Forex price action scalping block break method

fxoutlier, You always ask some really great questions. A close outside the box should equal one pip or more on a four digit chart.How far outside the block depends on how large of the range we are currently in. If it's a shallow range, say 12 pips, the block is four pips wide, your spread is one PIP, and the block breaks back into the range. That's six pips already used up of the range. A one PIP outside close gives you seven. So the most you could hope to target for a profit would be for five pips max to the next resistance level.

For the range breaks if you get three hits top and bottom of the range than a breakout of that range should be strong enough to capture 10 pips most of the time. If you get the squeeze from the 20 EMA that's great but it doesn't always occur, when you have the squeeze you should be more confident in the breakout.

What I look for on the level II screen or the time and sales, are there sufficient orders coming in that the market is likely to continue to move. In other words if the market breaks out but the time and sales screen only clicks off one trade (to keep it simple) it's likely the market is not in a move and it's going to return back inside the range. However, if the market breaks out and orders compiling in they should drive right to your profit target.


I use Henry Liu's Currency strength meter in a couple different ways. Since I keep an eye on the markets for many hours I need a way to do it quickly. The first thing I look for his risk on or risk off. Because this will drive trends for a long time if the dollar and yen are strong together. Then we have a risk off market and the counters were likely be dropping all day, however the opposite is true as well. If the dollar and yen are week together their counters will likely be going up all day. It's a quick heads in the direction I may want to trade. I also use it to match the strong with the weak without having to look at a bunch of charts. Also if for example the euro is blue, meaning it's extremely weak I'll be more hesitant about taking a break out to the downside. Because that gives me a heads up that counter trend traders will be looking for an entry to push the market back up.

Keep in mind when you're starting out trading and this is important. You have to have a set of variables that you follow because you need a way to quantify your trades so you can find where you're making mistakes and where you need improvements. You want to work on though your ability to "think like a trader" you want to have that set of rules that you follow intently that keeps you from making repeated errors. But the moment you see an edge appear on the chart you take it and trade the edge. Hold your trade to your target, or dump it is immediately if the edge goes away.