Price Action Swing Trading - The PAST Strategy

[Nigel Price]

Price Action Swing Trading - AUD/CAD short

Hi guys, I'm going to post a live trade here today if we are fortunate enough to see it pan out.

The anchor chart is the Daily Chart of AUD/CAD and I will be looking to play to the short side in the event of a breakdown.

The trendline is a pretty short-term one, drawn on the 15 minute timeframe, but I will be intraday trading here so if it doesn't work out I will be moving on fairly quickly.

I will be looking to keep losses to an absolute minimum, and will be trying to stretch out any winners for as long as I can.

Sorry for being absent from the forum over the last while, the truth of it is that I have been working on some exciting trading stuff and it has been consuming pretty much all of my free time. It's sometimes very difficult to even get a free hour during the day! Great to be busy though

Anyway, here are the charts - chart 1 is the daily, and the second is the 15 minute. I'll be updating here as I go along.

 

[Nigel Price]

Just hovering on top of the trendline now, coincidentally around the big round number too, at 1.0000.

A break below 0.9997 would see me jump in short.

If we get a bounce from these levels I will stand aside until the trendline is threatened again, which will probably be at higher price levels than here.

 

[Nigel Price]

Finding it hard to bounce here...

 

[Nigel Price]

Right, price has tickled the trendline but hasn't made any meaningful break below. So I am not in a trade yet.

Some people might have entered short when price was testing the line, and that's fine. It's not the entry that is important, it's more the exit.

If you are caught short, you should be looking for where the market might prove you wrong. For me, it would be above the purple line. That would mean that you would be taking about a 10 pip loss. Which is nothing in the grand scheme of things.

Get out with the small loss and wait to see if price is going to take a rattle at the line again. There is nothing to be gained from watching losers grow in your account. If the position is wrong, close it. You can always get back in again if price is going your way.

 

[Nigel Price]

Right, price has taken a bounce off the trendline and has broken higher.

No losses for me yet. If you were trigger-happy the worst case scenario should be -10 pips.

We will have to wait now to see if price manages to sustain the move higher or comes back down to test the line again this afternoon. Might be a good time to get a cup of coffee

 

[Nigel Price]

OK, in now at 0.9997

 

[Nigel Price]

Haven't set a stop yet, but 1.0000 should be a pretty good reference point. I'll be keep an eye on maybe 1.0005 which would be above the trendline as it is currently drawn. 8 pips risk approx.

 

[Nigel Price]

Right we have our break now and the position is about +10 pips.

We need to be thinking of what is to come now - we need to have a plan as to what we are going to do in each of the following situations shown on the attached chart.

Anything is possible

 

[Nigel Price]

Stop to break-even now.

My capital has been at risk for no more than a few minutes.

 

[Nigel Price]

Up to nearly 30 pips profit now.

This is the bit that separates the men from the boys.

The market now will do one of the three things that I showed on the last chart.

It will either continue to the downside, which would be great, retest the underside of the trendline (in which case my current position will be stopped out), or it will recover the trendline again and move further upwards (again, I will be stopped out).

Let's see what happens.

 

[Nigel Price]

There is plenty of the trading day still to go, but right now the daily chart is looking pretty good...

 

[Nigel Price]

Bears are taking a breather now. Hopefully they are gathering up some energy for another push to the downside. In the meantime the market will move sideways, slightly up.

Retraces are totally normal in the market - and it is necessary that we allow them to happen.

It is not particularly pleasant to watch a 30 pip profit move decline to a 10 pip profit, or even a 0 profit. But for the people who can stomach these retraces, there is significant rewards available - because when it works out, the 30 quickly turns into 60, into 120, into 240. That is where the big gains are

 

[Nigel Price]

Current state of play attached - consolidation. Stop is the purple line.

Bias remains short as long as price is below the trendline.

 

[Nigel Price]

0.9993

 

[Nigel Price]

Right I'm not out yet, but it's very close. If you got in a little later than me, you should be stopped out now. You could begin to turn your attention to initiating another position on any signs of exhaustion underneath the trendline.

This is not an exact science, there will be sometimes that price doesn't quite make it, sometimes price will get above it for a while and then fall, sometimes price will tag it precisely right to the pip. It doesn't matter which - it's simply a question of if you enter, you control risk tightly and you let winners run.

 

[Nigel Price]

Right, got stopped out at b/e, watching below the t/l now

 

[Nigel Price]

Taking a real rattle at it on my chart, up at 1.0004 now

 

[Nigel Price]

In at 1.0001

 

[Nigel Price]

Will close out if price above 1.0005 again

 

[Nigel Price]

I haven't put on a hard stop yet, just watching price closely ...