In a series of posts about the price action this time will be exemplified the formationreversal bar which pin bar reversal and fakey (false) reversal bar. For recall, here's a quote from a previous article about the pin bar and fakey (false) bar on price action.
Characteristics of the formation of the pin bar:
-Open price and the price is in the pin bar close or very close to the price range first and third bar bar.
-Open price and the price of each pin bar close, the small distance is makin bagus.
Pin-tail bar (line length) out prominent among the two bars which enclose it, the moreaccurate the length.
Examine whether the pin bar formation formed on 3 bars that occur sequentially
Characteristics of the
formation of the fakey (false) bar:
Fakey bar formation (false) indicates the refusal (rejection) at key levels(support/resistance) which is considered significant. As if the price moves follow the trend is going on, but then reverses direction or trend of the forwarding happens now.Often after the formation of the fakey formed, with strong price reverses direction.Hallmark consists mainly of inside bar, followed by bar false break formed and closed at the level of the range inside the bar. Entry point can be on the next bar whilemoving beyond the highest level inside the bar (or the lowest level to the bearishdowntrend fakey/).
The following example is the pin bar formation and fakey (false) bar which is formed on the EUR/USD and GBP/USD at the time frame of the daily and 4-hour.
In the following example GBP/USD double pin bar formation (two pin bar happenssequentially), so the resulting sell signals are quite valid. We can sell order entry afterdouble pin bar finish is formed with the risk/reward ratio is quite high (eg: 1: 3).
From the above examples it can be seen that the trading with price action is prettysimple and effective, without complex analysis by applying a lot of technical indicators.To make accurate trading signals should use high time frame (daily or a maximum of 4hour).
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