Welcome, guys, to this Price Action masterclass, where I will teach you all the technical concepts, like double bottom, start pattern, trap trading, and where to buy and sell. I will teach you with multiple examples. We will use forex charts for the international market and the American market. But this concept can be applied to the overall market as well. All the time frames will be the same. And it can be applied to the forex market and gold market as well.
So let’s start the blog, and read the whole blog.
Understanding 24-Hour Assets and Timeframes:
The 24-hour assets are a little different. In these, we have to consider 15 minutes as standard, and if it shifts to 5 minutes, then it is called scalping. Intraday trading is done in 15 minutes. In 5 minutes, we can call it scalping. In 5 minutes, it will be scalping in the 5-minute time frame. Okay, and if you want to do a swing trade, then it can be done in 1 hour, or it can be done in 30 minutes. So this swing trade will work, okay, so now the analysis is like.
First, the swings come from top to down. So, the first time frame that we have, which one should we look at if we want to do a swing trade? 4 hours. Okay. Here we have to use 4 4-hour 4 hour time frame is very important for us. 4 4-hour time frame is one of the most important time frames. Which people look at whether it is Bitcoin or Forex, or Gold? We use 4 4-hour time frame to make important levels.
Why a 4-Hour Time Frame Matters:
Okay, so we have to open a higher time frame. And what do we have to understand from this higher time frame?
Trends and all, do we have to understand trends? No, no, no. We don’t have to understand any trend from this higher time frame. Because we don’t even have to hold that long. We just have to bring important levels to a higher time frame. If you bring levels. Then that is the most important thing in 4 hours. Don’t look at the chart pattern in 4 hours, because suppose a chart pattern is being made.
Let’s say there is a breakout here. Pole and flag are being made. The market broke out. The market broke a pole and flag. So get this target. So, this target. How long did it take to hit the target? It took 6 days to hit the target. 6 days you will hold for 6 days? Then it’s fine. You will do it for 6 days if you think you have to cut it into 1-2 days. Or you have to cut it into 2-3 hours. Or you have to cut it into 1.5-2 days. Then you don’t have to look at it.
Anything else in this time frame? Just levels. So don’t look at the chart pattern, trend, or market structure. You have to make important levels here, and nothing else.
Creating Your Watchlist for Forex Trading:
Now I am opening my watchlist. So, where do you have to make watchlists? For forex. So there are many watchlists. You have DXY, Dollar. You can trade in DXY. If you want, you can trade in DXY through Exynos. DXY tells you the strength of the Dollar. I opened EURUSD.
So what I can see right now. The important levels have broken here. Like it broke here, okay. When analyzing the chart, the first step is to identify all the key levels. On the 4-hour timeframe, this means marking areas of support and resistance that define the market’s structure. These levels help you understand where the price might react or reverse.
Okay? So this is what you should do. Nothing else. Now we should shift the time frame to a smaller time frame. If I shift to 1 hour.
Swing Trading vs Intraday: How to Decide:
The next step is to define your trading plan. Are you preparing for a swing trade or an intraday setup? Once you decide to execute the trade, your approach should align with that plan. On the main timeframe, start by analyzing the chart to identify any visible patterns. Studying these formations helps confirm whether the market structure supports your trading idea.
Can we study what it is called? Can we make a trend line? Can we see waves no. 1, 2, and 3? So we can see a trend line that there is a good market here. There is the first touch. Second touch, Third touch, Okay. So here is the breakout. So, will you prefer the breakout?
In a swing trade, should we prefer a retest? In swing trading, you can take a reversal directly but avoid breakouts. Instead of a breakout, prefer a breakout and retest. Trap is fine, reversal is fine.
At this stage, we wait for the market to retest the level. The key question is whether the retest will hold or fail, potentially forming a trap. Next, assess whether the current candle provides a strong entry signal. On closer analysis, you can also identify another level here, where patterns such as a head and shoulders or a double top become visible, offering additional confirmation for the setup.
Recognizing Patterns and Levels:
On the higher timeframe, you can spot a clear double top formation, while the smaller timeframe reveals a head and shoulders pattern. This area aligns with a higher timeframe resistance level, making it a significant supply zone that traders should pay close attention to.
After marking a minor level, the ideal entry point appears on this breakout candle, which shows strong momentum and clear confirmation. Placing a stop loss just below the structure helps manage risk effectively. Since this setup fits a swing trade, a slightly larger stop loss is acceptable, as the trade aims to capture a broader price movement over time.
I can put a stop loss in a swing trade. If my target is big, my target is here. If my target is logical, where do I have to go? My target can be made up to here. My target can be made up to here Let’s see if the risk reward is matching If the risk reward is matching. Then we can take the trade. Target is coming 85 pip. Can you take a stop loss of 80 pips? You have to leave. What can we do best here? Let’s shift to the 15th time frame. Let’s make one more time frame smaller. Let’s see if we get a better stop loss.
When a candle is too large, it can be difficult to find an ideal stop loss position. In such cases, a practical approach is to reduce the candle’s size by half and place the stop loss slightly before the midpoint. This method helps manage risk while maintaining a reasonable risk-to-reward ratio. With this setup, you can enter confidently, knowing that both your stop loss and target are strategically aligned.
The level we identified was drawn from previous price action and can be clearly seen on the one-hour timeframe. You might notice that the market is moving sideways, which often happens during low-volume periods, such as nighttime trading hours. For example, activity tends to slow around 2 a.m. or late evening and picks up again during the day. In this case, the trade reached its target within two days because the analysis was done on a slightly higher timeframe. Remember, it’s not always necessary to stay fixed on the one-hour chart; sometimes, shifting to a different timeframe, such as 15 minutes or 4 hours, can provide better clarity depending on market conditions.
Identifying Strong Supply Zones:
Now let’s open something else. I will open a 4-hour time frame, USDCAD. Now we have to make an important level here. Is this a very important level? Is this a very dangerous supply zone on the way? Correct? Yes. And we can see that this is also a level. The market moves from here. Okay, done. Is my work complete? From 4 hours?
Can we draw one more level here? It will become a demand zone if the market comes back. What kind of trend is this? Uptrend. But 4 hours is just to find levels. It’s a big time frame only to mark levels, not trade from it.
From Levels to Market Structure:
Now the level is here and here. What’s the use of this level when the price is far? I can make a trend line, but will it help? No, it’s only drawing. An expert does simple things. Don’t draw unnecessary trend lines.
After 4 hours, shift to 1 hour. Now see the trend, see the market structure, see the pattern. If there’s no pattern, create a story.
Every Trade Needs a Story:
Write this down. If you want to become successful in trading, you need to create a story for every trade. Whether the story is right or wrong doesn’t matter. If you can’t follow your own story, you can’t trade.
The market gave a bullish breakout, broke an important level. It’s in a push phase. We know we will buy in the push phase, make a big target. If the market gives an evening star or double top and closes below the level, we can sell. Or we can exit and buy again.
Build Stories, Not Predictions:
If it does this, fine; if not, leave it. Open 5 forex pairs, maybe 2 have a story, others don’t. Still, you will earn. Keep expectations low. You’ll find a story in 2 or 3. That’s enough.
Breakout Qualities and Trade Examples:
Let’s look at past examples. Market making higher lows, higher highs, pullback. All breakout qualities: test level, take pullback, breakout again. This candle breakout is beautiful. Market-tested level, then broke it, gave the target.
So we made a story: if a breakout happens, we buy. That’s how you make a story every time.
Using Alerts for Smart Entry:
Now I mark levels in USDCAD. I’ll put an alert at 4 4-hour resistance or supply zone. When it breaks out, I’ll confirm short below that. I respect only big-time frame levels. Small time frames don’t matter much.
Why do people overtrade? Because they make too many levels in 5 or 15 minutes. I focus on 1-hour or 4-hour levels. Market breaks out, pulls back, hits target, returns. That’s how it works.
Gold Analysis and Stories:
Open gold in 4 hours, then weekly. Gold gave a breakout recently, like in 2009 or during corona. It’s rare. You can’t always predict it. When it comes down, you sell and get the target.
It’s not easy to buy or sell. You need a good story. Trend is up. Either buy on dip or sell after retest.
Plan 1: Buy on dip, mark levels where the market takes support. That’s dip level.
Plan 2: Important resistance can be a sell zone after a retest.
If it falls from this zone, I can sell.
Plan 3: Fake out. If the market makes a super green candle, it’s a fakeout buy.
So there are only 3 stories for gold: buy on dip, sell on retest, and fakeout.
Trading Psychology and Mistakes:
Psychology matters. You get scared, enter fast. The main problem is a lack of technical training. Knowing candles isn’t enough. Until you plan 2–3 stories, there’s no meaning.
Crude Oil Analysis:
Open crude oil 4-hour time frame. Look at the trend, uptrend after downtrend. It’s taking a pullback. Make levels, move ahead. Important levels: 85 support, key resistance.
In 1 hour, the market will consolidate. If a breakout happens upward, take the first trade with half the quantity, and second on retest. Same for sale. If SL hits, lose half only. That’s how you plan.
Bitcoin Levels and Scenarios:
Open Bitcoin in 4 hours. The market has never closed below 61,000 since February. That’s a strong buy on the dip level. Resistance above.
In 1 hour, downtrend, lower highs. Sell only if level breaks. In 15 minutes, intraday traders can take a small target, cut, and exit.
If a strong green candle breaks out, buy on reversal. Breakout trade has a retest, reversal doesn’t. Remember that.
Story 1 for Bitcoin: buy on a strong breakout.
Story 2: sell below 61,000.
Nothing else.
Building Watchlist and Practicing:
Best way to trade: go to a big time frame, mark level, go small, find a pattern, breakout, or trap. Practice on watchlist, Bitcoin, gold, silver, Dow Jones, NASDAQ, DXY, crude oil, NZDJPY, EURCHF, etc.
Make levels on 4 hours, plan in 1 hour, trade demo in 15 minutes.
Scalping Strategy:
For scalping, open a 15-minute chart. If oversold, see double bottom, neckline breakout, shift to 5 minutes. Small target, small stop loss. Scalper doesn’t aim for big gains.
Three types of trades:
- 4-hour levels,
- Intraday (1 hour),
- Scalping (15 and 5 minutes).
Conclusion:
Thank you all for reading this blog. I hope this breakdown helped you see how simple and powerful Price Action Trading can be when you focus on levels, structure, and clear stories instead of overcomplicating things. Remember, it’s not about predicting the market; it’s about understanding how it moves and reacting with discipline. Whether you trade Forex, gold, or crypto, these same principles apply. Keep practicing, keep refining your stories, and with time, you’ll start to see the market much more clearly.
FAQs:
1. What is Price Action Trading?
Price Action Trading focuses on analyzing price movements and patterns on charts without relying on indicators.
2. Why is the 4-hour timeframe so important?
It helps identify key levels of support and resistance that guide all trading decisions across markets.
3. Can Price Action Trading be used for any market?
Yes, it works for Forex, gold, crypto, and even indices since price movement principles remain the same.
4. What’s the difference between swing trading, intraday, and scalping?
Swing trading uses higher timeframes like 4 hours or 1 hour, intraday focuses on 15 minutes, and scalping works on 5 minutes.
5. Why should I create a “story” before every trade?
A trade story gives structure and discipline, helping you follow a clear plan instead of trading emotionally.
6. How do I manage risk in Price Action Trading?
Always set logical stop losses near key levels and ensure your risk-to-reward ratio makes sense before entering a trade.