Price action with Candlestick Analysis(No indicators)
- Thread starter hik
- Start date
Pay attention to the patterns being formed in a stock, chances are they will be repeated again.
Observe the pattern being followed, what are traders doing ? If they are buying, how and when they are buying ? I found out following pattern in JindalStel today:-
New high -> PB (low of candle broken ) -> first candle high break lead to new high .
This process was repeated 10 times successfully and 2 times it failed.
It was a steady trend environment and buyers were using small pullbacks to enter the trend.
Above pattern didn't work in downtrend but you could have shorted L2 and profited.
Observe the pattern being followed, what are traders doing ? If they are buying, how and when they are buying ? I found out following pattern in JindalStel today:-
New high -> PB (low of candle broken ) -> first candle high break lead to new high .
This process was repeated 10 times successfully and 2 times it failed.
It was a steady trend environment and buyers were using small pullbacks to enter the trend.
Above pattern didn't work in downtrend but you could have shorted L2 and profited.
These are terms used by Al Brooks in his books.
L1 stands for first low break of candle in pullback in downtrend. L2 stands for second low break of candle in pullback in downtrend.
H1 First pullback in an uptrend, above 1st bar that has a high above previous high.
H2 Second time a High above previous bar in that same pullback
L1 - First pullback in a downtrend, below 1st bar that has a low below previous low.
L2 Second time a Low below previous bar in that same pullback
Example :-
http://2.bp.blogspot.com/-fSnE2YYYJHA/Ty4PxhVll9I/AAAAAAAAMZ8/GEeu3gaoRkA/s1600/l12.GIF
anyway..the terms are not important, whats important is finding what other traders are doing and then following them if they have strength.
L1 stands for first low break of candle in pullback in downtrend. L2 stands for second low break of candle in pullback in downtrend.
H1 First pullback in an uptrend, above 1st bar that has a high above previous high.
H2 Second time a High above previous bar in that same pullback
L1 - First pullback in a downtrend, below 1st bar that has a low below previous low.
L2 Second time a Low below previous bar in that same pullback
Example :-
http://2.bp.blogspot.com/-fSnE2YYYJHA/Ty4PxhVll9I/AAAAAAAAMZ8/GEeu3gaoRkA/s1600/l12.GIF
anyway..the terms are not important, whats important is finding what other traders are doing and then following them if they have strength.
Hi Vjay,
I am purposely avoiding marking trades on the chart for following reasons :-
1. It takes focus away from the fundamentals and the process. Specially traders new to this approach would then focus on the setups and not on the process through which a setup is reached. This would lead inevitably to failure and trader looking for a new system.
2. It will make the chart difficult to read. Currently i find it difficult too to explain my every trade on a single chart, it gets just too messy.
In due course i will start marking my trades on the chart but for now lets keep it simple
.
I am purposely avoiding marking trades on the chart for following reasons :-
1. It takes focus away from the fundamentals and the process. Specially traders new to this approach would then focus on the setups and not on the process through which a setup is reached. This would lead inevitably to failure and trader looking for a new system.
2. It will make the chart difficult to read. Currently i find it difficult too to explain my every trade on a single chart, it gets just too messy.
In due course i will start marking my trades on the chart but for now lets keep it simple
.
Are you prepared for anything when trading ?
Below is an example of how fast strength can change from one side to other and how one should be prepared for any scenario:-
Today JindalStel was opening with gap down ( 1.89 % ) at 217.75. Its 1st bid and offer after pre-market were:- 217.5 - 217.75.
Now usually the stock has strength in the direction in which it breaks above range. So first it broke both sides, then sustained and showed strength below 217.5 (went till 216.4) .
After attempting few times it broke 218 @ 9:17:06 taking down huge offer of 15 k shares. So was expecting strength to continue to long now but soon after going till 220 it fell straight like a rock to 210.1 @ 927 hr.
From 210.1 it went again to 220 and this all happened in first 35 minutes.
This is how strength changed - Short -> long - Short -> long.
Frankly speaking, i expected it to hold it 218 level as there was a strong fight and when it broke i was caught unprepared (wasn't trading but hadn't given this possibility much thinking ). The only reason i think for that is that somewhere in my mind i was too much sure of it. I was certain where there is no certainty. Anything can happen and it does happen a lot of time in trading.
Trading is a game of analyzing past data and projecting future based on your analysis. However, future is much different than the past most of the times. An agile mind is needed to change the bias as the data changes.
Being ready for every scenario is what gives you the calmness, focus and ability to trade your plan effectively which leads to success ultimately.
Below is the tick chart :-
Below is an example of how fast strength can change from one side to other and how one should be prepared for any scenario:-
Today JindalStel was opening with gap down ( 1.89 % ) at 217.75. Its 1st bid and offer after pre-market were:- 217.5 - 217.75.
Now usually the stock has strength in the direction in which it breaks above range. So first it broke both sides, then sustained and showed strength below 217.5 (went till 216.4) .
After attempting few times it broke 218 @ 9:17:06 taking down huge offer of 15 k shares. So was expecting strength to continue to long now but soon after going till 220 it fell straight like a rock to 210.1 @ 927 hr.
From 210.1 it went again to 220 and this all happened in first 35 minutes.
This is how strength changed - Short -> long - Short -> long.
Frankly speaking, i expected it to hold it 218 level as there was a strong fight and when it broke i was caught unprepared (wasn't trading but hadn't given this possibility much thinking ). The only reason i think for that is that somewhere in my mind i was too much sure of it. I was certain where there is no certainty. Anything can happen and it does happen a lot of time in trading.
Trading is a game of analyzing past data and projecting future based on your analysis. However, future is much different than the past most of the times. An agile mind is needed to change the bias as the data changes.
Being ready for every scenario is what gives you the calmness, focus and ability to trade your plan effectively which leads to success ultimately.
Below is the tick chart :-
| Thread starter | Similar threads | Forum | Replies | Date |
|---|---|---|---|---|
| R | Price Action Analysis | Trading Diary | 64 | |
| P | Ytc price action trader pdf | Technical Analysis | 3 | |
| N | Practicing Equity Swing Trading With Only Price Action Analysis | Swing Trading | 22 | |
| T | Nifty Intraday Price Action | Day Trading | 11 | |
| P | Hello my fellow traders & price action enthusiast | Introductions | 1 |
Similar threads
-
-
-
Practicing Equity Swing Trading With Only Price Action Analysis
- Started by ncube
- Replies: 22
-
-
Hello my fellow traders & price action enthusiast
- Started by PriceActionChart
- Replies: 1