ANTS ANALYSIS

Pure Price Action Strategy

Take Your Trading To The Next Level

Written by Antonio Guidi

 Within the trading industry, there exist millions of
different profitable strategies, yet there is only ONE
trading mindset.

Traders often spend years hopping from one

strategy to another in pursuit of consistency in their
charting analysis, unaware that the true
consistency they seek lies within their own minds.

Given this realisation, why not opt for the simplest

trading strategy? Forget about complexities as I
introduce you to the most straightforward yet
effective trading strategy that I've successfully
employed for over seven years.

This strategy, when coupled with prudent risk

management and a disciplined mindset, is bound to
elevate your trading endeavours to new heights!
This pure price action trading strategy can be used
on any currency pair, on any timeframe.

Like all strategies, it will not work all the time, so

expect some losses. However, when used correctly,
it will create trades with high risk to reward
opportunities to completely out weigh the losses.

Now, without further ado, let's dive straight into the

strategy.
 Step 1 - Identify The Trend

To begin with, we need to identify whether the

market is bullish or bearish. This will determine
whether we will be looking for a buy or sell
position.

To identify this, we look at the highs and lows of the

market as followed:

When the market is forming

higher highs followed by
higher lows we are in bullish
market structure and as
traders we should only be
looking for buy positions

When the market is forming

lower lows followed by lower
highs we are in bearish
market structure and as
traders we should only be
looking for sell positions
 Step 2 - Wait for the impulsive
move

We now need to wait for an impulsive move which will give us our
confirmation of the trend to help set us up for our position.

A bullish impulse will set us up for a buy position.

A bearish impulse will set us up for a sell position.

For the examples going forward i will be using a selling scenario

In this example price has formed a bearish impulse move breaking

bullish market structure by breaking below the most recent higher
low. Price is now bearish and as traders we should be looking for sell
positions
 Step 3 - Look for a corrective pull-
back

We have identified the bearish impulse move which has confirmed we

will be looking for a sell position due to the momentum in the market
from sellers, We now need proof that buyers are no longer active
within the market, and we do so by looking for a CORRECTIVE
pullback.

The way the market is pulling back is corrective meaning buying

momentum is low.

Price is building up and grabbing liquidity for a continuation to the

downside.
 Step 4 - Identify most probable
area for price to pullback to

Now we need to find where the most probable place is for price to
pullback to. Be patient and wait for this to take place. Avoiding any
early trades, stop hunts and retail traps.

This most probable place should line up with a key level of sensitivity
within the market such as a support/resistance level combined with a
key Fibonacci level.

The most probable level for price to pullback to is this level of

resistance in the market so this is where we will be waiting patiently
for price to pull back to.
 Step 5 - Identify Stop Loss Level

Now we need to establish where to place our stop loss to protect our
capital incase the trade does not go our way.

We use key levels of sensitivity again such as a support or resistance

level and to make it even stronger we can also use the next Fibonacci
level.

In this scenario the most logical place and only place to put our stop
loss above is the most recent high.
 Step 6 - Identify Take Profit Level

Now we need to establish where to place our take profit level.

The way to do this is by measuring the length of the initial impulse

move and using that as a guide to where price will decline to.

The orange line represents the length of the first initial impulse move.

We use the same length from the area of entry to determine our take
profit level.
 Step 7 - Set Limit Order

Now that we have decided our entry level, our stop loss level and our
take profit level, we can set a sell limit order and input all the correct
levels and trigger a position.
 Step 8 - Trade Management

Once in the trade we need to manage our position accordingly to

maximise on profits whilst limiting our risk exposure.

When price breaks the next lower low point we will be moving our stop
loss to breakeven.

If price continues to form bearish market structure we will be trailing

our stop loss with each lower high.
 Step 1 - Identify The Trend

In this live chart example we can see that price is up-trending, forming
higher highs followed by higher lows, implying that buyers are in
control of the market.

Until the most recent higher low has been broken we should not be
looking for sell positions
 Step 2 - Wait for the impulsive
move

Price has now broken bullish market structure with a strong bearish
impulsive move to the downside, which has formed a new lower low in
the market.

This is our confirmation that we can now look for sell positions.
Step 3 - Look for a corrective pull-
back

After the bearish impulsive move we can now see that price is pulling
back in corrective market structure.

This corrective form implies that buying momentum is no longer

active within the market.
 Step 4 - Identify most probable
area for price to pullback to

We now need to identify the most probable area for price to pullback
to. We can use areas of sensitivity such as support and resistance as
well as combine the fibonacci retracement tool to find this level.

In this scenario we can see that the 61.8% fibonacci level which is
known as the golden level in Forex lines up with a key area of
resistance.

This level has been chosen as our most probable area for price to
pullback to.
 Step 5 - Identify Stop Loss Level

Now we have our area where we wish to enter the market, we now
need to find the most calculated area to place our stop loss.

In this scenario the most logical area to place our stop loss is above the
next fibonacci level, being the 78.6%
 Step 6 - Identify Take Profit Level

To identify where to place our take profit level we first measure the
length of the initial impulsive move.

We then use this length as a guide from where we want to enter the
market which will give us an estimate for the next impulse move which
we are looking to trade.
 Step 7 - Set Limit Order

Now we have our entry, stop loss and take profit level we can set a sell
limit at our entry point and wait for the trade to be triggered
 Step 8 - Trade Management

Once price breaks through structure we will be moving our stop loss to
breakeven to protect capital.

If price forms a lower high we will trail our stop loss with market
structure.