A great way to learn to read price action is to review your historical price charts, with a focus on the price action at key structural locations.

Find and review anything which fits these categories.

  • tests of significant levels
  • breaks of significant levels
  • traps
  • transitions between trends and ranges
  • transitions from volatility contraction to expansion
  • and in fact anything else that stands out on the chart

 

Each day, identify a key price sequence.

Study it and learn.

It only takes a minute.

Let's look at an example in which Crude Oil breaks higher in Monday's session, into layered levels of range resistance, before falling back into the range.

And a similar scenario in the emini Russell on Tuesday, in which price also broke and rejected prior session resistance. This time though the rejection was much quicker.

Each day, identify a key price sequence.

Study it and learn.

It only takes a minute.

(See here if you need more info on the above analysis)

Happy trading,

Lance Beggs


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4 Comments

  1. I have question, your maximum trades are pull back trades, so how you get conviction that its not going to fail,
    As there is always opposite interest which will create hurdles to our expectations.
    Like above example, you enter short, against big green candle, which shows huge buying interest.
    Whats the reason and logic for conviction

    1. Deeraj,

      I’m entering short on FAILURE of that candle. Not blindly fading that large green candle on it’s close. And I’m doing so in a structural location where context suggests potential for further follow through. Refer back to our previous discussion a few days ago. Context is essential. And then trade failure of those moving price into the setup area.

      And if it fails? Who cares. This is not a business of getting every trade right. It’s about identifying and trading edge. And allowing that edge to play out over multiple trades. Not one trade. MULTIPLE trades.

      What if all you could achieve was 50% win rate? Seriously, that is enough. Achieve winners larger on average than losers and you will profit through a positive win/loss size ratio. That is the aim of this game.

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