In this short text and video (scroll down for video) article I outline the Simple Price Action Trading principles that allowme to find "Levels of interest" that offer up what will potentially be the start of the next significant movement.
This logic can be used on any time frame and on any instrument to help to identify high probability trading locations based purely on price action.
I use this on a higher time frame to identify a potential starting location for the next potential price action movement as well as to see if there is a larger than normal volatility based target available to me.
The start of the move down has been highlighted and price has retraced back to that location of interest and it is now time to "deploy the strategy"
As price moves up the end of the move down can now be identified and used as the lower location of interest both to re-evaluate new trading opportunities and to use as a suitable targeting location
Price moves away from the upper location of interest and reacting off the lower location of interest. Trade options can now be reassessed.
As price pushed away from the lower location of interest in the chart below it is currently "between levels of interest" and effectively signalling a wait situation for any new trading opportunities.
Price Action eventually moves back to the upper location of interest where trading options can be reassessed and the strategy in use can be "deployed" once again.
As price moves down to the lower price action level of interest again. Trade options assessed and strategy deployed
Price action once again moves away from the previous lower level of interest but this time runs through the upper level of interest. The upper location can be assessed for new opportunities and deploying the strategy in this case continuation through the upper level of interest.
As price has now moved past the highlighted levels of interest the procedure can be started again to "identify levels of interest" near the current levels of price action activity and evaluate new trading opportunities