I just wanted to point out some nice trades that have formed recently on the EURUSD and GBPUSD. Below are some charts with classic examples of some of my price action trading strategies that I use on the 4 hour and daily charts.
You will notice the clean simple chart, with no indicators (pure price action). The charts show my “fakey setup” and “pin bar reversal setup”. The current market conditions (at the time of writing, November 2010) have been “perfect”. If you can’t make money in the current market then you won’t ever make money, this current trend is a “gift”, so trade it well.
You will also notice that the trade setups resulted in several explosive moves, allowing good profit potential and risk reward ratio. These setups are very simple and logical and have a positive expectancy, occurring often enough to actively trade the daily and 4 hour charts. I have had good success this past month with the fakey and the pin bar, and so I just wanted to share with you some of the trades I made recently…
Examples of trades made using the pin bar setup and the fakey setup
The chart below shows a daily chart time frame bearish pin bar reversal setup that kicked off a huge trend change. Note how the trend was up prior to the pin bar and then price immediately fell lower after the pin bar formed, and a significant downtrend followed. It doesn’t always happen this way, but pin bars do sometimes mark huge turning points in the market, and this is yet another reason why understanding how to trade them is so important…
The chart below shows a large pin bar sell signal on the 4 hour EURUSD chart which led to a nice move lower and then a fakey setup with a large pin bar as the false break bar. Fakey setups with a pin bar for the false break bar are among my favorite price action setups to trade.
You might also be interested in this trading lesson: