ElectroFX Pure Price Action Trading - page 8

[Theo Patsios]

OK, lets move on to the next trade/s of the chosen time period.

In this first one you will understand why I left the limitations of time and candle sticks a few years ago now, here we have a perfectly good trade with tons of proof behind it but before there was a closed candle to use as an entry trigger price had already gone too far.

As you can see, great trade but no entry trigger to use unless you were at you screen and watching the charts in which case you could have entered the minute the blue candle ate up that red one at the base of the move. Something you would do with experience if you liked the location and structure behind it which in this case was very clear. Another way to get this trade is to use a smaller timeframe for fine tuning entries, reducing stop loss, and increasing risk:reward even further in your favor. That comes later as we advance.

For now lets look at the next trade available to anyone just checking in once every 4 hours at candle close. The set and forget way.

Another breakout style situation here just to follow the herd some more. A new congestion area at a swing2 high with three reactions then is spiked through via that red pinbar, price pulls back briefly before heading off again leaving it's own spike behind it. Now you have an entry point and stop loss and as a breakout trade you can use this as a guide to how 'elastic' the market is on this move and shoot for a 1:1 risk:reward. This trade goes to profit easy enough.

More tomorrow

[Theo Patsios]

Moving along to the next opportunity in the screenshot....

This one is a trend continuation breakout style trade here on the H4. Unlike the breakout trades that we have had so far on this chosen time period we have plenty of proof for direction on swing 2. There is not a lower high, higher low, lower high situation and so we don't need the box I have drawn broken first and wait for a pullback.

In fact this time you would be waiting for a relative pullback to a great location to buy... but in this case it did not happen and instead it went kind of sideways.. a pause in the already well established trend. So now as that blue Inside Bar/Pinbar combo closes you have a perfect entry trigger level of proof to break this area and follow the trend some more. Only 1 question is left, what is in the way over there to the left?

There is your answer, and so this is also a breakout of a significant area of resistance, or a high/low breakout as I like to call them. So, the trade is a go and there is enough proof to make this have a high probability of success.

More tomorrow

[markcoronado]

I pretty much understand the trades that you are showing us but the problem I am having is seeing it happen in real time and getting in the trade at the correct time & place.

I made some good trades earlier this week but the past two days I have screwed up by getting in at the wrong time and had the market turn on me.

One trade they took my stop out by 2.1 pips and then turned around and went to my TP.

[Theo Patsios]

why don't you post these trades and I will see if they were just losing valid trades or if something was a miss

[markcoronado]

I'm sure something was a miss.

Like me making stupid trades.

Here is a C&P from my MBT MT4 the times are EST so you may need to adjust to your platform.

8217672 2013.02.28 05:34 sell 1.00 eurusd 1.31117 1.31290 0.00000 2013.02.28 07:34 1.31288 -0.33 0.00 0.00 -17.10

8218065 2013.02.28 07:44 sell 1.00 eurusd 1.31165 0.00000 0.00000 2013.02.28 07:57 1.31328 -0.33 0.00 0.00 -16.30

8218099 2013.02.28 07:57 buy 1.00 eurusd 1.31310 1.30937 0.00000 2013.02.28 10:03 1.30925 -0.33 0.00 0.00 -38.50

8219623 2013.02.28 11:19 buy 0.10 eurusd 1.30850 1.30700 1.30855 2013.02.28 13:31 1.30855 -0.02 0.00 0.00 0.05

8220038 2013.02.28 11:19 buy 0.90 eurusd 1.30850 1.30700 1.30855 2013.02.28 13:35 1.30855 -0.23 0.00 0.00 0.45

8222340 2013.03.01 03:18 buy 1.00 eurusd 1.30929 0.00000 0.00000 2013.03.01 05:02 1.30223 -0.33 0.00 0.00 -70.60

[Theo Patsios]

Can you post screenshots please Mark?

[markcoronado]

I hope this helps.

I put arrows at my entry's & exits.

[Theo Patsios]

M15 is harder than H4 but the same concepts apply on any timeframe.

Mark , I can't say I understand your logic for most of those trades.

Here is what I see for the period in time your were trading on the M15, 3 Evidence Based Trades

Trade A: Swing Trade

• Market reacts perfectly at the demand origin of the powerful push up previously.
• Since we had a lengthy sideways movement at the top that was broken south,
• so a Mirror Flip reaction must be the maximum Take Profit expectation.
• Pinbar closes at that area of demand, entry price is the break of it, SL is below the box.
• Risk:Reward is 1:1 or greater, in this case greater, so all systems are go.

Trade B: Swing Trade

• Price now comes back to the mirror flip area of that sideways support now acting as resistance.
• Indecision candle presents itself exactly where you would want one, entry price is the break of it,
• SL is above the candle itself since this is a mirror flip location or whatever you can make out as the zone.
• A conservative TP is a slightly higher low because you are really anticipating a lower low,
• risk:reward is 1:1 or greater, in this case greater, so all systems are go.
• (you can also shoot for the lower low based on a simple momentum trick that I haven't got to yet)

Trade C: Breakout Trade

• Previous low was broken and now you have a confirmed fresh lower low/lower high combo.
• Pause after the break supplied a pinbar IB combo as a trigger,
• break of it south is entry price, SL goes above it,
• TP is 1:1 on the breakout or look down and to the left of price for the next major obstacle.

SUMMARY:

All 3 of these trades followed the same principles I have been outlining.

Location Location Location, Entry Trigger, Intelligent management and Risk:Reward.

ALL based on evidence provided for you in recent history and in this case all information needed on 1 screenshot.

Market Structure for each of those trades was also observed but I couldn't mark it in on the above as it would be messy.

Here is another set of screenshots.

Hope that helps

[markcoronado]

Looking back at those trades I made I have to say to myself what were you thinking.

For some reason I had it in the back of my mind that the market was going to go up like the prior day which made me make stupid trades.

Instead I should have been looking for the evidence provided by the candles.

I have to work on that.

[Theo Patsios]

markcoronado:
Looking back at those trades I made I have to say to myself what were you thinking.

For some reason I had it in the back of my mind that the market was going to go up like the prior day which made me make stupid trades.

Instead I should have been looking for the evidence provided by the candles.

I have to work on that.

Never have it in your mind which way the market should go according to your opinion. You have to react the most and predict the least.

If you really need to predict then have it in your mind what you further evidence is needed (location, structure, and trigger wise) to satisfy you for the next sell and the next buy at any given time. Always be aware of the next setup potential in both directions.

Naturally, based on location and structure you will see which is the closer of the two but if the sell is closer to setting up than the buy it doesn't mean that it will. Don't get married to the idea. Any example would be where location and structure were good for a buy and you were just waiting on an entry trigger, but then price breaks through your location before an entry trigger confirms it. Now depending on the picture you're looking at then you may be waiting for a new location that maintains structure to prove itself for the buy, or maybe an entry trigger for a breakout style sell, or maybe things just got undecided and it's back to waiting patiently. The reason this evidence based approach is so solid is because it's all about following the herd/money and not guessing/gambling.