Intraday Trend Trading With Price Action (Trade Price)

By Galen Woods ‐ 4 min read

Learn an intraday trend trading strategy from a full-time trader on Forexfactory. This strategy uses the Keltner Channel to find trading momentum.

Trade price (Sho) is a member of the Forexfactory forum, where he shared his trading method in the thread “Intraday Trend Trading with Price Action”.

He trades price action with Keltner Channel and price action patterns including pin bars, inside bars and outside bars. This trading method is not a trading system with hard and fast rules.

However, Sho pointed out a couple of rules that produces high quality trades (A++ trades). The trading rules below combine his golden rules and my application of his trading approach.

Trading Rules - Intraday Trend Trading

Note that the Keltner Channel here consists of channel lines projected from a simple moving average.

Long Trend Trading

  1. Strong impulse move above upper Keltner Channel (10,1)
  2. 50% retracement to a support level
  3. Rejection from Keltner bands
  4. Buy on close of pin bar

Short Trend Trading

  1. Strong impulse move below lower Keltner Channel (10,1)
  2. 50% retracement to a resistance level
  3. Rejection from Keltner bands
  4. Sell on close of pin bar

Intraday Trend Trading With Price Action Trade Example

Winning Trade - Bullish Trend

Intraday Trend Trading Winning Trade

This is a 15-minute chart of 6A futures contract (AUD/USD). The only indicator on the chart is the Keltner bands which comprises a 10-period moving average and two bands displaced 1 ATR away from the moving average.

  1. There was a clear bullish move out above the upper Keltner band.
  2. Prices pulled back and stalled at the 50% retracement level of the bullish move. The level coincided with the low of an earlier outside bar which acted as support in this case. Furthermore, the chart printed a pin bar that tested these levels before closing above the moving average.
  3. We bought at the close of the pin bar and placed a stop at its low for a profitable trade.

Losing Trade - Bearish Trend

Intraday Trend Trading Losing Trade

We continued looking for A++ trades in the 15-minute chart of 6A. This chart shows a trading setup that failed.

  1. There was a strong down move beyond the Keltner bands.
  2. Price started to pull back up and we saw two strong bull bars with shaved bottom which implied eager buying. (Not good for a short trade.)
  3. The pullback up ended with a pin bar that got rejected from several resistance levels including the upper Keltner band, the 50% retracement level and a previous swing high (dotted line).

The pin bar led us into a losing trade as we got stopped out by the outside bar that appeared two bars after our entry.

Review - Intraday Trend Trading With Price Action

This is an excellent price action trading method. It emphasizes a simple principle, which is to follow the momentum.

Finding the momentum is truly the key to trading intraday trends successfully. Look out for bars that are completely beyond the Keltner Channel to find strong momentum. (This is similar to the moving average channel method by Jake Bernstein.)

Combining strong momentum with a pin bar rejected by a support or resistance level produces a high probability trade. If you add 50% retracement and Keltner bounce to the formula, you get what Sho calls a A++ trade.

I find that for long trades, rejection from the lower Keltner band is not as reliable. Focus on rejection from the top Keltner band (for very strong trends), and from the moving average itself. (The reverse is true for short trades.)

Remember that this is a trading approach and not a rigid system. The trading rules above are simply one formulation of this method.

To learn this method from Sho’s words, you can download this PDF document on this trading strategy. It has trade management advice and other nuances of this trading method.

I would like to thank Sho for sharing this excellent method publicly, and Alan One (also from Forexfactory) for compiling the thread into a PDF document.

For another excellent trading method shared in online forums, take a look at Jjrvat’s Price Action Trading.