Trading Price Action

The concept of trading price action, for our trading method, is the right side trading of prices that have previously been established from chart reading previous price action areas that preceded breakout continuation price moves.

Price Action Area
The rectangle area is what I refer to as a price action area.  A price action area is the area preceding where an 'extended' price move occurs - often from some consolidation period like in this case.  In the case of this price action area rectangle, there was a left side sell swing that consolidated between the swing low AND resistance, which was where the sell swing last broke at the yellow circle. I want to now try to identify the prices specifically [price specifics] related to the price action that occurred - which was a hold of resistance AND an eventual breakout out of consolidation, and resumed the left side sell swing. Our concept of trading price action 'says' that these same prices will again be relevant when there is a move back to this same area.
Price Action Area Price Lines
Prices action area prices:  839.80-839.10 - 838.40 Rectangle:  this area shows the key price action involved with breaking out of the consolidation. The 839.80 centerline broke AND then shifted to resistance. Then the 839.10 line broke for the 2nd time WITH mex flow [the flow of momentum on a retrace] down on the retest-retrace back to 839.80 - see dark blue dot-dark blue rectangle.  The dark blue dot move continued through the 838.40 consolidation low - resuming the previous sell to 835.90.  Our actual trading done on the faster chart combinations would have been short in the 840.80 area after the hold-reject of resistance - the dark blue dot is a very good addon trade setup to that initial sell.
Price Action Price Trading Setup
This chart shows a move back to the price action area shown on the charts above.  Note the 839.80 - 839.10 - 838.40 prices AND how they 'acted'-'provided' the trade setup that occurred - as price moves back to the 839.80 and holds 'to the tick', also becoming the start point to what becomes a reverse into sell.  red dot:  The timing is after the initial reverse into sell - then 839.10 shifts-rejects as resistance WITH mex flow down [see dark blue rectangle] = -838.40|.30f into-through the 2 blue squares [we chart read for price failure when the trade is done through 2 points].  This combination of a price reject-price failure WITH mex flow - is one of our key price trade setups. What is most important to me is that I already 'know' these prices AND how they were involved with previous price action - this very much 'helps' real time decision making.
Price Action Area Price Lines
Prices action area prices:  838.40 - 836.70-835.90 The first price action area chart above showed the consolidation break through 838.40 to 835.90.  Now note how there is a retrace-retest of 838.40 which holds at 838.30 AND the resulting price action to read - will there be a 'center area' hold and move up back through 838.40 OR will there be a 'center area' break then reject WITH continuation back through 835.90 and again resume the sell. As we can see, the sell did resume.  The key price action AND related prices were the 836.70 shift to resistance then reject - then the failure-break of 835.90.
Price Action Area Price Trading
blue line-blue dot:  this 'right side' setup synched with the price action price setup discussed above AND the blue line has now shifted to resistance AFTER the 836.70 price hit. red dot: there is a higher low hit at the the purple line BUT also a lower high retest of the blue line with mex flow down.  Now note how the 836.70 price action price was involved - the red dot was sold as an addon = 837.20|.10f sell - the timing of the entry as a break-failure of 836.70 through the 2 yellow squares. dark blue line-dark blue dot:  836.70 broke continuing through 835.90 AND then retraces-retests 836.70 which holds.  The resulting right side price action is a price momentum divergence 'around' the 835.90 price action price.  This resolves as a pmd failure, which is a continuation pattern AND the current sell swing accelerated with the failure-break.

 

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