Short-Term Trading with Price Action Model

Oct 12, 2024

Price Action Model #2: Short-Term Trading

Overview

  • Focuses on short-term trading using weekly range expansions.
  • Aims to simplify complex mentorship teachings into logical content segments.
  • Components: Stage, Setup, and Pattern.
    • Stage: Weekly directional bias for the candle.
    • Setup: Range expansion.
    • Pattern: Based on the PD array Matrix.

Weekly Range Expansion

  • Bullish Weeks: Targeting a buy stop liquidity pool, an old high, or a fair value gap above the market's weekly open.
  • Bearish Weeks: Utilizing three PD arrays: fair value gap, old low, or sell-side liquidity pool.

Examples and Practical Application

Bullish Example

  • Chart Used: Weekly chart of Dollar/CAD.
  • Target: Fair value gap and buy-side liquidity.
  • Execution: Price trades up to fill the fair value gap.

Trading Strategy

  • Timeframes: Weekly, daily, and 1-hour charts.
  • Entry Times: Tuesday’s 4:00 opening price for trades and hold till Thursday's New York open.
    • Use a 50 pip stop loss.
    • Ideal time for entries when not using London session is at 4:00.

Additional Insights

Reversal Market Profiles

  • European Open: Used as a filter for entry during reversal conditions.
  • Entry Strategy:
    • Bullish: Buy below the 4:00 price on Tuesday or Wednesday.
    • Bearish: Sell above the 6:00 European open.
  • Scenario Analysis: Consider price reactions at significant resistance/support levels.

Trading Patterns

  • Tuesday and Wednesday: Key days for potential reversals.
  • Weekly Candle Dynamics: Focus on capturing intra-week price movements.
  • Reversal Conditions: Utilized when price meets significant resistance/support.

Practical Trading Tips

  • Use of European Open: Helps determine when to look for shorting opportunities in a potential reversal.
  • Avoiding Monday Trading: Focus on setups on Tuesday through Thursday.
  • Weekly Bias: Determine through analysis of previous price movement and market structure.

Homework

  • Chart Analysis: Examine past charts to identify similar setups using model #2.
  • Focus: Weekly and intra-week price movements, patterns in trading range.

Final Thoughts

  • Amplified Learning: This model builds upon the previous knowledge, introducing new elements such as reversal conditions and expanded entry criteria.
  • Adaptation to Market Conditions: Be prepared for shifts in institutional order flow that may impact trade decisions.

This lecture provides a comprehensive understanding of price action model #2 for short-term trading, focusing on weekly range expansions and adapting to potential market reversals.