Comment by Gill on June 23, 2012 at 2:26am

Trae is 'inside bar setup' same as a master candle? This is one of the most educational picture I ever looked at - can you do more hehe

Comment by Gill on June 23, 2012 at 2:26am

I have a master candle indicator I got off forex4noobs

Comment by Trae on June 23, 2012 at 3:03am

Thanks Gill I will post more for sure I have had a bunch of trades so far this year with this pair. I will post more on other pairs athough there arent as many trades on them hope your good havent talk in a few .. Hope your week was better than mine! Lol

Comment by elanthiraiyan on June 23, 2012 at 11:54am

how do u define bull trap and bear trap here... i cant understand the fake out concept.. plz explain

Comment by Trae on June 23, 2012 at 4:41pm

Comment by Trae on June 23, 2012 at 4:51pm

 

Comment by Trae on June 23, 2012 at 4:58pm

Comment by 2ndSkiesForex on June 23, 2012 at 6:08pm

Hello Trae,

First off, from the USDJPY chart, what EMA's are you using?  Just curious as it looks like a 20 and some other shorter one.

Second, from the examples here in the last few charts, your mostly talking about a Hikkake Pattern.

The challenge with the example of the two inside bars is the A bar or the mother bar is a larger range that hasn't been broken.  So taking a short/long below the first inside bar before clearing the high or low of the mother bar will often lead you to getting tagged as the range of the mother bar holds, then pushes price in the opposite direction towards the top of the range leaving you stopped out.

We've actually quantitative tested Hikkake's, along with Bulkowski who's done a lot of work on them, and they fail quite a lot, more than enough to take away any edge.  I've also quantitatively tested inside bars, and without the right filters, they will tend to fail and provide no edge.

Besides, there is no fake-out if there is no breach of the highs/lows of the mother bar.  Only when there is a breach is there a fake-out, because, the fake-out is the result of trapping new traders on the break of the mother bar because the range has been broken.  On top of it, many day traders will take reversal trades at the highs/lows of the mother bar itself, so only when the break occurs is there a trap and potential fake-out.

As to the last chart, you're talking about an inverted pin bar that is an inside bar.  A great example of how this failed to play out in the way you described, one can find by clicking on the link above as I talked about this on my blog just the other day.

These are just my thoughts/experiences on the matter, and I am always happy to discuss things further as there are some interesting points around these formations.

BTW, I noticed in your profile your from NC.  Whereabouts as my brother went to school there and I got a lot of friends there, some traders as well.

Kind Regards,
Chris

Comment by Trae on June 23, 2012 at 6:54pm

Thank you for you post agreed there are many ways to read price action my theory's were taught to me by a well known price action specialist, I only post this to share trades that I have been involved in and explain why if asked, I will not make my living off showing people how to trade I make my living off trading and share why for free, Its up to you to develop edge and sentiment of the market, I have applied these rules in my trading on daily charts and have been very profitable I use a 8 and 21 day ma's for 2 reasons to pend price action that develops off these ma's and to determine the sentiment off the market, I only use support and resistance lines and three price action rules (inside bar set up) (fake out ) and (pin bars) there are two main ways to get into these trade inside bar set up if in strong trend i will enter on the break of the candle within the mother candle, if im unsure I will take a conservative approach and wait till the mother candle has been broken, yes sometime a fake out forms from this resulting in a loss but there is know way to know for sure and if it does turn into a fake out I will then re enter on the break of the inside candle within the mother candle, and the inside pin bar confirming sentiment of market can be very powerful, I have been involved with like 8 trades so far this year every one was at least a 2to1 trade they are my favorite, and pin bar set ups I will place a order at 50% of the tail confirming it is   in a good location (support/resistance) 8/21 day moving av. exx... sometimes I will split my order at 50% and the break of the body of the pin, I hope this helps I do not want to cause confusion I just want to post things that others may learn I appreciate your thoughts and I love your site however your charts are different from mine. I do live in NC near Asheville,   

Comment by Trae on June 23, 2012 at 7:17pm

here is a few examples

Comment

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