Price Action Trading For Beginners: How to Trade Reversals | Trading Tips
Vložit
- čas přidán 12. 09. 2024
- A reversal is a change in the price direction of an asset you are trading. A reversal can occur to the downside or the upside. Following an uptrend, a reversal would be to the downside. Following a downtrend, a reversal would be to the upside. Reversals are based on overall price direction and are not typically based on one or two bars on a chart.
When looking for reversal it is important to realize that reversal are countertrend entries. And as we all know countertrend entries are very risky and sticking with the trend is the best strategy. Therefor when looking for reversal a trader needs a safe place to enter. In this videos I am going to try to explain where the safest place to enter is - reversal pattern.
First we need to let the current trade finish. End of the trend happens after a break and a new extreme. Just because there is break of a trendline does not mean a trader can safely countertrend trade. That is too early.
After new extreme price action rules are telling is there is time for correction or possibly a reversal.
If prices go through the EMA and then EMA holds prices, that is a good sign market may be reversing and sides might be switching.
The final piece of the puzzle regarding reversal is a trader should be looking for failed 2 attempts in the direction of a previous trend. If after a break and a new extreme there is a failed 2nd entry in the direction of previous trend now trader can safely enter reversal trade.
More detailes are in the video. Good luck.
If you enjoyed this video and find it helpfull can SUBSCRIBE and learn more about trading. Enjoy the videos.
The best way to became consistantly profitable is to learn to read the chart in its purest form. There is no holy grail or set of indicators that can make you rich without work. Learning to understand how prices move and why they move is a learnable skill that anyone can achieve.
OUR PRICE ACTIONS RULES WORK IN EVERY MARKET AND EVERY TIMEFRIME.
Priceaction is universal and technical analysis patterns repeat over and over again on consistent basis.
Trading with a fear is the most common fear most trade have. It is crippling and can get your mind frozen. The key to consistancy is to be emotionless and fear nothing in trading.
Money Management
Target Profit - 10 Ticks
Stop Loss - below signal bar (around 10 ticks)
Overall market context is more important than individual patterns.
Technial analysis works and it repeats over and over.
If you want more Advanced Trading Tips, Strategies and Trading Community.
wadetradingaca...
#ReversalTrading #TechnicalAnalysis #PriceActionTrading
Hands down the best price action teacher on youtube.
Got second entry short failure trade today. First time. This video really helped. Thanks.
Thank you Thomas, your lesson made it crystal clear what a reversal pattern is. Critically, you also explained what a reversal pattern is NOT so you must stay out and wait. This is one of those videos that changes your charting reading skill permanently. Just fantastic, no more guessing about when the momentum has switched and the trend changed direction. I looked back through 2 years of my largest losses and they ALL happen where the market was changing direction but I perceived it way too late.
This is GOLD, thank you!
Appreciate it.
It is
I have to say, I am learning to hang on every word you are saying. I have to stop and restart randomly to make sure it is making sense. It is great how you explain and go into detail on each situation. Break trend, expect a new low, then look for reversal patterns as it climbs up. Learning a ton from you videos! Thank you very much Thomas!
OK, the light just came on. I know how to determine the trend is over. Now I know what I'm looking for after. A failure of the bears to continue the trend. Really great explanation!
Thanks for the explanation of reversal patterns. I really had trouble understanding Mack's explanations....yours is crystal clear. This is where I have most of my losses.
literally exact same situation, thank you
I go to your old videos and there is always something new to learn , thank you brother
trying to pick tops and bottoms is BY FAR the best proven accounts destroyers. Its a loosing strategy in the long run and there is absolutely no chance to be consistent doing it . Listen to the guy guys...every advise is a pure magic
What a nice and clear explanation of the reversal pattern. Thank you Thomas!
Its the best strategie that ever had been explained, and it works beautuful and steadily
Thank you Thomas, your lesson made it crystal clear what a reversal pattern is.
Thank you for sharing all you do. Means a lot to me👍💯
Very well explained!
Great Video on identifying reversal patterns - Thanks Thomas !!
Thank u very much Brother. You are the only person who teaching price action like a book. Now only I found your channel and watching all videos. All are very informative. Thank u once again.
Glad you find it useful!
what a beautiful clear explanation of the price action. you are really explaining it so nicely.....great work there Thomas
Hi Thomas, thank you for your video. Very informative and helpful! One thing I am hoping to get more clarity from you is how exactly do we define a “failed 1st/2nd entry with the trend”? Are we defining the failure as not surpassing the most recent high (when in bullish trend) or low (when in bearish trend) set by the trend?
Great job Thomas. This was very clear and helpful.
Awesome Awesome You are really different and I was very lucky to find you. You are so generous that you beautifully teach us valuable lessons. Thank you very much 💛💛💛
Super important video here Thomas. Great one
Hey Thomas! Great content, glad I found your channel.
Wow, these videos are great. Sounds like you can almost say that the second entry is a break higher off the smaller trend sometimes.
Yeah, sometimes it can work like that.
Thank you master. Crystal clear explanation
Amazing video, great lessons! Thank you soo much!! for your time teaching us (interested traders) happy new year!
Thanks for the feedback.
Learning so much from your videos!
Bravo! Thank you Thomas...
Thank you. Excellent and clear 👌 👏 👍 thank you 🙏
Thanks Tomas. I have been trying to understand the entry points. I always try to pick top and bottoms, but support and resistance dont always plays along. Your rules are exactly what I have been searching for
Yeah picking tops or bottoms works sometimes but not in the long run. I had to learn the hard way to find better entries... Glad you like the video.
Hey Thomas, can you tell me how do you manage your stop loss? I have been learning your strategy and although the prevision of the market is correct, sometimes i get stopped because of my stop loss position. What is your rule to define it?
Good video and nice strategy ;)
Cheers from Portugal
Stop loss is always one tick above the signal when selling and one tick below the signal bar when buying. You cannot put it in the middle because you can get stopped just on the pullback before trade working.
Thank you Thomas
Thanks alot Mr. Thomas.
This is so helpful.
Hello Thomas,
I liked your video but I have a comment to make.
Between 6.56-6.58, after the break of the trend, a new high is formed, which can lead to reversal or correction. Then, price goes downward without a break and then upward with a break.
Why did y ignore the break in the upward direction?
Thank you
Loved it
Thank you sir.
Thanks bro from morocco
Hi Tom,
Could you give the input info for the EMA for example: smooth line smooth length, source and offset.
21 bar exponential moving average
@@ThomasWadeThanks,
Thank so much
Thk for this but which EMA do u use 🙏
I use 21 bar EMA.
Whem you say new extreme after a break of a trendline, is it in the direction of the trend or can it go either way?
Yes, direction of the trend that just had a break. If uptrend has a break, new extreme means new high of the broken channel.
@@ThomasWadethank you, really appreciate you taking the time to reply
Hey Tom, do you use the Gann method for counting bars (For swings) to determine what's an up bar and what's a downbar?
Hello I don't.
At 13:20.."...eventhough we have a downtrend working lower....". After the break from the trend line, there is a correction. Why can't I take that correction as pullback and started counting the entry and I enter at second entry long. Is it because it is too far from the EMA?
Because we don't know how many pushes lower prices could make. It is better to start buying after prices push above the EMA.
Thomas sir can we use this concept on 5 min Timeframe or 15 min TF or 1 Hour TF ? Pls make video on these timeframes also... Thankyou
Price action works in all markets.
I would recommend 1-5 minute charts because high probability setups take time to develop.
At 6:54 during the micro trend lower it looks like we tick higher halfway through the move so I am a bit confused. These minor ticks have always been an issue for me when counting. Either way your videos are very very helpful so thank you for sharing your knowledge.
As at 10:31 why does the second entry failure not occur higher up it. It looks like the failure occurs on the 5th bear bar after the new high is made. Do we need to take into consideration the rhythm of the market when counting the entries? Best.
I think if you watch in full screen it does not tick higher, It was a valid first movement short, then the first entry long cut through EMA so thats why nothing happens to pay attention to a reversal.
Regarding the 6:54 question, Leandro is right I haven't noticed a little tick higher, but you can see that we still didn't tick higher above the bullish bar and that would be a bar we are looking to tick above, next bar was this bar with a little bearish body and we ticked higher above, but still didn't tick higher above the previous bullish bar. These minor triggers are quite confusing I agree, I am able to discern because of the experience but my advice would be to skip these trades and wait for clear entries. Even if we counted that as an entry it still wouldn't be a valid reversal pattern..
@@user-tv5of7eh3z Yeah you are right, I thought it may be a bit confusing. The reason why I mention 2nd entry as the entry i mentioned is because there are two clear legs that are visible when looking for reversal pattern. This video was mainly focused on what we are looking for when it comes to pick a reversal entry. You are very observant and the failed 2nd occured on the bar you mentioned... good job. I was just trying to make the video solely about reversals and how to look for them in theory for beginners. In my "after the fact videos" i try to mention all the nuances and tips regarding all of our rules together.
@@ThomasWade Thank you for your insight Thomas it was Very Helpful and explains why I get tripped up on these minor triggers I will learn to be more patient. Your videos are Excellent and I thank you for helping me becoming a better trader with each one you produce, it is very generous of you. Best, and Happy New Year to you.
I find m.a.helpful all the time.
Hi Thomas! Once the 2 legged pullback has played out, how do you enter the trades? Is it 1 pip above/below the signal bar via limit order?
I wait for entry to trigger, 1 tick above or below the signal bar and drop my limit at the close. You can see my live trading videos to see how I enter.
Thomas any books or any mentors you have that we could follow as well as yourself..Thanks bud !!
I would definitely recommend Al Brooks, and his book reading chart bar by bar. Most of his books are good but quite hard to understand. I try to make it as simple as possible. You can checkout Mack from Pats trading aswell. These two traders introduced me to price action trading.
And defenitely look up Mark Douglas and his books, Trading in the Zone and The Disciplined trader. HIs stuff is absolutely critical to becoming better trader.
Nice ..what time frame you trading on please??
It's 2000 tick chart - which is very similar to 5 minute chart (potentionaly 3 min chart). I use tick chart, because it shows me a little more details.
When u r talking abt ema....whats the duration....10d, 20d, 50d, 100d ??
Pls tell
21 bar EMA.
Thank you. Do you have example on range days as today 11April on the French 40 for example. It only moved a bit after 6pm (Paris time) I couldn’t find an entry.
super
can you please say which EMA and TIME FRAME is this?
21 bar EMA and 2000 tick chart.
Hi TW. For those of us that use the charts on trading view which are not tick charts, what would you recommend as the almost ideal tf for scalp trades please.
1 min. 1-5 min are good overall.
Hi Thomas, in a down trend, after trendline break, if prices don't form lower low but instead form higher low, so for counting failed second entry short, I get confused in how to count legs, should I start counting legs from the previous low formed before the trendline break or from higher low formed after trendline break, can you please help.
I would need to see it. Send me email to thomaswadetrading@gmail.com
What does it mean to have a "failed" move? In my understanding, when it fails to get a 1 point/4ticks scalp?
When we talk about failed moved we don't know whether the trade truly failed.
We consider failed short move by appearence of bullish bar.
When we have for example second entry short and I say it failed, I mean that following bar after second entry short is bullish.
So technically it is not a failure yet but we need to treat it like one otherwise market goes without us and than it is too late.
The amount of ticks doesn't matter. 2nd entry short can move 4 ticks or 8 ticks before the bullish bar will appear.
Does that make sense?
@@ThomasWade yes i got it! Thanks for this!
Also whats your EMA trendline?
It is 21 bar EMA.
Is this 1 min TF?
2000 tick chart. Similar to one minute.
Bro what time frame we have to use
Works in all timeframes. I trade 2000 tick chart. I also recommend 1-5 min.
@@ThomasWade Thanks sir
Does it work with crypto?
Price action works in all markets. You can check this video. czcams.com/video/hWjUp_Df_t0/video.html
Every market has its own personality so I recommend sticking to one timeframe and mastering it. I know ES very well by now.
Which time frame chart it is ?
2000 tick chart.
@@ThomasWade what is 2000 tick chart ? I mean which time frame like 5min,15 min, hourly, daily etc.
@@kishanbasida1922 2000 tick chart is another way to plot time frame. One candle prints after 2000 ticks(transactions) instead of 1 minute.
You can try 1-5 minutes. They are similar to 2000 tick chart.
I have an old video why to use tick charts and what are the differences.
Do you want to enter upon confirmation to follow reversal or would you wait for it to develop?
If the context is good we enter on the reversal pattern. Failed second entry. I wait for trend development in the opposite direction if the last trend was strong. In that case I need more confirmation.
sorry Thomas... I have got the answer you have already given in the comment section to another viewer
like