Price Action Simplified
Today we will talk about three simple but effective price action patterns, which every successful trader must know:
1️⃣ Head and Shoulders Pattern:
This pattern indicates a reversal in the market. When the price forms a head and shoulders on both sides, as soon as the neckline is broken, the market moves downwards.
2️⃣ Double Bottom Pattern:
This pattern is formed when the price finds support at the same level twice and then breaks upwards. This is a strong reversal signal.
3️⃣ Break and Retest:
This technique is used when the price breaks a resistance or support and retests the same level. If the price holds this level, it is a strong entry point.
📊 In the chart below, you are shown these three patterns with live market examples:
Confirmation after breakout.
Using the Neckline.
Retest
📌 Remember: Learning to understand price action will help you start to trust indicators less and price more, which is the mark of a professional trader.