Wysetrade
Learn how to trade using naked price action, which is more accurate than using lagging indicators in this video. Understand market structures, key levels, supply and demand, swing highs and lows, and major key levels. Use monthly levels to trade on lower intraday time frames and look for foreign candles to confirm trade opportunities. Additionally, learn how to identify an uptrend, its characteristics, and ways to enter trades.
Mastering Price Action Trading: A Comprehensive Guide
Introduction: Price Action Trading Explained
Price action trading is a method of making trading decisions based on the real-time price formations that materialize in the market. Unlike indicators that lag, price action is a leading indicator that tells you everything you need to know. In this video, we will cover multiple price action methods that will help you improve your trading skills.
Market Structure and Key Levels
Market structure refers to the arrangement of the market and the different levels that price moves through. Key levels are the points where price can reverse upwards (support levels) or downwards (resistance levels). When price comes up to a recently-formed resistance level, it is deemed expensive, meaning less buying occurs, and the market triggers a reversal downwards. In contrast, when price comes down to a recently-formed support level, it is deemed cheap, and value buyers take advantage of this to trigger an upward reversal.
Supply and Demand and Multiple Reversals of Price
When an area above experiences multiple price reversals, it is known as a supply zone. Market deems this area as expensive, and it results in buyers consistently closing their long positions at this zone while sellers open short positions. This creates downward momentum that generates short trade opportunities. In contrast, when an area below experiences multiple price reversals, it is known as a demand zone. Market deems this area as cheap, and it results in sellers consistently closing their short positions at this zone while buyers hold or open long positions. This creates upward momentum that generates long trade opportunities.
Extreme Swing Highs and Lows
Using extreme swing highs and lows as key levels, traders can identify high-quality trade setups. A swing high key level identifies the absolute highest resistance level that presents a higher percentage chance of price reversing off of. In contrast, a swing low key level identifies the absolute lowest support level that presents a higher percentage chance of price reversing off of.
Higher Time Frame Key Levels
Major key levels are visible on the weekly and monthly time frames. These slower-forming key levels are essential for large institutions to unload or take on new positions. Labeling these levels as monthly levels allows traders to anticipate price action and plan their trades accordingly.
Foreign Candles
Candles with wicks sticking out above in an uptrend indicate that buyers tried to push through a key level but failed, presenting short trade opportunities. In contrast, candles with wicks sticking out below in a downtrend indicate that sellers tried to push through a key level but failed, presenting long trade opportunities.
Foreign Trends Reversals, and Ranges
Identifying an uptrend requires traders to look for runs and pullbacks that make higher highs and higher lows. A moving uptrend indicates bullish momentum and that the buyers are in control, presenting an opportunity to trade with the moving upwards herd momentum. Traders can enter trades with a moving uptrend by taking pullback long trades at resistance or turning to new supports.
Conclusion: The Art of Price Action Trading
Mastering price action trading requires traders to stay alert, keep an eye on market structures, and identify key levels to make informed trading decisions. By implementing the different price action methods discussed above, traders can improve their trading skills and trade profitably.
