Price Action Swing Trading - The PAST Strategy

[Nigel Price]

Thanks for the warm welcome Nigel!

I was wondering if having a SL so tight doesn´t get you stopped out several times until price really goes in your favor?
I mean, is it realistic to go after hundreds of pips with just a 30 pips SL or so?

Greetings!
Sebastian

Hi Sebastian, good question.

It's realistic if you approach it correctly, but most people don't. People are perfectly happy to let losers grow big, but when a winning trade starts to grow they jump to close it out - preferring to take the short-term high you get when you close a profitable trade. The losing trade hurts, so the temptation is to postpone that and put it off to a later date, hoping it might come back and they might not have to confront the discomfort.

I do the exact opposite. I am ruthless with losing trades. A losing trade has no business being open in my account. It either moves into profit, or it gets cut.

I have found that trendlines breaks are a good way of getting trades into profit quickly. The market usually gives me my answer pretty fast. If it's loser, it's closed, if it's a winner, risk is taken off the table and my stop is brought to break-even. Cut the losers and run the winners.

Bear in mind, if price is moving against you, you most likely won't be trading, because the trendlines won't be breaking. Even if price is ranging over the course of the week you should be able to get a good portion of your trades to breakeven, in doing so keeping your losses capped.

I have many small losing trades and many breakeven trades. I think my success ratio for August is looking like it's going to come in under 10%, but it is still going to be a nicely profitable month for me.

If you let winner stretch their legs, you might be surprised how many will turn into multi-hundred pip trades. But if your losers are small you don't need many - just a few here and there. Try it and see

 

[Nigel Price]

Hi Everyone,

The end of another month is upon us! I won't be sorry to bid farewell to August as far as trading is concerned, with it largely being quite a frustrating month. However, this last week has been better, with some decisive-looking dollar strength. Hopefully this can develop into a more sustained directional move as we move into September.

In the eBook I speak about recording your stats and how it is important that you know them inside-out. I really do not think that there is an easier way of improving your trading than knowing your trading statistics - you can identify problems and you can often find yourself acting to solve those problems without even realising it. What more can you ask for than that?

The and of the month is a good natural time to do some analysis on the past months trading. At the very least, you should record the following:

average winning trade size
average losing trade size
trade success percentage

Perhaps you could tighten the losers a little bit - or maybe you could have let one or two of your trades stay open a bit longer for more profit. Maybe one of those trades, if left open, could have made all the difference to your month-end results. Perhaps you could have been a little bit more accurate with your trendlines/retests - maybe you could practice entries a bit more.

If you have ended August with a profit you have done extremely well - it was a month that required a lot of patience - if you continue in that vein you will do fine over the course of a normal trading year.

If you ended August with a loss, I guarantee you if you try to analyse your stats over the course of the weekend you will find that there isn't much to change to swing you into a profit. The difference between profit and loss is slim, I wouldn't be surprised to find that a few small tweaks here or there could make all the difference.

I'm away to the beach for the weekend - the report will be out on Sunday as usual and I'll be back in here Monday morning. See you in September!

 

[pa_pips]

Hi Nigel

Thank you for the PAST strategy ebook. I think this style of trading really suits my personality. I have started on the 26th of August. Two small losses of 30 and 17 pips for USDCHF on 4h and 1h timeframe, but currently in risk free long trade amounting to 95 pips in green. One EurUSD trade stopped out at BE, but risk free short trade running at 170 pips. Also a risk free trade on GBPUSD short which is 87 pips in the green. Did not manage to let a AUDJPY long trade stick and only one loss of 40 pips on 4H time frame.

 

[Olu]

Hi All

Back from a short break away from trading.

I am looking at the following for this coming week. Charts later.

BTW a lot of pairs that we caught their reversals are confirming those reversals e.g EurUsd. If we can close below 3200 then the coast is clear for a sell and hold (with weekly maintenance) trade for more serious downside.

EurJpy
UsdChf
EurGbp
ChfJpy
AudCad
Cad Jpy - this one never invalidated the signal from 3 weeks ago or thereabouts

Have a nice weekend all

Olu

 

[myknees]

Liking EURAUD and AUDCHF

 

[Olu]

EurAud

Liking EURAUD and AUDCHF

Just had a look MK and I am loving the possibility. It is also carry positive if activated so holding for long would not be a problem

Olu

 

[Olu]

Liking EURAUD and AUDCHF

Thought I should show the AudChf as well. By the way I dont use the 1h chart because I usually do not have free time to check the charts hourly during the week. I can just about manage the 4hr timeframe

Olu

 

[wqst]

Not a good week

Good Day Everyone!

This week is full of economic news releases so be careful before opening any new position ...

ref: http://forexuseful.com/blog

 

[Nigel Price]

Hi Nigel

Thank you for the PAST strategy ebook. I think this style of trading really suits my personality. I have started on the 26th of August. Two small losses of 30 and 17 pips for USDCHF on 4h and 1h timeframe, but currently in risk free long trade amounting to 95 pips in green. One EurUSD trade stopped out at BE, but risk free short trade running at 170 pips. Also a risk free trade on GBPUSD short which is 87 pips in the green. Did not manage to let a AUDJPY long trade stick and only one loss of 40 pips on 4H time frame.

Hi pa_pips, seems like you have got the hang of it, those are very impressive stats! Thanks for letting me know that you are getting on well - hearing about people improving their trading with PAST really does make my day!

If you have any questions as you go, don't be afraid to ask

Good luck!

 

[Nigel Price]

Back from a short break away from trading.

Welcome back Olu!

If we can close below 3200 then the coast is clear for a sell and hold (with weekly maintenance) trade for more serious downside.

I'm with you on this one

 

[Nigel Price]

Good Day Everyone!

This week is full of economic news releases so be careful before opening any new position ...

Welcome to the thread wqst. Thanks for the heads-up - you are right, it is a very news-heavy week. We just have to trade around it as best we can

 

[myknees]

Nice EURAUD so far Nigel - Thanks for the weekly report http://forexuseful.com/price-action-swing-trading-past-strategy-01-sep-13

 

[viper77]

Really great trade, but unfortunately i was stopped out at 1.4698 for using a trade manager that moves SL after every 30 pips or so when i was sleeping, i guess i shouldn´t have used it for this strategy or put a higher value, what a great lesson...

 

[Nigel Price]

Nice EURAUD so far Nigel - Thanks for the weekly report

No worries myknees, both are at breakeven now for me. Keeping an eye open for a retrace on both pairs now. Any retrace back up to those trendlines now is a screaming short, in my opinion!

Really great trade, but unfortunately i was stopped out at 1.4698 for using a trade manager that moves SL after every 30 pips or so when i was sleeping, i guess i shouldn´t have used it for this strategy or put a higher value, what a great lesson...

Hi Viper, I understand the desire to lock in profit, but if you do it so early you'll hardly ever get a really big winner. Don't think about the pips you might lose if price retraces, think about the pips you will forgo if you close out and then price continues

Although the market might give you a second bite at the cherry this time - I wouldn't be surprised to see a retrace over the next few days.

Good luck!

 

[viper77]

Hard lesson learnt without a doubt... next time will be better!
Let´s wait for that retrace for a second chance then...

Thanks Nigel!

Hi Viper, I understand the desire to lock in profit, but if you do it so early you'll hardly ever get a really big winner. Don't think about the pips you might lose if price retraces, think about the pips you will forgo if you close out and then price continues

Although the market might give you a second bite at the cherry this time - I wouldn't be surprised to see a retrace over the next few days.

Good luck!

 

[Jakspratt]

Really great trade, but unfortunately i was stopped out at 1.4698 for using a trade manager that moves SL after every 30 pips or so when i was sleeping, i guess i shouldn´t have used it for this strategy or put a higher value, what a great lesson...

I sometimes use a trade manager but recently forgot that I had it set and turned the PC off overnight. Result. Price reached my initial target but then retraced way back losing me my 20 pip stop instead of locking in the 20 pips and moving stop to B/E. Another lesson learnt, ie: EAs do not work if the PC is not swtiched on!

 

[Mc Kerry]

I sometimes use a trade manager but recently forgot that I had it set and turned the PC off overnight. Result. Price reached my initial target but then retraced way back losing me my 20 pip stop instead of locking in the 20 pips and moving stop to B/E. Another lesson learnt, ie: EAs do not work if the PC is not swtiched on!

Too bad..... if you use EA's better have a vps service. This should eliminate such occurrences.

 

[Nigel Price]

Too bad..... if you use EA's better have a vps service. This should eliminate such occurrences.

Welcome to the thread Mc Kerry - I agree, a VPS is a very good idea.

 

[Nigel Price]

Hope some of you caught the EUR/AUD trendline break from the report at the weekend. We are seeing some good momentum here, falling some 280-ish pips from the trendline. I'm not sure whether we are going to see a retrace here or not.

My plan is to hold my trade open - if price continues to fall, great. If price retraces and knocks out my stop, I haven't lost anything, plus I will also have the opportunity to short again underneath the trendline, at possibly a better price.

One of the main principles of PAST is letting your winners run. In order to do that, you have to be able to tolerate retraces. They are part of the way the market moves.

Most traders will let losers grow big and cut winners quickly. That is why most traders struggle. We need to do the opposite - that is where the big profits are

 

[Nigel Price]

The other trendline from the weekend report was EUR/USD.

Of the two pairs, I think this one might be more likely to retrace a bit before falling away further.

As wqst pointed out on Monday though, it is a very news-heavy week this week, so who knows what could happen if there are surprises in the data released.

If you have any positions on these pairs, please try to keep at least portion of them open. Remember what we are trying to do - manage risk on the small timeframe; manage reward on the big timeframe. There is no reason why these pairs can't fall hundreds and hundreds of pips from here