Price Action Swing Trading - The PAST Strategy

[Nigel Price]

Morning All,

I've been tracking short EUR/AUD since a nice daily long wick candle formed last Monday, shown in the first chart below.

Just in case anyone is suspicious of hindsight trading, here is where I posted the initial set-up. Sometimes a nice long wick candle can often resemble a head and shoulders pattern on the lower timeframe charts, a set-up that a lot of traders monitor.

Anyway, the bears have largely been in control since, with price falling 350 pips. There has been more than one opportunity to get in along the way which I have taken advantage of and I am now carrying quite a significant floating profit.

I think another opportunity to add might be forming this morning on the 1 hour chart - if anyone is interested, the chart is below

 

[Nigel Price]

Got this trendline on the 1 hour DOW

Stocks are suffering even more than FX in the summer doldrums! False breaks everywhere!

 

[myknees]

Morning All,

I've been tracking short EUR/AUD since a nice daily long wick candle formed last Monday, shown in the first chart below.

Just in case anyone is suspicious of hindsight trading, here is where I posted the initial set-up. Sometimes a nice long wick candle can often resemble a head and shoulders pattern on the lower timeframe charts, a set-up that a lot of traders monitor.

Anyway, the bears have largely been in control since, with price falling 350 pips. There has been more than one opportunity to get in along the way which I have taken advantage of and I am now carrying quite a significant floating profit.

I think another opportunity to add might be forming this morning on the 1 hour chart - if anyone is interested, the chart is below

Great post Nigel thanks and nice trade

 

[Nigel Price]

Broke nicely

 

[Nigel Price]

Comments as on the chart

Olu

Hope this works out well for you Olu - if you are in it I think this has the potential to be a great long term trade. I am firmly in the EURUSD belongs under parity camp - 3,500 pip trade, why not!

Good luck!

 

[Pips Ahoy!]

i was wondering a few things about the past method

don't many of the early entry opportunities happen before the weekly signal candle closes? if i try to get a precision entry after the weekly candle closes would it not be easier to just enter at the high or low of the signal candle?

i see how using a lower time frame for entry/setting stop loss will result in possibly the cleanest of entries, but doesn't it require much more work to wait on the 1 or 4 hour chart to give us that opportunity?

in the pdf the one example shows two possible entry points on i believe was the one hour chart. but zoomed out on the weekly they are both almost in the same point of entry had we just decided to enter at the signal candle close

 

[Olu]

Hope this works out well for you Olu - if you are in it I think this has the potential to be a great long term trade. I am firmly in the EURUSD belongs under parity camp - 3,500 pip trade, why not!

Good luck!

thanks Nigel

I only have a tiny position it it at the moment. BTW this inability to progress further than this is giving me concern

 

[myknees]

thanks Nigel

I only have a tiny position it it at the moment. BTW this inability to progress further than this is giving me concern

As the thread has only been running 6 weeks and you have picked up a completely new trading strategy how concerned are you?

 

[Nigel Price]

Welcome to the thread Pips Ahoy!. Thank you for your questions.

i was wondering a few things about the past method

Fire Away!

don't many of the early entry opportunities happen before the weekly signal candle closes?

Depends on how early you want to be. I like the market to confirm to me what it is likely to do before I get involved. A weekly close price is a good reference point that many of the big traders will watch and therefore has significance. A weekly close below the open price of the previous up candle (in an uptrend) will be noticed by the big players in a market and will lead to many liquidating their positions, leading to a greater chance of a turnaround. In short, waiting for a close improves the quality of the signal, and will guard against us just trying to fight a trend, something that many retail traders are prone to doing.

if i try to get a precision entry after the weekly candle closes would it not be easier to just enter at the high or low of the signal candle?

Where do you intend to put your stop? The great thing about trendlines is the speed at which they often break. Look at the EURAUD example I posted here this morning, in advance of it breaking. It was 30 pips in profit in a matter of a few minutes. It doesn't happen with evey trendline break but it happens often enough. I had my stop to break-even this morning very, very quickly, which means my capital was at risk really only momentarily. The trade is still open now, who knows how big it is going to grow?

Risk = small and limited; Reward = open and potentially very big.

This is the very essence of super-low risk trading. I don't know of any other entry method that does this - if anyone does, please let me know what it is!

i see how using a lower time frame for entry/setting stop loss will result in possibly the cleanest of entries, but doesn't it require much more work to wait on the 1 or 4 hour chart to give us that opportunity?

Depends what you are looking for I suppose! Yes, it is certainly more work, trading off the 4 hour and 1 hour charts, but they give you entries that have the potential to last a very long time and return great profits. I am more than happy to put in the extra hours for the quality of the trades I generate. You get out what you put in. Having said that, I am working on something that should help PAST users, and myself, to cut down on the amount of time spent screen watching. It's bad for the eyes

in the pdf the one example shows two possible entry points on i believe was the one hour chart. but zoomed out on the weekly they are both almost in the same point of entry had we just decided to enter at the signal candle close

I refer you to the part about trendlines breaking quickly above.

I hope these answers are of some help Pips Ahoy! Good luck with your trading.

 

[Nigel Price]

Right guys, I am taking the rest of the week off, am heading to a small house by the sea with no internet connection. No more charts for me until Sunday! Good luck for the rest of the week

 

[Olu]

As the thread has only been running 6 weeks and you have picked up a completely new trading strategy how concerned are you?

Hi MyKnees

I dont understand the question but I will clarify what I meant by my concern. This trade started as a result of a chart I posted which showed the euro was in an upchannel and price was right at the lower channel. Normally I would be looking to buy it looking for it to swing upwards and onwards as the weekly chart was bullish. At the same time I was considering the weakness in the stock market (euro bearish) and bonds rallying (dollar bullish) and lastly the strength of that uptrend line. So my boxes were ticked for sell a breakdown and leave an upmove alone for the time being.

So I sold.

However price has been oscillating not too far from my entry point when I was expecting a stronger downmove hence my concern for a false breakout

Hope this helps. If I didnt answer your question please ask some more I am always refreshing the page

BTW I love this strategy because I love trendlines, support and resistance trading

Thanks

 

[Olu]

i was wondering a few things about the past method

don't many of the early entry opportunities happen before the weekly signal candle closes? if i try to get a precision entry after the weekly candle closes would it not be easier to just enter at the high or low of the signal candle?

i see how using a lower time frame for entry/setting stop loss will result in possibly the cleanest of entries, but doesn't it require much more work to wait on the 1 or 4 hour chart to give us that opportunity?

in the pdf the one example shows two possible entry points on i believe was the one hour chart. but zoomed out on the weekly they are both almost in the same point of entry had we just decided to enter at the signal candle close

Hi PA

I hope I am right but I get my signals on what to trade after the weekly chart has closed. I then examine all the reversal candidates for trendline breaks that would indicate that the move is continuing. After I am in it is a different story and it is just trade management i.e stop movement

I have not ventured into adding to trades with this system. The closest I got to doing that was in the usdjpy trade but I chickened out


*******I looked back and saw that Nigel has already answered the above question*********************

 

[Pips Ahoy!]

thanks nigel and olu : )

this is my first time looking at trend lines for entry..

looking at some weekly charts like recent eurusd or gbpusd i can see each swing had an engulfing candle and on the daily (in retrospect) i can see the week during the signal candles' formation there was an entry signal which would have gotten me in the longer term trade 50 - 150 pips earlier. but alas i would have been speculating since the weekly candle hadn't formed yet

i had not the best luck picking daily reversal signals before trying weekly charts, there is more certainty and time for the move to play out. the same moves happen in slow motion and if looking at enough pairs there should be enough opportunities to trade this way exclusively (i hope!?)

 

[Olu]

thanks nigel and olu : )

this is my first time looking at trend lines for entry..

looking at some weekly charts like recent eurusd or gbpusd i can see each swing had an engulfing candle and on the daily (in retrospect) i can see the week during the signal candles' formation there was an entry signal which would have gotten me in the longer term trade 50 - 150 pips earlier. but alas i would have been speculating since the weekly candle hadn't formed yet

i had not the best luck picking daily reversal signals before trying weekly charts, there is more certainty and time for the move to play out. the same moves happen in slow motion and if looking at enough pairs there should be enough opportunities to trade this way exclusively (i hope!?)

Hi PA

This PAST strategy has its inherent risks as well. As you know an established trend in forex continues for a long time and trying to call tops and bottoms once in a while, if not more times, will put you in a position of catching the proverbial knife which is not what we want to be doing as traders. Hence the reason we want the candle to close. In retrospect sometimes we would be able to see where we could have got in earlier but this business needs for us to be mechanical at lower risk to be consistently profitable,

Good luck PA. I wish all of us loads of pips

Olu

 

[Pips Ahoy!]

i don't know if this has been discussed but eurgbp weekly showed a signal to go short

the 1 hour shows the trends and subsequent price drops, but there is a spike which would take the stop out. does this happen often?

 

[Olu]

EurGbp

Hi PA

I missed the eurgbp in my weekly analysis and shortlist-building. Yes it does look bearish. And price is on the support line. The eurgbp is suseptible to spikes so this must be put into consideration it it is to be traded.

 

[Olu]

EurGbp

Trend Like Break

 

[myknees]

Olu - No worries I was just indicating that you should not be so concerned after 6 weeks as its a completely new system to you but it seems you are well aware of that.

 

[Olu]

Olu - No worries I was just indicating that you should not be so concerned after 6 weeks as its a completely new system to you but it seems you are well aware of that.

No problem Myknees. Wish us all loads of pips

Olu

 

[Olu]

EurGbp

Trend Like Break

This pair has continued downwards - unfortunately without me. I was looking for a retest of the trendline but it did not happen.

Still on the lookout for entries but will not chase