Trading on the 8 Hour Charts

Hello all I hope you are having a restful and enjoyable Sunday! I find Sunday’s are always great to take some chart reviewing time, and plan out your upcoming trading week. As expressed in some of my previous posts I am partial to price action trading from the Daily Charts, and more recently the 8 hour charts. “8 hour charts?”; some of you may ask. Yes, 8 hour time frame charts are now offered on the MT5 platform. I recently started trying out the 8 hour time frame to see how it compared to the daily time frame with respect to providing reliable signals and frequency of the signals.

There is a great blog post on the Forex4Noobs website which offers some insights as far as using the 8 hour time frame for forex price action trading. For those of you using the MT4 platform the blog also provides a great indicator that you can download to allow you to convert your 4 hour charts into 8 hour charts.

As noted in his blog post Nick B prefers the 8 hour charts over the daily charts because in his opinion it offers more tradeable setups without giving up the time saving and quality aspects that the daily charts provide.

In reviewing my charts today I particularly noticed the nice bearish pin bar that formed at a key level on the EurUsd 8 hour chart.

20130407_EurGbp_H8

On my chart I have marked a key resistance level at 1.30000. You can see how price has retraced and extended about 30 pips past this level but then snapped back and failed to close above the resistance level. EurUsd is curently on a nice downtrend which makes this setup even higher quality in my opinion. It will be interesting to see how this setup pans out over the next day or two.

If you have never experimented with the 8 hour time frame for your price action trading you just might want to give it a try!

Once again this post is meant for educational purposes only and is not meant to be regarded as trading advice. If you enjoyed this post please, comment, share, and like!!

Cheers πŸ™‚

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Trading the USDJPY Daily

Hello all, again I must apologize for the long absence since my last post. Things have been rather busy as of late, and when ever I do have spare time I am generally analyzing my charts for setups. So as a result posting on my blog has taken a bit of a back seat as of late, but I intend for that to change!

Anyhow, I just want to talk a bit more about price action trading. As you probably know if you have read any of my previous posts I am very partial to plain jane vanilla price action trading. Meaning my charts are not cluttered up with indicators. I use price as my indicator, which in my humble opinion is the best indicator in the world. With practice reading the charts, price will tell you a story, and provide very strong clues or hints as to where price is likely to head in the future.

Unlike indicators price does not lag. It tells you what you what is happening now, in real time.

The only indicator I am using on my chart these days is an indicator which draws support and resistance lines on my chart. This indicator does not replace good old fashioned chart analysis and I always double check the lines this indicator has drawn to ensure they match where I would have drawn major support and resistance, but it is a helpful tool.

Essentially what I look for first of all is the trend. I am not going to get into a long explanation in this post on how I determine the trend. I will save that one for a future post. But essentially I zoom out on the Daily chart or will look at the Weekly chart to determine if there is a trend at the moment. It is entirely possible that there is no trend. Price may be stuck in a sideways consolidation or range. If that is the case I generally stay away from that currency pair for the time being as I find trading currency in a range fairly difficult. But there are times when I will look for high probability set ups even if price is ranging.

Lets take a look at the USDJPY Daily.

2013-03-02_USDJPY_Daily

The first thing that should jump out at you is that this currency pair is trending up big time. In these situations I am looking for buy trades only. In my opinion sell trades are just too risky when you have such a dominant trend to the north so why bother.

If you look to the right of the chart on February 26, 2013 there is a doji or spinning top candle near the daily support level 92.00 after a correction move down. The doji or spinning top candle is a very good indication that the bulls and bears are fighting for dominance, price has stalled and a change in direction may happen soon.

I don’t take a trade just because a doji candle has formed at support or resistance. I wait for a confirming candle. There are basically two other candles that confirm the resumption of the trend for me: 1) A Pin Bar, or 2) an Engulfing Bar. If you look at the candle on February 27 a nice bullish pin bar formed at support. I call it a bullish pin bar because the wick is pointing down. This indicates that the bears tried to make another push to break support and it failed. Again another strong indication that the bulls are back in control.

An engulfing bar would also be a nice confirming signal that the bullish trend may continue. A bullish engulfing bar occurs where the open and close engulf or cover the entire body (open and close) of the previous bar, and it is a bullish candle of course.

Based on the doji and bullish pin bar I went long at 92.43 setting my stop loss below the low of the doji and pin bar (90.95), and my take profit at the next major resistance area (93.95). This trade provides just slightly better than a 1:1 risk vs reward. Not fantastic, but not terrible. I personally need at least a 1:1 risk vs. reward before taking the trade, and preferrably 1:2 or 1:3 risk vs. reward.

The trade is currently looking good being 115 pips in profit.

Well that’s about it for now, I hope you enjoyed this post and please post a comment and share my blog using one of the social media links below!

Cheers πŸ™‚
Serge

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And the Yen Pairs Continue to Trend

Hello all, I must appologize for the long break since my last post. I was on a much needed vacation in beautiful Jamaica soaking in some rays and drinking a few red stripes!

I just wanted to get back into things with a quick post regarding the Yen pairs. I am partial to price action trading methods, as you have probably gathered if you have been following my blog. I am also partial to trading from the higher time frame charts such as the 4 hour charts and daily charts. I particularly like trading off of the 4 hour charts because for me they offer the perfect mix of reliable signals, and sufficient frequency.

Getting back to current market conditions. The UsdJpy and GbpJpy have been in a nice bullish trend since late October early November, 2012. These pairs have provided many nice entry points over the last 3 months.

20130210 usdjpy

As you can see in the 4 hour UsdJpy chart above, this pair is currently in a correction, or pull back. I will be watching closely for a resumption of the bullish trend. Once price confirms a resumption of the bullish trend I will jump on board and hopefully pull some pips out of the market.

How do I know price has resumed the trend? Or put another way, what is my trigger? Well being a price action trader the short answer is price! But I know that answer is not all that helpful. I personally use clues that the market provides such as pin bars, and some of the techniques taught by the PipDaq ebook. For those of you that did not cheque out my post on PipDaq price action check it out here: PipDaq.

Well it will be interesting to see whether this pair does infact continue its bullish climb or if the good times have come to end for now and the pair begins to show signs of reversing.

Well that’s all for this post. I encourage you to post comments, questions, or anything you want as long as it is related to forex!

Cheers πŸ™‚

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Forex Price Action Trading Part IV

So in my last post I was discussing forex price action trading and expressing my personal opinion that price action methods, especially when trading off the higher time frame charts such as the 4 hour, daily, or weekly charts are a vastly superior way to trade.

Forex price action methods heavily rely on the use of price indicators such as trend, key support and resistance areas, pin bars, engulfing bars and inside bars. If you are not familiar with these terms we will get into some of these concepts later on.

Ok, so in my last post I promised I would reveal the two price action membership programs that I have been a member of for some time, and highly recommend. I will talk about these in the order that I joined each.

The first price action membership course that joined was Learn To Trade the Market.com which is taught by a gentlemen by the name of Nial Fuller. If you go to the site you will see that Nial offers a boat load of free training videos and articles to give you a taste of what the membership and training is all about. I particular found both the free videos and member videos very very helpful when it came to understanding various price action concepts. The whole picture, or video in this case, worth a thousand words thing.

Below is an example of one of Nial’s training videos:

Nial Fuller provides lifetime access to his membership for a one time affordable membership fee which is another thing I like about the membership. I would definetely recommend checking out the site and making use of all the free videos and articles that he has to offer.

The other membership site that I belong to is Forex School Online taught by Johnathon Fox. Mr. Fox also does a spectacular job at teaching the fundamental price action trading principles. Similarly, he provides countless training videos and articles. What I also found as an invaluable teaching tool is the membership forum which allows members to discuss the forex charts in real time and analyze possible trade set ups or past trade set ups.

Both these forex price action sites are very high quality and definitely worth checking out. And just for the record my links are not affiliate links, and I have no financial incentive for recommending these sites.

If you want to check out another very good forex price action course check out our DNB Forex Price Action Membership Review.

Cheers πŸ™‚

Serge

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Forex Price Action Trading Part III

So picking up where I left off yesterday, I would like to provide some more thoughts on forex trading, and some of my experiences thus far with some of the systems I have personally tested and spent some time demo trading with.

Now before I go through a discussion of what I feel are some of the better forex programs or “systems” out there I am going to go out on a limb here and make a statement that some may or may not agree with. Here goes….. Forex Robots will not be profitable over the long term.

images

To be honest I have not even tested a forex robot in a couple years now. The reason being, I gave up on them a long time ago. In my humble opinion robots are programmed to base trading decisions on the past behavior of the market. The forex market conditions are constantly changing and evolving, and are driven by the millions of human traders buying and selling.

To put it simply you cannot predict what the market will do by analyzing past market conditions and programming a robot to take trades based on how the market has behaved in the past. Once again in my humble opinion robots will not work for you over the long term and you will eventually blow your account if you are trading with a robot.

Becoming a successful forex trader will take work and a great deal of practice on your part if it is something that you think you may want to pursue as a way of earning an income online. There is no magic out of the box push button software that is going to make you wealthy. But I am sure you are smart enough to know that already.

I am going to be completely honest with you here. I have been researching and demo trading forex for years now. I have not got to the point yet where I would be comfortable risking real money. I am still demo trading. The reason I am telling you this is because I do not want to give anyone the false impression that I am a professional forex trader. I am someone who has spent a few years now demo trading forex and may be able to offer some insight and advice to individuals just starting out.

Ok let’s cut to the chase. What do I think is the best forex “system” or “systems” out there? Here goes… based on my personal experiences and beliefs regarding the forex markets I truly believe simple price action trading methods whereby the trader primarily trades from the Daily and 4 Hour charts provide the best opportunity for success.

What is price action you ask? Price action forex trading is a method whereby you toss all the fancy indicators from your forex charts and you trade from clean uncluttered charts using the best indicator of alll….price!

I currently belong to two forex price action membership sites and I would highly recommend both of these membership sites. I know my skills and demo trading results have come a long way since becoming a member of these two sites. In my next post I will provide the names of both of these forex price action membership sites and why I would recommend either of them to someone who is interested in improving their forex trading skills, and hopefully one day becoming a profitable forex trader.

Once again if you are considering trying your hand at forex trading do not think about risking your real money until you have demo traded, and demo traded some more. Most if not all forex brokers out there offer a free Meta Trader 4 (MT4) demo account. There is no reason to risk your real money until you become 100% confident in your trading system and trading plan.

If you want to get a head start at checking out a very good forex price action course check out our DNB Forex Price Action Membership Review.

Well thats it for this post, I hope you found some of it interesting and useful. Please feel free to leave a comment, and or share my blog using one of the social media links below. And don’t forget to sign up for my free newsletter on the main page to receive more online money making ideas!

Cheers πŸ™‚

Serge

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Forex Price Action Trading Part I

Today I would just like to write a quick post on the topic of the best forex systems. Now as a bit of a disclaimer I am not claiming to be a forex expert. But as someone who has been experimenting with forex for a number of years now, and who has tested a multitude of different forex systems and indicators I feel I can offer some valuable information, especially for the newby forex trader.

When it comes to the best forex systems this is a very difficult question to answer. At the end of the day the best forex system is going to be highly dependent on your personality type and lifestyle. If there is one thing I have learned about forex trading over the years is that there is a great deal of psychology involved.

For example, if you are a very analytical person who likes to take your time and really think things through before executing, and have a great deal of patience then you will probably want to gear your trading to the longer time frame charts such as the 4hour, daily or even weekly charts. On the other end of the spectrum are those individuals with less patience desiring a forex system that is going to offer more “action”, involving quicker decisions and trades which are much shorter duration.

In my personal experience the second type of forex trader will have a much more difficult time finding or developing a profitable forex system. This is not to say that there are not forex traders who earn a consistent income trading from the 1 min or 5 min charts. But in my humble opinion the shorter the time frame one is using to trade forex the more skill is required in analyzing the market and reading the charts. There is also more “noise” or randomness on the lower time charts making it much more difficult to predict whether a currency pair will rise or fall within the foreseeable future.

This is just a very brief introduction regarding forex systems. The bottom line is that before someone can become a profitable forex trader and find a forex system that works for them, they will have to discover which trading style fits their personality and psychology. In my next post on forex trading I will get a bit more specific regarding actual forex trading systems that I have dabbled with and may be worth exploring if you are curious about forex trading.

If you want to get a head start at checking out a very good forex price action course check out our DNB Forex Price Action Membership Review.

As a bit of a disclaimer or warning, forex trading can be a risky venture and no one should ever consider risking real money trading until they have demo traded their forex system to death and are consistently making money on their demo account.

Thanks for checking in and if you liked the post please share or “like” on one of the social media links below.

Cheers πŸ™‚

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PipDaq Price Action Trading Setups

Hello and welcome to my forex trading blog! This is my first substantive post and I would like to discuss a price action trading system ebook or manual that I have recently purchased and have been testing out.

It is called PIPDAQ Price Action Trading Setups.Β  Right off the bat I would like to say that I love the simplicity of the price action trading setups explained within the manual.Β  I am a visual learner and the manual is full of price charts with explanations on the setups.

The manual teaches two basic types of setups.Β  The first involves trading with an established trend, and the second involves identifying a trend reversal and getting in relatively early on that trend reversal.

In today’s post I will be discussing the first type of price action setup taught in the PipDaq price action trading manual (trading with the trend) and going through three recent trades I took on my demo account.Β  Of the three trades two ended up being winners and one a loser.

Below is the demo trade I took on the UsdJpy on January 17, 2013 trading from the 4 hour chart.

USDJPY_H4

The PipDaq price action trading setup got me in the trade at the beginning of theΒ  resumption of the main bullish trend and I took 92 pips profit out of that trade.

Another trade was on the EurGbp 4 hour chart, taken on January 16, 2013 shown below.

EurGbp_H4

Once again the PipDaq price action trading setup got me in the trade at the resumption of the dominant bullish trend scoring me 40 pips by the time I took profit and got out of the trade.

Now any of you who have traded forex for any length of time will know that they are never going to be all winners.Β  I did have one losing trade of the three PipDaq price action setups I have taken so far and this was on the GbpJpy 4 hour chart trade below.

gbpjpy_H4

Now you will notice where I have marked the red upward arrow, this is where I got in long using the Pipdaq price action setup and price then continued on its downward correction taking out my stop loss.Β  If you notice the purple upward pointing arrow, I have marked where the Pipdaq price action setup would have triggered another opportunity to get in on the trade and this time it would have been a profitable trade.

Unfortunately I did not get in on the second opportunity and missed that one.

It is still very early in my testing of the PipDaq price action setups but so far I can honestly say I very much like the simplicity of the system, and I think it may have some very good potential.

Without giving away the elements of the PipDaq price action trading setups, I can say that it is not your basic Moving Average crossover as some systems advocate.Β  I have personally found the Moving Average crossover systems to be lagging and didn’t work well for me at all over the long term.

Well that’s all for this post but I will keep you updated on the PipDaq price action trading system as I continue to test and demo trade.

If you would like to investigate the PipDaq price action system a little further you can check out the PipDaq.Com website here:Β  PipDaq.com

Cheers πŸ™‚

Serge

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