I invite you to the Price Action Setup review after a fairly long break. The end of holidays is near so it’s time to go back to trading and I started just yesterday! One position was closed on Stop Loss (more in the article), the remaining ones are currently on plus, including GBP/CAD with more than the initial SL. Here we go:


In yesterday’s review: LINK I wrote about a possible sell signal on the Australian Dollar to Yen. Actually, there was a breakout from Inside Bar, but it was too violent to open shorts. There is still room for further development so we need to observe the pair unless a sell signal occurs.



Perfect signal is on Euro to Australian Dollar. Maybe even too perfect according to a article regarding PA in our educational part. Traders often lose using this formation falsely interpreting its occurrence. My strategy is simple – I open a trade when there is a signal that allows me to open position. Here it is worth to wait for a 50% abolition off of the signal candle because otherwise low risk to reward ratio makes trade risky.

I set the Buy Limit order on 50% off signal candle and Stop Loss below the candle (about 80 pips), Take Profit below the recent maximum (200 pips). This will give me a potential profit of 2.5:1, which is not very big in my opinion. Therefore, the risk will be slightly smaller.



On the other hand on this pair we have a buy signal. As the trend is rising slowly, we can look at the H4 graph where we see candle pin bar with black (bearish) body. This is not so important because in this signal we are not interested in the color of the candle (unless the body is big in relation to the candle) (Price Bar, Fakey, Inside Bar). Currently, it is possible to open a position with only 30 pips Stop Loss and a target of about 200 which will give a large potential risk of over 6:1.



The position was closed yesterday at Stop Loss. Pair all the time, however, looks bullish. Perhaps before another upward move, there is a need for a more decisive decline. I will carefully watch the pair, because it seems that bullish movement is coming soon.


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