advantage just like any other price action signal. Good trading, Nial Fuller, i would love TO hear your thoughts, please leavomment below. Mekonnen Demesew St, Merkato,Sebategna, to the right side of Sebategna Total Fuel Station, Dire Bldg. Read on to learn about this little-known trick. Text "Join" to (save this number in your phone's contact list). To clarify what I mean by predominant, lets compare it to the ascending channel that formed on nzdjpy. Just like the pin bars we use when trading price action, a breakout that immediately fails is a sign of strength or weakness. Lets take a look at an example.
Technically speaking, the pattern above was a bearish flag as it was the result of an impulsive move lower. Having said that, the technique Im about to show you is only accurate when used on the higher time frames such as the 4-hour and daily charts. At this point you would have 2R or 216 locked in, at this point you could either let the trade run past 3R or move your stop up to lock in 3R or 324. Remember that like any trading strategy, technique or concept, the ideas discussed in this post are based on probabilities, not guarantees. The best way to do that is through a firm understanding of price action. Messalemia Messalemia, Near to Shewa Tsega Bldg. Ideally, we want to look for trade setups with a risk / reward of at least 1 to 2, by getting a risk / reward of 1 to 2 on every trade setup, we can lose on well over 50 of our trades and still. Gurd Sholla Around Ethiopian Telecommunication, Gurd Sholla, Meher Bldg. This example also figured 1 per pip, or per smallest incremental price movement on silver, this results in 113 risked. Better yet, how could you have mitigated the risk or perhaps even benefited from the false break itself? Examples of how to draw risk / reward levels: First, we identify a high-quality price action trading setup, in the chart below we are looking at the 1hr chart of the eurusd from this week. The retest in the chart above occurred after just one other test of resistance.