The Authority’ on Price Action Level of forex traders. In 2016, Nial won the Million Dollar Trader Competition. Key market levels are the core foundation of all technical analysis and price action trading.
By focusing on the raw price dynamics and key levels in a market, we can remove the clutter and confusion that so many trading systems and strategies are full of, and instead trade from a clear and objective mindset. Note: All charts in this lesson reflect the daily time frame. Trading with the dominant daily trend is the primary technique I use to trade the markets. Much of my course is dedicated to trend analysis and teaching traders to trade simple price action strategies in the context of a trending market.
We can look for price action signals forming near levels of support and resistance that develop as a result of the natural ebb and flow of a trending market. In the example chart below we have the daily GBPUSD showing about the last 4 months of data. What I have done here is simply drawn in the obvious key support and resistance levels and then highlighted the valid price action trade setups that formed near these levels. Unfortunately, the market is not always trending, in fact it’s often said that markets spend more time consolidating and moving sideways than they do in trending conditions.
Fortunately, with knowledge of how to trade simple price action setups from key levels, we can effectively trade range-bound markets as well. In the example chart below we see the daily EURUSD from about the end of May to mid September of this year. We can see an obvious trading range that developed in this period of time and some price action setups that formed off the support of the range. When we see price approaching a recent swing point we can be on alert for price action setups forming near it. A recent swing high will often act as support in an uptrend, and a recent swing low will often work as resistance in a downtrend. Let’s look at a chart to see this more clearly.
In the example chart below we see the daily EURUSD from about mid-August until now. We can see that price came down and found support near 1. This swing point then became very important for the subsequent price action forming near it, acting both as support and resistance. For today’s lesson I am going to discuss how I use the daily 8 and 21 EMAs to highlight key levels in the market to trade price action from.