Price Action Trading - FREE PAST Update 6-Dec-15 538x218

Price Action Trading – FREE PAST Update 6-Dec-15

Price Action Trading

FREE Price Action Trading (PAST) Strategy Update 6-Dec-15

Hello PAST Traders!

Welcome to this week’s Price Action Trading Report!

I hope the market has treated you all well this week.

So, hands up – who was long Euro? 🙂

Not me, anyway!

As many of you will know, I have an open EUR/JPY short position. (You can see me fretting about it shortly I opened it here.) It’s been creeping slowly downwards over the last couple of months.

Needless to say, my floating profit of +800 pips took a big dent on Thursday. EURJPY rallied +400 pips in a day! It was NOT pleasant viewing!

But look where the rally stopped:

Price Action Trading - FREE PAST Update 6-Dec-15 1 - EURJPY

Yes, right underneath the long term trendline going back to 2012! (Read Chapter 7 of the PAST Strategy eBook for more info about trendline retests)

Now, I’m not going to jump in short yet. It was a violent rally. I would want to see some sign of weakness in the price action before I enter short.

I always say: price is communicating with us all the time about what it is doing – with price action! The only problem is…

we don’t listen!

So we have to wait to see if there are any signs of weakness before we can think about taking short trades here.

On the other hand, if price manages to establish itself above that trendline, that means the market is telling us something else. It’s telling us that the bullish move is likely to continue. So, if that happens, we weigh up that information and make our decisions to suit. We definitely close any losing trades we have open, that’s the most important thing. And we can also consider whether to take profit on any winning positions we may have open.

Does that make sense?

I hope so!

New Trade Opportunities

Now, what if you are in the market for some new trades?

Some reversals that have just occurred?

Well, you’re in luck this week!

The monthly candle for November has thrown up a couple of reversal candles that have caught my eye.

Let’s take a look at the PAST MT4 Scanner:

Price Action Trading - FREE PAST Update 6-Dec-15 - 2 -Scanner

By the way, I’m really proud and excited to announce that the Scanner is now finished, FINALLY! We ran into a few problems during its development but now we’ve finished it at last. We aim to start sending out copies of it next week, so keep an eye on your email for details. (PAST Video Course Members get their copy for free)

So back to the analysis. The two signals that catch my eye on the Scanner are GBPAUD and GBPNZD.

As you can see, the Scanner has picked out a monthly SR candle for GBPAUD, and an LW candle for GBPNZD. This means the price action is telling us that we might be in for lower prices ahead.

Next, let’s take a closer look at the charts:

GBPAUD Monthly Chart

Price Action Trading - FREE PAST Update 6-Dec-15 - 3 - GBPAUD

If you need to refresh your memory on how we trade these setups, check out the PAST eBook here. Basically, once we have spotted a reversal candle, we zoom down to lower timeframes to see if any trendlines are developing. If the trendlines break, we take the trades.

Here is what I see on the GBPAUD Daily Chart:

Price Action Trading - FREE PAST Update 6-Dec-15 - 4 - GBPAUD

Homework

Do you want some homework to do this weekend?

Take a look at GBPNZD by yourself and see if you can do a similar analysis to this one. Granted, the reversal on GBPNZD has happened a bit quicker than GBPAUD.  But there still will be opportunities on GBPNZD over the coming weeks and months too.

Remember, these are Monthly reversal candles. These are long term charts and they take some time to play out. Plenty of trendlines will form, and offer trading opportunities, in the run up to Christmas and beyond.

What is the question everybody’s lips now?

Will this trade work?

Will this reversal candle fail?

Will there be a new swing to the downside?

The answer?

Nobody knows. You’ll find plenty of people online who claim that they know, or pretend that they know, but the truth is that no-one knows.

PAST Strategy traders don’t bother trying to be amateur fortune-tellers. We don’t waste time trying to do the impossible, i.e. predicting the future.

No, we do what proper traders do, everyday in the markets.

If we are right about GBPAUD and GBPNZD, and they move to the downside, we get aggressive, and try to make as much money as possible. If price is moving to the downside, we keep winning trades open. If trendlines are breaking, we add more positions.

We strike while the iron is hot.

If we are wrong, and price just continues to move to the upside, we get defensive. We are quick to close out losing trades. We lose as few pips as we can. We don’t add more trades to positions that are showing a loss.

If we can always do this – keep risk under control and make the best out of opportunities when they arise, we’ll do well.  Over the long term, we’ll come out on top.

That’s it for this week!

Keep an eye out in your email this week – we’ll be sending you some details about the Scanner. And PAST Video Course Members, please have your MT4 account number ready!

Good luck for the coming week,

 

Nigel

PS – If you are struggling with your trading, take 15 minutes and watch my last video here on Youtube. If you haven’t seen it already, it shows you how fine the line is between consistent profit and consistent loss in forex trading. The maths says that you are probably a lot closer to profitability than you realise. If you haven’t seen it already, it’s worth a look 🙂

Nigel’s PAST Video Course Which Includes
The MT4 PAST I
ndicator and
MT4 PAST Scanner
Is Available
HERE

Have a great trading week!

Nigel

DISCLAIMER & COPYRIGHT

This price action trading report is based on my analysis on my charting package. It may differ to yours as it can be affected by time, market movements, charting packages and broker prices. I accept no liability for loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on any information in this report or analysis.