99.99% Of Traders Make This Mistake (Price Action)

99.99% Of Traders Make This Mistake (Price Action)

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In today's Trading Beacon tutorial, we will cover a mistake that most forex and stock traders make when implementing price action trading strategies. Remember: It's important to use multi timeframe analysis in your trading strategy, otherwise you will not have the required confluence to take the trade.

Whether you are scalping or swing trading in your forex and stock trading strategies, it's vital to understand the price action patterns that arise, and all this will be explained in today's video.


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Here we have a market that puts in a large swing down, hits a level of support, and then reverses to the upside. As we move up we hit a strong level of resistance, and again reject to the downside.

If we draw a trend line connecting this high here, with these two points of contact, we can see that price is struggling to break above it. Eventually we do break the trendline on this series of multiple green candles here.

What follows is a severe decrease in volatility. This is shown through the fact that:
The size of the candles have gotten much smaller
Any directional move loses it’s momentum rapidly
Price is unable to break above short-term swing highs, or break below short-term swing lows
Neither buyers or sellers are in control

Eventually we see a sharp increase in volatility, as this green momentum candle forms, which is the biggest candle of the trading session so far. We break above this strong level of resistance, and then eventually pull back into it.

Now at this point in time, price is looking very bullish.
Broken a trendline to the upside
We have multiple levels of support that are holding
We’ve broken a consolidation to the upside with momentum
And we’ve even made a new swing high.

By all ideals, this pullback looks like the perfect to place a buy trade, so that we can jump onboard the bullish trend. After all, levels of resistance often become support when broken.

Here is the level of resistance we were just looking at a moment ago. Here is the consolidation that we broke out of to the upside. And here is the location we were considering placing our buy trade.

As you can see this turned out to be only a temporary swing low. After price pushed slightly higher, we had an extended pullback down, taking out that swing low. After this happens the uptrend resumes, and we carry on much higher.

So what exactly went wrong with this trade?


Foreign exchange trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts. Past performance is not indicative of future results. The information presented today is not meant for use in live trading.
This video is not a recommendation to anyone on how to spend or invest their money. Take all videos as my own opinion, as entertainment, and at your own risk. I do not assume any responsibility or liability for any errors or omission in the content of this channel. This content is for educational purposes only, and is not tax, legal, financial or professional advice. Any action you take on the information in this video is strictly at your own risk. TradingBeacon.com and all individuals affiliated with this channel assume no responsibilities for your trading and investment results.


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