E.G. Price Action - NinjaTrader
The E.G. Price Action is a powerful tool for validating trade entries, especially when used alongside the E.G. Trigger Point levels. At its core, price action is the analysis of historical price behavior to forecast future market movement. Traders rely on this approach to read the market without lagging indicators, just pure price data.
The most common tools in price action trading are candlestick patterns and price bars, which reveal key data points like the open, high, low, and close within a specific timeframe. Interpreting this information helps traders understand the behavior of buyers and sellers, and more importantly, who’s in control at critical levels.
When the market approaches an E.G. Trigger Point, the E.G. Price Action indicator goes to work. It automatically scans for specific candlestick formations, such as engulfing patterns, pin bars, or consecutive candle setups, and highlights them with on-chart arrows and sound alerts. This added layer of confirmation strengthens trade decisions by aligning real-time price behavior with pre-identified key levels, enhancing confidence and confluence in your entries.
The E.G. Price Action is seamlessly integrated with the E.G. Trigger Point levels attached to your chart; it generates an alert (i.e., sound or an arrow sign appears on your chart) when one of the following types of candle patterns are observed once the market reaches the E.G. Trigger Point levels:
- Key Reversal Candlestick (Engulfing) – A reversal candle shows a clear sign of change in trend direction. For the bullish reversal setup, the price opens below the previous low and closes above the previous high. For a bearish reversal setup, the price opens above the previous high and closes below the previous low. According to the definition, the key reversal candle must have a gap-up opening.
The first candle represents the mass participation of the buyer and seller in a particular direction, as shown in our example the first candle was a big bearish candle which shows the seller’s participation. The second candle opens the gap down, indicating a powerful down thrust. As in the second candle, such a gap-down move is rejected and the price did close above the previous high. Essentially a key reversal candle hints a change of market direction. - Three/Two Candle Pattern – three/two consecutive candles with identical colors.
- Pin Candle – It has a long tail, it represents a rejection of price which is an indication of a possible reversal in the direction of a trend. For the bullish pin candle, the lower tail takes up most of the candle. For the bearish pin candle, it is the upper tail that dominates. It has a long tail which graphically represents a sharp rejection of price. With a long-tail pin, a candle breaks a support level, and resistance tricks the trader into entering in the wrong direction.
Trading platforms: NinjaTrader 8.
Instruments: All the instruments that the E.G. Trigger Point supports.
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