Lecture Notes: Price Action Trading Secrets

Introduction

Importance of mastering price action trading
- Distinguishes traders from those who rely only on indicators
- Increases probability of becoming a consistently profitable trader
Overview of personal price action secrets
- Predicting market trends using simple signals

Definition: Continuation patterns in strong trends
Characteristics of Flags:
- Strong trend followed by a short move in the opposite direction
- Pattern resembles a flag
- Angle of the flag is shallower than the main trend
- Indicates continuation of the dominant trend
Trading Strategy with Flags:
- Enter short when price breaks the trend line
- Wait for retest of trend line for safer entry
Market Behavior:
- Fast price fall followed by sideways consolidation indicates seller strength

Definition: False break of support levels
Characteristics:
- Price breaks support but then closes above it
- Signals bullish reversal
- Often paired with bullish engulfing candles
Trading Strategy with Bear Traps:
- Enter long after the price breaks resistance that was previously support

Definition: Decreasing candle size in a supply zone
Characteristics:
- Indicates weakening uptrend
- Bullish candles should increase in size, not decrease
Trading Strategy with Deceleration:
- Use lower time frames to confirm potential short opportunities
- Check for bull traps after trend line support break

Definition: Three consecutive highs with decreasing strength
Characteristics:
- Market struggles to make new highs
- Consolidation followed by weak higher highs
- Indicates potential trend reversal
Trading Strategy with Triple Tap:
- Enter short after confirmation of lower high

Definition: Price builds up under resistance before breaking out
Characteristics:
- Uptrend with higher highs and lows
- Resistance rejection followed by consolidation
- Buying pressure near resistance level
Trading Strategy with Breakout Buildup:
- Enter long after resistance break and candle close
- Look for a retest for confirmation