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Forex Price Action – Usd Cad
As seen in the chart above,
In the highlighted box 1. – It shows a consolidation of Price action – inside bars.
When we see that, we know that price is going to break out. Either up or down.
Therefore we would have played a pending entry on both side of the inside bars.
It eventually went down which we knew it would, and we took profit at the horizontal line, which you can see why in the bar on the left. It is hitting a support level – a price pivot.
Therefore no wonder, once it hit the support level, it went up and guess what took it down.
Picture 2. – A price action – Bearish outside bar
With the bearish outside bar in place, we knew price is going down further.
Therefore, what came after the bearish outside bars in picture 3. are more inside bars.
The bearish outside bar tell us that the inside bars are going down. Therefore, we would have played a pending sell order on the break of the inside bar and caught the next downward move.
You see, once you understand price action – reading the chart is like reading a book. =)
Next Intermediate Article: Price action pin bar
Ezekiel
On the break of the inside bar at pt 3, wouldn’t you have to wait for it to retest the orange resistance level before you take a short?
I see that you only trade on price actions but I do see you have the MACD indicator on the bottom of the chart? Do you really trade basing just on the price action alone or both? How sure are you, if you just rely on price action, that the bars would not reverse up after pt 3, since there is a possibility that it will retest a previous support (now a resistance level)?
In pt 3. You could have place a pending sell order at the break(low) of the inside bar. even if it went up to retest the orange resistance level. Your pending sell trade would not have triggered. However in this scenario, because there was a bearish outside bar. We knew it was going down, therefore we did not place a pending buy order at the (top) of the inside bar.
In Asia Forex Mentor, we trade not only on price action. We trade with confluence. The MACD is used for divergence purpose only.
We combine price action with fibonacci, price pivots, moving average etc.
Yes there may be a possibility that price will reverse up to pt 3. In that case as our sell order is not triggered, we are not in the trade.
Hope this clarifies.
Thank you, Ezekiel.
You are knowledgeable. How could I contact you via email.
Mine is: justonanything@gmail.com
Kindly email me so that I could communicate with you privately as there is something I wish to discuss with you in private. It’s a biz proposal regarding forex.
Await your email.