Trading With Sideways Price Action Area
Trading With Sideways Price Action Area
dotnettutorials.net/lesson/trading-with-sideways-price-action-area
In this article, I will discuss the two approaches to Trading with a Sideways Price Action
Area in detail. Please read our previous article, in which we discussed the Pin Bar
Trading Strategy. As part of this article, we will discuss the following pointers.
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1. Two approaches to trading with a sideways price action area
2. How enter?
3. How to exit?
4. Odd enhancer
A minimum of three candles are required for a sideways price action area break out.
Here are two approaches to trading the breakout designed to minimize risk:
Now that you know TWO tactical approaches to trade the breakout, let’s look at how to
recognize which OR breakouts are the best to trade. Again, I’ve created a quick checklist
for evaluating a stock’s price and volume action. Remember, these criteria are used to
find stocks likely to lead to a successful breakout and to define good risk points based on
the stock’s price and volume action.
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We are trying to identify the SM sentiment for the day. If Smart Money wants to buy stock,
we would see that on the open with heavy volume and a strong directional move. The
stock may gape at the opening, which shows that it may trend up the rest of the day.
1st candle having a lower wick indicates the price tray to move down, but Smart Money
enters to drive the price higher
1st 5-minute candle should be a wide range candle with a low wick or no wick with
volume
Stock in an uptrend with price above new demand
The next candle/candles should be inside candle be a doji or a shooting star or
narrow-range candle with less volume
The range stays within the top 2/3rd of 1st candle
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Odd Enhancer
Avoid if
3 action steps:
➡ Buy 1-2 cents above the second candle, preferably a Doji or shooting star if playing
long. The opposite of playing short.
➡ Upon entering your place, stop loss 2 cents below 1st candle or low of the last swing
low
➡ Target is 2R
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SMART MONEY ALWAYS BUYS FROM VWAP OR AROUND VWAP IF THEY WANT TO
BUY
See the pullback to VWAP OR 20 EMA. If the price pullback to VWAP EMA but is unable
to push and hold below VWAP, indicating that the buyer’s strength
Pullback condition
1. Low volume
2. Lower wick
3. NARROW RANGE CANDLE
ODD ENHANCER
Avoid if
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Let’s do an example
Big picture
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Sideways markets can offer numerous trading opportunities due to the predictability of
price bouncing between support and resistance. However, it’s important to recognize that
ranges don’t last forever, and the market can break out in either direction. Hence, staying
nimble and having clear rules for managing such transitions is critical. Always be aware of
market news and events that can cause a range to end and a new trend to begin.
In the next article, I will discuss the Pullback Trading Strategy in detail. In this article, I
explain the two approaches to Trading with Sideways Price Action Area in detail. I
hope you enjoy this article.
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Pranaya Rout has published more than 3,000 articles in his 11-year career. Pranaya Rout
has very good experience with Microsoft Technologies, Including C#, VB, ASP.NET MVC,
ASP.NET Web API, EF, EF Core, ADO.NET, LINQ, SQL Server, MYSQL, Oracle,
ASP.NET Core, Cloud Computing, Microservices, Design Patterns and still learning new
technologies.
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