A Winning Price Action Trading Strategy Made Simple For Beginners (Day Trading Or Swing Trading)

it's not a secret there is one thing that's going to separate those of you who go on to become money-making Traders and are consistently profitable from those of you who joined the 95% that unfortunately either completely give up on trading blow their account or fail at trading all together this one thing is a strategy that you can stay consistent to and that will make you money over time and while this is not the only thing you need to be a profitable Trader you will never become a profitable Trader without a money making strategy so in this video what I want to do is break down a trade I had on the New Zealand dollar along with teach you the entire strategy that I have used now for over 8 years to pull profits out of the market and it has been consistently profitable for me throughout that whole time so if that sounds good go a and click that like button for me go a And subscribe if you are new and I'll catch you after the intro and [Music] disclaimer first off I'm going to go through what a trading strategy is along with why we need one and how to create one for those of you who are brand new then we'll dive into the entire rule set for the whole strategy itself let's get started with what is a trading strategy a trading strategy is simply a method of buying and selling based on a set of predetermined rules that we use to make trading decisions this strategy and set of rules is just a fixed plan that we use every time we step in the markets in order to place trades I want you to think of this as counting cards in blackjack so in a casino the the casino always has an edge even in the game of blackjack the casino has an edge but when you count cards in blackjack you start to have an edge over the casino a strategy for us does the same exact thing and so just think of a strategy as a set of rules that we use every time we go into the markets in order to place trades next up why do we need a trading strategy the reason that you need a trading strategy is because despite what I personally thought whenever I started trading me and you will never get to a point where we can when 100% accurately predict exactly what the Market's going to do I'm not even kidding whenever I first started trading I literally thought that I would get so good at trading that one day I'd be able to just look at the market and I would know exactly what it was going to do I thought that I would become a wizard and be able to tell the future for some reason but that's not the case and that's why we need a trading strategy markets are slightly unpredictable so a trading strategy gives us a rules-based way to place trades that gives us a money-making advantage over the market and that's the way professional Traders actually pull profits out of the market it's not by being a wizard and knowing what prices are going to do it's by having a statistic Advantage based on a rules-based trading strategy so that's why you need to learn one as soon as possible next up how do you create a trading strategy well you create a trading strategy using different conditions that you look for each and every time that you place a trade along with a rules-based way that you actually enter the market and a rules-based way you place a stop-loss and a Target on a specific trade all of these are necessary so I use an acronym that I call C if you've been a part of the channel for a while you've definitely heard of that but C stands for conditions entries stops and targets and so the set of rules we create using the acronym C will be like our treasure map to Buried Treasure and the buried treasure is profits in our trading account it'll again be like the rules for counting cards except we're using rules of a trading strategy in order to gain an edge over the market now that that's clear let me walk you through the conditions that we're looking for with this trading strategy first off this can be traded on any time frame I personally use the 4H hour chart now what we're looking for with this strategy the first initial condition is going to be a market in Trend and when markets are trending they tend to do something like this pull back then break into new highs and a lot of times instead of just having this One Singular pullback we'll see a situation of what I call and what is considered accumulation so we'll see prices start to consolidate after our impulsive move and then eventually throughout this consolidation we'll see prices break above the previous swing high that was the highest point of this consolidation so this is what we're looking for with this strategy the initial thing we want to see is that price is in Trend the way we're going to do that is we're going to use a 50 EMA so just assume that this is the 50 EMA and what we're going to do is as long as price is trading above the 50 EMA we're going to say that's an uptrend after we see an uptrend price is consistently making higher highs and higher lows as well we want to see this period of accumulation that looks like this after we see price break above that while in an uptrend we're going to be looking for a pullback into this top layer of that accumulation phase this is going to be the conditions we need to see before we go and look for an actual entry reason these are the conditions of the strategy for a bullish trade so to break that down one more time we want to see the market in Trend meaning making new higher highs compared to the previous highs and new higher lows right here compared to our previous lows we also want to see all this happening above the 50 EMA we want to see a phase of accumulation which is going to be defined as we want to see a swing high that is tested at least twice it can be tested more than twice but we want to see it tested at least twice before the break through that in continuation in this uptrend now after we see that we want to see a pull back into the top layer of this accumulation or back into that previous resistance area and those are the conditions for a bullish entry we'll move on to the entry reason right after I go through a bearish example of this right now in a bearish version of this trade we would want to see prices pushing lower and then we would want to see what we would want to see a period of accumulation this is accumulation of sell Traders traders that are looking to sell the market after this period of accumulation that would be right in this area we would like to see price push back up to this area right here and all this needs to happen under what moving average that would be the 50 EMA right so we want to see all this happening below the 50 EMA once we have prices in a downtrend below the 50 EMA and we have a period of accumulation where a support level has been tested multiple times and we get a pullback into that level then we have have all our conditions met and at that point we can look for an entry reason and something that makes this even more powerful is if this level has been tested in the past throughout a bigger period of consolidation so something like this would be an example of that we would have this level tested multiple times back here in a period of consolidation then we have this downtrend below the 50 EMA then we have the accumulation period followed by the breakout of that accumulation period period and the pullback into it with that being the case we're going to go down some real charts now take a look at a real example of this on a trade I had on the New Zealand dollar and I'm going to share the entry reason stops and targets that I personally use for this exact trading strategy so let's take a look based on what you just learned about a bearish version of this strategy this is a bearish trade would we have all of the conditions met where price is right now where I just circled hopefully you were able to say yes and here's the reason we have price is doing what this is the 50 EMA by the way we have prices pushing below the 50 EMA we have this pullback we have what we consider an area of accumulation right here we then have a break through that area of accumulation and a pullback that comes right back into it so to draw this out the way we would be looking at this is right at this area of accumulation after we have price breaking through it I would mark off my zone of accumulation like this and at that point I would be waiting for price to push back up into that zone we've already broken through it so now that we've broken through it all the conditions except a pullback into this Zone have been met so in this case our little area of accumulation was buyers trying to step in sellers taking back control buyers trying to step in again creating our one two tests of this area of accumulation and then sellers taking over completely and continuing this downtrend so now the only thing left to do is wait to see if we get a pullback into this zone now what do we have have right here we have a pullback that comes up and actually touches our Zone with this Wick so this is exactly what we're looking for in terms of conditions we have our downtrend we are still below the 50 EMA we're even kind of pushing off the 50 EMA giving some added Confluence to help our trade out even further and now that we're here we have remember the acronym all of C taken care of C is conditions all of our conditions are taken care of now we move on to the next step in that acronym for this strategy which is what are we going to use as an entry so for this specific strategy I use Simple Candlestick and chart patterns I'm looking for simple Candlestick patterns or a simple chart pattern meaning in this area I'm looking for selling pressure for a bearish trade what would selling pressure look like well it would look something like this big red candle as soon as I see this big red candle come into play after all my other conditions are met the close of this candle is when I actually press the sell button this is going to be my entry so now what do we have now we have the conditions met for this entire strategy for a bearish trade we now have an entry in place because our entry was met after all our confluences were met as well the next step in our CEST process is finding a place for stops and finding a place for our Target now two things I want to share before we talk about the stops and targets first off this was actually an even more accurate trading opportunity because of the fact what did I say earlier remember the added Confluence of having this be a level that was a previous level of consolidation already well this is a level that was it had already been tested multiple times in the past then we also ended up getting all the Confluence that we needed all of the conditions for this exact strategy here with this downtrend accumulation breakout and pullback so that added even more Confluence to this specific trade also this is a trade I took and shared with all the members of the TTC forx University you can see that right over here and this is something I share with them two to five times a week depending on how many trades I end up getting based on the strategies they're learning inside of the University if you'd like access to all that plus you'd like to get these emails two to five times a week all you got to do is click the top Link in the description or go to www.tcf university.com if not no big deal at all let's go ahead and move on to stops and targets on this specific trade and for this entire strategy that I use So I entered the trade based on this entry candle and for a stop loss I just use something called the ATR indicator it's easily found all you got to do is go to your indicators on whatever platform you use type in average true range and it should be one of the top ones that pops up so the average true range gives you an average of the last 14 candles on the chart so this stop-loss placement keeps me in line with the volatility of the market and the volatility of the pair that I'm trading so with this being the case in the top left of my screen you can see this is 20 Pips we discount that last number so right now the ATR is 20 Pips what that means for my stop loss is I'm going to go 20 Pips above this swing high so up to that swing high is about 24 Pips if I add 20 to that my stop loss will be 44 Pips so that's how I place the stop loss for this strategy and now we have c e and s taken care of the last thing we need to do is find a spot to take our Target now this part of my trading is one of the only parts that's mostly subjective not objective if if you've noticed I have rules for everything for my target I have rules but they're not as set in stone as the rules for everything else I like to get as much as I can out of the market and specifically in this case all I did was look left for structure in order to take these targets I went out to a daily time frame as a matter of fact and I also looked here at the next level we would hit that's been tested multiple times I got about a 1.9 to1 reward to risk ratio out of this bad boy here so my targets were actually a little bit lower right in that area again just based on this next level of support that's been resistance before so for targets for me at least I use structure looking left the next level specifically I use the next level price will inevitably hit if we continue this downtrend and if we go back over to the 4our chart and I click play for you pause that let me actually just go over to a real time chart of the New Zealand dollar you'll see this trade right here this is the chart I actually placed it on I used a different chart to do the tutorial because I have this one marked up but as you can see we do in fact go down enough to hit those 1.9 to1 Targets on this trade so we started with a bearish version of this strategy why don't we take a look at a bullish version now for a bullish example now I want you to take a look at the chart and tell me do you think there's something you should be paying attention to at this moment where price is right now hopefully you were able to say yes and here's the reason we have price pushing up going above the 50 EMA we then have a pullback an area of accumulation why is this considered an area of accumulation because it's been tested multiple times within this pullback so we have one two we call this three tests before the pullback here and the break above now that we've had this breakout after having a trending move above the 50 EMA what are we doing now now we are going going to create a zone at the top of our area of accumulation which would be right there and if we want some extra added confirmation we can look left and if we look left what do we see we see that this is in fact an area that's been tested also recently in the past along with being an area of accum accumulation right now before the breakout so now that we have all of these factors together the next thing we're looking for after our accumulation that word's getting harder to say throughout the video the next thing we're going to be looking for is price to push higher and eventually pull back to this Zone that's the only other thing we need for our conditions to be met let's see what price does eventually price does this where it does in fact pull back to that area of accumulation at this point do we have all of the conditions met in our acronym CEST yes so our conditions are checked off what's the next thing we're going to be looking for it's our actual entry and what are we using for that it's just going to be buying pressure either a specific Candlestick pattern like an engulfing a close above a big green candle would be completely fine or some type of chart pattern maybe we end up getting a little double bottom right in this area before prices push higher both of those entries would be fine in my standards or at least for my specific way of trading this strategy so that's what we're looking for for e or for entry let's see what we get and voila that would be a close above green candle a big green candle that would be what we consider buying pressure after all of our conditions are met be aware of this we're not just trading based on a Candlestick pattern if you go out just trying to trade based on a single Candlestick pattern you're going to lose money we're waiting for all of these factors to align a very specific set of rules just like people that count cards in blackjack have a very specific set of rules they use in order to gain an edge over the casino we are using a very specific set of rules to gain an edge over the market and instead of being The Gambler we become the casino by doing so so in this case we have our entry right there do you remember what the stops and targets were when we're looking for stop losses remember the only thing I'm using is the ATR indicator which gives me the average of the last 14 candles at the point of this candle if we look up here to the left we have a 31 pip remember we discount that last number we have a 31 pip ATR so with that being the case we're going to go or I'm going to go excuse me 31 Pips below my swing low right there that red candle down to that swing low we have 45 so we add 31 to that we end up with a 76 pip stoploss after that 76 pip stop- loss in order to find a Target I'm going to look left and see where's the next level of structure price is going to hit and to me it looks like about this area due to the fact that we have support resistance support resistance so this is going to be and by the way I'm going to be managing the position up to this area but that's going to be about where I decided to take targets right at around a 1.9 to1 reward to risk ratio on this specific trade let's hit play and see how this specific trade would have worked out as you can see the market eventually pushes up high enough to in fact hit those targets one thing I want to make very clear and I want you to keep in mind is that you're not going to win every single trade that you place just like if a player is counting cards in blackjack they're not going to win every single hand they have an advantage that plays out over a long sample size of hands they play for us it's over a long sample size of Trades we place that's when our advantage plays out you're not going to be 100% accurate with any trading strategy that you use so just because all I showed was winning examples don't take that as this strategy only wins it wins and it loses and for my testing and trading it gives me around a 60% accuracy with whatever Target I use as long as I'm using structure for my targets which is an unbelievable Edge over the market when it plays out over a large sample size of Trades so now you've got the strategy down but wait there's more a strategy by itself is not going to make you a profitable Trader even if it is in fact a strategy that gives an edge over the market your emotions and your risk management are going to play a major role in your ability to become a profitable Trader let me do a visual example of this to make it more clear so I call this the triangle of trading success in the middle of this triangle is all the traders that are currently making money on the outside is everyone that's losing and the reason everyone on the outside is not making money is because they haven't mastered these three skills the first one we just worked on that's a strategy that has a proven Edge that will make you money if you stay consistent to it over time that's the first part of this it needs to be rules-based so you can actually follow it and stay consistent to it and it needs to be profitable over time so that it actually makes you money the next skill profitable Traders have mastered and non-profitable Traders have not is risk management go into any trading environment whether you're trading in stocks crypto Forex like me whatever it may be go into it understanding that there is a very high likelihood that you will be losing a lot of Trades what do I mean by that think about a 55 or a 60% accurate strategy that means 40 out of every 100 trades if you have a 60% accuracy that you place you will lose you're going to have losing trades what we do in order to handle our promotions and keep those losing trades from blowing our account or making us lose a lot more than we're comfortable with is we manage risk correctly as professional Traders we're not out here trying to gamble our way to getting rich as fast as possible if that's what you want to do with your money obviously it's completely up to you you can do whatever you want to I'm just telling you how professional Traders go about placing trades we don't do it with a 10 20 30% risk on every every trade because that's a great way to become emotional about your trades also a great way to blow your account very quickly we do it with a very small risk per trade and although we have a small risk per trade as long as we have an edge over the market that plays out over a long period of time we will make money consistently so managing risk is super important there's three different types of managing risk the first is going to be what I call your risk Capital this is the amount of money based on your net worth that you're comfortable trading with you're not going to be Trad or I guess you can again your money do what you want to with it but I would never put 100% of my life savings into a speculative trading account like swing trading or day trading in Forex it just does it's really risky so it doesn't make sense to risk everything you have on that now what you can do is break it up and go I'm going to risk a certain percent of my net worth on Forex and that percentage is going to be whatever makes you comfortable could be 10 20 30 40 50% of all the money you have that's completely completely up to you the second part of risk management is going to be risk per trade every time you place a trade how much are you risking on that trade for me it's between 1 and 2% it's going to be different for everyone and the third part of risk management is what I call overall risk exposure what this means is how many trades can you be in at once if I'm risking 2% per trade and I only want to have an overall risk exposure of 10% that means I can only be in five trades at once if you'll come up with a number that will keep you comfortable for all of those a comfortable risk capital a comfortable risk per trade and a comfortable overall exposure then you'll have risk management down and that's how you do it after having risk management down the third thing that separates profitable Traders from people that are still struggling from people that will either completely give up completely fail blow their accounts is going to be trading psychology so if you don't have a good trading mindset which is highly affected by the way by your risk management and your strategy but trading psychology is something that you must Master as well you have to understand losses are a part of trading and you have to be able to control your emotions without making silly mistakes when those losses occur you can't switch strategies once a week and expect to ever be profitable I know there's some of you out there doing that comment below if it's you don't worry you're not alone I did it to at the beginning of my career I'm just trying to save you the heartache that I went through before realizing trading psychology is an extremely important part of becoming a professional and profitable Trader now if you want help with all three of these we do go through this in a very organized way throughout the TTC forx University again that also comes with email analysis like New Zealand dollar that you saw earlier today and it comes with priority email support which means I will be the one answering any trading related questions that you have we also have a 30-day money back guarantee on the University so if you're interested in that top Link in the description or you can go to www.tcf university.com if you're not interested in that no worries at all make sure to click the like button if you enjoyed the video and learned something comment below if you made it to the end subscribe if you're new and I'll catch you in the next video see you soon

Channel: The Trading Channel

Views: 150,100

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Length: 23min 9sec (1389 seconds)

Published: Mon Oct 30 2023