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5 Price Action Rules EVERY Trader NEEDS To Know:
1. Trendline Rules
Trend lines are the identifiers and connectors of resistance and support in chart patterns.
Trend lines are identifiers of the trend in your trading time frame.
Vertical trend lines must be drawn from left to right to identify one of the following:
A trend of higher highs signaling an uptrend.
A trend of higher lows for support in an uptrend.
A trend of lower lows signaling a downtrend.
A trend of lower highs for resistance in a downtrend.
•Trendlines show the path of least resistance.
•After a trendline break a new extreme is created.
•Trendline breaks can signal a reversal in the current directional bias of a move.
•Trendline breaks can also signal a correction of the current move or that a new trend has begun.

2. Trading Range Rules
A range bound chart has a defined level of support where buyers come in at that price so it does not go lower there multiple times. A range bound chart also a defined level of resistance where there are no buyers above that price so it does not go higher there multiple times.
A range bound chart starts to convert to a trend after price breaks above resistance or below support and starts to move away from the established price range. Buying support and selling resistance is rewarded on a range bound chart.
•Price action ranges show congestion between buyers and sellers.
•Most breakouts fail the first few times.
•Most breakouts pullback to the previous range before continuing in the direction of the breakout.
•Buy low sell high.

3. High Probability Setup Rules
A high probability entry point for taking a new position is simply when their is a higher probability of one thing happening over another next based on a signal.
Examples of these are buying dips in uptrends or rallies in downtrends. Entering a failed breakout of a range that fades back inside the previous resistance or support. Extreme oversold or overbought levels that move to extremes in deviations from the mean of the 20-day moving average. Finally, a breakout of a range and a new trend signaled by a new high or low over a specific time frame.
•Second chance entry points in the direction of the primary trend.
•Failed breakouts against the trend.
•Failed extreme moves at peaks and valleys.
•Confirmed higher highs or lower lows signaling a trend has begun.

4. Don’t Fight The Trend
The most dangerous rule any trader can break is the rule to not fight the trend. Huge losses happen when a trader finds their self in a position on the wrong side of a trend and doesn’t take their stop loss and the small loss turns into a huge loss. Profitable traders stay with the path of least resistance, if they do take a counter trend trade after an extreme oversold or overbought level their position size is small enough and their stop loss is tight enough to exit with a managed loss when wrong.
•The market doesn’t have to reverse, it can keep trending.
•Picking tops and bottoms is a high risk low probability trading strategy.
•Trendlines show you the current trend regardless of your opinions or predictions.
•In bull markets thing long, in bear markets, think short.
5. Signal Candle Rules
A candle that shows confluence with other technical indicator signals and setups increases the odds of success at entry. A bullish candle with a bullish moving average crossover confirms the signal. A bearish candle at an overbought reversal signal in the RSI conforms the odds of a move to the downside. A candlestick pattern can confirm another technical setup.
•Signal candles confirm momentum for setups.
•Bullish candles can confirm long signals.
•Bearish candles can confirm short signals.
•Most strong moves start with big candles in the direction of the signal.


Trading is the ultimate challenge because it requires an uncommon level of personal growth & development.
The opportunity for independence, financial freedom, and limitless potential is available. But you can't bypass the development phase and skip directly to the rewards phase.
Before opening a position think in terms of what could go wrong with it and how you will react. Mental rehearsal will help you a lot to stick to your trading rules when in position.