Price Action Market Structure [PDF]

Zitiervorschau

PRICE ACTION & MARKET STRUCTURE The Market only moves in three ways: • Uptrend • Downtrend • Sideways (Consolidation) When looking at a clean chart, these are the first things you need to keep in mind: • • • • •

First identify the trend. Ride with it, and do not trade against the trend. Look for signs of weakness to exit, or place a different entry. Market always consolidates after a huge trend. If the pattern is strong, it should create a momentum candle through it.

UPTREND: Higher highs and higher lows. If you are in an uptrend, you want to gage when price will go back up by waiting for it to bounce off your trendline.

DOWNTREND: Lower highs and lower lows.

SIDEWAYS: Do not trade when the Market is consolidating, as you will find a lot of fake outs. This is when the market goes up down, up down and so on. FALSE BREAKOUT

COUNTER TRENDLINES: Many traders use counter trendlines to enter the Market. Whenever you have a trendline, make sure you look within it, as it will help your ability to find better entries. Traders use this tool to measure candlesticks during a counter trend (a small trend, going against a major one), until there is a break of that counter trendline. This strategy is used by many profitable traders to find sniper entries with amazing R:R ratios. In the illustration below, you can see the overall long-term trend is an uptrend. Price will at some point retrace and reverse before bouncing off of the trendline. Once you start scaling down to lower timeframes, you can place counter trendlines.