Sep 6

Price Action Setups - How to Identify Trend Reversal

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Edited: Sep 6

 

 

Price Action SetupsPrice Action Setups
How to Identify Trend Reversal

 

Price action trading considered by many to be the highest form of trading. The type of trading that is usually attributed to the professionals. It is indicators and oscillators free. Instead of packing the chart with multiple technical elements, price action trading is all about the simplicity of a clean looking chart. Experienced high-level traders don't need dozens of useless indicators decorating their charts. To them, it is a distraction at best and a complete deception at worse.

 

 

Instead, professional traders prefer to focus on price action setups that can provide high-probability trading opportunities on a day to day basis. Simply put, price action setups are a set of reliable support and resistance key-levels. That is the building block of any descent price action analysis, especially if you want to know how to identify trend reversal. Having a set of key levels that you can trust can really make a world of difference.

 

 

There are a few popular price action setups that you can study and apply to your trading routine. Fibonacci, Market Profile, Elliot Wave, Gan, Pivot Point, Point & Figure… Just to name a few. Here at Bulletproof Traders, we have developed our own proprietary price action setup – Cross-price Matrix. We always try to avoid trading with the crowd. In-fact, we're notoriously famous for going against it.

 

 

For example, most traders are constantly looking for price breakouts. We, on the other hand, are constantly looking for false breakouts, or what we like to call "fakeouts". On average, for every 1 real breakout there are 6.4 failed attempts (fakeouts). So, hunting down the false breakouts is a much more profitable business.

 

 

The presented EUR/CAD case study was a real-time position that we had managed over the course of 3 weeks during August - September 2019. It all started with an exceptional false breakout that we could identify after price had the audacity to bounce back no less than 200 pips to cross back below our key-level point of reference at 1.4806. The Daily closing bar is a first-degree trigger. It's a preliminary indication that has yet to be confirmed. The Weekly closing bar is the confirmation trigger that provides green light to go ahead with full force.

 

 

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