Price action trading Part 3 Pivots and Trading Ranges

Navigating Trading Ranges with Price Action Pivots

Traders explore the financial markets seeking profits like adventurers crossing the desert in search of oases. But without reliable navigation tools to read the landscape and identify potential pitfalls, risk running in circles until your resources dry up!

That brings us to today's vital topic - harnessing price action context to decode trading ranges and pinpoint powerful pivots.

Recapping Trend Dynamics

In our previous video, we embarked on a journey understanding trending behaviors. We discovered how bullish and bearish sentiment patterns drive directional impulse and corrective moves. Along the way, we uncovered tools to:

  • Identify market bias
  • Trade with momentum
  • Spot trend exhaustion
  • Manage based on key reversals

With this orienteering checklist, traders can navigate emerging trends. But since no stock trends indefinitely, what about prolonged sideways stretches when Mr. Market gets sand-trapped?

Introducing Trading Ranges

When conviction runs dry temporarily, bulls and bears battle to an equilibrium. This sideways tug-of-war carves out horizontal trading ranges bound between:

  • Distinct swing highs and lows - The upper and lower extremes where rallies repeatedly fizzle out and sell-offs find their floor. These brackets contain the range-bound price action.
  • Higher lows or lower highs - The alternating sequence of minor peaks and troughs demonstrating lack of follow-through in either direction due to the market balancing itself.

Think of ranges like compressed springs - coiled energy waiting to uncoil with an eventual breakout!

The Pivotal Development - Role Reversal

The biggest clues come from watching range extremes get breached and retested. The swap between supply and demand here leads to role reversal!

  • Broken resistance flips to become support - Fueling upside breakouts
  • Broken support morphs into resistance - Capping bounce attempts

This shift reflects changing market psychology. New information updates perceptions, reviving stalled bull or bear campaigns.

By noting range high/low breakouts and especially subsequent retests of these broken pivots, skilled traders seize the best risk/reward propositions when trends restart. Talk about golden buy or sell signals!

Let's demonstrate via a case study. Grab your navigational charts as we traverse sideways markets!

Wrapping Up With Key Takeaways

In summary, sideways trading ranges offer observational platforms for noting pivotal price action context. The vital clues come from monitoring range extremes and role reversal signals!

We hope you enjoyed today's oasis hunting adventure traverse trading ranges using price action maps. Please share your feedback on which golden sand dunes and mirages we should uncover next in our Share Market Malayalam trading education series!

Price action trading trading ranges and pivots

Below given is a video from our youtube channel "Share market malayalam by Muhammad Riyas".
I have explained these concepts in detail in this video. 

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In this third installment of our Price Action Trading series on Share Market Malayalam, we're diving into the fascinating world of trading ranges and pivots. Building on the insights shared in the first part, where we explored trends and characteristics of trending markets, this session takes a closer look at trading ranges.

Discover the unique features of trading ranges and gain valuable insights into effectively drawing support and resistance. These are essential tools in the trader's toolkit, helping you navigate the dynamic landscape of the stock market. Whether you're a seasoned investor or just beginning your trading journey, understanding these concepts can empower you to make informed decisions in the ever-changing realm of the Indian stock market.

Stay tuned to Share Market Malayalam as we unravel more layers of price action trading, providing you with practical knowledge and strategies to enhance your trading skills. Happy learning!


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