PATTERNS WITHIN CONTEXT

Posted on 8/4/18, 3:39 AM
PATTERNS WITHIN CONTEXT

Knowing a pattern and watching for it isn't enough to day trade successfully. The patterns you are about to learn occur frequently, but they are only powerful when they appear within a certain context.Getting a great day trading entry is about understanding price action, and seeing when a group of traders (who went long or short) are trapped and likely to cause the price to surge in a particular direction as they are forced out of their trades.The trade setups you will soon learn often occur at these "emotional" points, where a group of traders are likely to feel pain or greed. Unfortunately, that doesn't mean these patterns will occur before all big moves, or that these pattern will always result in a big move. We can't know exactly what other traders are thinking, or how they will act, but by watching for price action patterns that occur regularly, and that often produce a similar result, we can improve our chances of getting into a profitable trade.Getting into a trade—which is what this article covers—is only a small portion of the trading battle. A profitable exit is also important (see Where to Take Profit When Day Trading), as well as managing risk with a stop loss and controlling position size.

Download Android App Download iOS App Follow our Telegram Channel
keyboard_capslock