Price action trading strategy with trend reversals — Transcript

Full transcript

1. 0:00you guys have heard everybody in the
2. 0:02entire day trading world say that price
3. 0:05action is king there's a reason for that
4. 0:09in this video i'm gonna show you how to
5. 0:12look at the big picture check out the
6. 0:14charts no indicators just trading simple
7. 0:19price action
8. 0:20[Music]
9. 0:25welcome back to the channel everybody my
10. 0:27name's artie and this is the moving
11. 0:29average a show where we discuss
12. 0:31everything day trading to keep you
13. 0:32profitable on a consistent basis like
14. 0:35you guys have probably seen in some of
15. 0:36my live streams i like to start out my
16. 0:39day with a fresh perspective absolutely
17. 0:41no indicators just looking at the charts
18. 0:44so that i can get a good idea of what's
19. 0:46going on in the market without all the
20. 0:48noise and distractions indicators are
21. 0:50there to supplement your knowledge
22. 0:52not to predicate your decisions i'm
23. 0:54really gonna try to keep this video
24. 0:56under five minutes so let's get into the
25. 0:58charts alright so we're looking at us 30
26. 1:00right here on a 15 minute time frame and
27. 1:03what i like about us 30 and other
28. 1:06indices is that they trend very very
29. 1:10very well like you can see these long
30. 1:12periods of down price action long
31. 1:16periods of up price action long periods
32. 1:19of consolidation
33. 1:20all of this just makes me extremely
34. 1:23happy and it's it's basically a puzzle
35. 1:26to me so
36. 1:27what i like to do when i see this you
37. 1:29guys know about my support and
38. 1:30resistance levels but i'm gonna
39. 1:32completely not do that i'm gonna try not
40. 1:34to do that in this video and just talk
41. 1:37about price action and how you can draw
42. 1:40up trend lines
43. 1:41then looking for the divergences at the
44. 1:44overbought and oversold areas not
45. 1:47definitive points just those areas all
46. 1:49right give me a few seconds to mark this
47. 1:51up and then we'll get back to it
48. 1:56okay this is not zooming in whatsoever i
49. 1:59just drew up general areas of resistance
50. 2:03that i saw where the price rejected
51. 2:05consistently as many points as i can
52. 2:08connect the dots with this can be
53. 2:10fine-tuned once you zoom in but doing
54. 2:12this type of markup on your charts and
55. 2:15then looking for divergences like
56. 2:19just without even putting up an rsi
57. 2:21right here i'm pretty sure that this low
58. 2:24and this low created a divergence so
59. 2:26let's pop up an rsi indicator on here
60. 2:30and just just take a look at what it
61. 2:33does unfortunately unfortunately trading
62. 2:35view won't let me have my divergence
63. 2:38indicator like publicly available so i
64. 2:41don't know i'll probably just like make
65. 2:42the script available in the telegram
66. 2:44group or something but you guys know how
67. 2:46i change my settings we're going to go
68. 2:48yellow remove the upper band and the
69. 2:50lower band middle band is going to be
70. 2:52solid
71. 2:53and the background is going to go away
72. 2:55make this line just a little bit fatter
73. 2:58i think
74. 3:00now we'll keep it thin
75. 3:02and we're gonna look at this point
76. 3:05draw a vertical line
77. 3:07and this point draw a vertical line
78. 3:10right so sure as
79. 3:13we have a price action made a lower low
80. 3:16right but if you look at the rsi
81. 3:22we made
82. 3:24a higher low and it's like a clear and
83. 3:27concise divergence you can obviously see
84. 3:31that that's making a higher low so now
85. 3:33that you know that information and you
86. 3:36take this trend line and you make it
87. 3:38more just a little bit more precise you
88. 3:40know we take that top part we get where
89. 3:43all the price rejected you see these
90. 3:45like small breakouts if you don't know
91. 3:47how to avoid these please
92. 3:49please for the love of god watch my
93. 3:51video that i did to avoid false
94. 3:54breakouts but you know you see this
95. 3:56price continue to go down continue to go
96. 3:58down and then you see this like you know
97. 4:01opening bell type of mess right here
98. 4:03like say you didn't you weren't trading
99. 4:05this and you just saw you know this
100. 4:07trend line so i'm gonna have to explain
101. 4:09why why because with false breakouts
102. 4:13right so you you break out of the trend
103. 4:16line and then the next candle comes back
104. 4:19in so you want like to wait until you
105. 4:22know that candle has
106. 4:23like you know not done that and also you
107. 4:26want a divergence at the same time so so
108. 4:30when looking at like a break and re-test
109. 4:32with the divergence these are the things
110. 4:34that you need to look out for because
111. 4:37you're basically looking for a trend
112. 4:38reversal trade at this point which is
113. 4:41very risky and it's easier to trade with
114. 4:43the trend as you guys know from all of
115. 4:45my videos begging you to trade with the
116. 4:48trend but this is a trend reversal this
117. 4:50one wouldn't even be an option because
118. 4:52we're having basically the same point on
119. 4:55all of these not really lower lows yes
120. 4:57the rsi is making higher lows but that's
121. 5:00not a definitive divergence like you
122. 5:01want to see a nice big fat you know
123. 5:05angle and then you get this engulfing
124. 5:07candle it continues down makes this low
125. 5:09but then we had a breakout right here
126. 5:11and it it broke out and then the next
127. 5:13candle went down that's the thing you
128. 5:15need to look out for
129. 5:16this is where you need to be very very
130. 5:18cautious you already had your first
131. 5:20warning right here that this is a
132. 5:21possibility so i would be very cautious
133. 5:24on breaks and retests right here
134. 5:26this one would have been attractive to
135. 5:28me but i would have watched to see what
136. 5:31happened with this next candle then we
137. 5:33got this huge one and it's like okay i
138. 5:35know that there is like liquidity here
139. 5:37and they want to get as much as possible
140. 5:40so once you see things like this you
141. 5:43need to keep an eye out for the trap
142. 5:45these are all traps trying to bring
143. 5:48people back in draw the price down a
144. 5:49little bit more
145. 5:50and then we got this definitive
146. 5:52divergence right here at this point you
147. 5:54know you're still looking out for the
148. 5:56traps it happened here again
149. 5:59and then at this point right here where
150. 6:01this next candle did not break below
151. 6:04that trend line this would have been a
152. 6:06nice indication for me like okay now we
153. 6:09can think about taking long positions so
154. 6:12even if i did take it there at the close
155. 6:14of that candle and i know there's a lot
156. 6:16of people that like to put their stop
157. 6:18loss below the swing low but when you
158. 6:20see huge candles like this it's it's not
159. 6:24it's not intelligent to have a 230
160. 6:27point stop loss on us 30. so what i
161. 6:30would do is just go to the bottom of
162. 6:32that candle that signified the actual
163. 6:34break out of that trend line that's
164. 6:37still a huge stop loss but when looking
165. 6:39for a trend reversal trade
166. 6:42that's gonna have your biggest benefit
167. 6:44because you're getting the bottom of
168. 6:45that move and you can actually ride that
169. 6:48wave up quite high so this i mean
170. 6:50definitely would have scared the piss
171. 6:52out of me but only risking one percent
172. 6:54you know i would have been fine with the
173. 6:56loss if it did happen knowing how much
174. 6:58manipulation was happening here and all
175. 7:01of these like stop hunts to grab
176. 7:03liquidity but it didn't hit the stop
177. 7:05loss which is nice and then you just do
178. 7:07like you know a one to five if you're
179. 7:09skittish or a one to two risk to reward
180. 7:11ratio you know and once it broke out of
181. 7:13that range like you see that that second
182. 7:16rejection you feel more comfortable with
183. 7:18your trade and it obviously worked out
184. 7:20really well but once that happens you
185. 7:22need to see like where's the new trend
186. 7:24line forming and you you know you can
187. 7:26take it from the bodies or the wicks you
188. 7:28know it's it's all subjective i like wix
189. 7:30sometimes
190. 7:31because i know that at one point that
191. 7:33was an entire solid candle so you know
192. 7:36you take it off the wicks and you you
193. 7:38start drawing this new trend line and
194. 7:39you can adjust it depending on like if
195. 7:41it's literally vertical skyrocketing you
196. 7:43know
197. 7:44whatever
198. 7:45and you just rock that and then because
199. 7:47this is the new trend you know you you
200. 7:49see it kind of like losing momentum but
201. 7:51it's coming down to this trend line
202. 7:53again so at this point you know i would
203. 7:55be looking for a rejection off of that
204. 7:58because i haven't seen any divergences
205. 8:00here on the rsi so like i said again
206. 8:03price action is king when you can just
207. 8:05follow price
208. 8:06make good trend lines and make the
209. 8:08decision and avoid these traps like know
210. 8:11that the traps are always there this is
211. 8:14why 95 percent of day traders fail is
212. 8:16because they fall for these traps you
213. 8:19have to deploy patience it's the most
214. 8:22important thing you don't want like the
215. 8:24one candle to break a trend line because
216. 8:26the next one
217. 8:28most likely is going to go the opposite
218. 8:30direction you always want that break and
219. 8:32re-test and if you see a lot of noise
220. 8:35like this where it's just like whip
221. 8:36sawing back and forth you need to be
222. 8:38extremely cautious and know that there
223. 8:41is a chance that you're going to be
224. 8:43stuck in a position like this like
225. 8:45honestly this could have consolidated
226. 8:47here for a few days now one thing i'd
227. 8:49like to discuss about divergences is
228. 8:52that a lot of people are like taking
229. 8:54divergences at like the 60 or you know
230. 8:5765 level or on the bottom side you know
231. 9:01say 40 45 and it's like it's not it's
232. 9:05not what it's meant to do a divergence
233. 9:07you want it to get to that typical rsi
234. 9:09oversold the 70 and 30 levels and or
235. 9:13above so you know if the rsi hit the 90
236. 9:16level
237. 9:17and then you know price continues up but
238. 9:19then the rsi is going down that's the
239. 9:21area that you want to focus on so
240. 9:23anything
241. 9:24higher than 70 or lower than 30 like we
242. 9:28hit here we got a 23.5
243. 9:32on the rsi so once that happens you
244. 9:35don't want to immediately get in for a
245. 9:37buy what you'd like to do is wait for
246. 9:39the divergence and see if it makes like
247. 9:41a substantial divergence which it did
248. 9:43right here it went from the 23 all the
249. 9:46way up to the 40
250. 9:48while creating that lower low and those
251. 9:50are the things that you really want to
252. 9:52take advantage of you want to see that
253. 9:54divergence you want to track your trend
254. 9:56line and watch that break and re-test
255. 9:59and then get in on your trade but know
256. 10:01that that is the most risky area trend
257. 10:04reversal trades are extremely extremely
258. 10:06risky so you have to be very very
259. 10:09cautious and understand that you're
260. 10:11probably getting into early and it's
261. 10:13best to wait to see subsequent you know
262. 10:17continuous bullish candles out of that
263. 10:20old downtrend but the cool thing about
264. 10:23marking your charts up like this
265. 10:25is that you can just wait for things
266. 10:27like this to happen so we had this nice
267. 10:30run we had our first rejection at that
268. 10:32point you see you know this is your new
269. 10:36trend line so at this point any time the
270. 10:38price rejects off of that trend line
271. 10:40like it did right here with this trap
272. 10:42you know we had that break and then the
273. 10:44next candle like you know that that's
274. 10:46your old trend line
275. 10:48this is where you get in on a trade and
276. 10:50this is a really really safe one because
277. 10:52of that huge huge three-line strike you
278. 10:56guys know that i like to trade the
279. 10:57three-line strike a lot and at that
280. 10:59point it's just below you know you can
281. 11:01keep your stop-loss just below the
282. 11:03bottom of that candle and go for one to
283. 11:05two so these types of things having
284. 11:07trend lines already up and then while
285. 11:09you get on the charts and you check out
286. 11:10price action and you see like okay cool
287. 11:13it's getting to my trend line let's look
288. 11:15for trend continuation trades if i
289. 11:17haven't seen a good divergence here i
290. 11:19don't know for sure but let's just check
291. 11:21the rsi to see if there was a hidden
292. 11:23bullish divergence here look at this
293. 11:25we had our
294. 11:27you know our low and then our higher low
295. 11:30right
296. 11:31and then on the rsi we had a low
297. 11:35and a lower low that right there
298. 11:38is a hidden bullish divergence so at
299. 11:40that close of this candle i literally
300. 11:43yeah this is a money trade right here
301. 11:45and you had already known that because
302. 11:47you had drawn your trend line once it
303. 11:49rejected off of here so say
304. 11:52i don't know price action where's that
305. 11:54replay button boom you know you see this
306. 11:57and this is where you've already drawn
307. 11:59your trend line
308. 12:00because you you have this low point and
309. 12:02you have this higher low so you've
310. 12:04already drawn your trend line and you're
311. 12:06watching you know price action you know
312. 12:08while you're trading or whatever on the
313. 12:1015-minute time frame and you see price
314. 12:12coming down to your trend line and
315. 12:14you're just you're just sitting there
316. 12:15and you're waiting
317. 12:16and then you get that break
318. 12:18and then the next bullish one and you're
319. 12:20like okay i'm golden it's
320. 12:23this is why it's always good to have
321. 12:25markups on a naked chart apologies about
322. 12:28my low energy level um huge climate
323. 12:31difference between the canary islands
324. 12:33and like
325. 12:34mucky rainy poland so i'm a little bit
326. 12:37under the weather and i'm coming down
327. 12:39with it but like i said trend lines
328. 12:41price action divergences their money in
329. 12:45the bank but if you couple this
330. 12:48with support and resistance zones like
331. 12:50those big ones
332. 12:52look at look at what you're getting here
333. 12:54you know you're getting
334. 12:57levels and once price hits these levels
335. 13:00and rejects off of it dude it's price
336. 13:02action price action naked trading if you
337. 13:05can master this then add a few
338. 13:07indicators on it to help you make
339. 13:09decisions you know buy or sell whatever
340. 13:12it's good you just have to keep
341. 13:14practicing you have to keep practicing
342. 13:15this stuff and you have to just keep
343. 13:17watching charts the more you watch
344. 13:19charts the more the patterns come out
345. 13:22and you're like the dude from the
346. 13:23beautiful mind with all the flipping
347. 13:25numbers and you know oh my god i see the
348. 13:27patterns if you guys enjoyed this video
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351. 13:34realize and if you have not watched it
352. 13:37already please watch my video about top
353. 13:3910 trading mistakes that every day
354. 13:41trader has made like guaranteed and it
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