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Trading Setups

Trading Setups Tutorial

Trend lines are amazing trading tools. Even traders who swear off indicators draw trend lines. Seasoned traders can see how price action interact with trend lines without drawing them. If you want to join their ranks, John Hill’s Trend Line Theory is an excellent place to start. John Hill is a co-author of Ultimate Trading […]

Yum-Yum continuation pattern is a delicious trading setup found in the Ultimate Trading Guide by John R. Hill, George Pruitt, and Lundy Hill. If we're a book analyst, we would issue a “strong buy” for this book for its variety of sound price-based trading ideas. Take a look at Yum-Yum and if you find it yummy, […]

Bollinger Squeeze is a trade setup by John Bollinger, using his very own Bollinger Bands. Bollinger Bands is a channel formed by two vertically displaced moving averages: one displaced upwards by two standard deviations and one displaced downwards by two standard deviations. The typical parameters refer to a simple moving average and standard […]

Dan Chesler discussed this candlestick trading setup in the Active Trader Magazine in April 2004 (“Trading False Moves with the Hikkake pattern”). Hikkake means trap, trick or ensnare. This trade setup seeks to profit from false breakouts. RULES FOR LONG Hikkake An inside bar The next bar has a lower high and lower low Place […]

The Sandwich Trade Setup

The sandwich trade is made up of multiple candles and involves an engulfing bar. It forms by the market going up or down sharply and then having multiple small bars follow it. After those small bars a bigger bar engulfs the previous small bars. This essentially forms a sandwich and you will get a better idea of what it looks [...]

This day trading setup by Jake Bernstein uses a moving average channel to figure out trend and key support and resistance levels. For our review, we will build a moving average channel with a 20-period SMA of highs and lows. Rules for Long Day Trade Wait for two consecutive bars to move entirely above the high of the channel [...]

Trading Rules – 9/30 Trading Setups This trading setup uses two moving averages: the 9-period exponential moving average (EMA) and the 30-period weighted moving average (WMA). However, the buy order above the high of the bar was not triggered. The next bar went entirely under the 9 EMA, setting up a conservative 9/30 setup. The buy order at the high of this bar was triggered[…]

Alan Andrew’s Pitchfork is catchy. It catches your attention with its unusual name and its striking pitchfork appearance. It also catches trends with a channel. Essentially, Andrew’s Pitchfork is a tool for drawing price channels. While two lines surrounding price are usually enough to draw a channel, the Pitchfork has an […]

Many price action traders claim that two-legged pullbacks are the most reliable trade setups. The variant we are reviewing today is from Al Brooks, who wrote three tomes on price action trading. These three books are not an easy read, but are extremely informative for price action traders. In his books, he [...]

Toby Crabel did some serious work on volatility patterns in price movement. The Inside Day/NR4 (ID/NR4) is one of the patterns he wrote in “Day Trading with Short Term Price Patterns and Opening Range Breakout“. An inside day is one with a lower high and higher low than the previous bar. NR4 is a bar [...]

Trend Line Trading

Price action traders can’t do without their trend lines. Trend lines are practical tools for tracking and trading trends. It makes sense to form trading strategies with this simple but effective tool. Many traders who seem to trade with a blank chart have in fact internalized the art of trend line drawing. They are able [...]