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Showing results for tags 'johnathon fox'.
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This article is all about one of the most powerful and reliable Forex price action set ups available. It is the bearish or bullish Engulfing Bar. Some traders call it the bearish or bullish outside bar. When played from the right areas and with the knowledge of how to be used correctly the Engulfing Bar is an extremely useful price action tool to have in the traders armoury. The acronyms for bearish and bullish engulfing bar are BEEB and BUEB. Engulfing Bar structure: The Engulfing Bar as it states in its title is formed when it fully consumes the previous candle. The Engulfing Bar can engulf more than 1 previous candle but to be considered an Engulfing Bar at least the previous candle must be fully consumed. An example of a valid Bearish Engulfing Bar An example of an Bullish Engulfing Bar When looking for Engulfing Bars we are looking for the large and very obvious bars that stick out. The bigger the Engulfing Bar the better. Engulfing Bars are momentum bars, and we want to trade with momentum on our side! The bigger the bar, the bigger the momentum! Not all Engulfing bars are tradeable signals and this is where the knowledge of where to look for them to form is absolutely key! The 2 basic criteria that need to be followed for an Engulfing Bar, to be a tradeable Engulfing Bar are: 1: Must be large and obvious, 2: Must form at a swing point. Those are just the 2 very basic things you need to look for when assessing an Engulfing Bar. When I say the Engulfing Bar must form at a swing point, I mean if in an uptrend it must form at a swing low or if in a down trend it must form at a swing high. Example of large and obvious Engulfing Bars When combined on high timeframes such as weekly and daily charts, and used with correct money management the Engulfing Bar is a very reliable and profitable Forex signal that every trader should have in their arsenal. I hope you enjoy this article and can put this Price Action to work. -
Price Action trading is not rocket science, it’s just a logical way to trade. Everyone that has been reading these articles and watching these videos for a while now will know this whole site is dedicated to helping traders learn to trade Price Action in the Forex markets. Price Action is one of the best tools a trader can have in their trading tool box. Price Action is just looking at what price is doing and what it is telling us. We don’t need to carry a devise when we look a person’s face to see if a person is happy, sad or confused etc. We also don’t need indicators all over our charts to tell us that price is going up, down or sideways. We don’t need indicators or black box systems to show us that price is rejecting a support/resistance line as we can tell by how price behaving if it is respecting a level or not. This article is going to go over some recent setups and exactly how traders could have used the information that was there for all to see in the raw PRICE only. The Aud/Jpy 4 hour chart below shows that price is in a nice down trend. Once again we don’t need moving averages and trend lines to see this. We can tell that from left to right price is falling away. A simple horizontal line at a previous swing high shows us that price pulled back twice to this area and gave us two solid Bearish Engulfing Bars that were both very simple and logical trades. These trades form all the time in the Forex market. Both trades could have given about 2:1 risk reward depending on how you played them. AUDJPY 4HR CHART The next Price Action trade was on the Aud/Chf daily time frame with again another Bearish Engulfing Bar. This pair was in a sustained and very obvious downward spiral. A quick look at the chart tells us that the smart play would be trading in line with the recent down move. A pullback in this down move to a previous support area and the old price action principle of “old support becomes new resistance” comes into play. Again some nice pips to be made on a very logical setup. Price did move against the trader momentarily and this just goes to show that in Forex trading discipline is the key along with the patience to just let the market do its thing. Price eventually moved down allowing the trader to take some profits off the table and move their position to break even. AUDCHF DAILY CHART The last chart I want to highlight is the GBPCAD which has been a gold mine over the previous few months with price respecting levels continually. The daily chart below shows us the psychological round Number 1.6000. Price could not close above this number and gave us a clear story of rejection. The Bearish Engulfing Bar and Bearish Pin Bar on this chart were big clues to Price Action traders that a reversal was about to take place. This chart had no clear trend direction and when trading markets like these trading away from important levels become even more important. Both trades highlighted on this chart gave the trader more than enough chance to take profit and move their positions to free trades. GBPCAD DAILY CHART Price Action trading is the smart and logical way to trade. Just a few simple principles with some patience and discipline and you too will be on the way to being a consistently profitable trader. All these methods and principles have been around for a long time in all forms of trading. Along with sound trading and Money Management plans which are taught at Forex School Online, you can turn your trading around and get on the road to success. Safe trading, Johnathon Fox Price Action Trading
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The wonderful thing about Forex trading over trading so many other markets is that traders can make good money and only trade at the end of the day or the end of the New York session. This allows traders to keep their job and trade successfully at the same time. Many people have jobs they love or to be honest, cannot just leave at the drop of the hat. That doesn’t mean these people can’t trade and make good money also. In fact I advise traders when learning to trade to only trade the daily charts, and to only trade the end of session in New York. I am personally a massive fan of trading the close of New York setups. The reason so many traders like trading the daily charts are; - Daily candles do not have the noise that the intraday charts have. By trading the daily time frame we can more accurately predict the flow and trend of the market. Markets tend to be very choppy on the intraday time frames. By trading the daily charts we don’t have to deal with this volatility or market noise. - Lifestyle. Many traders come to Forex to enhance their lives, not to have Forex running it. This is a huge factor for traders trading the daily charts. Trading the daily charts takes anywhere from 5-20 minutes depending on whether there is a set up to trade or not. If there is a trade, the trader can place the trade and then come back and manage at the next close of the candle in 24 hours time. - People can keep their jobs and still trade. Obviously if traders are trading the daily timeframes they can place trades and then hop of to work or come in from work and check the market depending on which country and time zone they live. - Simplicity. Trading the markets on the daily charts offers a much simpler way to trade than sitting and watching computer screens all day long! Learn to Trade the Daily Charts I advise all new traders to Price Action to first start learning to trade on the Daily time frame. Once they have perfected their trading method on the daily time frame they can then begin to explore possible trading opportunities on the intraday charts. I recommend progressing in this manner because the daily charts are lot easier and less complicated to navigate. The intraday time frames tend to be more choppy and volatile. Traders have to learn to deal with noise and fast market movement when they move down the time frames. Many traders find that after trading the daily time frame and becoming consistently profitable they have no need to trade any of the lower time frames. They realise they can have the best of both worlds of having a busy and happy life and still being able to trade successfully. Perfect Your Method When learning to trade Forex there is no need to rush. The majority of traders do not make money in their trading careers and you don’t want to be one of these! When learning to trade the daily charts take your time and perfect your method. Before going live you want to be completely confident in your trading method. You can build this confidence by trading on a demo account. There is no set time frame a trader should be profitable on a demo account before going live, however I would definitely recommend being profitable for at least three months before putting any skin in the game and risking money. Moving Down to Intraday Charts As I said earlier a lot of traders find that after trading daily charts and becoming profitable they see no need to trade any other time frame. If you do want to trade the smaller charts such as the 1hr and 4hr charts you don’t just want to jump into the deep end. After moving from the demo account on the daily charts and becoming profitable on a live account you need to repeat the process. Your next step would be to move down to the 4hr charts and begin practising on the demo account. Once profitable on the demo account for a period of minimum three months you could consider also beginning to trade the 4hr charts live along with your daily setups. To trade the 1hr charts or anything smaller you should repeat the process. There is no need to lose money when learning to trade. If the majority of people trading do not make money you should start doing the exact opposite of what they do. The majority of traders will not learn on a demo and perfect their method. They will go straight to a live account and lose money. If you want to have things that most people don’t have, you must start behaving differently then how most people behave! Do not follow the crowd as nearly all the people in the crowd are losing money. Be smarter than the rest and start doing the exact opposite of what most traders are doing! Safe trading this week, Johnathon Fox Forex School Online
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Today's article is going to touch on a subject most traders never even consider working on improving. Ironically this is the very same thing that always with out a doubt stops them from creating consistent profits from the market. I am talking of course about trading psychology and the mistakes traders commonly make. Common emotions Professional traders know trading is very much a matter of having control over one’s mind and emotions. Some of the more common psychological mistakes are; - Fear: of losing, being wrong, missing out etc - Greed - Boredom - Revenge trading Fear Traders experience fear in a lot of their trading experience. Fear can be brought in by simply placing a trade or when a trade goes into negative territory. This fear can be crippling for a trader and can lead to that trader being frozen. Normally fear is a result of the trader either risking too much money or not having a sound trading plan. Traders that risk too much will tend to always worry with fear as they know it is only a matter of time before their account is crippled. Fear can be hard to banish. Traders can get rid of this awful feeling by learning a solid trading method as well as very sound money management techniques. Traders are less likely to be in fear mode if they are risking only a few % of their accounts and they know they will be able to trade another day. Trading with only money that a trader can afford to lose is also likely to limit the affect fear has on a trader’s mental state. Never ever trade with money that is supposed to be for something else such as rent or food! Anything can happen in the Forex markets and trading with money that one cannot afford to lose is a sure way to being frozen with fear. Greed Greed is trait that brings many traders undone. The feeling of making a lot of money in a short amount of time appeals to a lot of people. This then increases the trader’s appetite to risk too much, on too many trades and bingo their account is crippled! Another all too common situation is the trader in the winning position and is up a tidy sum of money. Instead of taking the money when the market makes it available the trader hangs on looking for more and more! You can guess what happens……… Yep the market turns and the trader is left with a loss. I have a motto and that is “Always leave some for the next guy”. I never look to pick the bottom or the top instead looking for a logical place price will turn. I place my take profit a few pips above or below this level as to make the chances of my target getting hit a lot higher. When the market makes profit available to you, take it and move on to the next trade. There will always be another trade! Boredom Forex trading is not a form of entertainment. It is a business! When new traders are bored they will quite often turn to the markets for excitement. This in turn tends to lead to over trading. They want to feel the rush of being in a trade so they place just any old trade. Do not fall into this trap. Have set times that you scan the markets for setups. As soon as your done, turn the computer off and do something else. Do not look to the market to fill the feeling of boredom. Revenge Trading Quite often when amateur traders lose a trade and money, they will look to make that money back straight away. This is regardless of whether there is a viable trade to be placed or not. This then leads to the trader losing more money and on the cycle goes. Trading is a random event. No matter how good the setups look you just don’t know which trades will be the winners or losers. If you have a proven edge on the market you know that over a large sample size of taking only the viable setups you will be up. Do not take average trades as they decrease your edge on the market. When you place a losing trade move on and look to the next trade. You should definitely learn from the trade but start to look at the market as a random event. Two traders can have the exact same method with all the same equipment. One trader makes money consistently and the other losers. Why is this? It’s because the trader that makes money has mastered their beliefs and frame of mind. They have learnt to deal with the problems detailed in this article. Trading is all about dealing with your emotions and subconscious beliefs. If you can start to work on your state of mind whilst trading you will increase your edge in the market. I hope you have enjoyed this article and can implement some of the thoughts and strategies into your own trading. Safe trading, Johnathon Fox
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Often new traders come to the market with many false beliefs about what is needed to make money consistently in the markets. This article will explore some of those false beliefs and how you can fix them to become a successful trader. False Belief 1 – I need to watch the markets as much as possible This is a very common belief that many new traders find themselves falling into. Quite simply trading does not have to involve long hours staring at the screen and many traders actually find that once they begin to cut back their screen time their success rate climbs. Traders need to identify when is the best time to place trades and then step away from the screen. An example of this might be a trader that trades off the 4hr chart. They may choose to look at the charts and scan for trades during the US and UK sessions when the 4hr candle closes. If they find a trade they place it and set stops and targets and then turn the computer off until the next 4hr bar closes. If there is no trade to place they simply turn the computer off until the next 4hr bar closes and they scan again for trades. Watching the markets endlessly will not produce any more trades for you to enter compared to scanning at a set time. Continually watching the markets will wear you down and make you a lot more likely to over trade. The feeling of wanting to be in a trade just for the sake of it is hard to fight when you are just watching the market endlessly. False Belief 2 – The more indicators and junk I can place on my chart the more likely I am to predicting the direction of the market Many traders believe that placing indicators on their charts give them a great chance of picking the right side of the market. The problem with this is indicators are built off what price has done or off old price data. What does this mean? It means traders who use any indicators at all, are using old price to predict what may happen in the future. This may sound crazy but it’s true! All that’s needed to trade successfully and to consistently make money is simple Price Action. Price Action is the key to all moves in Forex. Price Action is people’s behaviour placed on a chart for us to analyse. As all indicators are made of old price information, it makes sense to use the current live price information to base our trading around. False Belief 3 – I can’t be wrong Traders often look at trading as a matter of being right or wrong on each particular trade they take. I prefer to look at the market as a random event. I can never know for sure no matter how good the setup looks that it will work! I try to take only the best setups but does that mean they are all winners? No, the outcomes are random! I make money consistently month after month because I know I have an edge on the market that produces more winning trades than losers over a span of time. I may lose 3 trades in a row but I know over 30 or 40 trades I will always be up. Start forgetting and stressing over this trade and the trade the just went past. You are not right or wrong. Trading Forex will always produce a random result. False Belief 4 - I have to analyse every little thing and know everything inside out Whilst it is good to be a master at the method you trade you do not need to know about every little thing. People often come unstuck falling into analysis paralysis. They can never believe that things can be simple and more than that, making things simple is the way to success and profitability. SIMPLE is the way to go. Pick just one method to trade with such as Price Action and perfect it. Do not try to involve 100 methods with 10,000 indicators and just as many timeframes! Keep it simple and perfect you’re one chosen craft! I hope you enjoyed this article, Johnathon Fox
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Price Action is everything that price is doing on any trading instrument, being represented on a chart for a Trader to see. In very basic terms Price Action illustrates in a way that a Trader can see exactly on a chart, what a certain pair did for a particular time frame. For example the individual candle sticks or bars will show how high the pair went, how low the pair went and also the open and closing prices. Most charting platforms can produce candle sticks and bars for time frames varying from 1 minute to 1 month. Another way to think about it is, Price Action is everything humans are doing and how they are trading, shown in a chart form. This basic explanation of Price Action is not subjective. What I see on my chart is exactly what another Trader will see on their chart, providing they are using the same charting equipment. The next question is the important question. How can we use Price Action to profit? Humans are very habitual. Traders tend to do the same things and react the same way over and over again when presented with similar circumstances. Although if the same two Traders have the same charts they will see the same Price Action that does not mean the same two Traders will come to the same conclusion. In this way Price Action can be interpreted by the individual depending on how they understand different Price Action formations. If you have watched the charts previously you may have noticed that the same patterns, most of the time, repeat themselves. This is once again because humans are habitual and react the same way given very similar circumstances. So if we can notice these patterns and human trading habits in the markets, we can start to find a trading strategy and implement it, to make money off the other Traders, while they carry out their normal trading patterns. These patterns will continue repeating themselves as long as human’s trade. Like I said, humans are very habitual and most of the time they repeat themselves, over again given similar circumstances. What is needed to trade Price Action? Clean charts- Price Action is best seen and traded from clean charts. To trade Price Action we don’t need fancy indicators or anything at all except for a clean chart. Many Traders fall into the trap of thinking the more indicators they have on the charts the better chance they have of predicting where price will go. This is just plain wrong. Indicators just confuse what doesn’t need to be a confusing process. Solid method- Trading Price Action in the Forex market is the best way to consistently predict movement. For a Trader to do this however they need a strong method and skills to trade with. Learning through a course such as an Advanced Price Action Course will give Traders the skills and understanding they need to trade effectively. Continual education and practise- Trading the Forex markets with Price Action is a skill that takes continual practise. The Forex markets are continually doing new and different things and all Traders from the beginner to the advanced can continue to learn by trading and watching Price Action through their charts. An edge on the market- A trading edge is something that gives a Trader a statistical advantage of being profitable over a sample size of trades. The edge for a Price Action Trader is their Price Action signals and trade management. Forex School Online teaches its members how to trade low risk with high reward setups, using solid Price Action formations that form in the markets time and time again. Without an edge a Trader may as well just flip a coin because even a coin toss should average out to 50/50. Trading can be very rewarding and profitable endeavour if the Trader knows how to trade using solid Price Action techniques. Trading with Price Action allows the Trader more flexibility and a lot less stress than the Trader who trades with so many indicators they get confused. In forex trading less is more. Less confusion and less overcomplicating things leads to more success and ultimately more profit.