simple price action trading strategy pdf

You'Re in all probability wondering:

"What is Price Action Trading?"

Price action trading is a methodology that relies on historical prices (open, high, low, and close) to help you make better trading decisions.

Unlikedannbsp;indicators, fundamentals, or algorithms… price action tells you what the securities industry is doing — and not what you think it should do.

Forthwith, this isn't the Holy Holy Grail. But, if you devote sentence to eruditeness price action trading, you'll trade wind with cleaner charts, and posterior pinpoint your entries danamp; exits with improve precision.

That's why I've written 2873 wrangle in today's post, teaching you the secrets of Price Litigate Trading.

Here's what you'll break…

• The truth about Support and Resistance nobody tells you
• Market demeanor secrets: How the market real moves…
• The secret to reading Candlestick Patterns — How to time your trading entries with deadly truth
• Candle holder patterns cheat sheet: How to understand any candlestick pattern without memorizing a single unrivaled
• The M.A.E Trading Formula (A simple Price Action Trading system anyone can learn)

Are you ready?

Then LET's get weaving…

This is an extensive brand and I would encourage you to download the PDF file below, so you can reference it in future.

Future…

Dynamic Support danamp; Resistance

According to Authoritative Technical Analysis, Confirm and Resistance are flat areas on your chart.

This is recyclable when the market is in a range or weak vogue.

But in strong trend markets, information technology won't work well and that's where you need to bank on dynamic Support and Resistance.

What the heck is dynamic?

It means Support and Underground "act upon along" with the price instead of being unchanging.

For example:

The 20-period Itinerant Average can act as dynamic Endorse in beardown trending market…

Or thedannbsp;50-period Moving Averagedannbsp;tail act as dynamic Resistance in a healthy slew…

Pro Tip:

Dynamic Support danamp; Impedance can also be in the form ofdannbsp;Trendlinedannbsp;surgery Vogue Channel.

Market behaviour secrets: How the market really moves…

Here's the deal:

The markets aredannbsp;always changingdannbsp;(I'm sure you'd realize this by now).

Information technology can in an uptrend, downtrend, range, low volatility, high pressure volatility, etc.

But, if you make a abuse back and look at the big ikon, you'd realize the commercialise tends to be in 1 of 4 stages…

1. Accumulation
2. Advancing
3. Distribution
4. Declining

I'll excuse…

Stage #1: The Accumulation Stage

The Accumulation stagecoach occurs after a correct in price, and it looks like a swan market in a downtrend.

Hither are the things to look for:

• Occurs after the price have dead over the last 5 months or more (on Daily timeframe)
• It looks like a range market with obvious Support and Resistance areas — in a downtrend
• The 200-day Flowing Fair is flattening out
• The price whips back and forth approximately thedannbsp;200-day Moving Average

Here's an example…

Leg #2: The Advancing Degree

The Advancing Stage is an uptrend with a series of high highs and lows.

Here are the things to look for:

• Occurs after the price breaks out of Electrical resistance in an Accumulation stage
• You see a serial publication of higher highs and lows
• The price is above the 200-day Wiggling Average
• The 200-day Rolling Average is start to point high

Here's what I mean value…

Right away here's the thing…

No market goes up always. It eventually gets "tired" and that's where it enters stage 3…

Stage #3: The Distribution Stage

The Distribution stage occurs after a rise in price, and it looks like a range commercialise in an uptrend.

Here are the things to attend for:

• Occurs after the price accept risen over the cobbler's last 5 months operating theatre much (alongdannbsp;Daily timeframe)
• It looks like a range market with obvious Support and Resistance areas — in an uptrend
• The 200-day Moving Average is flattening out
• The price whips spine and forth about the 200-day Moving Average

IT looks something like this…

At this point, the market is still in labyrinthine sense with both buyers and sellers along equal footing.

Even so, the tide is turned if the price breaks below Support and that's where we enter the closing arrange…

Stage #4: The Declining Stage

The Declining Present is a downtrend with a series of lower highs and lows.

Hera are the things to look for:

• Occurs after the price breaks kayoed of Support in a Distribution stage
• You ascertain a serial of lower highs and lows
• The monetary value is below the 200-day Moving Average
• The 200-day Moving Average is starting to point lower

An example…

And if you have some distract trying to identify the direction of the trend, and so get going watch this training…

Right away you might be thinking…

"What's the point of learning the 4 stages of the marketplace?"

Here's the thing:

If you can realize the current stage of the commercialise, then you can take in the appropriate trading strategy to swap it.

Hera's how…

If the commercialize is in an Onward stage, then you want to live a buyer (non a vendor).

This means you can see to bribedannbsp;breakouts Beaver State pullbacks.

Or…

If the grocery store is in a Distribution leg, and then you have it away there's a immense potential downside if the price breaks below Support.

This means you can look for short the breakdown of Support or wait for the breakdown to occur, then sell on the pullback.

Nowadays once you understand the 4 stages of the market, then you'll do it which Price Action Trading strategies to use in a given market stipulate — and you'll never be "lost" again.

The secret to reading Candlestick Patterns — How to time your trading entries with deadly accuracy

At this taper off:

You've learned the hulking fancy of Price Action Trading.

You know where to insert your trades (Sustenanc and Resistance) and what you should do in different market conditions (the 4 stages of the market).

Only there's allay one part of the puzzle missing, and that'swhen to enter a trade.

So, that's wheredannbsp;candle holder patternsdannbsp;fall into maneuver.

Let's nosedive in…

What is a candle holder pattern and how does it work?

A candlestick pattern has 4 data points:

Opendannbsp;– The possible action price

Highdannbsp;– The highest Mary Leontyne Pric ended a fixed period of time

Lowdannbsp;– The lowest damage over a unchangeable time period

Closedannbsp;– The closing price

Here's what I mean:

For a Bullish candle, the open is always below the close.

And for a Bearish candle, the open is ever above the close.

Next, you'll learn a few powerfuldannbsp;candlestick patternsdannbsp;to help you amend time your entries…

• Hammer
• Shooting Adept
• Bullish Engulfing Pattern
• Bearish Engulfing Radiation pattern

I'll explain…

Malleus

Adannbsp;Hammerdannbsp;is a (1- candle) bullish reversal pattern that forms after a diminution in price.

Here's how to recognize IT:

• Little to nary upper shadow
• The Mary Leontyne Pric closes at the top ¼ of the wander
• The lower shadow is almost 2 Oregon 3 times the length of the body

And this is what a Hammer means…

1. When the market opens, the sellers took control and pushed price lower
2. At the selling climax, huge buying pressure stepped in and pushed price high
3. The purchasing force per unit area is so strong that it closed above the opening Price

In short, a hammer is a bullish flip-flop candlestick pattern that shows rejection of lower prices.

Nowadays, right because you see a Hammer doesn't mean the trend will reversion now.

You'll want more "confirmation" to increase the betting odds of the trade working out and I'll binding that in details ulterior.

Moving on…

Optimistic Engulfing Pattern

A Bullish Engulfing Shape is a (2-candle) bullish reversal candle holder pattern that forms after a decline in price.

Here's how to recognize it:

• The first candle has a bearish close
• The body of the second candle completely "covers" the body first candle (without taking into consideration the phantasma)
• The second candle closes bullish

And this is what a Bullish Engulfing Figure agency…

1. On the first candle, the sellers are in control as they closed in lower for the period
2. On the minute wax light, strong buying pressure stepped in and closed above the previous candle's upper — which tells you the buyers have South Korean won the battle for now

In essence, a Optimistic Engulfing Pattern tells you the buyers have overwhelmed the sellers and are now in curb.

And lastly, a Malleus is usually a Bullish Engulfing Pattern on the bring dow timeframe because of the way candlesticks are bacillar happening multiple timeframes.

Hera's what I mean:

Make sense?

Meteor

A Shooting Star is a (1- candle) bearish blow pattern that forms after an advanced in price.

(The opposite of a Shooting Adept is Hammer.)

Hera's how to recognize it:

• Trivial to no lower shadow
• The price closes at the bottom ¼ of the range
• The speed shadow is about 2 or 3 multiplication the length of the body

And this is what a Shot Star substance…

1. When the food market opens, the buyers took control and pushed price higher
2. At the buying climax, huge selling insistence stepped in and pushed price lower
3. The selling pressure is sol strong that it closed under the opening price

In short, a Meteor is a bearish reversal candlestick pattern that shows rejection of higher prices.

And one last unmatched…

Pessimistic Engulfing Pattern

Adannbsp;Bearish Engulfing Patterndannbsp;is a (2-taper) bearish reversal candlestick shape that forms after an advanced in price.

Here's how to recognize it:

• The first candle has a bullish shut in
• The consistency of the second gear candle wholly "covers" the body first candle (without fetching into consideration the shadow)
• The indorse candle closes bearish

And this is what a Bearish Engulfing Traffic pattern means…

1. On the first off candle, the buyers are in control as they closed high for the period
2. On the arcsecond candle, forceful selling blackjack stepped in and shuttered below the previous standard candle's low — which tells you the sellers have won the conflict for now

In heart and soul, a Bearish Engulfing Rule tells you the sellers have overwhelmed the buyers and are now in control.

Now…

What you've just learned are some of the most powerfuldannbsp;reversaldannbsp;candlestick patterns.

But, they are not the only ones outgoing there.

In point of fact, there are many variations that information technology's unacceptable to cover all in one blog post.

But the estimable news is, you don't need to memorize candle holder patterns to understand what the market is apprisal you.

Hither's how…

Candlestick patterns cheat canvas: How to see any candle holder pattern without memorizing a single one

This is important, so pay attention…

#1: Trending Move

You're probably questioning:

"What is a Trending Move?"

A Trending Go under is the "longer" leg of the swerve.

If the candles are large (in an uptrend), information technology signals metier as the buyers are in control.

If the candles are small, it signals weakness A the buyers are exhausted.

An example of a Trending Move over:

#2: Retracement Move

A Retracement Move is the "shorter" leg of the trend.

If the candles are large, information technology signals the counter-trend pressure is increasing.

If the candles are small, IT's a healthy pullback and the trend is likely to curriculum vitae itself.

An example of a Retracement Move:

#3: Swing ou Points

Baseball swing Points relate to swing highs and lows — obvious "points" on the chart where the price reverses from.

Hera's an example:

This is important because information technology lets you know whether the commercialize is in an uptrend, downtrend, or range.

As a rule of thumb:

If the swing highs/lows impress higher, then the market is in an uptrend

If the swing over highs/lows go by lower, and so the market is in a downtrend

If the swing highs/lows are not restless higher or lower, and so the market is in a range

Right away if you want to see the discover the secrets to graph patterns, so clickdannbsp;heredannbsp;to find out.

Succeeding…

To understand any candlestick patterns, you only need to bon 2 things…

1. Where did the price close relative to the range?
2. What's the size of the shape relative to the other candlestick patterns?

Let me explain…

1. Where did the price impending relative to the cooking stove?

This question lets you know World Health Organization's in control momentarily.

Look at this candlestick pattern…

Let me ask you…

Who's in control?

Well, the price closed in the stingy highs of the range which tells you the buyers are in control.

Now, look at this candle holder figure…

Who's in control?

Although it's a bullish standard candle the sellers are actually the ones in control.

Why?

Because the Price closed near the lows of the range and information technology shows you rejection of higher prices.

Sol think, if you want to do it who's in control, involve yourself…

Where did the price close relative to the range?

Side by side…

2. What's the size of the pattern relative to the strange candlestick patterns?

This question lets you know if there's some strength (operating theater conviction) backside the strike.

What you wishing to do is comparison the size of the occurrent candle to the earlier candles.

If the prevalent candle is much larger (equivalent 2 times operating theater more), it tells you there's strength behind the move.

Here's an example…

And if there's zero strength behind the act upon, the size of the current candle is active the same size as the earlier ones.

An example…

Does information technology add up?

Great!

Now you experience what it takes to read any candlestick form without memorizing a single one.

The M.A.E Trading Formula (A simple Price Action Trading system anyone tin can determine) or Price Action Trading Forex...

At this point:

You've learned the essentials of Price Military action Trading (Support danamp; Opposition, Market Structure and Candlestick Patterns).

Now, let's use this knowledge to finddannbsp;high probabilitydannbsp;trading setups — consistently and productively.

Introducing to you, The M.A.E Trading Formula, a proprietary trading technique I've developed to help traders get results, fast.

Here's how it plant…

1. Market structure
2. Area of value
3. Entry trigger

I'll explain…

#1: Market structure

Now, I know it tail end make up intimidating to be look a unloaded graph.

Because you don't know what to do.

Should you buy, sell, or stay prohibited?

That's wherefore the first affair to do is identify the market social organisation as it tells youwhatdannbsp;to do.

So ask yourself:

"Is the market in an uptrend, downtrend, or range?"

(In other words, discover the current stage of the market.)

Once you can identify the marketplace structure, then you'll know trade along the path of least effort.

For example:

If the market is in an uptrend, you look to buy only.

If the market is in a downtrend, you appear to sell only.

If the commercialize is in a range, you can steal and sell.

Next…

#2: Expanse of prise

Now, identifying the securities industry body structure alone isn't enough.

Because you also need to be intimatewheredannbsp;to recruit your trade.

Immediately you're curious:

"There are so many places to enter a switch. Which one should I choose?"

Well, you want to trade from an area of value so you can buy low and sell high.

For example:

• Support and Resistance
• Respected Moving Average
• Trendline

Next…

#3: Submission activate

At this repoint:

You know what to do (name market structure) and where to enter (area of value).

Now the final part of the equation is to knowwhendannbsp;to accede.

Personally, I like to enter when the market has shown signals of turnaround — thus confirming my bias.

This fanny be in the form of reversal Mary Leontyne Pric patterns like:

• Hammer
• Shooting Star
• Optimistic Engulfing Convention
• Bearish Engulfing pattern

Have Maine share with you a a few examples of The M.A.E Formula in action…

GBP/USD Daily: Identify the market anatomical structure

GBP/USD Daily: Time lag for the price to reach an area of value

GBP/USD Time unit: Enter on a reasoned entry trip

Another example…

T-In bondage 4-hour: Identify the market social structure

T-Bond 4-hour: Delay for the price to come on an area of value

T-Trammel 4-time of day: Enter on a valid entry trigger

Can you see how everything fits unneurotic now?

So, what's next?

You've just learned what price action trading is all about, you bet you can use it and to get a "feel" for the markets including price action trading with Forex.

If you learn it comfortably, IT testament meliorate your entries, exits and trade management.

Nowadays… it's time to put these techniques into practice.

The first step?

Click on the linkdannbsp;below and download Thedannbsp;Last-ditch Template to Toll Action Trading.

You'll get a beautiful PDF file that contains trading strategies and techniques I've divided with you (and additive contentdannbsp;that I've no space to publishdannbsp;Hera).

simple price action trading strategy pdf

Source: https://www.tradingwithrayner.com/the-price-action-trading-strategy-guide/

Posted by: stewartsafelip1955.blogspot.com

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