Mastering Price Action Techniques for Successful Trading

Hello, Traders! Today, we’re exploring key price action techniques that can elevate your trading skills, whether you’re trading stocks, Forex, currencies, or futures. Our focus will be on the E-mini S&P.

Before diving in, remember that trading is risky. Only trade with funds you can afford to lose.

Blueprint Software Overview

We’ll be using Blueprint software, available for Ninja Trader and TradingView. This tool creates shaded areas on the chart, highlighting potential breakout zones. The goal is to trade based on the market’s movement above or below these areas.

Price action trading involves using candle patterns to guide your market entries and exits. When the market trends higher or lower, you need a well-defined reason to enter the trade. Blueprint software helps by providing signals for potential long or short trades.

Rule 1: Wait for Candle Close Confirmation

To avoid false breakouts, always wait for a candle to close above or below the shaded area before entering a trade. This confirmation is crucial. For instance, a long trade signal at 5520 or a short trade at 5475 needs a candle close for validation.

Blueprint software offers audible alerts for both TradingView and Ninja Trader, signaling new areas to watch. Pay attention to these alerts and wait for a candle close confirmation before acting on any signal.

Rule 2: Aim for a Better Price

Always strive for a better price when entering a trade. Avoid chasing the market with unfavorable fills or market orders that result in a worse price. Use limit orders or stop-limit orders to secure better entry points.

Setting Targets and Stops

Your targets and stops should be adjusted based on current market conditions. The Average True Range (ATR) is a valuable tool for this. If the ATR indicates a three-point movement, set your targets and stops accordingly. Adjust these levels in response to market volatility.

Rule 3: Adjust Targets and Stops According to Market Conditions

Avoid using the same targets and stops for every trade. Instead, tailor them to the ATR and current market conditions. In slower markets, opt for smaller targets and stops; in more volatile markets, aim for larger ones.

Limiting Time in Trades

Limit the amount of time you stay in a trade. If a trade doesn’t move in your favor within a reasonable timeframe (typically 10-15 minutes on a one-minute chart), it’s best to exit. Prolonging a losing trade often results in greater losses.

Confirming Trades with Multiple Methods

Enhance your trading decisions by using multiple methods alongside Blueprint. Combining Blueprint with Atlas Line or Trade Scalper can provide additional confirmation and increase the reliability of your signals. Ensure these methods are aligned and not conflicting.

Conclusion and Free Resources

Price action trading, when done correctly, is highly effective. Always confirm signals, aim for better prices, adjust targets and stops based on market conditions, limit your time in trades, and use multiple confirming methods.

For more insights and hands-on training, visit Day Trade to Win to get a free member account, download free software, and join our accelerated mentorship class, which includes all our software. Happy trading, and I’ll see you in the next video!