GUIDE TO PRICE ACTION

ENTRY SIGNALS

How to find, enter & place price action trades 

LearnPriceAction.com
 TABLE OF CONTENTS

WHY ARE ENTRY SIGNALS SO IMPORTANT?

1

HOW CAN CANDLESTICK CHARTS HELP YOU?

2

PIN BAR REVERSAL = PIN BARS

3

ENTRY EXAMPLES
5

WHY ARE ENTRY

ENTRY
ENGULFING
WHY ARE SIGNALS SO
BARS SIGNALS SO IMPORTANT?
IMPORTANT?
8
WHY ARE ENTRY SIGNALS SO IMPORTANT?

INSIDE BARS =  IB'S

11

HOW TO USE AS PRICE ACTION TRIGGERS

14

STOP LOSS STRATEGIES 

16
 SIMPLE SETUPS

Using simple and repeatable price action triggers that form time
and again in the markets can be a great way to find entries into
the market.

These triggers will often get you in at the best time and just as
the market is about to reverse, giving you the optimum entry
price.

Why Are Entry Signals so Important?

Buying and selling a currency pair in order for you to gain profit
from the differences between the entry and exit price is your
main objective in Forex trading. 

Buying low and selling high is universal. Some traders spend

more time thinking profoundly on entry points, whilst others
believe that success sometimes relies on how a trader exits
their trades.

Knowing the value of a currency pair that will appreciate in the

future isn’t enough unless you have a clear conception of when
the appreciation will occur.

01
 CANDLESTICKS

Remember the saying; “Give a man a fish, and you feed him for
a day. Teach a man to fish, and you feed him for a lifetime”.

Just like in trading, you don’t need to get the signals, but learn
how to find them and teach yourself how to actually get profits
for a lifetime.

Without the mastery of trade timing and good trigger points you
will never make any profits. That’s why a trader uses charts in
their daily trading.

You can use charts to determine everything that is happening in

the Forex market. One of the most useful and common types of
charts is the candlestick chart.

How Can Candlestick Charts Help You?

It is a type of financial chart that is more visually appealing than
the common bar chart, thus making price action easier to
interpret and analyze.

It can also help an investor make wiser buy and sell decisions
because of its recognizable patterns.

02
 PIN BAR REVERSAL

Patterns play a very crucial role in trading, so here’s to a

breakdown of the most helpful patterns for your daily trading
needs.

Pin Bar Reversal = Pin Bars

Pin bars are one of the most powerful price action patterns in
Forex trading as they are easy to recognize which means both
professionals and retail traders use them.

03
 HOW TO FIND

What is a Pin Bar?

The pin bar (also known as Pinocchio Bar) formation is a
reversal setup. It is a one candle / bar formation that has an
obvious large tail or shadow either up or down.

A pin bar is a single candlestick setup that clues price action

into potential reversals in the market.

It also has an elongated wick that sticks out.

There is also a Fake Pin Bar that is different than the normal pin
bars.

Because of the price action, you can now determine the

difference between the two. If a long wick sticks out from recent
prices then it’s a pin bar, if the long wick does not stick out then
it’s not a genuine pin bar, but rather a ‘FAKE PIN BAR’.

How to Spot the Pin Bar?

Bearish pin bars form after several bullish candles and have a
nose that is higher than the top of the previous candle.

The nose must be at least 75% of the candle size and the candle
body must be less than 16%. (Vice Versa for a Bullish Pin Bar).

04
 ENTRIES

Pin Bar Entries

The best way to trade any market is to trade inline with the
trend.

In a trending market, a pin bar entry signal can offer a better

risk reward with lower risk.

If the pin bar shows a rejection to lower prices, it’s a bullish pin
bar since the rejection shows the bulls or buyers are pushing
price higher.

05
 RISK LEVELS

Aggressive - High Potential Reward and Risk: 50% Retrace

This entry involves taking a 50% retrace of the pin bar or other
reversal candles wick.

For this entry you would be setting a trade entry and waiting for
price to move higher or lower 50% in the opposite direction of
where you actually want price to go for your trade.

You do this to get a much tighter stop loss and potentially

higher reward pay off.

Medium Reward / Risk Entry: Entry on Close

This entry on reversal trade signals involves entering as soon as
price has closed. When the reversal candle such as the pin bar
has closed and it meets your criteria, you simply enter the
trade.

Lower Reward / Risk: Entry on Confirmation / Break Higher

or Lower
With this entry type you are creating a trade entry and waiting
for price to break higher or lower, above or below the pin bars
high or low.

06
 EXAMPLES

Price is then breaking in the direction that you are looking for
price to move.

This is lower risk, but can create bigger stops that will give you
lower reward.

Each entry has it payoffs for potential risk and reward.

07
 ENGULFING BAR

Engulfing Bar
Engulfing Bars = EB’s,  also known as Outside Bars = OB’s are
one of the most widely used strategies in Forex trading. EB’s can
generate very accurate and reliable signals if identified and
understood correctly.

What is the Engulfing Bar?

There are two types of engulfing bars:

(1) Bullish Engulfing Bar.

(2) Bearish Engulfing Bar.

08
 HOW TO FIND

Bullish Engulfing Bar (BUEB)

The bullish candle fully engulfs the previous candle. It can even
engulf more than one candle, but to be a valid bullish engulfing
bar, it must engulf at least one of the previous candles.

Bearish Engulfing Bar (BEEB)

The bearish candle fully engulfs the previous candle.

Both Bullish and Bearish Engulfing Bars have a “lower low” and
“higher high” like the preceding candle.

How to Spot Engulfing Bars?

Looking for the engulfing bar is pretty simple. The candle
should completely cover the previous candles range, taking out
the previous high and low.

09
EXAMPLES

10
 INSIDE BAR

Inside Bar = IB
One of the most familiar candlestick patterns is the inside bar. It
forms when price trades within the high and low ranges of a
previous day.

You can call an inside bar a ‘breakout play’.

The best IB’s are made in trending markets with the direction of
the trend.

What is an Inside Bar?

The inside bar is formed when the second bar or candlestick is
engulfed within the previous bar or candlestick high and low.

It is a two-bar price action trading strategy in which the inside

bar is smaller and within high to low range of the prior bar. It
can be at the top, middle or bottom of the bar.

How to Spot the Inside Bar?

You can see what it looks like in-line with a trending market
below. As you can see below it is a down-trending market so the
inside bar pattern would be called the inside bar sell signal.

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EXAMPLES

12
 TRENDS

Here’s another example; this time it’s an inside bar pattern with
a trending market.

In this example, the market was trending higher so the inside

bar would be referred to as the inside bar buy signal.

13
 ENTRIES

Inside Bar Entry

Inside bars can be traded both as reversals and market trend
continuations.

The most commonly used entry with the inside bar is to place a
buy stop or sell stop at the high or low of the mother bar. This
way your entry order is filled when price breaks out above or
below the mother bar to confirm you move and to miss as many
false inside bar moves as possible.

How to Use These Reversals Price Action Triggers?

Support and Resistance

In technical analysis, support and resistance levels are the most
important concepts to determine long and short trading
opportunities.

Support is a price level where due to a concentration of

demand, price will often turn around and be ‘supported’.

Resistance zones are the opposite to support zones and are

levels in the market where price is finding more sellers and less
demand; in other words, price is finding resistance.

14
 TREND LINES

Resistance zones can be great spots to target bearish reversal

trades or to use with your exits.

If you can recognize the zones of support or resistance on your

charts, it will provide both valuable entry and exit points. 

Trend lines
There are 3 different types of markets. These are the uptrend
(higher highs and lows), downtrend (lower highs and lows), and
sideways trends (ranging).

Uptrend trendlines (valleys) are drawn along the bottom of

identifiable support areas. And in a downtrend, lines (peaks) are
drawn along the top of identifiable resistance areas. 

15
 STOP LOSS

You should not try and make the line fit the market.

So how can you draw them? It's easy! Locate a minimum three
major points that align higher or lower.

What are Some of the Stop Loss Strategies Used?

Market volatility is never-ending. As a trader, the hardest part is
to mitigate against losses.

NOTE: Set your own stop losses depending on your individual

preferences.

Below are some of the most popular and commonly used stop
loss strategies.

Pin Bar Stop Loss Strategy

You can place a stop loss behind the tail of the pin bar whether
it’s bearish or bullish.

As a result, when price hits your stop loss, the pin bar setup will
turn out to be invalid.

Remember that the market is just notifying you that your pin
bar setup was not strong enough, don’t ever think that it’s a bad
thing when price hits the stop loss.

16
 STRATEGY

Inside Bar Stop Loss Strategy

The inside bar stop-loss strategy gives you two options on
where you can place a stop-loss.

It can either be behind the inside bars high or low or even

behind the mother bars high or low.

If you want a lower risk inside bar stop loss strategy, then it’s
behind the mother bars high or low. Just like the pin bar stop
loss strategy, the inside bar setup becomes invalid once hit.

Confluence Stop Loss Strategy

Traders often use this kind of setup.

With this strategy you will use support and resistance levels,
previous highs and lows, moving averages, trend lines, and
channels to find an appropriate stop level.

The good thing about confluence stops is that they are often
used at obvious price levels in the market.

Note: If price repeatedly takes out your stops by just a few

points, add more confluence levels or add a little padding to
place your stops outside the stop hunting zone.

17
 LASTLY ...

Volatility Stop Loss Strategy

Professional traders often use this strategy because it has the ability
to adapt to changing market conditions.

If the volatility is high, you can use a larger stop loss for greater
swings and you can shorten when the market calms down.

In times of high volatility, you should widen your targets to counter

the reduced effect on reward: risk ratio.

If the volatility is low then you should set closer targets because price
won’t travel as far.

Final Thoughts
Use price action patterns for entry according to your own risk
tolerance and how aggressive you are as a trader.

Always remember to use a stop loss and test and always test new
strategies on a good demo trading platform first.

I will leave you with this;

“Letting losses run is the most serious mistake made by most

investors.”

– William O’Neil

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