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The Price Action Confirmation Myth & the Retail Mindset

This is part 1 of a 4 part forex price action strategy series. Read the next one here: The Blind Entry (How It Will Leave You Trading Blind)

I can always tell where people are in the trading process based on how they speak about confirmation. Why is that? Watch, and find out!

Here’s the transcription for the video:

“There’s a really big misunderstanding about confirmation.

When I hear people talk about confirmation and how they talk about confirmation, I can always tell where people are in the trading process based on how they speak about confirmation. Why is that?

Because there’s been this proliferated idea in the trading education world that to trade a setup or trend or something like that you need this thing called confirmation and the confirmation comes in the form of a pin bar, an engulfing bar, an inside bar or whatever.

So that’s the general idea that’s out there when it comes to trading price action.

The thing is, is that when I hear somebody talk about price action in this way, I know exactly what level of trader they are and what level of trader they’re not, because how somebody speaks about confirmation is very indicative of where they are in their trading process.

If a trader is looking for confirmation that a trade will work and they’re doing this because they’re saying “ok, we gotta wait for a price action confirmation signal from support or resistance“.

Well, where does this idea and need for confirmation come from? It comes from a beginner’s understanding of trading.

Why is that?

Because beginning traders are looking for certainty in the market. They’re looking for solidarity, they’re looking for something really really potent that says “I need confirmation”.

The reason why they need confirmation is because they don’t trust price action, they don’t trust their skillset.

They don’t trust trading as a whole. They don’t trust trading with trends, they don’t trust reversals. They don’t trust support and resistance, they don’t trust price action as a whole.

In the beginning, traders want solidarity, they want certainty. And because of that, they’re looking for confirmation in the form of a pin bar or something like that.

The pin bar ‘confirms’ that this trend is going to continue.

The thing about it i,s is that this is something that professional traders have let go of that a long time ago. And they have to let go of it to become a professional trader.

The reason why that is, is because that idea of certainty, of confirmation and the way that a beginning trader is looking for it, that wanting things to be really certain, that A++ setup.

Where that comes from is a beginning understanding of trading.

“Professional traders don’t look for certainty, because they’ve realized it’s an illusion.”

What professional traders are looking at, which is a different perspective, is trading and thinking probability.

So if you hear somebody talking about confirmation, “we wanna trade with the downtrend and we’re gonna wait for a pullback towards resistance and a pin bar off that resistance as confirmation that the trend is still in play and we can trade it“.

How many have heard that story before?

The reason why you’ve been told that is because the people who are teaching that aren’t trading professionally.

If they were you would know this, and all professional traders would know this because professionals aren’t looking for confirmation signals via a pin bar.

So if you hear somebody talking about that, you know where they are in terms of their level of trading.

They’re still a beginning trader themselves, and if you think about it, if somebody is talking about an A++ setup or they’re saying “hey, we’re waiting for a pin bar from resistance for confirmation“, besides the fact that I would suggest running from them as far as possible, because they’re still beginning traders.

You have to ask yourself “look, if you’re only willing to wait for a pin bar or an inside bar, or a false break, if you’re only willing to wait for those signals before you enter the market, well then you really don’t trust price action, do you?”

You don’t trust trends, you don’t trust price action context, impulsive vs. corrective, volatile vs. non-volatile trends, you don’t trust support and resistance, you don’t trust your own ability to trade.

You have to wait for all these other things to be in place and then this one final supposedly magical pattern and supposedly there’s only like 3 of them, which is amazing to me that this idea is actually out there, that there’s only 3 possible ways that the market is telling you a trend’s going to continue.

I don’t know about you but that seems kind of absurd to me. It seems a little insane to think that a market that is so complex, across so many players, across trends that continue.

Confirmation via a pinbar is an illusion, it’s a beginning way to look at trading.

So, your job as a professional trader… you know you’ve kinda crossed the Rubicon and made a big leap in your trading when you look at trading in terms of probabilities, not confirmation in the ordinary sense.

Confirmation, the way it’s normally talked about is a very dubious notion. It’s a very slippery idea that doesn’t really exist in the way you think it does.

If you’re constantly looking for those things you’re going to miss thousands and thousands of pips in a trend that is already well-esablished.

If you’re looking for confirmation, you won’t be able to make this trade and this trade and this trade and this trade. And that’s… what is that? +240-250 pips?

In a period of, what, 3 days? On one pair? You won’t be able to do that.”

This is part 1 of a 4 part series. Read the next one here: The Blind Entry (How It Will Leave You Trading Blind)

Have you been trading price action via ‘confirmation’? If so, I want to hear from you and what you see as the difference, so please make sure to comment below.

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41 thoughts on “The Price Action Confirmation Myth & the Retail Mindset”

  1. Great insight; a video is worth more than 1000 trades…I’m one of those who is always late to the party, waiting for the invite that never comes. No confirmation ever seemed good enough for me.
    I have to say that starting to look just into Price Action with Chris’ materials (sorry Chris, only the free stuff for now :)), after having tried all the setups, charts, an and indicators available, has been revealing. I’m not claiming profitability yet, but I can claim an understanding that I never had before.
    Now, going on the sideways a bit, and if I may, I’d like to say we should cut a bit on the finger-pointing (you said this, he said that, you claim this, he claims that, etc) as no one, really no one benefits from it. Both, the one who points and the one who is pointed only lose credibility. Sooner or later, life gives everybody what they deserve without the need for any of us to intervene…let’s stick to the PA trading, this place is simply amazing on that.

    1. Hello Cesar,
      Yes many people have waited too long for confirmation trades that never form while a pair and trend moves 1000 pips and they don’t catch anything of it. This is not trading and not what institutions are doing.
      RE: Pointing Comments
      I think challenging a well established narrative via constructive criticism is healthy. These types of narratives have to be challenged as long as it’s done in a healthy way which I think we did.
      But I appreciate your feedback on the matter.
      Kind Regards,
      Chris Capre

  2. Hi Chris
    You say, “Even the claimed ‘authority’ on price action admits their own trading is 30-50% accurate.”
    Would you provide a link to where he says this?

    1. Hello Rico,
      Email me from this email address you made the comment with and I’ll share the link + a screenshot of the article where it says this.

  3. You’re so right Chris. I was trained to first do thorough back-testing and forward testing of any trading plan. Doing that will give confidence. It’s so sad people are scared of selling a bullish candle or buying a bearish candle at S/Rs. They’d rather wait for a confirmation which will make them miss the full meat. What if you wait for confirmation at S/R and the next candle significantly engulfs the previous? It’ll then be too late to enter! If you get a pinbar and are lucky to get on the ride, you still miss out some pips. And then if price comes to restest that S/R, you’re already at a loss and very nervous whereas those who got in right on the touch remain calm. Chris Capre, they say eduction in trading never ends, I should be joining you soonest. Cheers!

    1. Hello Olatunde,
      Yes, people are scared of trading price action and feel the only way they can enter is via some magical candlestick pattern – this is not trading price action, this is worried about taking a loss and looking for ‘confirmation’ when it actually decreases your profitability and accuracy.
      Meanwhile they miss trends which move thousands of pips all because no magic pin bar formed.
      After years of waiting for said patterns and not making money, most often realize they are missing something and were not trading price action all this time.
      Sad, but perhaps some people need to learn this way.
      Looking forward to working with you soon.
      Kind Regards,
      Chris Capre

  4. I agree with you about ‘confirmation’ in relation to pulling the trigger on a trade. Confirmation isn’t always present in the form you might want it – so its probably about looking at the trade from a top-down analysis perspective and going with the decision you’ve made!

    1. Hello Marco,
      I think this gets ‘part’ of the idea on how we approach confirmation, meaning there are things in other forms which help one pull the trigger without a ‘confirmation price action signal’ in the form of a pin bar, false break/fakey or inside bar.
      But there is more to this than just top-down analysis, particularly regarding the price action, but also regarding the mindset.
      Seems like you are getting ‘part’ of the idea, so kudos for making this partial leap.
      Kind Regards,
      Chris Capre

  5. Oula Souryasack

    Hi Chris, you are right to the point….This is what I am trading in the last 3 months, investing $2000 and making up to $5000, a 150% in returns, average of 50% per month. This far above my initial target of 25% return per month. All I want to say is your are the best and will always be…Good Job…I love what u do…

  6. dear sir
    i read your artical first time.it shooked me. i just want to ask you wheather we should take entry
    only on support or resistance. On other hand you are also opposing blind entry . could you explain it.

    1. Hello Azeem Haroon,
      I’d suggest watching the whole series of articles and videos to get the full message of what I am saying. I think once you go through the full series, you’ll get a better idea of the message I’m bringing forth.
      RE: Price Action Entries
      You are welcome to become a member and learn how we approach price action differently and determine our entries.
      Kind Regards,
      Chris Capre

  7. I trade PA and only two things matter. Where the highs are and the lows. Rest of it, confirmation, pin bars, set-ups boo hoo. PA is subjective and anything and everything price does.

  8. Very Insightful and yes I’ve concluded that some former teachers were Not as worthy to teach as I formerly gave them credit for. This trading game is a bloodsport and it owes nobody an apology. Those cruel manipulators with their self enrichment intentions and stop seeking programs can’t fool the market for long and generally have to establish trends and that becomes the “Read”. I thank you for being a worthy teacher and teaching how to identify lines in the sand and reaction points and what is unfolding before our eyes.

  9. Hey Chris
    I may have miss that “the idea of confirmation is a ‘stage’, that one is supposed to go through and pass, not stay at” part and don’t seem to see it in the transcription too. Your whole video gave the impression you are against trading pin bars, inside bars and whatever bars. I just find the message in your video strange given that you do have courses that teach about advanced pin bar trading (unless that advanced pin bar is different from the pin bar you are referring to in your video). Trading is about probability. Pin bar is not guarantee of a profitable trade. When people say confirmation by pin bar, that may just mean to add another piece of information to put the odds of the trade slightly in their favour, just like trading with trend, at key support/resistance zones, etc etc..It is just a piece of the jigsaw puzzle. There are professional traders who will look for ‘confirmation’ in lower time frame via patterns like double top, double bottom..Does that make them a beginner?
    I agree with you that waiting for a pin bar to be printed on the chart before taking a trade may lead to lost opportunities. But if people have traded pin bars or whatever bars and have positive expectancy, does it matter whether professionals like you trade them or not?
    No offense. Just my thought.

    1. @Casey,
      No offense taken, so no worries.
      Now regarding your comments, can you find me a trader with a positive expectancy on a live account over a year trading pin bars? I haven’t. But I have students in my course not trading them, with profitable accounts. I’ve shared them before in babypips and with my members.
      Let’s compare the top students of the pin bar factories to my top students and see who has better numbers. I’ll have that debate any day.
      Yes, I have 1 video (out of 45+) in my course on pin bars, so that should give you an idea of how much importance we give to them.
      However we do teach an advanced perspective to relating to them, particularly how to understand the order flow behind them, and avoid a retail entry on them, but where you really want to be positioned.
      But let’s talk about the mistaken idea that a ‘pin bar puts a little more odds of the trade slightly in your favor‘.
      If you watch my video (which you have yet to actually comment on), How the Typical Pin Bar Entry is A Retail Entry, then you’ll see how what is commonly taught about pin bars neither adds any greater probability or edge.
      In fact it reduces it.
      And look to the people who solely trade these pin bars and patterns themselves. Are their own stated accuracy levels of 30-50% representative of some distinct or greater edge?
      Not at all. So why use them if they offer no distinct edge?
      Again, I cover this in the video, which should clarify the difference, but why use something if it decreases ones edge and profitability on the exact same trades?
      Food 4 Thought.
      But as an experiment, feel free though to walk into any prop firm, bank or hedge fund, and ask said professionals at said institutions if they are ever saying “Well, I was going to get into that trade, but there is no pin bar, so I can’t.
      Good luck finding that, but that is the price action story you are being told by said pin bar narratives.
      Nor will you find the following scenario, where the same traders are saying, “I’m going to load up on this trade because it also has a pin bar behind it.
      Please tell me when you can find such a person in such a position saying such a thing? I’m guessing you’ll have lived about 3 lifetimes before you find such a person.
      They won’t say such things, which should communicate something to you about probability, edge, and how these patterns decrease both.
      But thanks for sharing and clarifying your position.
      Kind Regards,
      Chris Capre

  10. This is really an eye opener, finally someone that talks about trading from levels without waiting for the confirmation by a pinbar or other PA, and then miss a lot of the pips because of that waiting. Not to mention the stop loss that reduce my overall Risk Reward factor. Got to read more from you, thanks.

    1. Hello Tomson,
      Am glad this was an eye opener. And yes, there is no reason why we have to miss thousands of pips because of waiting for some magical pattern that doesn’t provide any real edge.
      Kind Regards,
      Chris Capre

  11. My challenge has always been as follow:
    1. To determine the price to enter my limit order since the S/R level is usually a zone. Should it be ahead or beyond or somewhere in between the S/R zone? It is very frustrating when I missed it by just a few pips and the trade move in my expected direction but without me.
    2. To determine where to place my stop loss since the candle is still not completed when it approaches the S/R level. Placing it beyond the S/R zone may result in too wide a stop.
    As compromise, I generally go to the lower time frame and look for candlestick reversal pattern when price approaches the S/R level. It is not as good but I can still get in at a reasonable price and identify the spot to place my stop.

    1. Hello Safree,
      Some good questions – ask these in the members area and we’ll dive into them further, especially on the private member webinar coming up.
      Kind Regards,
      Chris Capre

  12. “In case of an uptrend in the market, look for the price to retrace to a key support level within that trend and then watch for a price action signal to confirm a trade entry.” – from your free course Chapter 11. #justsaying

    1. Hello Casey,
      That is my ‘FREE BEGINNER COURSE’, not my paid professional course. As I go on to say later on in this video, the idea of confirmation is a ‘stage’, that one is supposed to go through and pass, not stay at.
      Hopefully that clarifies it further.
      Now with that being said, do you have any constructive dialogue about the actual content of this video you want to engage in?
      Kind Regards,
      Chris Capre

  13. Hi, Chris.
    I like the way you explained trading with probability a lot.
    Once I was told that “fx market is 20% analysis and 80% balls”.
    Luckily I joined your PA course before I developed bar-by-bar analysis, I could focus more on PA context and order flow.
    I keep digging deeper into PA context and order flow 🙂

    1. @Sen (my man from Japan),
      I am also glad you avoided the bar by bar analysis, and are now focusing more on price action context and order flow.
      So keep digging as there is much to be unearthed there.
      Kind Regards,
      Chris Capre

  14. Hi Chris, I don’t quite agree with what you are saying. Even using Pin Bar, inside Bar, you still need to consider the context in the all time frames,where the Pin Bar is, also confluence with S/R if possible. not every Pin Bar is tradable and even the best Pin Bar in the best context, the trade can still be fail. I just think that I trade Pin Bar in the right context as a higher probability trade. Can it be fail ? Absolutely ! And I don’t quite understand why you are against it so much. I think you need to have some simple ways to let people to your way of trading. I don’t think using Pin Bar as a certainty, or definitely sure thing, just some people think it got higher probability in right context. Hope my opinion is not offensive to you. I am really open mind to trading and it will be very much appreciated if you can give some more simple ways to trade than Pin Bar, etc.. Here my “simple ways” do not mean trading is easy. I have followed you sometimes, really enjoyed some of you lessons.
    PS I know that the price action is very complicated, Pin Bar, Inside Bar, etc. are only a few “patterns” of many :))

    1. Hello George,
      I appreciate your candor and constructive dialogue here. And there is no offense here taken, constructive dialogue is to be appreciated, especially when it’s neutral and focused on the content (and not personal).
      RE: Your Comments/Questions
      First off, I’d suggest watching the video How The Typical Pin Bar Entry is A Retail Entry.
      That should give you a different perspective on which method has a greater edge and accuracy over time. And please do comment over there on that video as well with your thoughts on the differences.
      Yes, we always need price action context first across multiple time frames. In fact that comes first before we even consider any entry method or entry location.
      The main points of these two videos are;
      1) The idea being perpetuated that a 1-2 bar pattern is a ‘confirmation’ signal, or some ‘confirmation price action signal’ is a beginner/retail traders mindset. When you examine where the very idea of ‘confirmation’ comes from, it’s a retail traders mindset, not a professional.
      2) Even if you use those patterns in context, they actually reduce your profitability and accuracy over time. They give a far lesser edge as I demonstrate in the second video.
      Even the claimed ‘authority’ on price action admits their own trading is 30-50% accurate. Assuming they use the same methods of the pin bar, inside bar, or whatever bar, that shows there is no real ‘high probability’ in it now, is there? There is no real edge.
      Hence it really doesn’t add any ‘higher probability’ to the trade. It forces you to have a larger stop, which means less profits and more work just to get the same amount of profit mine does, well before your’s hits its first target.
      So hopefully this clarifies it further.
      If you want to learn my ‘simply ways’ to trade price action, you are welcome to become a member.
      Kind Regards,
      Chris Capre

  15. Hello Chris, i have been following up with you on emails and social media…
    I am trained on PA and also wait for confirmation before entry… for reasons of precision rather than certainty.. however waiting for confirmation is one of the toughest job in trading so i agree with you life is a lot simpler without confirmation..
    There is no certainty in trading..
    For example let’s say i have identified a certain level in 10-min chart to enter.. I would not enter immediately when price action hits but would wait to see if price bounces off a reasonable pips on 1-min to confirm.. if it does and when it comes back again i would enter, usually on the 3rd time…. otherwise price might just run through that level…and i am proven wrong..

  16. It’s been long time (around 1 year I knew about Forex Trading) that I heard about confirmation from candlestick like pinbar, engulfing, and etc..
    It was made me unrealized that actually I missed a lot of trading opportunities, and also unrealized that it’s actually I was not learning the real price action context, order flows, how people react to the market by real buy/sell orders.
    I thought those confirmation was the actual trading price action, and I thought it would make me confident in trading, can read the chart and the market orders properly and I thought it would make me profit.
    It became worse that made me believe in deeply after I found out the internet traders out there talked a lot about it in free forums and selling their strategies, trading plan, via websites, in which made me more believe in those confirmations. Yet I never feel confident about the reading the chart and market orders, and never made good profit out of it.
    A bit regret about my previous adventure to find the real truth about those confirmation.
    It is finally I ended up found this website, learnt from it and it’s been 3 Months now, and now I can say that I don’t regret it at all. These 3 Months adventure learning price action FROM YOU is a lot more worth it, compare than 5 years chart screen time, ended up learnt nothing but only loss trades !!
    In short : You have enlightened me !! and I Thank You very much.
    Best Wishes

    1. @Tjenarvi,
      Yes, many people have been taught this narrative and has caused them to miss a ton of trading opportunities. Even if those missed opportunities are only 50% accurate, they still have an edge in our favor by a long shot. And they increase the feedback loop which increases one’s training and learning curve.
      And yes…you were never able to make a profit from it, and nobody else really has, nor been able to demonstrate an actual edge.
      But now you are learning that ‘confirmation’ is not how we trade price action. You are starting to read price action more each day and it shows in the forum.
      You are here now and things are changing for you on how you trade and see price action.
      That is the best thanks I can get (except for you turning fully profitable for yourself).
      Kind Regards,
      Chris Capre

  17. Russell Haynes

    Hi Chris … I have started your Price action course again. Re – leaning everything after I fell off the wagon.
    The pin bar and engulfing is simple for me to follow … so I am looking forward to a change in mindset and the way I look at a the market.

    1. Hola Russell,
      Good to have you back.
      Also looking forward to changing your mindset on this as well and seeing the market in a new way.
      Kind Regards,
      Chris Capre

  18. Thanks for quick reply,
    Unfortunately, I can’t attend your seminars as i live in different part of the world but i am very much anticipated to see your online webinar someday.
    I am fully agree with what you have written about those so called price action gurus. They are simply selling free content with a fancy packaging and their target audience is novice traders.
    One thing which i like in your blog posts is that you always talk about developing mindset and trading psychology 🙂

    1. Hello Ahmer,
      Stay tuned to the site and twitter feed as I’ll be announcing my webinars there.
      And yes, most of those ‘gurus’ are selling free content relabeled for novice traders.
      Luckily I think that version of price action is about to change.
      And yes, I spend a lot of time talking about mindset, which to me is crucial for one’s success in trading and life.
      Kind Regards,
      Chris Capre

  19. Although I have not taken any of your trading course yet but I am following you on social media, I like the way you approach the market with simple PA setups. i am curious if you integrate fundamentals and news events with your trades or not. Can you arrange a free webinar to describe more about your trading.

    1. Hello Ahmer,
      Am glad you like my price action approach.
      RE: Webinars
      I have one free seminar in Toronto in May, and then a webinar scheduled (me thinks) in June as I do one every 3-4 months.
      RE: Integrating Fundamentals/News
      I’m aware of them, and trade based on what is coming out, but I’m a pure price action/order flow trader at heart.
      I’m more concerned with how people react to the market via their actual orders of buying/selling in the market vs. potential interpretations of news.
      Generally if you can learn to read and trade price action in real time, you can have the right bias going into any news announcement, hence why in my members commentary yesterday, we were bearish on the USD vs. the majors.
      But to help, here are a few videos of some live trades going into my methods further, along with a few articles:
      That should give you some good material to work with.
      Any questions, do not hesitate to ask via [email protected]
      Kind Regards,
      Chris Capre

  20. Hi Chris,
    I think you’ve just wrote down my tradingplan 🙂 Pinbar/engulfing bar from S/R and with an oscillator (and confirmation from HT’s). And you’re right. I don’t trust my PA skill set yet. I’ve tried trading from PA alone and I took trades I shouldn’t take, overtraded etc….
    But you know what…..I’m fine with it. Because I’m focusing on trading my plan right now and cultivating the right mindset with your ATM course. And I’m really looking forward to following my next course with you for enhancing and improving my PA skills 🙂
    So, hi, my name is Carmen and I’m a beginner trader working towards becoming a profesional one 🙂

    1. Hallo Carmen,
      You and many others lamentably have trading plans like this. It’s not your fault…this is the ‘story’ and retail version of price action that’s been told.
      Luckily we are shining a light on the difference and that is starting to come through.
      But you are building a new trading plan and mindset, and you are working hard at it on the ATM course, so keep at it as I have great faith in you.
      Kind Regards,
      Chris Capre

  21. Very insightful post, Chris!
    I’m hoping this will be a cornerstone in the understanding of a lot of traders out there about what it takes to trade profesionally.

    1. Much appreciated.
      I’m hopeful this will change the conversation out there as this version of price action that’s out there regarding confirmation needs to change.
      Kind Regards,
      Chris Capre

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