Price Action Trading Was Hard, Until I Discovered This Easy 3-Step Trick...

oh god that is some really old coffee but anyway trading around pure price action is one of the best ways i have ever found to trade and if you can master price action trading you can not only set yourself apart from other retail traders that are using indicators all over the place but it can also dramatically increase your probabilities of becoming a consistently profitable trader and that is why in this video i'm going to show you a really simple three-step process that for me turned price action trading from something that seemed like rocket science to something as easy as counting one two three with no exaggeration at all so if that sounds good go ahead and click that like button for me go ahead and follow us if you're new by clicking subscribe and the notification bell to join the ttc family i'm gonna let the intro and disclaimer roll and i'll see you directly after [Music] welcome back and first off for those of you who are brand new let's talk about what price action trading is very simply put price action trading is trading based on what you see on the chart with no indicators it's trading based on the action of price and we use price action trading in order to find really high probability setups in the market based on things like trend support resistance supply demand candlestick patterns chart patterns we use a combination of all of these things in order to find really high likelihood opportunities on a specific instrument in today's case we're gonna be talking about forex and the how we use price action to do this is where people oftentimes get stuck so let's dive right into this three-step process right now okay so what you see on the screen in front of you is the three-step process that i use in every single price action trade that i place and if you adopt this three-step process the first thing it's going to do is keep you from placing random trades which is the downfall of a ton of beginners in the trading world they'll just go out and want to place a trade during a day so they'll just click the buy or sell button no matter what without doing any preemptive analysis or any preparation so this is my preparation for any price action trade let's get started with number one the first thing i do what i'm going to trade a price action trade is look for the trend and the structure levels that i need to pay attention to on any particular market we're gonna take a look at a lot of examples of this but right now we're on the four-hour chart of the aussie dollar you can do this on any time frame and on any financial instrument including crypto stocks whatever it may be but let's go ahead and get started on the aussie dollar let's identify trend first what type of trend are we in well depending on the way that you classify trend it may be different for everyone but i can tell you the way i'm identifying this we are currently in a downtrend because of this move right here we've seen price have a dramatic fall and then break into new lower lows the definition of a downtrend is a low followed by a lower low along with a high followed by a lower high we have that right here i call this a one two three move so now i have identified trend as down the next thing i want to do is identify the structure levels that i'm going to be paying attention to the way i define a structure level that matters is the most recent level that was broke in my one two three move let's draw this out one two three the most recent level that was broke is right here right this is the low that was just broke to make the lower low of the trend so with that being the case i asked myself do i have a level that is also not only was it the low that was just broken but that has also been tested multiple times looking left if i scroll the chart back and draw our box to the left you can see that we have this level as resistance and support so now i've checked off one which is identify the trend downtrend and i've checked off two here's the structure level i'm paying attention to now the only way that i'm going to be paying attention to levels the only way i have a structure level that i consider important enough to trade around is if it's the most recent level broken for trade continuation and if it's been tested multiple times so i'm looking for those two factors and at this point i'm done with number one so what's the next step what's number two number two is to prepare and predict let's do that this is a this is kind of what that would look like so preparation and predicting if the market's sitting right here at the end of this red candle what could it could happen what's the prediction here well we could see price just continue down right price could do that no problem or price could continue up that's essentially the only two options that we have it's going to do one or the other now it may consolidate a bit in through here oh i can draw pacman hold on it's an ugly one but we can draw a little ghost right here yeah we're calling this the pac-man pattern the ghost is like running away ah so scared that's it pac-man but essentially these are the only two things price can do either go up or down so what i have to ask myself during my preparation and prediction phase is if price goes up and we stay in my structure zone then my prediction that's the preparation price could go up now i have to prepare for that and predict what i think is going to happen if price goes up into this area my prediction is that we will continue lower based on the fact that i've identified my trend as a downtrend and that structure wise we are in an area that is likely to push the market lower so after my preparation and prediction which is just asking yourself what can price do price can either go up or down if price does that let's say goes up and stays in our zone then predict what you expect to happen my prediction is that we're going to fall from this song hopefully you're keeping up with this again it's a really simple process but it can save you a ton of losing trades and save you a lot of beginner mistakes which normally tend to be just jumping into trades without doing any preemptive analysis now once i've prepared once i've predicted what i think is going to happen my next step is to take action and enter a possible trade and personally i have a few ways i can do this you can decide for yourself how you enter a market whether that be a chart pattern whether that be some kind of candlestick pattern whether that be just selling pressure based on whatever you consider selling pressure considering we're going short right here personally i look for chart patterns on lower time frames so my take action and enter the trade happens one time frame lower than this right now we're on the four hour chart this is the four hour my trading time frame if i'm on the four hour is going to be the one hour chart and i'm gonna drop down to that one hour chart and look for patterns like the double top or uh head and shoulders pattern those are the only two that i trade i have a full video on chart patterns that'll be in the top right hand side of the screen but if price gets into this area that's what i'm going to look for and that's going to be my action taking my enter into the trade that's the third step to this process so as you can see following and adopting this three-step process puts you in positions to get the best trade possible and what i see a lot from beginners is they never put themselves in position to get the best trade possible instead they just want to get into a trade they just want to make sure they're trading every day and that's a recipe for disaster you only want to enter into a market if you have an extremely high probability of having a winning trade or a really high probability of having a large reward to risk ratio what you'll see here as i click play is that price comes into this area drops a bit gets back into this area this is when i decided that i wanted to go ahead and take a chance on this trade we saw a lot of selling pressure especially on a lower time frame right in this area so with that being the case i actually entered this trade a couple of candles later somewhere around here and i'll actually i'll put a screenshot up of entering this trade i sent it out to eap members so you can see the proof that i actually sent this to everyone on our email list in our paid program but entering the trade right here again taking action after all my preparation and just to hit on this one more time a lot of traders are really good at number three they can get into the market they can see a double top or double bottom they can see a candlestick pattern but then they just take action but they have not done one or two they've not identified trend or structure levels they should pay attention to and they haven't prepared by predicting what they think will happen based on these two things so ensure that you do one and two before you're actually taking action or entering into a trade because otherwise you're just randomly placing trades and you're going to lose money after getting into this area as you just saw this was a trade we actually placed and since then if i click the play button here on market replay mode you can see that price has tumbled down dramatically now does that mean that every time i place a trade like this price tumbles down dramatically if i'm short or that i'm correct every time absolutely not no i'll show you examples of losing trades throughout this video as well i really want you to take this home with you what i mean by that is i want you to have this ingrained in your head so that it's really really easy to identify this three-step that's for this three-step process so what we're gonna do is take a look at a few other examples starting with another trade we actually had on the pound dollar so let's take a look at the pound dollar we'll identify this three-step process and talk about the trade we had there as well so here on the pound dollar let's go through the same thing what's our first step our first step is to identify trend and the structure level that we want to pay attention to have you ever seen traders that have like a thousand horizontal lines on their chart hopefully i can delete these pretty quick but this is what their chart looks like do you know what i'm saying maybe your chart looks like this instead of marking off every structure level you can see on a chart just pay attention to one at a time and then once the price gets above or below that one put another line on your chart like it's not that hard just make sure that you're not cluttering up your chart so much that you can't even see the extremely obvious levels like this one right here so let's go ahead and back up identify trend what trend at this exact moment where price is right now would you say that oops the pound dollar is in hopefully you said downtrend no matter how you identify trend this would be considered a downtrend as you can see if i draw this out we have a low to lower high lower low lower high lower low lower high another thing that i get asked a lot about trends is stephen it hardly ever looks that clean that is absolutely true and another part another thing that beginners have so much trouble with they want to be in a trade so bad that they don't wait for very clean setups they're trying to trade train continuation and consolidation they're trying to trade train continuation even though the market doesn't look clean like this so whenever i get the question stephen what do i do because trends don't always look that clean if it's not extremely obvious if it's not an extremely clean trend don't trade it go move on to another pair just don't trade anything that doesn't look extremely clean if you're confused about what trend the market's in it's very likely in consolidation and you don't need to be trading trend continuation during that consolidation so let's just back up here here we go we have our downtrend right trend is identified structure level i just pointed it out but this should be the obvious low that was just broken that's the structure level if price is right here that we want to pay attention to we don't want a line in every single place on the map you know what i mean we want to pay attention to the obvious level which is the latest level of support that was broken so now we have identified the trend and remember what i said about structure we can only take trades if this structure level has been tested multiple times looking left and i know this looks a bit choppy but once i see this and consider that this was support along with it being support and the latest level that was broken that is enough for me i just want to see that it's been tested multiple times in a recent span of time with all that coming together we have our structure level and our trend step one is complete preparation price can either go down or up that's that's the preparation right if price goes down we expect it to break below this low why because we're in a downtrend if price goes higher we expect this level to become resistance and push the market lower why because it's the latest level of structure support that was broken and we know support oftentimes becomes resistance it's also a level that's been tested multiple times there is our preparation and predicting the next step for me in my trading is to take action and enter on a one hour chart based on some type of chart pattern like double tops like head and shoulder patterns whatever it is and at times i'll go really aggressive and enter based on candlestick patterns if if i'm really in tune with the market that i'm trading and a few other factors come together that i'm not going to explain in this video but essentially i'm going down to a one-hour chart to take action and enter based on chart patterns so in this case own the pound dollar price eventually came up into our zone and gave us an entry reason right in here again i'll throw up the screenshot of entering this trade somewhere to the left side of the screen that might be the right side of the screen not sure but somewhere on the screen we entered this trade and it eventually and almost immediately pushed down and has since we've seen like a waterfall since then now again as i said not like this works every single time it's just really easy for me to point out examples that we actually took in live trading and that are winning trades but i can point out examples of losing trades as well and i will do that right now for instance let's keep this on the screen let's go right here and right now let's go ahead and identify prepare predict we know what price is going to do because it's already on the screen pretend you don't so if you didn't what would your preparation be identify the trend right now very obvious uptrend on the pound dollar we're in an uptrend what's our latest level of resistance that was broken well if we have our higher high higher low higher higher low higher high than the latest level right here so we'll make a little line there look left oh look it's a level that's been tested multiple times and it's the latest level of resistance that was broken draw out our little zone i have no set in stone rules for zones i just kind of draw them based on experience so i never know like i don't have a set how big is the zone going to be i get that question a lot i don't have any rules for that i just draw them that's all i know i draw them and i make sure they have as many touches as possible so there we have our structures on we've identified trend and structure preparation price is either going to go up or go down if price goes down we're expecting price to have a bounce from this level because of the fact that it is a solid level of resistance that could turn into support and it's been tested multiple times see how logical that sounds but now let's go ahead and see what happens price comes down oh that's a good aggressive candlestick right a lot of buying pressure right here with this green candle so with that being the case let's say you went aggressively and just entered that trade boom you enter the trade say you're shooting for like a 1.5 or so click play and eventually you are stopped out so there's an example of it not working the point of trading and if you are a complete beginner please listen up you are never going to find something that's a hundred percent accurate every technical factor in the world every indicator if you trade based on indicators could all line up to tell you that the pound dollar is a buy and you should go long and that trade could lose when i click the button to buy or sell i don't know if that trades going to win or lose no one does no one can predict 100 accurate exactly what the market's going to do if we knew the future we would all be trillionaires right we don't we are not trading based on the fact that i know whether or not the pound dollar is going to go up or down i'm trading based on a statistic advantage i have over a long period of time with my three-step system if i trade this over and over let's say throughout an entire year i get a hundred trades trading exactly like this or i get 500 trades whatever it is just keep math simple i get 100 trades trading like this if i can get and i normally do get between 55 and 60 accurate if i just get 55 accurate and i have a 1.4 to 1 reward to risk ratio then i have a statistic advantage that will play out over that long span of time and means that i'm going to make money over the course of a year dramatically more money than if i invested in an index fund dramatically more money than if i were to just plant my money in some stocks for the most part depending on the stocks i know that but it's just the best way i've found to trade pure price action that gives me an advantage but that advantage plays out over time that advantage does not exist in one single trade the outcome of a single trade is random i know that was a bit of a rant we're gonna do one more example i think three's the magic number here so i'm gonna do one more example to ensure that you have this again i know that rant was probably a little bit long but just understand as a beginner that it was necessary for you to hear that even if you're just a struggling trader and you're not quite a beginner if that's something you didn't know now you know so let's go ahead and move on to one more example of this and i'll see you guys in just a second so here's a trade that we're currently in on the new zealand dollar sorry to blind you with the white charts but that's just where i have all this analysis done let's go ahead and go through step one step one is what identify trend and structure let's identify the trend here it's it's not that it's not that hard on this one right definitely a downtrend we've had a waterfall on the new zealand versus the dollar lately so we have a downtrend we know that trend check it off structure levels we want to pay attention to now looking at this the structure level i would normally pay attention to would be at least up here because that's a bit more of a bounce up than this was but let me explain why i used this level instead i did look left this is technically the latest support level that was broken in this downtrend so with that being the case i do have a reason to see it as a recent level of support and if i look left this is what really made me do it is the fact that this level also had been reacted to dramatically by this market so throwing those two factors together this became my structure level so now i have trend is downtrend structure is right here and with that being the case what's my next step preparation and prediction if we're going to predict or prepare we have to prepare for what price to go up or price to go down so if price goes down we expect it to break through this low just because we're in a downtrend if price goes up we expect this level to become resistance because it's a previous level of support and it's been tested multiple times looking left if we do push up to this level what's our next step we've now prepared we've made our prediction that this should become resistance if this downtrend is going to continue because it's the next major level of resistance price will hit so the next step is to wait for price to get there and then take action slash enter the trade so let's go ahead and push the market forward here oh we're in our zone we got involved somewhere around there i'll put again the screenshot up from the email analysis i sent out which are like email alerts that come with the eap training program by the way if you want to get involved in the eap training program the link is in the description or you can go to www.eaptrainingprogram but after we got this on we got our entry price started to push down right and eventually after today's news on the nfb we did hit our targets today for a one-to-one move or stop to break even and we're still trailing the second part of that position just to show you a counter-trend trade that's losing so it doesn't seem like i win all my trades this trades about to hit the stop loss and i risked wait this should have been three 000 my position i risked way too little so i'm it's a happy mistake it was a mistake this should be about a thou about a 1900 loss but cool deal i made a mistake another trade i'm probably about to lose just to be completely transparent with you guys is here on the dollar and i don't know we're back at break even here on the dollar canada we'll see how this trade plays out but let's end it on some losses right there we go hopefully you guys enjoyed it if you did comment below make sure you're subscribed if you want to see more content like this let me know in the comment section comment for sure if you made it to the end of the video i wish you the best of luck on all your future trades and i'll see you in the next video talk soon

Channel: The Trading Channel

Views: 1,185,305

Keywords: price action, price action trading, price action strategy, price action trading strategies, price action trading course, price action forex, price action patterns, price action indicator, price action course, price action scalping, price action analysis, price action explained, price action full course, price action for beginners

Id: APUVNDWelRI

Length: 23min 7sec (1387 seconds)

Published: Fri Dec 03 2021