Price Action Trading Hacks

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So…

In my earlier posts, you’ve learned why trading indicators, fundamentals news, and signal services actually HURT your trading results.

Then, we discussed the power of price action trading and what it can do for YOU.

In case you missed it, here it is…

Price Action Trading Secrets

Now:

Unlike what you’ve seen on the internet, trading forums, or from trading books, price action trading is not what you think.

It’s more than just trading Engulfing pattern, Hammer, Support & Resistance, and etc.

Instead…

Price action trading is about reading what the market is doing, so you can use the correct trading strategy in the right market condition.

Now if you want to learn how to be a real price action trader, then today’s lesson is for you.

You’ll discover:

  1. How to identify high probability breakouts trades (and avoid false breakouts)
  2. How to tell when Support will break so you don’t get caught on the wrong side of the move
  3. Why your stop-loss always gets eaten and what you can do about it
  4. How to profit from “trapped” traders
  5. And much more…

Are you ready?

Then let’s begin…

#1: The SECRET to trading breakouts like a pro

Trade breakouts with buildup.

You’re probably wondering:

“What is buildup?”

A build-up is a tight consolidation otherwise known as volatility contraction.

And the location where a buildup occurs gives you a BIG clue to where the market is likely to breakout.

For example, if there’s a buildup formed at Resistance, the market is likely to breakout higher.

Let me explain…

You know Resistance is an area to short the markets (after all the textbook says buy Support and sell Resistance).

But what if you go short Resistance and the price is still hovering at that area.

What does it tell you?

To an amateur price action trader, they will think Resistance is getting stronger as the price fails to break above it.

But…

To the seasoned price action trader, this is a sign of strength from the buyers.

Why?

Because if there is a strong selling pressure, the price should move quickly away from Resistance.

The fact that price is still at Resistance is telling you there are buyers willing to buy at higher prices — and that’s a sign of strength.

And that’s not all…

When the price breaks above Resistance, it will trigger a cluster of stop-loss (from traders who are short) which fuels buying pressure.

Plus, breakout traders will long the break of the highs which adds even more, strength to the move.

An example:

So…

Whenever you see buildup form at Resistance, it’s likely the price will breakout higher (and vice versa for Support).

Continue reading…

#2: How to tell when Support will break so you don’t get caught on the WRONG side of the move

Old Rayner: “Oh look! The price is coming to Support, time to long this market.”

New Rayner: “Not so fast…”

Here’s the thing:

You don’t go long just because the price is at Support.

Why?

Because how the price approaches Support matters — a lot.

For example, if you see lower highs coming into Support, it’s a sign of weakness.

It tells you the sellers are willing to sell at lower prices and the buyers are unable to push price higher (than it did previously).

And this looks like a Descending Triangle on your chart:

Can you see the lower highs approaching Support?

That is a sign of weakness.

And more often than not, the price breaks down lower.

#3: Why most traders get stop hunted and how to AVOID it

Let me ask you…

Do you always get stopped out, only to see the market reverse back in your direction?

Well, that’s because you place your stop loss at the same level as everyone else, and this gives the smart money an incentive to hunt your stop loss.

So what can you do?

Simple.

Don’t put your stop loss at an obvious level.

Now you’re probably wondering:

“So where should I set my stop loss?”

Well, the trick is this…

Identify the level on your chart where it’ll invalidate your trading setup — and give your stop loss a buffer away from the level.

Let me explain…

Most traders place their stop loss below Support and above Resistance (after all that’s what the textbooks and courses tell you to do).

But the problem with this is that’s where everyone else places their stop loss — which makes it easy for you to get stop hunted.

Instead, a better way is to set your stop loss a buffer away from Support and Resistance, away from the noise of the markets (or everyone else).

An example:

And this same concept applies to Trendline, moving average, and etc.

Read on…

#4: When is the best time to trade pullback (hint: when the trend just started)

A pullback is when the price temporarily moves against the trend. And this provides an opportunity for traders to get on board the trend.

In my experience, the best pullback is the first pullback after a breakout.

Here’s why…

When the market is in a long-term range, it will have to breakout eventually. And when it does, the breakout tends to be huge.

That’s why you hear… “The longer it range, the harder it breaks”.

Now when the market finally breaks out, traders who miss the move can’t wait to enter on the first sign of a pullback.

These pullbacks usually have shallow retracement as not many traders want to trade against the strong momentum.

And this offers a high probability pullback trade.

Here’s what I mean:

Now you’re wondering:

“How do I find such high probability pullback trades?”

Simple.

Just follow this 3 step process:

  1. Identify markets which are in a range
  2. Let the market breakout
  3. Trade the first pullback

Now let’s move on to my final hack…

#5: How to profit from “trapped” traders

Has this ever happened to you?

You noticed the market broke out of the highs and you think to yourself…

“This breakout is real. Just look at the HUGE bullish green candle.”

So, you immediately go long… hoping to catch a BIG move.

But shortly after you entered the trade, the market reverses in the opposite direction!

And it doesn’t take long before you get stopped out of your trade.

Here’s what I mean…

So, what just happened?

Well, this is what I call a False Breakout.

It’s when you trade a breakout only to get “trapped” and have the market reverse against you.

Now you’re probably wondering:

“How can I profit from the False Breakout?”

Here’s how:

  1. Identify the key Support and Resistance where traders will look to trade the breakout
  2. Wait for the breakout to fail when the price trades back into the range
  3. Trade in the direction of the False Breakout

Here’s an example:

So right now…

You’ve learned 5 powerful price action trading hacks that work (and it doesn’t involve Pinbars or Engulfing patterns).

With this knowledge, you can now better time your entries & exits in the markets.

Of course, there’s much more you can do if you want to improve your price action trading skill… far more than I can fit into one blog post.

That’s why I’m opening up the doors to my premium training program, The Ultimate Price Action Trader (UPAT).

It opens on 27th November, Wednesday, and is perfect for you if you want to learn how to become a consistently profitable trader, without relying on fancy indicators, fundamental news, or black-box algorithms.

So if you want to join The UPAT, then keep a lookout for my next email.

For now, here’s what I’d like to know…

Do you see the markets differently with price action?

Leave a comment below and let me know your thoughts…

  • Hi Rayner, thanks a lot for your blog here. Really helpful for me and I’m sure for other traders too. Keep up the great work Bro….

  • 1. Identify markets which are in a range……. please explain This further. I a newbee. Seeking to gain more knowledge before I get more serious drawdowns on my account.
    Thanks so much for the knowledge shared. Because of it I am beginning to feel more comfortable in the trading market. I look forward to your reply.

  • Brother greetings from India. You said you dont buy on support just like that, how the price approaches Support matters, you showed a pic of lower highs.

    Then can you clarify when to buy?
    Should it be when it creates a higher high after hitting the support .

    Thanks for your guidance.
    Roy

  • Thank you Rayner for sharing your experience and knowledge. I found your videos and blog about 2 months ago and already see an improvement in my trading.
    One guestion I have, what do you think is the best way to tell if its a real breakout with a pullback compared to a fake breakout. If I wait for confirmation wont I miss the move or just set my risk at 1% and let the markets decide

  • Hi Rayner, if your breakout is only refer to ranging? Does it also apply while steadily trending upwards (with higher high and higher low) and broke down below previous low.

  • Great work Rayner! I agree wholeheartedly with # 3 and am already applying it. Thanks for the tips. Your explanations make a lot of sense.

  • Hello Rayner, your blog is the most useful trading blog I’ve come across in my 6yrs of trading , thanks for all the resources . This is how I have recently started using price action , I use the 200 EMA as dynamic support and resistance and I make my decision based on price action in respect to the EMA level, so I watch to see if price will cross the 200 EMA or pullback from it , the response of price action to that level informs my trade decision .

  • Hi Rayner,
    Thank you so much for providing very valuable informations.
    I request you to write an article about Trader Affirmations’.

    Thank you again.
    Siva.

  • Hi Rayner thank you so much for the incredible information you have given me. Because of you my trading has improved a lot. I would love to be part of your Trading Programme UPAT.

  • Hi Rayner,
    I’m a newbie in trading and this by far is the hest channel to learn from. Thanks a lot for sharing this knowledge.
    God bless you!

  • Very thankful for your insight, now gathering a wealth of knowledge from your blogs that are improving my trading experience.Keep it up sir for the good work to community, you such a blessing to me.

  • thank you sir for your time and not being stringy with knowledge. realy appreciate sir. am following lots of your teaching but am still struggling with time frames, which time frame can you suggest that we can learn with the one that you know its appropriate when applying your teachings.

  • Hi Rayner,

    Just wanted to say thanks for sharing knowledge that you have built over years .

    God Bless….Now i eagerly wait for your mails .

  • Thanks alot bro
    honestly speaking ,
    my understanding of price action is more and more better than was before ,
    this is becouse of your simple and direct explanation.

  • Hey Rayner, As I starded to trade the first pullback after a breakout I started doing much better. Because when i’m entering the first pullback i’m very early on the trend and breakout has been confirmed. Thus it increases the odds of capturing a big trend.

  • Hey Rayner, Thank you. It is now, I am beginning to understand little by little what I should look out for, though, it is still not easy when I am in the front of a real chart.

  • Hi Rayner,

    Concerning the Buildup at Resistance advice that it will likely break through higher, what do you think about OMXS30’s recent Buildup at Resistance, it built up some weeks ago to 1677 but couldn’t break through 1680 , and it was it’s 2nd or 3rd attempt, and then it crashed, together with s&p 500 and DAX indexes. If it has tried more than 2 3 times, is there a variation of this Buildup at Resistance advice that should be applied instead?

    Regards

  • Hi Rayner,
    I got a question under point #3. When you say “give your stop loss a buffer away”, how many pips should “a buffer” be ? Do you have a guideline ?

  • I’m joel jmk from kenya and I really happy for these you are teaching it is truly if I follow that price action the way you teach me I see I can go far far far than the way I am and I will have for you keep it up and continue to help us please

  • Wow you are such a good mentor even though you don’t know me I am learning a lot from you I have improved on price chart analysis since I started following you big up my brother keep on doing great work may the Lord continue to increase and multiply you
    From south Africa Lubabalo makalima

  • Hey Rayner. Great job. What if the false breakout candle is just more than one? I have seen take outs with three candle set. Thanks

    • That’s possible.

      The key thing about false breakout is the price makes a strong reversal back into the range. It could take anywhere from 1 – 5 candles (or more).

  • Hi Rayner! Thank you for your Price Action Trading Hacks you taught me, my trading knowledge get better and more each an every time I read or listen to your teachings, my God bless you.

  • I really enjoyed reading your blog & watched your training videos. Thanks for everything my friends day by day I’m making profit trading forex. Keep on doing it as your’re helping more traders out there becoming profitable traders!

  • Excellent explanations, you see one permanently in the graphics but does not analyze it in that way and continues to empty the account, Like all your posts out of series, I imagine that when we involve chartist patterns and have an open mind to the global chart, ( always observing what the price does) our operations must improve substantially. Thank you Rayner.
    Translated by Google

  • Hi, regarding #5 point 3 regarding false breakout, don’t you mean that a trade should be taken in the ‘opposite’ direction of the false breakout? e.g as in your chart example, if price breaks out higher but then pulls back into the lower range below resistance then you should look to place a ‘short’ trade. Therefore going ‘short’ would be the opposite direction of the false ‘upwards’ breakout.

  • Hi rayner, please it be very good if you made payment for the UPAT available in variety of methods accessible by most people, like e-wallet thanks

  • Super…….. Rayner, you are the best. Have learned alot from your blogs and YouTube videos. But just out of curiosity, can these strategies and lessons be applied to binary trading? Thanks

  • Thanks Ray, it’s been a wonderful experience reading your material. Quite understandable. I can now see the market as my hunting field. Those analysis are real.

  • Hi bro,simply marvelous.ur teaching is simple.i follow plain naked charts to trade now and it works wonders.thanks and highly appreciate your efforts.

  • Rayner you are just awesome with this new knowledge of price action. am now seeing the market in difference light. This simply implies that one should not throw all his weight behind all the moving averages and all the oscillators of this world. Teacher([instructor) i wish to appreciate your efforts, thanks.

  • Damn bro. ur the best. I have learned so much from u. Sinds watching ur vids, ive stopped using many indicators. Clean charts makes it so much easier to trade tbh. Thanks again.

  • Thanks Rayner for this great insight. Yes indeed l do see the market differently. Hope to learn more from your blog on price action trading.

  • Thanks for the 5 tips of price action trading. It helps me a lot as a newbie in this field. Those guide will surely win win solution for me! Thanks!

  • Excellent Sir.The mail came at 3:30pm IST.Market will be closed at that time .Today i saw one stock named India bulls housing finance.I was wondering why my indicators arent working.Today the stock gave multiple breakouts.Now i understood the power of price action trading

  • Its wonderful experience reading your posts and watching videos on YouTube… I learnt a lot from you…
    Appreciate your hard work and support to small traders…

  • Thank you Mr. Rayner,
    I have not begone trading yet. I am more comfortable about what a chart is telling me , because of your guidance. I expect to begin in a couple more weeks. What I need to find now is access to something that will allow me to scan the charts. So I can start selecting non-irratice price lines. Thank you so much.
    Scott.

  • Yes Rayner you’ve helped me a lot from this past 7 to 8 weeks I started watching your YouTube videos and studying both of your books…. But am still ready to learn more… I don’t get tired of this knowledge you share with us day by day.. Thanks a lot…. May to good lord bless you and see many more years.

  • Its absolutely different now ,I had spent my time reading books about buy support ,selling resistance and candlesticks but hey this different.

  • In tip 5 – isn’t the punch line to trade in the opposite direction of the false breakout (not the SAME direction of the false breakout)? A typo? Or am I missing a key point? Thanks.

  • Hi, on #5 – how do you differentiate whether it is real or false break-out?… bcos if you were anticipating for break-out and it does happen, then you go in the direction of actual break-out… but detecting the false-break out requires to wait whether the break-out holds or not… so does it mean that you never play the initial break-out from the build-up?… thanks!

  • I feel lyk laughing at myself Mr Rayner,am sitting in front of the screen as am reading your mail and all u said is happening right in front of my eyes,thank u so much Rayner for opening my eyes into your very effective strategies.

  • Just wanna say thanks, for sharing with us your trading hacks. I personally appreciate! I just love the way you break things down in Your teachings. Thanks plenty.

    can you plz talk about PinBars!

  • Thank you so much Rayner. Youve corrected my psychology when it comes to build ups and breakouts at resistance. I always thought the more price hit resistance, that it meant its all coming down, and id get into a loss and not know why. Now I know, when price continually hits resistance severally its more likely to blow through it. Crucial lesson. Thanks.

  • Excellent blogs, very simple to understand and logical. Just got into trading and wanting to learn more. I hope to be your new student.

  • This price action lessons have helped me a lot and still do.I not oblivious to what’s happening in the market and I make profits here and there.

  • There is a lot I didn’t know about price action. I was one of the people who was chasing the market even enter when I see a big candle stick,in your language the energy has already been realesed

  • Did not fully understood the point no.
    #5: How to profit from “trapped” traders?

    Would you please elaborate more or guide me to the “guide” from where I can understand it.

  • Hi rayner, i’ve lost my lot of money. Totally i wexed but nw u opened my eyes little bit.. i hope u will train me coming days..

  • Hi Rayner
    I have been trading with success for 10 years.
    In the early days I did attend a couple of expensive ‘training courses’.
    You are doing a great job educating and helping newbies to avoid the ‘snake oil’ salesmen that seem to be out in force during the current climate.
    I have enjoyed your videos on youtube.
    Good health to you and your very fortunate followers
    John

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