SIMPLE Price Action Rules to Predict Market Direction and Trades — Transcript

Full transcript

1. 0:00In this video, I'm going to be showing
2. 0:01you my scalping session. We're looking
3. 0:02at S&P 500 E-mini futures. The ES is in
4. 0:06a slight bullish bias, I can see as a
5. 0:08price action trader, series of higher
6. 0:09highs and higher lows. But, as of right
7. 0:11now, I don't have no confirmed wide
8. 0:14channel that would give me confidence in
9. 0:16this structure. So, I'm taking a little
10. 0:18bit easy. I'm going to wait for a little
11. 0:19bit more price action. This is what you
12. 0:21have to do as a trader. Wait for price
13. 0:22action, wait for confirmation, so you
14. 0:24know exactly what you're trading.
15. 0:26Because right now you have two legs up,
16. 0:28there was overshoot that created push
17. 0:30above EMA, so structure is still
18. 0:32developing.
19. 0:37All right, traders. There was a massive
20. 0:38spike in volatility, you can see massive
21. 0:41spike down followed by massive spike up.
22. 0:44This generally distorts price action, so
23. 0:46I'm not really trading for a few minutes
24. 0:48once this happens. Right now I have a
25. 0:50breaking new high, but I'm going to wait
26. 0:51a little bit to see what's the next
27. 0:52structure because spikes like these,
28. 0:55they will distort the current price
29. 0:56action, and you need to give it some
30. 0:58time for price action to go back to
31. 1:00normal and to establish confirmed
32. 1:02pattern.
33. 1:07All right, traders. I was looking to go
34. 1:09short on a second entry short, a
35. 1:10downtrend needs new low. Up trend played
36. 1:14out, but the signal bar ended quite
37. 1:15weak,
38. 1:16so I didn't drop the limit order. It's
39. 1:18very close. The risk is three points,
40. 1:20not as big,
41. 1:22but the signal bar I can see quite weak.
42. 1:24Downtrend is new low. It's a decent
43. 1:26second entry short, new low first entry
44. 1:27short, second entry short,
45. 1:29but I waited here. Looks like the limit
46. 1:30order would not be filled anyway, so no
47. 1:32problem. Okay, it's a shame. With better
48. 1:34bars, this is a great trade. Everything
49. 1:36aligned.
50. 1:40All right, traders. Up trend played out.
51. 1:42We are near the top of the trading range
52. 1:44where you expect sellers to step in. So,
53. 1:47right now I'm looking for failed second
54. 1:50entry long below EMA. Up trend played
55. 1:52out, and we are in a trading range. All
56. 1:53right, traders. I attempted to get
57. 1:55filled on a limit order here, but the
58. 1:56scalp was already reached. This setup
59. 1:59happened super fast. There was no way
60. 2:01for me to catch it, unfortunately, so I
61. 2:04had to cancel order because scalp was
62. 2:05made.
63. 2:10All right, I'm going to zoom in a video
64. 2:11because I'm I'm going to enter double
65. 2:13trap on a new high first entry long,
66. 2:15second entry long that is far from the
67. 2:16EMA.
68. 2:18I'm looking for new high of this uptrend
69. 2:20because this downtrend had overshoot
70. 2:21which generally reversal was completely
71. 2:24retraced.
72. 2:25We are near the highs of the range which
73. 2:27is not ideal. This is why I'm going to
74. 2:29use limit order and the bar is quite
75. 2:31big. I want to have room to scalp before
76. 2:32reaching the new high. Therefore, deep
77. 2:35limit order, but we are at the EMA. It's
78. 2:36a double trap correction better than to
79. 2:38break new low. We need new high. So,
80. 2:41let's see we can get pull back with
81. 2:42limit order or not. All right, traders,
82. 2:44I came back from my break. As you can
83. 2:47see, the uptrend is slowly but surely
84. 2:50evolving into spike and channel pattern.
85. 2:53This is why I'm drawing the secondary
86. 2:55channel. We have a tool like a pull
87. 2:57back, but it's an inside bar with a weak
88. 2:59close at the top. So, I'm not going to
89. 3:01go long above this bar, but if I'm going
90. 3:03to get a hollow confirmation trade, that
91. 3:05would be interesting. Other than that,
92. 3:07slow methodical price action, nothing
93. 3:09much happened before I took break, just
94. 3:10breaking new high. And now we have some
95. 3:12secondary channel. All right, traders,
96. 3:14I'm trying to take hollow confirmation
97. 3:16trade.
98. 3:17Okay, I'm going to place the order one
99. 3:18tick above the bar because I don't want
100. 3:20to miss it this time.
101. 3:22We have a nice confluence of multiple
102. 3:24key entry points. You can see how strong
103. 3:26this channel is confirmed so many times
104. 3:30alongside with the EMA combined with
105. 3:32this key level. So, you have three key
106. 3:34entry points in one market corrected
107. 3:38to these key entry points, which is
108. 3:39where you expect
109. 3:41the new push phase to start. We just
110. 3:43need to get filled. Come on.
111. 3:45Another stronger pull back. All right,
112. 3:47traders, I took the felt second short
113. 3:49since I didn't get filled on the hollow.
114. 3:52Okay, got the scalp instantly. So, I'm
115. 3:54going to place the stop loss to break
116. 3:56even. We got eight ticks, two points on
117. 3:58the eight contracts.
118. 4:00So, this high low is a better trade mark
119. 4:02key entry points, but I didn't get
120. 4:03filled. It already made the scalp. Then
121. 4:05we had a failed second entry short,
122. 4:06basically bouncing off the key level
123. 4:09again and the EMA. You can see
124. 4:12the trend line is confirmed so many
125. 4:13times. This is exactly where you want to
126. 4:15be buying. So, great trades to finish
127. 4:17the day with, just in time before it's
128. 4:19too late.
129. 4:20So, I'm not going to be too greedy with
130. 4:22the runner. I'm just going to take what
131. 4:23it'll give me and I'll wrap it up.
132. 4:25Right, traders, I'm going to wrap it up
133. 4:26with my one trade. So, this is the
134. 4:28overall structure for today.
135. 4:31We started with a little bit of unclear
136. 4:32price action, where it's not easy to
137. 4:35identify what exactly is the pattern.
138. 4:38We have two legs up measure move.
139. 4:40We have overshoot for this downtrend, so
140. 4:42we can expect stronger push up. And then
141. 4:45it takes time for new structure to be
142. 4:47established. So, you have to be really
143. 4:48patient at the beginning. We started
144. 4:50really slow and choppy.
145. 4:52Then you finally have some confirmed
146. 4:53downtrend where you can start to look
147. 4:55for second entry short. You have second
148. 4:57entry short here, but the signal bar is
149. 5:01inside bar, so you can't take the inside
150. 5:03bar right here.
151. 5:04Then you need lower high below EMA. You
152. 5:06have lower high above the exponential
153. 5:08moving average, so you need failed
154. 5:10second entry long below EMA to test the
155. 5:12new low. Then you have this massive
156. 5:14spike in volatility, which really
157. 5:16destroyed the price action. Spike down,
158. 5:17spike up.
159. 5:19We end up having a nice high probability
160. 5:21setup right here, but you know, this is
161. 5:24nine points. It's after this volatile
162. 5:26spike, so we can't really take it.
163. 5:27There's not even trigger. But context
164. 5:29wise, this is okay trade. It's a failed
165. 5:31second entry short combined with the
166. 5:32second entry long, two setups in one.
167. 5:34Option is new high, but you can't take
168. 5:36it. It's too big, didn't trigger
169. 5:38properly.
170. 5:40Then because you're in a trading range,
171. 5:41it's better to expect breaking new high
172. 5:44and trends to be short lasting, to pivot
173. 5:46quickly. This is common behavior in
174. 5:48trading ranges. You don't argue with
175. 5:50trends. Okay, you expect trends to have
176. 5:52a new extreme and then pivot. So, expect
177. 5:54trends to be short-term in the change
178. 5:56like this. New downtrend, second entry
179. 5:59short as I talked about would be nice
180. 6:00with stronger bar.
181. 6:02It's a little bit more aggressive. Work
182. 6:03for a scalp breaking a low.
183. 6:06Uptrend working higher, you have a break
184. 6:07pushed to new high, okay. Then you have
185. 6:10a great short actually below EMA. You're
186. 6:12coming off trend highs, uptrend played
187. 6:14out. You're in a trading range, really
188. 6:15strong signal bar. Look at the top to
189. 6:16top and you're getting momentum.
190. 6:18But it was very, very hard to get
191. 6:20filled. Also, because it looked very
192. 6:22bullish. So, once the bar was forming
193. 6:24all the way up here, I thought, "Okay,
194. 6:25we're not going to get nothing below the
195. 6:27EMA." But last second it dropped down,
196. 6:29so you need to be quick to react. And
197. 6:31once I reacted, dropped a limit order,
198. 6:33it was already halfway down. So, very
199. 6:35hard trade to take
200. 6:37watching this real time. I was expecting
201. 6:40initially a new low, but once again, a
202. 6:41dead with overshoot, retracement is too
203. 6:44deep. No new low was expected. You have
204. 6:47to play the new high now because in
205. 6:49trading ranges this is the recent
206. 6:50structure. You have a decent double
207. 6:52trap.
208. 6:54You have break new low, but market keeps
209. 6:55working higher. You have another second
210. 6:57entry long here,
211. 6:58which after breaking new high, you have
212. 7:00no reversal, no correction, another push
213. 7:02up. So, you're getting signs of trend
214. 7:04continuation.
215. 7:06But you had to be more advanced to
216. 7:07identify this spike and channel pattern,
217. 7:09okay? Because at the end of the day, you
218. 7:10still have breaking new high and a
219. 7:11second leg up. Okay, you already need to
220. 7:14be playing this wider channel. If you
221. 7:16have a confirmation here of the channel,
222. 7:19okay, you can go long. It's also quite
223. 7:21big, 5 and 1/2 points, so you need to
224. 7:22use a limit order. But without the
225. 7:24channel, I would not take it. If you
226. 7:26have the channel, if you're more
227. 7:28advanced and you understand, "Okay,
228. 7:29there's signs of trend continuation. I
229. 7:31can read the market geometry well." You
230. 7:33can take the second entry long. This
231. 7:35would be great trade, almost repeat
232. 7:37pattern to what we have yesterday. We
233. 7:39had a nice second entry long, I remember
234. 7:40I took it. So, great second entry short
235. 7:42yesterday, but this time it's an inside
236. 7:44bar, quite weak one. If this wasn't an
237. 7:46inside bar, honestly, I'd go long even
238. 7:49with this bar. Let's say there's one
239. 7:50little tick working over here. Even with
240. 7:52a doji like this with few ticks bullish
241. 7:54body, it's a good trade because two legs
242. 7:56are broad, breaking low, and you're at
243. 7:58two key entry points. The more key entry
244. 7:59points you have, the stronger the setup
245. 8:02is, the stronger the context is.
246. 8:05First entry long. This is really great
247. 8:08double assuming great high low. Three
248. 8:10key entry points, tiny risk. This is the
249. 8:12trade of the day when it comes to, you
250. 8:14know, where everything aligned. This was
251. 8:15a second entry short more aggressive
252. 8:16because at this point it's going to roll
253. 8:19over soon. So, I took a little more
254. 8:20aggressive trade. Worked for a scalp.
255. 8:23And then you have a nice felt second
256. 8:24entry short to test the new high of the
257. 8:26channel following the channel rule, but
258. 8:28it's too late. So, I'm not even going to
259. 8:29mark it. You cannot take a trade this
260. 8:31late. So, yeah, decent price action
261. 8:32basically after this volatile spike.
262. 8:36Okay, so you saw me reading this real
263. 8:37time. It's doable. You can definitely
264. 8:40spot these channels, spot these trades,
265. 8:42take these trades. I would have much
266. 8:44more trades today if I got filled on
267. 8:45more of these. Unfortunately, didn't get
268. 8:47filled a lot of those. Just one of those
269. 8:49days. But, what's important is not to
270. 8:51force trades when the market is in this
271. 8:54area slow and choppy or maybe here. You
272. 8:56know, especially if it's a range like
273. 8:57this. It takes time for some structure
274. 8:59to be established. So, as a trader, it's
275. 9:01very important to protect your capital
276. 9:03when your trend is not confirmed, you're
277. 9:05not sure. And once you're starting to
278. 9:07get hint that, okay, there's something
279. 9:09confirm,
280. 9:11I know what's happening, I know what to
281. 9:12expect. This is where you pounce and you
282. 9:14have to take those trades, okay? So,
283. 9:16this is part of trading. You will learn
284. 9:18this with time. You will get better with
285. 9:19time. When you're starting out, of
286. 9:21course, hard to do. But, with more
287. 9:23experience, it's going to be easier and
288. 9:25easier. It's a skill like anything else.
289. 9:26Takes screen time. Takes a lot of work.
290. 9:29It's a real skill. Weak traders, they
291. 9:31will give up. And if you persevere,
292. 9:33you'll be rewarded. So, I hope you had a
293. 9:35good trading day. I'm going to wrap it
294. 9:36up, and I'm going to talk to you next
295. 9:37time. Good luck with your trading.