I will reveal 4 accurate price action signals that even a newbie trader will manage to easily recognize.
Watch carefully because these signals alone will help you to make a lot of money trading Forex, Gold or any other financial market.
Change of Character
Change of character is a strong signal that indicates a trend violation and a highly probable market reversal.
In a bearish trend, the change of character will be a bullish violation of the level of the last lower high.
Check how the change of character accurately indicated a bullish reversal on EURJPY pair.
In a bullish trend, a bearish violation of the level of the last higher low will signify a change of character and a highly probable bearish reversal.
Bearish violation of the last higher low level and a change of character on USDJPY gave a perfect bearish signal.
Breakout of Consolidation
No matter what time frame you trader, you probably noticed that quite often the markets become weak and start consolidating.
Most of the time, the prices tend to consolidate within horizontal ranges.
Breakout of one of the boundaries of the range can give you a strong trading signal.
Check how the price acted on GBPCHF.
The breakout of the support/resistance of the range always gave an accurate signal, no matter what was the preceding direction of the market.
Trend Line Breakout of a Pattern
There are a lot of trend line based bullish and bearish price action patterns: the ranges, the wedges, the triangles, the channels.
What unites these patterns is that the violation of the trend line of the pattern gives a strong trading signal.
A bullish breakout of a resistance line of a falling wedge, a bullish flag and a symmetrical triangle will give us a strong bullish signal.
Just look how EURUSD bounced after a bullish breakout of a resistance line of a falling wedge pattern.
While a bearish breakout of a support line of a rising wedge, a bearish flag or a symmetrical triangle will indicate a highly probable bearish continuation
Here is how a bearish breakout of the support of a symmetrical triangle formation helped me to predict a bearish movement on Gold.
Neckline breakout of a horizontal pattern
There are a lot of different price action patterns.
One element that unites many of them is the so-called horizontal neckline.
In bearish price action patterns like double top, head and shoulders, descending triangle, triple top, etc. a horizontal neckline represents a support from where buyers are placing their orders.
Bearish violation of such a neckline will be considered to be an important sign of strength of the sellers and a strong bearish signal.
In bullish price action patterns like double bottom, inverted head and shoulders pattern, ascending triangle, cup & handle, etc. a horizontal neckline represents a resistance where sellers a placing their orders.
Its bullish violation will be a strong bullish signal.
Below is a perfect example how a bullish breakout of a neckline of an inverted head and shoulders pattern on Bitcoin triggered a strong bullish rally.
Here is how a breakout of a neckline of a double top on USDCAD confirmed an initiation of a bearish correctional movement.
The most important thing about these price action signals is that it is very simple to recognize them.
You should learn the basic price action rules and a couple of classic price action patterns, it will be more than enough for you to identify confirmed bullish and bearish reversals on any time frame and any trading instrument.
