Understanding the Patterns and Price Action, Manipulation idea.
Candlesticks Are showing the same price reversals as a line chart but with a much more information.
Also shows signs of manipulation, which mostly are shown as a long "tales" higher or lower of the candlestick's body.
As You can see, this tales or manipulation signs are not always appears at the point of price reversal on the line chart, what does it tell us?
Smart money are following the fundamental chart moves (same as other market participants) using a better price. But most of the crowd - I would say simpler - "Crowd" is using the worse price, and placing a stop losses at the places - where Smart money are actually entering a trade.
On a largerperiod candle it will look like a tale, on a smaller it will look like accumulation.
I prefer using a multiple timeframe analysis and candles, to get the same information as those - using VSA or some other methodology to recognize smart money moves on the chart.
Volume is probably the most powerful indicator of all ...(everyone is saying that), but:
The most of the volume is hidden, as for example in forex we're seeing only our broker's tick volume, or the volume - the broker want's us to see.
In futures - if we're trading EURO Currency futures, the price is changing in relation to the whole world's EURO turnover, and traders around the globe are trading the same instrument, but on different platforms, exchange's, using different brokers etc. so we actually don't see the whole volume.
Using volume is good if you like, but think globally.
Candlestick patterns please read carefully:
Each candle represents time period (e.g. one day)
If after one bullish candle next candle is breaking through previous low and closing above previous open, close, or 50% (sometimes even lower 5-10%, but the body in comparison to the candle's fill range must be smaller then tales or a tale) - market makers have used a low price to enter the market where the stops where. The longer the tale - the more it is correct.
The price was going down (e.g.) 1 day, but with no tales on the candles the same time (or less) it took the price to cover the drop (raise if bullish market) and closed above (beyond in bullish market) the 50% of the previous day (in this case) tells us about market participant's change in mind.
When market moves without tales - it's likely that the tale will appear in the future to cover at least bottom/top of the closing price or a line chart if you like, but most of the time it is a place where the most commonly traders are placing stop losses - under structure, or under channel etc...
Conclusion regarding price patterns:
It's much easier to understand the pattern, then to learn the patterns, and all the patterns are showing the same - continuation of the price or it's reversal.
Always have it in mind.
Offcoure some times it takes years to come to this conclusion, but for not arguing I suggest going through the subject, learn all possible patterns and create your own opinion. But know this - there are Continuation patterns, and reversal patterns, which shows us when the price reverse or continues, no magic.
here's the link to the chart, all the questions are welcome. All the patterns can be learned and explained in the advanced course.
Conclusion regarding the method of trading
No matter how Smart "your money" are, the target is to buy cheap, sell to make money, and if you're wrong - cut quick.
The smarter Your money will be - the less trades you will make and less losses will take.
Always remember - To make money you don't have to take each signal.
Saying that I mean - Don't look for the signals where market is not showing anything. Only use a clear signals.
Never - NEVER - NEVER use someone else's opinion on what you're doing, your journal and statistics is the N1 trainer of your performance, you must run it as a routine to follow for a better performance and PROFIT.
Thank You for your Attention, any questions are welcome!!!
Also shows signs of manipulation, which mostly are shown as a long "tales" higher or lower of the candlestick's body.
As You can see, this tales or manipulation signs are not always appears at the point of price reversal on the line chart, what does it tell us?
Smart money are following the fundamental chart moves (same as other market participants) using a better price. But most of the crowd - I would say simpler - "Crowd" is using the worse price, and placing a stop losses at the places - where Smart money are actually entering a trade.
On a largerperiod candle it will look like a tale, on a smaller it will look like accumulation.
I prefer using a multiple timeframe analysis and candles, to get the same information as those - using VSA or some other methodology to recognize smart money moves on the chart.
Volume is probably the most powerful indicator of all ...(everyone is saying that), but:
The most of the volume is hidden, as for example in forex we're seeing only our broker's tick volume, or the volume - the broker want's us to see.
In futures - if we're trading EURO Currency futures, the price is changing in relation to the whole world's EURO turnover, and traders around the globe are trading the same instrument, but on different platforms, exchange's, using different brokers etc. so we actually don't see the whole volume.
Using volume is good if you like, but think globally.
Candlestick patterns please read carefully:
Each candle represents time period (e.g. one day)
If after one bullish candle next candle is breaking through previous low and closing above previous open, close, or 50% (sometimes even lower 5-10%, but the body in comparison to the candle's fill range must be smaller then tales or a tale) - market makers have used a low price to enter the market where the stops where. The longer the tale - the more it is correct.
The price was going down (e.g.) 1 day, but with no tales on the candles the same time (or less) it took the price to cover the drop (raise if bullish market) and closed above (beyond in bullish market) the 50% of the previous day (in this case) tells us about market participant's change in mind.
When market moves without tales - it's likely that the tale will appear in the future to cover at least bottom/top of the closing price or a line chart if you like, but most of the time it is a place where the most commonly traders are placing stop losses - under structure, or under channel etc...
Conclusion regarding price patterns:
It's much easier to understand the pattern, then to learn the patterns, and all the patterns are showing the same - continuation of the price or it's reversal.
Always have it in mind.
Offcoure some times it takes years to come to this conclusion, but for not arguing I suggest going through the subject, learn all possible patterns and create your own opinion. But know this - there are Continuation patterns, and reversal patterns, which shows us when the price reverse or continues, no magic.
here's the link to the chart, all the questions are welcome. All the patterns can be learned and explained in the advanced course.
Conclusion regarding the method of trading
No matter how Smart "your money" are, the target is to buy cheap, sell to make money, and if you're wrong - cut quick.
The smarter Your money will be - the less trades you will make and less losses will take.
Always remember - To make money you don't have to take each signal.
Saying that I mean - Don't look for the signals where market is not showing anything. Only use a clear signals.
Never - NEVER - NEVER use someone else's opinion on what you're doing, your journal and statistics is the N1 trainer of your performance, you must run it as a routine to follow for a better performance and PROFIT.
Thank You for your Attention, any questions are welcome!!!
