4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
The success rate is much harder to achieve with a quantitative simulation, due to the discretionary (human decision) factors – so I can’t put a % against this, but I will continue with my work here.
If you’re guilty of the first flow chart, try switch to the ‘get context’ flow chart, and watch how quickly you start filtering out bad signals.
Check out this example…

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
Above: Very hard to build value to a ‘sell trade’ here, based off the pin bar candlestick alone.
If you look beyond the candlestick, you can see the market is very bullish. That’s evdident by the higher highs, and higher lows being printed, which is the footprint of a bullish trending market
If you want to sell against that, you need to have really strong technical evidence that a reversal is likely to occur (I’ll cover that later in the tutorial).

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
Above: The ‘what happened after’ shot. As expected the bullish moment continued, because that’s what the market structure was screaming after. Market structure analysis through reading price action takes priority over candlestick signals (remember the flow chart above).
Any price action based signal is going to dramatically change in value depending what kind of market environment the trade setup forms in.
Lets take a look at a signal that fits within the market context…

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
Above: A candlestick signal that fits well within the ‘story’ price action is communicating here.
A similar structure to the previous example. This market is making higher highs, and higher lows – a bullish market, where we should be looking to buy only.A bullish rejection candle formed here, and off a trend swing level. The trade idea is within context and has a lot of technical value.
Above: The bullish rejection candlestick signal had good follow through, which is expected, because it was backed by many technical factors – aligning it with the market context.

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
2. Top Down Analysis is A Critical Step For Price Action Traders
You might have heard the term ‘top down analysis’ being passed around the Forex communities from time to time. This nicely complements the ‘getting context’ tip above.
Top-down analysis is the idea of aligning what’s going on in the market from a higher time frame perspective (top), and then stacking it with your trading time frame analysis(down) – to create strong synergy with your trade idea.
This is a critical, and an overlooked step when evaluating a trade idea by many traders who are trying to learn price action.
To begin, start your analysis from the top time frame – I recommend using the weekly chart for your entry point.
The weekly chart offers a lot of value, big technical details that you might otherwise miss on your trading time frame. I mostly use the top time frame (weekly chart) for gathering information.
I am looking for information such as:
Critical support and resistance levels: Levels which have proven to act as a major turning point in the market before.
Dominant technical features: Major trend line structures or price squeezing structures.
The market structure: Which way are we moving/trending? Where are we within a range? Is this a choppy consolidation period?
Previous weekly candle anatomy: Provides good insight to where price is likely to try move.
Then we move down to the trading time frame…
Because I am dominantly a swing trader, that’s anything between the “4 hour” to “Daily” charts. Occasionally I will use the 1 hour chart for an aggressive swing trade entry, but only when I can build very strong top down analysis.
When you’re on your primary trading time frame, it is business as usual – looking for details such as:
Market structures: trending, ranging, etc.
Turning points: trend lines, swing levels, support/resistance or whatever your trading system dictates is a technical feature.
A clear trade signal: usually a candlestick pattern, or some kind of price action event.
To illustrate why this is important, lets walk through an example where we disregard top down analysis and focus only on the trading time frame.
This example is a ‘what can happen’ if you ignore the bigger picture, so we will just check in to see what the higher time frame chart is communicating so I can make my point…
As per usual, I begin on the weekly time frame.

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
2. Top Down Analysis is A Critical Step For Price Action Traders
From the weekly time frame we gather the key information I would normally bring down to the trading time frame.
We can see price is testing a major weekly resistance level here. This is something we do not want to attempt to buy through.
It is a risky practice to try trade ‘through’ weekly turning points.
If anything, we could consider looking for sell signals off that level on our trading time frame.
Now we have the information in hand, keep it in mind. We will go to the trading time frame – in this case, the daily chart, and disregard what we’ve learned from the weekly chart.

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
2. Top Down Analysis is A Critical Step For Price Action Traders
If you were stuck in the mind-set of ‘trading a candlestick signal just because it’s there’, then you might take taken this.
This is what happened next…

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
2. Top Down Analysis is A Critical Step For Price Action Traders
Above: A classic scenario where the higher time frame analysis overpowers the single value of a candlestick trade signal on the trading time frame.
In this case, it is bad practice to try and challenge the market by buying or selling through proven major turning points.
Without the top down analysis element here, we could have easily overlooked the major level, not even knowing the danger was there in the first place.
This is the kind of ‘tunnel vision’ a lot of faster paced, lower time frame traders suffer from.
Top down analysis is extremely important when you’re thinking about trading counter trend. I am speaking from a swing trading point of view, where you’re looking to catch a really big move.
Higher time frame analysis actually becomes paramount in a counter trend trade decision!

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
2. Top Down Analysis is A Critical Step For Price Action Traders
Above: Starting our top down analysis, we can see the price is testing a major level.
We look to the left and see this level is a proven turning point, so we can only logically anticipate one thing – a good chance of a reversal occurring.
Next step: look for signals to fit that analysis on the trading time frame.

4 Crazy Price Action Forex Tips That Will Seriously Improve Your Trading!
2. Top Down Analysis is A Critical Step For Price Action Traders
Above: We step down onto our trading time frame and see a bearish candlestick sell signal.
This signal fits the context of the market, and aligns with our higher time frame analysis. An authoritative counter trend signal which builds a very strong case to position against the existing market trend.
If the signal follows through with this bearish pattern, it’s like to be a very extended move, as weekly levels tend to be the starting point for complete trend reversals.