Ultimate Beginners Guide: To Price Action Patterns (Must See)

"so if we scroll the chart down here you can see that trade and do you notice anything familiar compared to what we just discussed about this specific trading opportunity well of course you probably do we have a market that was pushing up right we're waiting for overextended markets this market was pushing up what do you see right here on the RSI we have an overbought RSI so now we know that the markets pushing up we're overextended after pushing up meaning we're primed for a reversal we get to a major level of structure now we're at this major level structure we're already overextended what are we looking for next next we're looking for those consistent rules of a double top in this case double bottoms what we discussed earlier consistent rules of a double top that we just discussed do we get that here yes we do and again there were other key components that went into this specific trading opportunity that we use in the EAP training program but all of the things we just discussed were key components and creating success in this trade as well and as you can see currently this trade up a little over a hundred pips right now"

"well currently if you're familiar with the blue and red lines I normally put on my screen these point out major and minor levels of structure resistance and support right now where are we at we are at a previous level of major support my blue line indicates that for me so I have this previous level of major support the market hit that level close below it signaling trend continuation right well what happened after that is pretty significant after closing below this level we have now created a lower low pushed back up and we're finding support at this previous level this is a very familiar age-old pattern called the Head and Shoulders pattern a traitor's"

"The third and final key component we're gonna discuss before we go down to the charts take a look at a couple of examples and take a look at that live trade we're still currently in on the dollar yen the third and key component of improving double top and double bottom price action pattern traits is consistency and consistency is key guys"

"so the third component is being consistent by creating rules for a double bottom for instance the rule could be that as you push down for your double bottom trade we have a candlestick here let's say this is the swing low of this first push we get a rally and then the pull back towards that previous support level that we're gonna use as the first step of our double bottom well here what is one thing we don't want to see well if you're a trained continuation trader or if you know a little bit about trend as of right now you know that if we get a candle that closes below the previous swing low right here let's say that happens then that's a pretty significant sign that we could see some trend continuation out of this market and guys if we could see trend continuation do we want to trade a reversal pattern no no we do not so what's another thing we can look for well before we get into that if we see it close lower than this low right here then we want to discount that trade right because we know that means possible trend continuation"

"well for me a double bottom needs to look something like this we need to have that second push down and I need to see a candle that at least touches the bottom of the body of this first candle but does not close below the bottom of that wick that swing low to signal trend continuation as long as we have that in some way we now have one bottom to bottom by touching the lower half of that body of that candle or the lower point of the body of this first wing low so we have two bottoms and we do not have a lower low lower closed signaling trend continuation"

"The reason we trade this way the reason I knew that I wanted to trade that double on the dollar um we just looked at it's not because I knew it was gonna go down it's not because I knew those are 100% accurate wait for to go down that's why risk management's in place that's why only risk a very small portion of my account every time I place a trade"

"The same way casinos capitalize on a slight advantage they have every single time you give money to the person running the craps table they have an advantage and they know that they know over time they're going to create success because the dollar yen has a Head and Shoulders pattern right now at a level structure with an overextended market doesn't mean there's a hundred percent chance that it goes up that's just not how trading works we look for these statistical advantages and guys the only way to know if you have a statistical advantage is to test through historical data and see how many times throughout the past has the market reacted in a certain way"

"make sure the backtest all of this make sure that you have a statistical advantage even demo trading this for a while it will give you a pretty good idea of whether or not you have an advantage over the market also implementing risk management after you see that you're only gonna win sixty percent of the time or fifty-five percent of the time or maybe only fifty percent of the time with a good risk reward you have to implement a risk management plan based on those numbers"

"The three key steps and components to improve the accuracy of all price action patterns guys I hope it was valuable to you I hope you got some good information out of this video if you enjoyed this training one we have an absolutely free reversal training series it's a three part series that we're offering to you guys for absolutely free there's a link in the description to this series there's a clip of me at the pool telling you guys about this as well but that link is in the description labeled free reversal training and in this three-part series guys we tell you an entire strategy based around some of the key components we discussed here and a couple of other components we use in order to trade reversal so get your hands on that it's absolutely free to take"

"if you're interested in some more advanced training that goes beyond the scope of the things we talked about here in YouTube videos or the free trainings that we offer and you're ready to invest in your trading education of course we have the EAP training program that we've ran here at the trading channel for a couple of years and that has gotten fantastic results from traders around the world"