hello guys today we will do a video about price action and trading styles
the trading styles we will talk is trend training
range trading, breakouts and scalping
there reason why we're doing this video is because you need to be familiar with
these concepts in the future because a
in the following videos will be going very deep into
advanced technical analysis. it's important for you to understand what we're talking
about
what you need to know is that the price action
is generally moving in 3 different ways
it either trending up, it's either trending down
or its not trending it's consolidating or moving in a specific range
each of these different ways that the
prices moving can be going with different
volatility so it can be trending up with high volatility
or with low volatility
or there can even be high volatility range. What's important for you to
understand
In which state the price is moving at any given time
so that you can use the correct type of trading strategy
for each of these these specific price movements. we're going to start with
trend trading and we're gonna go to cTrader so I'm gonna show you
about trent trading here we see the
in the EURUSD chart in the one hour chart
we a trend the characteristic of
a trend is that the price is moving
towards a specific direction in this case the price is moving up
that's why you have an uptrend
the major characteristic of a trend is that
in each swing on an uptrend you have a higher
high and higher low so if you see here in this particular swing
we have this low point, then the swing goes up
and makes a new high point. Then it makes another low point which is higher
than the previous low and then a new high point which is higher than a previous
high
then it goes on and on that's the main characteristic of the Trent
if it was a downtrend there would be lower lows and lower highs
let's talk about how we usually trade
in trend trading I'm going to give you the most
widely used trading styles, I'm not going go in to very much details
because this is an introductory video but we're going to cover all these
kind of trading styles
with extensive videos
the the main and most
popular method may be, of trading trends if you I have identified
that you have a trend is to trading it with
some kind of moving average crossover so have here a two hundred
period moving average
which is a hgh period moving average
let's put a lower period moving average
100. In this case
what we're doing is we're entering on the
when that slow moving average is crossing the high moving average
like in this spot for example and we exit
on the opposite signal and we're getting the major part of the trend
next trading style is, we can
when we are trend trading we use trailing stops
in cTrader you can find the trailing stop settings here
for your position
you can set up your trailing stop there are explanatory videos that explain how
it is used
but what's going to happen in a trend if you're using a trailing stop
you gonna have, while the price is
constantly moving up, and the trend is developing
you're going to have a trailing stop a stop-loss that
trails the price and it is going to stay a particular number of pips
below the price so it's going to go up and up and up and at this point when the price
goes down
in a bigger amount of peeps than the trail
the stop loss is hit so you get the major part of the trend
the next method that we use to
trade trends is trading retracements of the trend
let's set this up again to a hundred periods
so as you can see
in the trend the the trend is usually
going up then it retraces back to the moving average
going up again retraces back going up retraces back
so you can trade all these particular points
when the trend is on the moving average you can enter long and you can exit
with various ways
so this is like this is reverse trading on
on a trend. In a trend the
the trend is usually going back to a moving average so if you put an
oscillator
most probably it's not going to go in to the
overbought area or oversold areas because it's too low
oscillators are used for range which we're going to talk about in a bit
another way of trading trends
is using the
changes in volatility so let's take a volatility indicator
let's put Bollinger Bands
and let's zoom in
so when we have a trend what's happening is usually we have low volatility
periods
which are followed by high volatility periods when the trend is developing
so in this case that we're using Bollinger Bands let's
kill the main line and have only top and bottom you 're going to find
sports that the bands are very narrow
that means low volatility like this spot. You can enter long here and there is going
to be a burst of volatility afterwards same thing here
low volatility you can enter long and it's going to go up
another way of trading trends is using
price patters you can use wedges or flags
we're going to talk about them in other videos, price patterns are
when the price is moving it makes specific price patterns that mean
specific things that we are going to talk about and so that's another way of
trading the trend
and, we will do
dedicated videos on all of these different trading methods
this video is an introductory video it's about
helping you understand what a trend is so we're not going to go into
further
details. Now we're going to talk about range
and mean reverse trading. When the price is moving in a Range
it means that it's actually not trading it means that it's moving up and down
having specific support and resistance levels
and it continues straight on. Usually in a range
you don't have volatility spikes of low and high volatility
you don't have any news or people are expecting for news that's why the
prices is not going somewhere. Let's go to cTrader
where I'm gonna show you , technically what we mean by range trading
where we have a range here which I found on the 10 minute EURUSD chart
as you can see like I told before the price is moving
up and down it's oscillating without having a specific
direction going up or or down.
We see here support and resistance levels
being developed that the price is moving in the specific channel
which is a straight channel so,
how do we usually trade ranges
the first
more popular method of trading a range market is by using an oscillator
an oscillator is an indicator that oscillates
between from a specific value in the middle in its showing
overbought and oversold areas
here we have the relative strength index
which is considered to be overbought at
70 price and oversold at
30 price so what we're doing here is we're
finding places that the price is on the
oversold or over bought areas and going long or short we are actually
buying low and selling high. So let me mark this places better for you to see
so for example we have a trading signal here
when the price is on the seventy area we can go short here
we have another signal here we can go long here we can go short here
and if the market is ranging we're going to
get a these good trades
let's talk about mean reversing during a range period
mean reversing means that the price is always
moving around a moving average so if I plot a moving average here
simple moving average let's plot a 100 period moving average
we see that the price during a range is always oscillating around the
moving average
so when mean reversing what we are doing
because we want to get a sure profit we're
entering the same way we entered before on the overbought and oversold areas
and we have an exit right at the moving average which we are sure that the
prices is going to go so we can enter here and here and here and here
another way of doing the same thing is without using an indicator we can use
support and resistance levels so we can have the first
support level here from the first swing first resistance level here
we can be getting all these short signals same thing
we can be using candlesticks formations so we can be using hammers for example which
you see here big
wicks on this candlestick it's a hammer we can confirm it and go short see
here we see a big hammer another reversal
during range trading as i said there are no major
news and actually that's it about
ranges I'm sure after that we understand what a range is
now let's move to the next trading style which is
scalping. So-what is scalping exactly it
has become very popular when the
with trading platforms now with very good internet connections
especially with trading platforms like cTrader which is a No Dealing Desk platform
which means that no one is on the other side to mess with your trading so
we can actually skalp the market
very successfully. Scalping is
a pretty simple concept, it means getting a very small
part over of the price action for your benefit
so practically what does it mean? It means like if the EURUSD is doing
150 peeps range
in a specific day you're just doing positions and getting
from I don't know half a pip up to
3-4 pips
these are very fast very small trades
you taking advantage of the volatility and the
that Isis scalping I'm gonna show you in cTrader now
how we usually do scalping
there are two major ways of doing scalping
one-way is trying
let's remove all the objects we have here and the
One very famous way of people
scalp is they trade specific candlesticks
what they're doing is they're finding specific
very high probability set-ups like a reversal here
so let's say for example we have here
a doji candlestick which means that the market is not going
is not knowing where it's supposed to go next, the buy and the sell are equal
then you see some kind of confirmation
it doesn't go higher than here then you see another
candlestick which means that a reversal is happening and then on this candlestick
scalpers start entering, and they enter on this place with a very small take profit
for example they enter here let's do limit orders
so they entered like
in this place with a very small take profit
like this take profit very conservative stop loss like this one
and they're getting
their money. This is one method
I'm gonna show you now another method which is which you can only do on
cTrader because it's
one of the very few platforms that offer offer tick charts
what's scalpers do is they
just load one or two tick tick charts cTrader offers from
two ticks up to 34 tick tick charts
when you have a three tick tick chart
you zoom in to the price a lot
so you can do your normal technical analysis
instead of doing what we showed before which is getting a very small part of
the candlestick
you can load your template and you can do
normal technical analysis you can load your fibonacci tools you can load
your indicators you can load everything
and you can be trading like you 're trading normally range
trend strategies but because you are zoomed into the charts
a lot you're only going to be getting a small amount of pips because the charts are
this range for example is just six pips
So if I enter here and I get a take profit here
I am just getting four pips. Next thing that we're going to talk about
is breakouts in breakouts
in breakout trading what we're doing is when the price
is leaving a specific range which is usually a consolidated range
which means that it doesn't have a big volatility
we try to assume that there's going to be a trend
that's going to develop after this slow volatility
breakouts fail a lot so you cannot, I don't
recommend trading breakouts using only technical analysis because you're going to have
a lot of failed signals
the whole point of the breakout is that the market is expecting something
and that something happens and then you have a quick move
so when trading a breakout try to see the economic calendar
try to see the news try to see what's happening for the currency that you are
trading
and then you will find when it leaves some consolidated range
and you have big news
some move is going to follow however let's see that on
cTrader so let's put the 10 minutes chart
let me show you what a breakout is
let's use bollinger bands again
so the break out is actually
in this particular area here for example
or in this particular are we see how low the volatility is
that the price is consolidating a lot if we if we change that
10 minutes chart to a one minute chart we''re going to see tht prices will be moving
on a range
in this particular sport so what we do is
when we see that there is a spike of volatility
here for example like this we assume that the trend is going to develop
and we trade it using
some kind of moving average crossover like we did on the trend
this a better example
again the price is consolidating here then it it starts going down
let's put some a couple of moving average indicators
so like 200 again and le'ts put like
50 periods here
so after this
break out here we start we see the
slow moving average below the high moving average we wait for them to cross
again to close our position. Then we will get all the movement that is going to go
after this so
with breakouts we are covering
all types or trend movement. I remind you again this was just an introductory video
for you to understand the basic concepts
we're going to do a lot more advanced videos in the future about
technical analysis about each of these setups
about the risk-reward ratios and where to place your stop loss
don't forget to always be using a stop loss et cetera
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