One of the Best Day Trading Strategies Using Price Action Patterns PDF
For me, price action trading starts with knowing the proper price patterns to search for on the charts. That's why I've introduced the day trading strategies using price action patterns PDF.
In it, you'll discover one of the most profitable chart patterns you can look at daily for different currency pairs. Price action alone is insufficient, so I'll introduce other confluences that help you determine high-probability trading setups.
Price Action in Forex
Price action is decisive in finding an entry on lower and higher time frame charts. The day trading strategies using price action PDF will show how lower time frames, used for day trading, require more significant confluence than time frames such as the daily.
I'll briefly highlight the necessity of backtesting for day trade patterns to become second nature and gain the certainty necessary to trade your plan.
These patterns must also be recognized immediately to enter a trade at the optimum time without any hesitation. I also suggest restricting yourself to the 1hr and 4 hr time frames for day trading since these are more accurate than the lower time frames.
This seeking out of high-probability trades can be applied similarly to choosing the best time frames. Limit yourself only to these unless you can add extra confluences to the lower time frames.
I suggest to take only the trades occurring on the time frames that provide the highest probability for day trading, the 1hr and 4hr. It's your choice to try lower time frames, but you must do your backtesting to see if they are worth it for a particular pair, and you may have to add extra confluence.
Price Action in Forex Trading Needs Confluence
What's a confluence? A confluence is another chart or fundamental news feature supporting the price action.
Confluences include :
- round numbers
- Fibonacci retracements
- candlesticks
- support/resistance on the current and higher time frames
- overbought/oversold regions
- sentiments due to fundamental news.
Round numbers are numbers such as those shown below. They end in 50 or 00 and provide an added area of support or Resistance. The 00 round number, in particular, offers strong confluence.
Support and Resistance are well-known; my next article will deal with these in more detail. Suffice it to say that the patterns I mention below should coincide with local support/resistance and even better with support/Resistance from a higher time frame, such as the daily.
Applying a collection of these confluences together, especially with the fundamental news driver, will result in a higher trade probability. Building the habit of patiently waiting for these higher-probability trades will result in a winning strategy over time.
Day Trading Strategies Using Price Action Patterns PDF
The following day trading strategies using the PDF accessible below are only a few examples of various strategies that can be used as part of a winning strategy. Notice that I mentioned "part" of a winning strategy.
Again, factors such as confluence must be considered before applying the pattern. You could use the pattern as a trend reversal or part of a trend continuation strategy.
The examples shown in the PDF, accessible through the lightbox or link below, will only apply to a trend continuation. If you're interested in an online trading course that teaches this confluence, check out the following article: What are the Best Online Trading Courses? Part 1
The Importance of Backtesting
You must apply backtesting for each currency pair and time frame using the day trading strategies using price action patterns PDF accessible through this page's lightbox or link below. Only then will you see how the patterns in the PDF work and under which confluence constraints? Only then can you apply the correct risk-reward ratios appropriate for each time frame and currency pair.
A typical risk-to-reward is 2:1. Using a Fibonacci extension, I'll provide a backtest with approximately a 2:1 risk-to-reward ratio. However, other options exist for placing an exit target; you can backtest your own using the same price patterns as an entry signal.
Backtest each pair you plan to trade before trying them with real money, and continually review this backtesting. Similarly, backtest each time frame individually and compare your results. Start with at least two years of data to give you at least 50-100 trials.
Backtesting properly is a whole different discussion.
On MT4, you can scroll one bar at a time as listed in the Day Trading Strategies Using Price Action Patterns PDF accessible below. The instructions are for a PC running MT4 only. It doesn't work on a Mac unless you have the MT4 running on a virtual machine.
The one characteristic that cannot be backtested is the fundamentals because they occur on a real-time basis and are too difficult to access in back history. However, they will only enhance the exactitude of the systems. How this can be done requires more articles to address it. Please start with the theme I've listed here.
The price action trading strategies PDF will be emailed to you by subscribing through this page's post footer below.
FAQ
Q: What are price action trading strategies?
A: Price action trading strategies are techniques price action traders use to make trading decisions based on the patterns on a price chart rather than relying on indicators or other technical analysis tools. These strategies focus on analyzing historical price data and identifying patterns and trends to predict future price activity.
Q: How do I set up a price action trading system?
A: To set up a price action trading system, you must first choose a time frame that suits your trading style. Next, you must familiarize yourself with different price action setups, such as candlestick patterns and trading ranges. Identifying key support and resistance levels on the price chart is important. Finally, you can develop a set of rules and guidelines for entering and exiting trades based on the price action patterns you observe.
Q: What are the benefits of price action trading?
A: Price action trading offers several benefits to traders. First, it provides a simple and straightforward approach to trading, eliminating the need for complex indicators or technical analysis tools. Second, it helps traders better understand market dynamics and price behaviour. Finally, it allows traders to make better trading decisions by focusing on the most important factor in trading - the price itself.
Q: How can I trade with price action?
A: To trade with price action, you need to analyze the price patterns on a price chart and look for setups, such as candlestick patterns or breakouts. You can then use these setups to enter or exit trades based on your trading strategy and the rules you have established. It's important to be patient and disciplined when trading with price action, as it requires careful observation and price action analysis.
Q: What is the role of support and resistance in price action trading?
A: Support and resistance levels are key concepts in price action trading. Support refers to a price level where buying pressure is expected to be strong enough to prevent the price from falling further. In contrast, resistance refers to a price level where selling pressure is expected to be strong enough to prevent the price from rising further. These levels can act as barriers or turning points in the price action and can be used to identify potential trade opportunities.
Q: What is intraday price action trading?
A: Intraday price action trading refers to strategies focused on short-term price movements within a trading day. Traders who engage in intraday price action trading aim to capitalize on small price fluctuations and take advantage of market volatility. These traders often use smaller time frames, such as 5-minute or 15-minute charts, to identify and execute their trades.
Q: How can I identify price action setups?
A: To identify price action setups, you must look for patterns and formations on the price chart. These can include candlestick patterns, such as bullish or bearish engulfing patterns, inside bars, or trend lines. Studying these setups and understanding their meaning allows you to recognize potential trade opportunities and make informed trading decisions.
Q: Can I use indicators in price action trading?
A: While price action trading focuses primarily on price movements and does not rely heavily on indicators, some traders may use indicators to complement their price action analysis. Indicators, such as moving averages or technical indicators, can provide additional information or confirmation of the price action signals. However, using indicators judiciously and in conjunction with price action analysis is important to avoid overcomplicating the trading approach.
Q: What is the significance of trading with price action patterns?
A: Trading with price action patterns allows traders to make trading decisions based on the actual price movements rather than relying on lagging indicators or subjective analysis methods. By observing and interpreting price action patterns, traders can gain insight into market sentiment, identify potential trend reversals or continuations, and improve the accuracy of their trading signals.
Q: How can day traders benefit from using price action strategies?
A: Day traders can benefit from price action strategies as they provide a simple and effective approach to short-term trading. By analyzing price movements and identifying price action setups, day traders can make quick trading decisions and take advantage of intraday price volatility. Price action strategies also help day traders develop discipline and patience, key qualities for successful day trading.
I’d like to express my gratitude for the insightful and detailed information you’ve provided here on trading strategies based on price action patterns. In recent times, I’ve been focusing on expanding my knowledge of trading patterns. However, this can be challenging because we are still in the beginning stages. This content of yours will undoubtedly be of assistance to me. Continue to post in the same manner. I will most certainly pass this along.
The first i want to do is try to share this great article with some of my friends. The website is really nice. and i have learnt something tangible from this well detailed article on some of the best trading strategies to use. in 2020. trading online seems to the order of the day due to the effect of covid 19. thank uyou for this tips
I wouldn’t delve into trading in hopes of making up for lost revenue due to the COVID 19 crisis. Start on a demo account by doing some backtesting on the longer time frames focusing on areas that seem to show trending price action. You can use the price action pattern I highlight in the PDF below in conjunction with significant support and resistance levels on higher timer frames.
I would also include pay attention to longer wick candles at these areas of support and resistance as they are a giveaway of possible trend reversals. Include with these the reversal candlesticks I highlight in this article: https://andiamolireforex.com/candlestick-patterns-for-day-trading-pdf/
Also, make sure you’re buying in oversold regions and selling in overbought regions. The stochastic divergence indicator can help with this.
I can tell that this is a really good one. I should first commend the input of effort in making this superb website with nice features and also writing an article on best day trading strategies. using the price action pattern is new to me and i am glad that this is really detailed. thank you very much for this post.
Since you’re new it’s best to keep it simple when using technical analysis strategies. Look for a bullish or bearish trend on an upper and then lower time frame, say Daily time frame, and then the 4 hr. After locating the trend focus on the lower time frame and find support zones on an uptrend and resistance zones on a downtrend.
Look for retracements towards these support/resistance zones. At these locations you can then look for price action using Japanese candlesticks. You can look for outside bars, pin bars, indecision bars, or long wick candles. The best price action I’ve found is what is mentioned in the Day Trading Strategies Using Price Action Patterns PDF downloadable below.
This is really nice I am a bit new to trading, I have just been doing it for 4 months now, although I am new to the system I am already catching up with some of the terminologies, one that has been giving issues is price action patterns and after reading this i think my problem would be solved i have already subscribed to get the pdf…thanks a lot for sharing
You’ll need more than just price action. You’ll need to use support and resistance, trends, higher time frame analysis. This day trading price action Pdf includes a pattern that works best in conjunction with the trend and has been tested on a particular time frame and currency pair. You’ll have to test it for different pairs and different time frames.
I would use it in conjunction with those high time frame trends consistent with the lower time frames. The fundamentals can help narrow down what the best trending pair might be.
Price action patterns have been one my major constraints when it came to trading I have tried my best to understand it, but to no avail, I would subscribe to pdf maybe I would be able to get a better understanding from reading it thanks a lot for sharing this helpful article I hope it helps others to
Whether it’s for day trading, scalping, or swing trading this price action strategy has a high win rate, but only when taken with the trend on both the entry and upper time frame. If you’re using this for day trading I suggest you use it with support and resistance zones for exits and entries. Always confirm the uptrend or downtrend on 2 successive time frames.
I can tell you are expert in this field. I am at the point of my career where I want to become an expert in stock exchange and trading. I’ve never been live on Forex, but only used virtual account to get to know the process better. No one have told me about the importance of backstaging. First time I read its importance in your article. I am thankful for this amazing insight.
It will do much for me when I go live. I will bookmark your website for future posts.
I think the price action trading strategies pdf I link to below will help with stocks as well. Price action setups alone are not enough. Remember, don’t forget to apply the same techniques I mentioned above. That is, use the convergence of support and resistance, fibs stochastics oversold/ overbought, round numbers along with the fundamentals and sentiment of a stock. Maybe narrow your focus on some prime blue chips movers that you get to know well. Here I have an article on the importance of fundamentals and news in the forex market:
https://andiamolireforex.com/forex-trade-research/
You could apply fundamentals, sentiment, and news similarly when trading stocks.
Yes, there’s much more to trading than simply looking for price action patterns, but they do help. Refer to these articles on the fundamentals and news for more of the bigger picture:
https://andiamolireforex.com/trade-like-the-banks-trade-with-forex-fundamentals-analysis/
https://andiamolireforex.com/forex-trade-research/
https://www.jarratt.blog/fundamental-analysis-for-beginners/
Just this morning I and my room mate were discussing about starting forex trading lessons once we finish our exams this November and use the 4 months vacation to get started with online trading. I have no idea how this works at all and these are real deep things I guess I may need to read a little bit of introduction to forex trading to understand about the price action patterns and forex trading strategies. What platform would you suggest if I’m to start forex trading lessons.
Price action patterns without layers of convergence and understanding the underlying fundamentals and sentiment won’t work.
See here for info on fundamentals:
https://andiamolireforex.com/trade-like-the-banks-trade-with-forex-fundamentals-analysis/
I use MT4 to trade with since it doesn’t cost anything and is available with most brokers. MT4 also allows to set up different scripts as well.
Hello,
I found your article to be very informative. I am kind of new at the trading world but I found that I could understand the information you were giving! I am further interested in your article about bitcoin! Keep up the great work and I will visit your site again!
Amy B
Than you. Trading Bitcoin is a bit different than trading the forex market. The Forex market has a lot of institutional money involved and so in some ways is more predictable. I’m sure you can apply the price action trading strategies pdf information to Bitcoin, but you’d have to do thorough backtesting.
Fundamentals don’t have as big a role to play with Bitcoin, but I’m getting to know better what does. You’d have to combine what I mentioned in the article above with those underlying factors to cryptos such as Bitcoin, XRP, Litecoin, and Ethereum. I am more of a long term holder of these assets.
Hi, you have a rich content. I’m not really clear about the importance of backtesting. Also, do you have a link to a post on your site that talks about Confluence i.e. the Fundamental news release. I most times want to focus on the technical aspects of the trades. The trend is my friend you know. How do I connect both, technical aspects and the news release. I’m a day trader. Thanks for sharing
Even the best price action book fails to mention the importance of confluence, especially with the daily sentiment. The trend is your friend, and I’m sure that you can use strength meters to determine which are the strongest and weakest currencies. However, these meters don’t tell you why these particular currencies are strong or weak or how long these might last. A technical trend line tells you nothing of the underlying reason for the trend in the first place or how long it may last. News sentiment and long term fundamentals help you determine the strong and weak currencies and give you a sense of certainty that is important in taking consistent calculated risks. I have two articles relating to how to do research using news, but I’m preparing a more thorough course to deal with this :
https://andiamolireforex.com/forex-trade-research/
https://andiamolireforex.com/trade-like-the-banks-trade-with-forex-fundamentals-analysis/
A price action strategy is useless without these supporting confluences, especially the fundamentals. I’m sure you can be profitable without the fundamentals, but why make it harder on yourself?
Thanks for this informative and useful article on the best day trading strategies using the price action patterns PDF. This was not a long read, and the video helped me understand a lot more about what you are advocating. I have done day trading in the past with success.
There are some definite things to watch for though, or you can lose money fast. I have had friends who tried trading and lost their money rather quickly. In my case, I followed guidance and went slow using small amounts of money (low risk). Is that also a good way to start using the price action patterns PDF? I am interested and would like to try this method.
Price action patterns, as mentioned above, are only part of the puzzle. Money management is part of this puzzle as I address here:
https://andiamolireforex.com/forex-and-money-management/
and money management trade example here:
https://andiamolireforex.com/forex-risk-management-example/
Risk little on each trade, but also combine the day trading strategies using price action patterns pdf information with what I mentioned above: support/resistance, fibs, sentiment and news, overbought/ oversold using stochastics:
https://andiamolireforex.com/the-best-stochastic-divergence-indicator-for-mt4-and-download/
Sounds like you have some nice strategies, I am curious about a couple. Why only 1 hour or 4 hour time frames? Do you use stop/limits or do you just keep an eye on the stocks and make sure that they do not drop too much? Also, do you only use these strategies for Forex or do you use them for stocks here as well? Thank you for the help!
I will usually enter the market on a market order with a stop loss to protect it. I may close a trade early if the market conditions warrant it.
The download I’ve included above is basically a candlestick patterns cheat sheet pdf for forex. It’s a quick reference that could also be used for stocks as well, but they would have to be backtested for each stock to be certain. These would again be used in confluence with the underlying fundamentals.
I still trade on smaller time frames than the 1 hour, but only in the case of quick moves such as those after a news report. In general, the higher the time frame the more accurate the price pattern is for entry.
I read your article with interest since I day trade Forex almost every day. The two people I follow are Justin Bennett who is a great proponent of Price Action and VP who is more into indicators.
Since I like to trade the GBP pairs as it allows me to do this before I got to bed living in LA, I like using the 1H London Daybreak strategy. I am sure you must have traded this. What is your opinion of it?
I subscribed to your website since I am interested in getting your PDF document on Day Trading strategies. My track record is not good. I have been using a $2500 trading account and managed to loose $1000 over a period of two years. This account is mainly to learn. The fact that I have not lost it all means I have had successes, though hard to sustain. The account I have is provided by the Apiary Fund where they train members and when they qualify provide them with their money to trade. You start of by keeping 65% of the profits made in small accounts. If you can maintain three consecutive months they raise the capital you can trade with. The maximum you can go up to is $250,000 of their money.
It is interesting that Justin Bennett talked about the importance of confluence. And how powerful that can be if recognized.
I hope you are doing much better than I am. Perhaps I can learn something valuable from you.
Cheers.
Edwin
In my forex trading strategies pdf, I highlighted the power of using the double top and double bottoms in a trend. I used the trend as established by the recent sentiment driven by the news. This is part of the confluence you mentioned. This has allowed me to become consistent. I’m going to reveal another price action trading system later on, but I need to combine this with the sentiment as well. Try including support/resistance and oversold/overbought in your entry decisions as well:
https://andiamolireforex.com/the-best-stochastic-divergence-indicator-for-mt4-and-download/
Thanks for the info on trading OPM. This may come in handy.