Trading the Price Spike High or Low

 

Let's start with a little disclaimer – I didn't trade this price sequence. I took a break on Friday 18th of January in an effort to manage my fatigue levels. But this does not mean that I don't review the session. The next day I scheduled some time to look over the charts in a number of markets in order to (a) see how I would have traded them, and (b) complete an entry in my Market Structure & Price Action Journal.

Yes… just because you skip a session it doesn't mean you get to skip the study!

One of the very first things to jump out of the screens at me, upon opening the 1-minute Emini-Dow futures chart, was an awesome price spike at 10:19am. This became the focus of some extra study, for my journal. And I thought I should discuss it with you here today as well.

I love price spikes – a sudden and dramatic expansion in price range and volume. Because they often create a shift in the market structure. And they allow you to immediately identify two potentially great trade locations.

Let's have a look at the charts.

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

Happy trading,

Lance Beggs

 


 

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YourTradingCoach - Admin

2 Comments to “Trading the Price Spike High or Low”

  1. pyn says:

    The article clearly explains the trading opportunities at the high and low points of the price spike. What I want to ask is, when there is a price spike, will there always be trading opportunities at its high and low points. Will the price directly pass it as if the high and low are likely transparent?

    • Lance Beggs says:

      Pyn, this is no different to trading with any other form of level. We’ve simply identified a significant level in the recent past and then watch it for POTENTIAL opportunity on a retest. There are no certainties. If the sentiment changes sufficiently to drive price straight through the level, we simply have no trade. New information has been provided. We adjust our analysis and move on to the next.

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