We show trading opportunities and really help you understand and master the price action systems. Or if you prefer to work on your own, then I’ve put together four trading courses for Tradeciety is run by Rolf and Moritz who have over 20+ years of combined experience in Forex, stocks and crypto trading. For the last 8 years, we have been providing a wide range of trading Price Action Trading Masterclass FREE – How to master price action. In this almost 30 minute long price action video, we dive very deep into some of the more advanced price action 15/11/ · Tradeciety Forex Training – Price Action Course. Learn to trade like a professional Forex trader, Learn how to trade like a professional, Forex system for all timeframes and 22/3/ · Tradeciety Forex Training – Price Action Course Free Download. We talked a little bit about market selection in the past but it’s important that we are clear about this very ... read more
However, the head and shoulders shows us that on the left side from the head, this was true to make the market was making higher highs and higher lows. And we have also, obviously we have a head, we have the right shoulder and then we have our neck line. And where, once the price breaks underneath the neck line, this is usually when the head and shoulders has been triggered. This is when the market is not only making a lower high from the head to the right shoulder, but sorry if I did the mic, but the market is also making a lower, low and the first lower low.
So this trend structure is now completely broken, and this is often where you can see them, the trends turn around. So the head and shoulders often marks the end point of a uptrend and often foreshadows a downtrend that is about to start. And in the beginning, what I would recommend sometimes switch on the line graph on your charts. And obviously we can also flip this around.
So instead of a head and shoulders at an uptrend, we can also look at an inverse head and shoulder at a downtrend. And we can use that with a trendline. And what you usually do is that you either trade the breakout or you trade the pullback. And I think my last video was about the difference between pullback and trend trading. So I will also make sure to put that in the video description below, check that out if you want to see the difference between a pullback trading approach and a breakout.
And head and shoulders can usually be used for both. Sometimes you will have an immediate breakout and retest. And there are a lot of variations. Obviously a head and shoulders can come in many different ways and shapes.
And I really urge you to study the different variations because what happens is that most trading books, trading websites, trading literature, focuses on those textbook head and shoulders or textbook patterns in general. And what happens is that if you are just trained to look for those perfect patterns, you will miss a lot of trading opportunities and those very beautiful, obvious, and easy to support patterns, what happens is that I feel in my experience shows that they fail a little bit more often because this is where everybody is jumping on the same thing.
So here we have some variation of a head and shoulders. We have a left shoulder that is taking a little bit longer. We have a right shoulder at a significantly lower from the head, and this is often referred to as a breakout buildup.
And I also made some videos on my YouTube channel around breakout buildups. And I will show you that in a moment. And the market here on the right shoulder is really sticking to the previous low. Whereas previously the market was always able to push higher quite easily, on this right shoulder, something different happened.
The market was really sticking to the level. And this tells us that, whereas previously, the buyers were able to push the price higher here, the sellers here were able to keep the price low. And it was probably significantly more selling interest than buying interest.
And this may foreshadow here, then this turnaround. And this is one of the most important rules when it comes to pattern trading, is that you always need to wait for the market to break out of your pattern. It is an example, we are looking at head and shoulder. You need to wait out for the market to fully break the head and shoulders pattern.
Here we have a wedge pattern, and wedges are also considered in a classic sense reverses, but I will show you in the next example where a wedge is also a continuation.
So what happens is that the market is coming here from the left in a strong uptrend. And the wedge really nicely shows you how a strong uptrend is then slowly fading. So this tells us already that the difference between the buying and selling has definitely changed.
And there are not a lot of buyers anymore. And when we look at the highs, especially where if you connect the highs here, you can see the market did rise very quickly here. So shows us that although the price did move higher, kind of, it is a very, very weak indication here that not a lot of buyers are anymore in the market. And then what you generally want to do is you want to wait for the market to break out of your wedge pattern, and which is made up of a trendline here at the bottom, where we connect the lows to form the trendline.
And you generally want to see that the market is breaking out of the wedge and also breaking into a new law. So now the market is making a lower low, and it made also lower high here already. So this is how you see a good wedge pattern. Wedge continuations sometimes are also referred to as flags. And I remember Morris saying in our mentoring program, the link to that is also under description, is that flags are one of the most reliable patterns that you can find.
They are usually considered trend continuations and what they show you is a temporary pause in an overall trend. And in the next chapter, I will go very deep into trend analysis. However, what we can already see is that the market is going higher here.
Then obviously trends were never just through higher in one straight line. However, every trend is coming to an end eventually. And sometimes the trend is just going to pause for a moment, so that some people who made profits are going to take profits here, and some people are trying to sell.
And sometimes those pullbacks, turn into new trends. But very often, especially if you are in a long, higher timeframe trend, you would see that those pullbacks at then converted and are rejected. So here you can see the market made a move lower here. You can see we made a double bottom. Then we have a breakout out of our wedge, which we can very nicely connect the highs here and here and here. So we have a very nicely defined wedge, and then we have a breakout and the up trend is continued.
And again, we would come into that at the moment, and understands the natural flow and the rhythm of price action. Trends will not move one straight line and there will always be this wave function and the wave formation of trends. We have rectangles or Rangers, and those are also often considered continuations. And again, it depends on the trend context. So the market is coming here from an uptrend here on the left, then the uptrend, whereas previously in the wedge example, the uptrend was temporarily broken by a move lower.
So sometimes those, we would call it correction waves are actually moving lower, but sometimes those correction phases are just sideways phases where the existing trend is currently pausing. Some people may take profits. Other people may trade, take new positions, and then the market moves sideways until the trend is then continued into continuation happens on the breakout out of the pattern. A lot of traders, especially in the beginning, were suffering from so-called FOMO.
The fear of missing out and those traders were then trying to outsmart the market. And as we all said, this is going to lead to a continuation. So I may just be a little bit smarter than everyone else and get into the trade a little bit earlier before the market breaks out.
However, obviously, nothing in trading works a hundred percent and very often those Rangers will lead to nothing. Sometimes the market will keep ranging afterward. Sometimes those ranges will even trigger into the opposite direction and then you are completely screwed. We have triangles which are also usually considered continuations and the triangle is telling you a very nice story as well.
So the market is in an uptrend, moving higher and higher and higher, then the uptrend is pausing. And we have another type of pause.
So a very strict resistance level. And to the downside, we have a triangle formation. And what does it tell us is that when we look at the lows we go from here to here, the market is continuously pushing higher. Whereas previously, after the market moved into this resistance, the market was able to sell off to this point and the sellers were able to push the price quite a bit lower.
The next time the market came into the level here. Now, the market, the sellers were not able to push the price that low, and the buyers stepped in much sooner and pushed the price up higher. And then it continued. And here we have another example of a different market, also in an uptrend also here, resistance level, and each time the market moved into this area the price was able to move lower, less and less strong.
And this can often foreshadow a continuation. And again, context really matters. Where do you see a triangle? Where do you see a wedge? Where do you see a flag? Is it in a nice trending market? Is it in a sideways market? This is very important. Try to only look for patterns in well-defined nicely trending markets and your odds of finding successful patterns may increase quite a bit.
And then we will move on to trend analysis. And the cup and handle is very often found in a stock market. So they seem to be more a stock thing and they are generally considered a trend continuation pattern. And again, the market is in an uptrend uptrend, temporarily pauses that it moves low on tries to start a new downtrend, but the buyers are coming in and pushing the price higher and higher and higher.
When we just look at the lows, the market is already making higher lows here. Once again, then the handle is our so-called breakout buildup. And this is often an indication that now there are quite a lot of buyers in the market. Everyone who tried to sell or who wanted to take profit here, took profits, and now they have repositioned. The price was low, that it was interesting to buy again. And maybe this is happening in an overall uptrend. Maybe there are great fundamentals here behind it.
And then it makes sense to look at a cup and handle as a continuation pattern. And trend analysis, as I already hinted one or two times is very important for context, because we can find candlesticks everywhere.
We can find chart patterns everywhere, but it really matters where they happen. And very important is to trade markets that are trending, because trending markets are the ones who move, and this is then not a guarantee, but it helps us to find markets that may also move in the future. So those are the markets that we want to trade because they may show the highest profit potential for us. And when we look at a trend we can, and we should distinguish between different terms and we can look at the overall trend.
And this is then creating this rhythm of the markets, and you will find it, whether you trade Forex, stocks, commodities, even cryptos, you would see this rhythm function and this rhythm feature, we are looking at a long-term uptrend, but in those long-term uptrend, we are looking at small waves into the trend direction.
And as I said, Rangers can come in many different farms. They can be sideways, they can be against the trend direction. They can be triangles. And what is also important is the sequence. And usually what we see is here, we have our continuation trading approach, trading opportunities in form of flags, Rangers, cup and handles, wedges. And then at the top of a trend after a mature trend, this is where we can start looking for reversal patterns, such as a head and shoulders.
So of course we can see that the market is trending here. Then the trend is becoming less strong than the market is not able to move higher at all. And we can still put everything into context. We can still use those terms that we have used here on a little bit more of a messy approach, but what is really helping us is to look at the building blocks.
What actually makes up a trend, what is actually driving the price higher and lower, and what are the building blocks that we can use to simplify and to make our price analysis significantly more effective. And highs and lows are the building blocks of trends of patterns of pretty much anything. And you may have heard about highs and lows before. However, if you really understand why you actually using those and how they really make up your charts, the power of them will become much, much clearer.
And as I said, during an uptrend, what is happening is that the market makes higher highs and higher highs and higher highs and higher highs. And when we look at the lows, the market makes a higher, low, higher, low, and a higher, low, and higher low, and this is showing us a healthy trend structure. But once this healthy trend structure is broken, that is often when you see reversal opportunities.
Um, but once you have seen that as higher high and higher low structure is broken, then your focus should shift to a reversal approach. So here you can see here was the higher high. Then here we have a lower high and we had a lower low before. So now we have a complete trend change here from higher highs and higher lows to lower lows and lower highs.
And then you can see this foreshadows, the complete collapse of the market here. And also is the trend accelerating or decelerating. And this is very important and trend waves you can see they move higher, but as obviously a very big difference between how the market moved higher here, here, and here.
Whereas here in the beginning, the price in a very short period of time moved higher a lot here. You can see the price initially moved higher, but then the market was pausing here for quite a long period of time. If you have been trading higher here, and then here, you can see the market is making a very weak attempt to move higher. Whereas from here to here and from here to here, the market moved higher quite a lot. And the distance between the highs and the lowest is quite a significant, the distance from this high to this high is much, much shorter.
So the prices obviously not rising as strong. We can also apply it here on the right-hand side. The trends were very strong here on the left hand side. You can see from this low to this low, the price was moving lower quite a bit. And from this low to this low, the price was almost not able to make a lower low at all.
And then from here as well. And you can see that the trend is very slowly dying down. It is losing momentum. It is decelerating clearly. And then here on the right side, the market is then even moving higher. So now we are seeing a higher, low, and we are seeing a higher high here. So when we really pay attention to those individual building blocks, highs, and lows, but even go further into how strong and how fast are those highs and lows moving. Then we can take our trend analysis to a completely new level.
We can also incorporate the theory of the Dow theory, and you can look it up. The Dow theory is simply saying that the markets and a trend is likely to continue as long as there are higher highs and higher lows in an uptrend and lower lows and lower highs in a downtrend.
And here you can see I marked lows and the highs here, the market was very healthy here on the left-hand side, but something has changed here to market was making lower highs here already.
And then here, it made lower lows as well. So here you can see the market may have already indicated a change here. However, the market never really made a lower low, so it continued higher.
And then here is really where things changed. We have a series of lower highs, and then we had also a series of lower lows. And this is a very good way of looking at trends because it keeps you away from the so-called top and bottom picking.
And another problem besides FOMO or where it is also ties in with FOMO is that a lot of traders try to predict turning points. They may have missed here all the upside potential in all the upside move.
And then their thinking shifts to, if I can just time the short at the best possible time, if I can predict when the market is moving lower, then I will have the best entry price and the biggest profit potential.
So what is happening is that we call it catching a falling knife and trading, and the traders try to predict what may happen without a lot of context. Another tool that I really like, and I will get back to that is just using trendlines, and trendlines help you have a little bit more of an objective way of analyzing trends, and you can use trendline analysis on the lows, or we can also use it on the highs.
And when we connect, the highs you can see from here to here to here to market was rising quite quickly. Now you can see the angle is significantly dropping off. And then here, the market is even making lower highs and we can do the same here on the downside. You can see when we connect the lows here, we have a very steep trendline. So everything is pointing towards a loss of bullish interest. The highs are not able to move higher that quickly.
And the lowest are also here are coming down further and further. So very, very important piece to the puzzle. And you can see this all foreshadowed here and the complete collapse.
So now we have taken a look at trends. We have taken looks at price action, patterns and candlesticks. And now I just want to give you a few other tools, indicators, or tips of how you can further improve your price action reading and your chart reading.
So the first one is moving averages, moving averages are considered an indicator. However, there are more actually a price action tool, because they are directly a substitute for price action. And then it would just give you an average of the price action. So this is a very, very helpful and a very powerful indicator, it is also used a lot in algorithmic trading. And this is probably also why moving averages are so powerful because just such a variety of traders are using moving averages.
And you can see, I plotted a few moving averages, two actually on the chart and they are also great for pullback trading. And first of all, the way a moving average is used is that you only trade into the direction of the moving average. And the best price to buy is obviously when the price is low and the moving average helps you find that.
So you want to find when the trend is pulling back into a moving average, and this is where you want to trade, because you will get the best possible price. And it is still in the context of the, of the trend.
And then the downtrend is starting. And in this case, you want to look for selling opportunities at the moving averages. So this is a great way for a higher timeframe approach. If you use this, for example, as your higher timeframe, then go down to the 15 minute timeframe when the market is hitting those moving averages and look for trade continuations, you can then, for example, look for candlesticks. You can see sometimes you have pinbars, you have sideways Rangers, and then you can use those to time your trades.
Moving average are also used by professional traders. And he said that moving averages are his red and green light. So he only trades short when the market is below a certain moving average.
And he only trades as long when the market is above the moving average. And this is his way of her filtering for direction. So here you can see, I plot a moving average. And by those vertical lines are indicated the break below or above the moving average. And when the price is below the moving average, such as here, you would only look for shorts when the price is above the moving average, you will only look for longs.
And this is a great way of helping you establish an objective approach to finding a trend direction. You can also use a moving average crossover, especially when you look for the golden cross.
That is something that is very popular. So you have two moving averages and whenever they cross, this is your potential signal to start looking for trades into the direction of the cross. And especially again, with a lower timeframe approach, you would then wait, not only for the cross, but also for the market to get back to the moving average, to provide you a favorable price on the lower time frame, especially that is where you will see a lot of trading opportunities.
The MACD is a derivative of the moving average. It stands for moving average convergence divergence. And again, the MACD also helps you determine a trend direction. And what you can do is also whenever the MACD is above the zero line, you would look for long opportunities.
And when we moved away, we can then see the times when the MACD is below zero. And this is then where you start looking for shorts only. And this is another objective way of just having your filter trend direction. And one of my favorite signals and setups with the RSI is the RSI divergence.
And the divergence means that the price action and the indicator are not agreeing. And whereas here on the left side, you can see the market is making higher highs and higher lows, especially here at the top. The indicator was already indicating that here, the RSI made lower highs.
So the RSI looks very deep into the trend, strength analysis, and way deep into the trend waves. So here the market was moving down, lower lows and lower highs, but ours, I was showing you that here RSI made a higher low. And if we look in deeper, you can see that here was already quite a big of a sideways move, which is never a strong sign of a healthy trend. Usually trends move lower and higher in an orderly fashion in a quick fashion. But when it takes long for the market to make a continuation, it may already indicate that a price is not as strong as you believe.
Bollinger bands are one of my absolute favorite. They are used for trend trading, but they can also be used for continuations pullbacks or reversals.
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Most traders make the mistake that they want to trade all the markets all the time. The best traders have a deep understanding when their method works best and when to stay out of the markets. Please watch the video first and then read the bullet points and the case studies below for more information. Case studies — good vs bad markets Keep in mind, as reversal traders we look for strong trends with multiple trend waves and a good trending structure.
Here are a few examples of good vs. bad market. In a later module, I will lay out my whole screening process for you step by step and we I will walk you through my watchlist process. Bad market — range and V-bottom Here are two classic example of bad market structures. First, price trades in a large range without any trend action. Then, when price leaves the range, price drops like a strong in one single line. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.
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Tradeciety Forex Training - Price Action Course. Welcome visitor you can login or create an Forex Trading Systems. Forex Full Courses. Forex Indicators. E-Books (Trading,Forex & 14/7/ · Tradeciety Forex Training – Price Action Course. Learn to trade like a professional Forex trader, Learn how to trade like a professional, Forex system for all timeframes and all We show trading opportunities and really help you understand and master the price action systems. Or if you prefer to work on your own, then I’ve put together four trading courses for Price Action Trading Masterclass FREE – How to master price action. In this almost 30 minute long price action video, we dive very deep into some of the more advanced price action 15/11/ · Tradeciety Forex Training – Price Action Course. Learn to trade like a professional Forex trader, Learn how to trade like a professional, Forex system for all timeframes and 22/3/ · Tradeciety Forex Training – Price Action Course Free Download. We talked a little bit about market selection in the past but it’s important that we are clear about this very ... read more
So now the market is making a lower low, and it made also lower high here already. And there are not a lot of buyers anymore. And usually what we see is here, we have our continuation trading approach, trading opportunities in form of flags, Rangers, cup and handles, wedges. So this is going to be a very fascinating journey. So here you can see here was the higher high.All right, so this was a very tradeciety forex trading price action course video. And then you can see this foreshadows, the complete collapse of the market here. And this is then where you start looking for shorts only. And there are some variations, some traders only accept an engulfing candle if the full candle, if the full first candle is engolfed, some traders like me, I would also accept if just the candlestick body of the second candle is engulfing the candlestick previously, but there are a few variations. So in this case, this is a bearish pinbar.