Price Action

[trade4life]

Candlesticks helped me exit a trade just now, I was up 60+ pips and just see EURJPY and this candlestick formation, knowing it is way outside the statistcal channel for going much lower, why not exit?




Still could go lower, but I am happy with the result. Thanks for keeping this method in the front of my mind

Looks like a classic counter-trend pin bar setup to me! A great exit point indeed.

[Mike]

Tick Charts might do away with that problem but it would be hard to cross reference with all of you who do not use Tick charts no matter when you set your time zone (for time charts).

I always had that problem using a demo account from an overseas broker set to GMT and it drove me nuts.

Anyway, I wanted to share with you an interesting formation on a tick chart but if you notice what creates the candlestick pattern, there are pivot levels directly above it so at the very least having pivot levels on your charts will give you a heads up.

[Mike]

I'm sorry folks, I did modify it to a 15 minute chart to share with you before saving the chart image.

[Mike]

Still could go lower, but I am happy with the result. Thanks for keeping this method in the front of my mind

Good stuff Mike. Thats another good thing about candlesticks. Not only do they get you in a trade, they can also get you out.[/QUOTE]

Truth be told, the trade would not have resulted many more pips so it helped me make a good decision in retrospect. Just by seeing the candlestick formation you can get a good idea of what traders are doing, feeling, and reacting to the certain level it just reached. I like it

[Mike]

Looks like a classic counter-trend pin bar setup to me! A great exit point indeed.

Thanks, right, like I just said in a way it really does help you understand whats happening at the very moment, something lagging indicators can not do most of the time accurately. So, this is a method not to be ignored

[Mike]

you're SOOOO right Mike. When you see certain patterns, you should always take notice. Your chart shows a great example of this.

Totally. And look at how weak things are. Indicators only go so far, I use what I think are great technical indicators to get into trades but like most traders its easy to follow your own rules, but what can you say if your own rules get you out of a winning trade 30-40% of what it could have made you. But, here I am rambling about what could be when we should be concerned with what is.

Here's a cool chart for you guys I put in the other thread. What would you consider this? I'm sure on a 60 or 240 minute chart the down pressure on the candlestick would be more pronounced, we see price just hit that level and drop.

[sniper012]

I live in new york so of course I use the new york close, but thank you.

I think you need to have the New York close charts, my candles close at 5pm eastern, Nial Fuller recommends this, that's where I got the idea from, it makes sense too...you want your candles to close at 5pm EST because closing prices are very important as we all know, and 5pm marks the end of NY FX trading.

[sniper012]

perhaps the other person was not using the nyc close.

I think you need to have the New York close charts, my candles close at 5pm eastern, Nial Fuller recommends this, that's where I got the idea from, it makes sense too...you want your candles to close at 5pm EST because closing prices are very important as we all know, and 5pm marks the end of NY FX trading.

[sniper012]

lots of confluence on this daily chart. As I have said in the past, it's not JUST about price action, it matters where this stuff forms. So as you can see, the tail of the circled bar is using three different levels as support. You have the 61.8% fib line, also we have the weekly pivot level, which is the smaller white line and we have the monthy R1 line. Yes, I know it says R1, but as you should know, old resistance becomes new support once it's broken. When you see these, trade away!

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[yogibear]

Sorry Mike, I can't make out from your chart what you're looking at.

[yogibear]

New trade
this order triggered last night, and it looks as though it's going to be a loser.
bearish engulfing off the 61 fib. I did debate whether to take it, as it wasn't at any meaningful resistance.
Also, in hindsight, the ma's below should have been another reason not to take it.
Still. too late now!! It's clinging on for dear life, but i'm not holding my breath.

[sniper012]

Well I hope it works out but if it doesn't, you know...that's trading for ya. Based on the candlesticks, maybe this is why it didn't work out: the best type of engulfing patterns for us to trade are the ones that form during a trend, obviously. The next thing that I look for is a small first candle, followed by a large second candle. That second candle should cover the entire first candle, shadows and all. The next best engulfing patterns are when, at the very least, the shadows of the second candle are higher AND lower than the shadows of the first candle.The pattern on your chart was close but the shadows weren't exactly exceeded. If there is a close above the high of the pattern, maybe you should look to trade it long perhaps and get some pips back. Just mt 2 cents.

New trade
this order triggered last night, and it looks as though it's going to be a loser.
bearish engulfing off the 61 fib. I did debate whether to take it, as it wasn't at any meaningful resistance.
Also, in hindsight, the ma's below should have been another reason not to take it.
Still. too late now!! It's clinging on for dear life, but i'm not holding my breath.

[sniper012]

quick 20 pips off the inside bar formation, using the last swing high as a target. Also notice how the body of the inside bar rests right above the 21 moving average.

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[sniper012]

How do you set up your entry, stop loss and take profit levels when you trade engulfing bars. Do you enter on a 1 pip break of the engulfing bar's high/low. Just curious because I do trade them but you know what my main staple is so I'm not as well versed on them.

New trade
this order triggered last night, and it looks as though it's going to be a loser.
bearish engulfing off the 61 fib. I did debate whether to take it, as it wasn't at any meaningful resistance.
Also, in hindsight, the ma's below should have been another reason not to take it.
Still. too late now!! It's clinging on for dear life, but i'm not holding my breath.

[yogibear]

How do you set up your entry, stop loss and take profit levels when you trade engulfing bars. Do you enter on a 1 pip break of the engulfing bar's high/low. Just curious because I do trade them but you know what my main staple is so I'm not as well versed on them.

On the daily chart, i use a 10 pip buffer. A lot of the time i've found this is enough to stop you getting dragged into bad trades, but obviously not on my gbp/chf. So sell order 10 pips below low of bar, stoploss 10 pips above high of the bar. On a 4hr or 1hr, i would use 5 pips buffer.
Initial profit target would be a recent swing high or low, or any nearby area of support or resistance where the price may stop temporarily. I think j16 calls them first trouble area.
If price does break through and keep going, then i wait for reverse pa to exit, if i havent been shaken out of the trade. Usually i close half at 40-50 pips, or wherever price is when i check the chart in the a.m., and move stop to b/e.

[DickP]

This week was exactly the same as last week- absolutely nothing worth trading. Just doesn't seem to be the volume there in the mkt yet.
Last year most weeks you could pick up 40 - 100 pips without much of a problem,watching a dozen or so pairs, which is a nice way to start the week. I always wonder why more people don't trade it.

EJ began a good descent Sunday but the big move happened Monday morning. But thats like a lifetime ago already

[yogibear]

EJ began a good descent Sunday but the big move happened Monday morning. But thats like a lifetime ago already

Yes, it did fall monday, but i didn't have any pa friday, so for me there was no trade to take.
In terms of the sunday gap, on my feed there was only a 16 pip difference between fridays close, and sundays opening. I think i've mentioned before that i look for gaps of 30 pips or more, so again there was no trade. Just gotta be patient. Hopefully we might get some opportunities this sunday.

[sniper012]

Cool. Thanks for the info!!

On the daily chart, i use a 10 pip buffer. A lot of the time i've found this is enough to stop you getting dragged into bad trades, but obviously not on my gbp/chf. So sell order 10 pips below low of bar, stoploss 10 pips above high of the bar. On a 4hr or 1hr, i would use 5 pips buffer.
Initial profit target would be a recent swing high or low, or any nearby area of support or resistance where the price may stop temporarily. I think j16 calls them first trouble area.
If price does break through and keep going, then i wait for reverse pa to exit, if i havent been shaken out of the trade. Usually i close half at 40-50 pips, or wherever price is when i check the chart in the a.m., and move stop to b/e.

[trade4life]

I live in new york so of course I use the new york close, but thank you.

Well, actually it all depends on what charts you use and what time they are set to close at, different charting platforms close at different times usually, where you live has nothing to do with with, it just depends on what charts you are using. NOT trying to be a D$%!, just explaining myself.

[trade4life]

Totally. And look at how weak things are. Indicators only go so far, I use what I think are great technical indicators to get into trades but like most traders its easy to follow your own rules, but what can you say if your own rules get you out of a winning trade 30-40% of what it could have made you. But, here I am rambling about what could be when we should be concerned with what is.

Here's a cool chart for you guys I put in the other thread. What would you consider this? I'm sure on a 60 or 240 minute chart the down pressure on the candlestick would be more pronounced, we see price just hit that level and drop.

I would call this ALOT of indicators that make my head hurt!