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STEP 1 - IDENTIFY A LEVEL OF DYNAMIC
SUPPORT OR RESISTANCE ON THE WEEKLY
TIME FRAME:.
We start on the weekly time frame so that we know what is going on, on the big picture. Without looking at the weekly time frame you can get caught on the wrong side of the dominant trend.
Why do we need to identify key levels of dynamic support or resistance? Because if price reacted to these level s in the past , there i s a possibility that price can react to these levels again in the future so we need to have them drawn in as a reminder once price get s to these levels again.
STEP 2 - LOOK FOR PRICE ACTION PATTERNS:
Once price get s to a dynamic level of support
or resistance we need to look for key price
action patterns to tell us that piece is
“actually reacting” to the level.
Without price act ion patterns occurring at a
dynamic level of support or resistance, this
means price is disregarding the level and
buyers and sellers are not taking action at the
level and we do not move onto the next step
without price action.
Price action patterns we like to see: long wick
candles , multiple candle rejections ,
momentum loss candles , patterns & shapes .
Once we have identified a key price action
pat tern at a dynamic level of support or
resistance then we move onto step 3.
STEP 3 - TIME FRAME CONFLUENCE:
We want our directional bias on the weekly to
be the same as the daily (bullish bias or
bearish bias ).
The reason for this is because if you have a
short bias on the weekly, but the daily is
showing bullish momentum, you have
conflicting data and can get caught on the
wrong side of a trade.
We first establish our bias through looking for
price action on the weekly that is either bullish
or bearish, and once we have that , then we
jump to the daily to see if we have a matching
directional bias .
Once we have confluent and matching
directional biases on the weekly and daily,
then we need to further confirm the direct ion
through the 4h time frame as the daily time
frame i s 24 hours worth of data per candle and
we want to look deeper into the immediate
trend to see a more detailed representation.
STEP 4 - INTRADAY CONFIRMATION & ENTRY:
The 4h time frame i s the key to understanding
the immediate trend as it shows you exactly
how price i s moving at that particular
moment .
We then look for a breakout in the direct ion
of our daily and weekly bias and enter with a
stoploss behind some form of protect ion,
such as an intraday level of support or
resistance or behind a t rend line, because
price can swing before i t moves in our desired
direct ion and you don’t want to choke the
trade and have your stoploss hit before it
moves in your favour.
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ENTRY CHECKLIST:
STEP 1 - IDENTIFY A LEVEL OF DYNAMIC SUPPORT OR RESISTANCE ON THE WEEKLY TIME FRAME:.
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ENTRY CHECKLIST:
STEP 1 - IDENTIFY A LEVEL OF DYNAMIC SUPPORT OR RESISTANCE ON THE WEEKLY TIME FRAME:.
- Are we at a key level of support or resistance
- Is the level obvious ?
- How many reject ions of this level ? ( the more the better)
- Was it recently respected?
- Has it acted as both support and resistance?
- Is i t an extreme swing high or swing low? Meaning is it at the highest or lowest point price has reach in recent time?
- Evidently you don’t need all of the above but the more criteria you check off the better and higher quality the dynamic level is .
STEP 2 - LOOK FOR PRICE ACTION PATTERNS:
Price action patterns to look for :
- Long wick candles
- Multiple candle
- rejections
- Momentum loss candles
- Patterns & shapes : triangle, wedge, double bottom, head & shoulders , etc.
STEP 3 - TIME FRAME CONFLUENCE:
To do:
- Check the weekly again for your directional bias (bullish or bearish)
- Check the daily for your directional bias (bullish or bearish)
- Is the weekly and daily directional bias the same?
- Only if both time frames are the same do we go to the 4h time frame
STEP 4 - INTRADAY CONFIRMATION & ENTRY:
Ask your self:
- Ask your self:
- What i s the directional bias we have on the 4h time frame?
- What price act ion pat terns do we have?
- Does the 4h directional bias match the daily and weekly directional bias ?
- If all time frames are confluent look for a momentum breakout and enter
Again Advanced Price action setup from Stock Alphabets
ReplyDeleteMany many thanks to Rahulprasd Yadav sir God bless you . Keep progress.
ReplyDeleteBest Wishes,
Jasraj sodia
thank you Rahul Sir,now you have written about thie i can see this pattern everywhre all over my charts but before that never thoughts or khonwb about theC. close thank you so much
ReplyDeleteThank you Rahulprasd for the best article.
ReplyDeleteThis is one of the best article I will forever cherish in my entire life and I am greatfull for it.
I have always asked myself when I see other traders who enter market right on the kill zones and I always wonders “what they saw” , “what made them enter there?”
With this article I can erase everything else that I have learnt regarding trading and ONLY keep this. Thank you Sir – you’re a great inspiration
Best Wishes,
Kumar saurav
Hello Rahulprasad
ReplyDeleteFirstly, I would like to say I do find your articles posted online quite detailed and informative and will help anyone starting off in trading with the fundamentals. Question is, what is the average time you suggest or recommend for someone who sign up to membership and access the course material to absorb the information within?
Rahulprasad , you are doing great job. I have learned more about trading policy the last 6-7 days since I discovered your tread at stock alphabtes and then your articles here than my studies the previous 4 months. Excellent and clear explanations and guidelines. I guess I will be one of your lifetime students soon. Again thank you so much for all your work to educate us amateur traders.
ReplyDeleteWarm regard,
Seraj