Price Action Trading Strategies

There are many Price Action signals traders can use to create an edge in their favour over the market. An edge is something that over a large sample size of trades tilt the odds in the traders favour. A trader could flip a coin and have 50% win rate over enough trades (minus the spread), so finding an edge should average a minimum win rate of 51% or better. In this article we are going to concentrate on the Pin Bar Reversal.

The Pin Bar

The Pin bar is a very simple setup and very easy to spot for Price Action traders. A Pin Bar consists of a small body with a large wick or nose. The name Pin Bar is derived from the name Pinocchio Bar which means a candle that is telling a lie.

The nose on the Pin Bar is the large wick. It is telling a lie to the market. It is telling traders it is looking to break out one way when we know in fact the reverse is true as the Pin Bar is telling a lie and looking to go back the opposite way.

Below I have attached some examples of the Pin Bar. Take note of the long wicks and small body.

An example of a Bearish Pin Bar in a chart is below. Notice the Long wick and then the explosions of price going back the other way (lower).

The Pin Bar can be a very powerful and reliable setup when traders enter them from the correct areas. Traders will normally get caught out with the Pin Bar when entering from the incorrect positions.

The best places to enter trades on the Pin bar are from areas we would expect other traders to enter from. These are areas such as support or resistance, pull-backs within the trend or making a false break of a supply and demand zone.

An example of two Pin Bar’s with the trend is below. Trading with the trend improves a traders overall edge as they are taking a position with the same market bias as the big players.

 The following example is of a Pin Bar that has formed from resistance. This is an example of what we call an A+ trade. The recent momentum was down and price pulled back to a solid resistance zone. This was a very solid trade.

 Recap

The Pin Bar can be a very reliable and powerful setup when the Price Action trader has acquired the correct knowledge. The trader needs to know much more than just what a Pin Bar is. They also must learn:

• How to enter Pin Bar
• How to manage the Pin Bar i,e: take profit and place stops etc
• The Best places to take profit or move to break even
• When not to enter the Pin Bar
• The Pin Bar’s to not get sucked into trading
• The best markets traders can trade Pin Bar’s in

Forex School Online with head coach Johnathon Fox has a plethora of free Price Action videos and articles that can help traders learn the art of the Pin Bar and Price Action trading. Johnathon also runs a course for serious traders looking to take their trading to the next level. To watch or read any of the Price Action videos or articles please visit here: Forex School Online Free Education

Forex Trading with Price Action

Forex trading with price action is one of the most fundamentally responsible ways to approach the trading world in the Forex market place. Trading with price action is simply a way to address the movement of price on your chart, and responsibilities movement with destinations in terms of price direction and targets.

The beauty of price action trading is that fallibility is built into the program, and failure to respond to the price action method you are reading on the chart will allow you are system to close out the trade for a responsible loss. Many of the most dance price action traders in the Forex market place generally regarded as the most responsible professionals.

Two sources for price action trading online either not helpful or poor Forex. Nial Fuller is a gentleman based in Australia who offers his students a very intense programs that allow students to develop price action reading skills and apply his skills to the Forex market. Niall is one of the more responsible trading coaches online, if you still took quite a reputation over the years for developing such responsible system, and implementing very strong videos.

The first video we are showcasing is the Forex . This is a pretty advanced approach to price action, but gives the trader some sort of idea as to how this all works — how the market lures people into squeeze trade.

Discretionary Price Action Trading

For those of you that dont know what this is, its definately time you learnt, and fast or you will inevitably blow your account chasing the elusive holy grail forex system. Discretionary price action trading is not a technical indicator, its not even a combination of indicators, its reading what the market is telling you about price behaviour and movement in the PRESENT.

It can tell you when the current move is running out of momentum through candlestick patterns! It can tell you when the current move is going to continue at a rapid rate on the break of important support or resistance! It can highlight possible retracement areas with the fibonacci ratios! It can warn you of a major move even before it happens with breakout chart patterns like flags and pennants! So if Discretionary price action trading is so great why isn’t everyone using it and why is it not all over my forex brokers website!?

The simple answer is you cannot buy Discretionary price action trading in a packaged, advertised and marketed commercial trading system. Learning to trade Discretionary price action requires skill, education, patience and time. Discretionary price action takes years to master, and by master i dont just mean understanding and being able to use price action, i mean being able to feel the market, being able to use your own discretion when it comes to judging the strength of support and resistance, whether or not that particular fib level will hold, whether the preceeding trend is strong enough to trade that particular inside or pin bar , whether that potential candle pattern your watching will form or fail.

Discretionary price action trading requires you to constantly think, analyse and adapt along with the market and this is why it is so powerful! So from this day forth throw away your lagging indicators, pull up a naked chart and start looking at what the market is telling you right now, i guarantee you will not regret it! If your not quite sure where to start when it comes to trading price action take a look over at my website, over at the daily technical analysis blog everyday i post my technical analysis and potential set-ups for a range of different currency pairs.

Euro Finds Renewed Bids But Price Action

Euro Finds Renewed Bids But Price Action Still Classified as Corrective. The latest resurgence in risk appetite has helped to prop the Euro, but more needs to be done on the fundamental front if the rally is to gain traction…

• Risk correlated assets finding renewed bids
• German plans to strengthen Spanish banks inspire confidence
• ECB Draghi says the central bank is ready to act if necessary
• EUR/USD next key resistance comes in by 1.2625
• Bank of England rate decision due later today

Risk correlated assets have been very well bid over the past few sessions, with currencies and equities reversing sharply as market participants are able to let go of the worst of their fears for the time being. The doom and gloom sentiment that had taken hold in the previous week has faded and investors are once again warming up to the idea that the Eurozone may be able to escape the current crisis and avoid breakup. News that Germany is drafting plans to strengthen the Spanish banks without expecting further reforms or any formal aid deal has been seen as a huge positive and this has been once of the primary drivers of this latest risk-on trade.

Although the European Central Bank left policy on hold as was expected, comments from ECB President Draghi that the central bank is willing to act if necessary have also been helping to bolster sentiment. The Euro now eyes a retest and break of the previous weekly high by 1.2625, while the Yen has also been very well offered on the liquidation of safe haven plays. Still, at the end of the day, this is a market that had been in desperate need of technical correction following some intense risk-off moves, and at this point, we would attribute the recent price action more to the technicals than fundamentals.

European leadership will really need to dig in and come up with some serious plans to resuscitate the region for there to be any hope of a sustained Euro recovery. Until then, the strategy should be to look to sell these currency rallies into additional strength. Looking ahead, the Bank of England is slated for a rate decision later today. While no policy change is expected, there is a good deal of speculation that the Bank of England will shift to a more dovish stance in light of the ongoing pressures in the global macro economy.

ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD:The market is in the process of correcting from some violently oversold levels after breaking to yearly lows just under 1.2300. While our overall outlook remains grossly bearish, from here we still see room for short-term upside before a fresh lower top is sought out. Look for the latest daily close back above 1.2545 to open the door for acceleration into the 1.2800-1.3000 area, where fresh offers are likely to re-emerge.

USD/JPY:The latest setbacks have been rather intense, with the market collapsing through the 200-Day SMA before finally finding support by 77.65. We have since seen attempts at recovery and we contend that the market should continue to break higher, with sights ultimately set on a retest and break of the 2012 highs by 84.20 further up. However, at this point, we will need to see a break and close back above 80.00 to officially alleviate downside pressures and reaffirm bullish outlook.

GBP/USD: Daily studies are now well oversold and from here risks seem tilted to the upside to allow for a necessary short-term corrective bounce after setbacks stalled just shy of the 2012 lows from January. Look for the latest daily close back above 1.5440 to strengthen short-term bullish outlook, with acceleration projected into the 1.5600-1.5800 area where a fresh lower top will be sought out in favor of underlying bear trend resumption.

USD/CHF: While we retain a broader bullish outlook for this pair, with the market seen establishing back above parity over the coming weeks, shorter-term risks are for more of a corrective pullback to allow for the market to establish a fresh higher low. As such, we see risks for weakness over the coming sessions towards the 0.9300-0.9500 area before the market looks to reassert its bullish momentum and broader uptrend.

The Best Currency Trading Tutoria

Currency trading is essentially similar to trading stocks except that you are trading world currencies in what are called currency pairs. This is done on what is called the foreign exchange market and this is the largest market in the world. Currency trading is typically considered as a very high risk investment and while there are some that simply speculate on currency values many become very skilled and over time can turn a serious profit. Currency trading allows you to leverage your money on a incredible scale, and it is not uncommon for a brokerage to permit between a 100:1 and 200:1 leverage ratio.

There are different levels of trading when it comes to trading on the foreign exchange markets and many beginning investors will not have the same kind of access as some of the bigger brokerages. Many of the larger world banks and established financial institutions are the only ones that gain knowledge of the tiniest spreads and if you must realize that this is much different from trading stocks in which most investors have access to almost the identical prices as bigger organizations.

If you are looking for a currency trading tutorial then you are probably a novice currency trader who hasn’t had much experience with trading forex. The best currency trading tutorial is one that can point you in the right direction in terms of finding guidance and resources for your currency trading, and it is beyond the scope of this article to go into every single area of currency trading. A forex trading tutorial is essentially about the level of knowledge of the reader and whether that person already has their feet wet, or if that person has never made a currency trade in their entire life.

Currency trading is an extraordinarily deep subject and the only way to learn properly is to put in the time and effort to go over all of the best resources that may be available to you. If you are willing to authentically learn then becoming a profitable forex trader is something that is feasible but is also something that many people have tried to do but in the end have failed. It is important to get all of that nonsense out of your head that many companies and forex gurus might promise you such as how you can make a million in a month with forex, or that you can start with a few hundred dollars open a forex mini account and double or quadruple your money in less than a week.

Forex is similar to more conventional trading in that many attempt to make real money with it, but most fail to make anything significant and the few that really make money are the ones who have done their homework and have gone about doing things the right way. You can do the same with currency trading if you are willing to put in the time but just realize that no one tutorial is going to make you profitable and it is vital that you commit yourself to learning as much as you can as fast as you can.

Johnathon Fox Offering 30-Day Money Back on Price Action Trading Course

Johnathon Fox specializes in helping traders demystify the myths that surround the Forex business and helps traders gain a trading education they will have for life through Price Action Trading. Instead of the many automated and black box systems that many traders fall victims to, Mr. Fox concentrates on teaching his students a method that can help them make their own trading decisions, based on the analysis of Price Action.

“After achieving a high level of success in my own trading I set about spreading the word and helping struggling traders by sharing my trading methods and systems. I have now setup Forex School Online so I can reach more struggling traders, and get them on the right path,” says Mr. Fox. Forex School Online is so confident with their Price Action course they have introduced a 30 day money back guarantee. This is simply unheard of in the Forex Business when most educators are after quick cash at the expense of the student’s education.

The methods and systems of price action trading that Mr. Fox teaches allow traders to navigate the markets and make informed decisions for themselves. As Mr. Fox noted, “the approach we like to take is to give students an education they will have for life, rather than needing to depend on someone else to help them trade.”

The Forex Price Action Trading course offered by Johnathon Fox has garnered much praise from its participants. “I initially followed a path that many new traders take … then I was lucky enough to be introduced to Johnathon’s site,” says Forex School Online trading student Rob. “Twelve weeks. That’s roughly how long it took for me to become consistently profitable once I started to follow Johnathon’s advice.”

The Forex School Online Members area features six sections of targeted content to assist Forex traders with attaining their goals. Section 1 is the Advanced Price Action Trading Course that focuses on providing students with the step-by-step plan that Johnathon uses to continue on a profitable path of action in Forex trading. Members receive the information of what Johnathon uses to trade the markets with. Section 2 helps students get into Forex Trading Psychology. So many traders focus solely on their trading strategy and fall down in the way they approach and think about their trading. Trading psychology can be the difference between success and failure. “Price Action Trading is about helping students change how they think about Forex markets,” observes Mr. Fox. Forex School Online covers this topic with a 6,000 word document that will take you through how you need to approach you trading and how to avoid the psychological pitfalls.

Section 3 is the section that gives members exclusive articles that cover extra topics and teach little extra tips and tricks traders can deploy to increase their success in the markets. Section 4 is made up of videos that include everything covered in the Price Action course created specifically for visual learners. Traders can cement the knowledge of the strategies covered in the course by watching videos where the trading method is put into action by Johnathon himself. Section 5 offers student’s access to the Members “Live” Setups Forum where the senior coaches and other members discuss all things trading from the “live” setups they are entering, to any other help that members may need. Section 6 is where members can gain direct email access to professional trader Johnathon Fox. When you become a member of Forex School Online you are not just left in the dark. Johnathon pride himself on giving traders all the support and help they need to become successful traders. Trading can be daunting and having a mentor to answer any questions you may have will definitely benefit your trading.

If you would like to learn more about Forex Price Action Trading or how you can become one of Johnathon Fox’s members please check out he’s website: http://www.ForexSchoolOnline.com

Johnathon Fox is a professional Price Action trader and is widely known as the master of Price Action trading. Johnathon is the author of an Advanced Price Action Trading Course and has many students from all around the world.

Like It To Lead In Practice - Forex Price Action

 Forex price action trading strategies are strategies that merely focus on trading price action. Price action is simply a term used to describe the movements of currency pair prices, in Forex trading.

Most Forex trading strategies focus on more complicated elements, but this type of trading is actually very simple and it is easy to pick up too. Most other strategies that are also based on technical analysis, will involve the use of at least one or more technical indicators. There are many technical indicators, including: RSI, CCI and MACD. Not only can it be hard to choose one or more technical indicators to use, but it can also prove to be difficult to actually use them effectively, especially for beginners.

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Price Action Forex Trading Strategies

Price action is a simple yet very effective way to trade the Forex market. Price action is the study of price, how it moves and reacts to areas and levels in the Forex market. Generally speaking we don’t use indicators with this strategy, although moving averages are good as acting as dynamic support and resistance.

Pin bar reversals are best taken at strong support and resistance levels, these are the areas where institutions and banks place their orders, when you see a pin bar at support or resistance, we can deduce that the big players bought or sold at this level. We can then assume that price may bounce on this level and continue in the new direction for a time. But remember there are no gaurantees!

Price action strategies revolve around candlestick patterns, these include inside bars, pin bars and engulfing bars. My favorite is the pin bar. The pin bar is a reversal bar, it shows us that price moved in a certain direction for a time, but at some point it changed direction and ended up closing near or beyond where it opened. This tells us that during the session sentiment about the market changed. From this we can deduce that the market did not want to go in the original direction, and we can now place trades in the direction of the new sentiment. Or opposite to the direction of the tail which shows us rejection of higher or lower prices.

My favourite pin bars occur when price breaks trough a key level and then retests it, old support becomes new resistance and vice versa. These are very high probability setups that you really should be learning to spot and trade, because they work!

The best pin bars occur on daily forex charts and on the 4hr. Below this and you start to see price action signals caused by market noise.

I genuinely believe that anyone can learn price action, so long as you are prepared to put in some work and take some time to put these things to use you can make money. If you are fed up of heavy charts where you can hardly see price then this could be the strategy for you. Strip away the indicators and start watching price, soon you will be able to spot patterns and see things you were previously blind to.

So where do you learn this stuff? Well a good book to buy is Martin Pring on Price Patterns, this is a great book about price action. Also you can visit my website which is a free resource for traders.

I must stress here that there is no need to buy expensive trading courses and all sorts of BS. Everything you need to succeed is freely available on the internet, an if its not my site there is plenty of other places to learn like on forums and on you tube.

Price action has made me a confident and profitable trader, and with a bit of determination and belief you can do it to. You don’t need to be a genius, in fact the dumber you are the better! Forget about excel, and programming systems, go look at your charts and learn to read them.

A Forex Trading Tutorial

I know there is a million forex trading tutorials on how to use all the hundreds of indicators that are on your trading platform, but there are so few that actually teach about price action. For every 100 people that want to show you how stochastics work or how to trade fibonnacci retracements, you can't find too many people to teach you about how to actually read a price chart without all the gadgets.

The entire concept that people need to understand is how to trade without using any indicators. The main purpose is to show traders that all the relevant information you will ever need is in the price.

Do me a favor and pull up a bar chart on whatever platform you are using. DO NOT put any indicators on the chart. I know this is uncomfortable, especially if you are used to using them.

The next thing I want you to do is just to study it. I want you to particularly pay attention to when the markets get volatile. Notice the strong upward and downward movements and take a look at the corresponding market behavior. You will begin to notice obvious support and resistance areas that are basically the most pivotal areas on the chart.

You can tell exactly where the price is headed just by witnessing what happens in these key areas. You can tell if the particular currency will continue its trend or we are setup for a strong counter trend move. Its all there in black and white. This is something that you will not see with indicators.

Price Action News Events

Trading news announcements like Non-Farm Payrolls can be dangerous, and to anyone going into a news release without fear of how badly an account can be ravaged by volatility should probably avoid doing so, and instead - wait for quieter markets.

But to the trader that always protects their downside, adheres to strong money management, and protects their account by avoiding the number one mistake Forex Traders make - News announcements can offer compelling opportunities for a lot of movement in a very short period of time. Price Action, as discussed in The Forex Trader's Guide to Price Action can assist greatly in the initiation of trades.

This movement and volatility can bring a significant amount of pips to a trader's account.

Rampant volatility that can typify news events; created on Trading Station/Marketscope

It can deplete even more if not done correctly.

What follows is one of the more common ways traders can look to trade the news - regardless of which way the announcement comes out; but before we get into that - let's establish a couple of important points.

1. Nobody can tell the future (which is why risk management is so important in the first place).
2. We will likely never know what the news will be before the release (see #1 as to why)
3. Even if we did know what the news announcement would be; we still don't know exactly how the market will react to this news.

To sum it up, trading news announcements adds additional volatility to the trader's charts. By many accounts, trading news is very similar to trading in 'panic' situations. The more important the news announcement, the more potential volatility that may enter into the market and the more similar to a 'panic' situation that news release is. An announcement like NFP (Non-Farm Payrolls) can bring some significant movement as much of the world is watching this figure for signs of future direction.

Step 1: Observe Price Action Leading into the Announcement

At 8AM Eastern Time, approximately 30 minutes before the NFP announcement the trader can plot support and resistance based on price action. This can be done by observing the past few hours immediately prior to the release, and drawing a rectangle around the high and the low that was hit during this period. This can be done on the 5, 15, or even 1 minute chart - the high and low of this time period will be the same.

If looking for maximum movement, often one of the 'major' currency pairs (any currency with USD in it) will suit that need; if looking for a more conservative approach cross-pairs can certainly work as well (pairs without the US Dollar). Below is a chart of the most popular currency pair in the world, the EUR/USD for the 14 hours leading into last month's Non-Farm Payrolls report:

Created with Marketscope/Trading Station

Step 2: Identify Support and Resistance

As you can see, for 14 hours leading into Non-Farm Payrolls in April 2012 price respected a 25 pip range. The reasons for this can be numerous; key amongst them is the fact that liquidity providers and market makers that set the prices we can execute our trades against are cautious of NFP as well.

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They fully realize that a surprising number can spark a rally or a sell-off in a very short amount of time. And leading into the announcement, any significant positions taken on (by liquidity providers or retail investors executing trades) bear significant risk.

Below is a chart of EURUSD ahead of the March Non-Farm Payrolls report. Notice, the same type of phenomenon takes place here, as the market stays range-bound leading into the announcement.

Created with Marketscope/Trading Station

Step 3: Set Entry Orders

Now that we've plotted support and resistance, based entirely around the price action taking place leading into an announcement - we can begin to set our game plan.

The one thing we know, for certain, going into a news announcement is that there will probably be volatility. Predicting which direction that volatility may move is what makes trading news difficult. But, we don't need to know the direction that volatility will push prices, as we can set entry orders on either side of support and resistance. The picture below will illustrate more fully:

Created with Marketscope/Trading Station

Step 4: Manage Orders

What if price comes down to open up our short position, and then moves directly back to prior resistance to trigger us in a long position?

For traders in the United States, where FIFO (First in-First Out execution) is the standard, it may close out our short position at a loss. So going into the trade, you have to know how you would want this situation handled.

If you would like the entry order to go long to be canceled as soon as the short position is entered (or vice versa), you can set an 'OCO,' or 'One Cancels Other,' order. That way, when the short position is entered into, the long entry gets canceled. This can be done very easily from the Trading Station platform.

After all orders are entered, you can click on the tab for 'Trading' on the platform - and then choose 'Orders,' followed by 'Complex OCO.' Doing so will bring up the following box:

Created with Marketscope/Trading Station

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Initially, all entry orders will show in the top box. We can simply highlight the orders we want to be part of the 'OCO' order (or clicking on 'select all' will select all available orders), followed by clicking on the button below the top box, to the left for 'Add.'

Step 5: Add Stops/Limits

Because we are anticipating volatility during a fast-moving environment, it behooves us to add proper risk management parameters in our trades.

We have to keep in mind that The Number One Mistake that Forex Traders Make is risking too much to make too little. Despite lofty winning percentages, that type of inverse risk-reward ratio doesn't allow for much long-term success. Directly from the Traits of Successful Traders series compiled by DailyFX, David Rodriguez states:

"Traders are right more than 50% of the time, but lose more money on losing trades than they win on winning trades. Traders should use stops and limits to enforce a risk/reward ratio of 1:1 or higher."

Because we have identified support and resistance previously when setting up our entry orders, we can look to place our stop on the other side of the range.

So for the short entry looking for breaks of support - stops can be placed slightly above resistance.

For the long entry hoping for breaks of resistance - stops can be placed slightly below support.

And profit targets or limits should be, at a minimum 100% of that amount. If you are risking 50 pips on the trade idea, look for a minimum of 50 to make sure that is worth your time. Many traders will look for far more than the number of pips risked, seeking a much higher risk-to-reward ratio such as 1-to-3 (50 pips risked, 150 pips sought) or 1-to-5 (50 pips risked, 250 pips sought).

Read more: http://www.investopedia.com/forex/news/dailyfx/AttackingNewsEventswithPriceAction.aspx#ixzz1wLgBLflB