IN THIS THREAD: IronFist learns (the elusive) PRICE ACTION
- Thread starter IronFist
- Start date
IF, do you still check in on this thread? I hope you are still enjoying the journey towards consistent profitability. This thread has been extremely informative and helpful, and I hope you are still out there.
I am new this forum, but still wanted to give my .02, as I am embracing this concept of PA more and more as I go along.
From what I can gather from the charts that you posted, I always felt that you entered way too late. For me, the easiest way to determine the end of a trend is to look for a LL to determine the end of a bullish trend, or a HH to determine the end of a bearish one. I personally am a fan of 50% retracements, and while I won't preach on about fibs, I do think that the 50% pullback has merit, especially for entries at the beginning of new trends. I also think that your charts showed that you were looking at larger swings, without noticing that there were smaller swings within that may have clued you in as to what was about to happen. I always judge the most recent swing compared the one directly before it, no matter how small or large it may be, and trade on a very small time frame. I also have a scale out method that puts me into a completely risk free trade very very quickly, so that I can afford to be wrong without getting hammered. It does mean that I have to be right more than wrong, but my first target is very modest (2 ticks) and I am fairly confident that I can achieve that if I wait for the most "perfect" setups.
I would be more than happy to elaborate, but I would hate to babble if no one is interested in listening. Let me know if you are still out there and I can fire off another post. Take care and be well.
I am new this forum, but still wanted to give my .02, as I am embracing this concept of PA more and more as I go along.
From what I can gather from the charts that you posted, I always felt that you entered way too late. For me, the easiest way to determine the end of a trend is to look for a LL to determine the end of a bullish trend, or a HH to determine the end of a bearish one. I personally am a fan of 50% retracements, and while I won't preach on about fibs, I do think that the 50% pullback has merit, especially for entries at the beginning of new trends. I also think that your charts showed that you were looking at larger swings, without noticing that there were smaller swings within that may have clued you in as to what was about to happen. I always judge the most recent swing compared the one directly before it, no matter how small or large it may be, and trade on a very small time frame. I also have a scale out method that puts me into a completely risk free trade very very quickly, so that I can afford to be wrong without getting hammered. It does mean that I have to be right more than wrong, but my first target is very modest (2 ticks) and I am fairly confident that I can achieve that if I wait for the most "perfect" setups.
I would be more than happy to elaborate, but I would hate to babble if no one is interested in listening. Let me know if you are still out there and I can fire off another post. Take care and be well.
The op needs to see this video http://rs6.net/tn.jsp?e=001cNIv73zlV...Wiz5s72WL9CmFj
and check out this thread http://www.forexfactory.com/showthread.php?t=76597&page=105
and check out this thread http://www.forexfactory.com/showthread.php?t=76597&page=105
WTF???
I clicked on that first link and got some sort of "click through tracking page"
I better not have some sort of virus or malware on my computer
Quote from IronFist:
How bad I did today (12/4/08)
Morning:
Afternoon:
6 trades, 1 winner.
To Iron
I've been reading over this thread again. As a price action trader I try and learn from other pa traders as well, and from looking at your chart from a while back I want to say this, if I havn't already:...
Some of your long entries were done on red bars. A mistake imho While I understand that a touch and bounce off a tl is generally a buy/short signal, you want to wait for the bar to close in your favor. Not only should the bar close in your favor, but the it should also close above the high of the previous bar (if going long) this will further confirm the fact the market could push higher.
recap:
1. wait for the bar to close in your favor, and bounce off the tl you drew.
2. the bar also needs to close above the high of the previous bar (or any "dark cloud cover" bars, which I'll show you later) to help confirm a bullish move.
3. Also you probably dont want to go long on bearish TL's, but thats just my personal preference.
---
I'll post some charts in a min.
Chart1.
A simple trend line, nothing more. The second test is where things get a little interesting.
1. After the bar which im pretending was todays bar, we saw two down days of bearish movement...would I short here?...yes, sure..why not? Id be risking about 10 cents to make 30 cents (if i covered at 30.60) but to be honest, those down days were small and probably would not have caught my attention.
fast foreward about 6 days to the doji...
2. Price slightly penetrated the TL, but soon got weak. One signal to show this weakness was the "Gravestone Doji" http://www.fxwords.com/b/bearish-gravestone-doji-candlestick.html ..and yes, just as it sounds, going long off this bar or anything near it, will probably put you down for the count. The fact that bulls lost that battle, and price closed near its lows, is something to pay attention to.
3. Another 6 days after the doji, we have this "wide range bar" on heavy volume showing up that this TL is for real, and there are sellers up here. I probably would have shorted near the close of this bar.
why the close? -- because all too often price can rally and close near its highs, or even make new highs closing as a green bar. This is common near the last 30 to 60 mins of trading..so to take out that risk, I like to buy near the close. Not always but sometimes at least.
next up: Stops, targets, etc..
A simple trend line, nothing more. The second test is where things get a little interesting.
1. After the bar which im pretending was todays bar, we saw two down days of bearish movement...would I short here?...yes, sure..why not? Id be risking about 10 cents to make 30 cents (if i covered at 30.60) but to be honest, those down days were small and probably would not have caught my attention.
fast foreward about 6 days to the doji...
2. Price slightly penetrated the TL, but soon got weak. One signal to show this weakness was the "Gravestone Doji" http://www.fxwords.com/b/bearish-gravestone-doji-candlestick.html ..and yes, just as it sounds, going long off this bar or anything near it, will probably put you down for the count. The fact that bulls lost that battle, and price closed near its lows, is something to pay attention to.
3. Another 6 days after the doji, we have this "wide range bar" on heavy volume showing up that this TL is for real, and there are sellers up here. I probably would have shorted near the close of this bar.
why the close? -- because all too often price can rally and close near its highs, or even make new highs closing as a green bar. This is common near the last 30 to 60 mins of trading..so to take out that risk, I like to buy near the close. Not always but sometimes at least.
next up: Stops, targets, etc..
Chart 2.
Stops: I like to place stops at obvious places of support and resistance. My first stop would have been the high of that doji PLUS .01 cents
why .01 cents? because when it comes to making new highs and lows, every penny counts. Im serious.
My second stop would have been at the next highest resistance zone as marked.
--
targets: You could have targeted the lows near 30.60..probably a good place to scale out some profits and move to break even, but the next days gap erased the need for that.
You could also turn that TL into a channel to see if price would test the lower extremities which it did.
2 months later (not shown on chart) price fell to 27.50.. I like to take some off the table and either put in a trailing stop or move to break even so I can enjoy the ride further down. This requires patience, but it can be rewarding.
Stops: I like to place stops at obvious places of support and resistance. My first stop would have been the high of that doji PLUS .01 cents
why .01 cents? because when it comes to making new highs and lows, every penny counts. Im serious.
My second stop would have been at the next highest resistance zone as marked.
--
targets: You could have targeted the lows near 30.60..probably a good place to scale out some profits and move to break even, but the next days gap erased the need for that.
You could also turn that TL into a channel to see if price would test the lower extremities which it did.
2 months later (not shown on chart) price fell to 27.50.. I like to take some off the table and either put in a trailing stop or move to break even so I can enjoy the ride further down. This requires patience, but it can be rewarding.
If you're still working on being a pa only trader, I invite you to check out my thread http://www.elitetrader.com/vb/showthread.php?s=&threadid=29468&perpage=6&pagenumber=60 and FX4Newbies's thread http://www.elitetrader.com/vb/showthread.php?threadid=200455 which are very similar. We use the same technique but focus on two different markets.
-KON
-KON
Oh and here are some examples of dark cloud cover. Get a good understanding also of basic cahrt patterns, and that will help as well. I like to see price break above the red candle before I go long, because at least in my mind, as long as price is "inside" those bars, I ignore the trade.
http://www.trending123.com/patterns/Inside-Bar-Bullish.html
http://www.trending123.com/patterns/Inside-Bar-Bullish.html