Price Action Trading Forex at Low Volatility

Forex strategies

Last night I held a webinar trading Forex from the now low volatility states we’re experiencing. Below you’ll locate the webinar together with extra details.

In the past couple of months, the Forex has dropped to an interval of low volatility. Right now, volatility is moving up. But, it is going to soon be a lengthy rise until volatility reaches mid-2013 levels .

For me personally and the discussion members, these states are brilliant. A whole lot of folks view low volatility because a terrible thing. But if you are aware of just how to trade inside it, then very low volatility might be amazing.

Why Is low volatility amazing?

Well, among the greatest reasons is that there are fewer openings. Low prices stores are a lot of more stimulating and a lot of more predictable. You’ll earn less volatility, however who take care of pips…

… As a Forex trader you overlook ‘t measure your success in pips.

If Bob is making $100 per pip and Time is making $10 per pip, Tim needs to make 10x the pips Bob has to make to equal Bobs benefits. You calculate benefit and risk based on a percentage of your total trading capital. Since you can have a lot of tighter stops in low volatility conditions, you can trade more lots. So less pips will equal the similarly amount of money.

Low volatility has been causing issues for a lot of traders. If you look at Forex forums, or trade following services, the performance of many traders has gone downhill.

Why?

Because these traders do not know how to adapt to current marketplace conditions.

Adapting your trading to current low volatility conditions

One of the best aspects of trading cost action is that cost action works in all marketplace conditions. There will always be a few changed you need to make, but with cost action those changes are minor.

The main changed I have made to my plan in the last few months are as follows.

  • I have tightened my stops and targets.
  • I have tightened the space between my support and resistance areas.
  • I have been adjusting my support and resistance areas weekly as opposed to monthly.

These are all the changed I had to make to adapt to current marketplace conditions. In the video underneath I will show you my plan in action. Before I do that, I want to talk a trade that a viewer of the webinar alerted me to during the webinar.

The EUR/GBP Long

After last nights webinar, a whole lot of trades triggered. This was no surprise as the massive move caused by the European interest rate news had to retrace at some point.

During the webinar, a webinar attendee spotted an awesome trade set up on EUR/GBP and demand me to check it out. This is seen at around about the 37 minute mark on the video. Below is an image of the set-up during the webinar.

EUR/GBP Price Action Long Trade

This was an awesome reversal set-up. I was in two minds about entering it as NFP was coming up the next day. However, in the end I jumped in for a quick 23 pip gain.

EUR/GBP Successful Price Action Long Trade

I ended up entering this trade in bed at around about 6:00 am my time. I waited for cost to retrace to around about 0.7927. I only entered this trade because I could obtain a very tight 10 pip stop on it. My before all else target was at the blue dotted line, which was 0.7952. Since NFP was nearing I ended up closing the full position at 0.7952 instead of holding out for a second target.

So, thanks Andrea for spotting this trade in the webinar!

An important thing to note about this trade is that I did not make any changes to my normal position size. So technically, this trade was not a huge gain. What do I mean by this?

Well, let’s imagine I normally risk 0.5% of my account on a trade with a 30 pip stop and a 60 pip target. If I have a 10 pip stop and a 25 pip target, I would still risk 0.5% which means I would need to trade more lots. In this case, I did not change my lot size, so the 25 pip gain was more like a 15 pip gain when compared to an average trade. Either way, benefit is benefit, so I am happy with the trade.

Some of the other trades taken on the forum were EUR/USD 8hr long and USD/CAD 6hr short.

We do not normally trade this close to NFP. However, for me, it was really hard to pass up on the opportunity to make some quick benefits from the retrace of yesterdays fall.

Trading Forex in Low Volatility Webinar

That was pretty a lot of the longest written introduction I have ever done for a webinar. I hope you got through it all though, I know you are anxious to see the webinar, so here it is…

My Free Price Action Strategy

If you want to know more about my plan and how I trade, here are a few links.

  • Check out the Free Price Action Strategy section for a break down of my plan.
  • Recent webinar on candlestick analysis in my plan.
  • Recent webinar on how I place and use support and resistance areas in my plan.
  • Recent webinar on how I use support and resistance together with candlestick analysis to enter cost action reversal trades.