Language of Markets will be observing the 4th of July weekend. There will be no Live Sessions on Friday, July 4th. Sessions will resume on Monday, July 7th at 12:00 pm PDT. Have a safe long weekend with family and friends.

Language of Markets will be observing the 4th of July weekend. There will be no Live Sessions on Friday, July 4th. Sessions will resume on Monday, July 7th at 12:00 pm PDT. Have a safe long weekend with family and friends.

Learning Price Action Through Observation

Learning Happens when you’re open and curious and making observations from what you see. From there, you must be mentally balanced to take action on your observations.

In this post, I focus on the price action that happens in the pivot portion of a swing cycle. If you make observations of this area you will see a certain kind of repeating behavior that can help you understand and design methods for trading swings. You will notice that the market likes to wash everybody out of their positions before pivoting to continue its swing.

I look at two ways this shows up in the price action of a pivot. The first is an engulfing bar that expands and swallows at least 3 of the previous bars. The second is a Gap Swap where a WRB Gap will make an effort in one direction just to be followed by another WRB GAP that reverses that effort and direction and shows that the balance of power has shifted.

This is just a small part of what makes up a swing but it factors into my overall methods and trade plan. You can make observations yourself on pivots and see what you can learn.

Shane