ElectroFX Pure Price Action Trading

timsk said:
Hi tkpower8,
I beg to differ.
:p
Click to expand...

Sounds like we are almost on the same page really Tim,
I have used Indicators long ago and used them well because I used them to back up what I was seeing with price action, after I started teaching people I soon realized that most people will look at the RSI or STOCH or whatever first, then they would barely look at what price was doing. Indicators are not worth the screen space if they are your main focus, like you say, you need to know how to use them.

Long story short I soon realized that these Indicators were not even necessary so they were removed from my chart and not missed at all. They were clearly just a visual crutch to back up what I was seeing in price. I have to insist, at least for me, there is nothing that can't be seen in price itself, and by that I mean Support/Resistance, Swing Highs and Lows, Trend Lines, Candlesticks, checking for Psych levels that may be in the way and so on. After that good money management and risk reward is needed and there is no need for anything else. You will not win them all but losing some is part of the overall winning and that needs to understood by anyone who attempts to trade the markets.

A candlestick to me is not an Indicator btw but a part of what I consider price action.
So I guess there is plenty of perception at play also.

Thanks for the post, all opinions are respected in my world :)
 
Liquidity - squeezes and breaks. Strength - weakness. Just posting some basic recollections.
 
kimo'sabby said:
View attachment 115534


Candle vision.
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Big fan of the Double Tap Candle confirmation of SR myself .. interesting pics btw... not bad for a 6 year old :LOL:

I am trying to keep this thread slow and steady though... no use just throwing a massive pile of information at people all at once... once concept at a time, one trade at a time.. explained thoroughly... slowly the whole picture will become clear

Of course, you could start your own thread and try a different method of teaching if you disagree ;)
 
tkpower8 said:
Big fan of the Double Tap Candle confirmation of SR myself .. interesting pics btw... not bad for a 6 year old :LOL:

I am trying to keep this thread slow and steady though... no use just throwing a massive pile of information at people all at once... once concept at a time, one trade at a time.. explained thoroughly... slowly the whole picture will become clear

Of course, you could start your own thread and try a different method of teaching if you disagree ;)
Click to expand...


Going back to basics is good, by all means carry on. (my actual age is 6 and a half and a bit)
 
I think I have been thorough enough in explaining that first trade and since there seem to be no questions yet I will answer them later if/as they come in.

REMEMBER: the core trade explained I have traded right down to the M2 chart with decent success..
it will work on any timeframe but my crazy 8 hours staring at the screen days are long over with my new trade management EA's and VPS,
so I now take this trade on M30 and above depending if I am travelling the world or at home.


I will now go prepare a similar step by step process to explain the dynamics behind the next price action trade I will explain.. the TL bounce
 
Trend Lines

Drawing Trend Lines is actually something I should have covered before the 1st trade example but I will cover some basic TL drawing concepts I have before I move on.

The next trade is the TL bounce so it is very important that you draw them correctly.

Firstly there is no point drawing a TL unless there is a Trend, hence the name of the Line I suppose. So how do we determine if a TL is warranted?

There are essentially 2 main conditions I look for to draw a TL. TL's are used to gauge the Momentum of a move.

1. Confirmed Trend Line Zone:
Quite simply 3 points to connect that, in the example of a sell, created the Lower High, Lower Low, Lower High, Lower Low scenario.
*When you look at my charts you will see the gray boxes, these are Support/Resistance boxes, they are not a single price but a small area. Trend Lines are essentially angled Support/Resistance and therefore I also look at them as zones rather than a single line.

2. 2nd wave has greater gains and is much more powerful than the first indicating a possible Impulse wave from the Elliott wave theory. I don't apply the EW theory too much in my trading except in this kind of scenario where it tends to apply more often than it does not. I won't go in to Elliott Wave theory here but instead explain in a logical manor. Basically the increase in power and momentum indicates that there is a very high chance of the next wave continuing a Lower High Low pattern so I place a single TL (as it is not a confirmed TL zone by having a 3rd point) to remind me that it is not as solid as a zone, but a predictive momentum line. I do not find these as reliable if the TL is way too steep.
 

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Trend Lines ... cont

The one exception to the rule is when price is swinging in large smooth swings yet still making gains in a particular direction.

These TL's should also not be very steep and remain a single TL to remind you it is a predictive TL and not a confirmed TL

* Do not clutter your charts with TL's, they are momentum guides and help with 3 of the types of trade I take, The first was of course the Core Trade and the 2nd is the TL bounce which comes next
 

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TL Bounce Swing Trade

So now we move on to another swing trade.

The market moved in nice smooth proportionate looking swings whilst making it's 1st Lower High, Lower Low scenario, the 2nd wave of movement down does not indicate that the momentum is slowing.

A single TL was drawn (please ignore the TL zone as that applies to the next trade using this same image)

The 3rd hit on that TL was also confirming a Resistance area that was created during the previous wave of selling. It lines up perfectly with the TL, and SR box and gives a place to enter, a place for your SL, and the ability to judge RR before you enter the trade. I will go over that in the next post
 

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TL Bounce Swing Trade.. cont

In this example since we have our confirmed Resistance area at the predictive TL and we have our SL.

Using Candlestick patterns the 1st entry opportunity is the IB after the PB.

The black area is an intelligent area to move your SL to BE based on recent historical price action

The Conservative TP is an equal low minus any spikes that stick out by themselves.

Now we can judge RR which as you can see in the picture is greater than 1:1

Notice how I say conservative TP, what I mean is that clearly we are expecting a Lower Low, The waves of movement down have not lost momentum yet, so the RR will be much better in fact.
But if we assume the worst we have locked in Break Even at the next logical place for price to possibly create a Higher Low and we base our RR on the safe outcome of at least an equal low to be conservative. This way if we always look for 1:1 as a minimum TP based on conservative logic but we more often than not will always exceed that 1:1 RR
 

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TL Bounce Swing Trade.. cont

As I mentioned before the gray boxes on my chart are Support Resistance areas, but I only have a limited number above and below price at any one time so for that previous trade there were none there.

For this next TL bounce trade using that same picture the gray boxes are there as they were in real time.

In this next trade the confirmed TL zone was not quite reached but a nice Resistance box was created as price headed down on that previous wave, the previous wave of selling was much greater in power than the first 2 waves of selling indicating increased momentum.

The chances of another wave of selling were high so once a Resistance box close to the TL zone was confirmed by that 2nd visit there....

Candlestick patterns were all that was left to wait for.

2 Pinbars side by side was a nice touch and the trade now had an entry point, a SL point, a conservative TP point to judge RR, and an intelligent place to move your SL to BE based on historical price action.

It was just about 1:1 RR at the conservative TP so all systems go.

In this pic though I also marked out a more likely TP that you would have shot for when you saw those nice red candles gaining strength on each one ;)
 

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Re: TL Bounce Swing Trade.. cont

tkpower8 said:
Pretty much everything you tried to cover comes later kimo'sabby :)
So we are certainly on a similar page

But people will not understand from just a picture so I am going the thorough explanation route
Click to expand...



(y)
 
TKP8,

Can u provide some thoughts (and pictures) on order placement, with some reasoning? Tanks in ads.
 
kimo'sabby said:
TKP8,

Can u provide some thoughts (and pictures) on order placement, with some reasoning? Tanks in ads.
Click to expand...

For what exactly?

If you mean to your pictures then it comes later... this thread will be 1 trade at a time with complete reasoning, entry points, sl points, tp points, the whole lot... Just as I have done for the first 2 trades... and first we need to discuss all the swing trades, breakout trades after
 
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