TIPS, Setup Price Action On Some Market Conditions

As discussed in some of the previous articles, the price action can be applied to a variety of market conditions provided that the formation of the bar that is formed is pretty valid. A valid bar formation is supported by momentum trend (bullish/bearish), key levels (support/resistance) and also moving average as an indicator of the dynamic level to confirm the strength of a trend of form.

This article discusses examples of the application of price action on market conditions some of the currency and the commodity gold (XAU/USD), how do we identify the formation of bar and timings for entry. From the few examples it can be seen that the formation of the price action could always formed on the price movement of several currencies and other commodities, not only on currency pairs or only certain commodities, also in different market conditions (trending and ranging/sideway)

not all of the application of price action always went smoothly, there were also indications that failed though quite valid, but in an important us forex trading must always be based on risk management to determine the stop loss and profit target in accordance with trading plan that we agree upon.

1. Examples on the EUR/USD: pin bar and counter trend

 

On the chart of the EUR/USD 4-hour formed a valid pin bar on August 6, 2010. We note the daily chartnya, level 1.3333 is a level where a strong key support level has been previously compromised and now so resistance level tested (arrow to the left of the 3 on the daily cahrt above). Well, on the 4-hour chart is tested again by the pin bar formed, apparently not translucent or experiencing rejection (rejecting). After the pin bar finished the next bar and also formed under this key level, then we can decide to sell at a level around 50% of the length of the bar pin. Although the previous price movements rising trend, but with the formation of price action that is valid on the key level which indicates impending counter trend (with the resistance level by rejecting the pin bar formed), we can take a position based on a sell signal that enough valid it is.

2. Example on AUD/JPY: inside bar/pin bar on conditions ranging (sideway)

 

The chart above AUD/JPY daily market conditions being sideway with resistance level at around 77.60 and support about 73.62. In August 2010 is formed inside the bar and bar/pin combinations inside the bar. As discussed in the previous topic, price action formation inside the bar indicates the market is this group, and in this case the forwarding happens trend (downtrend) after the next bar is formed. If we miss the moment, entry on on 23 August be formation inside the bar with a combination of pin bars that support the forwarding of the previous trend, and this is the sell signal which is quite valid for our open positions with the reward level (target) at level supportnya.

3. Example on AUD/USD: fakey bar, counter trend and pin bar

 

Similar to the previous example 1, price action on AUD/USD above also confirm the counter trend that will occur with the formation of fakey bar once inside the bar. Fakey rejecting bar at 0.9200 resistance level gave a sell signal with the target level on support at 0.8920.

Then on the 4-hour chart formed a pin bar unconfirmed clearly on the daily chart. If our assumptions on a 4-hour course, and rejecting the pin bar at 0.8920 support level, we could sell entry with reward (target) level that is not too large because of unconfirmed right with higher time frame (daily chart).

4. Example: NZD/USD pin bar that runs good and fail

 

In the example above there are 2 pin bar. The first (top) go according to the rules of price action after rejecting on its resistance level. Stop loss can be at a level slightly above the highest level pin bar, and if left open positions can still be entry level corrections bars 4-6 the next day during resistance level has not been impregnable.

The second pin bar (below) that is formed is an example of an indication of the price action that failed. If we open buy on the day afterwards with stop loss at the level of the lowest level under little pin bar, maybe the losses we are not too large.

Indeed not all lineups bar formed in the price action always goes well, that we still have to take care of is the risk/reward ratio in accordance with our plan. trading

5. Examples on the USD/CAD: pin bar that runs good and fail on ranging market

 

As with example 4, pin bar last (rightmost) on ranging USD/CAD daily chart above has failed to indicate a buy signal, at least if the stop loss level we are slightly below the lowest level the bar pin
 

6. Examples on the XAU/USD (Gold): pin bar that runs good and fail on ranging market 

 

The price action in gold (XAU/USD) at the time of the period such as the image above indicates the signals a valid trading supported by key resistance level in 1, 210.00. After rejecting occurred inside the bar on the level of the key we can sell with stop entry levels above the highest level inside the bar. Our buy position open after closing prices the day after the fakey setups candlestick bar broke through a key level, and we can average with a buy entry again after rejecting the pin bar (far right) at level a key support level now so

. If we see the price movements in the days that followed, the formations are formed inside the bar (lower picture) that allows forwarding trend up, and with the momentum bullish signal indicates a fairly strong buy

 

In conclusion, the formation of price action always happens almost every week on the price movement of several currencies and other commodities. Some of them are there really is less valid even fail to indicate signal trades. The more we often observed with careful analysis on a wide range of currencies and commodities will be the more accurate we determine the formation of a valid bar

Because not all lineups bar formed in the price action has always run smoothly, we should keep trading in accordance with the risk/reward ratio that we agree upon.