EAZEE Price Action | Foreign Exchange EA Download- MT4/MT5 Resources
Simple price action.
I hope this approach will attract new traders and allow them to see how it is possible to trade using only bars with closing prices close to their endpoints (e.g. within 20% of their high/low). The reason is that if we simplify the 2 main Price Action (PA) bars - PB (pin bar) and OB (outer bar), we will get a bar close to its end close - so we can generalize and say that the end bar (hence called EB) is a bar with PB and/or OB properties. This is a simplification, but a good option for beginners. Once we have this simplification, what we do is look for bars like this - EB. Since the original PA-based approach was highly discretionary, I simplified the approach by creating some steps as follows. The key is to take the time to trend the higher timeframe (daily TF) using the EB bar or any of the commonly used PA bars, and then use the lower timeframe EB for entries and exits. Insiders (IBs) are also very powerful in identifying trends, so once you become familiar with EBs, you can start incorporating IBs. So we start with the following principle: just looking for bars near the end close can be a good indicator of the trend for the next bar.
1> Open the daily chart. Look for bars that close close to the top 20% or bottom 20% of the bar. The smaller the percentage, the less signal you receive. The accuracy does increase as the percentage is lowered, but if you set it too small then you will get very little signal, or you may not get any signal at all! What matters is the principle - a bar very close to its high/low shows a lot of interest in moving in that direction, so we take that information and use it to enter a trade after confirming the trend from a higher time frame. If you use other means of determining daily trends, then EB will still provide good entry and stop loss signals. You can reduce the percentage on EB if you want, especially if you want to lower TF
2> Now wait for 1 hour of EB.
3> Now enter only if the 1 hour high/low is broken in the same direction as the daily bar. Add buffer to h/l. I added 5-10% of the 1 hour bar range. Additionally, the bar's ATR needs to be greater than the 100-period average. This tells us that the momentum of the bar has increased. The included indicator is also responsible for ATR.
4> Stop loss is placed below/above the 1 hour bar. If the 1 hour bar does not have a good tail (more than 3% of its range), the previous bar's low is used (assuming we go long). Indicators handle this situation as well.
5> Make profits based on support levels, resistance levels, judgment, etc.
change:
1. As one gains experience, price action bars (such as outside bars, inside bars, and pin bars) can be used in steps 1, 2, and 3.
Easy to test the strategy, comes with indicator - indicator just to help identify closing price bars very close to their end.
Building an EA for this method is also quite easy.
Hopefully you'll ask me questions and I'll answer them so we can work on the finer details.
Please consider this work in progress.
Also, I'd like to take this opportunity to thank the folks at James16's thread for showing me the possibilities of trading this way.
Hope you like it.
===============================================================================
The material in this thread is for educational purposes only.
The use of this material is entirely at your own risk and you are responsible for any loss/profit you may incur from the use of this material
===============================================================================
I hope this approach will attract new traders and allow them to see how it is possible to trade using only bars with closing prices close to their endpoints (e.g. within 20% of their high/low). The reason is that if we simplify the 2 main Price Action (PA) bars - PB (pin bar) and OB (outer bar), we will get a bar close to its end close - so we can generalize and say that the end bar (hence called EB) is a bar with PB and/or OB properties. This is a simplification, but a good option for beginners. Once we have this simplification, what we do is look for bars like this - EB. Since the original PA-based approach was highly discretionary, I simplified the approach by creating some steps as follows. The key is to take the time to trend the higher timeframe (daily TF) using the EB bar or any of the commonly used PA bars, and then use the lower timeframe EB for entries and exits. Insiders (IBs) are also very powerful in identifying trends, so once you become familiar with EBs, you can start incorporating IBs. So we start with the following principle: just looking for bars near the end close can be a good indicator of the trend for the next bar.
1> Open the daily chart. Look for bars that close close to the top 20% or bottom 20% of the bar. The smaller the percentage, the less signal you receive. The accuracy does increase as the percentage is lowered, but if you set it too small then you will get very little signal, or you may not get any signal at all! What matters is the principle - a bar very close to its high/low shows a lot of interest in moving in that direction, so we take that information and use it to enter a trade after confirming the trend from a higher time frame. If you use other means of determining daily trends, then EB will still provide good entry and stop loss signals. You can reduce the percentage on EB if you want, especially if you want to lower TF
2> Now wait for 1 hour of EB.
3> Now enter only if the 1 hour high/low is broken in the same direction as the daily bar. Add buffer to h/l. I added 5-10% of the 1 hour bar range. Additionally, the bar's ATR needs to be greater than the 100-period average. This tells us that the momentum of the bar has increased. The included indicator is also responsible for ATR.
4> Stop loss is placed below/above the 1 hour bar. If the 1 hour bar does not have a good tail (more than 3% of its range), the previous bar's low is used (assuming we go long). Indicators handle this situation as well.
5> Make profits based on support levels, resistance levels, judgment, etc.
change:
1. As one gains experience, price action bars (such as outside bars, inside bars, and pin bars) can be used in steps 1, 2, and 3.
Easy to test the strategy, comes with indicator - indicator just to help identify closing price bars very close to their end.
Building an EA for this method is also quite easy.
Hopefully you'll ask me questions and I'll answer them so we can work on the finer details.
Please consider this work in progress.
Also, I'd like to take this opportunity to thank the folks at James16's thread for showing me the possibilities of trading this way.
Hope you like it.
===============================================================================
The material in this thread is for educational purposes only.
The use of this material is entirely at your own risk and you are responsible for any loss/profit you may incur from the use of this material
===============================================================================
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