Trader DNA: Mastering Price Action Signals

Introduction

• Focus on eight core trading signals.
• Avoid overly complex patterns and order block models.
• Simplify trading, focus on proven methods.

Market Structure

• Definition: Series of higher highs/lows (bullish) or lower highs/lows (bearish).
• Importance: Crucial for successful trading; helps with entries, exits, and risk management.
• Tool: Custom zigzag indicator to identify structure shifts.

Key Signals

1. Market Breaks

• Concept: Breaking previous swing highs/lows indicates trend strength.
• Action: Traders should identify strong support/resistance levels for entries.

2. Swing Highs and Lows Distance

• Significance: Larger distance indicates strong market control (buyers/sellers).
• Bullish Example:
  • Identify key support; look for confluence buy signals.
  • Enter buy if support holds and bullish pattern forms.
• Bearish Example:
  • Identify key resistance; look for confluence sell signals.
  • Enter sell if resistance holds and bearish pattern forms.

3. Trend Bars

• Definition: Candlesticks with large bodies (>50% range).
• Strategy: Focus on series of trend bars to determine market direction.
• Trading: Enter trades in the direction of trend bars, avoid counter-trend trades.

4. Strong Bars with Little to No Wicks

• Indicator: Signals urgency and buyer/seller control.
• Entry: Enter trades upon confirmation of trend continuation.
• Example: Buy after strong bullish bar, sell after strong bearish bar.

5. Gaps Between Candle Bodies

• Importance: Signifies market urgency and momentum.
• Bullish/Bearish Gaps: Enter trades after gap confirmation with stop-loss management.

6. Sideways Corrections After Trend Line Break

• Scenario: Price stalls after breakout indicating indecision.
• Action: Wait for confirmation of trend resumption before entering trades.

7. High Probability Pullback Entries

• Setup: Temporary retracements followed by strong candlestick patterns.
• Example: Buy after bullish pin bar, sell after bearish engulfing.

8. Breakout Signal

• Characteristics: Large-bodied candle with little wick, indicating strong trend continuation.
• Trading: Enter immediately upon confirmation of breakout.

Conclusion

• Mastering these eight signals provides a strong foundation for high probability trading.
• Further learning recommended through video resources for advanced comprehension.