Hey, nobody ever said this stuff was rocket science 😉. Here are two great examples of where and what we should be trading when it comes to price action trading strategies. There are several other confluence factors that come into play. However the price action trading strategies as illustrated in these two charts are a great place to start. Hopefully this lesson has helped to clarify any misconceptions about what price action trading strategies are and how they can be used.

Just remember that every good price action trading strategy should be:. Do you use price action trading strategies? If not, do you think this style of trading could be advantageous? Feel free to leave your feedback in the comments section below.

All comments on the subject are welcome! Save my name, email, and website in this browser for the next time I comment. Thanks, Colin. Very true. Most new traders are led to believe they need something proprietary if not ground-breaking to be consistent. I was one of them for almost three years…. Thanks Justin. I have been trading for 4 years and have learned some new things. I mostly scalp trades but think the trading strategies that you use sound a lot better! Scalping definitely is stressful and it took a while before I became profitable.

One thing that I have learned is that you have to gain as much knowledge as you can to become a successful trader. Swing trading with price action is certainly much less stressful than scalping.

And I would agree with you that knowledge is paramount. Hi, Dear Justin, As always, well-defined with objectivity and conceptual clearance. A month ago, I attended your 7 secrets webinar but PAT was not cleared. Now I can say , YES, I understood, Thanks and happy weekend. Am also new to trading and i dont have a single clue about any thing except the blue and red indicators from metatrader 4…i hope i can learn from you. Thank you Justin. Please what currencies pair work perfectly well with price action?.

Thank you.. Hi Justin. Out of curiosity, you have always been going for 2R minimum. In the video example, it seems like its less than 2R. You explanation and methods of teaching is the best, you break complex to simplicity. Definitely would pay for your course if I had means to, you too good Justin👍. or is only forex your PA covers. WHY ARE YOU BEING SO DISHONEST?

So what is it, really, you ask? What is Price Action? The reason price action works, and works well, is because everyone is looking at the same chart, with respect to the same time frame of course. Think of price action as where you should look for trades and your trading strategy as what you should trade. Justin Bennett says Thanks, Colin. I was one of them for almost three years… Thanks for your comment! Altaf says I follow only the green bars when they are momentum. Great post! Justin Bennett says Well said.

Thanks for sharing! Thanks Justin Reply. Darlene Hemple says Wow! akhtar butt says Hi, Dear Justin, As always, well-defined with objectivity and conceptual clearance. Elvis says Am also new to trading and i dont have a single clue about any thing except the blue and red indicators from metatrader 4…i hope i can learn from you Reply. Note that the study of price action involves studying the market itself, rather than studying a lagging indicator. Speak to any professional trader, Forex or otherwise, and they will tell you that they use price action in one form or another.

It is by far the most raw look at the market, and one that serves the most purpose regardless of your style of trading. The trend is your best friend. The saying is as old as trading itself, but trading with momentum at your back is timeless advice. If someone asked me to identify the most common pitfall that holds most traders back, I would say trying to pick tops and bottoms.

In other words, trading against the trend. But if you do, they have to be calculated and backed by strong technical factors. There are a couple ways to identify a trend in order to trade along with it. I prefer using trend lines combined with dynamic support and resistance. The GBPCHF daily chart below shows how trading with the trend can help you identify favorable entries. Notice how the third touch from trend line support produced a bullish pin bar. Just taking a step back and looking at the span of price action between the first and third touch, would you rather buy or sell this market?

It becomes pretty obvious why you want to trade with the trend once you learn how to use trend lines. Learning to trade with the trend is paramount to your success as a trader. Which is why, in my opinion, it should play a vital role in any good trading strategy. Key levels are the cornerstone of any good Forex trading strategy. Think of these levels as your roadmap to trading the market. Think of key levels in the same manner. The Forex market has a strong tendency to move between levels of both support and resistance , making it vastly easier to put on profitable trades once you understand how to identify them.

Notice how previous resistance becomes new support. Knowing where the market is likely to bounce makes it that much easier to become consistently profitable. Based on the preciseness of the level above, I think it goes without saying that the study and application of key levels is a necessity in any good Forex trading strategy. This is perhaps my favorite part about drafting a solid Forex trading strategy. Using simple patterns to help define your trade ideas is one of the easiest, and most overlooked, practices in the Forex market.

The wedge and channel are a great place to start. In fact, you can become a successful Forex trader using only these two patterns — they are that powerful. Notice in the GBPNZD 4 hour chart above, the market consolidated into a well-formed wedge pattern, giving us an easy way to spot a favorable entry. That entry came as soon as the market closed below support and ended up netting us a handsome profit.

More on this breakout strategy here. The second pattern is the equidistant channel. Although a channel can be traded between the levels, my favorite way to play it is to wait for a break of either support or resistance. Notice how once the market closed below support, it promptly retested old support as new resistance.

This is the key to profiting from this pattern — waiting for the break and retest. Learn more about this strategy here. My hope with this lesson was to give you ideas about some of the elements that should be included in any good Forex trading strategy. It should be noted, however, that these elements are much stronger when used together.

The real magic comes when you begin to combine these elements into a focused, strategic approach to the markets. Only then will you be able to stack the odds in your favor. Only then will you have a defined edge. What is a Forex Trading Strategy?

Price action trading strategies have been around for quite some time, and for good reason. But I find that many traders tend to confuse the term for what it really is. Every day, week and month, the Forex market is paving its own road. This road can become our road map to future price movement, if we know how to read it. By studying the highs and lows of these previous days, weeks and months, we can develop a general idea of what price may do next.

Notice how these key levels can act as boundaries. This can become our road map to future price movement, if we know how to properly identify these levels. It should be immediately apparent how these levels can be advantageous for us traders. I should note that not every chart will line up this perfectly. This allows us to only trade the pairs that have the most obvious price action levels.

When I first started trading Forex in , I was constantly trying to figure things out. Technical, fundamental, you name it. I would reverse-engineer anything I could get my hands on.

Having been through that experience, I can tell you that a far better use of your time is to practice identifying these levels on your charts. A daily chart of EURUSD looks the same on my chart as it does to every other trader around the world. Now imagine how many eyeballs that works out to, all looking at the same chart. A lot! You get the point, the variations are endless. Because the variations are endless, so is the outcome.

I will say that some brokers may show different open and close prices, but typically those differences are only a few pips. The major exception being the brokers who follow a New York close 5 day chart. Even then a key horizontal level or trend line on a specific chart will look the same as it does with any other broker. Why does this matter? It all comes down to psychology. Have you ever been sitting in traffic and witnessed one driver get so frustrated that they pull out on to the shoulder to bypass the other cars?

What happens immediately after? Other cars begin to follow their lead, right? This is because the majority of humans are followers, not leaders. The same rule applies to trading Forex, or any market with decent liquidity. If a large percentage of traders have the same levels or similar on their charts, the odds of price action respecting those levels traders following other traders becomes infinitely greater. Those traders are just following the pack.

The Forex market is one place where it pays to be a follower and not a leader. This is why it works so well in the Forex market. Because of its high liquidity highest in the world in fact the Forex market produces some of the best price action levels of any financial market.

That about covers why price action works. A trading strategy is a fixed plan with one goal — to achieve the most profits while using the least amount of risk. Some examples of trading strategies include:. The list goes on for miles, which is why so many traders spend years trying different strategies before they find one that works. Think of the trading strategy as the signal you look for before entering a trade.

The criteria that must be met in order for you to put money at risk. That about covers trading strategies. Hey, nobody ever said this stuff was rocket science 😉. Here are two great examples of where and what we should be trading when it comes to price action trading strategies. There are several other confluence factors that come into play.

However the price action trading strategies as illustrated in these two charts are a great place to start. Hopefully this lesson has helped to clarify any misconceptions about what price action trading strategies are and how they can be used. Just remember that every good price action trading strategy should be:.

Do you use price action trading strategies? If not, do you think this style of trading could be advantageous? Feel free to leave your feedback in the comments section below. All comments on the subject are welcome!

Save my name, email, and website in this browser for the next time I comment. Thanks, Colin. Very true. Most new traders are led to believe they need something proprietary if not ground-breaking to be consistent. I was one of them for almost three years…. Thanks Justin. I have been trading for 4 years and have learned some new things. I mostly scalp trades but think the trading strategies that you use sound a lot better! Scalping definitely is stressful and it took a while before I became profitable.

One thing that I have learned is that you have to gain as much knowledge as you can to become a successful trader. Swing trading with price action is certainly much less stressful than scalping. And I would agree with you that knowledge is paramount. Hi, Dear Justin, As always, well-defined with objectivity and conceptual clearance.

A month ago, I attended your 7 secrets webinar but PAT was not cleared. Now I can say , YES, I understood, Thanks and happy weekend. Am also new to trading and i dont have a single clue about any thing except the blue and red indicators from metatrader 4…i hope i can learn from you. Thank you Justin. Please what currencies pair work perfectly well with price action?. Thank you.. Hi Justin.

Out of curiosity, you have always been going for 2R minimum. In the video example, it seems like its less than 2R. You explanation and methods of teaching is the best, you break complex to simplicity. Definitely would pay for your course if I had means to, you too good Justin👍.

or is only forex your PA covers. WHY ARE YOU BEING SO DISHONEST? So what is it, really, you ask? What is Price Action? The reason price action works, and works well, is because everyone is looking at the same chart, with respect to the same time frame of course.

Think of price action as where you should look for trades and your trading strategy as what you should trade. Justin Bennett says Thanks, Colin. I was one of them for almost three years… Thanks for your comment! Altaf says I follow only the green bars when they are momentum.

Great post! Justin Bennett says Well said. Thanks for sharing! Thanks Justin Reply. Darlene Hemple says Wow! akhtar butt says Hi, Dear Justin, As always, well-defined with objectivity and conceptual clearance. Elvis says Am also new to trading and i dont have a single clue about any thing except the blue and red indicators from metatrader 4…i hope i can learn from you Reply.

Ghulam jelani says Nice strategy Reply. jonathan eyina says Thank you Justin. Adesoji says This is great. thanks for the lecture Reply. Dang Khoa says Hi Justin.

Aphile says You explanation and methods of teaching is the best, you break complex to simplicity. Definitely would pay for your course if I had means to, you too good Justin👍 Reply. Douglas says Hey, your explanation is the simplest I have come across.

It comes down to what works best for each trader. I would reverse-engineer anything I could get my hands on. I need explanation on swing highs and swing lows. The following is a crash course on how to pyramid. Omer says Dear Justin, First of all I would like to thank you for valuable information for me.

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