[PDF]Tradingwith Rayner The Ultimate Guide To Price Action Trading 1

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RAYNER ТЕО


The Ultimate Guide To Price Action Trading





CONTENTS


DEDICATION О О о EEEE EEEE 4
АВБОШ НЕА ОШТО О ш ш хло ос хох ос ш ох ош хх 5
INTRODUC HON a и зен о о и са исле н аса кс с е ш а са с е 6
EVERYTHING УОП МЕЕО ТО КМОУ/ АВОПТ 5ПРРОКТ & КЕ5І5ТАМСЕ.........................................2...«в..ұ.иеө еее» 8
ӘМРБОБФИКЕББТАЫСЕЕ 52-222... 22.2. 3-22 8
КОЕ КЕМЕКВ АЕ 2... 2-22... 2-2. 9
DYNAMIC SUFPORT & RESISTANCE йж иы их л хи олш са у ка их ха лш ил а ы: 11
IMPRESE CORREC HVE MOVES T аллы о у ос ел ох ха л л хи шшс ки 12
THE 4 STAGES OF THE MARKETS EVERY SERIOUS TRADER MUST KNOW ................. «eee esee e eee eene e teen neon ete eeu 14
See E oct ЫОМ РНАЗЕ ———— —— ——À 14
ШО ЕДЕ S OE ext CCU MANTO РНА5$Е: ................................................................................................................... 14
arp «UMS MU СЕ Т А..................................................................................................................... 15
ПБ ЕРЕ ................................................................................. 16
aT ИЕР О И О ИРЕ МЕРКИ ИИИ 2 ға Ы................................................. 16
STAGE 4: ПЕСП МИЧ SE. ....eeuenonesen omen nonno 17
CHARACTERISTICS OF ОЕСОМ!МО РНА 5 Е: -<< + 17
НОМ ТО ТЕШ МНЕМ ТНЕ МАККЕТ 15 ТКЕМОІМС...................... ШИЕЛИ ОЧ 19
ТАОСТОКЕ ОҒ ТНЕ МАККЕТС ...................... „оонньоон нинки око ннавовннко ннан нано внано ванне ннан внаненнаноннннент ЭЛИ. 20
MKOVINGIAVERAGE К О Ох хоо EE. 21
FOWTXOTELEEWHEN THE MARKETIS RANGING ааш ао шома саша аш ышна: аы сы 24
BANGEEXPAINSION 22222222. ER UNUS 24
КАМСЕ СОМПКАСТОМ Ее 25





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КОР О ЕЕ К РАО ТЕ а О ЫЕ ЕН ЕН 72772727323 аа Ы................................... 28
CANDLESTICK BODIES GETTING LARGER ON CORRECTIVE MOVES... О О ОО О КО ОО Л........................ 29
EXAMPLE T E LM 29
EXAMPLE? е 30
EXAMPLE S ш ры уо ш оу о хоу оо ш о у уо ш хх о ш хо л» 31
FORGET MEMORIZING CANDLESTICK PATTERNS, YOU ONLY NEED TO KNOW THESE 4 THINGS................. 33
Mec ОИЕ 33
LENGTER ORRE VICCRE О ОООО О ОО О ооо о о ester serene eee eee are 34
IZE OFTHE CANDLE T А 35
С О5бЕ ОБ НЕВРО Б О О ОО у охо о ооо оо ар нее ОВ ВЕ Сара рана а пее 36
АОУАМСЕО САМОГЕЗТ!СК КМОМ/ГЕОСЕ (ТНАТ МОВОРҮ ТАГКЅ АВОЧТ) .................................................... 37
Еос е 37
ISTIS Ғ.................................................................................................................................................... 43
ЕИО Иса ЕН ЕЕ IESU nd ии авоооововевовооввововавовввввпвавопввввоповововевонвовввввоввовововввавовввапопооввввввавовввввваво 47
LIMEN И ее E ................................................................................................ 49
СЕ ОАЕ ТИЕ Т С .................................................................... 50
A PRICE ACTION TRADING STRATEGY ТО САРТОКЕ МОМЕМТОМ АМО АІРЕ ТКЕМ№ОС.................................. 52
INSIDE BAR TRADING ЅТКАТЕСТИ ТИИТ... n gg 52
СШИІГЕПМЕБ5:.............м.һмамненаммена ммен аман нн нн ОЬ, 53
ҒУЕТНЕК СОМЫІРЕВАТІОМ5 ТО АЭК ҮОУНОСЕІЕ:...........0..Һ.4 Қ еее « «фл ее, ЕИ 54
РМСЕАСПОМЛПКАЕИСНЕБОЦКЕЕ5 222222... 0 55
PRICE AC THONTRADING BOOKS а 55
PRICE ACHONTRADING BLOGS R шы ме сс NEN хох TENET 55
FINAL WORDS EROM RAYNER 22222222... 56
EOWMUCGEI Y OUS UGCEEDIS VALLE ОВОО Оа tro m STUDET TORIO ERE: 56
ГОМЕ МА ТИВИ ИЧА ОАЕ е 56
ШАНК ЛЗ ЛЕР Т е 58





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DEDICATION


This guide is dedicated to all traders out there, young and old. You are awesome
and lll see you on the battlefield.


The information contained in this guide is for informational purposes only.
| am not a financial advisor.


Any legal or financial advice | give is my opinion based on my own experience.
You should always seek the advice of a professional before acting on something |
have published or recommended.


Please understand that there are some links contained in this guide that | may
benefit from financially.


No part of this publication shall be reproduced, transmitted or sold in whole or in
part, or any form, without the prior written consent of the author.


Users of this guide are advised to do their own due diligence when it comes to
making business decisions and all information, products, and services that have
been provided should be independently verified by your own qualified
professionals.


By reading this guide, you agree that myself and my company is not responsible
for the success or failure of your business decisions relating to any information
presented in this guide.





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ABOUT THE AUTHOR


You've probably found your way to this guide from my website, or maybe a friend
passed it along to you. Either way, I’m happy your're here.


| created this guide because | feel that every trader should learn how to read price
action of the markets.


By learning how to read price action, you can better time your entries, reduce your
risk, and improve your trading performance.


Tradingwithrayner and this guide are my way of giving back for all the fortunate
things that have happened to me.





This guide lays the foundation to price action trading. It is not a “system” and
definitely not a “get rich quick” scheme.


l've given you a trading strategy as well just to get you started. If it can help just
one person to get closer to being a consistently profitable trader, then the month
l've spent writing this trading guide will have been totally worth it.


To all my subscribers, followers and friends out there, old and new, thank you for
the gift of support. | only hope this trading guide can begin to repay you for all the
time and attention you've given me. Here's to you and your continued success!








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INTRODUCTION


What moves the market?

It's not because there's more buyers than sellers.
Its not because of support & resistance.

It's because of buying and selling pressure.
Imagine:

| want to sell 1 million shares of "Apple."


And, at the same time, there are 10 buyers wanting to buy 100 shares of “Apple”
each. In total, their buying pressure is 1,000 shares.


Now, compare this with the selling pressure of 1 million shares from me.
Where do you think price is headed?

Down.

Why?


Because there’s more selling pressure than buying pressure. And not because
there’s more sellers than buyers!


In this case, there is one seller (which is me) against 10 buyers, but the price is still
heading lower.


The takeaway is this...
Price goes up because there’s more buying pressure than selling pressure.
And price goes down because there’s more selling pressure than buying pressure.


You can call this price action trading, order flow of the market, supply & demand,
etc. But let's stick to price action trading.





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So, here's what you'll learn:
© Everything you need to know about Support & Resistance
€) The 4 stages of the market every serious trader must know
© How to tell when the market is trending
© How to tell when the market is ranging


© Howto read the price action of any markets (and determine the strength and
weakness of it)


© Forget about memorizing candlesticks, you only need to know these 4
things


© Advanced candlestick knowledge that nobody talks about
© A price action trading strategy to capture momentum and ride trends


© Price action trading resources





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EVERYTHING YOU NEED TO KNOW ABOUT SUPPORT &
RESISTANCE


They are:
1. Support & Resistance
2. Role reversal
3. Dynamic Support & Resistance
4. Impulse & corrective moves


Let's begin.


SUPPORT & RESISTANCE


Support — An area on the chart with potential buying pressure to push the price
higher.


Resistance - An area on the chart with potential selling pressure to push the price
lower.


Here are a few examples:


* USDCAD,Daóy 1.36257 1.36594 1.36227 1.36462


| я
p^ Um үше


1.31100


Jy i
т Support


| Е
| V | i \ | =


и | il! =


|
Де i ү r | if |
(1 w Ц


|


! ке
И Wy ^y h н | а











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The Ultimate Guide To Price Action Trading








tw ul Ш
№ | ^i i" |
| Resistance


| ү, Т | y Ji^ N (| =
\ /' E





2015 1 Ѕер 2015 11 бер 2015 23 бер 2015 5 Ос 2015 15 Ос 2015 2702015 6Nov2015 > 18 Моу 2015 30 Моч 2015 10 Dec 2015


Remember...
... SUpport & Resistance is not a single line, but an area on the chart.


And when price breaks Support & Resistance, a role reversal occurs.


ROLE REVERSAL

Simply put...

If the price breaks below support, previous support becomes resistance.

If the price breaks above resistance, previous resistance becomes support.


Here's what | mean...





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2.23165
2.212


2.19415


/

| Hn li wis M, \ =
/ i Ny pr | д

| "i т wh PW қ v ^


Previous Support ^ іы |
turned Resistance i |








| | | 2.09410
| Т ж
н 2.06165

2.07535
00 700000 800800 901600 130с000 14Oc 08400





Nn. |

' | | | /
i

d қ i

ы | ТЕН ul А


2 2040 13 Ксу 0400 16 Мом 12:00 17 Мох 20:00. 19 Nov 04400 20 Nov 12:00 23 Nov 20:00 25 Now 04:00 26 Now 12:00 27 Now 20:00 1 0400 2 0 3 2000 7 0400 8 1200 9 2000 1 04:00


W


| Previous Resistance
h | turned Support








женната ети
3
fhe sided és


Now:


You've just learnt what Support & Resistance are, and their role reversal with one
another.


This is "static" Support & Resistance, where their areas are fixed on the chart.


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But wait, that's not all...





The Ultimate Guide To Price Action Trading





DYNAMIC SUPPORT & RESISTANCE


Support & Resistance can also move along with price, which is called Dynamic
Support & Resistance.


Dynamic support occurs in an uptrend, and dynamic resistance in a downtrend.
They can be identified using moving averages (l use 20 & 50 EMA).


This is what | mean...





* USDZAR, Weekly 14.324


21 15.47361 14.32027 15.37177 $ 15.75230
=
еа = кела
| 15.
cmm
Blue = 50 EMA











Dynamic Resistance sta


Mf) `


oN
ы қ

T ate |
Т,





—
ed =
-—
че -
15 May 2015 19 May 09:00 20 Мау 1200 21 Мау 20:00 25 Мау 0400 26 May 12:00 27 May 2070 39 Мау 04:00 1 Ум 1240 3 Ул 2800 4 Ха 0400 5 Ми 1200 8 т 2000 10 0 0400 11 т 1200 12 от 000 16 әт 04000 17 Ха 12:00 18Xun











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You're wondering:
Rayner, is there anything special about 20 & 50 EMA?


The answer is no. | use it because it fits my trading style. Ultimately you need to
find something that suits you.


Indicators are simply trading tools. It's how you use them that make a difference.


IMPULSE & CORRECTIVE MOVES


Markets don't move in one straight line.


There's an ebb and flow to it. And this process contains impulse & corrective
moves.


Wait, what's that?


Impulse move - "Longer leg" on the chart, which points towards the direction of the
trend. Candlestick size is usually larger, signaling momentum behind the move.


Corrective move - "Shorter" leg on the chart, which is against the current trend.
Candlestick size is usually smaller because of traders taking profits, without strong
pressure.


Here's a few examples:


+” USOJPY,Weeldy 123.159 123.475 121.073 122.039








Green = Impulse move е6 Nin
Red = Corrective move i a uad w
la, n e
Jue
1 :
! l | will Witten it [en
... кө
Т | Т! w/ Без
Hd z
M z
i к
| | |
al li
Ww i i ", А A
ОЛ, ! "ү


2 Jan 2011 27 Ее 2011 24 Арг 2011 19 мп 2011 14 Ао 011 9Ос 2011 4 Оес 011 29 јап 2012) 26 Ма 212 20 May 2012 15342012 95ep2012 4Nov2012 30 Оес 2012 24 Ғеһ 2013 21 Ах 13 16Jun2013 11ug2013 6 Ос 013 1 Оес 2013 26 әт 2014 23 Маг 2014 18 Мау 2014 13 312014 7 бер 2014 2 Ноу 2014 28 Оес 2014 22 Рев 2016 19 Ар 2016 14 015





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The Ultimate Guide To Price Action Trading





^ || \\ үк |

| JC | ru | ү!" d

| | | K н / UN
|


| p N
7 1


Green = Impulse move
=
Red = Corrective move
26 Ма 2015 7 Арг 2015 17 Арг 2015 29 Ар 2015 11 Мау 2015 21 Мау 2015 2 Jun 2015 12 мо 215 24Jun2015 6 Jul 2015





Here's a tip for you...

You can trade pullback on a corrective move, and breakout on the impulse move.
Depending on your trading style, both approaches let you get on board with the
trend.


Now, let's move onto to the next section...





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THE 4 STAGES OF THE MARKETS EVERY SERIOUS TRADER
MUST KNOW


The markets are always changing. It moves from a period of trend to range, and





range to trend.





You can break it down further into 4 stages:
© Accumulation
© Advancing
© Distribution


© Declining


STAGE 1: ACCUMULATION PHASE


Accumulation usually occurs after a fall in prices, and it looks like a consolidation
period.


CHARACTERISTICS OF AN ACCUMULATION PHASE:


© It usually occurs when prices have fallen over the last 6 months or more
€ |t looks like a long period of consolidation during a downtrend
€; Ihe 200-dau moving average tends to flatten out after a price decline


т” Price tends to whip back and forth around the 200 day moving average





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It Looks something like this:








Lower prices followed by long bs
"Ми. | periods of consolidation |


lu
"1
"ll


ММ, и, “ -








| 1.06620
| 1.05220


рг 2015 6 Мау 2015 28 Мау 2015 19 мп 2016 1302015 4 Aug 2015 26 Aug 2015 17 Sep 2015





N
M Ш M, Ы =
UM / | ХА, |
|


1 29 Aug 2014 22 5ер 2014 14 Ос 2014 5Nov2014 27 Now 2014 19 Оес 2014 14 ап 2015 SFeb2015 27 Feb 2015


STAGE 2: ADVANCING PHASE


After the price breaks out of the accumulation phase, it goes into an advancing
phase (an uptrend).


CHARACTERISTICS OF ADVANCING PHASE:


e It usually occurs after the price breaks out of the accumulation phase
е The price forms a series of higher highs and higher lows


e Short term moving averages are above long term moving averages (e.g., 50
above 200 day ma)


• The 200 day moving average is pointing higher
е [he price is above the 200 day moving average


It Looks something like this...





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мА”


М. x


Qt


! f $ 8.
А „Ае gt


іш A р. E

ма
GR мм B
т / I nud — ;


Breakout of accumulation phase








STAGE 3: DISTRIBUTION PHASE


Distribution usually occurs after a rise in prices, and it looks like a consolidation
period.


CHARACTERISTICS OF DISTRIBUTION PHASE:


© It usually occurs when prices have risen over the last 6 months or more
€ |t looks like a long period of consolidation during an uptrend
€; [he 200-dau moving average tends to flatten out after a price decline


© The price tends to whip back and forth around the 200-dau moving average





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It Looks something like this:





v GBPAUD, Dally 2.16618 2.18672 2.15592 2.17438 f 1.93640







M yel " af "al |


y W pns


Higher prices followed by long ES
| —
i e


periods of consolidation








STAGE 4: DECLINING PHASE


After price breaks down as a result of the distribution phase, it goes into a declining
phase (a downtrend) and consists of lower highs and lows.


This is the stage where traders who do not cut their losses become long term
investors.


CHARACTERISTICS OF DECLINING PHASE:


© It usually occurs after the price breaks out of a distribution phase
© The price forms a series of lower highs and lower lows


9 Short term moving averages are below long term moving averages (e.g. 50
below 200 dau ma)


© The 200 day moving average is pointing Lower


© The price is below the 200 day moving average





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It Looks something like this...


lh. P^ 200 period MA
a" уч a s — M ma P uuu 2 = pointing lower


т. Кы





т ВСОЦ50,Оаду 47.493 48,046 46.507 47.756








43.970
ау 2013 23 Мау 2013 14 ап 2013 & 2013 30 5й 2013 21 Ад 2013 12 Ѕер 2013 4 Ос 2013 28 Ост 2013 19 №» 2013 11 Оес 2013 6 јап 2014 28 јат 2014 19 Рев 2014 13 Ма 2014 4 Арг 2014 28 Арг 2014 20 Мау 2014 11 Уот 2014 3 41 2014 25342014 18 Азд 2014 9 бер 2014 1 Ос 2014 23 Ос 014 М” 2014 8 Оес 2014 1 Оес 2014 23 Зап 2015


So, you've learned what the 4 stages of the market are, and the key
characteristics to look out for.


Now, let's move onto the next section...





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HOW TO TELL WHEN THE MARKET IS TRENDING


There's a famous Wall Street saying that goes like this...
Question: What is the trend of the market?

Answer: What is your time frame?

You're wondering:

What does this mean?


This means there are trends on different time frames. You can have а
downtrend on a 5 minute chart and an uptrend on a daily chart.


Here's an example...





| jon


Wl ІШ
a Ди qn A |” Mi


Uptrend on USD/CAD (Daily)











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л Р
| | | А) ынтаны


|
at н d


Т,


| | juna


^L


[^ АМ, |
Г ||
T


|








So, now you understand that trends can exist on different time frames.
Now... let's learn how to define a trend objectively.


There are two ways you can go about doing this:


©® Structure of the markets
€ Moving average


STRUCTURE OF THE MARKETS


The market is in an uptrend when there's series of higher highs and higher lows.








Series of higher highs and higher lows


| p
— | "| ii
M ^ қ
| OW


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il
jl


ний i
| i | ^ тың КТ,
Ті


—— at
NN,

i t "illi ! il

1 м 1 |


i i Т
1, IL h | !
a a








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Likewise, in a downtrend there's a series of lower highs and lower lows.








Series of lower highs and lower lows w


ni
hy


І
"ыы іш


үйе,


og
Muri eod me |


%


|


uh ==
M We Mt











MOVING AVERAGE


Alternatively, you can use moving average to define the trend.


Here's how you can do this:
@© 20 ma - Short term trend
е 100 ma - Medium term trend


Ф 200 та - Long term trend
If 20 ma is pointing higher and the price is above it, then the short term trend is up.


If 100 ma is pointing higher, and the price is above it, then the medium term trend
is up.


If 200 ma is pointing higher, and the price is above it, then the long term trend is
up.





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Let's look at a few examples:





USOCAD,Daéy 1.39366 1.40009 1.38541 1.39475


Red = 20 ma
Brown = 100 ma
Black = 200 ma


Me А


М
A | г ч M i


init |


а М | Fi E Short term trend is up
| ңі A Medium term trend is up
еее i^ ы; Long term trend is up








С Red = 20 та
=100та
Black - 200 та 1


|


---


Short term trend is down
Medium term trend is flat
Long term trend is up











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Short term trend is up
Medium term trend is up
Long term trend is flat


If you want to learn more, go watch this training video here.


Now, let's learn how to identify a range market...





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HOW TO TELL WHEN THE MARKET IS RANGING


A range market is contained between Support & Resistance.


A textbook example looks something like this:


„А
А ^ М | |














ty |
y V^ Y | MW


Now, before the light bulb in your head goes off with "buy low and sell high," | want
you to see the reality of trading range markets.


Because, in the real world, you get variations like:
€; Range expansion


€) Range contraction


RANGE EXPANSION


This occurs when the market does a false breakout and trades back into the range,
thus expanding the "space" between Support & Resistance.


Selling at resistance would get you stopped out as the price breaks above the
resistance only to trade back into the range.





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An example:





Range expansion
>>>