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#1 Live Trading on Glenmark Pharmaceuticals Ltd #1 Live Trading on Godrej Industries Limited #3 Live Trading Session 1-2-3 Strategy 1-2-3-4 Reversal Trading Strategy 10 CHART PATTERNS FOR PRICE ACTION TRADING 10 Habits of successful traders 10 Performing Candlesticks 10 PRICE ACTION BAR PATTERNS YOU MUST KNOW 10 PRICE ACTION CANDLESTICK PATTERNS YOU MUST KNOW 10 Things You Can Learn From The World’s Best Traders 10 TYPES OF PRICE CHARTS FOR TRADING 123 forex trading strategy 123 Trading Strategy 200 SMA 3 Bar Net Line Strategy 6 Best Price Action Trading Strategies 7 RSI TRADING STRATEGIES 9 Advanced & Profitable Trading Strategy 9 Funny Facial Expressions AB = CD Price Action Strategy Abb India Limited Aditya Birla Nuvo Limited Aditya Birla Nuvo Ltd ADVANCED REVERSAL STRATEGY Alice Blue Opening Link Alphabets Amaraja Battries Ambuja Cement Anupam Rasayan India Limited IPO Asian Paint Ltd Aurobindo Pharma Limited Bajaj-Auto Bearish Crossover Bearish Engulfing Bearish Engulfing Candle Bearish Reversal (Red-Red) BEML Ltd Best Stock Market Strategy Bharat Finance Inclusion Blood Rain Pattern bollinger band Bollinger Band Price goes below Mid line Strategy Bollinger Band Price gone above mid line Bollinger Band Strategy Breakout Stock Trading Strategy Bullish Crossover Bullish Engulfing Bullish Gartley Pattern Strategy Bullish Three Bar Reversal Butterfly Spread Cadila Healthcare Limited Calendar Spread Camarilla Equition canara Bank Candlestick Charts Candlestick Patterns Candlestick Patterns Strategy Cesc Limited Chart Patterns Cipla Closing Above Previous High for 3 Days Closing Below Previous Low For 3 Days coal India Cup & Handle Pattern Daily Life of a Trader dark cloud cover Day Trading Breakout Day Trading Setups Day Trading Setups – 6 Classic Formations Day Trading Strategy DBLHC Descending Triangle Divergence Price Action Strategy DIVI'S Laboratories Ltd Doji Candlestick Patterns Dojis Double EMA Dr Reddy Dr. Reddy's Laboratories Limited Early Morning Range Breakouts – 4 Trading Strategies EMA Equity Market EXHAUSTION BAR Falling Wedges (26th Dec 2017) Federal Bank fibonacci Fibonacci Retracement Fibonacci Retrenchment Strategy Fibonacci swing trading strategy Flag Pattern Strategy Flash Pattern Forex Trading Strategies Fyers Account Gandhi Jayanti Gap Up Gartley Pattern Glenmark Pharmaceuticals Limited godrej Godrej Consumer Products Limited Godrej India Gppl Happy Birthday Happy Chhath Puja Happy Diwali Happy Diwali (2017) Happy Diwali (2018) Happy Dussehra Happy Ganesh Chaturthi Happy Holi Happy Independence Day 2017 Happy Janmashtami Happy Krishna Janmashtami 2017 Happy Muharram 2017 Happy Navratri To All Happy Teacher Day Harmonic Pattern HCL Technology HDFC HDFC Bank Head & Shoulders breakout Head & Shoulders Pattern (6th Oct 2017) Head and Shoulders Pattern Higher high of 3 days Hikkake Pattern Hindustan Petrolium Hindustan Unilever Hindustan Unilever Limited HOW TO DRAW TRENDLINES How To Trade Supply And Demand IndusInd Bank Indusind Bank Ltd Infosys INSIDE BAR Inside Bar - 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1-2-3-4 Reversal Trading Strategy
10 CHART PATTERNS FOR PRICE ACTION TRADING
10 Habits of successful traders
10 Performing Candlesticks
10 PRICE ACTION BAR PATTERNS YOU MUST KNOW
10 PRICE ACTION CANDLESTICK PATTERNS YOU MUST KNOW
10 Things You Can Learn From The World’s Best Traders
10 TYPES OF PRICE CHARTS FOR TRADING
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123 Trading Strategy
200 SMA
3 Bar Net Line Strategy
6 Best Price Action Trading Strategies
7 RSI TRADING STRATEGIES
9 Advanced & Profitable Trading Strategy
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LEARNING PRICE ACTION TRADING FOR BEGINNERS: A STEP-BY-STEP GUIDE

Why is trading with price action so tricky?
It’s not because of its technical difficulty. In fact, beginners can pick up the necessary price action concepts and tools in a matter of weeks.
It’s that for most beginners, they embark on this learning journey haphazardly. While there’s no lack of educational materials, it’s hard to map out an organized learning plan.
Where do you start?
With the exotic candlestick patterns? Or with the famous Head & Shoulders?
With the many options you face, your perspective gets muddled quickly.
But there’s light at the end of the tunnel.
Price action trading can be broken into eight easy-to-manage steps. This is what I’ve done here for you.
Learning Price Action Trading Step By Step
Below, I’ve highlighted the key ideas for each step together with handpicked resources.
Are you ready?

#1: LEARN WHAT PRICE ACTION TRADING IS

Investopedia defines price action as:
… the movement of a security’s price. Price action is encompassed in technical and chart pattern analysis, which attempt to find order in the sometimes seemingly random movement of price.
But you need to get beyond a technical definition of price action trading. You need to get a realistic grasp of what price action trading really means.
This step is critical.
If you think that price action is a magical solution to your trading woes, you will be disappointed.
But if you see price action as a way to understand the market and to focus your analysis, you will gain much more out of it.
Also, price action trading is not a dogmatic approach that forbids trading indicators. It is a change of perspective that helps you ground your analysis with price movements.
Instead of saying no to indicators, interpret them with the guidance of price action.
Introductions to price action often focus on the technical aspects. Or they present an overly rosy picture for its learners.
For a balanced view of price action trading, refer to the two articles below:

#2: START WITH THE CONCEPT OF DEMAND AND SUPPLY

Demand and supply explain price changes. This basic tenet applies to all markets.
When demand overwhelms supply, it causes the market price to increase. When supply is more forthcoming than demand, the market price falls.
The turning points where demand overwhelms supply and vice versa are critical. The primary goal of a price action trader is to find these turning points.
Demand and supply forces manifest themselves as support and resistance in the market. Hence, it’s crucial to comprehend the concept of support and resistance fully.
Support and resistance is a core concept in price action trading.
Support levels are price levels where the demand overcomes supply. At these levels, the market is likely to turn up.
Resistance levels are price zones where supply exceeds demand. At these price levels, the market is likely to reverse down.
Here are a few chart examples of support and resistance.
Finding Support and Resistance with Swing Points

Practical Tips -Support and Resistance
To get a firm understanding of support and resistance, see more examples here:
Ultimately, every price action tactic takes advantage of support and resistance (demand and supply).
Hence, it’s essential that you internalize this concept as early as possible. It will help you see the links between the trading techniques you learn later.

#3: LEARN HOW TO ANALYZE THE MARKET TREND WITH PRICE SWINGS AND TREND LINES

This step is often skipped by overly eager traders who just want to take trades as quickly as possible.
You should not think about entering the market without understanding the larger picture.
What is the market trend now?
What is the market bias relevant to your time frame?
What is your macro view of the market?
You need to answer these questions before you can take your first trade. Luckily, price action has ready tools to help you with analyzing the market trend.
Don’t get confused by the myriad of trading methods. To make sense of the market, focus on two essential trading tools: price swings and trend lines.

PRICE SWINGS – DETERMINE THE MARKET STRUCTURE

The market never moves in a straight line. It always proceeds in a zigzag fashion, forming what we call price swings.
Observe the magnitude, momentum, and direction of these price swings. They will highlight the market structure which will set the stage for any setups you take.
Market Swings Trending Up
Start with these general guidelines:
  • Higher highs and higher lows = Bullish trend
  • Lower highs and lower lows = Bearish trend
Dive into the topic of market structure and price swings with these articles:

TREND LINES – ANALYZE THE TREND BY CONNECTING THE SWING PIVOTS

Trend Lines - A Support Bounce
By connecting swing pivots and extending the line to the right, you get trend lines.
Trend lines are excellent tools for tracking the market trend.
Draw trend lines and observe how price action interacts with them. This is excellent practice for all traders.
To learn how to draw a proper trend line, I recommend Victor Sperandeo’s book.
Here are more examples of how you can use trend lines to your advantage:

#4: LEARN TO PINPOINT TRADE ENTRIES WITH PRICE PATTERNS

At this stage, you should be able to look at a chart and state if it’s trending upwards, downwards, or going nowhere.
Now, you are ready to move on to micro price analysis. This step focuses on bar-by-bar analysisand chart pattern analysis.
Pin Bar Trapped Traders
The Pin Bar shown in the image above is one of the most popular price patterns.
You might be looking forward to learning candlesticks, bar patterns, and chart patterns.
But before that, take a look at this article:
This article will show you a basic template to perform close price analysis. It emphasizes the principles of price analysis. These guidelines will help you keep perspective as you learn more price patterns.
Finally, these are the resources for learning the standard price patterns.
Candlestick Patterns
Bar Patterns
Chart Patterns
For these patterns to work, you must find the right context. Hence, you should not think of them as profit-making patterns.
Think of them as ways to observe, analyze, and describe the market.

#5: LEARN HOW TO PLACE LOGICAL STOP-LOSSES WITH PRICE ACTION

Risk management requires that you know when to get out when the market moves against you. Otherwise, there’s no way to limit your losses.
Luckily, price action is not just useful for getting into the market. You can also use it to decide when to get out.
But first, ensure that you have the correct understanding of a stop-loss. A stop-loss will only protect you if you place it logically.
The key takeaway from this article is that you should not place your stop-losses based on your emotions or how much you can lose. A logical stop-loss depends on the price action context and volatility.
For specific stop-placement techniques, refer to:

#6: LEARN HOW TO TAKE PROFIT WHEN THE MARKET GOES YOUR WAY

Let’s do a quick recap of the last two steps. You’ve learned to:
  • Enter the market.
  • Exit when the market goes against you.
What’s missing?
Exit when the market moves in your favor.
Taking profit is as essential as placing stop-losses. After all, you only have paper profits until you exit from your winning trades.
In line with what you’ve learned so far, let price action guide your profit-taking decisions.
One of my favorite methods is to project a target based on a price thrust, as shown in the image below.
Bullish Price Thrust Target Projection
Using chart patterns to project targets is also a standard tactic.
Bullish Flag Trading Example
In general, there’s too little attention given to the topic of profit-taking. To plug this gap, I’ve written a comprehensive guide to profit-taking methods:

#7: UNDERSTAND THE CONCEPT OF EXPECTANCY

Expectancy = ( Winning Probability x Reward ) – ( Losing Probability x Risk )
where Losing Probability is ( 1 – Winning Probability )
Expectancy is a concept that helps you combine what you’ve learned into a viable strategy.
The reward-to-risk ratio is the result of your entry, stop-loss, and profit-taking decisions.
The winning probability is what you infer from your trading experience and research.
Ultimately, you want to employ trading tactics to achieve positive expectancy.
There are three key lessons you should learn from the concept of trade expectancy.
#1: A good trade is not a winning trade.
A good trade is one with a positive expectancy.
#2: The winning probability of each trade is not isolated from its reward-to-risk ratio.
Beginners often think that they can aim for a higher reward-to-risk ratio to ensure positive expectancy. But they fail to recognize that by aiming for a higher reward-to-risk ratio, they might have lowered their winning probability.
You will appreciate this point more when you start to refine your trading performance.
#3: Use the concept of expectancy to guide all your trading decisions.
Does it improve the expectancy of your trade? If so, do it.
Does this trade offer positive expectancy? If so, take it.
Make sure you understand this crucial concept:

#8: PRACTICE, PRACTICE, PRACTICE

Price action trading is mostly discretionary, and practice is essential. You should put the price action tools you learned into constant practice.
The aim of your practice is two-fold. The first is to hone your price action trading skills. The second goal is to practice control over your emotions and cognitive biases.

HONING YOUR TRADING SKILLS

When starting out, do not rush to look for actual trading setups.
Start by analyzing and recording your observations. Arrive at your own conclusions how the market behaves. At this point, you should focus on a single market.
Not sure what to look out for? Here are some examples of detailed chart analysis.
Once you’re comfortable with reading price action, you can start to virtual trade.

CONTROL YOUR EMOTIONS AND COUNTER YOUR BIASES

Eventually, consider trading with a small live account.
This approach will give you a more realistic learning experience. It comes with the emotions of losing and earning money.
Dealing with your emotions and biases is an aspect that requires years of deliberate practice. These resources will help you out.
Need a platform to get started with your practice? Here are some resources for you:

CONCLUSION

This organized plan to learn price action trading proceeds step-by-step, complete with useful resources.
To summarize, here are the eight steps to picking up price action trading:
  1. Learn what is price action
  2. Start with the concept of demand and supply
  3. Learn how to determine the market bias
  4. Learn how to enter the market
  5. Learn how to set stop-losses
  6. Learn how to take profits
  7. Understand the concept of expectancy
  8. Practice, practice, practice
Start today, and refer to the references below for more help!

PRICE ACTION TRADING REFERENCES

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