Welcome to PriceTrader.io. This website, the associated YouTube channel, and the business behind it aim to teach you price action trading (with intuition).
I intend to offer you a comprehensive price action trading strategy here and to give you the necessary understanding and insight to trade this successfully. Consider this website as your free price action trading course.
Let’s start our learning journey by considering what price action trading is.
What is Price Action Trading?
Price action (PA) trading is a form of trading where the trader learns to read everything they need to know to trade successfully from only the price of their trading instrument or security.
They say that simplicity is the ultimate sophistication. PA trading is the simplest form of trading, where you look at clean charts, read the market cycle, and trade appropriately for the current stage of the market cycle.
Over time, you will learn how to see all the important price action signals by just looking at the price chart and the movement of price.
Key Concepts in Price Action Trading
As a PA student and trader, you must understand certain key concepts.
Support and Resistance
If you have ever meddled in technical analysis, you will know that key chart levels serve as support and resistance.
A long trade can experience resistance at a chart level where previously there was a swing high. This might lead to a reversal trade entry.
Similarly, a short trade can find support at the level of a previous swing low.
Other levels that might give support or resistance to price movements include:
- Trend lines,
- Trend channel lines,
- Day highs or lows,
- Week highs or lows, and
- Month highs or lows.
It is helpful to consider all or some of these levels in your trading to read and trade the market accurately.
You will also learn to see certain candlestick patterns unfolding at these levels to give you an indication of what market participants want to do.
Trends
Trends are an essential part of price action analysis. They will also form a large part of any successful price action strategy.
Every trader wants to see the market trend in his trade direction. Even the reversal-to-mean traders are hoping the market will move in their direction, yet this direction is a trend on a smaller timeframe against the prevailing current trend of the day.
So, trends are important. We can agree on that.
But all trends are not created equal. Some strong directional market moves are called breakouts. These are fast and strong moves in one direction. Legendary PA teacher Al Brooks says that when a breakout occurs in the long direction, it is an “all in long” and you can “buy for any reason.” The same applies to the inverse.
Then you have strong directional moves with some minor pullbacks in the move. These are called tight trend channels. You still want to trade mostly with the prevailing direction.
And finally, you have wide trend channels. In these moves, you can trade both directions successfully during the market stage.
Chart Patterns
Clean chart patterns on naked charts indicate much for a trader to take note of. The main chart pattern to identify and identify early is a trading range.
We just spoke about trends, and the absence of any notable trend is a trading range. In my early trading days, before I discovered ranges, I called these periods trend freeze periods. And that is exactly what happens.
If you try and trade trading ranges in the same way as breakouts, you will get badly hurt. You will get into a trade in an area of potential reversal (if you don’t see a reversal pattern forming). But the converse is also true.
We will also consider a myriad of other chart patterns. You can learn more about these on the What is Price Action Trading? page
Before we continue, let me answer an important question.
Who Am I?
My name is Dries Cronje. Our home language is Afrikaans, and I live in Cape Town, South Africa with my wife.
My name is quite difficult to pronounce correctly in English, so I adopted the nickname of DCron, which I will use here on this site and also on my PriceTrader.io YouTube channel.
I am very happily married and a father to two amazing kids and an insanely spoilt cat. I love rugby, and I love braais. And biltong!
More importantly, I have always had a deep passion for and interest in the financial markets. I started seriously pursuing this passion in 2011 and in 2012 I started trading futures.
Initially, I was a trend trader, and always searching for and refining my trend trading approach. This worked amazingly at times, but it would never bring me reliably consistent profit.
Eventually I discovered the approach of price action and started trusting my intuition, and I have deep appreciation for this. It changed everything for me.
But okay, enough about me!
Trading Strategies in Price Action
Once you know how to read PA, it becomes necessary to know how to trade what you read. And for every stage of the market cycle, it is important to have your strategy ready to trade that stage.
Breakout Strategies and Reversal Strategies
During the stronger trend moves, a very simple strategy that takes into account decisions for breakout entry and where to get out or reverse works pretty well. Stop orders are the name of the game.
Range or Channel Trading Strategy
In a price channel or range you want to sell near the top and buy near the bottom. And you do not want to aim for too large moves. Scalping and limit orders are the name of the game.
Importance of a Clean Chart
An essential element of PA is having a clean chart. You will only learn how to read the finest nuances of the price movement if you look at a clean chart. By studying price over time, you will learn the art and science of predicting future price movements.
Technical indicators will only serve to distract you.
Rather focus on drawing lines to help you see important price action patterns and support and resistance levels as they form.
Before we continue let’s consider something that I have learned is essential to successful trading.
Intuition Plays an Important Part
Listen carefully: It is not all about technical analysis and price action setups.
You need to learn intuitive trading. For a period of time near the start of their trading journeys (typically), traders want to have hard and fast rules to follow. The rules give them safety and they are discouraged from trusting themselves to make decisions.
I believe this is wrong.
As a trader, you will never find a set of rules that contain a strategy that always works in all market conditions. Trust me, I spent a decade trying to do this. And it was miserable. I would have wonderful periods of insane profit, followed by horrible periods of giving it all back.
No, a trader needs to man up and make some subjective decisions. Is this market trending? Does this feel like trending or ranging price action?
On this site, there will be a great focus on all things PA, but we will also speak about trading psychology and intuition. We will cover some spiritual and even muystical topics in our quest to produce consistently successful traders!
But, for now, enough about the soft side of trading. Let’s talk about the technicals again…
Understanding Market Structure
If I was on video now, I would indicate with my hands how the market moves. Who knows, maybe I will post a video on this soon.
The market moves in strong and often long-lasting impulse moves, but these are interspersed with pullbacks, giving the price action a zigzag appearance (see image below). On the 1h hour chart, you will see a long zigzag down and then as the direction changes, a long zigzag up.
The tops and bottoms of these zigzags, as they form higher highs and higher lows (or lower lows and lower highs) are important support and resistance levels.
This is market structure. And it is so simple. If all you did was to find the longer impulses in the zigzag pattern, and trade them wisely, you would easily over time be a very wealthy and free trader.
But PA trading goes a step further. It allows you to trade and benefit from every section of the market structure by learning you to read live market action and trading accordingly.
Price Action Trading Strategy
As already alluded to various times, a healthy price action trading strategy involves identifying the current stage of the market cycle, and then having a plan to trade that stage.
In theory, it is all very simple.
It can be a little harder in practice, since you need to make tough calls in the moment while price moves are happening and as price patterns are forming. But with time and practice anyone can become great price action trader.
Advantages of Price Action Trading
PA trading has some clear advantages over other trading approaches. Let’s consider a couple.
Flexibility and Adaptability
PA works on all financial markets, including the Forex, stock, crypto, and futures markets.
It also works on all time frames. You can use it for swing trading or day trading.
Reduced Dependency on Indicators
PA trading helps you trade without an unhealthy dependency on indicators.
In the years leading me to this moment, I have often out of frustration tried to find a technical indicator or trading strategy that would give me a proven trading edge.
Little did I realize that I needed to become the edge to really step into my full destiny as a trader.
Common Mistakes to Avoid in Price Action Trading
While it is hard to fail with PA trading, you should not expect this to be a get-rich-quick approach to trading. You need to invest time and effort to learn all you can about PA. You will need to become an experienced price action trader to succeed.
Thankfully the PriceTrader.io website is here to help you! You’re welcome 😉
Also, expect to be wrong sometimes. Even great price action traders take losing trades up to 40% of the time. Yet, it is all part of the process. You can only experience the winners if you learn to live with the losers.
Tips for Successful Price Action Trading
If you are convinced and want to become a successful PA trader, then I have some tips for you.
Continuous Learning and Adaptation
In your quest to become a powerful and free price action trader, continuous learning is encouraged. But it is about more than the theory…
You also need to get onto charts and do your own price action analysis. As you spend time looking at what happens on the charts, you will start forming your own price action strategy. You are also welcome to use my strategies. I will teach and share my full price action trading strategy here.
In the meantime, focus on learning the candlestick patterns and recognising support and resistance levels. Do your technical analysis on the charts as you learn. And keep coming back here, and reading and studying.
Keeping Emotions in Check
As also mentioned, intuition and subjectivity are essential for successful trading.
It is hard to feel into what is happening and read the price action signals if all you can feel is fear, worry, anxiety, and discouragement. You need to learn how to master your emotions.
I needed to do this, and discovered some amazing ways to do it. I will share them all here and help you take command of your emotions.
Conclusion: The Role of Price Action in Trading Success
Okay, so I am hoping by now (assuming you are still here, and still reading) you will have realised the importance of price action in trading success. Combined with a healthy dose of intuition and the courage to make some subjective (tricky) live trading decisions, I believe this is the one-two punch a trader needs to break through to consistency.
As I mentioned, you can consider the articles and videos on this website to be your free price action trading course. Spend time here to learn the basics of price action. When you are done, you will walk away with a proven price action trading strategy that, together with your intuition, can set you free.
You are welcome to follow along with my personal trading results on the day trading results page. I do a summary screenshot of every day that I trade, like this one.
We all know the tremendous potential of trading. I mean that is why we are here, right?
If you develop a solid understanding of and trade PA and learn to trust yourself through the development of intuition, you will see a profound improvement in your results. I am convinced of that!
So, welcome once again to my website. I hope you enjoy and find benefit in the material I create here for you.