Day Trading Using Key Price Action Entries

Traders, welcome back to another price action trading lesson where we're going to analyze the S&P 500 and many futures, the price action rules work in every market and time frame. Right now what I can see that the bias of the market is neutral. There is no big trending structure in either direction and for the most part we are going sideways. So because I can see structure going sideways, initially I was mainly focusing on this option working higher and I was expecting new high to be tested following the trend line rule. But what I can see is massive spike back below the EMA. So once I saw such a massive spike down, this made me question the structure and now the wider downtrend seems a little bit more valid because we have massive spike down below the EMA. Now the structure, remember, is still conflicted and I have felt second entry long here, new high, first attempt to go long, pullback, second attempt to go long, failure, if there is going to be break below this bar. Can you take this felt second entry long? You cannot. There are two main reasons. Number one, we initially thought about this uptrend being main pattern and getting new high because we were quite sideways, okay. After this pushdown, we took into consideration the wider downtrend, which is not a bad play, but notice these two legs down are broad and the structure played out at one leg down, break, second leg down. I cannot draw wider trend like this. This is way too broad. It also has overshoot. So you can see why you cannot take this felt second entry long because we need some secondary trend in play, not broad, two legs down that played out and potential uptrend was the main pattern. So right now, basically, if I have conflicting variables like this, I simply wait and market continued to go higher. So now I was looking for felt second entry short to test the new high, but it was bad bar, far from the EMA, simply cannot take it and uptrend played out with a break, push to new stream. So you have a break, a new high, uptrend played out. Because we're starting to go sideways, I'm going to draw small consolidation. I have to follow the trendline rules. Let's see what's going to happen. I'm not really looking for trades because everything pretty much played out. We have consolidation and I am in the middle. I'm still not fully trusting the downtrend to the left because we're kind of moving away from it. The bearish bias is very small, but I can see that the market keeps breaking lower like this. So now what I can do, I can redraw channel like this, and see how price action is going to react. Okay, I have new low first entry short, pullback, and I have two-legged pullback to the upside. No wider channel, so uptrend played out again. So this is telling me, okay, there's probably not reversal. Break below EMA is confirming more of a bearish bias, and this downtrend right now is what I'm focusing on, and we need to test the new low simply because we have brought two legs up. That is telling us that there is no bullish reversal, no nothing. I have a new high first entry long feather, or how we call it, a lower high trade, but it's an inside bar, weak one for the most part above EMA, so I can't really take it. Weak bar. And I have felt like an entry long here. If you have felt like an entry long with a decent bar, you could have considered, but this bar is rather sketchy, doji with bullish body, not ideal, and market is correct. I was actually hoping for mini second entry short, new low first entry short, pullback second entry would be good, and even this downtrend played out with the break, push to new stream. So everything to the downside played out as of right now. Can you go long? You cannot. Okay? This is not typical range where you can buy. This is just big consolidation with lower high, so there's definitely bearish bias, and you have no bounces of the skinny level, so you need some, at minimum, felt second entry short above EMA, but even prefer some proven uptrend before you start buying. Okay, the market keeps going lower. The new low first entry short failure. Okay, you have a felt second entry short, but of course, you cannot go long above bearish bar like this. There is no reversal, no nothing. We broke below EMA, so now I cannot go long because we have a new high first entry, second entry long, but we broke below EMA significantly combined with the bearish bias, I cannot go long. In fact, I'm starting to take into consideration why the downtrend like this, because it fits the structure. You can see you keep making low highs and low lows even after channels, the short term ones played out. That's a generally good sign that there is some bigger pattern, low highs and low lows. We even have confirmations here. You have felt second entry long. This one is decent. Now, when I was watching this live, I wasn't fully trusting it just yet. Once again, kind of like brought two legs down, weaker bar, but more advanced trader can consider, especially if you're already playing the wider downtrend, you can consider, and you have significant push down, which pretty much makes you trust the wider channel. And now it's simple. We have a trending structure. So as a trader, I'm looking to go short at the key entry point, either EMA or the trend line. And I want to see second entry short at the EMA. You have a great second entry short here, but not full at the EMA. Had this second entry short been full at the EMA, great short opportunity we can consider, but it's not the EMA, so I cannot market. Market is correcting higher, although I have to respect the short term correction, break, push to a new high, and we have bounced all of our trend line. Okay? We have two legs up. Once again, market moves in pairs of twos, one leg up, break, second leg up. Our trend played out, and you have fifth confirmation of this channel. You have a new low, first entry short, second entry short, can't reset, first entry short, second entry short. And this is a decent trade to consider. You can sell above the EMA if you have a big trend line that is confirmed a lot. The more confirmations you have, you can sell above EMA like this, can get a lower high below EMA would be great, or a full second entry long. Nothing, just push phase happened. It's a shame. Lower high here is the easiest trade to consider to catch the new push phase down. We have a second entry short. I actually took this trade, it was my mistake because it's an inside bar, which is bad. And also you broke above EMA, EMA didn't even hold. This is generally what we do once we break above the EMA, we generally stay patient. I took this trade, it was mental mistake on my part. I also didn't take my break around this time I was supposed to take it. So I took this trade, but I'm not going to mark it. It's not a good trade to consider. It's an inside bar, we broke above EMA, also the push phase pretty much happened. So you need really something clean here if the push phase already happened. Now you have new low, first entry, second entry short. You have bounced off the trend line again, but it's only like first entry short. Another two legs up like this, but because it's only first entry, you can consider breaking your high. I'm going to get some lower high below EMA. Once again, no lower high below EMA. You technically have lower high here, but it's back above EMA. But more importantly, the bar is really sketchy, bullish doji bar, I can't take it. Okay, I don't think we can sell now because we broke the trend line. What's happening is probably a sign that buyers are a little bit stronger. And now we are very close to FOMC announcement. You can see there can be massive spike in volatility. So we generally don't trade like 30 minutes before and after the FOMC. So I'm just going to skip through this a little bit. You can see how messy it is. And at this point, I'm still not really looking for trades because number one, it's too volatile, but it's still part of this terrible consolidation. This is really ugly structure to be trading, and it's too much risk to look for trades while we are after FOMC and still part of this. Sometimes out of FOMC, after the news come out, you have nice clean trading structure either to the upside or downside, and you can be trading this, but because you're still part of this consolidation, this whipsawing up and down, I don't think it's safe to be looking for trades. I'm just going to fast forward a little bit. I'm basically hoping for some clean trend to be established and for us to get out of this consolidation. Okay, it makes sense pretty much in hindsight, but when you're watching this live, it's really too cluttered. Okay, we finally have a breaking new high. So this is what I wanted to see. You have one leg break, second leg up, brought two legs up. So now, finally, we have a felt breakout, uptrend played out, so I'm looking for felt second entry long below EMA, new high, first entry long, failure, can I get a felt second entry long? Well, technically I can, but it's all the way here, you know, after significant push already happened. I don't think we can take it, also getting a little bit late, so market is about to close soon here. So this is the overall structure for today. Once again, this week has been very boring to trade. It's hard to find great trading opportunities. So we have a few decent trading opportunities, but really nothing we would really want to see. Then we had FOMC, very choppy here. We have a tempting felt second entry short right here, which is decent trade, but you're still part of this consolidation, so you have to be a little bit careful. So this is a decent felt second entry short to consider because this leg up needs to get new high, but pretty much nothing after we broke out of the trading range. I've been talking to multiple traders and they even agreed with me on this, that the last two weeks are really not easy to trade. So you're definitely not alone if you're experiencing struggles trading the structure because it's really boring, not that many good trades, weak signal bars. So it's not a good period right now that we have. Last two weeks are quite difficult. A lot of traders are not even taking trades, they're 0-0 for the day. So this is normal. You're not alone. So something to take into consideration because you may feel like you're not reading this correctly or like you're doing something wrong, but it's really not the case. The market just doesn't seem that great. It's a cycle and we simply have to wait this cycle out because eventually a good cycle once again will come back. But I hope you had a good training. I'm going to wrap it up and I'm going to talk to you next time. Good luck with your trading.