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How to use trendline to identify price action structure/patternHi everyone: Many have asked me about how to properly use trendlines to identify price action structures and patterns. So in today’s educational video, I will go over this topic in more detail. First, I use the trendline as a “frame” to identify structures and patterns, and NOT use it as a Support/Resistance. What I do is to put in the trendline for the highs and lows of the price action that can help me to pinpoint what the price is doing, what kind of a correctional structure that it is currently in. Typically after an impulse phase of the market, then we start to identify a structure/pattern by connecting the swing highs and lows. Second, as I always point out in my videos/streams, a structure/pattern needs at least 2 swing highs and lows to classify as a structure. Certainly more swing highs and lows are good, but it's not necessary. Often I get asked about the “third touch” or more. To me it's not necessary, but if price does form the third touch, I would proceed the same as the price has a second touch. Third, we are identifying the price action correctional structure, and sometimes the market is not perfect, it will not give you a textbook looking bullish flag as an example. Hence the backtesting and chartwork from each trader is important to get your mind familiarized with the market and its “imperfect” development of the price action. After identifying the impulse phase, then look to see what the market is doing. Is it falling into a consolidation ? Not much movement except sideway price action, or ascending/descending like consolidation will give you a clue on whether the price is correcting to continue, or correcting to reverse. Take a look at the educational videos I have made in the past regarding the type of correctional structures we typically see in the market. All the videos are down below. Continue to backtest and do chart work to get familiar with drawing in the structures/patterns. The more you do these, the better and easier it is for you to identify them in your trading journey. Remember, the market is not perfect, so not all the structures/patterns will be “Textbook” like on the real, live market. Learn to deal with the “imperfect” market, so you can better utilize price action analysis to your advantage. Any questions, comments or feedback welcome to let me know :) Thank you Below are all my price action structures/patterns videos on different type of corrections. Continuation and Reversal Correction Identify a correction for the next impulse move in price action analysis Impulse VS Correction Multi-time frame analysis Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Rising/Falling Wedge Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern
OANDA:XAUUSDEducation
by jojofang0901
61
ADAUSD bull flag consolidation continued Now that there was an initial push upward through the channel, you should expect a pullback and further consolidation which I have mentioned on the chart. I expect it to pullback and consolidate before the announcement of when the smart contracts go live. The announcement should be on Friday 8/20. I expect the price to push up further after the announcement and confirm the upward trend. You can see that the price has already pushed past the lower highs (the green lines). Friday should confirm or deny the upward trend for ADA. This is not financial advice.
KRAKEN:ADAUSDLong
by mysticalwalrus
NZD-CHF Breakout! Swing Long! Buy! Hello,Traders! NZD-CHF was trading in a falling channel That was also a bullish flag pattern Now, the pair broke out of the channel to the upside And the breakout is conclusive because the 1D candle closed above the resistance We are currently seeing a pullback and a retest of the broken level Below it and till the support below is a strong demand zone And given that I am convinced the trend has changed I am expecting a move upwards mid-term Buy! Like, comment and subscribe to boost your trading! See other ideas below too!
Long
by TopTradingSignals
1
SCHW Trade RecapEarlier this week, I took a trade on SCHW on the 30 minute chart. Found it had been rallying on higher time frames (HTF) from a pullback. I decided to scale down to a lower time frame chart to find an entry. Preferably a pull back. Decided to enter on a bull flag. The previous day had shown strong bullish buying pressure as indicated by the bullish candlesticks closing near their highs during the rally. The first flag that I entered on was a 2-legged pullback from the highs with a High 2 breakout. When the breakout bar closed on its high, indicating strength from the bulls, I took a long position. My exit strategy was to trail my Risk Units. (For example, when risking $100 on a trade, $100 is 1 Risk Unit (1R). Therefore for every $100 move in profit, or every 1R move, you'd move your stop loss up 1R behind it.) I bought more shares, equal to my first entry, on every bull flag that had occurred in the bullish trend. Therefore, I bought additional shares twice over the course of the trade. This increased my chances for earning bigger profits as long as it continued to go in my direction. I bought my first additional shares after my stop loss had already been moved to 1R. Effectively eliminating my risk. Since I bought the new shares around 2R, my 1R stop loss was now breakeven. Due to share price averaging. So I was at no risk of losing any money. As the trade continued to move in my favor, I continued to move my stop loss up, locking in profits. I bought my last shares near 3R after the final flag in the move. Again, for the same amount of shares I had bought in my original entry. My size was now 3x bigger than my original entry. After the trade had reached 4R, I moved my stop loss up to 3R and got stopped out there after the stock had came back down. Even though I got stopped out at 3R, I walked away with a 4R profit, due to buying additional shares on the way up and my risk never being greater than my original positions stop size due to my trailing stops.
NYSE:SCHWLong
by Trade_Soup