15 combination trading. The price trends from the level of 61.8%. Usually, when the price trends from the level of 61.8%, it does not take that long to make a breakout. However, in this example, we will demonstrate that it may sometimes take longer than our expectations. Let us get started.

In today’s lesson, we are going to demonstrate an example of H1-15 combination trading. The price trends from the level of 61.8%. Usually, when the price trends from the level of 61.8%, it does not take that long to make a breakout. However, in this example, we will demonstrate that it may sometimes take longer than our expectations. Let us get started.

The chart shows that the price makes a strong bullish move towards the North. The last candle comes out a bearish inside bar. It indicates that the price may make a bearish correction. The buyers are to wait for the price to produce a bullish reversal candle followed by a bullish 15M breakout at the highest high of the wave to go long in the pair. This is the plan of the game. Let us find out how it goes.

The next candle comes out as a bearish candle as well. The last bearish candle has a long lower shadow. It indicates that the chart may produce a bullish reversal candle anytime soon. The buyers are to wait here with patience.

As expected, the chart produces a bullish reversal candle. The candle comes out as a bullish engulfing candle. The H1-15M combination traders are to flip over to the 15M chart and wait for a bullish 15 candle breaching the wave’s highest high to trigger a long entry.

You may have noticed that the price has been within the level of resistance for several candles. It means the buyers are to keep their eyes on this pair for a long time. Look at the last candle. After so many hours of waiting, the 15M chart produces a bullish candle that closes above the level of resistance. The buyers may trigger a long entry right after the last candle closes. Let us flip over to the H1 chart with Fibo levels on and find out what happens here.

The Fibo level shows that the price trends from the level of 61.8%. This is one of the levels, which usually produces good momentum. In this example, it produces a good bullish momentum after the breakout, but it takes a long time to make the breakout. The H1-15 combination traders’ patience is tested here. The buyers who wait and keep the belief that it may end up producing the signal make money out of this setup in the end. It is not easy, but this is what trading is all about. Having a belief in analysis helps a trader be a better trader.

Categories
Forex Price Action

H1-15M Combination Strategy: Entry upon Consolidation and Fibo Targets

In today’s lesson, we are going to demonstrate an example of the H1 -15M combination trading strategy offering entry upon consolidation. We are going to integrate Fibonacci levels to see how far the price moves. This would give us an idea of how effective Fibonacci levels are to determine the stop loss and take profit level. Let us get started.

In today’s lesson, we are going to demonstrate an example of the H1 -15M combination trading strategy offering entry upon consolidation. We are going to integrate Fibonacci levels to see how far the price moves. This would give us an idea of how effective Fibonacci levels are to determine the stop loss and take profit level. Let us get started.

In today’s lesson, we are going to demonstrate an example of the H1 -15M combination trading strategy offering entry upon consolidation. We are going to integrate Fibonacci levels to see how far the price moves. This would give us an idea of how effective Fibonacci levels are to determine the stop loss and take profit level. Let us get started.

The H1 chart shows that the price makes a strong bearish move and finds its support. The black marked level is the level of H1 support here. The price moves towards the North with two candles and may have found its resistance. One of the candles comes out as a bearish engulfing candle. Traders are to wait for an H1 breakout followed by a 15M bearish reversal candle to go short in the pair. Let us see what happens here.

The chart produces one more bearish candle followed by a doji candle. It means the price consolidates in this chart. The next candle closes just below the level of support. Ideally, this is not a perfect breakout candle. However, the price consolidates and produces an H1 bearish reversal candle (the last candle). This is a signal that the price may get bearish and head towards the South. Let us flip over to the 15M chart.

The 15M chart shows that the last candle comes out as a bullish candle. Do not forget that H1 candle closes with a bearish body. Thus, a 15M bearish reversal candle (preferably engulfing candle) will push the price towards the South.

Look at the last 15M candle. It comes out as a bearish engulfing candle closing well below the last candle. This means the price may head towards the South with good bearish momentum. Let us proceed to the next chart with Fibonacci levels to find out how far the price heads to.

The price trends from the 78.6% level and reaches 161.8%. Usually, the 78.6% Fibo level drives the price towards the level of 138.2% with good momentum. It often reaches up to the level of 161.8% because of momentum. However, we may set our target at 138.2% if it trends from 78.6%. Another point you may have noticed is that we draw Fibonacci levels by using the lowest low, not the H1 support. These are two different things.

If the H1 chart makes a straight breakout, we may wait for a 15M reversal candle to take entry. If it consolidates and produces an H1 reversal candle, we may trigger entry if 15M chart produces a strong reversal candle closing well below the wave’s lowest low. Do some backtesting; you will see many charts where the price makes a move like this. Stay tuned. We will reveal more examples of this.

 

Categories
Forex Price Action

The H1-15M Combination Trading: Waiting for an H1 Reversal Candle Ensures Better Reward

The H1 reversal candle plays a significant part in the H1-15M chart combination trading. If the traders wait to get an H1 reversal candle, by using candle’s lower low/higher high, they get a better risk-reward. In a bearish market, a trader needs to wait for an H1 bearish reversal candle after the breakout. In a bullish market, he needs to do the opposite. In today’s lesson, we are going to demonstrate an example of a bullish market where the H1-15M chart combination offers an entry upon producing an H1 bullish reversal candle. Let us get started.

The H1 reversal candle plays a significant part in the H1-15M chart combination trading. If the traders wait to get an H1 reversal candle, by using candle’s lower low/higher high, they get a better risk-reward. In a bearish market, a trader needs to wait for an H1 bearish reversal candle after the breakout. In a bullish market, he needs to do the opposite. In today’s lesson, we are going to demonstrate an example of a bullish market where the H1-15M chart combination offers an entry upon producing an H1 bullish reversal candle. Let us get started.

The H1 reversal candle plays a significant part in the H1-15M chart combination trading. If the traders wait to get an H1 reversal candle, by using candle’s lower low/higher high, they get a better risk-reward. In a bearish market, a trader needs to wait for an H1 bearish reversal candle after the breakout. In a bullish market, he needs to do the opposite. In today’s lesson, we are going to demonstrate an example of a bullish market where the H1-15M chart combination offers an entry upon producing an H1 bullish reversal candle. Let us get started.

This is an H1 chart. The chart shows that the price heads towards the North with good bullish momentum. The price, then upon finding its resistance, has been in a bearish correction. It consolidates around a level and heads towards the North. The buyers are to keep their eyes on the chart with a hope that it may make a bullish breakout.

The chart shows that the last candle makes a bullish breakout closing well above the last highest high. The buyers are to wait for the chart to produce an H1 bullish reversal candle followed by a 15M bullish candle to trigger a long entry. Let us keep watching the chart to get that H1 bullish reversal candle.

The chart shows that it produces two doji candles. It means the price has been in bearish correction at the minor charts. An H1 bullish reversal candle at the breakout level would be the ‘getting ready’ signal to go long in the pair.

Look at the last candle. The last candle comes out as a bullish candle forming at the breakout level. The buyers are waiting for the chart to produce such a candle. They may flip over to the 15M chart now. Let us flip over to the 15M chart.

The last candle comes out as a bearish inside bar. Since the H1 candle closes as a bullish candle, so a 15M bullish candle is the signal to trigger a long entry. Let us proceed to the next chart.

Here it is. The chart produces a bullish Pin Bar. The buyers may trigger a long entry right after the last candle closes. Traders may set their stop loss below the H1 bullish reversal candle’s lowest low, which is below the red-marked level. To set take profit, they may use Fibonacci levels. If the price trends from 61.8%, it usually goes up to the level of 161.8%. Let us find out how this one goes.

Yes, the price heads towards the level of 161.8% with good bullish momentum. If we flip over to the 15M chart right after the breakout, we would take entry by setting stop loss below 00.00%. By waiting for an H1 reversal candle, we may set the stop loss below 38.2%. This ensures a better risk-reward. On the other hand, if we always wait to get an H1 reversal candle after the breakout, we may not get it all the time. Thus, we end up being offered less number of entries in the H1-15M chart combination trading.

 

Categories
Forex Daily Topic Forex Price Action

The Levels You Need to Pay Extra Attention

Support and Resistance are the two key factors of Forex trading. The good thing is in most cases time these levels can be guessed well earlier. By drawing support/resistance levels where the price reacts earlier,   we can spot those levels. This helps a trader set his stop loss, take profit and make a trading decision. […]

Support and Resistance are the two key factors of Forex trading. The good thing is in most cases time these levels can be guessed well earlier. By drawing support/resistance levels where the price reacts earlier,   we can spot those levels. This helps a trader set his stop loss, take profit and make a trading decision. […]

Support and Resistance are the two key factors of Forex trading. The good thing is in most cases time these levels can be guessed well earlier. By drawing support/resistance levels where the price reacts earlier,   we can spot those levels. This helps a trader set his stop loss, take profit and make a trading decision. In today’s lesson, we are going to demonstrate an example of how the previous levels where the price reacts earlier play a significant part as far as support/resistance is concerned.

Look at the chart carefully. The price makes a strong bearish move and makes an upside correction. The chart produces a spinning top followed by a bearish engulfing candle. If we consider the existent trend and candlestick pattern, it is a short signal. The question is whether it really is a short signal or not. Look at the next chart.

At the correction, one of the candles breaches through a level. This level was a level of support earlier. After being bearish, the level should work as a level of resistance. It does not. The price breaches through the level. In fact, it may work as a level of support again. If it produces a bullish reversal candle, the buyers are going to take control here.

The level seems to hold the price as a level of support. It produces two a bullish pin bar and a doji candle. If it produces a bullish engulfing candle here, the price may get bullish and head towards the North.

The chart produces a bullish engulfing candle closing well above the wave’s highest high. Let us calculate whether the buyers should go long here or not. The price makes a bullish move breaching a significant level. The price makes a bearish correction and the breakout level works as a level of support. As far as price action trading is concerned, traders may trigger a long entry right after the last candle closes.

As expected, the price heads towards the North with good bullish momentum. It gets the buyers 1R already. The last candle comes out as a bearish inside bar. The price may reverse now. However, there is still a 40% possibility that the price continues its bullish move. Let us assume that the buyers close the trade and cash in some profit.

If we consider the whole scenario, the market seems bearish in naked eyes. When we draw the significant level, it gives us a clearer picture of the breakout and correction. We, then realize that the market is actually bullish. A long entry at the pullback gets the buyers some green pips. This is what Support and Resistance (significant levels) do.

Categories
Forex Price Action

The H4-Daily Combination Strategy: Do not Get Carried Away

In today’s lesson, we are going to demonstrate an example of an H4-daily chart combination trading. The lesson has an important message to remember for the H4-Daily combination traders. Let us get started. The chart shows that the price produces a double top and heads towards the South with good bearish momentum. The daily candle […]

In today’s lesson, we are going to demonstrate an example of an H4-daily chart combination trading. The lesson has an important message to remember for the H4-Daily combination traders. Let us get started. The chart shows that the price produces a double top and heads towards the South with good bearish momentum. The daily candle […]

In today’s lesson, we are going to demonstrate an example of an H4-daily chart combination trading. The lesson has an important message to remember for the H4-Daily combination traders. Let us get started.

The chart shows that the price produces a double top and heads towards the South with good bearish momentum. The daily candle closes as a bearish Marubozu candle having no lower shadow at all. The next trading day starts with a Spinning Top. It seems that the H4 chart starts having consolidation. The last H4 candle comes out as a bullish engulfing candle. This looks good for the sellers that the price is having consolidation after making a good bearish move. However, the H4-Daily combination traders must not forget one thing that the signal is to be produced within the next two candles. Otherwise, it becomes daily support.

The fifth H4 candle of the day comes out as a bearish engulfing candle. The candle closes well below consolidation support. The sellers may trigger a short entry right after the last candle closes by setting stop-loss above consolidation resistance and by setting take profit with 1R.

The next candle comes out as a bullish inside bar after triggering the entry. The sellers would love to get a long bearish candle here. However, a bullish inside bar suggests that the bear still holds the key. Let us proceed to the next chart.

The next candle comes out as a bearish engulfing candle. This looks extremely good for the sellers now. The price finds another resistance. This attracts sellers to add more short positions. Anyway, the H4-Daily combination traders are to wait for the price to hit their 1R take profit.

The price takes two more candles to hit the target. I would say that the price hits the target at a moderate pace here. Anyway, the H4-Daily combination strategy offers entry, and the trade setup works well for the sellers.

The message this lesson has is that we must not get carried away with bullish or bearish move followed by consolidation. The H4 chart is to produce a trade signal within the next day. If it does not, that chart does not belong to the H4-Daily combination trading strategy.  If it does, then the H4-Daily combination traders may trigger an entry.

Categories
Forex Daily Topic Forex Price Action

Double Top-Engulfing Combination and Trade Management

In today’s lesson, we are going to demonstrate an example of daily-H4-combination trading. The trade setup starts with a double top, and the trend-initiating candle comes out as a bearish engulfing candle. The price consolidates and produces another bearish engulfing candle closing below consolidation support. We find out what happens next and how we may manage the trade to get the best result out of it.

In today’s lesson, we are going to demonstrate an example of daily-H4-combination trading. The trade setup starts with a double top, and the trend-initiating candle comes out as a bearish engulfing candle. The price consolidates and produces another bearish engulfing candle closing below consolidation support. We find out what happens next and how we may manage the trade to get the best result out of it.

In today’s lesson, we are going to demonstrate an example of daily-H4-combination trading. The trade setup starts with a double top, and the trend-initiating candle comes out as a bearish engulfing candle. The price consolidates and produces another bearish engulfing candle closing below consolidation support. We find out what happens next and how we may manage the trade to get the best result out of it.

This is an H4 chart. The chart shows that the price produces a double top. At the second rejection, the reversal candle comes out as a bearish engulfing candle and drives the price towards the South with good bearish momentum. Upon finding its support, it consolidates for a while and produces another bearish engulfing candle. We know what the daily-H4 combination traders are to do here.

The daily-H4 combination traders may trigger a short entry right after the last candle closes by setting stop-loss above consolidation resistance and by setting take profit with 1R. Let us proceed to the next chart to find out what the price does after triggering the entry.

The next candle comes out as a bearish candle as well. It looks good for the sellers. It seems the price may not take too long to hit the target of 1R. Let us proceed to the next chart.

It does not look good for the sellers now. The last candle comes out as a bullish engulfing candle. It suggests that the price may get bullish and hit the stop loss. Since this is an H4 chart, traders are to manage their trades according to the candlestick. The entry is carrying a loss now. Traders have three options here.

  1. They may close the whole entry
  2. They may let the whole trade run
  3. They may close 50% of the entry

It depends on an individual trader how he likes to manage his trades. Some traders may want to keep the whole trade, and some may want to close the whole trade. There is a saying that cut your losses short and let your profit run. Thus, we may manage the trade by closing half of it and let the rest of it run. This is how we earn or lose 50% of the initial target. Let us see how it goes now.

The chart produces a spinning top and heads towards the downside. The last candle comes out a hammer, but it hits the target of 1R. This means the trade setup brings profit for the sellers. It may have gone another way round. Thus, in such a situation, taking out half of the trade offers us less profit but less loss as well in the end. It does not always happen. However, when it does, we may consider managing the trade by doing it so.

Categories
Forex Price Action

The H1-15M Breakout Trading: Concentrate on Breakout and Reversal Candle

In today’s lesson, we are going to demonstrate an example of a trade setup based on the H1-15M chart combination. Usually, the straighter the first move, the better it is.  However, the price sometimes consolidates in the first arm as well. Such consolidation makes a move look weak and may hold us back from eyeing on the chart. We try to find out whether we should skip eyeing on such a chart or not.

In today’s lesson, we are going to demonstrate an example of a trade setup based on the H1-15M chart combination. Usually, the straighter the first move, the better it is.  However, the price sometimes consolidates in the first arm as well. Such consolidation makes a move look weak and may hold us back from eyeing on the chart. We try to find out whether we should skip eyeing on such a chart or not.

In today’s lesson, we are going to demonstrate an example of a trade setup based on the H1-15M chart combination. Usually, the straighter the first move, the better it is.  However, the price sometimes consolidates in the first arm as well. Such consolidation makes a move look weak and may hold us back from eyeing on the chart. We try to find out whether we should skip eyeing on such a chart or not.

This is an H1 chart. The chart shows that the price makes a bullish move. Then, it produces a bearish inside bar followed by a bullish engulfing candle. The H1-15M buyers may flip over to the 15M chart to get a 15M bullish reversal candle to trigger a long entry. However, those two bearish H1 candles suggest that the 15M chart does not produce any bullish reversal candle after the H1 breakout. The price starts having a bearish correction instead.

The chart makes its bullish move, followed by a bearish correction. The bullish move does not look that impressive. It consolidates before making the bearish correction. Many traders may skip eyeing on this chart to go long in the pair. Ideally, the H1-15M combination trading requires an H1 breakout followed by a 15M bullish reversal to offer a long entry. Let us proceed to the next chart to find out what the price does here.

The price finds its support and heads towards the North. The last candle closes above the level of resistance. This is an H1 breakout. The H1-15M combination traders are to flip over to the 15M chart to trigger a long entry. Let us flip over to the 15M chart first.

This is how the 15M chart looks right after the H1 breakout. If the price comes back to the breakout level, and the level produces a 15M bullish reversal candle, the buyers may trigger a long entry.

The 15M chart produces a bearish engulfing candle closing within the breakout level. The next candle comes out as a bullish engulfing candle. The H1-15M buyers may trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R.

The price never looks back before hitting 1R. It heads towards the North at a very good pace. Consolidation and bullish reversal candle come out exactly the buyers would want to get. Do not forget that the first bullish move does not look that impressive. The breakout and 15M chart’s price action attract the buyers to go long here, though. This is what we are to look for in the H1-15M combination trading. It is good if the price makes a strong move in the first arm. However, if it does not, we may still eye on the chart to see whether it makes an H1 breakout and offers us an entry by producing a 15M bullish reversal candle.

Categories
Forex Elliott Wave

Additional Observations in Wave Analysis – Advanced Level

Introduction

Introduction

Introduction

R.N. Elliott, in his treatise “The Wave Principle,” emphasizes the importance of the corrective patterns knowledge. Elliott adds that its comprehension can provide to wave analyst an advantage in the forecasting process.

Glenn Neely, in his work “Mastering Elliott Wave,” not only expands this information defining a set of observations about the different corrective patterns and its potential implication for the next path. He also extends these observations to impulsive structures.

Corrective Patterns

The significative movements occur after a correction; in this sense, the knowledge of the potential extension of the next move provides a valuable edge to wave analyst.

The following list shows the corrective formations according to their strength level.

  1. Triple zigzag. This complex corrective pattern is the strongest of the corrections group. The triple zigzag rarely appears in the real market; however, its appearance is indicative of its strength (or weakness) level. When it surges, it will raise on a terminal structure, or in a triangle pattern. Once the triple zigzag ends, the next move will not experience a complete retracement.
  2. Triple Combination. This type of complex correction can be formed by a combination of flat, zigzag, and triangle. Usually, it will end with a triangle pattern. Once the triple three formation ends, the next path would tend to retrace the entire movement even in an upper degree. If this pattern surges as a terminal structure, the next move should entirely retrace the formation triple three.
  3. Triple Flat. This complex formation corresponds to the combination of three flat patterns. In this case, the next path should not retrace its advance completely, except when the Elliott wave structure surges as a terminal structural series in the fifth wave.
  4. Double Zigzag. This complex corrective pattern should not experience a complete retracement by the next movement.
  5. Double Combination. The double combination is a complex corrective pattern that generally could contain a zigzag or a flat formation with a triangle. In the same way, this structure tends to end with a failure in wave c. This pattern tends to be entirely retraced by the next path.
  6. Double Flat. This complex combination surges in rare cases. However, when it rises, generally, the next move will not retrace the complex structure fully.
  7. Extended Zigzag. This variation of the zigzag pattern generally appears in triangle formations or at the end of a terminal structure. The next path of an extended zigzag generally will never be entirely retraced.
  8. Extended Flat. This variation tends to emerge in triangle patterns. In the same way that the extended zigzag, the next move should not retrace it completely.
  9. Zigzag. This standard corrective pattern can be found in the real market. In general, the next path could retrace wholly and partially the extension of the zigzag pattern.
  10. Flat. Although this pattern and its variations are typical, the retracement of the next movement tends to be unclear.
  11. Double Three. In general, the extension of this complex corrective pattern tends to warn about the potential next movement. In short, while most extended being the double three pattern, the next move will be stronger.

Triangles

Glenn Neely, in his work, considers that triangle patterns require a different treatment. 

  1. Contracting Triangle. The thrust developed in a contracting triangle is a movement with a higher level of momentum. This move will be bigger or smaller, in terms of time, depending on its nature. If the contracting triangle is horizontal, the next path will be equal to the largest segment of the triangle. In the irregular contracting triangle case, the next movement will reach the 161.8% respecting to the largest leg of the triangle. Finally, in the continuous contracting triangle, the thrust can reach the 261.8% of the broadest segment of the triangle. 
  2. Expanding Triangle. In this kind of triangle, the thrust differs from the case of the contracting triangles. The thrust of an expanding triangle tends to be minor than the most extended segment of the triangle.

Impulses

The advantage of the next movement of an impulsive wave is the knowledge of the potential correction. In this context, it is tough to determine what kind of correction will occur before the corrective sequence begins. 

  1. Trend. After the motive wave completion, the impulsive movement should not experience a retracement beyond the origin of its first segment, except if the impulsive wave corresponds to a fifth wave. In general, waves A, 1, or 3, should not experience a retrace greater than 61.8% by the next move.
  2. First Extended Wave. When the extended wave is the first move, the motive wave should experience a retracement until the end of wave 4. 
  3. Third Extended Wave. In this case, once the impulsive wave is completed, the motive structure should experience a retrace between the high and low of the fourth wave.
  4. Fifth Extended Wave. The next corrective structure of a fifth extended wave should retrace more than 61.8% to the impulsive move.
  5. Terminal Structure. The movement after a terminal structure should retrace the progression of the terminal structure completely. The time elapsed in the evolution of the corrective move should be shorter than 50% of the time elapsed in the making of the terminal structure.

Conclusions

In this educational article, we discussed the observations described by Glenn Neely in his work “Mastering Elliott Wave” concerning the potential next movement, depending on the pattern in progress.

In this context, Neely, following the steps of R.N. Elliott, provides an ample proportion of time to describe what to expect after a corrective structure. This knowledge could provide the wave analyst an advantage in its comprehension about the market situation and what should be the potential next move.

In our following article, we will present the advanced applications in the wave analysis in a four-part series.

Suggested Readings

– Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).

Categories
Forex Daily Topic Forex Price Action

The H1-15M Combination Trading in a Bearish Market

In today’s lesson, we are going to demonstrate an example of the H1-15M combination trading strategy offering a short entry. In one of our previous lessons, we demonstrated an example of a long entry. Let us see how it ends up offering us the entry.

In today’s lesson, we are going to demonstrate an example of the H1-15M combination trading strategy offering a short entry. In one of our previous lessons, we demonstrated an example of a long entry. Let us see how it ends up offering us the entry.

In today’s lesson, we are going to demonstrate an example of the H1-15M combination trading strategy offering a short entry. In one of our previous lessons, we demonstrated an example of a long entry. Let us see how it ends up offering us the entry.

This is an H1 chart. The chart shows that the price gets caught within two horizontal levels. The chart shows that the price after getting the last rejection has been heading towards the South. The sellers are to wait for a bearish breakout to go short in the pair.

Here it comes. The last candle breaches the level of support closing well below it. The H1-15M combination traders may flip over to the 15M chart to get a bearish reversal candle for triggering a short entry. Let us flip over to the 15M chart.

This is how the 15M chart looks. As expected, the last candle comes out as a bearish candle. If the next 15M candle comes out as a bearish candle closing below the last candle, the sellers may trigger a short entry. If the chart consolidates, the sellers are to wait for a 15M bearish reversal candle to take the entry. Let us find out what happens here.

The chart produces a bullish corrective candle. The sellers are to wait for a bearish reversal candle to go short in the pair. Usually, if the price makes a correction, it goes towards the breakout level and produces a reversal candle there. Let us find out where it produces a bearish reversal candle for the sellers.

The chart produces a bearish engulfing candle closing below consolidation support. The sellers may trigger a short entry right after the last candle closes. Stop Loss and Take Profit are to be set according to the H1 chart. Stop Loss is to be set above H1 horizontal resistance before the breakout, and Take Profit is to be set with 1R. Let us now find out how the entry goes.

This is the H1 chart. We see that the price heads towards the South with good bearish momentum and hits the target of 1R with ease. After producing the 15M bearish reversal candle, the price never looks back but goes towards the trend’s direction. This is what usually happens in the H1-15M combination trading. The price heads towards the trend’s direction without wasting time.

Do a lot of backtesting in your trading chart to find out some entries based on the H1-15M chart. Then, do some demo trading with the strategy before going live. It will help you be a better trader.

 

Categories
Forex Daily Topic Forex Price Action

The H1-15M Combination Trading Has a Lot to Offer

In today’s article, we are going to demonstrate a combination strategy. The combination is made of the H1 and the 15M chart. Since these two are busy intraday charts, thus a trader can find a good number of entries with this strategy. Let us now proceed and find out how it works.

In today’s article, we are going to demonstrate a combination strategy. The combination is made of the H1 and the 15M chart. Since these two are busy intraday charts, thus a trader can find a good number of entries with this strategy. Let us now proceed and find out how it works.

In today’s article, we are going to demonstrate a combination strategy. The combination is made of the H1 and the 15M chart. Since these two are busy intraday charts, thus a trader can find a good number of entries with this strategy. Let us now proceed and find out how it works.

The above image displays the H1 chart. The chart shows that the price gets caught within two horizontal levels. At the last bounce, the chart produces a bullish engulfing candle and heads towards the North. The sellers may wait for the chart to produce a bearish reversal candle at the level of resistance. On the other hand, the buyers are to wait for a breakout at the level.

The bull wins. A good-looking bullish candle breaches through the level of resistance, closing well above the level of resistance. Some traders may trigger a long entry right after the last candle closes. Some may initiate their long entries by setting limit order above the level of resistance. Every strategy has some advantages as well as disadvantages. Anyway, we are going to flip over to the 15 M chart to trigger an entry.

This is how the 15M chart looks. The last candle closes as a bullish candle too. This suggests that the bull has taken control. The H1-15M combination traders are to wait for the price to consolidate and produce a 15 M bullish candle to offer them a long entry.

The chart produces a bearish engulfing candle followed by a bullish engulfing candle. The buyers (H1-15M combination traders) may trigger a long entry now. The stop loss is to be set below the level of new support (breakout level), and take profit may be set with 2R. Let us proceed to the next chart to find out what the price does after triggering the entry.

This is the H1 chart. The chart shows that the price heads towards the North with good bullish momentum. The buyers achieve their 1R with ease. The point we may notice that the price never even comes back to the breakout level again after triggering the entry.

By using the H1-15M strategy, traders can get an excellent risk-reward. It offers a high winning percentage as well. In most cases, the price heads towards the trend’s direction with good momentum. On the contrary, the 15M chart may not always consolidate and produce the signal candle. Thus, traders may not get as many entries as they would like. However, since it is the H1-15M combination, it still offers a good number of entries per week in major pairs.

Categories
Forex Price-Action Strategies

The Longer It Ranges, The Harder It Breaks

Price action traders usually look for entries on the chart that has a clear trend. However, even a choppy chart end up providing good entry to the traders. In today’s lesson, we are going to show how a choppy chart ends up producing a good entry. Let us get started.

Price action traders usually look for entries on the chart that has a clear trend. However, even a choppy chart end up providing good entry to the traders. In today’s lesson, we are going to show how a choppy chart ends up producing a good entry. Let us get started.

Price action traders usually look for entries on the chart that has a clear trend. However, even a choppy chart end up providing good entry to the traders. In today’s lesson, we are going to show how a choppy chart ends up producing a good entry. Let us get started.

The chart shows that the price has been choppy. It bounces at a level of support three times. As far as resistance is concerned, the price has a rejection at a level once and comes back down. Then, it heads towards the upside and finds its resistance getting rejection twice. The level of support seems stronger than the resistance here.

The price finds its resistance, and at the second rejection, it makes a breakout. As mentioned, the price bounces three times at the level of support. Thus, the breakout is strong as well. The sellers are to wait for the price to be held by the breakout level and a bearish reversal candle to go short in the pair.

The next candle comes out as a doji candle closing within the breakout level. The breakout comes out as a valid breakout. The sellers are to wait for the level to create a bearish reversal candle to trigger a short entry.

Here it comes. The last candle on the chart comes out as a bearish engulfing candle closing well below the last swing low. The sellers may trigger a short entry right after the candle closes by setting stop loss above the resistance and by setting take profit with 1R. Let us proceed to the next chart to find out how the entry goes.

The price heads towards the South with good bearish momentum. The price hits the take profit (1R). The last candle suggests that the price may head towards the South further. Some traders may take partial profits and let the rest of the trade run to make more pips.

The chart produces a bullish inside bar. The chart still favors the Bear. However, it may be time for the sellers to give it a second thought to close the whole trade. If we look at the chart, the price heads towards the downside and hits the target without producing any bullish candle in between. This is how it usually goes if the price makes a breakout within a long choppy market. Thus, traders may keep their eyes on the choppy charts to see whether the price makes a breakout to offer them an entry. A breakout in a choppy market is often very rewarding.

Categories
Forex Price-Action Strategies

Forex Price Action: Do Not Be Over Confident

Engulfing candle is the strongest reversal candle. In a bearish market, the buyers wait for a bullish engulfing candle and flip over to the minor chart to take entry. It does not usually go wrong. However, from time to time, things may not go according to traders’ expectations, even with engulfing candle. In today’s lesson, we are going to demonstrate an example of that. Let us proceed.

Engulfing candle is the strongest reversal candle. In a bearish market, the buyers wait for a bullish engulfing candle and flip over to the minor chart to take entry. It does not usually go wrong. However, from time to time, things may not go according to traders’ expectations, even with engulfing candle. In today’s lesson, we are going to demonstrate an example of that. Let us proceed.

Engulfing candle is the strongest reversal candle. In a bearish market, the buyers wait for a bullish engulfing candle and flip over to the minor chart to take entry. It does not usually go wrong. However, from time to time, things may not go according to traders’ expectations, even with engulfing candle. In today’s lesson, we are going to demonstrate an example of that. Let us proceed.

This is a daily chart. The chart shows that the price makes a bearish move and finds its support. It produces a bullish engulfing candle. Thus, the H4 breakout traders may flip over to the H4 chart and wait for the price to consolidate and to create a bullish engulfing candle to go long in the pair. Let us flip over to the H4 chart.

The H4 chart also looks very bullish. The price starts having consolidation. Then, it produces a hammer. It seems the chart may not take too long to produce a bullish engulfing candle breaching consolidation resistance.

The chart produces another bullish candle closing within consolidation resistance. The price heads towards the South to search for its support. It has been taking longer than the buyers’ expectations. They must not be impatient but keep their eyes on the chart.

The price finds its support and produces a bullish engulfing candle. The candle closes well above consolidation resistance. The buyers may trigger a long entry right after the last candle closes by setting stop loss below the level of support and by setting take profit with 1R. The signal candle suggests that the buyers find a good deal here. Let us proceed to the next chart to find out what the price does.

I do not think that the buyers are ready for this. The last candle comes out as a bearish inside bar, but it closes within consolidation resistance and support. It does not hit stop loss yet. The buyers still have a chance to win this. This looks ominous for them, though.

The price hits stop loss now. The last candle comes out as a bearish candle closing below consolidation support this time. All of a sudden, it becomes the sellers’ territory. The H4 buyers must avoid this chart for a while.

The lesson we get from today’s example is a chart, which looks only for the buyers’ turns into opposite within two candles. Things get changed anytime in the Forex market. Thus, traders should not be overconfident with their analysis, strategy at any point in their trading life.

Categories
Forex Daily Topic Forex Price-Action Strategies

Forex Price Action: A Losing Trade

Forex trading is considered one of the riskiest businesses. The market is volatile and it gets unpredictable from time to time. There is no trading strategy, which can guarantee one hundred per cent success. Thus, Forex traders must be mentally prepared to take losses. In today’s lesson, we are going to demonstrate an example of […]

Forex trading is considered one of the riskiest businesses. The market is volatile and it gets unpredictable from time to time. There is no trading strategy, which can guarantee one hundred per cent success. Thus, Forex traders must be mentally prepared to take losses. In today’s lesson, we are going to demonstrate an example of […]

Forex trading is considered one of the riskiest businesses. The market is volatile and it gets unpredictable from time to time. There is no trading strategy, which can guarantee one hundred per cent success. Thus, Forex traders must be mentally prepared to take losses. In today’s lesson, we are going to demonstrate an example of a losing trade.

The chart shows that the price upon finding its resistance heads towards the South with good bearish momentum. The first candle comes out as a bearish engulfing candle followed by two bearish candles. These suggest that the bear takes control. The sellers are to wait for the price to consolidate and a bearish engulfing candle to go short in the pair. Let us proceed to the next chart to find out what the price does.

The price finds its support. It produces a bullish inside bar followed by two doji candles. It seems that the price has been searching for its resistance. The sellers are to keep their eyes on this chart.

The price finds its resistance. It produces a bearish engulfing candle closing below consolidation resistance. Without any doubt, this is an A+ breakout candle. The sellers may trigger a short entry right after the candle closes by setting stop loss above consolidation resistance and by setting take profit with 1R. Let us find out how the trade goes.

It looks fantastic for the sellers. The next candle comes out as a bearish candle as well. Consecutive two bearish candles suggest that the bear is in a hurry to hit the take profit. The sellers may not have to wait too long to achieve their target as far as the price action in this chart is concerned.

Would you believe it? The next candle comes out as an inverted hammer. The upper shadow hits the stop loss. The sellers are out with their entry with a loss. That was beyond their imagination some might say. However, it happens a lot in the Forex market. Thus, traders must not be overconfident with any entry. Discipline and money management are to be maintained with every single trade.

Some traders, especially at the beginning can’t take losses easily. It bugs them up. Losing money may make them think something is wrong with their strategy. There is nothing wrong if traders want to try to develop new strategies. However, they should not just lose the belief and abandon a long proven strategy all of a sudden.

Categories
Forex Price-Action Strategies

Breakout With and Without Momentum

A Breakout without momentum often does not push the price towards the trend. The price seems to come back at the breakout level again. On the other hand, a breakout with momentum pushes the price towards the trend in most of the cases. In today’s lesson, we are going to demonstrate a chart, which has two types of breakouts. Let us get started.

A Breakout without momentum often does not push the price towards the trend. The price seems to come back at the breakout level again. On the other hand, a breakout with momentum pushes the price towards the trend in most of the cases. In today’s lesson, we are going to demonstrate a chart, which has two types of breakouts. Let us get started.

A Breakout without momentum often does not push the price towards the trend. The price seems to come back at the breakout level again. On the other hand, a breakout with momentum pushes the price towards the trend in most of the cases. In today’s lesson, we are going to demonstrate a chart, which has two types of breakouts. Let us get started.

The chart shows that it heads towards the North. Upon finding its resistance, it makes a bearish correction. It finds its support and produces a bullish engulfing candle. The price heads towards the North again. It makes a breakout with a candle having a long upper shadow. It is a breakout. However, the breakout takes place with two bullish candles. Let us proceed to the next chart to find out what the price does.

Despite making a breakout, the price does not head towards the North. It rather consolidates around the breakout level. The breakout level still holds the price. Nevertheless, it does not look that good for the buyers. The price may come back within those two levels and hit the lower support. Let us find out what happens next.

The price does not come back within the breakout level. It makes another breakout at consolidation resistance. It takes only one candle to make the breakout. Breakout traders want to get this kind of breakout to trigger a long entry. The buyers may trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R.

The price heads towards the North with good bullish momentum. The next candle comes out as a strong bullish candle. It suggests that the bull has taken control. It seems the price may hit 1R in a hurry as well. This is what the breakout traders want.

As anticipated, the chart produces another bullish candle and hits the target. It takes two candles to achieve 1R. It gives traders more confidence about the strategy and saves their time. They can concentrate on other charts to look for entries. It does not mean it goes like this every single time though.

The above charts show that a breakout by two candles does not generate the momentum towards the trend. However, when the breakout takes place with a single candle, the price heads towards the trend’s direction in no time. Thus, if we do not want to hang around with our entries and keep an amazing winning rate, we may take entries on a breakout that takes place with good momentum.

Categories
Forex Daily Topic Forex Price-Action Strategies

Price Action Trading and Trade Management

Trade management is such an important factor in Forex trading. Managing trades effectively saves traders from making a loss or help them secure their profit. Sometimes traders are to close their trades earlier or lock the profit. This shall be done only when trading is done on major time frames such as the H4, the daily, or the weekly, though. In today’s lesson, we are going to demonstrate an example of an early exit in the H4 chart.

Trade management is such an important factor in Forex trading. Managing trades effectively saves traders from making a loss or help them secure their profit. Sometimes traders are to close their trades earlier or lock the profit. This shall be done only when trading is done on major time frames such as the H4, the daily, or the weekly, though. In today’s lesson, we are going to demonstrate an example of an early exit in the H4 chart.

Trade management is such an important factor in Forex trading. Managing trades effectively saves traders from making a loss or help them secure their profit. Sometimes traders are to close their trades earlier or lock the profit. This shall be done only when trading is done on major time frames such as the H4, the daily, or the weekly, though. In today’s lesson, we are going to demonstrate an example of an early exit in the H4 chart.

The chart shows that the price makes a strong bearish move. It makes a breakout and produces a bullish inside bar. The H4 breakout traders are to wait for the price to find its resistance and produce a bearish engulfing candle to offer them a short entry. The price is at the breakout level. It seems that the breakout level is going to play a vital role here.

The chart produces a bearish spinning top and a bullish candle. However, the breakout level works as a level of resistance and produces a bearish engulfing candle closing well below consolidation support. The sellers may trigger a short entry right after the candle closes by setting stop-loss above the breakout level and by setting take profit with 1R. The signal candle suggests that the sellers do not have to wait too long to achieve their target.

As expected, the next candle comes out as a bearish Marubozu candle as well. The sellers would love to get a bit longer bearish candle. However, as long as it comes out as a bearish candle, they should be happy with it. Remember, this is an H4 chart. Thus, a bearish Marubozu candle means a lot for the sellers. It seems the price is going to take one more candle to hit the target.

The next candle comes out as a Bearish Marubozu candle as well. However, it does not hit the target 1R. A very few pips are left to achieve the target. The sellers must wait. The last candle suggests that it is only a matter of time for the sellers to reach their destination. Let us proceed to the next chart and find out what happens next.

The last candle comes out as a bullish engulfing candle. This does not convey a good message for the sellers. The price is yet to hit the target. They have some profit running in the trade. What should the sellers do here?

If it is an inside bar bullish candle, the sellers should keep holding the position to hit the target. However, the last candle comes out as a bullish engulfing candle (in an H4 chart). This means a lot for the minor intraday buyers. Thus, the best thing to do would be if the trade is closed manually, right after the last candle closes. It gets the sellers some profit, at least. Yes, the target is not achieved, and some profit is lost. Take it easy. Things go according to plan and sometimes don’t. This is what trading is all about.

Categories
Forex Price-Action Strategies

Price Action Trading: The Morning Star at a Breakout Level

Breakout is the first thing that attracts the price action traders to keep eying on a chart. Then, correction/consolidation followed by reversal candle breaching consolidation support/resistance is the signal to trigger an entry.

Breakout is the first thing that attracts the price action traders to keep eying on a chart. Then, correction/consolidation followed by reversal candle breaching consolidation support/resistance is the signal to trigger an entry.

Breakout is the first thing that attracts the price action traders to keep eying on a chart. Then, correction/consolidation followed by reversal candle breaching consolidation support/resistance is the signal to trigger an entry.

The breakout level plays an important role, which often becomes consolidation support/resistance and produces the reversal candle. Sometimes a breakout level produces even stronger reversal patterns such as Morning Star and Evening Star. When that happens, it attracts more traders and brings more liquidity. In today’s lesson, we are going to demonstrate an example where the breakout level holds the price as support; produces the Morning Star to offer a long entry. Let us get started.

The chart shows that the price heads towards the North with good bullish momentum. On its way, it makes a breakout at the highest high. The pair then produces a bearish reversal candle to consolidate around the breakout level. The buyers are to keep an eye on this chart. If the breakout level produces a bullish engulfing candle closing well above consolidation resistance, they may trigger a long entry.

The chart produces a Doji candle (tiny bullish body with long shadows both sides). The breakout level holds the price, for which the buyers are going to be very keen to keep an eye on this pair. If the next candle comes out as a bullish engulfing candle, it would also form a candlestick pattern called Morning Star.

The chart produces a bullish engulfing candle closing well above consolidation resistance. A bullish engulfing candle is enough to attract the buyers to go long in this chart. The combination of the last three candle forms Morning Star, which is a strong bullish reversal candlestick pattern. The buyers may trigger a long entry right after the last candle closes. Stop Loss is to be set below the breakout level and Take Profit is to be set with 1R. Let us proceed to the next chart to see how the trade goes.

The next candle comes out as a bullish candle. The buyers seem to have taken control. The price may hit the target soon.

It takes only two candles to hit the target. Traders make some green pips in a hurry. If we analyze this trade, we find

  1. The price makes a bullish breakout and comes back at the breakout level.
  2. The breakout level works as support and holds the price
  3. It produces a bullish engulfing candle closing above consolidation resistance.
  4. It produces a candlestick pattern called Morning Star as well.
Categories
Forex Daily Topic Forex Price-Action Strategies

Example of a Breakout Unfit for an Entry

 

 

 

In today’s lesson, we are going to demonstrate an example of a breakout on the H4 chart. The chart shows that the price heads towards the North with good momentum. It makes a bullish breakout upon consolidation. However, the breakout is not the kind that the breakout traders look for. Thus, this is going to be an example which we should skip taking entry. Let us now have a look at what happens.

The chart shows that it produces a bullish candle followed by a bearish inside bar. The next candle comes out as a bullish engulfing candle. Do you notice something here? Yes, this is an entry for the buyers. However, this is not where we concentrate today. Let us proceed to the next chart to dig out the main story.

The price keeps going towards the North. The buyers are to wait for the price to consolidate and produce another bullish engulfing candle to offer them entry. The way it has been going, it seems that the buyers hold the key and dominate over the sellers.

The price makes a bearish correction and finds its support. The first bullish reversal candle comes out as a bullish inside bar. This is not a strong bullish reversal candle. It produces three more bullish candles but the price does not make a breakout at the level of resistance. The last candle closes within the level of resistance, which is a point to be noticed. It means even the next candle makes a breakout, it would be a breakout right from the level of resistance.

The next candle closes well above the level of resistance. This is a breakout but not the kind of breakout that the breakout buyers wait for. The price is trending towards the upside; it consolidates and makes a bullish breakout. These three equations suggest that the buyers may take a long entry. They must not forget that the breakout candle does not make an explicit breakout. If a breakout takes place by one bullish engulfing candle that brings momentum. Over here, it needs four candles to make the breakout. Moreover, the breakout candle forms right at the level of resistance (now support). The buyers may restrain themselves from taking such entry. Let us find out what the price does next.

The price comes back to the breakout level. This is what usually happens when the price does not make a breakout with an A+ breakout candle. The price may still head towards the North, but 1 out of 3 times, it may come back in and hits the stop loss. Thus, to have winning consistency, we might as well skip taking entry in such price action.

Categories
Forex Price-Action Strategies

A Classic Example of the H4 Breakout Trading

In our trading lesson, we have been demonstrating H1 breakout strategies in our last five lessons. Today, we are going to demonstrate an H4 breakout trade setup, which is a classic example of price action breakout trading. The price makes a bullish breakout at the last highest high; comes back at the breakout level and produces a beautiful bullish engulfing candle closing well above consolidation resistance to offer a long entry. Let us proceed and see how it occurs.

In our trading lesson, we have been demonstrating H1 breakout strategies in our last five lessons. Today, we are going to demonstrate an H4 breakout trade setup, which is a classic example of price action breakout trading. The price makes a bullish breakout at the last highest high; comes back at the breakout level and produces a beautiful bullish engulfing candle closing well above consolidation resistance to offer a long entry. Let us proceed and see how it occurs.

In our trading lesson, we have been demonstrating H1 breakout strategies in our last five lessons. Today, we are going to demonstrate an H4 breakout trade setup, which is a classic example of price action breakout trading. The price makes a bullish breakout at the last highest high; comes back at the breakout level and produces a beautiful bullish engulfing candle closing well above consolidation resistance to offer a long entry. Let us proceed and see how it occurs.

The chart shows that the price heads towards the North with good bullish momentum. On its way towards the North, it does not produce even a single bearish reversal. It suggests that the buyers have been very confident. It makes a breakout at the last swing high. The breakout is not explicit though. However, the price continues to go towards the North after the breakout. Then, it finds its resistance and produces two bearish reversal candles. Look at the last candle. It closes within the last highest high (breakout level), which is a flipped support now. This is one of the most important factors in price action trading. The price reacts to such levels and produces reversal candles.

As mentioned, the level produces a bullish engulfing candle closing well above consolidation resistance. The buyers may trigger a long entry right after the candle closes by setting stop loss below the level of support and by take profit with 1R. Let us proceed to the next chart how the trade goes.

The last candle comes out as a spinning top. Not a good start for the buyers, but the buyers must keep patience here. Trading on the H4 chart allows traders to manage their trade and take early exit. However, they must not think taking an early exit here. The last candle is not a strong bullish candle, but it is not a strong bearish reversal either. Let us proceed to the next chart. It may take one good candle to hit the target.

The price does not take too long to hit the target. It hits the target with the last candle. This is a classic example of trading on the H4 breakout trading. After the breakout, the price comes back at the breakout level. It produces a bullish reversal candle right at the breakout level. The bullish reversal candle comes out as an engulfing candle closing well above consolidation resistance. Price actions traders wait for the price to behave like this to take an entry.

 

Categories
Forex Daily Topic Forex Price-Action Strategies

H1 Breakout Trading: Keep Holding Your Positions

Price action traders are to maintain discipline with their entry and trade management. As far as trade management is concerned, it varies on time frames. Trade management on the H4 chart and the H1 chart is different. A reversal candle on an H4 chart has more potential to change the existent trend. Thus, traders may need to think about an early exit. On the other hand, H1 breakout traders may keep holding their positions until it reaches the target. In today’s lesson, we are going to demonstrate an example of this.

Price action traders are to maintain discipline with their entry and trade management. As far as trade management is concerned, it varies on time frames. Trade management on the H4 chart and the H1 chart is different. A reversal candle on an H4 chart has more potential to change the existent trend. Thus, traders may need to think about an early exit. On the other hand, H1 breakout traders may keep holding their positions until it reaches the target. In today’s lesson, we are going to demonstrate an example of this.

Price action traders are to maintain discipline with their entry and trade management. As far as trade management is concerned, it varies on time frames. Trade management on the H4 chart and the H1 chart is different. A reversal candle on an H4 chart has more potential to change the existent trend. Thus, traders may need to think about an early exit. On the other hand, H1 breakout traders may keep holding their positions until it reaches the target. In today’s lesson, we are going to demonstrate an example of this.

The chart shows that the price after being bullish has rejections at a level of resistance. The price heads towards the North but does not make any breakout. It has been in the bearish correction again. Let us see whether it finds its support and makes a bullish breakout or not.

Here it comes. The price finds its support and produces a bullish engulfing candle breaching the level of resistance. This is an A+ breakout candle. The buyers are to wait for the next candle to close above the breakout candle to trigger a long entry.

The next candle comes out as a bullish candle as well. It has an upper shadow, but the last 15 candle comes out as a bullish candle. The buyers may trigger a long entry right after the last candle closes by setting stop loss below the support level and take profit with 1R.

The price heads towards the North. However, it seems that the price does not head towards the target with good bullish momentum. Moreover, the last candle comes out as a bearish engulfing candle. This is ominous for the buyers. Do not forget this is an H1 chart, and the buyers are not supposed to take an early exit. They should keep holding their position and wait for the price to do the rest.

The price gets rather choppy. It has been testing traders’ patience. It is hard to keep holding positions. However, traders must not keep looking at the chart. Meanwhile, they might as well concentrate on other charts to find out potential entries.

Patience pays back to the buyers at last. The last candle comes out as a bullish candle, which helps the buyers to reach their take profit target. In the end, the trade goes well for the buyers. It may have gone the other way, but H1 breakout traders should stick with their plan and keep discipline.

Categories
Forex Daily Topic Forex Price-Action Strategies

Breakout Length: Key to Trend’s Strength

In today’s lesson, we are going to demonstrate the relation between the trend’s strength and breakout length. The breakout length usually represents one-fourth of a potential trend. If the breakout length is 25 pips, the trend may sustain up to 100 pips before making a big correction or long consolidation. It is important for breakout traders since the market often makes a breakout; confirms the breakout. However, the price does not head towards the trend direction. Let us clarify this by the examples below.

In today’s lesson, we are going to demonstrate the relation between the trend’s strength and breakout length. The breakout length usually represents one-fourth of a potential trend. If the breakout length is 25 pips, the trend may sustain up to 100 pips before making a big correction or long consolidation. It is important for breakout traders since the market often makes a breakout; confirms the breakout. However, the price does not head towards the trend direction. Let us clarify this by the examples below.

In today’s lesson, we are going to demonstrate the relation between the trend’s strength and breakout length. The breakout length usually represents one-fourth of a potential trend. If the breakout length is 25 pips, the trend may sustain up to 100 pips before making a big correction or long consolidation. It is important for breakout traders since the market often makes a breakout; confirms the breakout. However, the price does not head towards the trend direction. Let us clarify this by the examples below.

The price has been bearish upon making a bearish engulfing candle. The last swing low is quite far. This means the breakout length looks good for the sellers. The more the breakout length, the better it is for the traders.

The chart produces a bullish engulfing candle in between. This is bad for the sellers. The price may find its new resistance to produce a bearish reversal candle to make a breakout at the lowest low. This means the breakout length most probably needs to be adjusted.

The price seems to have found its new resistance here. It produces a do candle followed by a bearish engulfing candle. This means it produces an evening star. If the price heads towards the South and makes a breakout, the sellers may go short upon breakout confirmation. However, they must calculate new breakout length from the new resistance to the lowest low.

Here comes the breakout candle. This is an explicit breakout. The sellers are to wait for the price to make a breakout confirmation. If the next candle closes below the breakout candle, the sellers may trigger a short entry.

The confirmation candle looks to be an A+ breakout confirmation candle as well. However, do not forget the distance the price has already crossed. The price has crossed about 70% length considering the breakout length. Thus, the price may make a bullish correction. It usually happens when the price finds a new level of support/resistance. Let us proceed to the next chart.

The chart produces a big bullish engulfing candle, which changes the entire scenario. It happens when the price is about to make a correction. Sometimes corrective wave changes the trend. The sellers if the blindly trigger a short entry after the breakout confirmation without calculating breakout length and trend’s strength, they are to take a loss here.

Breakout strategy traders must calculate breakout length to determine how far the price could go. If it crosses more than 50% to confirm the breakout, it is better to skip such entries.

 

Categories
Forex Price-Action Strategies

When Price Finds New Support/Resistance

Price action traders are to be calculative and watchful. Breakout and breakout confirmation are two things that price action traders keep eyes on. Trend initiating candle is another important factor. We often see that the price upon finding its support/resistance does not make a breakout straightway. It sometimes makes a little correction and then starts trending to make a breakout. This new level of support/resistance plays a significant role in price action breakout trading. In today’s lesson, we are going to demonstrate an example of this.

Price action traders are to be calculative and watchful. Breakout and breakout confirmation are two things that price action traders keep eyes on. Trend initiating candle is another important factor. We often see that the price upon finding its support/resistance does not make a breakout straightway. It sometimes makes a little correction and then starts trending to make a breakout. This new level of support/resistance plays a significant role in price action breakout trading. In today’s lesson, we are going to demonstrate an example of this.

Price action traders are to be calculative and watchful. Breakout and breakout confirmation are two things that price action traders keep eyes on. Trend initiating candle is another important factor. We often see that the price upon finding its support/resistance does not make a breakout straightway. It sometimes makes a little correction and then starts trending to make a breakout. This new level of support/resistance plays a significant role in price action breakout trading. In today’s lesson, we are going to demonstrate an example of this.

The chart shows that the price after being bearish makes a bullish correction. It produces a bearish engulfing candle and drives the price towards the downside. However, look at the last candle. It comes out as a bullish engulfing candle. This means the price is to find its resistance again.

It does not take long to find its resistance. The next candle comes out as a bearish engulfing candle. The sellers are to keep their eyes on the pair to get a breakout. It seems that the price may head towards the South and make a breakout this time upon finding its new resistance.

The chart makes the breakout by the next candle. The sellers are to wait for the next candle to close below the breakout candle to trigger a short entry. Do not forget that it makes the breakout upon finding a new resistance.

The next candle comes out as a bearish candle having a long lower shadow. Thus, they should flip over to the 15 M chart to see how the last 15 M candle comes out. Despite having a long lower shadow, the last 15M candle comes out as a bearish candle too. The sellers may trigger a short entry right after the last candle closes. Stop Loss is to be set above the last resistance and Take Profit is to be set with 1R. This is why the new level of support/resistance plays a significant role.

The price heads towards the South but not with strong bearish momentum. It hits 1R though. The distance between new resistance to entry point= Entry point to Take Profit= 1R.

Whenever the price finds its new resistance/breakout, breakout traders must count those to set their stop loss and take profit level. Breakout trading needs the price to make a breakout with good momentum. If it takes any pauses before making a breakout, ignore the last support/resistance. It gives us better risk-reward as well as more chance of winning a trade.

Categories
Forex Price-Action Strategies

Breakout Confirmation Candle and the Difference It Makes

Breakout trading strategy traders first wait for the breakout with good momentum. Then, they are to wait for the breakout confirmation candle. A breakout can be confirmed in two ways. It can take the price towards the trend, or it could come out as in inside bar reversal candle. As long as the candle closes below the breakout level, it confirms the breakout. However, these two types of breakout confirmation push the price towards the trend a bit differently. In today’s article, we are going to demonstrate an example of this.

Breakout trading strategy traders first wait for the breakout with good momentum. Then, they are to wait for the breakout confirmation candle. A breakout can be confirmed in two ways. It can take the price towards the trend, or it could come out as in inside bar reversal candle. As long as the candle closes below the breakout level, it confirms the breakout. However, these two types of breakout confirmation push the price towards the trend a bit differently. In today’s article, we are going to demonstrate an example of this.

Breakout trading strategy traders first wait for the breakout with good momentum. Then, they are to wait for the breakout confirmation candle. A breakout can be confirmed in two ways. It can take the price towards the trend, or it could come out as in inside bar reversal candle. As long as the candle closes below the breakout level, it confirms the breakout. However, these two types of breakout confirmation push the price towards the trend a bit differently. In today’s article, we are going to demonstrate an example of this.

The price after being bearish makes a bullish correction. The last candle comes out as a bearish pin bar. This is a strong bearish reversal signal. The sellers are to wait for the price to head towards the level of support, where the price has a bounce earlier.

The price heads down with good bearish momentum. It seems that it is going to make a breakout at the drawn level. The breakout sellers are to keep their eyes on the pair closely to take a short entry upon a bearish breakout and breakout confirmation.

Here it comes. The last candle breaches the level of support closing well below it. This is an explicit breakout, which the sellers wait for. If the next candle confirms the breakout, the sellers may drive the price towards the South further.

The next candle comes out as a bullish inside bar. However, it closes within the breakout level. It means the breakout is valid. It is not an A+ breakout confirmation. It offers less reward and does not drive the price towards the trend with good momentum. If the candle came out as a bearish candle closing below the breakout candle, it would be a different ball game. The price may make a move towards the downside by offering 1R at least. Let us see what happens here.

The next candle comes out as a bearish candle. Some sellers may trigger a short entry. In most cases, it does not travel as far as it has traveled to offer the entry.

It produces a strong bearish candle. It seems that the sellers are in control. The question is whether it travels the same distance of Stop Loss-Entry or not. Let us find out from the next chart.

The price starts making an upward correction. It goes back within the breakout level. This chart does not look good for the sellers any more unless it makes a bearish breakout at the last lowest low.

We have seen that the breakout candle and breakout momentum are good. However, the price does not head towards the trend and travel the distance as it usually does. This is what happens if the breakout confirmation candle comes out as an inside bar reversal candle. Thus, it is best if we skip taking such entry.

Categories
Forex Daily Topic Forex Price-Action Strategies

Do Not Give Up Until It Is Void

Forex traders have to have no given up attitude. With patience, discipline, and diligence they have to stick with a chart unless it is completely messed up. In today’s lesson, we are going to demonstrate an example of this.

Forex traders have to have no given up attitude. With patience, discipline, and diligence they have to stick with a chart unless it is completely messed up. In today’s lesson, we are going to demonstrate an example of this.

Forex traders have to have no given up attitude. With patience, discipline, and diligence they have to stick with a chart unless it is completely messed up. In today’s lesson, we are going to demonstrate an example of this.

The chart shows that the price makes a strong bearish move. It finds its support and heads towards the North for an upward correction. Look at the last candle on the chart. This comes out as a bearish engulfing candle, which the sellers wait for in such price action. If the price heads towards the downside and makes a breakout followed by a breakout confirmation, the sellers are going to trigger a short entry. Let us proceed to the next chart.

The sellers do not expect this. The price does not head towards the downside. It rather goes towards the North and roams around the level of resistance. It is painful for the sellers. However, observe on the chart that the level of resistance is still intact. The price may head towards the North but the sellers still have a chance. Let us see what happens next.

The sellers are on their toes again. The chart produces an inverted hammer followed by another long bearish candle. If the price makes a breakout and confirms that, the sellers are going to trigger a short entry.

Here comes the breakout candle. A good-looking bearish candle breaches the level of support closing well below it. This is an explicit breakout. The sellers are to wait for the next candle to close below the lowest low of the breakout candle to trigger the entry.

The next candle comes out as a bearish candle closing well below the breakout candle. The sellers must not waste a second here but trigger the entry right after the last candle closes. A dead-looking chart for the sellers ends up producing entry. Let us proceed to the next chart to find out how the trade goes.

The price heads towards the South in a hurry. It is quite a big bearish move, which offers more than 1R. A trade setup works wonderfully well for the sellers.

Let us recap the entry again. It looks good at the beginning. The price then goes towards the upside and it seems that it may not offer a short entry. The price finds its resistance at the same level; makes a breakout followed by a breakout confirmation. As far as breakout strategy is concerned, the sellers trigger a short entry and make a profit out of it. This is why traders must not give up but stick with the chart as long as it’s valid to produce a signal.

Categories
Forex Daily Topic Forex Price-Action Strategies

Don’t Lose Patience if a Chart Does not Produce the Signal

Breakout strategy traders wait for a breakout followed by a breakout confirmation candle. If the next candle does not close with a new higher high/lower low from the breakout candle, traders must not trigger entry. The price may go towards the trend sometimes, but it often goes another way. In today’s lesson, we are going to demonstrate an example of this where everything looks good, but it ends up without producing a signal candle.

Breakout strategy traders wait for a breakout followed by a breakout confirmation candle. If the next candle does not close with a new higher high/lower low from the breakout candle, traders must not trigger entry. The price may go towards the trend sometimes, but it often goes another way. In today’s lesson, we are going to demonstrate an example of this where everything looks good, but it ends up without producing a signal candle.

Breakout strategy traders wait for a breakout followed by a breakout confirmation candle. If the next candle does not close with a new higher high/lower low from the breakout candle, traders must not trigger entry. The price may go towards the trend sometimes, but it often goes another way. In today’s lesson, we are going to demonstrate an example of this where everything looks good, but it ends up without producing a signal candle.

The chart shows that the price heads towards the North with good bullish momentum. It finds its resistance and makes a correction. Upon finding its support, the chart produces a bullish engulfing candle. The candle suggests that the price may head towards the North. The buyers are to wait for the breakout followed by a breakout confirmation candle to trigger a long entry.

The price heads towards the North but does not make a breakout candle yet. The last candle closes within the level of resistance. The buyers must wait and keep their eyes on the chart since the breakout may take place anytime soon.

Here it comes. The last candle on the chart breaches through the level of resistance closing well above it. This is one good breakout candle. This must attract the buyers to stick with the chart and hope for the next candle to close above the breakout candle to trigger the entry. It looks extremely good. The entry is knocking at the door. Let us proceed to the next chart.

The breakout strategy buyers must be disappointed. After all the hours of waiting, the chart produces a bearish inside bar. Pullback buyers may wait for a bullish engulfing candle to go long in the pair. However, this chart does not have anything to offer for the breakout strategy traders at the moment. Let us proceed to the next chart to find out what happens.

The chart produces a bullish inside bar. However, the price heads towards the South with good bearish momentum. The last candle seems to hit the level of support as well. This means it does not produce any signal for the pullback buyers as well. It is disappointing when traders do not get the signal they wait for a long time. However, it does not hurt as much as a losing trade does. After a long wait, if a chart does not produce the signal, it often leads us towards taking bad entry in other pairs. Let us make sure we never do that. Patience is a great virtue as far as Forex trading is concerned. Traders must make sure that they have this virtue.

Categories
Forex Price-Action Strategies

The Benefit of Checking Minor Chart before Taking Entry

In one of our lessons, we have learned that when a breakout confirmation candle comes out with a long upper or lower shadow needs to be checked on the 15-min chart. The last 15 M candle plays a significant role to drive the price towards the breakout direction. A breakout confirmation candle with a long upper or lower shadow does not mean that the last 15M candle comes out as a reversal candle. We are going to demonstrate an example of this in today’s lesson.

In one of our lessons, we have learned that when a breakout confirmation candle comes out with a long upper or lower shadow needs to be checked on the 15-min chart. The last 15 M candle plays a significant role to drive the price towards the breakout direction. A breakout confirmation candle with a long upper or lower shadow does not mean that the last 15M candle comes out as a reversal candle. We are going to demonstrate an example of this in today’s lesson.

In one of our lessons, we have learned that when a breakout confirmation candle comes out with a long upper or lower shadow needs to be checked on the 15-min chart. The last 15 M candle plays a significant role to drive the price towards the breakout direction. A breakout confirmation candle with a long upper or lower shadow does not mean that the last 15M candle comes out as a reversal candle. We are going to demonstrate an example of this in today’s lesson.

The price after being bearish finds its support. The chart produces two bullish candles consecutively. A level of resistance produces a bearish reversal candle. The correction length looks good. Let us proceed to the next chart.

The next candle comes out as a bearish candle as well. However, it closes within the consolidation support. The sellers are to wait for a candle to breach the level closing well below it. It is waiting time for the sellers.

The last candle breaches through the consolidation support. The breakout does not look an explicit breakout. However, it closes below the level. If the next candle closes below the breakout level, that would confirm the breakout. The breakout confirmation candle holds the key for the sellers.

The last candle closes below the breakout candle. This confirms the breakout. However, look at the long lower spike. This looks ominous for the sellers. In naked eyes, it does not look to be a good confirmation candle for the sellers to trigger a short entry. Let us now flip over to the 15 M chart and find out how the last candle comes out.

This is the 15 M chart. The last candle is a strong bearish candle despite having a long lower spike. We do not need to flip over to any minor chart here. This means the pair is having a strong bearish momentum in the 15 M chart, which is a signal for the sellers to trigger a short entry.

As expected, the next candle comes out as a bearish candle. It seems that the price is going to hit 1R in a hurry. Let us proceed to the next chart to find out how the trade goes.

The price heads towards the South with one more candle. It hits the take profit level (1R) with ease. The price may make a more bearish move as well. The trade setup with a less promising breakout confirmation candle works wonderfully well for the traders. Do not forget to check the 15 M chart if the confirmation candle has a long upper/lower shadow. It may help you decide which entry to take and which one not to.

Categories
Forex Price-Action Strategies

Shallow Consolidation to Skip, Deep Consolidation to Go For

In price action trading, consolidation length is a vital factor. The deeper the consolidation, the further the price goes towards the trend. Sometimes, shallow consolidation takes the price towards the trend direction as well. However, we may skip taking entry, when the price makes a shallow consolidation. In today’s lesson, we are going to demonstrate an example of these in the same chart.

In price action trading, consolidation length is a vital factor. The deeper the consolidation, the further the price goes towards the trend. Sometimes, shallow consolidation takes the price towards the trend direction as well. However, we may skip taking entry, when the price makes a shallow consolidation. In today’s lesson, we are going to demonstrate an example of these in the same chart.

In price action trading, consolidation length is a vital factor. The deeper the consolidation, the further the price goes towards the trend. Sometimes, shallow consolidation takes the price towards the trend direction as well. However, we may skip taking entry when the price makes a shallow consolidation. In today’s lesson, we are going to demonstrate an example of these in the same chart.

This is a daily chart. The price after being bearish produced a bullish engulfing candle. The breakout trading strategy traders are to wait for the price to consolidate and produce another bullish engulfing candle to offer them entry.

The price consolidates with a doji candle followed by a bullish engulfing candle. It makes a shallow consolidation. Moreover, the bullish engulfing candle has a long upper shadow. The buyers may skip taking the entry. Let us proceed to the next chart.

The chart shows that the last candle comes out as a bearish candle. If the price consolidates from here, it is going to be a deep consolidation. Let us wait for a bullish engulfing candle closing well above consolidation resistance to trigger a long entry.

Here it comes. The chart produces a bullish engulfing candle closing well above consolidation resistance. The buyers may trigger a long entry right after the candle closes. The last swing high is quite far, offering more than 1R.

The next candle comes out as a bullish candle as well. The candle has a long upper and a lower shadow. Nevertheless, it is a bullish candle. It looks good for the buyers. The price keeps going towards the North with good momentum. It looks the price hits the last swing high easily.

It does not take more than two candles to hit the last swing high. The last candle suggests that the price may go further up. However, the buyers may consider closing their entry or at least take partial profit. The plan has worked wonderfully well for the buyers.

In this chart, we have seen a shallow and a deep consolidation together. Both have offered entries. However, to be safe, we need to stick with the breakout trading strategy’s rule. We may skip taking entry when the price makes shallow consolidation. In most cases, shallow consolidation brings less liquidity. It means it often goes wrong. On the other hand, if the price makes a deep consolidation followed by an engulfing reversal candle, we may trigger an entry.

Categories
Forex Daily Topic Forex Price-Action Strategies

Long Shadow in Breakout Confirmation Candle

In price action trading, breakout, as well as confirmation candle’s attributes, plays a significant role. In today’s lesson, we are going to demonstrate an example of how upper/lower shadow of a breakout confirmation candle plays a role to offer us entry. Let us get started.

In price action trading, breakout, as well as confirmation candle’s attributes, plays a significant role. In today’s lesson, we are going to demonstrate an example of how upper/lower shadow of a breakout confirmation candle plays a role to offer us entry. Let us get started.

In price action trading, breakout, as well as confirmation candle’s attributes, plays a significant role. In today’s lesson, we are going to demonstrate an example of how the upper/lower shadow of a breakout confirmation candle plays a role in offering us an entry. Let us get started.

This is an H1 chart. The chart shows that the price makes a strong bearish move. It finds its support. Having a bounce, it goes towards the North. The last candle suggests that the price may have found its resistance too. If it makes a breakout at the level of support, upon getting breakout confirmation, the sellers may go short in the pair.

The price heads towards the South but not with good momentum. It takes only one candle to make a breakout. The sellers must wait. Let us find out what happens next.

Here it comes. The last candle breaches through the level of support. It has a lower shadow, but it closes well below the level. The sellers are to wait for the second important factor, which is breakout confirmation.

The next candle comes out as a bearish candle closing well below the breakout candle’s lowest low. In naked eyes, the sellers may trigger a short entry right after the last candle closes. However, the confirmation candle has a long lower shadow. To be sure about it, we may flip over to the 15 M chart. Let us have a look at the 15 M chart.

Look at the last 15M candle. This is a bullish pin bar, which is a strong bullish reversal candle. The 15 M traders may push the price towards the North. It means the H1 sellers may have to wait to reach the target. That may even end up being a losing trade. Let us flip over to the H1 again.

The last candle comes out as a bullish corrective candle. Usually, the price goes down after a breakout confirmation in such a setup. It this case, it does not. It may keep pushing towards the North even further. Let us find out what happens next.

The last candle comes out as a bullish corrective candle. Usually, the price goes down after a breakout confirmation in such a setup. It this case, it does not. It may keep pushing towards the North even further. Let us find out what happens next.

Yes, the price heads towards the North further. The last candle breaches through the breakout level as well. This does not look good for the H1 sellers. It all starts with a long lower shadow (in a selling market).

Whenever we see a long lower/upper shadow in an H1 chart, we may check it with the 15 M chart. If the last 15 M candle is a strong reversal candle (for opposite trend), we may skip taking the entry.

Categories
Forex Price-Action Strategies

Forex Price Action: Trendline Breakout Strategy

In today’s lesson, we are going to demonstrate an example of trendline breakout trading. Price action trading is mainly based on support/resistance and breakout. It does not mean that support/resistance is only horizontal. A trendline works as support/resistance as well. Let us now proceed and find out how a trendline breakout offers entry.

In today’s lesson, we are going to demonstrate an example of trendline breakout trading. Price action trading is mainly based on support/resistance and breakout. It does not mean that support/resistance is only horizontal. A trendline works as support/resistance as well. Let us now proceed and find out how a trendline breakout offers entry.

In today’s lesson, we are going to demonstrate an example of trendline breakout trading. Price action trading is mainly based on support/resistance and breakout. It does not mean that support/resistance is only horizontal. A trendline works as support/resistance as well. Let us now proceed and find out how a trendline breakout offers entry.

The price has been bearish by obeying a down-trending trendline. The price has rejection at the trendline four times. Now, it is the sellers’ territory. However, one bullish candle may change the game.

Here it is. One big bullish candle breaches through the trendline’s resistance closing well above it. Usually, trendline breakout traders wait for the price to come back at the trendline again and get a reversal candle to take entry. This is the safest thing to do in trendline breakout trading.

The chart shows that the price heads towards the North for two more candles and comes down for a correction. Trendline’s resistance becomes support now, which is what happens with horizontal support/resistance. The buyers are to wait for a bullish reversal candle to go long in this chart. Typically, a bullish engulfing candle is the best reversal candle to go long as far as the trendline breakout trading strategy.

The chart produces two doji candles. These are reversal candles. However, look at the last candle. This is a bullish engulfing candle; thus, the buyers may go long right after the candle closes. Stop loss is to be set below the new support.

The next candle comes out as a bullish candle too. This looks good for the buyers. Since the price makes a breakout, confirms the breakout, and produces a bullish engulfing candle, it may make a new higher high. However, the safest option to set take profit is at the last swing high.

The price heads towards the North with good bullish momentum. The price hits the last swing high in a hurry. It gets us 2R here. As long as it offers us 1R, we shall go with it. If it offers less than 1R, we may skip taking the entry. The last candle comes out as a bullish candle. It suggests that the price may make a bullish breakout. That is another game. If we want to take a long entry upon the next bullish breakout, it would be based on a horizontal breakout trading strategy.

Trendline breakout trading is quite simple and rewarding. Stay tuned to get to more about trendline breakout trading strategy in our fore coming lessons.

 

Categories
Forex Price-Action Strategies

Skip Some Entries to Maintain Winning Consistency

Forex price action breakout trading strategies mainly rely on the breakout. Breakout candle’s attributes mean a lot, whether we shall take entry or not. If a breakout takes place with a strong bullish/bearish candle followed by another strong bullish/bearish candle, it is considered a good entry. On the other hand, if a breakout takes place […]

Forex price action breakout trading strategies mainly rely on the breakout. Breakout candle’s attributes mean a lot, whether we shall take entry or not. If a breakout takes place with a strong bullish/bearish candle followed by another strong bullish/bearish candle, it is considered a good entry. On the other hand, if a breakout takes place […]

Forex price action breakout trading strategies mainly rely on the breakout. Breakout candle’s attributes mean a lot, whether we shall take entry or not. If a breakout takes place with a strong bullish/bearish candle followed by another strong bullish/bearish candle, it is considered a good entry. On the other hand, if a breakout takes place right from the support/resistance level, it is not considered a good entry. In today’s lesson, we are going to demonstrate an example of a breakout from the breakout level. Let us find out what happens in the end.

The price after being bearish finds its support. It has been making a bullish correction. The sellers should wait for the price to produce a bearish reversal candle and a breakout with a good-looking bearish candle.

The price heads towards the level of resistance. If the last candle makes a breakout closing well below the level of resistance, it would be a perfect breakout by a good-looking bearish candle. It rather closes adjacent to the level, which may not produce a strong bearish candle to make the breakout.

It produces more candles but does not make the breakout. The price is roaming around the breakout level, which is not a good thing for the sellers. Usually, if a candle closes below the breakout level right from the level, it consolidates. Traders are to wait more and get less reward.

The next candle closes below the breakout level. It is a breakout but not the breakout that the breakout traders would love to get. Let us proceed to the next chart to find out what happens next.

The next candle closes well below the breakout candle. It confirms the breakout. A question may be raised here whether the sellers take the entry or not. Since the breakout is rather a fragile breakout, it is best to skip such entry. The price often comes back to the breakout level and takes time to finds its next direction. Yes, sometimes it continues to go towards the breakout direction too. Let us proceed to the next chart and find out what happens here.

The price here heads towards the South with extreme bearish pressure. The last candle suggests that the trend is strong, and it may continue. According to our today’s lesson, we shall skip taking such entry. It means we have wasted an opportunity. Do you really believe so?

Do not think it is an opportunity missed. A losing trade hurts a lot. We do not only lose money, but we also lose our faith. Forex trading is a psychological game. To be consistent, we must have strong faith in our trading strategy. To have that,  we must maintain winning consistency.

Categories
Forex Price-Action Strategies

If Price finds New Level of Support/Resistance

To measure risk-reward, price action traders must identify the level of support/resistance accordingly. It gets tricky sometimes. In today’s lesson, we are going to demonstrate an example of that.

To measure risk-reward, price action traders must identify the level of support/resistance accordingly. It gets tricky sometimes. In today’s lesson, we are going to demonstrate an example of that.

To measure risk-reward, price action traders must identify the level of support/resistance accordingly. It gets tricky sometimes. In today’s lesson, we are going to demonstrate an example of that.

This is an H1 chart. The chart shows that the price has a bounce at a level. Upon producing a bullish engulfing candle, it heads towards the North. It finds its resistance and produces a bearish engulfing candle followed by another bearish one. If it makes a breakout and confirms the breakout, the sellers may trigger short entry by setting stop-loss above the level of resistance and take profit with 1R.

The price does not make a breakout, but it heads towards the North. The sellers must wait to find out what happens next. It may go back to the level of resistance, have a rejection at double top, and make a breakout.

It may even make a breakout from here. Let us find out from the next chart what happens.

The price finds its resistance at a new level. It produces a bearish engulfing candle again. If it makes a breakout at the level of support and confirms it, it would be a short signal.

The chart produces a bearish candle, which breaches the level of support. If the next candle closes below the last candle, the sellers may trigger a short entry.

The next candle confirms the breakout. The sellers may trigger a short entry right after the candle closes. Question is where do they set their stop loss and take profit? Do they use the new level of resistance to set stop loss and take profit or use the old one? We find out the answer in a minute.

The price heads towards the South with good bearish momentum. Trade setup works as well as it usually does in breakout trading strategy. The price keeps making lower lows, and it seems it may go further down. However, since the price makes an upward correction before making the breakout, we may consider the second level to set our stop loss. We may set our take profit with 1R by measuring the same number of pips from the entry point to stop loss as well. This provides fewer pips as a reward, but to be safe with an entry like this, we may do this. The price often makes a consolidation, or it makes a correction (once it hits 1 R from the new resistance/support) after such breakout. A correction/consolidation sometimes leads towards a trend reversal as well. Thus, there is no point in taking a loss for hunting some extra pips. Always remember ‘safety first.’

Categories
Forex Daily Topic Forex Price-Action Strategies

Price Action Trading: The Daily Chart’s Consistency

The Price Action Breakout Strategy works in almost all the charts. However, it works best on the daily chart. In today’s lesson, we are going to demonstrate an example of a breakout-trading example of that. The chart has a bullish gap, but consolidation followed by a bearish engulfing candle offers an excellent entry for the sellers.

The Price Action Breakout Strategy works in almost all the charts. However, it works best on the daily chart. In today’s lesson, we are going to demonstrate an example of a breakout-trading example of that. The chart has a bullish gap, but consolidation followed by a bearish engulfing candle offers an excellent entry for the sellers.

The Price Action Breakout Strategy works in almost all the charts. However, it works best on the daily chart. In today’s lesson, we are going to demonstrate an example of a breakout-trading example of that. The chart has a bullish gap, but consolidation followed by a bearish engulfing candle offers an excellent entry for the sellers.

The chart shows that it makes a strong bullish move. Upon finding a level of resistance, it produces a bearish engulfing candle. The sellers may want to keep an eye in this pair to go short.

The price keeps going towards the South. The sellers must wait for the price to consolidate and produce a bearish reversal candle. The swing low is far enough, which offers the price to travel towards the South further.

Here it comes. The chart produces a bullish candle. The sellers are to be attentive here. The chart may produce a bearish reversal candle and offer a short entry to them. Do not miss the point that the price has a little bullish gap. The gap is not visible explicitly, but if you count the last candle’s opening and the closing one before it suggests that the price starts with a gap.

The chart produces a bearish engulfing candle closing well below consolidation support. The sellers may trigger a short entry right after the candle closes by setting stop-loss above the signal candle’s highest high. The space between the last swing low and the signal candle’s closing price suggests that the entry offers 1R. This should be enough to bring enough liquidity and drive the price towards the South.

As anticipated, the price heads towards the swing low and hits the target. The sellers achieve 1R here with ease. The last candle comes out as a bullish reversal candle since it closes within the previous candle’s lowest low. The sellers may want to close their whole trade and wait for the next one.

Price action breakout strategy works in 5M to the weekly chart. However, the daily, the H4, and the H1 are the three best charts that work best with the strategy. Usually, the gap creates confusion among traders. It creates more confusion among price action traders. In this example, we have demonstrated that the gap does not create confusion, but the Price Action Breakout Strategy works well as it usually does. The little gap may be one of the reasons. However, if the daily chart produces a trade setup like this, it does not usually go in vain.

Categories
Forex Daily Topic Forex Price-Action Strategies

Keeping an Eye on Some Levels Comes Handy

Forex price action trading requires a clearer chart. Traders are to keep an eye on candlesticks’ attributes, consolidation, reversal candle, and support/resistance levels. The last swing high and the last swing low are two levels that traders must count. However, the price often reacts to certain levels, where it reacts heavily earlier. We may keep an eye on those closely since they often offer entries. In today’s lesson, we are going to demonstrate an example of that.

Forex price action trading requires a clearer chart. Traders are to keep an eye on candlesticks’ attributes, consolidation, reversal candle, and support/resistance levels. The last swing high and the last swing low are two levels that traders must count. However, the price often reacts to certain levels, where it reacts heavily earlier. We may keep an eye on those closely since they often offer entries. In today’s lesson, we are going to demonstrate an example of that.

Forex price action trading requires a clearer chart. Traders are to keep an eye on candlesticks’ attributes, consolidation, reversal candle, and support/resistance levels. The last swing high and the last swing low are two levels that traders must count. However, the price often reacts to certain levels, where it reacts heavily earlier. We may keep an eye on those closely since they often offer entries. In today’s lesson, we are going to demonstrate an example of that.

The chart produces a bullish engulfing candle after being bearish for a long time. The buyers still hold the key. However, the sellers may keep start eyeing on the pair as well. The chart shows a pullback level in its bearish wave. The highest high is further up, though. Thus, if the price makes a bullish move from here, it would be a big one.

The price heads towards the North with good bullish momentum. The buyers are to wait for the price to consolidate and produce a bullish signal candle to go long on the pair. A level of resistance (drawn level) is nearby. The price may consolidate around the level. Thus, this is time for the buyers to keep an eye in the pair closely.

The price does not consolidate around the level of resistance, but it makes a breakout.  Some traders may think that they have wasted time here by keeping an eye on the pair, which is never right. In Forex trading, we need to invest money and time. After such a breakout, the price usually keeps going towards the trend’s direction for one or two more candles before having consolidation. Do not forget, it often consolidates around the breakout level and offers entry.

The chart produces one more bullish candle followed by a bearish candle. The last candle closes within the breakout level. This means the price is having consolidation around the breakout level. If the chart produces a bullish engulfing candle closing consolidation resistance, the buyers are going to push the price towards the North.

The buyers crave for getting such a good–looking bullish candle to go long from here. The equation is simple here. The buyers may trigger a long entry right after the candle closes. Let us find out how the entry goes.

The price heads towards the North with good bullish momentum. The buyers achieve their 1R easily here. The highest high is further up. Thus, it may remain bullish for some more candles.

The price may consolidate and offer entry at any level when it is trending. However, it tends to consolidate around some particular levels often. By spotting them out, we may make our trading life a bit easier.

Categories
Forex Basics

Some Spikes are Not to Be Ignored

Forex traders often struggle with spikes on their trading charts. The Line chart does not show spikes, but Candlestick Chart does. Price action traders usually use candlestick charts as one of their weapons to trade effectively. Thus, they face this problem every now and then. There is no sure method confirming which spikes are to be ignored, and which are not to be ignored. We have to be sensible about that. In today’s lesson, we find out a kind of spikes that are not to be ignored. Let us get started.

Forex traders often struggle with spikes on their trading charts. The Line chart does not show spikes, but Candlestick Chart does. Price action traders usually use candlestick charts as one of their weapons to trade effectively. Thus, they face this problem every now and then. There is no sure method confirming which spikes are to be ignored, and which are not to be ignored. We have to be sensible about that. In today’s lesson, we find out a kind of spikes that are not to be ignored. Let us get started.

Forex traders often struggle with spikes on their trading charts. The Line chart does not show spikes, but Candlestick Chart does. Price action traders usually use candlestick charts as one of their weapons to trade effectively. Thus, they face this problem every now and then. There is no sure method confirming which spikes are to be ignored, and which are not to be ignored. We have to be sensible about that. In today’s lesson, we find out a kind of spikes that are not to be ignored. Let us get started.

The price heads towards the South with good bearish momentum. It finds its support and produces a bullish reversal candle. The last candle comes out as a bullish candle as well. The sellers are to wait for a bearish reversal candle to go short in this chart.

Here comes the bearish reversal candle that the sellers wait in such price action. We have not drawn any resistance line. If we closely observe, we find that the last two candles’ bodies suggest a line of resistance. Candles’ bodies play a significant role in determining the support/resistance line. Let us draw a line of resistance here.

Here it is. The combination of the last two candles and their bodies suggests that we may draw a line right above their bodies. In most cases, we are to do this. However, the last two spikes have something more to think about. If we closely look, we find that the last two spikes are lined up. They have had their rejection at the same level. This means that the line is significant, which must not be ignored. Thus, if we want to take entry here, we may count the line above as the level of resistance. Let us have a look at the chart below with more drawn lines.

Look at the Stop Loss level. To be safe, we may not ignore such levels, where the price gets rejected multiple times. The candles may end up having spikes, but these spikes shall be counted to determine our stop loss, take profit, and breakout level. Let us not proceed to find out how the entry goes.

The trade setup works well for the traders. The price heads towards the South with more bearish pressure. It gets 1R to the sellers in a hurry. Now many of us may say the price never goes back to the level. In 80% of cases, the price does not go back near to the resistance. In the rest of the 20% cases, it may go. That is when we are to take an unnecessary loss. As they say, it is better to be safe than sorry. Let us be safe with spikes like these.

Categories
Forex Price-Action Strategies

Price Action Trading: Weekend and Partial Profit Taking

Partial profit taking is an option to be safe with our investment. It provides less reward to some extent. However, for the Forex traders, it is a great way to make sure that they cash in some profit or lose less money in a particular trade. In today’s lesson, we are going to demonstrate an example of a trade setup offering an entry four hours before the market closes. Traders have only one H4 candle to hit their target, or they would have to carry the trade during the weekend. Let us find out what we should do in such a situation

This is an H4 chart. The price heads towards the South at a moderate pace. The last candle comes out as a bullish engulfing candle. This may work as a bullish reversal for the minor charts’ traders. However, the H4 breakout sellers are to wait for the chart to produce a bearish engulfing candle closing below consolidation support to offer them a short entry.

The price makes a bearish breakout. However, the H4 breakout sellers do not wait for such a breakout. The last candle comes out as a bearish engulfing candle, but the consolidation is shallow. Thus, the sellers may skip taking this entry as well.

Again, the price consolidates and makes another bearish move. This time it does not make any bearish breakout. The chart may end up producing a double bottom here. It is a long way to go. Meanwhile, the sellers must wait.

The chart produces a bullish engulfing candle followed by a bearish inside bar. Now, it looks that the buyers may take control. Let us proceed to the next chart and find out what happens next.

What a Surprise for the H4 breakout sellers! The last candle comes out as a bearish engulfing candle closing well below consolidation support. The sellers may trigger a short entry right after the last candle closes with 1 R by setting stop-loss above consolidation resistance. Do not forget this is Friday. The market is closing within 4 hours.

This is how the last candle looks. It suggests that the price may keep heading towards the South. However, carry trade during the weekend on the H4 chart is risky a little. The market often starts Monday with big gaps that affect the H4 charts. Thus, the sellers may consider taking a partial profit just before the market closes on Friday. It would not get them to achieve 1R in the end, but it would make sure that they earn some profit out of it. Even if the rest of the trade hits the stop loss, he will not lose as much as he would with his whole trade.

 

Categories
Forex Daily Topic Forex Price-Action Strategies

Price Action Trading: An Important Thing to be Remembered

To draw Support/Resistance, price action traders are to be sensible. They often need to be adjusted. In today’s lesson, we are going to demonstrate an example of this. To spot out support/resistance, traders are to aim the zones. Then, in the end, they are to draw levels to have the confirmation of a breakout. Let us learn more about this from the examples below.

To draw Support/Resistance, price action traders are to be sensible. They often need to be adjusted. In today’s lesson, we are going to demonstrate an example of this. To spot out support/resistance, traders are to aim the zones. Then, in the end, they are to draw levels to have the confirmation of a breakout. Let us learn more about this from the examples below.

To draw Support/Resistance, price action traders are to be sensible. They often need to be adjusted. In today’s lesson, we are going to demonstrate an example of this. To spot out support/resistance, traders are to aim the zones. Then, in the end, they are to draw levels to have the confirmation of a breakout. Let us learn more about this from the examples below.

This is an H1 chart. The chart shows that the price has been choppy for quite a while. It has been roaming within a descending triangle. The price may make a breakout to either side. Let us work with horizontal support and spot out point/points where the price bounces twice.

We may spot out two points here. These two levels are nearby to each other. Without any doubt, this is a strong support zone. If we consider levels, we may get confused since we get two levels. In such a situation, we may closely observe what the price does around the last swing low. Let us proceed to the next chart.

The chart shows that the last candle breaches the level of support (the last swing low). This is not an explicit breakout. We must wait for the next candle to have the breakout confirmation.

The next candle comes out as a bearish candle as well as closing well below the breakout candle. If we consider the price action for the last two candles, it is clear that the sellers have taken the control. The level of support at the last swing low holds the key as far as the last two candles’ price action is concerned. The H1 breakout strategy sellers may trigger a short entry right after the candle closes. Let us proceed to the next chart what the price does after triggering the entry.

The price heads towards the South with good bearish momentum. The sellers achieve their 1R with ease. The last candle’s attributes suggest that the price may go towards the South further. In a word, this has been a prolific trade setup for the sellers.

If we consider the first swing low on this chart, we may get confused about the breakout. Considering the price action and the last swing low, it is a basic thing to understand that the price makes a breakout at the last swing low. The last swing low matters most as far as the breakout strategy is concerned. If the price consolidates after a breakout, then other levels (previous levels of support/resistance) may work as flipped support or resistance. This is one important thing to be remembered by the price action traders.

Categories
Forex Daily Topic Forex Price-Action Strategies

Price Action Trading: Entries to Take and Entries to Skip

In today’s price action trading lesson, we are going to demonstrate an example of a chart that offers multiple entries. We try to spot out entry/entries that we may skip and the entry/entries we may take. We try to find out the reasons behind that as well. Let us get started.

In today’s price action trading lesson, we are going to demonstrate an example of a chart that offers multiple entries. We try to spot out entry/entries that we may skip and the entry/entries we may take. We try to find out the reasons behind that as well. Let us get started.

In today’s price action trading lesson, we are going to demonstrate an example of a chart that offers multiple entries. We try to spot out entry/entries that we may skip and the entry/entries we may take. We try to find out the reasons behind that as well. Let us get started.

The price after being bullish for a long time produces a bearish reversal candle and heads towards the South. Look at the last candle. It comes out as a bullish inside bar. Price action traders start eyeing on such a chart to go short. However, the sellers would love to see the price have deeper consolidation.

The chart does not make a deep consolidation. It produces a bearish engulfing candle closing well below consolidation support. The trend and the reversal candle get 10 on 10, but the consolidation is not deep enough. It is not an A+ entry. It is best if we restrain ourselves from taking such entry. Let us proceed to the next chart.

Many of us may think an opportunity missed. Here is one added lesson on ‘ do not cry over spilled milk.’ Forex traders must obey this. Let us concentrate on the chart again. The last candle comes out as a very strong bearish candle. The pair may offer more short entries.

The chart produces a bullish inside bar again. The equation is simple for the sellers based on price action. The chart is to produce a bearish engulfing candle closing well below consolidation support. Let us proceed to the next chart.

Here it comes. This is one good-looking bearish engulfing candle closing well below consolidation support. The trend, consolidation length, and the bearish reversal candle all get 10 on 10. As far as price action breakout trading strategy is concerned, this is an A+ entry. Let us now find out how the entry goes.

It does not go according to our expectations. It rather produces a bullish inside bar again. It is an inside bar. Thus the sellers still hold the key here. The fact remains at the first consolidation, despite having shallow consolidation, the price heads towards the South with extreme bearish momentum. On the contrary, despite being an A+ entry, the price does not move according to the sellers’ expectations. It may even go towards the North and hits the stop loss. Then again, we must stick with our trading rules and be extremely disciplined. Let us proceed to the next chart to find out what happens next.

Ah! What a move this is! The sellers make some green pips here. The chart makes them wait, but it pays them back. As mentioned, it could go another way. That does not mean we start thinking to change our strategies or start taking random entries. We must make sure we only take entries that get A+ after considering all the segments.

Categories
Forex Daily Topic Forex Price-Action Strategies

Price Action Trading: Let it go

The Engulfing Candle is considered one of the most influential candles to indicate a trend reversal. Price action trading is closely related to identifying trend reversal for which price action traders give value to engulfing candles a lot. In today’s lesson, we are going to demonstrate an example of an engulfing candle, which does not work in favor of the traders. We try to find out the reason behind that.

The Engulfing Candle is considered one of the most influential candles to indicate a trend reversal. Price action trading is closely related to identifying trend reversal for which price action traders give value to engulfing candles a lot. In today’s lesson, we are going to demonstrate an example of an engulfing candle, which does not work in favor of the traders. We try to find out the reason behind that.

The Engulfing Candle is considered one of the most influential candles to indicate a trend reversal. Price action trading is closely related to identifying trend reversal for which price action traders give value to engulfing candles a lot. In today’s lesson, we are going to demonstrate an example of an engulfing candle, which does not work in favor of the traders. We try to find out the reason behind that.

The chart shows that the price heads towards the South with good bearish momentum. On its way, it makes a breakout and trades below the level for one more candle. The sellers are to keep an eye on this pair for the price to consolidate and produce a bearish engulfing candle closing below consolidation support. Do not miss the point ‘closing below consolidation support’.

The price does not consolidate. It instead produces another bearish candle. It may consolidate now. A candle like this attracts more sellers to go short on the pair. Let us proceed to the next chart.

The chart produces a bullish inside bar. This means the chart is still bearish biased. The signal candle may come out at any time. The waiting game gets intense. The sellers are to keep checking the chart since the next candle may be the signal candle.

The chart makes them wait further. It produces a bearish inside bar followed by a bullish engulfing candle. The chart is still bearish biased, but the chart may get choppy as well if the next candle comes out as a bullish candle. Let us wait and find out how the next candle comes out.

The next candle comes out as a bearish engulfing candle. Is this what the sellers want? Here is a question for you. Would you trigger a short entry?

If the answer is no, you are right. The reason behind that is this is an engulfing candle, but it does not close below consolidation support. Look at the line below. This is where both candles get rejection. Thus, we may consider this one as consolidation support. Even if we consider only their bodies (not the best way), the candle closes within that level as well. The equation is an engulfing candle does not make a breakout. Thus, traders may skip taking this entry. We need to make sure these four things are there before taking entry based on this setup.

  1. Clear trend
  2. Consolidation
  3. Engulfing candle
  4. Breakout

If a trade setup misses any one of these, be patient. Let it go.

 

Categories
Forex Daily Topic Forex Price-Action Strategies

Price Action Trading: Support/Resistance and Breakout

Support and Resistance are the two most important things as far as price action trading is concerned. We often see that too many support levels/resistance levels are nearby being too close to each other. It may confuse us to be sure whether a breakout takes place or not. In today’s lesson, we try to find an answer to that. Let us get started.

Support and Resistance are the two most important things as far as price action trading is concerned. We often see that too many support levels/resistance levels are nearby being too close to each other. It may confuse us to be sure whether a breakout takes place or not. In today’s lesson, we try to find an answer to that. Let us get started.

Support and Resistance are the two most important things as far as price action trading is concerned. We often see that too many support levels/resistance levels are nearby being too close to each other. It may confuse us to be sure whether a breakout takes place or not. In today’s lesson, we try to find an answer to that. Let us get started.

This is a daily chart. The chart shows that the price heads towards the South after producing a bearish engulfing candle. Look at the last candle, which comes out as a bullish corrective candle. If the next candle comes out as a bearish engulfing candle closing below consolidation support, the sellers may trigger a short entry.

The last candle comes out as a bearish engulfing candle closing below consolidation support. The question is whether the sellers may trigger the entry or not. Look at those two drawn levels. The price reacts to those levels. Usually, price action traders count such levels to determine risk-reward or to set take profit level. Let us assume a trader takes the entry.

Typically, he should trigger the entry right after the last candle closes with 1R. Do not forget this is a daily chart. The daily chart usually offers more than 1R. Let us proceed to the next chart.

The price heads towards the South with extreme bearish pressure. As mentioned, it gets him more than 1R. It seems it may continue its bearish journey. At least the seller may hold his position until it produces a bullish reversal candle.

Here it comes. It produces a bullish inside bar. This is not a strong bullish reversal candle. However, some traders may consider come out with their profit or at least some part of it. Some sellers may still hold it until it produces a strong bullish reversal candle.

The last candle comes out as a bullish engulfing candle. This time the sellers are to think twice whether they should hold the entry. Many price action traders close their entry here. The trade setup works excellently well here. However, do you remember those two more support levels? The price does not seem to react to those levels at all. You may notice this next time. When support/resistance levels stand too close to each other, the last level and the last breakout gets the priority (in 80% cases). However, if they have enough space in between, then they must be counted by the traders to calculate risk-reward or to set take profit.

Categories
Forex Price-Action Strategies

Price Action Trading: Be Psychologically Strong

Today, we are going to demonstrate an example, which has several lessons. Forex price action traders need to concentrate hard on the trading charts. They must have ‘never give up’ attitude, must not make decisions emotionally. In a word, they need to be psychologically strong. Let us now proceed to our lessons with examples.

Today, we are going to demonstrate an example, which has several lessons. Forex price action traders need to concentrate hard on the trading charts. They must have ‘never give up’ attitude, must not make decisions emotionally. In a word, they need to be psychologically strong. Let us now proceed to our lessons with examples.

Today, we are going to demonstrate an example, which has several lessons. Forex price action traders need to concentrate hard on the trading charts. They must have ‘never give up’ attitude, must not make decisions emotionally. In a word, they need to be psychologically strong. Let us now proceed to our lessons with examples.

This is a daily chart. After being bearish, the chart produces a bullish reversal candle. The combination of the last two candles is called Track Rail. It is a strong bullish reversal pattern. The daily- H4 combination traders may flip over to the H4 chart to go long on the pair.

 

The H4 chart does not look that promising. The price heads towards the North, but the momentum has not been strong. However, the buyers have their first signal to keep an eye on this chart. They are to wait for the price to consolidate and produce a bullish engulfing candle to offer them a long entry.

The price makes a deep consolidation and produces a bullish engulfing candle. However, it closes within a level where the price gets rejection twice. The engulfing candle does not close above the level of resistance, but the next one does. This is not an A+ entry. The buyers may skip taking the entry.

The price continues to go towards the North. Some traders may think an opportunity is missed. Do not forget that we shall only go with A+ trade setups. Here is a question. Look at the last consolidation and the bullish reversal candle. The candle closes well above the level of resistance. However, it is not a deep consolidation. Would you trigger a long entry here? Do not miss the point that it is not a deep consolidation. Thus, this is not an A+ entry either. Let us skip it and concentrate on the next chart.

 

Again, the price heads towards the North. This is where we must not panic and think we keep losing opportunities. It is always better to be safe than sorry. What do you think about the last bearish candle? This seems to be a deep consolidation. If the chart produces a bullish engulfing candle, the buyers may trigger a long entry.

 

The last candle comes out as a bullish engulfing candle closing well above the level of resistance. The price makes a deep consolidation. This is an A + trade setup. We may trigger a long entry right after the last candle closes. Let us proceed to the next chart to find out how the entry goes.

 

The price heads towards the North with good bullish momentum. It gets us more than 1R. At last, our patience has paid off. Do you notice how strong we need to be psychologically? This may seem easy, but it never is when we trade and make a decision in the live market. It is tough to restrain ourselves from taking bad entries. Sometimes they may make a profit and make us upset if we do not take the entry. To be consistent, we must not be upset but wait for the best setup (A+ trade setup) to offer us entry.

Categories
Forex Videos

How To Achieve Free Trades & No Risk Double Up Trades In Forex

https://youtu.be/DIYYOUu1j5E

https://youtu.be/DIYYOUu1j5E

Free trade and a no-risk double up trade

In a perfect trading world, we would have no risk trades and be able to double up on those trades if we were 100% confident that price would continue in the direction that our technical charts said they should. Of course, there is no perfect world in trading, and absolutely anything can happen at any time, and we have to guard against those eventualities. However, with some careful preparation, we can protect winning trades from loss, and even double up on those trades, with little or no risk, if we prepare carefully.

Example A


Example A is a 1-hour chart of the GBPUSD the pair. On the face of it, it looks like price action reached a plateau in the middle of the chart and then gradually begins to fall. We are in a bearish descending channel.

Example B


Example B, backs up this theory with two simple descending trend lines. The trend lines A and B are acting as an area of resistance and support for price action and where lower highs and lower lows are clearly evident. Therefore a breach higher than trend line A would be considered a bullish move, and a more likely breach of trend line B would be considered as a bearish move.

Example C


In example C price action has breached trend line B, and this move is associated with bearish candlesticks just before the breach. We have chosen to sell at position 1 with a stop loss at position 2 in case price action reverts higher. Should it do so, we would need to adjust our stop loss lower along the descending line of resistance.

Example D


In example D, and in line with our free trade promise, price action has moved lower, and so we have put a protective stop (PSL) just below the entry point of this trade by a couple of pips. No matter what happens now, we cannot lose money on this trade. It is effectively a free trade.

Example E


In example E, price action has continued to fall. Let’s say by 20 pips from our original sell entry. We can sell this position again using the same amount of leverage as trade 1, with a stop loss of 10 pips; and by bringing our protective stop from trade 1 lower and placing it in the same position as our second trade stop-loss, we have effectively doubled up on this trade with no risk of loss. So if trade two is stopped out at minus 10 pips, it will be netted out by trade one which gained 10 pips, minus your spreads.

As price action continues to fall lower, we simply bring our protective stops lower in order to maximize our profit.