2 powerful price patterns simple truth about...
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2 Powerful Price Patterns&
Simple Truth About Trends
© Trading Concepts, Inc.
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Price Action Analysis
Interpreting the OPEN, HIGH, LOW, & CLOSE on a Price Bar or Candlestick & comparing it to the Prior Price Bar or Candlestick provides insight into what the Market may likely do next.
BAR CHARTS (Price Bars) or CANDLESTICKS
RANGE: Confirms Momentum…………………….
CLOSE: Confirms Price Action
Price Action Analysis helps a Trader…Identify insight into what the Market is likely going to do next.
RANGE
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BULLISH Outside Vertical Bar (BUOVB) / BULLISH Engulfing Pattern
HIGH & LOW must exceed Prior Bar’s HIGH & LOW; CLOSE in Top Quarter of Bar
USED at logical SUPPORT in an established UPTREND
BUOVB (BULLISH OVB)
ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of BUOVB)
BULLISH ENGULFING
ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of Engulfing Candle)
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Inside Vertical Bar (IVB) at SUPPORT / BULLISH Harami
HIGH & LOW both INSIDE Prior Bar’s Range
Does NOT MATTER where the Bar Closes
USED at logical SUPPORT in an established UPTREND
ISL
BUY ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
IVB (Inside Vertical Bar)
ISL
BUY ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
BULLISH HARAMI
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BEARISH Outside Vertical Bar (BEOVB) / BEARISH Engulfing Pattern
LOW & HIGH must exceed Prior Bar’s LOW & HIGH; CLOSE in Bottom Quarter of Bar
USED at logical RESISTANCE in an established DOWNTREND
ISL
SELL ENTRY
PROFIT OBJECTIVE(1X Range of BEOVB)
BEOVB (BEARISH OVB)
ISL
SELL ENTRY
PROFIT OBJECTIVE(1X Range of Engulfing Candle)
BEARISH ENGULFING
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Inside Vertical Bar (IVB) at RESISTANCE / BEARISH Harami
LOW & HIGH both INSIDE Prior Bar’s Range
Does NOT MATTER where the Bar Closes
USED at logical RESISTANCE in an established DOWNTREND
ISL
SELL ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
IVB (Inside Vertical Bar) BEARISH HARAMI
ISL
SELL ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
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The Simple Truth About Trends
Only 3 Primary Waves (or Trends) in the Markets:
1) UPTREND – Higher Highs & Higher Lows
2) DOWNTREND – Lower Highs & Lower Lows
3) SIDEWAYS Market – Relatively Equal Highs & Equal Lows
Identifying which Wave the Market is in is vital to successful trading. The Simple Truth About Trends is all about pure Price Action! These simple principles form the cornerstone of any consistently successful Trading Methodology.
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UPTREND: Higher Highs (HHs) & Higher Lows (HLs)
LOW
HL
HL
HL
HLHIGH
HH
HH
HH
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DOWNTREND: Lower Lows (LLs) & Lower Highs (LHs)
HIGH
LL
LL
LOWLH
LH
LH
LH
LL
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SIDEWAYS Market: Relatively Equal Highs & Equal Lows
HIGH
LOW
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UPTREND reversing into DOWNTRENDDOWNSIDE Penetration of the most recent Higher Low (HL)
HL(most recent Higher Low)
HL
HH
HH
HL
HH (Lower High)
LH
LL(Lower Low)
UPTREND potentially reversing into a DOWNTREND with DOWNSIDE penetration of most recent HL
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HL(most recent Higher Low)
HH
LL(Lower Low)
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HL(most recent Higher Low)
HH
LL(Lower Low)
(Lower High)
LH
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DOWTREND reversing into UPTRENDUPSIDE Penetration of the most recent Lower High (LH)
(most recent Lower High)
LH
(Higher High)
HH
LL
LH
LH
LL
LLHL
(Higher Low)
DOWNTREND potentially reversing into an UPTREND with UPSIDE penetration of most recent LH
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LH
LL
HH
HL(Higher Low)
(most recent Lower High)
(Higher High)
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(most recent Lower High)
LH
LL
(Higher High)
HH
HL(Higher Low)
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2 Powerful BULLISH Price Patterns@ logical SUPPORT in an established UPTREND
BUOVB (BULLISH OVB) IVB(INSIDE Vertical Bar)
BULLISH ENGULFING BULLISH HARAMI
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2 Powerful BEARISH Price Patterns@ logical RESISTANCE in an established DOWNTREND
BEARISH ENGULFING
BEOVB (BEARISH OVB)
BEARISH HARAMI
IVB(INSIDE Vertical Bar)
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