Price Action

Price Action

Identifying Trends

·         Higher highs and higher lows – Uptrend

·         Lower highs and lower lows – Downtrend

·         A break in these patterns is a warning sign of trend change.  Not necessarily will reverse to other trend.

·         Trading range is the more probably change from a trend

·         Trend length should be longer than the length of the pullback

Trading Ranges

·         Long term chart can be in range while shorter term chart trends

·         Top and bottom the range can be areas of support and resistance however they can be very wicky

·         More noise on lower on time frames

·         Execution so important on short term time frame

Trend Change Patterns

·         Higher low and higher high followed by lower high and lower low (Without lower low just becomes trading range)

·         Higher high followed by lower low and then lower high then a break of lower low confirmation of trend change

·         Trends are always cleaner initially than longer into the trend

Apply Theory

·         Be aware of market structure

·         Evaluate each swing v the previous swing

·         Know what the theoretical structure is but focus on current supply and demand story

·         Nothing is perfect.  Learn to make decisions on imperfections