I can guarantee if you follow every single one of these price action secrets, you will become a better trader. Trading around pure price action is one of the best ways I've ever found a trade. If you can manage to master the skills of reading price action, you will not only set yourself apart from other traders who only know how to read indicators, but also increase your probability of becoming a consistently profitable trader. And who doesn't want that?
I'm going to show you some of my own personal price action secrets that you can spot in live markets and use them to predict if price is going to go up or down. I'll show you simple and easy ways to spot these signals, so if you think reading price action is like rocket science, well, after this video, you should have a pretty good idea on how to read the market. Enough talk, let's get straight into it. The first trading pattern we're going to look at is one of the most popular price action patterns out there.
What's the pattern? The flag. Flags are continuation patterns, so for example, you want to find a strong trend, heading in one direction.
So in this example, we found a strong downtrend and the market is moving lower. Now, whenever a chart hits upwards or downwards, it never moves in just a straight line. Ah, if only it were that easy. They often have these ups and downs.
So maybe you missed the initial movement downwards for a short, or maybe you want to add on to your already made short position. Well, the flag is the perfect time to do that. So you'll have a strong trend movement.
followed by a short move to the opposite direction. In this case, we headed downwards and are now starting to move upwards a bit. As you can see, this is how it gets its name.
It looks like a flag. upside down. One thing that is often very common with successful flag patterns is that the angle is often much shallower than the actual trend. What I mean by that is this.
So here the downtrend fell pretty strong, so the angle is pretty steep, but the flag pattern is a gradual uptrend, much shallower than the downtrend itself. This is very important, as this is showing that yes, there are There are buyers counteracting the downwards movement, but this move is not as strong compared to the downtrend, so overall sellers are still winning. Which is important to understand we would not want a fly pattern that is very steep heading in the opposite direction as that's showing buyers Are starting to have control once you have identified a gradual flag pattern and mark the trend lines You can enter a short once price breaks the trend line or if you want a little bit more confirmation You can wait for price to break the trend line and oftentimes it'll head back up retest it and fall again So you could enter at the retest of the trend line for a little safer entry So price broke the trend we entered a short and look what happens price falls That was beautiful. But something very interesting happens. When price falls, it falls extremely fast.
Then it ends up consolidating and moving sideways. Just from this happening, we can almost predict what the chart is going to do next. How would you do that? Well, as you can see here, price was rising, it took a very long time for it to rise, but then when it dropped, it dropped extremely quick.
Then instead of it rising back up again making another flag pattern, price started to consolidate. So that's showing buyers weren't able to get the price back up, which shows that buyers are starting to lose control even more, and sellers are gaining momentum. So you could potentially, if price breaks this lower consolidation trend line, either enter another short or add on to your already made position, as the chart is showing seller momentum.
And price ends up breaking the trend line yet again. And look what happens. Price falls. This next price action secret is unbelievable.
Once you see it on your chart, you can predict when the market is going to reverse. But first, check this out. I found a trading platform called PrimeXBT. And they have an option that I haven't seen on any other trading platform.
It's called Covesting. They basically have a dashboard of successful traders and their trading strategies where you can pick and choose and copy their exact strategy. Let me show you how to do it.
So for example, you would click the link in the description. To be able to copy trades, you have to add funds to your account. You can deposit any amount of crypto you would like, just click the deposit button.
You can either buy it directly on PrimeXBT or send it there. Before you deposit, make sure to go to the margin tab, click account, and make sure to use my code LAB7000, as that will give you a free 7% of what you deposit. So it's basically free money.
You can thank me later. Once you have your funds added, click this copy trading tab. Then it'll bring you to this dashboard.
This is all the strategies. A tip for finding good strategies, first the longer the strategy is active, the more established it is. You also want to find performance charts that have a steady uptrend like this.
Then the higher the star rating, the better rated the strategy is. Once you find one you like, you can literally just click on it and copy the exact strategy. If you guys are interested, I'll leave a link in my description.
Back to the price action baby. The next price action secret we're going to be talking about are bear traps. Now while bear traps and bull traps may sound scary, you can actually use them to your advantage. So here we have a support line from this recent swing low. As price is heading back downwards towards it, you have to think in the mind of the people who are shorting this play.
Where would you take profit? Right at this support line. Also, breakout traders who want to short this play are gonna do so when price breaks this support, which means they will be setting their stop losses around this area, so we have to keep that in mind as well. If price breaks this support, then ends up coming up and closes up here, this is a very strong bullish sign.
In this case, it happened twice, which is an extremely strong sign. This is showing that sellers don t have enough momentum even when price breaks the support. You also have to remember, the breakout shorters are going to start covering their position in this area, which will also help the price go up.
This example is even better because these bear traps are paired with a momentum candle, bullish engulfing candle. So we now have three signs that the market is going to reverse. The final confirmation would be price breaking this resistance that was previously used as a support, which it does, which gives us confirmation to enter this trade. And look what happens, it goes up. The next price action tip I want to talk about is called deceleration.
First, we have a supply zone. Usually, supply zones will be at the start of a downtrend. Then you can see that price has a huge spike and rises back up to the supply zone. But look closely to what's happening. Right here we have a super strong long bullish candle heading upwards.
But then the candles start getting smaller and weaker, right in the supply zone. If an uptrend is strong, the candles should be gaining in size as they go up, not shrinking. Now I wouldn't necessarily say this is enough to go short.
What I would do is go on a lower time frame and get a closer look. So we're on the 4 hour time frame now, let's check out the 15 minute. You can see that price is making this very nice pattern.
where it made a trend line and a support. So if price ever breaks this support, this is where you could look for a potential short opportunity. So as you can see, it broke out, then tries to retest the pattern again, but it ends up being a bull trap, which from what we just learned is another very great sign that the market will continue to fall, which it does.
Next, I want to talk about one of my favorite price action formations. The triple tap helps you figure out when a trend is over. and is about to reverse.
All the triple tap is is three consecutive highs, but then they get weaker and weaker over time. So we can see the market trended up pretty good right here, but as we keep moving forward, price was barely able to make a higher high. That's warning sign number one.
Then next you can see the market starts to consolidate, taking a very long time and finally making another higher high, but just barely again. The two warning signs are that it was consolidating for a long time and that it could barely make a new higher high yet again. This indicates a lot of weakness at the end of a strong uptrend. After that, price ends up making a lower high, which is just icing on the cake.
This is where you would enter your short position. Then the market collapses. The last and final pattern I want to talk about is the breakout buildup. And this one is extremely powerful. So what happens is price starts trending upwards, making new higher highs and new higher lows.
But then it gets rejected off this resistance level and starts making a bearish move downwards. It doesn't end up going past the previous low though, so technically we're still in an uptrend, which is very important to understand. Then look what happens. Price reaches this resistance yet again, but it barely bounces off it this time. Compare that to when it first happened, you can see a big difference in selling pressure.
Then after that, it kind of consolidates here right under the resistance. What this is representing is a lot of buying pressure right in this area. After seeing these signs, you can enter once price breaks this resistance.
Make sure to wait for the candle to close over the resistance or wait for a retest. We get the retest right here. We enter. It works. Price goes crazy upwards.
Being able to pair these price action secrets with support and resistances is a magic strategy and will work wonders. If you want the secret formula for drawing perfect support and resistance, watch this video, it'll absolutely change the way you trade. Thanks for watching, and I'll see you guys next time.