Trading Strategies With Price Action


Trading Strategies With Price Action

Basically, price action is a series of price movements over time, and price action analysis is done by observing the candlestick bar formation. Here are some terms in trading with price action:

Trading Strategies With Price Action

-Up Bar

Also called the ‘bullish bar’, which is a bar with a high level higher than the previous high (higher high) and a low level higher than the previous low (higher low). A series of up bar on the picture above shows uptrend movement.  The bar up bar suggests that the buyer or ‘the bulls’ are controlling the market.

-Down Bar

Also called ‘bearish bar’, which is a bar with a high level lower than the previous high (lower high) and low level which is also lower than the previous low (lower low).

-Inside Bar

Inside Bar is a bar with a high level lower than previous high and a low level higher than the previous low. Many traders consider the bar with the same high or low level as the previous bar as the inside bar.

-Outside Bar

Outside Bar is also called the ‘mother bar’, which is the bar that ‘swallows’ the inside bar, or on the engulfing bar formation is the bar that ‘swallows’ the previous bar.
In candlestick terms, the combination of outside bar and inside bar formations is often referred to as ‘harami’.

– Trading Signals From Price Action

Signals or gestures of price action are usually indicated by the formation of a pin bar which is a bar with a tail (axis) longer than its body. The longer the tail means the stronger the rejection sentiment at a given price level.
In trending market conditions, the pin bar usually indicates a reversal or opposite trend, and the pin bar is often called pin bar reversal. Here are some pin reversal bars where one of them fails or is a false signal:

Trading Strategies With Price Action

-The Supporting Factors Of Trading Signals From Price Action

To avoid the possibility of errors as in the picture above, it is necessary to support factors that confirm the trading signal of the price action.
Confirmators or supporting factors are support and resistance levels, trend direction and technical indicators. A frequently used indicator is the moving average to confirm the direction of the trend. Here is an example of a trading signal (pin bar) with 3 supporting factors:

Trading Strategies With Price Action

Thus the probability of successful entry sell after pin bar is high.

Here are examples of trading signals from price action for trending and ranging conditions:

Trading Strategies With Price Action

Looks the price broke the lowest level outside the bar which means seller re-control the market.

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