Pure Price Action For Dummies

Pure Price Action Trading For Dummies.



No Indicators.

No Guestimations.

No Checklist as long as a pilots to enter a trade.

Ideal for newbies if they have not yet cluttered their trading method with too many things.

Now enough of the sales pitch!!!!

All you have to do is click this link below and you will be on your way to your first couple of millions and a few more to spare.............. ( heard that one before havent we??? )


So without further ado, I present to you a very very basic way to make a few pips.

Always keep it simple.

Happy Pipping.

Below are the example of a screen shot that I use to trade.

Again I dont use Indicators for this trading method.

D TF



H1 TF



I believe in keeping it simple. Especially when you are starting off and you should be paying attention to the candlestick charts and money management more than figuring out how indicators work

Happy Pipping.

Need To Know

1. Wave Patterns in a real chart.

- No need to be an Elliot Wave expert. Just watch and learn on how prices move in a real chart. Especially Higher Highs HH and Lower Lows LL. ( helps with TP and SL )

2. Candle Stick Patterns

- First 6 basic patterns will do.

3. Support and Resistance.

- I am not big on these, but basic knowledge is always an advantage.

4. Currency Correlation.

- Read up on what this is. It helps when making a buy or sell call in general. Again no need to get your PHd on the subject matter. Just read up on what kind of an animal this is. I dont trade a single pair but I have my favorites.

5. Market Bias.

- Get a general idea what this is.

Trading Tools / Parameters.

1. Time Frame ( TF )

- Day TF for market bias
- Hour 1 TF for entry, SL and TP

2. Indicators

- None
- Candlesticks only
- Warning. Adding Indicators to this without knowing what you are doing will cause you to loose pips / money.

3.Trading Hours.

- All market hours. Monday to Friday. The only thing that matters is valid bias and entry.
- Preferably UK open ( 3pm GMT + 8 ) to US close ( 5 am GMT + 8 ).

4.Stop Loss ( SL )

- None / Imaginary *Warning, not recommended for newbies
- Practical SL. Previous wave peak. Or previous D TF wave peak if entry is on today's HH or LL.

5. Holding Period

- Rarely more than a few hours. Max one day. Greed occasionally makes me hold longer.

Take Profit ( TP )

- 40 to a 100 ++ pips per entry. Ability to read waves really helps.

6. Entry Per Day.

- Maximum of 2 entries. Ideal is one entry per day as only one valid entry is available per day if you look at it technically.

Entry Triggers on D TF

1. If yesterday was a buy, then today is a buy.

2. If yesterday was a sell then today is a sell.

3. Watch for the 6 basic candle patterns

- watch for the 6 basic candle patterns that indicate a reversal on D TF. When that occurs, wait for a reversal confirmation candle to complete before taking the trade.
Example : when there is a hammer or tweezer pattern on your D TF Chart, wait for a confirmation candle in D TF to strengthen your analysis.

4. Entry is based on H1

- easiest way to trade when direction is known is to enter when price crosses the opening of D TF candle. Hold for about 40 pips.

- Look for HH for a sell and LL for a buy on H1 TF. Again candle stick patterns or even support and resistance areas can be used as a guide for entry in the H1 chart.


The beauty of trading with market bias is, even if you made a mistake or entered too early on the H1 chart and it is going against you by 40 or 50 pips, you can still confidently hold the trade as you know where it will end up.

Its as simple as that. Keep it simple.

Happy Pipping.

The Following are the D TF Charts of three USD pairs.

GU


EU


AU



They are not complete candles as the trading day has not ended. I look at these in the morning +- 9 am GMT + 8 so that I can see what is going to happen today.

I did not take screen shots of yesterdays candle first thing today morning. It was a classic scenario of different bias on different pairs. I should have because it showed a good example of issues with correlation and the reading of bias.

AU had completed the pullback D TF candle as highlighted by the yellow arrow today morning. So AU should most probably be a buy.

But then GU had a bear candle. EU had a bear candle. Bear in mind, you are looking at the chart without today's candles being there. So ignore the last candle and continue reading.

The validity of a reversal is only comfirmed when there is a confirmation candle. So until the confirmation candle for AU that is currently taking place or the pull back candle on EU at the moment was formed, the scenario was still set for a sell. Can u see what I mean?? Picture it by getting rid of the last candles on the charts.

The first rule is if yesterday was a sell then today is a sell. If your correlation is not spot on and you are not sure then you dont take a trade.

I avoided AU altogether.

Skipped GU because of the cluttered candle patterns on previous days around that price range. There are more than one candle that had long wicks in GU at that price level.

EU looked clean. So I stuck to the communist doctrine and went for a sell.

Now this is where experience helps a little. I took 60 pips, my daily target and not hold for more because the correlation was out of whack with AU, which was showing that it might turn around and be an upper. Looked at GU and it was a mess that didnt inspire confidence. What is there to say that prices wont get rejected at one of those areas and it ends up like an AU candle like the previous day?

EU hit my 60 pips, went down a tad bit more then reversed and now it looks like a reversal.

So this is an example where you use correlation to avoid misreading charts. Its an additional layer of safety. It is what I use to judge if my chart reading for the day is solid or not. If correlation is out of whack and I cant see where prices of a pair are going to go, then I avoid trading.

Correlation has one drawback that you have to keep in mind. Prices dont move just because of USD movement. It also can move because of AD, Euro or Pound. Think about that part.

I hope it helps.

Its NFP today.

Have fun and Happy Pipping.

Another example of Pure price action trading.

EU D TF.



Please note the candle that is being pointed by the arrow. Its a classic reversal candle.

Keep in mind, there is no confirmation candle to validate the candle being pointed.

But if we had checked other USD pairs for correlations, we would have seen that USD pairs were going to fall for the day.

This is as early as you are ever going to get on a trade.



EU H1 TF



Entry on H1 was based on candlestick patterns also. Note the third candle from the current candle. It looked like prices upwards had stalled. I entered there without a confirmation candle being formed.

This screen shot was taken on the second hour after trade was entered.

See what happens for jumping the gun?

Well prices did go up a little bit further but since I am trading with bias on my side , it was a very good trade.


EU H1 TF



Please note that had we placed a SL, we would have most probably placed it at the previous wave peak, which was the peak of the day before. And you would have been taken out before prices started going your way.

This is another reason why I dont put SLs on when I am trading. I have to remind you that I am online watching every 15 or 30 minutes once just to keep an eye on things. A trader should not leave a position without safety levels if they are not going to be watching the markets. Better still dont trade if you are going to be away.

This applies especially when you take risks that are a much higher than 3 or 5 % per trade.


Hope that helps peeps ( pips ? )

Happy Trading.

Another good example of a reversal pattern and entry.

AU D TF.



Note the candle on the previous day.

No confirmation candle formed yet. But I took it because the two other USD pairs that I trade gave me a correlation confirmation. Even looked at NZD USD and it was showing a buy.


AU H1 TF



I entered this trade at 4 am GMT + 8. I knew I was not going to get up in time and AU tends to move more in the Asian session.

This again goes to show that although market times are important consideration, what matters most is the trade entry. The setup. The pattern.

This trade went on to about 250 over pips.

Keep it simple guys.

It makes forex much more enjoyable.

Happy Pipping.