Why. Price Action Context (PAC) provides probable structure to an otherwise random beat. PAC is a skill that can be learnt and continually improved.
Task: (1) Continue to develop as a fulltime, PAC trader. (2) Build financial resources for my family and investors.
Daily preparation. Review my charts for structure, pattern and entry from a
Core trading mechanics:
Instruments: Currency pairings, the DAX, the US 500, gold and silver.
Timeframes:Weekly, Daily, 4hr, 1hr, 5min.
Risk profile: 1.0% – trade max, 0.5% for split positions, 5% – day, 9.9% -month
- Weekly: all trades opened/closed within that week logged
- Monthly: all trades opened or closed within that month/overall monthly performance
- Quarterly: quarterly trading plan review/performance
- Annually post investor results
- Higher to lower timeframe analysis
- probable vs possible
- Based on flexible rules
Strategy: Execute PAC setups: (see examples below)
The USD/JPY example below supports a PBO build-up. The box below shows on the 1hr chart; however, in this trade, I referred to the lower (5min) chart for the PBO entry long.
EUR/USD below is a suitable example of a diagonal PBO and from within a box pattern. Stop placement above the prior high or more conservatively above the high of the box pattern.
Roll reversal level (RRL).
The example below of USD/JPY is counter-trend on the 1hr entry chart but is near the top of a range on the 4hr chart; this is a 2R opportunity, but countertrend makes us more watchful.
False break (FB).
Breakout pullback (BOPB).
XAU/USD below is a trade in-waiting short from a possible BOPB short CT. The CT is a concern as an engulfing close long would signal a FB and therefore change to trade direction to long. The conservative stop is above the box pattern drawn. About a 2.7R potential.
Pure momentum breakout (PMB)
The skill of interpreting between higher to lower timeframe charts is most prevalent in the PMB entry.
Limit level trade (LLT).
The example below is a 1hr chart. On the higher timeframe price is in a downtrend. A short entry via an LLT with the target established on the 4hr chart. (The LLT must show on a higher timeframe chart to that of the entry chart)
The chart below is an example of a 3P entry short from the 1hr chart USD/CAD. The 3P setup also provided a double top entry with a 28 pip stop (stop above the middle high) and a potential 178 pip target or 6R.
Impulse, correction, continuation (ICC)