Price Action Trading Method.

[wisp]

traderdude,
when u place an order above ib or pinbar, do u place order at exact price of ib/pb high? in case of ib entry is on ib high/low or wait for next bar and take high or low of it? is initial sl at exact bar low? thanks for all the nice charts.

how did you decide on 2145 for entry. on which bar is the entry in this chart

 

[TraderDude]

chart showing entries. Since we are going to take limit order near current price. They may not be exact.

Also note that for Outside bars, there will be retracement, you can enter on that as well, but it will take some good judgement and practice.

For beginners, this chart should explain clearly. Let me know if something is not clear.

 

[vikrit]

chart showing entries. Since we are going to take limit order near current price. They may not be exact.

Also note that for Outside bars, there will be retracement, you can enter on that as well, but it will take some good judgement and practice.

For beginners, this chart should explain clearly. Let me know if something is not clear.

you wait for close of next candle or enter with limit orders once OB/IB/PIN complete??
if using limit order then what value you use?
for ex take last bearish pinbar, after completion of pinbar,
you will put order at 2195(i.e. low of pinbar) or 2195-x.

 

[TraderDude]

you wait for close of next candle or enter with limit orders once OB/IB/PIN complete??
if using limit order then what value you use?
for ex take last bearish pinbar, after completion of pinbar,
you will put order at 2195(i.e. low of pinbar) or 2195-x.

This is a good question.

The entry should be taken at the low of pinbar. But sometimes we can get entry at better price. Since we do not know the outcome of the trade. we can enter anywhere from 2200 and 2195.

If you are on shorter time frames, you will have less chance of getting all your orders filled. So take the entry at low of pin , because will go slightly up from the low of pin in most cases.

On longer time frames , just set a limit order just below the low of pin. It will get filled easily.

Try to enter at some round figure, since this is where most orders are likely to be set and price ALWAYS makes it to these round figures, because people like to get their profits in round figures and not some random number.

Also, sometimes you enter late or early, there is no rule for entry.

All that matters is you enter at the low of the pin or near it +/- few points.

 

[vikrit]

This is a good question.

The entry should be taken at the low of pinbar. But sometimes we can get entry at better price. Since we do not know the outcome of the trade. we can enter anywhere from 2200 and 2195.

If you are on shorter time frames, you will have less chance of getting all your orders filled. So take the entry at low of pin , because will go slightly up from the low of pin in most cases.

On longer time frames , just set a limit order just below the low of pin. It will get filled easily.

Try to enter at some round figure, since this is where most orders are likely to be set and price ALWAYS makes it to these round figures, because people like to get their profits in round figures and not some random number.

Also, sometimes you enter late or early, there is no rule for entry.

All that matters is you enter at the low of the pin or near it +/- few points.

there are two parts of your reply which are contradictory, so to understand without making it complicated, asking two questions.

1. i don't get it what you mean by 'no rules for entry'. after checking 2-3 things for confirmation/confluence/validity how come one can trade without having predefine rules/mindset for entry, SL and exit. just in last post you drew entry lines, also all patterns defined here have defined entry rules. actually what i asked how 'you' entered/enter in these trades. so, what i am getting that according to your price action method there are more things to consider for enter, even after getting setup confirmation. am i understood correctly? if yes, then now onwards, plz also mention how you decide entry price and bar in individual trades. if no, then plz post rules you are using to enter.


2. as per your last two posts about entry, considering 'ok-type' entry for -

bearish pinbar (tail up) - use limit order for sell at low of bar just after completion of the bar
bullish pinbar (tail down) - use limit order for buy at high of bar just after completion of the bar

then my confusion is why you didn't enter in following M&M trade?? setup was confirmed, after completion of pinbar next two bars crossed high of pinbar, so how come limit order didn't fill? and if didn't set limit order, then why not? as in 2nd last post chart entry was good b/w 2200-2195, i guess here anything b/w 703.20-704 would be good.

............ Found only two of them. As for M&M , there was no trade. ...................

Take the trades ONLY when our criteria matches, otherwise there is just no trade. you will need to be patient as long as it takes to get the right setup. It will take some time to do this. Keep practicing.

Had we got the M&M setup @ 700. It would have been great. But it did not. No worries. Next time..

 

[TraderDude]

@Vikrit,

I do not want to confuse people, but here goes.

1. When i say there are no rules to entry in this context. I mean you can enter in the area of the bar pattern. there is no hard set rule for entry when you get a confirmation from the bar pattern.you can enter +/- few point after you see the bar pattern, in this case the pin bar. Our setup is complete at this point. After seeing all the confluence and the final bar pattern confirmation we are ready to take the trade. Do not confuse this with rules of confluence. Here we are talking ONLY about the entry after setup is confirmed.

2. Why i didn't enter M&M?. because it was not the best setup. I m repeating this again - we only want to take the best setups , not every setup. There is a difference. A lot of times , people will force the confluence or just think there is a pin bar , so let's enter. This kind of impatience will get you killed. Read the post on why M&M was not the best setup. Not every bar pattern is a confirmation. The location of the bar pattern is very very important. The bar patterns works best at the area of confluence.We do not want 'ok-type' entries. They are bad long term.

This is the hard part for people. Most traders do not have the patience to wait for the right setup and are always looking to enter based on almost any reason.

Remember we trade on probabilities , nothing is sure. Hence we have to make sure our entry has the highest probability.How do we make sure of that? by using confluence. How many methods/strategies do you know that ensure at least this part?. the more confluence, the higher the probability. Now assign a score to each item of confluence. say 40% for fib , 30% for trend line , 20% for a S/R level. 5% for round no and 5% for shape of the bar pattern.

Now, how much do you think the probability for the M&M setup be? I hope you get the point. When i say best setups i mean high probability setups.

I can understand it is difficult to communicate over this medium. People understand and see the same things differently. I do not want this to happen.I hope the above points are clear. If not let me know.

 

[Phani333]

@traderdude.

i need your help on trading divergences. I am new to Trading, so looking for some mentorship.

While scanning trough the stocks, i came across Adani ENT(Daily), which is showing divergence on RSI, MCAD. Please let me know your advice regarding this.

Thanks,
Phani.Y

 

[pundit]

@Vikrit,

I do not want to confuse people, but here goes.

1. When i say there are no rules to entry in this context. I mean you can enter in the area of the bar pattern. there is no hard set rule for entry when you get a confirmation from the bar pattern.you can enter +/- few point after you see the bar pattern, in this case the pin bar. Our setup is complete at this point. After seeing all the confluence and the final bar pattern confirmation we are ready to take the trade. Do not confuse this with rules of confluence. Here we are talking ONLY about the entry after setup is confirmed.

2. Why i didn't enter M&M?. because it was not the best setup. I m repeating this again - we only want to take the best setups , not every setup. There is a difference. A lot of times , people will force the confluence or just think there is a pin bar , so let's enter. This kind of impatience will get you killed. Read the post on why M&M was not the best setup. Not every bar pattern is a confirmation. The location of the bar pattern is very very important. The bar patterns works best at the area of confluence.We do not want 'ok-type' entries. They are bad long term.

This is the hard part for people. Most traders do not have the patience to wait for the right setup and are always looking to enter based on almost any reason.

Remember we trade on probabilities , nothing is sure. Hence we have to make sure our entry has the highest probability.How do we make sure of that? by using confluence. How many methods/strategies do you know that ensure at least this part?. the more confluence, the higher the probability. Now assign a score to each item of confluence. say 40% for fib , 30% for trend line , 20% for a S/R level. 5% for round no and 5% for shape of the bar pattern.

Now, how much do you think the probability for the M&M setup be? I hope you get the point. When i say best setups i mean high probability setups.

I can understand it is difficult to communicate over this medium. People understand and see the same things differently. I do not want this to happen.I hope the above points are clear. If not let me know.

Here I remember someone's words : In market winners wait for opportunities and losers try to create opportunities.

 

[TraderDude]

@traderdude.

i need your help on trading divergences. I am new to Trading, so looking for some mentorship.

While scanning trough the stocks, i came across Adani ENT(Daily), which is showing divergence on RSI, MCAD. Please let me know your advice regarding this.

Thanks,
Phani.Y

 

[murthyavr]

@ TD:
MACD divergences are observed between the closing prices and the signal line.
The OP probably wanted to say that the divergence in MACD is under making.

Refer to MACD divergnces here.


@ Phani:
Bullish divergence is there on RSI. But you should remember that bullish divergences
in a downtrend market and bearish divergences in uptrend market occur very
frequently. We need further confirmation to decide on the change of trend.