Price action: trading without indicators
What you learn in 3 minutesThis lesson shows how to read a chart from price structure alone, using highs, lows, ranges and breaks, without adding a single indicator. You will see the same AUD/USD entry worked out twice: once from a calculated line, and once from the shape of the price itself. By the end you can place a stop and a target in A$ terms from structure, and you will know why the two methods can give different numbers.
One entry, two ways: structure against a signal
| Step | Amount | Note |
|---|---|---|
| Instrument | AUD/USD | the pair used throughout this course |
| Price area | around 0.6640 | the level where the range forms |
| Range high | 0.6660 | the highest traded price in the range |
| Range low | 0.6620 | the lowest traded price in the range |
| Range height | 40 pips | 0.6660 minus 0.6620 is 0.0040, which is 40 pips |
| Entry on a break | 0.6665 | price closes above the range high, so the break is confirmed |
| Stop distance | 25 pips | 0.6665 minus 0.6640, placed back inside the range |
| Target distance | 40 pips | the range height projected from the entry |
| Position size | 0.10 standard lots | a size chosen before the entry, not after |
| Value of one pip | A$1.00 | one standard lot is A$10.00 per pip, so 0.10 lots is one tenth of that |
| Risk in A$ | A$25.00 | 25 pips multiplied by A$1.00 per pip |
| Target in A$ | A$40.00 | 40 pips multiplied by A$1.00 per pip |
Your broker may round the pip value, quote a slightly different price, and charge a spread or commission on top. Those charges vary between brokers and are not included in the figures above.
The mistake people make here
The common mistake is to wait for an indicator to confirm what the chart already shows, so the entry lands late and the stop has to sit further away. A second mistake is to move the stop once price is running, which turns a planned A$25.00 risk into something larger. Decide the entry, the stop and the size from structure before the trade, and write them down. If the structure changes after entry, the stop is what protects the account, not a new signal.Check yourself
A range runs from 0.6620 to 0.6660. How many pips tall is it?
0.6660 minus 0.6620 is 0.0040. One pip is 0.0001, so 0.0040 divided by 0.0001 is 40 pips.
You enter at 0.6665 with a stop at 0.6640 on 0.10 standard lots of AUD/USD. What is the risk in A$?
The stop distance is 0.6665 minus 0.6640, which is 0.0025, or 25 pips. One standard lot is A$10.00 per pip, so 0.10 lots is A$1.00 per pip. 25 pips multiplied by A$1.00 is A$25.00.