Trading instead of crowding your chart with complicated mathematical indicators like MACD or Bollinger band he focus entirely on the raw data historical price movement support/resistance levels and candlestick structures. The call philosophy is that everything happening in the Market news fundamentals and human psychology is already reflected in the real time movement of price on the chart as shown in the diagram price action traders look for visual zones, where buyers or sellers historically took control these raw boundaries form the framework for all your trading decisions the three pillars of price action to master price action you need to read like a map by looking at Market structure, location, and the final confirmation signal one Market structure the Context Any trade look at the big picture is the Market in an up trend making higher highs and higher low down trend lower, highs and lower lows or range bouncing sideways between fixed boundaries never trade a signal blindly without knowing the overall structure first two key levels the location. You only want to trade it important areas on the chart where institutional money is likely to step in these areas where the price has sharply reversed in the past support an area where buying pressure outweigh selling pressure, stopping price from dropping further resistance an area where selling pressure outweigh buying pressure, stopping price from climbing higher candlestick patterns the trigger once a key level the shape of the individual candlesticks tells you who is winning the immediate tug of war here are the two most powerful rehearsal patterns, pattern, visual structure, trading meaning the pinball hammer a small But was aggressively rejected by the other side, a long, lower wicked support is a powerful bi signal the engulfing bar a large candle that completely covers the body of the previous days candle momentum has flipped entirely a massive green candle swallowing. A small red candle shows buyers have taken full control the price, action execution checklist when you combine all three pillars trading becomes a highly object objective if then framework one define the market trend context open a daily or four hour chart determine if the dominant Market force is moving up down or sideways always trade in the direction of the major trend to draw your major horizontal zones location. Identify the two or three most obvious support and resistance lines where price has touched and bounced at least twice in recent weeks free wait for price to reach his own patience do nothing while price is drifting in the no man’s land between your drawn levels. Wait for it to specifically test to support or resistance line for look for rejection candles trigger, watch how price reacts at the level if a clear rejection candlestick like a pin bar forms right on the support line prepare your trade entry the false breakout trap price action traders learn to love fake out often. Price will briefly appear right through a support line tricking retail traders into selling only to aggressively reverse enclose back above the line these create a massive pinball and offers one of the highest probability entry points in trading.
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