총 Price Action Trading – Complete Guide – Complete Guide

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Learning the price action trading strategies are the pivotal requirements for the successful trading in financial markets. So, we have compiled the guidelines for our worthy readers whether you are a long-term or short-term trader. These strategies are simplest yet very strong and powerful tool for acquiring a distinctive place in the financial markets. Arguably, you should pay keen attention to learning these strategies because you are going to get the edge in the market with the help of these strategies.

As we all are aware of the fact that price is considered trading indicator across the globe. Moreover, price controls and monitors the trading decisions and moves into the market. So, reading and learning the of the Price Action Trading is worth of your precious time.

What Does Price Action Mean?

Simply illustrated, price action is the price’s response to certain levels and types of supports and resistances. This analysis includes the study of historical movement of the price and predicting the behavior of the price in response to the past support and resistance factors. So, successful traders are those who analyze and predict the price behavior with precision to take benefit out of the analysis. Most useful and important indicator for price action is price bars which include open and closing price, highest and lowest price levels for the certain period of time.

Precision is the key of success

It is worth mentioning that analysis of the price action with taking all available tiny details into consideration is the key of success. If we explain in more simple words, price action is in fact the study of the behaviors and responses of all buyers and sellers into a certain market for the specific product. So, we have a promising objective of enabling our readers to consider all these details while analyzing the price action. Consequently, you would be able to get a unique edge into the market while trading for a specific product or service.

By using price action determine a market’s trend

One of the most important aspects of learning to trade with a P.A. The first is to learn how to identify a trending market compared to a stable market. Trading with trends is probably the greatest way to trade and you have to learn what to do if you want to make serious money as a trader.

We consider a market to be an advanced destination if it is building higher and higher (HH, HL) and lower and lower low (LH, LL).

Market secrets: How the market moves

The agreement is:

Markets are always in changing phase (you’ll realize it by now).

It can be in uptrend, downtrend, range, low volatility, high volatility etc.

But, if you take a step back and look at the bigger picture, you will realize that the market trend is in 1 out of 4;

1. Accumulation

2. To advance

3. Distribution

4. The Falling Phase

I will explain;

1. The Accumulation phase

The accumulation phase occurs after the price has fallen, and the market seems to be on the decline.

Example Given As,

   Here are some things to look for:

  • Occurs after last 5 months or more of price reduction.
  • It looks like a range market with clear welfare support and resistance areas
  • 200 day moving average flat
  • The price fluctuates around the 200-day moving average

2. To Advance phase

The advanced stage is an advanced stage with a high altitude, lows and a chain of command.

Example Given As,

Here are some things to look for:

  • The accumulation phase occurs after the price has run out of resistance
  • Series of highs and lows
  • Above the 200 day  the price is moving average
  • The 200 day moving average is pointing to an altitude

No market grows forever. It eventually becomes “tired” and from there it enters stage 3;

3. Distribution Phase

The distribution phase takes place after the price increases, and it seems that there is a limit to the increase.

Example Given As,

Here are some things to look for:

  • Occurs after price increase of last 5 months or more (on daily time frame)
  • This seems to be a clear boundary between support and resistance
  • The 200-day moving average is flat
  • The price bounces back and forth around the 200-day moving average

At this point, the market is still in equilibrium between buyers and sellers. However, the tide turns if the price falls below the support and this is where we enter the final phase.

4. The Falling Phase  

The Falling Stage is a high and low, with a lower and higher series.

Example Given As,

Here are some things to look for:

  • In the distribution phase, the price is out of support
  • You see a series of lows and lows
  • The price is moving average  below the 200 day
  • The 200-day moving average is starting to get low

Now you might be thinking.

Main purpose of 4 phases of market trend:

Here’s the thing:

If you can identify the current state of the market, then you can adopt the appropriate trading strategy to trade it.

Here’s how

If the market is booming, you want to be a buyer (not a seller).

That means you can buy breakouts or pullbacks. If the market is in a split-phase, you know that if the price falls below the support, there is a good chance. This means you can search for support to reduce the error or wait for the error to occur, then sell on the pullback. Now that you understand the 4 steps of the market, you will know which price action trading strategies to use in the market situation – and you will never be “lost” again.

By using price action pattern identify trending and consolidating markets

As we discussed earlier, the P.A. or “Price Action Trading Analysis” is an analysis of the price movement of a market over time. From our analysis of price movements, we can determine the basic directional bias or “trend” of a market, or if there is no trend in the market it is called “stable”; we can easily determine one can determine whether the market is trending or stabilizing just by analyzing it. PA. We looked at how to determine the market trend from above, to determine if the market is stabilizing we only look for the absence of HH, HL or LH, LL patterns. Notice in the chart below how the “steady price action” is good between the horizontal support and resistance levels and is not making HH, HL or LH, LL but going in the way instead.

Evaluation fo Some of the Common Price Action Patterns

Doubtlessly, price action patterns are very helpful tool for the technical analysis of the market. However, some of the traders are seriously concerned with authenticity of these price action patterns and question the reliability of these patterns. Good thing is that there are a number of ways to understand the present structure of the market and we can look for trading opportunities into the market.

We have tested and analyzed the data of 200,000 patterns and collected the data of more than 10 years and accumulated the statistics. Price action patterns were only considered after successful completion. So, we have laid down the requirements for the completed patterns against every single case herein below.

Ascending Channel Pattern (73.03%)

Descending Channel Pattern (72.88%)

You can easily witness the channel price pattern in the trending behaviors that have good quantity and behave as a delayed continuation pattern.  In that case, channel pattern is quite similar to the flag in as they have periods of consolidation among the parallel trend lines. However, the channel pattern is generally comprises of multiple bars which shows the increased success rate and strength.

We can define the ascending channel pattern as bullish trending move followed by the serial of lower highs and lower lows. These moves constitute parallel trend lines having price information. Similarly, descending channel pattern may be defines as bearish trending pattern followed by a series of higher lows and higher highs.

When it breaks the upper trend line in an increasing channel or below the lower trend line in an ascending pattern, pattern is considered as completed. Similarly, pattern is considered successful when it achieves the movement from the external edge of the pattern which is equal to the distance of the starting trending behavior that started the channel pattern.

Double Top Pattern (75.01%)

Double Bottom Pattern (78.55%)

This double top and bottom the most common reversal price pattern. Top move depicted with the help of two equal highs and double bottom is defined with the help of two equal lows. Generally, pattern becomes more powerful with more and wider gap between the touches. When price breaks below the swing low point, the pattern becomes completed, or when price breaks above the swing high point created by the first ever low in the double bottom. Technically, this is the first pattern remarkably different from the bearish double top and bullish double bottom patterns. Evidently, double bottom pattern is mo0re fruitful as compare to double top pattern because their targets reach 78.55% and 75.01% respectively.

Triple Top Pattern (77.59%)

Triple Bottom Pattern (79.33%)

Another version of the reversed price pattern is triple bottom and triple top moves. Three nearly equal highs are visible in triple top and triple bottom contains thee approximately equal lows. Usually, pattern is considered powerful with wider the gap between touches either top or bottom.

When price breaks below the swing low points between the highs in the triple top, the pattern is considered completed or when price breaks above the swing high points between the low in a triple bottom. Similalry, when price completes the same distance after the breakout as the distance from triply high to the far swing low, it is considered successful (See Red Arrows)

Bullish Rectangle Pattern (78.23%)

Bearish Rectangle Pattern (79.51%)

The continuation pattern that follows a trending move termed as rectangle price pattern.  Similalry, channel pattern, except that the pattern does not shows a slope in contrast with the previous trend which gives it a higher probability of successful and long lasting continuation.

Sound and strong trending move followed by two or more approximately equal tops and bottoms that compose two parallel horizontal trend lines (support and resistance) defined as the rectangle pattern.  However, that the bullish rectangle pattern starts after a bullish trending move, and the bearish rectangle pattern starts after a bearish trending move and this is the only difference between the bearish and bullish versions. It is worth mentioning that rectangle price patterns are essentially failed double and triples tops and bottoms. Moreover, lows do not break to affirm the patterns. So, those reversals are not confirmed. So be careful while trying to anticipate double and triple tops/bottoms. This is because it can be hazardous and damaging for you to try. Often times, they don’t fully complete and price shift back to the previous trend. However, when price breaches into the resistance line in a bullish rectangle or when price breaks the support line in a bearish rectangle it is considered completed. Additionally, when price reaches beyond the breakout point and covers the same distance as the width of the rectangle pattern, it is considered successful.

Head and Shoulders Pattern (83.04%)

Inverted Head and Shoulders Pattern (83.44%)

Statistically, most accurate of the price action patterns till times are considered the head and shoulders patterns. This is because they reach their projected target level around 85% most of the time. Two swing highs with a higher high between them show the regular head and shoulders pattern. Two swing highs are called shoulders and higher high is termed as head.

Inversely, the reversed head and shoulders pattern contains two swing lows and one lower low among them.  Generally, their distance from the same area is directly proportional to the strength of pattern. Means, closer they are to the same area the stronger the pattern becomes.

When price moves through the neck line created by the two swing lows in the head and shoulders the pattern is considered complete. It can be sloped as the swing points do not need to be exactly the similar to have a completed pattern. However, in the chart example above this line is horizontal.

When price breaches out from the neckline and moves a distance equal to the distance from the neckline to the head of the pattern it is considered completed.

Bull Flag Pattern (67.13% Success)

Bear Flag Pattern (67.72% Success)

After a strong trending move, flag which is a continuation pattern comes into light. Basically, it is a strong bullish move followed by the instant serial of lower highs and lower lows for the bull flag. On the other hand, it can be called strong bearish trending move followed by a rapid series of higher highs and higher lows against the bear flag. These patterns may cause little bit resistance in strong trends. So, they are only composed of little number of price bars ranging from 10 to 20. Contrarily we can define longer and wider patterns as channels as you can see below.  

In fact, flag pattern is a small rectangle usually bent over the existing price trend. Mainly, there are two remarkable features of best flag patterns.

  1. Very rapid run in price almost vertical before setting up of the flag
  2. A tight flag occurring right on the upper (or lower) edge of that run

So, higher the percentage that pattern will break favorably in the prevailing trend direction is depicted by the higher and tighter patterns.

In a bull flag, when pattern breaks into upper trend line, it is considered a successful pattern. It is to keep in mind that majority of the pattern projections are made from the breakout point, pennants, but flags and channel patterns. Similarly, channel patterns are gauged from the external edge of the pattern instead of the red arrows as shown in the charts.

Ascending Triangle Pattern (72.77%)

Descending Triangle Pattern (72.93%)

Usually, the triangular pattern appears and behaves as a continuous pattern. It is explained by a bullish trending move followed by two or more parallel highs and a series of higher lows for increasing triangle patterns. In addition to this, with a bearish trending move followed by two or more equal lows with a number of lower highs for increasing triangle pattern and a bearish trending move followed by two or more equal lows with a series of lower highs for a decreasing triangle pattern.

When it breaks above the horizontal resistance area in an increasing triangle, the pattern is complete or it goes lower to the horizontal support area in a decreasing triangle. If the price extends beyond the breakout spot for at least a similar distance as the pattern, the pattern is considered successful.

Poor Price Action Pattern

Bullish Pennant Pattern (54.87%) and Bearish Pennant Pattern (55.19%)

We have mentioned 7 number of the very successful patterns but now I am going to mention one of the poor price action patterns. It would be very useful to mention one of the flop patterns to show you how poor patterns move. It is one of the most used patterns despite such remarkable failure. This pattern is one of the patterns you see right next to the bull and bear flag pattern in the textbooks. However, it is very rare that anyone talks about its failure and incompetence.  It has success just below 70% but the pennants come in remarkable below that. It commonly occurs in high momentum markets after the strong trending moves. However, stiff price composition can lead to breakouts against the previous trends almost as often as we get a continuation. Do not underestimate this slight difference as this slight difference in the pattern between flags and pennants is the key and pivotal difference and your trading result might be shocking for you.  

Pricing is one of the most popular business concepts. A trader who knows how to use the pricing process correctly can often improve his performance and the way he views the chart significantly. However, there are still many misconceptions and half-truths circulating that confuse traders and lead them to failure. In following patterns, we explore the some key secrets of pricing action and share the best pricing tips.

1. Reality of support and resistance

Firstly, let’s explain what support and resistance are, so we’re all on the same page.

Support and resistance indicate a significant price level, because if the price is forced to change to the same level over and over again, this level must be and this will cause many market players to make their own trading decisions.

If the upward trend is forced to reverse the same resistance over and over again, it means that the ratio between buyers and sellers suddenly disappears.

It is not only the all buyers retreat at once, but sellers also dominate the market activity when a new downward trend.

Naturally, support and resistance do not always stop the price from continuing the trend. Breakouts can also provide high potential trading signals.

Traditional technical analysis states: The more often the price reaches a certain level of support or resistance, the stronger it becomes.

Each time the price reaches a support or resistance level, the balance between buyers and sellers changes. Whenever resistance is reached during the price uptrend, more sellers will enter the market and trade their sales. If the price reaches the same resistance level again, very few sellers will wait there. This phenomenon is also called order absorption. The resistance gradually weakens until the buyers face further resistance and the price breaks upwards and the upward trend continues.

We can observe this trend when the rejection of resistance weakens sharply and the price returns to the resistance level more quickly in each case. Formation orders such as triangles or cups and handles are also based on the concept of absorption.

The above figures illustrate this point. The price of silver sooner or later comes to the same level of resistance, as the arrows point out. This shows that fewer sellers are interested in selling at resistance levels each time. In this case, the resistance level weakens rapidly. Furthermore, just before the breakout, the point of view indicates that the trend was moving upwards. Eventually, the price broke through the resistance level and when there was no selling interest left, the upward trend emerged.

Let’s discuss support and resistance further:

Support A horizontal area on the chart where buyers can raise prices.

Resistance A horizontal area of the chart where the seller can lower the price.

We can change the role of support and resistance.

This means that when support is broken, it can gain resistance. And when resistance is broken, it can become support.

Reason?

Because when price support is broken, traders have been losing money for a long time and are “red”.

So, when the price returns to support, this group of traders can now get out of their lost trade-in Breaking and that creates selling pressure.

And that’s not all, because traders who miss out on breakouts want to shorten markets, which increases selling pressure.

And that’s why when support is broken, it becomes resistance.

Do you understand?

Now you might be thinking

What is a pattern to draw support and resistance on my chart? That’s a good question.

So, here are the guidelines I use;

  • Zoom your charts (at least 200 for me)
  • Draw very clear levels (this is not a significant level if you need to make a second guess)
  • Adjust your level to get the maximum number of “touches” (it can be physical or back)

Dynamic Support and resistance

According to the classic technical analysis, support and resistance are horizontal areas in your chart.

This is useful when the market is in a weak trend or in a change.

But in strong trend markets, it won’t work good and that’s why you need to depend on dynamic support and resistance.

Is the hack dynamic?

This means that support and resistance “move forward” with price rather than stabilization.

For example:

20 Trim Moving Average can act as a dynamic support in a strong trading market;

Dynamic Support & Resistance is also a form of trending and trend channel.

2. The Chart phase

At any time, the price may rise, fall, or move sideways. This may seem simple, but as we have seen in the analysis of the candlestick pattern, when we break down complex facts into its components, we can quickly gain comprehensive knowledge.

Each chart comprises the following five phases showing in the given chart:

 Corrections

 Corrections or Reforms  are a low-cost move in the direction of the current trend. During an upward trend, reforms are short-term stages in which prices fall. As we will see, the price does not always move in a straight line in one direction during the phases of the trend, but constantly moves up and down in the so-called price waves.

Trends

If the price rises over a period of time, it is called a rally, a bull market or just an upward trend. If the price continues to fall, it is called bear market, sell-off or downward trend.

Different trends can have different degrees of severity. In the next section, we will learn the individual aspects of trend analysis..

Stability

Stabilization is a side step. During a phase of sideways, the price usually moves intermittently along the clear price corridor and has no effect to start the trend.

Breakout

Buyers and sellers remain in balance during in this sub-phase. If the balance of power between buyers and sellers changes during stabilization and one side of the market players wins the majority, there is a breakout from such a round. Price then starts a new trend. Breakout, therefore, is a link between stability and new trends.

Trend Reversal

If the correction lasts for a long time and if its intensity increases, the correction can also cause a complete trend to change and start a new trend. Like breakouts, trend reversal scenarios, thus, indicate a change in prices from one market stage to the next.

Chart phases can be viewed globally as they represent a battle between buyers and sellers. This concept is timeless and explains the mechanism that causes all kinds of price movements. The trend phase pushes the price upwards, pushing the buyer higher. Stability prevents the temporary trend. However, this trend continues until the price reaches a new height during the upward trend. The reforms reflect the short-term rise of the opposition. If they are stopped, the trend will continue. On the other hand, when the power ratio changes completely, the long correction phase eventually turns into new trends.

 Although the order and strength of the each chart phases can vary highly, any chart contains only these phases. If we understand them comprehensively, the analysis of prices becomes relatively easy.

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3. Steepness and wave length

 Now, we’re getting even more grainy. After seeing that only different chart phases can be created in any chart, which itself consists of price waves, we will look at four different elements of wave analysis. They finish our basic work. The formation of each of the following charts, and any chart in general, can be understood and understood with the building blocks learned earlier.

The wavelength of individual trend waves is the most important factor in estimating the strength of price movement.

During a high trend, long wave trend waves that are not interrupted by correction waves show that the majority of buyers. On the other hand, short trend waves or slow trend waves indicate that a trend is not strong or is losing its strength. The data below shows that the trend-setting phases are clearly defined in the direction of a clear trend through long price waves.

Left: Long trend waves confirm the strength of the high trend. As soon as the waves shorten, the trend stops. Right: Downward trend is characterized by downward trend waves. However, the length decreases downwards and the trend changes soon after.

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 The rate at which a price increases during a trend is also very important. In general terms, moderate trends have a long lifespan and a sudden rise in price usually indicates a less sustainable trend. We can often see this trend during the so-called (price) bubbles, in which the price falls again soon after the explosive rise.

Compared to the overall chart context, the development of trends and price wave verticality is also important: accelerating or weakening price waves indicates that a trend is picking up speed or stopping slowly.

An interesting correlation can be made with the concept of length, If we find long wavelengths or trend waves that lengthen with moderate or increasing angles, an interesting correlation can be formed. On the other hand, a trend with trend waves that is rapidly declining, and which is simultaneously losing its steepness, indicates a possible end. The screenshot below shows a situation where the length and verticality change during an up trend. A complete reversal soon followed.

“Messy” Indicator-laden Charts v/s “Clean” Charts

Next, to show the exact contradiction between pure P.A. Chart and one with some popular trading indicators, I have shown two charts in the examples below. There are no indications of this in the chart above, there is nothing but raw drink. Market on this chart. Below the chart are the MACD, Stochastic, ADX and Bollinger Bands. The four indicators that are  mostly  used  AKA “secondary” analysis tools as they are sometimes called: As shown in the image below, the clear price action chart is shown, which has no glitches, and no indicators, only net prices:

The image below shows a dirty price act chart, with lots of clutter, clutter and clutter.

 It is worth mentioning that in a chart laden with indicators you have to leave some space at the bottom of the chart below which the indicators are found, this forces you to create a PA. A small part of the chart, and it also diverts your attention away from the natural P.A. And on the indicator, therefore, not only do you have less area of ​​the screen to view the PAA, but your focus should not be entirely on market prices as it should be.

If you really look at these two charts and think about which ones are easier to analyze and trade, the answer should be very clear. All the indicators on the chart below, and in fact almost all the indicators, are derived from the basic PA. In other words, when all traders add indicators to their charts, they create more variables for themselves. They are not getting any insights or predictive signals that are not already provided by the market price action.

4. Improve Your Trading Rapidly

 Even if you see the best price action signal, you can greatly increase your odds by trading only at significant and meaningful price levels. Most amateur traders make the mistake of taking price action signals no matter where they are located and then wonder why their winters are so low.

In my own business, I pay a lot of attention to this place. A good signal in a very important support / resistance or supply / demand sector can often predict a big trade.

On the other hand, even a strong price action signal in a bad place is nothing that I would trade.

 In order to increase the chances of successful business opportunities, do not enter into business tied up in such support and resistance areas. It is important to wait for more factors. For example, if head and shoulder formation or a double top appears at the level of support and resistance, the chances of a positive outcome may increase as a result.

The screenshot below shows how the right-left and shoulder pattern on the right is located at the level of long-term resistance. Mark 4 on the right chart where the head and shoulders are formed. Zooming of your chart often helps you to see the big picture better and you are able to choose the key points.

 When we zoom out, we can see that the formation of the head and shoulders is formed directly at the lower end of the strong resistance level, which creates an additional crossroads in our trade.

5. How to Trade with Price Action Trading Strategies

So how do we trade in terms of price? He really learns to trade PA. Setups or patterns from conflicting levels in the market. Now, if this is new or confusing to you right now, sit back and I’ll explain soon. First we need to cover a few more things.

Due to the recurring nature of market participants and the way they react to global economic variables, P.A. The market repeats itself in different patterns. These patterns are also called price action trading strategies, and many different price action strategies are traded in many different ways. These price patterns or setups of price processes reflect changes or continuity in market sentiment. In layman’s terms, this means that by learning to look for patterns of price action, you can get “clues” as to where the market price will be next.

The first thing you should do is start a PA. The trade is to get rid of all the “crap” on your charts. Hints, get rid of expert advisors. Everything on the chart but the prices go down. I prefer to use candle charts because I think they convey market price data more dynamically and with “force”, if you are still using the classic bar chart and about candles. I like the general black and white charts best, as you can see below. In MetaTrader 4, you just right-click on the chart and adjust the chart’s “Features” so that it looks like mine below. After removing all the indicators and other unnecessary variables from your indicator, you may want to draw at the level of the key chart and find the setup of the trade price action process.

The following illustration illustrates some of the trading strategies I use in my Price Action Trading course. Note that key support / resistance levels have been developed.

How Candlestick Patterns Work?

 The candlestick pattern is a powerful tool for predicting price fluctuations. We are going to explain the best candlestick patterns for traders to enable them to identify and select viable business opportunities.

 A candlestick is a technique for expressing the value of an item. These candles are an integrated part of technical analysis through which traders can get price information and interpret them to take advantage of trading opportunities.

 Basically, we are focusing on the daily chart and each candle focuses on the same day trade. Basically, there are some basic features to keep in mind and these features are:

  1. Body: Represents the range from open to close
  2. Wick: Shows upper and lower limits for the same day
  3. Color: This feature represents market trends with color coding. Green or white is a sign of positive trends, meaning prices are rising. On the other hand, red or black represents a decrease in price.

The candle pattern has 4 data points.

Open – Price Cost

High – The highest price during a given period

Less – Less than a fixed price

Close – Closing price

I mean:

For a bullish candlestick, the open is always close to the bottom.

And for most candles, the open is always close to the top.

Furthermore, with the help of these candlestick patterns, traders can gauge the level of support and resistance. Different candle patterns provide important information such as market opportunity, continuity trends, market volatility, and buy-sell balance.

So, if you are a beginner and trying to enter the commercial world, learning from candle patterns will help you miraculously make a positive difference.

To understand this candlestick pattern and price analysis, it will help you if you think of price movements in financial markets as a battle between sellers and buyers. Buyers are likely to call everyone who looks appropriate, if there are only a few. Sellers bet on a reduction in prices and push the price down with their selling interest.

If strong on the one hand, the following trends will emerge in the financial markets:

If there are more buyers than sellers, or more interest buying than selling interest, buyers do not have anyone to buy from. Prices then go up until the price is so high that sellers find it interesting to get involved again. At the same time, the price is too high for buyers to buy.

However, if there are more sellers than buyers, prices will fall until the balance is restored and more buyers enter the market.

The more imbalances are created between these two market players, the faster the market moves. However, if only slightly exceeded, prices change more slowly.

When buying and selling interests are in balance, there is no reason to change the price. Both sides are satisfied with the current price and there is a balance in the market.

This is always important to keep in mind as price analysis is a comparison of the strength ratios of the two sides to determine which market players are stronger and which direction the price is in, candlestick pattern has 4 basic factors which are given bellow:

  • The length of wicks
  • Bullish vs. bearish wicks
  • Position of the body
  • The body

Let’s discuss them further in details.

1. The length of the wicks

If you see very long waxes, it means that fluctuations and uncertainty are increasing.

2. Bearish v/s Bullish wicks

Do you see more / longer vacations upside down or down? Weeks that remain on the negative side usually indicate rejection and failed attempts at recession.

3. Body position

Does the body of the candle stand at the top or bottom of the candle? Bodies that live close to the top often indicate rapid pressure.

4. The body

It shows open-to-close range. Candles with large bodies and small wicks usually indicate too much power, while candles with small bodies and large wicks indicate animosity.

The amateur squeeze and stop hunting

The pattern of traditional pricing processes is quite clear and many traders believe that their broker hits their stops because it always seems to stop – even though the setup was so clear.

It is very easy for a professional trader to estimate that when amateur traders enter and stop trading, there is a pattern of action in price. The “hunting” you will see is not done by your broker, but by the for-profit traders who squeeze out the amateur makers to create maximum liquidity.

This is one of the price action secrets that can make a big difference and we have seen many of our students turn their business around with it.

Don’t waste time on books

Don’t waste your time reading lengthy books and seeking help from them.

It is one of the biggest problems I often see is that merchants or traders keep looking for different books and then use their textbook knowledge.

you just only need to ask yourself: Why do so many traders lose money? Does it have anything to do with the fact that they all read the same books, trade in the same way, and look the same in the chart? I think! every trader should think differently.

Trade doesn’t work that way and price is a very dynamic concept. Prices and patterns change continuously and if every trader is trying to trade similarly, then only some traders will take advantage.

This is probably one of the most misunderstood prices. Stop looking for shortcuts and don’t wait for textbook samples – learn to think and trade like a pro.

The M.A.E Trading Formula:

At this point:

You have learned the basics of price action trading (support and resistance, market structure and candlestick patterns).

Now, use this opportunity to find high potential trading setups – permanent and profitable.

Introducing the M.A.E Trading Formula, a proprietary trading technique that I have developed to help traders achieve faster results.

It works here

  • Market structure
  • Area of value   
  • Enrollment stimulus

I will explain;

Market Structure

I know it can be difficult to look at a blank chart. Because you don’t know what are thesteps to follow. Should you buy, sell or stay out?

That’s why the first thing to do is to identify the market structure because it tells you what to do.

So ask yourself:

“Is the market rising, falling, or range?”

(In other words, identify the current state of the market.)

Once you can identify the structure of the market, you will at least know the trade on the path of resistance.

For example:

  • If the market rises, you just look to buy.
  • If the market is down, you just sell.
  • If the market is in range, you can buy and sell.

Area of value

Now, just identifying the market structure is not enough.

Because you also need to know where to enter your business.

Now you are surprised:

“There are a lot of places to get into business. Which should I choose?

Well, you want to trade from a valuable area so that you can buy low and sell high.

For example:

  • Help and resistance
  • Respectable moving average
  • Trend line

Enrollment Stimulus

At this point:

You know about identify market structure and area of value.

Now the last part of the equation is to know when to enter. Personally, I like to enter when the market shows reversal signals – this confirms my bias. This can be in the form of ultra price patterns such as:

  • Hammer
  • Shooting star
  • Blush engulfing pattern
  • Bearish engulfing pattern

Let’s discuss them in detail…

Hammer

The hammer is a rapidly changing alternating pattern, indicating that the stock is moving closer to the bottom. The body of the candle is short with a long shadow which is the price of the sellers who lower the prices during the trading session, then only face strong buying pressure to end the session at a high close. We need to take a closer look at the next few days to confirm this trend before we rapidly reverse. This reversal should also be confirmed by the increase in trade volume.

Shooting star

As the name suggests, the Morning Star is a symbol of hope and a new beginning in the city. This pattern consists of three candles: between a long, long black candle and a successful long white candle is a small body candle (called a doji or spinning top). The actual color of a short candle can be either black or white, and there is no overlap between them. This shows that the selling pressure on the first day is now lessening. The third white candle disappears from the body of the black candle and represents a new pressure and rapid reversal for buyers, especially if the high volume is confirmed.

Blush engulfing pattern

The Blush-filling pattern is made up of two candles. The first candle is a small red body that is completely wrapped in a green candle. Although the second day opens less than the previous one, the bullish market has pushed up prices, which will give buyers a clear victory.

Bearish engulfing pattern

An example of a bearish is a technical chart that indicates the coming low prices. The pattern can be important because it shows that the seller has outperformed the buyer and the buyer is able to hold it (up to the candle) down more aggressively than it is down (candle down).

Our Verdict

I hope today’s introduction to Price Action Trading has been a helpful and enlightening lesson for you. It doesn’t matter what strategy or system you trade with a solid understanding of P.A. Only you, as the parent can know for sure. If you’re like me, and you like simplicity and minimalism, you want to be a “pure” P.A. trader and remove all unnecessary variables from your chart.

You have just learned what price-trading is all about, and how you can use it to gain a “feel” for the markets. If you learn it well, it will improve your entries, expenses and business management. Now is the time to put these techniques into practice. If you are interested in learning how to trade with easy pricing strategies, you have gone through the above pattern.

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