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0:00 you will never need to use an indicator again if you learn all the price action methods in this video because naked price action tells you everything you need to know now if you want more trading videos make sure to hit the like button subscribe but most importantly turn on the notifications Bell as this goes a long way in supporting our team first what is price action exactly price action is you making trading decisions based on price formations you see materializing in the market in real time indicators are lagging whereas price action is a leading indicator so let's dive right into it starting with Market structure and key levels
0:46 [Music] what are key levels exactly this is the Uber stock price moves up before reversing drastically making this a key resistance level resistance levels are areas where price can possibly reverse downwards from so as price came back up you had a great short trade set up right at the resistance level that produced a winning short trade now from a price action standpoint when price comes up to a recently formed resistance level it is deemed expensive within that particular Moment In Time meaning less buying occurs triggering the reversal downwards now going in the opposite direction this is the general electric or GE stock price moves down before reversing
1:32 drastically making this a key support level support levels are areas where price can possibly reverse upwards from so as price came back down you had a great long trade setup right at the support level that produced a winning long trade from a price section standpoint when price comes down to a recently formed support level it is deemed cheap within that particular Moment In Time meaning value buyers will take advantage and load up on Long positions triggering the reversal upwards so moving on apply and demand and multiple reversals of price when you have an area above where price reverses off of multiple times this is
2:19 known as a supply Zone Supply zones are areas where price has failed to push through on multiple separate occasions from a price action standpoint the market is deeming this area of price as expensive which results in buyers consistently deciding to close their lawn positions at this area and sellers choosing to hold this area strong and open new short positions the double action of buyers closing loan positions and sellers opening new short positions is what creates downwards momentum for your short trade entries off of these key areas now in the opposite direction when you have an area below where price reverses off of multiple times this is known as a demand Zone demand zones are areas where price has failed to push through on multiple separate occasions from a price action standpoint the market is deeming this area of price as
3:04 cheap which results in sellers consistently deciding to close their short positions at this area and buyers choosing to hold this area strong and open new lawn positions the double action of sellers closing short positions and buyers opening new loan positions is what creates upwards momentum for your long trade entries off of these key areas let's show this again this is the Funko stock notice how on multiple separate occasions price tried to push through this area and failed making it a supply Zone and presented a ton of great short trade opportunities so moving on extreme swing highs and lows [Music]
3:50 these reversal points in between the swing highs and lows are your traditional key levels the absolute highest resistance level here is your swing High key level short trade setups off of Swing Highs are of higher quality because there is a higher percentage chance of price reversing off of the level as prices deemed very expensive within that time frame the absolute lowest support level here is your swing low key level long trade setups off of Swing lows are of higher quality because there is a higher percentage chance of price reversing off the level as prices deemed very cheap within that time frame so moving on higher time frame key levels
4:36 [Music] when you are using the weekly time frame or monthly time frame many of the key levels you find on the lower time frames aren't visible but then the levels that are visible and Visually obvious on the weekly and monthly are known as major key levels which are levels where there is a higher probability a price reversing off of them but not just a slight bounce but a true reversal that will often move a greater distance so this is the monthly time frame these levels here that are visible are known as your major key levels because these levels are slower to form they become very key levels because these are the ones where slower moving large institutions look to unload positions or
5:22 take on new positions notice how this level here formed in 2008 but was still valid in 2010 still valid in 2012 and again still valid in 2018. now you don't trade on the higher time frames but here's a technique on how to use them label the levels as monthly levels so this is Priced Right Now moving up towards that key monthly resistance level but again you aren't spending most your time on the monthly time frame so let's jump to a lower intraday time frame of this same asset so you are doing your usual day-to-day trading on these lower intraday time frames but then you notice price approaching a level but this isn't just any regular level this is a monthly level by having this level labeled as a monthly level you are reminded that this will be a killer short trade opportunity
6:07 once price gets to the level so moving on foreign candles [Music] in an uptrend when price is approaching a key level how do you know whether price will break through a level or react to it look for candles with the Wicks sticking out above like this from a price action standpoint it shows buyers tried to push through the level but failed and price swung back down causing the wick to stick out above if buyers successfully pushed through the level you would have a full rectangle body momentum candle like this closing through the level these Longwood candles show a reaction to the key level within that moment in time and present short trade
6:53 opportunities now going in the opposite direction in the downtrend when price is approaching a key level look for candles with the Wicks sticking out below like this which shows price reacting to the key level and presenting long trade opportunities from a price action standpoint it shows sellers try to push through the level but failed and price swung back up causing the wick to stick out below if sellers successfully pushed through the key level you would have a full rectangle body momentum candle like this closing through the level after you had the longwick candles look for an intraday Trend change confirmation before taking long entries so moving on foreign Trends reversals and ranges
7:41 now before we continue we need to hear from you what kind of videos you want us to make next do you want more trading videos and if so which topics should we cover or do you want more investing related videos let us know in the comments below right now as always please hit the like button as it goes a long way in supporting our team so here are the traits of identifying an uptrend you have your runs here and your pullbacks here which means an uptrend makes higher highs and higher lows from a price action standpoint a moving uptrend shows bullish momentum and that the buyers are in control so you lean towards taking long entries to trade with the moving upwards herd momentum
8:27 there are many ways to enter trades with a moving uptrend but a simple way is to take pullback long trades at resistance turn to new support levels so now how do you identify a trend change from an uptrend to a downtrend type 1. you have your moving uptrend through the higher highs and higher lows before a lower low forms signaling a trend change from an uptrend to a downtrend type 2. you have your moving uptrend to the higher highs and higher lows before you have a lower low form followed by a lower high pullback before the full Trend change breakout and lower low type three you have your uptrend through the higher highs and higher lows before
9:14 you have a lower high that forms followed by a trend change breakout and lower low now going in the opposite direction in a downtrend you have your runs here and your pullbacks here which means a downtrend makes lower highs and lower lows from a price action standpoint a moving downtrend shows bearish momentum and that the sellers are in control so you lean towards taking short entries to trade with the moving downwards herd momentum there are many ways to enter trades with a moving downtrend but a simple way is to take pullback short trades at the support turn to new resistance levels so now how do you identify a trend change from a downtrend to an uptrend type one you have your moving downtrend to the lower highs and lower lows before
10:00 a higher high forms signaling a trend change from a downtrend to an uptrend type 2 you have your moving downtrend to lower highs and lower lows before you have a higher high form followed by a higher low pullback before the full Trend change breakout and higher high foreign type three you have your moving downtrend through the lower highs and lower lows before you have a higher low that forms first followed by a trend change breakout and higher high now let's take this up a notch combining key levels with Trend change price action this is the GE stock daily time frame this reversal Point here gives you your key support level you have your downtrend here through the
10:45 lower highs and lower lows once price got to the key level you had a trend change pattern through the higher low and higher high that formed which presented a great long trade setup now that we've covered uptrends and downtrends here are sideways and ranging markets price is making same highs and same lows and moving in a sideways Direction in markets like this look to take trades in both directions with confidence so moving on fresh Trends versus Trend exhaustion you enter long trade setup here followed by a higher high and trend line break confirmation when you get into a trade
11:32 close to the start of a move this is known as a fresh Trend which is where price has lags and room to move because Traders just got into the trade and haven't made their money yet so they most likely aren't closing out those positions just yet fresh Trends or fresh reversals are higher quality trade entries because you can capture a larger portion of the move as you are getting in early now in contrast if you get into a long trade up here after price has already moved significantly price might suffer from what we call Trend exhaustion during Trend exhaustion if not enough new buyers enter the market price will lose momentum and chop sideways also during Trend exhaustion if Traders have made their money and see potential risks coming up they will decide to start locking in profits and closing out their long positions if enough Traders take
12:18 profit the trend will reverse now does Trend exhaustion mean that Trend will reverse 100 no it does not price can go on and on but in terms of trade quality the higher quality trade would be one that is closer to the start of a trend and fresh Trend change so next momentum gain versus momentum loss starting with how to identify momentum gain First Look for tight price movement without large swings in an uptrend notice how prices vary tight together without wide swings which shows buyers are in full control and
13:04 that not enough sellers are in the market to cause swings in the opposite direction you want to trade with this upwards gain of momentum and not against it in the opposite direction in a downtrend notice again how price is very tight together without wide swings which shows that sellers are in full control and that there are not enough buyers in the market to cause swings in the opposite direction you want to trade with this downwards gain of momentum and not against it so the second way to identify momentum gain is candles growing in size in an uptrend notice how each candle is getting larger and larger and moving a greater distance per candle which shows a gain in bullish momentum you want to trade with this gain of momentum and not against it and then a downtrend notice again how
13:51 each candle is getting larger and larger and moving a greater distance per candle which shows a gain and bearish momentum you want to trade with this gain of bearish momentum and not against it now moving on to identifying momentum loss first look for wide swings of price so this uptrend here is tight price movement which means the buyers are in full control you then had wide swings occurring which shows momentum loss and that the buyers are no longer in complete control and can lead to a possible reversal of price if paired with Trend change price action going in the opposite direction this downtrend here is tight price movement which means the sellers are in full control you then had wide swings occurring which shows momentum loss and that the sellers are no longer in complete control and can lead to a
14:36 possible reversal of price if paired with Trend change price action so the second momentum loss type to look for is sideways price movement so this uptrend here is tight price movement which means the buyers are in full control you then had sideways price movement occur which shows momentum loss and that the buyers are no longer in complete control and can lead to a possible reversal of price if paired with Trend change price action going in the opposite direction this downtrend here is tight price movement which means the sellers are in full control you then had sideways price movement occur which shows momentum loss and that the sellers are no longer in complete control and can lead to a possible reversal of price if paired with Trend change price action so the third momentum loss type is shrinking candles you have your key level here as price
15:22 approaches the level you add shrinking candles which shows momentum loss and that the sellers are losing speed as the distance traveled per candle is shorter this presents long trade opportunities so the fourth momentum loss type is a candle color change your key level here as price approaches the level all red candles before a green candle appears which means this is the first candle that closed higher than the previous candle showing the loss of bearish momentum and sellers losing steam this presents long trade opportunities now moving on [Music] deep pullbacks versus shallow pullbacks foreign
16:08 [Applause] pullbacks during a trend the best kinds are what we call Deep pullbacks which are pullback trades to roughly 50 percent or more of the current leg of the trend these work best when paired with a key level from a price action perspective you're getting in at a great area of value within a moving trend in contrast a shallow pullback would be roughly 25 percent to 30 percent of the current leg of the trend which is still a great trade setup but when deciding between a shallow pullback and a deep pullback a deep pullback is the better trade option so next [Music]
16:56 chart patterns [Applause] we use chart patterns or what we call consolidation patterns to help identify Trend continuations versus trend reversals so you have your moving uptrend followed by your pattern formation this could have been any pattern from this list but in this case you would add descending triangle pattern once the pattern breaks above and in the same direction as the larger Trend this signals a trend continuation upwards and presents long trade opportunities now in contrast you have your moving uptrend again followed by your pattern formation again this could have been any pattern from this list but in this case you had a descending triangle pattern form
17:43 now price breaks below and in the opposite direction of the larger uptrend which signals a trend reversal downwards and presents short trade opportunities so going in the opposite direction in the downtrend you have your moving downtrend followed by your pattern formation again this could have been any pattern from this list but in this case you had a descending triangle pattern form once the pattern breaks below and in the same direction as the larger Trend this signals a trend continuation downwards and presents short trade opportunities one more downtrend but an ascending triangle pattern this time break below Trend continuation downwards now in contrast you have your moving downtrend followed
18:28 by your pattern information again this could have been any pattern from this list but in this case you had a channel pattern form once price breaks above and in the opposite direction of the larger downtrend the signal is a trend reversal upwards and presents long trade opportunities from a price action standpoint chart patterns represent indecision and infighting between buyers and sellers and the side that wins is the side that the pattern breaks on so moving on [Music] looking at where price is coming from [Applause] so you notice along with Kendall at the key resistance level and you think to yourself This is a great short trade
19:14 setup but now if you had looked to the left and to where price is coming from you would think otherwise you had a clear recent long trade setup here through the longwick candle at a very key support level creating heavy bullish upwards of momentum so if you entered this short trade here you were going against where true momentum is headed which is upwards this is why all you got was a slight bounce downwards before price continued in the true market Direction which is bullish and upwards let's show this again you notice this Longwood candle at the key support level and you think to yourself This is a great long trade setup but now if you had looked to the left and to where price is coming from you would think otherwise you had a clear short trade set up here and a lower high that formed creating bearish downwards momentum so if you
20:00 entered on this long trade setup here you are going against where true momentum is headed which is downwards now moving on stacking high quality traits now before we continue we need to hear from you what kind of videos do you want us to make next let us know in the comments below right now as always please hit the like button as it goes a long way in supporting our team so the best trade setups are the ones where you have a lot of high quality traits baked into them the higher the trade quality the higher the probability of the trade going in your favor but
20:46 more importantly moving a greater distance so that you can make a good return on the trade this here is where the high quality short trade setup occurred so let's break down the high quality traits that this trade had going for first you have a clear moving downtrend to the lower highs and lower lows so you would be trading with the downtrend this is a positive factor second you had a descending triangle pattern followed by a break below seemingly a trend reversal from an uptrend to a downtrend third you're at a key level with multiple recent reactions another great Factor fourth you're at a trend line with multiple recent reactions another great Factor fifth you had shrinking candles as price approached the level showing momentum loss another great Factor
21:32 sixth you had a long candle form right at the area of Confluence showing price is reacting to the area seventh you had a bearish momentum confirmation candle right off of the level that is also a candle color change another great Factor look at this list of all the great factors going in your favor for this short trade setup this is a high quality a plus short trade opportunity so let's show this again this here is where the high quality long trade setup occurred let's break down the high quality traits that this trade setup had going for it first you have a fresh Trend change through the break of the short-term trend line and break of the longer term trend line this means the new uptrend has legs and room to move further second you have a clear moving uptrend
22:19 through the higher highs and higher lows so you would be trading with the uptrend third you're at a key level with multiple recent reactions another great Factor fourth you're at a trend line with multiple recent reactions another great Factor fifth you had shrinking candles as price approached the level showing momentum loss another great Factor sixth you had along with Kindle form right at the area of Confluence showing prices reacting to the area seventh you had a bullish momentum confirmation candle right off of the level that is also a candle color change again look at this list of all the great factors going in your favor for this long trade setup this is a high quality a plus long trade opportunity so moving on
23:12 trigger event and continuation entry [Music] you first need to identify a trade setup or what we call a trigger event to give you a confirmed directional bias to trade in and momentum for the trade this double bottom here and along with candle out support followed by a bullish momentum candle acts as your trigger event this long trade setup and Trigger event gives you an upwards directional bias and bullish momentum so you want to take long continuation trades exclusively to ride the upwards bullish momentum now to get into a long continuation trade after the trigger event you have two options option one look inside of the moving
23:59 uptrend for any continuation pattern to form followed by a break in the momentum Direction so in this case when you look inside you add a falling wedge pattern followed by a break above which is then when you would take a continuation trade long to ride the upwards of momentum option two look inside of the moving uptrend for an intraday long trade setup so once you look inside of the moving Trend you hit an intraday long trade setup here where price pulled back to the trend line and entered a support level which is then when you would take a long continuation trade to ride the upwards momentum so moving on time frame confluence
24:47 foreign [Music] Confluence is having the Three core time frames you trade on all with price action that tells you to trade in the same direction which gives you super accurate trades The Three core time frames you choose to use will be based on your speed of trade if you trade lower time frames then your three time frames will be adjusted for that which we cover with our members so the top left chart is the weekly time frame the top right chart is the daily time frame of the same asset and the bottom chart is the intraday time frame of the same asset starting with the weekly you have a clear moving downtrend through the lower highs and lower lows so you want to trade with the downtrend and you have a bearish bias this here is your short trade setup do the longwick
25:33 Kendall at the key weekly resistance level now you look inside of the trade setup area here on the daily time frame on the right to see if there is also bearish price action which you had through the double top reversal pattern giving you a bearish bias again on the daily time frame at this point the weekly time frame and daily time frame are both bearish and confluent so when you look inside of the trade setup area here but on the lower intraday time frame below you had a trend change pattern through the neckline break and lower low that formed which again is bearish price action and gives you another bearish bias the weekly downtrend Daily Double top reversal pattern and intraday Trend change pattern all give you bearish price action and all tell you to take short trades meaning all three time frames are confluent you would then go to the very low time frames and take a hyper
26:19 accurate short entry using our entry and exit strategy now we applied the same method to a great Tesla short trade this is the Tesla stock the top left is the Tesla weekly time frame the top right is the Tesla daily time frame and the bottom chart is the Tesla four hour time frame starting with the weekly you get a clear moving downtrend through the lower highs and lower lows so you want to trade with the downtrend and you have a bearish bias this here is where the short trade setup occurred through the longwick candle at the key weekly resistance level and trendline that crossed giving you an area of Confluence now you look inside of the trade setup area here but on the daily time frame on the right to see if there is also bearish price action which
27:06 you had through the multiple longwick candles reacting to the level but also the two recent reactions to the left made this an imperfect triple top pattern at this point the weekly time frame and daily time frame are both bearish and confluent so when you look inside of the trade setup area here but on the four hour time frame below you had a rising wedge pattern once the pattern breaks below this confirms the reversal from an uptrend to a downtrend and again is bearish price action and gives you another bearish bias the weekly downtrend daily triple top and multiple longwick candles and four hour reversal wedge pattern and Brake all give you bearish price action and all tell you to take short trades meaning all three time frames are confluent you would then go to the very low time frames and take a hyper
27:52 accurate short entry using our entry and exit strategy so moving on [Music] trade exits and stop-loss management [Music] so you entered the short trade setup here at Key resistance and you target this next support level here price gets there and your position automatically closes for our profit great you then enter a long trade setup again at Key support and your target is this next key resistance level up here price gets there and your position automatically closes for a profit
28:38 awesome but now this is what occurs in the best case scenario but as a Trader you should know that it doesn't always play out as picture perfect as this alternatively these scenarios can occur instead after you enter scenario number one you enter on this long trade setup here and are targeting this next key level but before price gets there it reverses all the way back down and you would end up with a loss without knowing how to manage a position correctly you would have taken a loss on this trade instead of knowing where to lock in profits scenario number two you enter on this long trade setup here and are targeting this next key level price starts to pull back and you think it will come all the way back down so you let your emotions take over and you manually close out the
29:23 position then what happens price takes off upwards hits your Target and even continues on further for a massive profit you missed out on again not knowing how to properly manage a trade means you're at a huge disadvantage and leaving a lot of money on the table scenario number three you enter on this long trade setup here and price hits your profit Target so you close out the position but closing it out was premature because price continued on even further for even larger gains again you need to know what to do to lock in gains but also still be able to take advantage if price continues on in all of these scenarios where do you initially place your stop loss where do you move your stop loss if
30:09 there is a trend change before price reaches your target to not only protect your position and locking gains but also to not have it hit by accident in case price swings before continuing on how do you know how to correctly manage your position to maximize gains to not miss those big profitable trades but also protect yourself from losses we answer all these questions in depth on our site at wisetrade.com everything we've covered in this video is only the foundational Concepts but we go in depth into a lot of advanced strategies and methods only available on our site at wisestrade.com so go check that out now as we have some limited time special things available for you as always we want to hear from you what topics do you want us to cover next let us know exactly in the comments below
30:55 right now as always please hit the like button subscribe but most importantly turn on the notifications Bell and lastly make sure to go subscribe to our Instagram account at WISE trade so thanks for watching and I'll see you in the next episode [Music]
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