Price Action Trading - page 3
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Another Example of Continuation
This is the same screen shot of the EUR/USD. But this time the trades are shorts. The same logic applies as above
but just in reverse.
Sorry for the typo - It should read "increasing EMI" in the top box.
Divergence Example
This is the same screen shot of the EUR/USD, but in this example I want to discuss divergence. Divergence usually occurs when price makes a new high/low on less buying/selling pressure and then reverses.
You can see price make a new high around 3:40 but compared to the previous high it looks like buying pressure may be fading. You can also confirm the lack of buying pressure by comparing the 2 highs EMI's. The 1st high around 2:50 the EMI is around 4.70 and then the 2nd high the EMI is around 4.30.
Looks good for a potential trend reversal. Get short if next price bar is weak and EMI is less than the previous bar. Stop loss will be previous high.
I usually only trade off of the 5min chart, but wanted to post a 15 min chart to show same set ups work as well. In fact should work on any time frame. Action on this chart is around the white squares.
do u have a signal indicator for this system ?
do u have a signal indicator for this system ?
Not yet.
Just want to post another example of EUR/USD trading RIGHT now. Nice continuation trade at 10:45 am
Just want to post a continuation trade (+ 24.5 pips) I just made. See below chart with trade details.
Trade Details
I only took 1 lot because volatility is high, so I reduced my position size.
Let me know if anyone has any questions.
Hi, great info. Quick question, how do you decide to when to exit?
Hi, great info. Quick question, how do you decide to when to exit?
Since I like to keep things simple I usually exit the trade once price breaks the low/high of the previous bar (initial stop loss is usually swing low/high). Not perfect, but I'm looking for the situation where price is moving higher/lower for greater than 2 bars in a row. Of course there are a few exceptions for example prior S/R, price velocity, etc...