Price Action Trading Setups That Score With Any Currency Pair

Literally every day, in every currency pair, price action trading is taking place with a full cargo load of profits for the taking. As long as you know what you’re looking for, all you need to do is… you guessed it.

Wait, watch, and execute. The key? Knowing exactly what price action formations you’re looking for.

Fortunately, there are several to choose from. And they land like clockwork without a care in the world because price action trading doesn’t care about currency pairs, time of day, or trading level.

It’s equal opportunity profits for all. Before we get to the formations, let’s get the traps out of the way first.

Price action trading is a good day trading strategy as it champions an objective market mindset. Calmness is of utmost importance when looking to open and close trades before the end of the day to end up with substantial profits.

Once you master price action setups, knowing what you are looking for becomes much easier before entering a trade. The fact that there is no guessing enables traders to take calculated risks based on predefined rules, which are crucial to surviving as a day trader.

The Capers Retail Traders Fall For All The Time

It all went down, starting with a bang — literally. Senior agent Rolf Rebmann heard a noise by the loading ramp in the cargo terminal at JFK. 

He was having a bad day and didn’t know it yet. Six masked men, fully armed, forced their way in and put him in handcuffs. And the heist was officially on.

In a high-volume market, there are always loud bangs in the form of big, enticing reversals. Not just any reversal, but those that are so violent they make you think the sky is falling. 

They take the form of interim rips or dips. Many retail traders mistake these for a reversal in a trend — due to the volume that’s involved and the size of the rip.

These are the traps that clear accounts out, because traders enter… and then they wait… and wait for a move that never comes. Instead, the prevailing trend continues — and for many beginners, clears out their account in the process.

Phantom reversals. Every day, they claim their victims and clear out accounts. Don’t fall for these price action trading mistakes!

Waiting for a setup that’s never going to materialize is one of the worst traps a trader can fall for. It’s wasted time and money.

Instead, let’s tear a page out of the lessons of Lufthansa. Specifically, let’s find a way to (legally!) take the money and run with simple price action setups.

Step one:  Let’s get the right chart.

Get rid of anything that causes confusion, hesitation and missed opportunity! Roll into your currency pair with a clear chart!

Now that we have that out of the way… Let’s identify the basic formations that you’ll be able spot pretty much everywhere.

They finally found what they were looking for. Parcels filled with cash started flying through the door — about 40 in all. The guard was then forced to lock the door, before he was tied up. A fifteen-minute buffer was even included in their timeline, because they knew security could seal off the entire airport in 90 seconds.

You can make a clean getaway with price action trading profits, simply by watching for the following setups. With thousands of supposed strategies out there, we have three basic questions that we need to answer for a setup to make the cut.

1. Easy to spot.  Like ‘a mile away’ easy to spot as they unfold — with confirmation that the setup is in fact there for the taking.

2. Wide margin for error.  Since we’re not performing brain surgery, let’s go with setups that don’t require perfect timing.

3. Clear exit.  When it’s time to bolt, it’s time to bolt. No second-guessing — we want clear signals for our exit.  

With that in mind — here are three setups that meet our criteria:

Action Setup 1:  Trend / Continuation

It doesn’t matter what time frame you trade, what currency pair you prefer, or how many lots you're cooking with. Any trader, at any level, can learn to spot and then trade with a price action trend.

Spot the highlighted lower lows and lower highs in the downtrend. And right on cue, the retracements come in (marked with the ‘R’) providing opportunities to enter when price action touches the channel

Action Setup 2:  Range Reversal

When you see your currency pair grind along during a normal range trading day — think of a cash machine that’s lost its mind, spitting money every chance it gets — these are the moments when you can rack up quick hit trades at the edges.

≫ Ingredients: Clear range boundaries and support tails.

≫ Example: Here is the EUR/USD on a fantastic range trading day. Price runs back and forth — almost like it’s on a paper route making stops at the top and bottom of the range. To make your entries…

− Tails: As price approaches an edge, you’re looking for the opposing side to step in and push back. That’s your confirmation that it’s time to enter.

− Halfway Exit: Ranges often have a halfway point where price chops along.  Plan to peel off profits at that point on your way to the other side — or exit altogether.

After price goes on a big move, find the Break Point followed by the Entry location. It’s right there waiting for you if you just look left!

After big news, you’ll often see price get on its bike and take off for home. If you don’t have the stomach to ride out a big move, look for the support and/or resistance home base that it’s likely headed for. When it arrives, you can roll out the red carpet for profits.

≫ Ingredients: Big rips or dips, headed for a prior consolidation point.

≫ Example: Again in the EUR/USD, the upward trend heads for a big run by the sellers — a massive, prolonged rip downward. What are we going to do? Simply look left and we have a landing zone that we can stalk. We’re looking for the following:

− First Break Point - BP:  You’ll see that there was prior resistance, where we put our first landing zone. This serves as our first break point to see if price is slowing down. NOTE:  We’re not entering here — rather, we’re looking for an indication that buyers are stepping in.

− Support Entry - E: Just past the first break point, we have our confirmed support level. As price hits, what are we looking for? You got it! Another tail for confirmation.

After price goes on a big move, find the Break Point followed by the Entry location. It’s right there waiting for you if you just look left!

In a sea of setups, start with these three and take home your profits consistently!

Does Price Action Trading Work?

Is price action trading profitable? It’s a common question. Price action trading does work and leads to profitable outcomes. However, like any other strategy or tool used in price determination, profitability will always come down to how the strategy is executed. Many price action strategies implemented to the letter have been shown to be accurate, leading to profitable outcomes more than 75% of the time.  

Make Your Clean Getaway With Profits While Others Wait

The heist was planned by a Lucchese crime family member named Jimmy Burke.  Aside from the haul itself, the crime family members found the fact that the cash was untraceable completely irresistible. Today, it’s still the largest cash robbery that’s ever taken place on American soil.

Every second, millions are heisted from unsuspecting retail traders and they’ll never know it. When institutional traders unload or assume a position big enough to collapse 10 Lufthansa cargo holds — very few people have any idea what’s really happening. When price reacts, many simply assume it’s the market moving along.

Put yourself in the ‘know’ simply watching for established price action trading setups. When this happens, you know that price is operating with muscle memory that it can’t ignore!

Shake the urge to enter on that temporary reversal if you’re working with a trend. Stay true to the boundaries on a range trading day. And make sure the price pumps the brakes after a big rip or dip! 

Take home your share of the haul every day, while everyone else wonders what happened.  

So How Do I Learn Price Action Trading?

Contrary to perception, price action is not as complex as many people make it appear. It can be mastered as long as there is determination and an urge to know the tiny bits that support the entire analysis structure. The first step is to understand what price action is all about. Knowing how to identify support and resistance levels is crucial. It is also essential to master the supply and demand dynamics at support and resistance, as they immensely affect price movement. 

Mastering and being able to identify various price patterns on charts should follow suit. Price patterns are the heart of price action as they provide valuable insights on market perspective, thus making it easy to ascertain the direction price is likely to move.

Risk management strategies should also be mastered as it is crucial to know when to take a loss and when to close a position to avoid loss accumulation. 

Price action trading is arguably one of the best forms of analysis as it provides an ever-relevant market perspective. It provides an easy and effective way of making sense of the overall market movement. It is a time-tested strategy as professional traders have tested most of the setups used as part of the analysis for decades. 

Additionally, price action trading factors are in all market variables. It gives a visual representation of the only thing that matters, which is usually traders’ reaction to all developments in the market. Mastering various price action setups makes it easy to know the ideal entry and exit points of a trade. Conversely, it averts guessing, as is the case with other methods.

Price action also stands out as one of the best trading strategies as it helps traders achieve the discipline required to excel. The fact that entry and exit levels are defined based on price patterns, means emotion management becomes much easier. Trades are only triggered and closed based on well-defined rules.

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