Which is most successful price action strategy in day trading?

First we will see what is price action:

Price action is one type of technical analysis basis on the price movement over the time period. Traders can spot and interpret trends, breakouts and reversals. Many traders use candlestick charts since they help better visualize price movements by displaying the open, high, low and close values in the context of up or down sessions.

Candlestick patterns such as the Harami, engulfing patterns and three white soldiers are all examples of visually interpreted price action. Many short-term traders mainly rely on price action and the formations and trends that help them make trading decisions.

Now will discuss what are the 5 powerful Price action Strategies:

Pullback:

Many short term traders prefer to trade on Pullback.The concept is that you should wait for the price to “pull back” during a trend to get a better entry price. When the market is rising, and you believe it will continue to grow, you want to enter a trade at the lowest possible price. In these market conditions it will be great opportunity to trade on pullback, but make sure that your pull back are supported by volume.

Adding one Pullback chart for better understanding.

Breakout on Pattern:

These are the most reliable breakout patterns one can trade on, because here we will be taking confirmation from Price Actin strategy as well as Chart patterns, make sure that in All the price action strategy volumes should support the movement.

Adding one Breakout on Pattern fro better understanding.

False Breakout:

Many traders will trade on breakout, but some times they can be fake breakouts also, In order to avoid looses double check before trading on false break out. Beginners will all ways fall for this trap and enters what appears to be an ‘obvious’ breakout, only for experienced will double check .

Adding one chart for False Breakout:

Breakout Retest:

As we said earlier many experienced double check the breakout by waiting for retest to happen, Retest confirm us that break out is strong enough and price can be taken as strong support for further up move volumes should support the move as well

Adding one chart for Breakout Retest:

Breakout Buildups:

Some traders will try to take trades when stock is ready for breakout, to Identify the stocks which are ready for breakout this strategy will be helpful, A build-up is a tight consolidation area where we notice that the size of the candles gets smaller. But there is a risk involved here, some times it may lead to false break outs also , so always trade with stop loss.

Adding one chart to identify the Breakout buildups.

Here’s a great trick I’ll give out for free, I know it has helped plenty of new and struggling traders.

RSI and CI - Relative Strength Index and the Composite Index

You can read about these indicators and how they work and what they measure on your own, but this is how to apply them for an extremely positive probability of profitable trading.

Look at the blue vertical line. The two oscillators below are the RSI and then the CI is below the RSI. Look at the ‘structure’ of the RSI and the CI. Rather, notice how the peak or the top of both of those oscillators look relatively similar. This is a strong signal that price will pull back very soon. It was easy to short because price was near an important resistance level and the RSI and CI were at elevated levels. Let’s look at another example.

Now, here’s how you can apply this. Make the screens of both oscillators cover your entire screen. You don’t want to see price. It should look this this.

Then, you want to find all of the similar peaks and troughs you can find and mark them with vertical lines. It should look like this.

After that, make your screen normal again and then observe how price action responded to those levels.

Please SHARE and FOLLOW me to encourage writing more insights about the stock market.

Thanks and regards