War & The Art of Price Action

Discussion in 'Trading' started by Xuanxue, Jul 17, 2008.

  1. Xuanxue


    Minor Swings

    1) The opposition must show conviction they wish to reverse the trend by stopping the trend and holding it briefly. (Consolidation).

    2) The opposition must then breach the trending party's line by surpassing the aggressor's own conviction level of price satisfaction. (Breakout).

    2a) If the party line is breached then momentum is required to better the breach.

    3) All subsequent breaches after two shall be considered momentum exhausting, should there be any, and once depleted all movements with the trend shall be considered jockeying to create a base of the same low in price (for reversing downtrends) and the same high in price (for reversing uptrends), if the base requisite to stage the attack on the trend was found weak and/or the momentum in breach attempts were weak.

    4) Movement to create support for the base only occurs when the opposition to the trend temporarily loses edge to the trending party by ceasing to breach its own levels. (Corner and retrace head fakes).

    5) Support for the base and a change of trend will not occur unless or until the trending party moves lower than the base (in a downtrend) and higher than the base (in an uptrend).

    5a) Support for the base must not be considered established unless or until the bar, line or candle closes higher in price than the lowest low in the immediate, relevant price action (in a downtrend reversal) and lower than the highest price (in an uptrend reversal).

    Major Swings

    Rules 1-5a of Major Swings apply, only you're after breaching swing consolidation arms sequentially. Ideally you require two breaches of attacks beating the immediate arm, a manageable retrace still in favor against the trend, and two breaches of the arm preceding it. A trend wont reverse unless that happens.

    Also learn all that you can about Elliot Wave counts and as a few have pointed out by way of example, experiment with forecasting using channels or trendlines as some call them.

    You can trade this price action theory on any time frame with nothing more than some lines at corners.
  2. bighog

    bighog Guest

    I read the first line and went no further.

    Consolidation in no way means setting up for a reversal. Actually just the opposite, they usually are reloading for a CONTINUATION..

    Your friendly <a href="http://www.sweetim.com/s.asp?im=gen&ref=11" target="_blank"><img src="http://content.sweetim.com/sim/cpie/emoticons/00020281.gif" border=0 ></a>
  3. Consolidation usually means continuation of the trend, reversals involve things like blowoffs, and capitulation.
  4. Xuanxue


    Alright wise-asses. In ES we're consolidated, locked in a tight channel at 1250 and sellers created a base on a double top at the high in hopes to run up, better the last retrace, and correct the last arm.

    Dollars to donuts sellers win and you're both contradicted.
  5. Xuanxue


    If it pleases you, kindly direct your attention and reread as many times as it requires to understand how one trader trades only on price action.

    You're welcome.