Profits from identifying and trading recurring price patterns
| Strategy Type | Price Action Pattern Recognition / Classification |
| Market Outlook | Profits from identifying and trading recurring price patterns |
| Risk Profile | Moderate - patterns have statistical edge but require confirmation |
| Reward Profile | Consistent returns from systematic pattern trading (15-40%+) |
| Time Horizon | Short to medium-term (hours to weeks) |
| Iv Environment | N/A - pure price-based strategy |
| Breakeven | Depends on pattern accuracy and risk management |
| Primary Instruments | US stocks via CFDs, S&P 500 E-mini, NASDAQ 100 E-mini, Forex, Commodities |
| Mas Compliance | MAS regulated brokers required for CFD/futures trading |
| Trading Hours | Multiple sessions - US 9:30 PM - 4 AM SGT, Asia 8 AM - 4 PM SGT, Europe 3 PM - 11 PM SGT |
| Contract Size | E-mini S&P: USD50 per point; Forex: varies by pair |
| Settlement | Cash settled for CFDs and futures |
| Tax Treatment | No capital gains tax for individuals in Singapore |
| Margin Requirements | Standard CFD/futures margin |
| Cdp Account | Not required for CFD/futures |
| Singapore Relevance | Price action works across all markets and timeframes - Singapore traders can apply to Asian, European, and US sessions |
Price action is trading based on raw price movement from charts without indicators. It focuses on candlestick patterns, chart patterns, support/resistance, and market structure.
A pin bar is a candlestick with a long wick (2-3x body length) showing rejection. Bullish pin bars have long lower wicks at support. Bearish pin bars have long upper wicks at resistance.
Uptrend: series of higher highs and higher lows. Downtrend: series of lower highs and lower lows. Range: price moving horizontally between support and resistance.
Support is a level where buyers tend to enter, preventing price from falling. Resistance is where sellers enter, preventing price from rising. These are zones, not exact lines.
Best patterns occur at key levels (support, resistance, trend lines) with higher timeframe alignment. Context determines pattern reliability - not all patterns are tradeable.
Checking multiple timeframes for alignment. Higher TF sets direction/bias, trading TF for patterns, lower TF for entry timing. Trade only when timeframes agree.
When price breaks previous swing high (bullish BOS) or swing low (bearish BOS). It confirms trend continuation or signals potential trend change.
The last candle opposite to a significant move. Bullish OB is last bearish candle before rally. These mark where institutions positioned and often act as future support/resistance.
Grade A: Perfect pattern at perfect level with trend. Grade B: Good pattern at good level. Grade C: Acceptable pattern or level. Trade only A and B grades.
When a pattern breaks opposite to expected direction. Failed patterns can be traded in the opposite direction as they often lead to strong moves.
Price spiking beyond obvious levels to trigger stop losses before reversing. Institutions need this liquidity. Trade by fading the spike after reversal confirmation.
Expectancy = (Win% × Avg Win) - (Loss% × Avg Loss). Example: (60% × 2R) - (40% × 1R) = 0.8R expected per trade. Must be positive for edge.
Optimize on training period (e.g., 2 years), test on subsequent out-of-sample (e.g., 6 months), roll forward. Validates that optimized parameters work on unseen data.
Imbalance created by rapid price movement - gap between candle 1 high and candle 3 low. Price often returns to fill these gaps before continuing.
Reading candles for institutional footprints: displacement (large candles), imbalances (gaps), rejection (wicks). These reveal where institutions are positioned.
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