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profits-price-action-signOne thing I have realized over years of helping people learn how to trade, is that most traders tend to try and tackle too many variables at one time, especially traders in the beginning stages of learning how to trade. They often want to trade 10 or 20 different setups with numerous indicators on their charts whilst looking at every time frame available on their trading platform in 30 different markets. This is in a word, ineffective. Traders often come into the markets with good intentions but their focus is too broad, this causes over-analysis, confusion and usually frustration.

The concept I am going to introduce in today’s lesson that will help you become a profitable price action trader is “specializing”. Your new goal is to think of yourself as a “specialist” trader, and to actually become one. If you look around at most professions, it’s the most specialized people that make the most money. For example, a family doctor makes a good income, but a neurosurgeon most certainly commands more money because he or she is a specialized doctor who has “mastered” the skill of performing complicated brain surgeries, amongst other things.

There’s an old saying that you may have heard: “Jack of all trades, master of none” and according to Wikipedia it is “…used in reference to a person that is competent with many skills but is not necessarily outstanding in any particular one.” As specialist price action traders, we want to take the opposite approach, our aim is to become “outstanding” at one particular price action setup at a time; this is perhaps the most powerful thing you can do to start profiting as a price action trader. What I am going to share with you guys today is something that’s as close to a “secret” to trading success as you will find, and I hope after reading today’s lesson you guys have a sense of confidence and direction about how best to proceed in becoming a master price action trader

The “secret” to profiting as a price action trader

As price action traders, we have a distinct advantage over traders who might use indicators or trading software, that advantage lies in the simplicity of price action trading strategies. The fact that we can simply focus on a market’s raw price action and its support and resistance is something that easily allows us to specialize in mastering one setup at a time. This is in direct contrast to many other trading strategies or systems out there that might require a trader to trade with numerous different indicators while trying to trade the news at the same time…it’s pretty hard to become a “specialist” of such a messy and haphazard trading style.

Basically, what I want to really drive-home today is the point that focusing on one price action setup on one time frame and in one market, will allow you to become a master of that “strategy”. For example, if we choose to trade the pin bar strategy from key levels on the 4 hour chart and in the EURUSD market…that would be considered “one strategy”…the goal is to really MASTER that strategy…trade only that strategy until you feel like you are ‘Jedi master’ of it…(yes I made a cheesy Star Wars reference there).

However, I want you to go even further, I want you to master one setup at a time, on one time frame, and in one market and with one very specific set of entry parameters. For example, you might decide you want to look only for inside bars on the daily chart time frame of the GBPUSD that occur in the context of a trend….that would be one strategy and you would stick with it until you are successful with it, which could take 1 month, 3 months or even more…the point of this exercise is that if you really stick with this method of trading, after a year goes by you will be one potent “badass” of a price action trader. Those feelings of looking at a chart and being afraid to pull the trigger will be completely gone, and with mastery of such a sniper-like trading approach, your success in the markets will only be a matter of time.

An example of “specialist” price action trading:

Now let’s go over an example of what would be considered one specific price action trading strategy that you could focus on until you’ve mastered it. Keep in mind, this is just an example and you can come up with your own strategy if you want, this is to get you thinking and to get you on the track to becoming a “specialist” price action trader…

Find your market first: The first thing to do is pick the market you want to trade. I suggest sticking with one of the major currency pairs or one of the more popular crosses as they are the most liquid, have the tightest spreads and will generally behave more “predictably” than the more exotic pairs. We are picking the EURJPY for today’s lesson.

Next, zoom out on your chart to get an overall view of longer-term trend and draw the levels on the daily chart, you can also do this on the weekly chart too if you want. Below we see a zoomed out daily EURJPY chart and we can clearly see that an uptrend was in place as marked by the higher highs and higher lows which we can see by the red circles. So, the first two parts of our “specialist” trading strategy are in place: we are looking at the daily chart EURJPY and we are looking for an obvious directional bias to be in place, in this case the bias is up:

eurjpy

After determining trend and overall market condition, we draw in the key “obvious” levels:

eurjpy2

You will then pick the particular price action setup you want to trade. You can learn all my setups in my trading course, but for today’s lesson we are going to focus on just one, the fakey setup. This is also what you will do when you try this approach for yourself; stick with ONE setup at a time…you have to ignore the temptations to add setups right now, you can add setups to your toolbox later on as you master one at a time. Now, after about 4 days went by, a very obvious fakey / pin bar combo setup formed showing rejection of the 8 day EMA support level and implying that price might continue pushing higher in-line with the uptrend. We now have the next two parts of our “specialist” trading strategy: we are looking for a fakey setup which creates a false-break of either a dynamic EMA support or resistance level or a horizontal support or resistance level within a trending market:

eurjpy3

The specific factors of confluence supporting our price action setup are actually part of the setup itself and are necessary for us to consider the setup as being valid. Many traders make the mistake of trading any old fakey or pin bar, etc, when in reality the location and placement of the price bar within the broader market structure is just as important as the price bar itself.

Now, the next part of our specialist trading strategy is how we will enter and exit it. Let’s say we choose to stick to an entry above or below the inside bar high or low after the false-break of the mother bar has occurred. Let’s also say for this strategy we will place our stop at or near the high or low of the false-break bar. So, we will enter on a buy-stop entry 1 pip above the inside bar high and our stop loss is a sell-stop placed 1 pip below the false-break low, now let’s see what that looks like:

eurjpy4

Next, you will decide your risk reward and money management scenarios. We aren’t going to get into money management very much in this article but I have discussed it extensively in other articles, specifically my risk reward ‘Holy Grail’ article and risk reward and money management article, so be sure to check those out.

For this particular “specialist” strategy we are simply aiming for a risk reward of 1:2 on every trade with little to no interference. Let’s take a look at our trade now and see what that 1:2 risk reward looks like:

eurjpy5

Note: When first implementing this “specialist” trading approach it might be best to just aim for a strict 1:1 risk reward ratio just to build a little confidence and build your trading account up a little. Then, after you’ve gained some confidence trading your strategy and beefed up your account a bit, you can start to aim for 1:1.5 and then 1:2. Doing this will give you ample time to gain screen time and over time you will get better at managing your exits, eventually you can try trailing stop methods in trending markets and looking for larger risk rewards like 1:3, 1:4 etc.

Now it’s time to tie this all together and make a visual “check list” out of the above elements that you will use to check for your trading strategy each day and to help keep you on track. It’s one thing to have your trading strategy in your head, but it’s best to have it tangible and visible so that you are reminded of what you are trying to do…

Here is an example of the above “specialist” trading strategy summed up very concisely in a visual check list:

guide

In closing:

You have to have the patience and discipline to make this work. I can almost promise you this “specialist” approach will improve your trading results, but you have to give it time and you have to learn to be OK with not trading. If you’re only trading one market at a time and one time frame / one setup…you aren’t going to have a lot of setups each week. But that’s part of the point of this, it’s to show you that if you just really learn when to trade and when not to trade, you can be a profitable trader. Remember, as you master one particular strategy you can then move on to another, then after a while you might have 3 or 4 different but very specific trading strategies that you can quickly look for on the charts each day. In my opinion, this is the fastest route to profitable price action trading.

If you want to learn more about the price action setups and strategies discussed in this lesson, plus more “specialist” trading techniques, checkout my price action trading course here.

nialfuller

About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 15,000+ students since 2008.
Checkout Nial’s Professional Forex Course here.

Now I want to hear from you! - Click Here to Leave a Comment

90 Comments

  1. Vic says:

    Hey Nial,

    Your articles are as a sip of water in the desert. It’s very helpfull and just in time always. I’m reading, reading and can’t stop. It looks like i’ve found something what i’m looking for a long, long time.. I see everything in charts what i can’t find before. I’m not blind now- I see clearly. And even my bad english can’t stop me. Thank you very, very much, Master!

  2. asif says:

    dear Mr nail fuller your work is amazing and thanks for give this information

  3. harpreet singh says:

    Thank you Nail

  4. arin collins says:

    great work Nial.
    Arin Collins

  5. Dave P U.K. says:

    Great advice Nial, i am an enrolled student now!

  6. Andre says:

    Thank you so much for all the training info on your website!. I am now following your advise on using a CLEAN unclutered chart, and it work great!!!Will advise later how it it is going. Andre from South Africa.

  7. Leon says:

    thank you so much Nial.

  8. Zulkifly says:

    thanks for sharing your very helpfull knowledge nial.

  9. silver obelley says:

    i am new and about to start the trading practice, and know that these will be of help to me. thank you

  10. Pinz says:

    Simply to the point, it’s a fantastic artical, one of your best! Thanks for sharing Nial.

  11. Jagadish says:

    Great Thanks Nial !!!

    You gave us the clear vision on FX trading, With your help, surely now we can trade with confidence and with strong strategy.
    I sincerely want to thank you for article : “The Forex Trader Vs The Forex Gambler” : http://www.learntotradethemarket.com/forex-articles/forex-trader-vs-forex-gambler

    Regards,
    Jagadish

  12. Raphael Festus U says:

    NIAL, many thanks. Your tutorial has made Forex more real to me than ever.
    I will prove it to my skeptic friends that FX is not a gamble but a profession worth engaging in.

    Regards.
    Festus, From Nigeria

  13. Marcelo Gil says:

    Nial,

    This was the best article I’ve ever read until now.

    Thanks for your help.

  14. martinmary says:

    To all my Nigerian brothers and sisters who believe the forex is not real,You Are wrong.Subscribe to the KING of FOREX.
    His name is His Royal Majesty NIAL.

  15. Gbenga Adisa says:

    You’re doing a great job here,your article has changed my trading live, I now make consistence profit. Only God can rewards you. May the Good God blessed you richly.

  16. Fatim says:

    This is the best strategy ever, Focus and Mastery! Luv it!

  17. Sher says:

    Thank you Nial.

  18. JJozsef says:

    thanks again for the setups. you are great!

  19. Eve says:

    Mr. Nial Fuller you are top of the top!!!

  20. Olatunde says:

    you are GREAT!

  21. Oral Gordon says:

    This is real good Nial.

  22. preciouschizy says:

    Great article Nial, keep it up!

  23. lloyd Mabheka says:

    thanks again for the setups.great message!!

  24. slivester says:

    thanks a lot nial……merry xmas n god bless u.

  25. Dorota says:

    Hi Nial. I really appreciate your articles. I like your straightforward approach to the FX market and trading it. I learn a lot. Thank you. Dorota

  26. jeffrey says:

    Hi, Nial, great true teaching from a great teacher, Easy to understand and follow. Thanks.

  27. Nyaenya Daniel says:

    Good as always!

  28. nickzam says:

    superb,briliant article

  29. allan clarke says:

    Hi Nial,an excellent reinforcement of your teachings and for those of us a little slower to learn, for whatever reason, a superb confidence booster. Thanks for your persistent renewal of presentation and reinforcement of principles.
    Wishing you and yours and all the other members of the LTTTM family a safe and happy festive season.
    Allan

  30. Wajdi says:

    great nial u hit a mark there. I want to know something; is it ok to enter a trade in one market on two time frames if both frames show price action signals at confluent levels?

  31. Swede says:

    Another great article! Anil summed it up well.

  32. sonny says:

    Thanks Lord Fuller.

    Very Informative article. A festive Xmas and a happy new year in advance to u and yours.

  33. Richy says:

    Hope you see this amongst all your fan email…lol. Just wanna wish you and your family all the best over the holidays and the same for 2013…fondly and gratefully..r

  34. Habanahaba says:

    Great article. Like wine, they seem to be getting better with time. May you, your family and all your members and fans have a great Christmas and a Happy New Year.

  35. val says:

    i’ve seen this lessons work on my demo account really working on my membership and hope to fund soon thanx so much and i appreciate

  36. val says:

    i appreciate sir even though i’ve not started live trade but i can see what it’s like on the demo trade may god bless u and i’m still working on my membership thanx once again

  37. victor says:

    Hi Nail,
    Many thanks to you once again for this ever
    expository insight of forex trading.May God
    Bless You.

  38. Ioannis says:

    Nice article!

  39. Veronica says:

    Hi Nial, thanks for another very superb article. Have been a subscriber for some time and all of your articles have been really great but this time you have outdone yourself. Keep them coming.

    Gratefully yours
    V.

  40. Rahim Aziz says:

    Hi Nial,

    I wish you and your family a very happy Chirstmas and a new year aswell.

    In above mentioned faky setup for down trend just appeared in GBP/USD like 12 hours ago in 4 hour chart and exactly happened what you have explained. Your experience really speaks I really loved when I got back and watch the setup and your article. Thanks much Nial!!

    Have a blessed day!!!

    BR
    Rahim Aziz

  41. RNManiam says:

    Dear Mr. Nial Fuller,
    Thanks for your action price “specialist” approach.
    Now i’m more clear and confident in my trading.

    Thanks for support and service.

  42. Many says:

    Hi Nial: You are a true mind reader !! Too many markets, timeframes, too many stretegies…makes me really confused , and recently watching equity graphs where I see PIN bars on 5 min TF on stocks almost every day where stock turns!! and I see this artical in time!! Tuely appreciated. Thank you.

  43. Jotex says:

    Just in Time Article Nial.just as if you read mind.i’m actually over complicating my strategy.love this Article,thanks

  44. woodya69 says:

    Hi Nials, thanks for this years endeavours, wishing you and your family the very best for Xmas and the New Year 2013.
    Good trading 2013.
    Cheers W

  45. steve says:

    this may turn out to be a very big help after a long profitless try.

  46. Steve West says:

    Hi Nial, this article makes excellent reading and sounds so simple. I think I will try this process and use one set up.Are there more fakey set ups as opposed to inside bars or pin bar setups… Again thanks for your guidance oh master…you are a true jedi and leader to the cause..!!! Merry Christmas mate

  47. John Brown says:

    After several months of “TRYING” this article has put me right back to where & how I should have started – Thanks Nial and have a great holiday period

  48. Rein says:

    Approach is sensible! However, you still need to keep in mind that your edge is very small and you deal with probability, perhaps not better than 55% – 65%. If it were the Holy Grail (as Rosemary suggested), then the boys at Goldman Sachs would have already used it over and over again! In trading there is no silver bullet.

  49. Linda says:

    Nial, This is indeed a good Christmas gift. Thanks a lot and remain blessed. Merry Xmas.

  50. emmanuel says:

    like l said in the past, Nial is actually the” holy grail” in FX in human form..so generous with your thoughs and write ups..it just blows my mind..still digesting the Croc analogy now this..simple n pure…av a wonderful christmas n a fabulous new year!!cheers!

  51. Phil Leiba says:

    Nial, you are a Great mentor!

  52. Purpleskye says:

    Great article. A reminder that a basic strategy with no frills can take you a long way.

  53. Rosrmary says:

    Awesome, awesome, awesome.

    You make trading sound so easy, and it is, so long as I follow your every word.

    PS: I think I have found the “Holy Grail”. You!!!

  54. pham says:

    Great article, Nial. It reminds me again to focus on simplicity and basic principle of trading forex. Thank you again and please keep posting tutorals.

  55. Erika V. says:

    As always, you show your trading wisdom, and thank you for sharing it with your readers/students. I appreciate everything you write. Good wishes for the Christmas season to you and your family.

  56. samuel says:

    Inow see that i can also become a specialist in my trading career too.Nail , you are too much o!

  57. Tuian Nguyen says:

    Merry Christmas for You and Family

  58. Tuian Nguyen says:

    Ok ! Thanks Nail Fuller a lot !

  59. Tay Tiang Ho says:

    Hi Nial,

    I have gain a lot of trading knowledge from your articles. Very good, please keep writing. Thanks!

    Tay

  60. liton says:

    Thanks sir

    wonderful resource

  61. John says:

    Hi Nial
    Thanks for the lesson as a beginner I will surely take the lessons within the lesson up and try it out.

  62. Rajib says:

    good NIAL….

  63. Victor Damane says:

    Thanks a million times Nial! This is sure a great Xmas present for me particularly because I am still a novice in forex trading but i am learning very fast. With your support and that of other members I am convinced that one day I will become a professional trader like u. Once again thank u very much! A happy Xmas and a prosperous new year!

  64. Tomson says:

    Excellent article again, thanks for sharing your knowledge with us.

    It is very easy to follow your thinking and philosophy about trading and life, and I’m very glad that I am following you here, it make’s me a better trader and person in all ways.

    Thanks
    Tomson

  65. Richard Agustin says:

    Nial,
    Thanks for teaching us once again for free. The Law on exceeding returns will take care of you.God Bless us and
    advance Merry Christmas.

  66. Charles says:

    Awesome stuff Niall. Thank you for all you write and make available.I am a member and due to lots of external issues I haven’t been active in taking the forex training course, but in the past week am able to get to the point of giving more time to trading and learning the art of successful.Thanks again and wishing you and your family an awesome Christmas and New Year.

  67. John says:

    Brilliant article. Totally agree with the sentiments of Anil and Richard.

  68. Tim Rogerson says:

    WOW Nial, what a great Xmas pressy from you. Thank you so much for ‘spelling’ this setup out for me. Up until this article, I had missed the point on the inside bar about taking the high or low after the false-break of the mother bar has occurred. It just goes to show me, read, read and read again. Great advice on patience and targeting one setup at a time.

  69. Muhammad Zain says:

    I have read it. I will surely try this

  70. sachith says:

    Thank you Nial Great article.

  71. Rayh says:

    Just brilliant!!

  72. Nabs says:

    Nice one ! But the most complicate is not to learn this GREAT strategy is to learn the discipline and get the patience to apply it

  73. Mi$$ion says:

    Once again – and just like always, your article makes for fascinating and enlightening reading. A sincere thank you for trading info that has literally changed my life. Bless.

  74. florina says:

    Dear Nial,

    If one wishes to choose and master only one price action set up, which one you advise …………..

    INSIDE BAR OR PIN BAR

    Thanks

  75. Peter says:

    Very good article puts it all into perspective i’m glad that i’m learning via your membership and would look forward to any potential trading courses that you may be considering in the UK.

    Merry Christmas to all.

  76. Colin says:

    Thanks Nial I was putting my S/R lines not quite in the right area doing the cicles first makes it so much easier. Plus sticking to one set up like P/Bs which I trade the most. This was a great lesson. 2013 here we come Thanks Nial

  77. david awoyera says:

    thanks for all your effort.we shall be great in this business call FOREX.merry xmas!!

  78. Alan says:

    Thank you Nial, one of your best yet.

  79. CHYNADO says:

    my man, you are the main man. great article.

  80. KC says:

    Nial,
    Am glad to tell you that i have been following your article over the past six months because you have change my orientation about forex market. i now trade like a pro but never let it get into my head like you advised.
    Pls keep the gospel up because i have been recommending your site to people who rely want to learn trading from the best source.
    Mary Xmas.

  81. grant says:

    Very good article again thanks.

    Have a good Christmas nial.

  82. Erwin says:

    Really great
    thank you Erwin

  83. Dan says:

    Great article again Nial. I continue to improve my trading mind set thanks to you!

  84. Ramli M.S says:

    Thanks Guru

    Brilliant texts

    Cheers

  85. William says:

    Masterful teaching Niall, many thanks

    William

  86. Greg says:

    Nial,

    This is one of the best articles i’ve read from you. It totally resonates with me now that i am maturing as a trader, i.e. trading less, and only AAA set-ups.

    Great stuff mate. Merry christmas to you and your’s and to all our traders on the forum and beyond.

    Greg.

  87. Richard says:

    Hi Nial,

    This article you wrote about trading using price action trading without indicators except EMA’s (optional),concentrating on one time frame and one currency is about the best text I have read during the last ten years or so.

    Regards

    Richard Shaw (UK)

  88. Thomas Sebastian says:

    Thank you Neal, I will follow your advise.

  89. Dave says:

    Nial, I really do think we are extremely fortunate to be part of your membership. This is superb advice, very pertinent and on the button. Thanks for all your help and best wishes over the Christian festive season to you and all your family.

  90. Anil says:

    Nial,
    It seems you are at a turning point in your life, with a return-to-basics, uncluttered and simplified approach to life (from your recent articles), and today’s article carries a strong flavour of the same.
    Two years ago, I had to cease work from health reasons, lost everything material I had, and have come back from the abyss. You are the only – THE ONLY – trading guru (and I have spent countless hours the last two years trying to learn and find information on trading) who is TRUE. Congrats on that.
    On the trading front, I’ve started trading only pin bars and the peace of mind, the clarity of thought, the ease of execution is astounding. I owe you that. Thanks mate.
    Anil

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