Forex Price Action - Video Manual: Basic Setups and Stop Placement

Forex Price Action - Video Manual: Basic Setups and Stop Placement

21 July 2015, 21:11
Sergey Golubev
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Most price action traders place buy or sell stop orders with a pre-determined stop loss level, and a take profit or target level. The buy or sell stop sets the level that price much reach for the order to be filled; the stop loss level sets the margin of loss that a trader will accept before closing the position; the take profit level sets the level at which to automatically close a successful position.

Buy or sell stop, or entry level, is typically set at a significant support or resistance level so that it will only be filled when price has broken definitively in the desired direction; by setting strategic entry levels in their orders, traders can ensure that they enter trades with the momentum of the market.

Setups

  • Most basic setup is the pinbar which has an open and close within the previous bar, and a wick at least 3 times the length of the candle body.
  • Another basic setup is the inside bar: bar or series of bars contained by the preceding bar; it can mean that a big move is on the way, either a strong continuation of the current trend, or a reversal. Inside bars are more effective to trade on larger time frame charts because they are so common on faster chart.


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