2YRHealth

I just wanted to add one more chart to show the difference between a supported trade location and an unsupported trade location with regard to filtering out low probability trades. The examples in this chart can be seen with greater context on the previous chart I posted 'trade sample 2' For me trading is a game of strategy. Cam

First of all I am not trading this method live yet. I will back test and forward test the method until I am comfortable enough with it but I am fairly certain I can make it work for me and that it will replace my current live method. It is really an enhancement on what I already have. Necessary definition; Price Action is a term used often but will mean different things to different people. My use of the term encompasses a range of 1-3 bar patterns used for trade initiation. However, it is also used in reference to analyzing pivots and support/resistance structure, as in 'higher highs, higher lows' etc. So when I mention it here, you know I am referring to the former rather than the latter definition. Now back to the method. simple description: I am looking for reversal bar setups (PA) in the direction of the 5minute trend within context of the 30M trend and support/resistance. detailed description: Price Action Setups I have posted a description of the primary patterns I look for, as I said before they are basically candle patterns with different names. You need to be a little flexible with these at times (that does not mean sloppy!), but if you just wait for the ones that look perfect at the right place then you wont go wrong. You can also zoom in to a lower time frame to read the PA. Often you will get a number of PA patterns and micro SR areas on a lower TF that add up to give you the decision to pull the trigger. It is important to note though that a PA signal will increase the odds of a decent reversal, but if you rely on signals from lower time frames the amount that it reverses is relative to the time frame you are look at (I hope this is not too vague!). There is more to PA then what I have written here but....:sleep: Use of the MACD When the MACD (standard setting) fast line crosses below the zero line I am looking for shorts only. (Trend defined) As long as the fast line stays below the zero line I will look for pullbacks to get short (with caveats, see below). Use of the 3 period SMA with 2bar shift If I am looking for shorts I will hunt for my price action setups when price pops above the 3SMA. I am also very aware of near term and long term support/resistance and where the pattern occurs within that context. This sounds complicated but it is not. I will elaborate further below. Use of the 25 period SMA The 25sma aids in identifying where support/resistance might be found. If there is a PA reversal pattern at the 25sma this will usually coincide with a near term S/R area. The 25sma also aids in identifying momentum. If I am looking for a short, I want to see a bounce at or just under the 25sma, if price has punched through the sma then there is significant momentum from the bulls and I will be wary of taking the short (this is the caveat I mentioned earlier). If price is just above the 25sma it has probably just broken resistance and is now testing for support. I still may take the trade if the PA/SR looks good but the trigger must be below the support line. Use of Support and Resistance A simple use of S/R is to make sure the trade sets up being supported by SR and not against SR. I have attached a diagram to explain this. Final words Discretion, pattern recognition, common sense, good trade management, good nerves and MM are all necessary to make most systems work. Every potential trade is a new set of circumstances. I hope someone got something out of this. Cam

Thank you BF for bringing the thread to my attention I have looked into the SPM method and see how it could help my trading. I must say though it was quite an interesting journey reading some of the associated threads. Much better than any mid day television drama. I have been around for a while and have settled into a method that is based on support/resistance and price action setups (akin to candle patterns, actually almost the same with different names). My dilemma has been taking too many counter trend trades which has stunted my profit objectives ( 1:1 RR), my accuracy is quite good 70%+(when I follow my system properly ) but I feel its too much work to settle for such a poor RR ratio. Exits and psychology are the things that are holding me back at the moment, mind you I am comfortable with my method in terms of having an edge. So I am happy to be where I am in terms of my trading career. What I have found beneficial to me with the SPM is that it gives me a much needed directional bias and gives a well defined window of opportunity to look for my price action setups. I'll show you what I mean with a sample chart. Green vertical lines are my SPM entries based on looking for my price action patterns after the ZLC. Pink arrows are successful or failed trades based on the SPM Blue arrows are successful or failed trades based on my current method. Being well versed in candle stick formations I'm sure you will recognize my entry patterns . If anyone is interested i am happy to discuss the method further. Cam PS. I trade Forex EURUSD 5Min with 30Min Support/Resistance. Broker - Alpari UK.