I am getting fully into price actions without using any indicator. A beginner cant start with this, he/she has to learn its way around candlestick formations, patterns, shapes and so forth.
So I have a market structure on a particular asset pair I was trading. It was a downtrend (major one to be precise), I was aware of lower highs and lower lows formations on my chart (4Hr) which I ignored totally to enter any open position. Guess what I was focusing on? I’d focus on shapes of correction to go more downtrend for example, after a bearish downtrend, a correction leading to ascending triangle was formed, my aim was to trade the ascending triangle breakout in continuation of preset downtrend.
So I looked at my trading style, another price action trader would have traded the same asset pair using purely lower highs and lower lows on every breakouts.
So I want a comprehensive discussions with more advanced and experienced price action traders, what knowledge could you possibly pass in your approaches?
Price action doesn’t just create candlestick formation. Provides price action ideas about market sentiment. Traders have a candle idea about how emotions work. From support / resistance level, pin bar, engulfing bar, 2 bar etc. signals the formation market in case of continuation and reversal.
Thank you @Kathlyn_Pollich for your contribution. Those are basics for any price action trader should know. What are the technicalities with your trading style would you like to share?
I feel that price action is the most reliable trading strategy on the market. I mean that all the indicators can be wrong from time to time and the most accurate thing on the market is the price and how it behaves.
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Yes it is @Peavkiods
It makes trading simple when you fully understand, no sophisticated indicators required.
i love trading triangles as you described. but for me the breakout entry it the least efficient. there is the revesal high or low before the triangle break and the the retest of the break
Thanks for your take on this and what a lovely chart you share with us @YoungTrepTrader . So I would like to ask with your experience, how do you tweak the breakout before entry into new position?
yes indeed a great thread to discuss… so how i approach an anticipation of a wedge breakout is to analyze the strengh of the wedge and wat stage in accumulation. the narrower price goes into the wedge the stronger the break. and so wat i will look for in price is a smaller candle in the direction of anticipated break after a larger candle that pushed further into the wedge. as far as timing price action i like to see a nice rejection wick on the large candle or shortly before in previous candles. for a long entry, as long as the small volume bull candle closes below previous large bear candle open i am taking a trade on that candle close. you can see the difference in entry compared to entering after a clean break in the next pics
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Bro what about price action divergence? that one of my favorites.
@YoungTrepTrader Price action divergence is cool for change in momentum. I do make my price action simple approach. What’s your take on price action divergence? Do you use any indicator to correlate the divergence? How has it improve your trading? How can you shed more light on the matter?
are you able to see my screenshots abouve? yes change in momentum divergence is great but the win rate is less or draw down is more in some cases. because u know price can diverge endlessly some times. but there are specific thing i look for when look to trade reversals as opposed to tradinf in direction of general trend as seen in my pics
im not using indicators when im trading my price action strategies. i am using the momentum of the trend to measure price divergence. this helps for precise low drawdown entries. for example for short trades i will look for a down trend that is in motion and then im marking each retracement swing high point. wat i will look for as price makes lower highs is for price to break one of these lower highs. to me that is price action divergence. downtrend momention but higher high priced in. and any time this happens as im takeing and entry on next candle if price closes on or near that high level. if price closes strongly abouve i will wait for the smaller volume candle in the direction of bigger trend and then enter… see the Screenshots
@YoungTrepTrader thanks for the clear out
Price action strategy combined with any indicator can provide the ability to figure out entry and exit points more accurately. Indicators like moving averages help in spotting any support and resistance levels based on previous price movement.
Really simple way to think I like to use:
Bias- Using a higher time frame which way is the overall movement. I’m a weekly swing trader aiming to have positions last 2-3 days only. My approach to this is simply go on the daily timeframe after 10am gmt and have a look at the colour of the candle, also, use an RSI indicator on the daily time frame (if RSI is above 50 it’s bullish, below 50 bearish). When both of these show a match/convergence then you have a confirmed bias.
Structure- mark points of interest on your main timeframe after getting a bias for the day. Look for things like moving average levels (50 and 200) along with support and resistance and supply and demand zones. Mark them on your chart that are relevent.
Chart Patterns- look for double tops/bottoms and head and shoulder based chart patterns to confirm reversals may be happening at key structural levels.
Candles- use a lower timeframe and wait for candles that support the entry (engulfing/pinbar) along with a 2nd candle confirming momentum in the desired direction.
TPs- Place take-profits nearby key structural levels
SL- place stoploss below 2 levels of key structure
Aborts- your abort strategy needs to be defined in advanced of your placing the trade. I like to use double tops/bottoms or head and shoulders as an objective early abort. If I see chart patterns confirming a reversal to my intended trading direction I will abort early.
RR- I ensure an RR of at least 2 to maximise return
My own personal strategy uses fib retracement tool to help objectify levels. I don’t trust my brain so rely on objective tools where possible to reduce mental workload.
Hope this helps!
