Hey hey: what's up my friends, so in today's training i want to share with you the top four price action trading rules you can't afford to ignore. So let's get started number one avoid trading in the middle. So what do i mean by this? So, let's say, for example, the market is kind of like in the range like this right. Price goes up, comes down, goes up comes down now in the middle of the range.

Many traders will be tempted to buy in this middle of the range thinking. The price you know could go up higher, but the problem when you buy when the price is in the middle of the range, is that where you set a proper stop loss, many traders would just set their stop loss a distance away from their entry point somewhere. Like this, but here's the thing right, if you understand that this market is in range, what it could possibly do is it goes up, comes back down, goes up, comes back down, then maybe break out in one direction. So you can see that if you put your stop loss in the middle of the range because you're trading in the middle of the range, you will likely get stopped up from the noise of the market noise of the market agree.

So some of you might be thinking. Okay, rainer, i'm smarter than that right. I will not put my stop-loss in the middle of the range. So what i do is price goes up, comes down, goes up, comes down middle of the range they put their stop loss somewhere about here.

Okay, so you can see that this is the distance of your stop loss. Let's call it sl. Where is your target? Most traders will probably set the target before resistance, so this is the potential reward. So if you look at it right from a risk to reward standpoint, this is, i would say, mediocre, not the best right and again, that's because you're trading in the middle of the range right.

So again, this is better than the first scenario, but not the best. So, what's a better outcome? Well, my suggestion is to be trading from an area of value. So in this case you know that this is a range. Let's say you are looking for buying opportunity.

Why not look to buy near this area of support? Your stop-loss now? Can go outside of the range, let's say somewhere about here, your entry. Let's say it's here, so this is the size of your stop loss. Now, what about target again our target? We're not changing our target, we're still referencing the resistance as our target. So now this is our potential reward.

Let's call it re, so you can see that now from a risk to reward standpoint, this trade is going to be much more favorable and your stop-loss is no longer within the noise of the market where you might get zoom zoom stopped out. Okay, so that's the first uh rule that i have for you to avoid trading in the middle of the range number two avoid placing your stop-loss just below support. Why is that simple right, let's say again: market is in a range and again it doesn't have to be just applied to the range market it can be applied to. You know uptrend downtrend et cetera, but i'm just using range because it's easier to illustrate so market goes up, comes down, market goes up, comes down near support, bounce up, you look to buy and you place your stop loss just below support.

Now. Why is this a problem, and the reason is simple: is because support and resistance they are in area on your chart. This means right. The market cap reverse up higher and then slightly trickle down lower, hit your stop loss and then goes up and hit your target over here.

So remember when you buy at support, it doesn't mean that the price has to come into support and then bounce off nicely. Above support, you can come to support bounce off slightly higher collapse, down lower trigger your stop loss and then rarely and hit your target, and this is what can happen right in the market. So this is why you want to avoid placing your stop-loss too close right to your to your area of support instead give it some distance, give it some buffer set your stop-loss away from support. So let me give you a way to do it, so let me say, let's say for example, again: market is in a range, goes up, comes down, goes up, comes down, and you look to buy over here, set your stop-loss a distance away from support, possibly somewhere Over here, so you know that if the market this time around heads down lower it reaches your stop-loss over here chances are.

This area of support is broken. If you can no slice down by so much see where i'm coming from so second tip is to avoid placing your stops just below support third thing: is this: avoid chasing the market, so many traders they love to chase the market, because you know oh reyna, look How fast this market is going, i'm just going to capture 20 pips from this market. I'm just gon na capture two dollars off this stock price, so market. Let's say you know it breaks out of a range, and then traders are looking to buy over here, because the market is so bullish.

Problem with this is that, at this point, this is where the market is right to make either a complete reversal, or it's right to make a pullback. So now, how do you capture a piece of the move safely right without you know getting caught with your pants down, so here's what i suggest instead of chasing the market, what you can do instead is to wait for what i call the first pullback. So it looks something like this. Let's say again, i draw this range, i think usually 10 times in this video market breaks out.

Let the amateur traders right chase the market over here is that you, the professional price action trader, you will wait for the first pullback, which looks something like this right market makes a pullback like this right. This looks something like kind of like a bull flag pattern. Where you know the market makes a slight pullback where the range of the candles get really nice and small. Then it starts it starts after it makes a pullback okay.

Let's say the market makes it pull back. It starts to creep up higher when it breaks above this high. It already breaks above this high, so you can look to get long at this point now. What makes this different by waiting for this first pullback well number one: is you have a point of reference to set your stop loss? You now can refer this swing low.

To set your stop loss, you can keep set your stop loss. Let's say a distance from this swing low somewhere about here and let's say your entry price is here: you can define your risk properly right by waiting for the first pullback, and the second thing is that you're not entering your trade right after the end of the Pullback, which should increase the probability of the trade working out because you're no longer chasing the market. You're waiting for the pullback to occur for the buyers to step in to start pushing the market up higher and for the possibly for the second wave of the up move to occur before you step on board, make sense okay, so this is uh. The third thing i have for you avoid chasing the market.

Instead, what you can do is to wait for the first pullback and the fourth and final tip that i have for you is to avoid shorting higher lows into resistance resistance. So many traders think that you know: oh, let's buy support, let's sell resistance. Well, not quite you want to actually watch how the price section approach this area. So let me let's say, for example, if you see the price does this right, you see a series of higher lows into resistance like this.

Okay, you want to avoid shorting right, because at this point the market has a higher probability probability of breaking out higher, rather than you know, reversing from resistance. And why is that and reason is simple: is because you see that there are buyers stepping in and that's why you have this series of higher lows higher lows, higher lows, higher lows coming into resistance. It tells you that the buyers are willing to buy at this higher prices. This is a sign of strength and there's a good chance.

The market could break out higher so avoid shorting, higher lows into resistance, and likewise avoid you know. Uh buying lower highs into support, see lower highs, lower highs, low highs, avoid buying lower highs into support. I hope you've enjoyed know this few trading tips in today's training. If you enjoyed it, then you can get a copy of this book.

Called price action trading secrets over here i'll put the link somewhere below this video, so you can get a copy of it uh with that's it. I wish you good luck. Good trading! I will talk to you soon. You.