I wrote this 26,000 word online price action manual to show traders how to trade to trade price action consistently like a professional. I based it on the material in the Brooks Trading Course, my books, and what I say every day in my Trading Room.
Although I use mostly candle charts, I believe that context is more important than candle patterns, whether I am day trading or swing trading. This is true for the Emini, Forex markets, the stock market, and any other market.
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I make my trading decisions based on where the market is in the market cycle. I decide if it is in a trend or a trading range. If it is in a trend, I then decide if it is in a channel or in a breakout. I then structure and manage my trades by using appropriate protective stops and profit targets.
Each chapter is a post in my blog and these articles provide the foundation for trading using price action and are a good overview of the material in the Brooks Trading Course. The course goes into far more depth and has many more examples. However, these articles give you an idea of how I view and trade the markets.
The book Flash Boys has received a lot of attention lately, but it has nothing to do with day trading. We operate in a time frame of seconds to minutes, so milliseconds are meaningless to our trading.
However, financial institutions dominate trading and most trading is controlled by computer algorithms. This makes markets move closer and closer to perfection and it reduces the edge for everyone, but there will always be traders who are better than others, and they will consistently make money. Traders do not have to be great, but they do have to be consistently good.
Even though I scalp many trades every day, swing trading should be the foundation for every trader. A swing trade is simply any trade where the reward is at least twice as large as the risk. Since 90% of the bars on any chart leave traders confused, the probability most of the time for any trade, long or short, is between 40 and 60%.
Some traders are comfortable trading any market, but others prefer specific types of market conditions. For example, I like high probability trades, which means that I especially like to trade during strong breakouts.
Entering with stop orders is the best choice for most traders because the market is going your way, at least for one tick. During strong breakouts, entering at the market or with limit orders on the close of bars is also trading in the direction of market momentum, but is more difficult emotionally for traders starting out.
Experienced traders will use limit orders to fade breakouts at the tops and bottoms of trading ranges, and will often scale in and scalp. It takes years of trading to do that well, and traders should focus on other entries until they are consistently profitable.
For example, when the market is in a trading range, traders will buy low, sell high, and scalp. Bulls will scale into longs in the lower half of the range and scalp out with profits in the top half. Bears will do the opposite. They will scale into shorts in the top half and take profits in the lower half.
When I hold positions overnight, I usually do so using put and call options. Traders do not need to understand iron condors, broken wing put flies, or the Greeks to make money from trading options. I use simple puts, calls, and spreads, and I trade them just as I do stocks and futures. If I think the market is going up, I buy a call or a call spread. If I think it is going down, I buy a put or a put spread.
The most important aspect of trading psychology is that traders should always strive to stay in their comfort zone. They need to be happy. If a trader finds himself feeling too anxious, he needs to find out why. Is he trading too big of a position and is constantly worried about losing too much money? Is he buying in a bear trend, hoping that the current reversal attempt will be the one that finally works?
Everyone wants to get rich. But traders need a plan, and a plan has many steps. The 1st step is to start making money. When a trader begins trading, he typically has a small account. His initial goal should be to become consistently profitable, and he should not worry about getting rich immediately.
If you begin with a $5,000 account, and you are starting to make money on some days, try to see if you can make money on most days. It does not have to be much. One point in the Emini is $50. One point in the Micro Emini is $5. You should be trading as small as possible, and the Micro Emini is a good place to start.
If you then can increase your position size to 3 Emini contracts, that is $150,000 a year. At that point, you will be making enough money to be trading for a living. That is the time to begin to think about getting rich!
Have you been looking for a strong, simple, and useful price action trading strategy lately? This day trading price action strategy will teach you how to spot dead zones, red zones, and end zones. Be ready to hear some Football terminology! This sounds a bit complex. But trust me, you are going to want to pay special attention to this trading strategy. It might be all you need to become a full-time trader.
Price Action Trading is very straightforward. Instead of relying on fundamental indicators (qualitative stories in the news) or indicators that are typically lagging, price action traders focus on the actual price movements.
The relationship between ongoing price movements and current price levels is strong. Day Trading Price action strategies are ideal for day traders, due to the fact they use information that is accumulating in real-time. Here at Trading Strategy Guides, we will help you discover how to make quick trading decisions and how to become an effective price action trader.
In fact, we could run an entire day trading price action course on this single approach to trading. We think we have uncovered the best price action trading strategy. Make sure you read, study, and take notes on this approach to trading. Also, please leave a comment below to give us some feedback. We will do our best to answer your questions.
This is a stock price action strategy, a forex price action strategy, and an options trading strategy. The pure price action trading system needs no price action indicator to help you trade. Also, read about Scaling in and Scaling out in Forex.
Additionally, price action strategies are ideal for day traders because they are clear and actionable. Once you can effectively distinguish the dead zones from the red zones (explained below), the lines for trading will be clearly drawn and you can trade automatically. The purpose of these strategies is to eliminate the need for speculation while also protecting you from trading risks.
So if you see this occurring, you know that no indicator on earth will make you 1,000s of pips here. Scalpers will enjoy those small retracements, but for this price action strategy, we are not interested in this small channel or consolidation.
They only need a few more yards until they reach their goal of a touchdown. The same can be applied to this price action approach. We saw that the dead zone was stagnant and boring. Hardly any movement and not many pips to come by. But once we get in a red zone, traders get razor-sharp in their approach to get to their end goal of a 20, 60, maybe even a 100 pip winner!
This red zone is where many traders are making buying or selling decisions. Once you determine that the price action will not return into the dead zone, you can go ahead and make the buy trade here. Read more about rectangle patterns here.
Place your stop loss in the lower red zone. If the price action would make its way down to the lower red zone, then the trend is obviously not going up anymore and you want to get out of this trade immediately.
You can exit the trade when you see that the trend is most likely over (due to consolidation in price action.) We saw that the price bounced off of this resistance so that is why you would have exited this trade in profit.
This price action strategy is a great day trading price action strategy to use. There may not be hundreds of price action setups a day, but when you find a trade that follows the Price Action Red Zone Trading Strategy you should see great results. Here are 5 key things to remember about price action:
Be sure to leave us a comment below and tell us what you think of this strategy, and how you trade using price action analysis. Also, make sure you check out one of the most popular strategies that we call the 80-20 RSI strategy.
With over 50+ years of combined trading experience, Trading Strategy Guides offers trading guides and resources to educate traders in all walks of life and motivations. We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. We provide content for over 100,000+ active followers and over 2,500+ members. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.
Sideways markets can be worth trading IF they are range-bound, meaning they are trading / oscillating between well-defined horizontal levels of support and resistance that have good distance between them.
Perhaps the best way to trade range-bound markets is the false break trading strategy. By waiting for the market to make a false-break of a trading range, you significantly increase your chances of profiting. In almost every trading range, there is at least one false-break, and they often create powerful moves in the other direction, back toward the other end of the range.
To get more insight into why breakouts often fail, leading to false-breaks, check out my recent article on why breakouts often lead to losing trades. The important thing about failed breakouts or false-breaks of trading ranges, is that they are excellent trading opportunities to take advantage of. 2ff7e9595c
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