Pure "PRICE ACTION Mastery" Course🔥 | 3+ Hours of Price action Content 🤯

0:04 foreign of a new course completely free of course exclusively on the concept and application of price action trading the course is designed in an orderly manner from the very basic to the advanced level as we move up the ladder I have accumulated a good chunk of the information from some of the best trading books trading blocks paid courses of some of the famous professional Traders and a few relevant online sites also I have taken a lot of effort to explain each Concept in a way that even newbie Traders can understand without much difficulty so I hardly

0:49 welcome every asparing Trader to take a ride with me throughout this course so let's get started foreign [Music] of it the stock market is all about buying and selling demand and Supply sometimes we buy a stock and sometimes we sell one but just by buying and selling based on our instincts will not do any good for our trading account chances are we end up in losses and a worse case scenario we blow up our trading account that is why almost all the Traders try to find an edge in the

1:35 market to remain profitable depending on the type of Trader you are you can choose between technical analysis fundamental analysis quantitative analysis and finally price action analysis the technical analysis primarily involves using different categories of indicators to predict the future price movements fundamental analysis on the other hand relies on the fundamentals of the stock or the company primarily focusing on the financials earnings Etc to make a trade decision similarly quantitative analysis utilizes the use of statistical tools to analyze the market data but if we talk about technical analysis in particular which is followed by majority of Traders the

2:22 interesting thing that can be identified is that the indicators used for the analysis are derived from some of the fundamental inputs of the market namely the price and the volume think about it for a while which is better a fruit from our own home song or one with a heavy pesticide usage the former may not be very good looking and won't stay fresh for many days but it's healthy while the latter may look appealing to the eyes and stays fresh longer but it's not even remotely good for our health likewise too many indicators for our trading is not very good for our trading account this is because the indicators are a result of so many intermediate processing of the

3:10 basic price and volume so that the pure behavior of price and volume are lost and at the end of the day you make your own conclusion without listening to what the market has to say I'm not in any way concluding that technical analysis is not good or that the indicators are instead what we have to understand is that we have with us a Gold Mine by by the name of price which if studied properly can help us identify what the market is doing this study of price and Its Behavior is known as price action so unlike indicators fundamentals or algorithm price action tells you what the market is doing and not what you think the

3:58 market should do the price action focuses mainly on the recent and current prices it is also dependent on the overall Market trend and finally on the price structure of the market we will talk about each one of them in our upcoming episodes now price action is not the Holy Grail or the mantra for ultimate success in stock markets because trading is mostly about your psychology and implementation and not about a single special strategy the goal for most Traders is to maximize the trading profits through a style that is compatible with their personalities without that compatibility I believe that it's virtually impossible

4:45 to trade profitably for a long term but if you devote a good amount of time to learning price action trading will trade with cleaner charts without hell lot of indicators will also be able to pinpoint your trade entries and exits with better precision foreign this video will focus on how the market price moves or how the prices are made to move in a particular Way by some big players you might have heard people saying things like history repeats

5:30 itself price memory and stuff like that what they really mean is how the market price moves in a specific pattern time and time again now the question is why does the price of a stock go up or down there can be different answers to this particular question like it could be the news or government passing some Bill a new monetary policy by the RBI some legal issues ETC but at the center of it all the one thing that makes the market movements are the earnings of a company even if a piece of very bad news related to a particular stock has come out but it has no direct impact on the earnings of the company then there might be a temporary noise in the stock for a short period but eventually the stock will

6:16 recover but on the other hand stocks like Vodafone idea yes Bank Etc are victims of the news that directly affects the earnings of the stock and thus resulting in their crash in the stock market there are mainly two players in general number one are the retailers and number two are the institutions 90 or more of all the trading in the markets is done by institutions which means that the market is simply a collection of Institutions the institutions includes mutual fund houses Banks brokerage houses insurance companies Pension funds hedge funds Etc these companies account for most of the trade volume and they mostly trade on

7:02 the fundamentals of the stock but now they are eventually shifting to the algorithmic side of trading what I mean to say is that the trading done by these institutions controls the direction of the market on daily and weekly charts and a lot of the big intraday moves or swings are also controlled by the big institutions it is not very surprising to know that almost all these institutions are profitable over time so the institutions are generally considered to be the smart money meaning they are smart enough to make a living by trading and they trade a very large volume every day no trade can take place without one institution willing to take

7:47 one side of the trade and the other willing to take the other side the small volume trades made by the retailers can only take place if an institution is willing to take the same trade let me explain this if you want to buy at a certain price the market will not get to that price unless one or more institutions also want to buy at that price similarly you cannot sell at any price unless one or more institutions are willing to sell there because the market will only go to a price where the institutions are willing to buy and others are willing to sell I hope the point is clear most individual Traders or retailers have no ability to move the

8:34 market the market will only test a particular price if one or more institution believes that it is financially sound to sell at that price on the other hand there are other institutions which believes that it is profitable to buy there so to be very precise at every tick in the stock market institutions are buying and other institutions are selling and all of them have proven systems that will make money by placing those trades so the main point to be noted or the main point that I want to convey is this you should always be trading in the direction of majority of the institution or like the professional say follow the footprints

9:21 of these institutions because they control where the market is heading or simply they move the market now let us look at a new scenario you have found out a new trading strategy that makes money and it works perfectly but at some point it stops working after a while many of us might have gone through this situation the reason for this is simple the markets are changing it is never fixed but it is always in transition from one stage or one phase to the other this simply means that if you are using a trend trading strategy today and you continue to do that then at some point you will lose money in range markets and similarly if you are

10:07 using a range trading strategy and continue using it for a while at some point you will end up losing the money in the trending markets the thing to understand is that the profitability of trading system moves in Cycles there are periods during which the trend following systems are highly successful and profitable then the market shifts from the trending to range price action that is when all the trend trading systems becomes unprofitable and the inexperienced Traders start making losses this is the reason why you see a lot of newbie Traders boasting up their p l during the trending markets while all of a sudden they disappear when the range Market arrives to sum it all up Market moves in three phases or three

10:53 stages number one is the uptrend or the advancing stage number two is the downtrend or the declining stage and number three is consolidation stage so the consolidation stage can be further subdivided into accumulation phase and distribution phase so let us look at how the market transition from one phase to the other let us start with the accumulation phase the accumulation phase is when the big institutions start buying a particular stock this institution deals in huge bulks of money therefore their order sizes are expected to be huge so think

11:38 what happens if they buy such huge quantities in a single order the prices would react suddenly and the prices would just shoot up they will be able to purchase the stock at a specific price only if there is enough liquidity in the stock else the orders will be matched at higher prices which will in turn reduce the profitability of the institution but they will not allow this to happen so instead of placing a bug order the institution places small orders secretly and this is called as position building in short we can conclude that during the accumulation phase the institutions are building up the position slowly and

12:24 silently and during the accumulation phase the market tends to be in a range or this range bound and the trend Traders would face losses if they don't adapt suddenly so how will you identify the accumulation phase generally the accumulation phase occurs after the price has fallen down or simply it happens after a downtrend the accumulation phase can also be viewed as an area of low volatility or an area where there is a lack of interest between the Bulls and the Bears moving on to uptrend or the advancing phase this stage occurs usually after the price breaks out of the accumulation phase here's what happens in the uptrend

13:10 or the advancing phase after building up the positions the institutions take the market higher so there is a bullish sentiment in the market all along the institutions will not book profits anytime soon so the uptrend can last anywhere from months to even years it is during this phase that the trend Traders make a note of profit we will discuss on how to identify an uptrend and how to approach your trades during an uptrend in our upcoming videos but now let's move on to the third phase which is the distribution phase the distribution usually occurs after the prices have rised to a good extent and the distribution phase looks similar

13:57 to an accumulation phase where the market remains in a Range here's what happens in the distribution phase the institutions begins to distribute or cell or Square of their positions after they have made a good chunk of profit on their initial Investments similar to the accumulation phase the institutions sells the shares secretly and slowly so that the market doesn't fall immediately creating a panic situation so they will sell at a range of Target prices and that is why the distribution phase is also range bound and the trend Traders don't stand a chance if they don't adapt suddenly in the distribution phase the volatility tends to be high due to the

14:44 Panic of an imminent crash or fall in the prices the last and the Final Phase is the downtrend or the declining phase the decline phase happens when the price breaks down of the distribution phase during this phase the selling pressure is high and the Market Outlook is bearish most Traders try to cut their losses and those who don't well they remain as long-term investors in the hope that the price will come back up the volatility tends to be very high due to panic and fear in the market so this is a good time for Trend traders who can short the market and get hold of good profits this is how the faces look like

15:31 in a chart and it is interesting to note that these stages continue to appear time and time again as cycles and if you could spot them early then you have an edge over the market and eventually you can use a suitable strategy that works in the situation we will talk about different Trend trading and range trading strategies in detail in the upcoming videos and we will also understand how to design your trading strategy according to changing market conditions foreign [Music]

16:18 we come across innumerable apps like Tick Tock Instagram Etc where the creators introduce a new idea every day and some becomes so hyped and popular that others begin to perform the act it becomes a trend or the ACT is said to be trending even YouTube has a trending section that features the most popular videos at a specific time this trend stays for a short duration that is for a few days to a few weeks so this is a short-term Trend similarly the stock markets also have trends that may range from short-term Trends to medium term Trends to even long-term trends depending on the duration which the trend persists in the market so in the

17:06 stock market scenario a trend is the overall direction of the market during a specified period of time in the stock market there are mainly three types of Trends number one the uptrend number two downtrend and number three sideways Trend there are different methods to identify the general trend of the market but the most popular ones are by using the trend lines for visualizing the price rings and the other method includes the use of indicators like moving averages average directional index Etc but we will limit our discussion to only the first method the simple reason being this is a price action course and we want to trade with cleaner charts and minimum confusion

17:53 before moving on further let me talk about a situation where there are three stock market participants an investor a swing Trader and an intraday Trader if I ask them what is the present Market Trend do you think all of them will have the same answer not necessarily investor could say it's a bullish Market while the intraday Trader would say it's bearish trend even the swing Trader can say there is no Trend at all or the market is sideways what is the reason for different opinions why do different people have different views on the market Trend given the same charts and same conditions at the same instance the simple and straightforward answer is the

18:40 time period that each trade are used for their analysis the investor might conduct his analysis on the monthly or yearly time frames while the swing Trader might be using the weekly or daily time frames and for an intraday Trader the time frame might be 15 minutes or 5 minutes therefore as the time frame changes the analysis changes so does the perspective on the market trends so this is my first conclusion that Trends are relative in nature that is Trends are dependent on time frames and it change with time frames there is so common saying in the market that trend is your friend I will try to bring clarity as to why this statement is

19:26 relevant for our trade success in the last episode we have talked about the four different faces or stages of the stock market price movement now let us analyze in detail how the price moves for that let's take an example of a rubber ball for instance and let's bounce the ball once the board would not just take off and go to space right it will come back to the ground and bounce back up similarly in the stock market also the price does not move indefinitely up or down there will be Direction changes once in a while this nature of price oscillation is called as price swings a typical price ring will consist of an Impulse move and a

20:13 corrective move the impulse move is the strong move with stronger price action candle while the character moves in a trend are generally weak or dull moves opposite to the direction of impulse mode moving on let's understand this by taking up each of the trend types and learning how to draw the trend line for analysis by definition uptrends are marked by Rising data points such as higher swing highs and higher swing lows so here the price moves up in such a way that the swings also move up making a recognizable pattern during an uptrend the impulse move is a strong up move with a series of strong bullish candles which forms a higher price than the

20:59 previously formed High the impulse move is followed by a corrective move in the opposite direction of the prevailing bullish Trend the corrective move usually includes a lesser number of weaker candlesticks that forms a lower price but this lower price is still higher than the previous lower price formed the corrective moves are generally due to profit booking by some Traders as a rule of thumb a trend can be confirmed as an uptrend only when the price has made at least two swings on the upside after finding out put all the higher lows all we have to do is to draw a line connecting all the swing lows or the higher nodes that we have plotted this line connecting a series of higher

21:47 lows creating a support level for future price movement is called as a trend line it is from the vicinity of this trend line that future price movements would reverse or break out and therefore it is a very important trading zone or an area of value the trend line is an area from which we can trade the impulse swing moves or simply we can place a buy order when the price reaches the trend line after identifying all the higher highs we can draw a line connecting the series of higher highs or swing highs that we have plotted and this line is called as the trend channel line which will act as an area of resistance for the prices and we can trade the corrective moves from the trend channel line or simply we can

22:34 place a cell order when the price reaches the trend channel line coming to downtrends by definition these are marked by Falling data points such as lower swing lows and lower swing highs in a downtrend the price moves down in such a way that the swings also movable making a recognizable pattern so during a downtrend the impulse move is strong in the downward Direction with a series of strong bearish candlesticks which forms a lower price than the previously formed low the impulse move is followed by corrective moves in the direction opposite to the prevailing bearish Trend the character move usually includes a lesser number of weaker or dull

23:21 candlesticks that forms a higher price but this higher price is still lower and the previous formed high so the corrective move is generally due to profit booking by some traders who took a short trade earlier in the trend so a trend can be confirmed as a downtrend only when the price has made at least two strings on the downside that is two impulse move and two correcting moves should be there now after plotting all those lower high points we can draw a trend line connecting all the swing highs or the lower highs that we have plotted the trend line so font acts as an area of resistance from which we can treat the impulse mode to the downside or simply we can place a sell order when

24:08 the price reaches the trend line as in the previous case if we plot the lower lows and then draw a line connecting all these lower lows we will get a trend channel line which will act as a support for the future prices and it is from this trend channel line that we can place buy orders to trade the correct you move so by now you might have the realization that the character moves are weak moves opposite to the existing Trend while the impulse move happens in the direction of the trend and is generally a series of stronger candles this is the reason why we should trade the impulse move during trending market so that the probability of profit is

24:55 high this is the reason why trend is your trend as we move on it is very important to understand when a trend will end and when the consultation will start this can be identified by the use of Swing transition during an uptrend whenever the price breaks the higher low for the first time then it is an indication that there is a transition in the uptrend similarly when a price breaks the lower highs in a downtrend it indicates in the transition from downtrend to a sideways Trend or even an uptrend the final type of trend is not actually

25:40 a trend but it is a situation where there is no clear Trend in the market where the market stays inside the range we have talked about ranging stages of the market as accumulation phase and distribution phase so the price movement between two price levels is called as sideway strains there are three types of sideways Trends number one is the range contraction number two is the range expansion and the last one is the Triangular range let's talk about range contraction first during range contraction the levels shrink and the price action becomes almost neutral or flat this shows the lack of any interest between buyers and

26:26 sellers the volatility in the market also drops so range contraction happens when there is a shortening of the price bars or simply the Candlestick sizes reduces the high and low range or levels get narrower or closer to each other and this is a strong indication that a trend reversal is coming so that is if there was a prior downtrend now the trend might change to an uptrend but it is just an indication it is not for sure during a range expansion as the name suggests the 11th will expand and the price action starts becoming visible so range expansion is associated with lengthening of the price bar or the size

27:12 of the candlesticks becomes larger and the high and low range or the levels gets wider so range expansion usually indicates a continuation in the price pattern that is if there was a prior uptrend it is an indication that the uptrend might continue in the future but it is not for sure now the final type of sideways trend is the Triangular range where the price shrinks or expand not between two fixed horizontal levels but rather an expanding or converging level this is a topic which needs broader discussion so we will talk about triangle patterns and how to trade them further forward in this course even though the trend lines do a good

27:58 job of showing overall Market Direction one issue with trend line is that they often need to be redrawn for example during an uptrend the price may fall below the trend line but this does not necessarily mean that the trend is over or there is a breakdown the price may move below the trend line and then continue Rising so in such an event we have to adapt ourselves and the trend line needs to be redrawn to reflect the new price action drawing the trend lines is easy but there can be errors in drawing the trend line so that is why just using trend lines exclusively to determine the trend is not really advised because most

28:45 professional Traders also tend to look at other indicators like moving averages or average directional index to confirm the market trends because the more the confirmations the better the analysis so it's finally time for the most important part of the video that is identifying the strength of a trend so generally Trends can be categorized into two types depending on the strength that is there can be a strong Trend or there can be a dull or weak trend the main parameters to keep in mind while categorizing the trends based on their strength includes a few parameters number one is at least two or more swings has to be there or there should

29:33 be two or more points of contact in the trend line then only a trend is considered to be valid number two is the slope so the slope of a trend indicates how much the price should move each day so steeper the slope the better the trend the slope is simply the angle between the critical price level during a consultation and the trend line so if it was an accumulation phase and the price breaks out to an uptrend if we take the angle between the trend layer and the top price level of the accumulation phase then we can easily find out the slope of the trend so if the trend is too flat strength is considered to be weak or dull the third

30:19 parameter is the time of the trend it is actually about the time required to form a trend because the trend took months to form then it is considered to be more stronger than a trend which took just weeks or days to form so more the time a trend takes to form the more stronger it is we can also categorize the trend based on the duration like it could be a short-term Trend an intermediate Trend or a long term trend the longer the trend Remains the stronger it is so these are a few parameters to identify the strength or the weightage of a particular trend [Music]

31:13 in this video you will learn how to read Candlestick patterns like a professional Trader this is even if you have no experience with candlesticks patterns beforehand and here's the good thing I will explain a simple method to read the Candlestick patterns without memorizing a single pattern that's right you don't need to buy heart any of these patterns so let's get started candlesticks are a way to show the market prices of a security on your chart it's not the only way to represent it we have other ways of protein them like bar chart lion chart Etc but the candlesticks are one of the more popular approaches the Candlestick usually consists of two parts a real body and shadows or wicks also

32:03 when you're dealing with candlesticks you must be aware that there is a four price point for every candle on the chart these price points are the opening price the high price the low price and the closing price for the same period or simply we call them as ohlc the real body of the Candlestick shows the open and close prices while the Shadows on the top and the bottom of the body shows the high and low prices for that particular period the Shadows looks like Wicks and hence they are called as candlesticks the upper Wick signifies the high of the period and the lower weight signifies the low of the period the high is the

32:48 highest price point of the candle at a particular time and the lowest the lower price point of the candle at a particular time depending upon the time frame you are trading on candlesticks generally have two popular colors green and red sometimes it might be white and black depending on the settings that you use but most commonly it's green and red and a very important feature is that for green and red bars or candles they're opening and closing prices are at different locations the color of the body of the candlesticks determines if the Candlestick is showing a bullish or bearish Price movement that is if the opening price is less than the closing price then the body of

33:35 the Candlestick is green or white similarly if the opening price is more than the closing price then the body of the Candlestick is red or black the longer the real body the more bullish or bearish the candle is there are so many Candlestick patterns out there ranging from engulfing candlesticks shooting stars hammers spinning tops dojies Etc to name up very few so if you were to learn all these patterns it would seem very hard and confusing but don't worry because we have got an easy way to understand what each Candlestick means and identify the strength or priority of each of them to learn this Method All you have to

34:22 understand is just two little things number one is the Open high low close or the ohlc of the candles and number two is to figure out who is more dominant in the market whether it is the Bulls or the beers or simply the buyers or the settlers at a particular time period let's start our discussion on the first category of candlesticks these candlesticks are called as marbosus let's look at the first type since the candle is a green one it is a candle it has a big rail body but has no Wicks or Shadows on either the upper or the lower end so we know that the longer the real body the more bullish the candle is the ohc of the candle is as follows since it

35:08 is a bullish candle the buyers are under control so the closing price is greater or higher than the opening price since there are no weeks on either side the high and low prices coincides with the close and open prices respectively as a rule of thumb the wick of a candle indicates price rejection or opposition by the opposite party in case of a bullish marabosu the open and low prices coincides and similarly the high and close price coincides which means that there is no selling pressure from the base that brings us to the conclusion that bullish marabusos are the strongest bullish candles we can find on a chart but we have to be verified flexible with

35:54 patterns that is we have to first quantify and verify because in the market the patterns generally don't occur exclusively the same way as it is mentioned in those textbooks so let's look at this green Candlestick pattern where the price has closed higher for the period it has opened lower and closed higher which means it is a bullish Candlestick and there is a small lower Wick and a small upper whip but the high and low prices are so close to the open and close prices which means there is a very weak selling pressure from the Bears so in real market conditions we can actually consider these candles as bullish marabosos because even though there was a slight selling pressure it is still a strong bullish candle now moving on to bearish

36:40 marobosu which is similar to the bullish marubosus but this pattern is a strongest bearish batter for a bearish candle the open prices are higher than the closing prices this is because the sellers are willing to select all the available prices a bearish marabosu also indicates that there is so much selling pressure in the that the participants actually sold at every price point during the day so much so that the stock closed near the low point of the day in case of a bearish marabosu the high price and the open price coincides while the low and closing prices coincides the candle has a big rail body with no Wicks on either end indicating a strong selling and a complete lack of buying or

37:28 or position from the booze as mentioned earlier we can be a little bit flexible when trading in real markets now let's look at the second category of candlesticks the pin bars the first category of pin bars are the Hammers and hanging man talking about hammers a pin bar is said to be a hammer when it appears at the bottom of a downtown Trend the hammer consists of a small real body at the upper end of the trading range with a long lower Shadow the longer the lower Shadow the more bullish the pattern is generally the prior trend for a hammer should be a downtrend as mentioned we should visualize the hammer pattern in the following manner the market is in a

38:15 downtrend so bears are in absolute control over the markets when a hammer forms the price goes even lower and it forms a new low price the price action of hammer formation indicates that the Bulls attempted to break the prices from falling further down which simply means that the Bears tried to bring the market lower but they did not succeed in their attempt to do so because the Bulls generated a lot of buying pressure so much so that the price closed near the open of the candle this action by the bulls has a potential to change the sentiment in the stock so we can say that Hammer is a reversal pattern and a hammer pattern could indicate a bullish reversal in the market now moving on to

39:01 the hanging man a pin bar is said to be a hanging man when it appears at the top of a trend similar to the Hammer pattern the hanging man is also a reversal pattern except the fact that it is a bearish reversal pattern a hanging man signals the market High here's how you should visualize the hanging man pattern the market is in an uptrend hence the Bulls are in absolute control over the market a hanging man at the top of the trend indicates that the Bears have managed to make an entry this is emphasized by the long lower shadow of the hanging man which signifies that bears have tried to break the stronghold of the Bulls because the Bulls tried to push the prices higher but the Bears managed to bring in so much selling

39:47 pressure that the price closed closer to the open price creating a small real mode and there is a high probability that the market Trend would reverse and the hanging man pattern is a good indication that bearish sentiment is about to Prevail in the market and it is a good time to short the stocks now the second category of pin bars goes by the name of shooting stars or inverted hammers depending on where it is formed on the chart talking about an inverted Hammer generally occurs at the end of a downtrend this is the weakest bullish candle that you can find in the market we can see that the range of the candle or the real body is very small also the open and closing prices are close to each other the long Wick

40:34 suggests that the Bulls try to take the price higher but there was a big selling pressure by the Bears so it indicates that the weak buyers are in control of the market and there can be a shift in the sentiment so we can say that even though a green candle was formed the sellers are actually in control of the market the inverted Hammer is generally accepted as a price reversal Candlestick pattern just like the hammer where the trend shifts from a downtrend to an uptrend but if you were to ask me which signal would you trade the hammer or the inverted Hammer I would definitely go for the hammer pattern because the hammer pattern gives a much stronger indication of a trend reversal than an inverted Hammer pattern this is also due

41:21 to the difference in selling pressures in both these cases now moving on a pin bar is said to be a shooting star when it occurs at the end of an uptrend indicating a price reversal similar to an inverted hammer it also has a real body with the open and close prices close to one another it also has a large wick on the upside indicating that the Bulls tried to bring the price up but they were overpowered by the Bears who push the price below the open price so the shooting star is a strong bearish pattern it is stronger than the hanging man pattern that is formed in the uptrend this is because the sellers were more in control when the shooting star was formed rather than during a hanging man pattern now let's move to the third

42:07 category of candlesticks we can clearly see that the candle server small real body a small real body indicates the open and close prices are quite close as we have discussed so far the upper and the lower Shadows are almost equal in length since the open and close prices are close to one another the color of the candle doesn't really matter now talking about the upper Shadow the presence of the upper Shadow tells us that the Bulls did make an attempt to take the market higher however they were not successful in their attempt if Bulls were truly successful then the real body would have been a long green candle as seen before in case of marabosus hence this can be treated as an attempt by pools to take the market higher but they

42:53 were not successful at it similarly the presence of lower Shadow tells us that the Bears did attempt to take the market lower however they were not successful in their effort if they were really successful then the real body would have been a long red candle as in case of a bearish marabosu hence the Bears attempt to take the market lower can also be treated as an attempt which was not successful so here neither the Bulls nor the Bears could establish an influence or a superiority in the market which is evident from the small Trail body what this means is that there is an indecision between bulls and bears they are not able to clearly influence the market Direction so this type of

43:38 candlesticks is called as spinning tops which are actually indecision candlesticks now let us consider two situations where spinning tops can be formed and let us discuss what the outcomes are now what if the spinning tops were to occur in an downtrend so during a downtrend the Bears are in absolute control as they are able to take the prices lower or spinning top in the downtrend indicates that the Bears could become consolidating their position before resuming the trend it can also be seen as an attempt by the Bulls to arrest any further price for but are they really successful because if the Bulls were to be really successful it would have resulted in a strong bullish candle rather than a spinning top so clearly there are two

44:25 foreseeable situations or outcomes with equal probability in this case number one either there will be another round of selling and the market will continue with its slow number two the markets could reverse its directions and the prices would increase as a Trader you need to be prepared for both the situations that is for either a reversal or a continuation an obvious situation persist in the uptrend also now lastly let's talk about the dojis so dojis are similar to spinning tops except that it does not have a real body this means the open and closing prices are equal so doji is an important Candlestick pattern as it provides very crucial info informations regarding the market sentiment by a textbook definition doji

45:11 suggests that the open price should be equal to the close price which indicates that the real body does not exist the upper and the lower Wicks can be of any length and the color of the candle does not really matter because the prices are very close to each other the dojis have similar implications as spinning tops as we have discussed just now so whatever we have learned from spinning tops a place to doji's as well so doji also conveys indecision in the market meaning that the bulls and bears are confused whether to take a trade both dojis and spinning tops ask the trader to remain cautious in the market there are a lot of other candlesticks but those mentioned so far is enough to understand the idea of similar candlesticks that

45:59 forms in the chart now let us arrange the candlesticks from strongest to the weakest so first of all we'll consider the bullish candles and arrange them in the order of their strength moving on let us arrange the bearish candlesticks in the order of their strength from strongest to weakest

46:46 a gentle reminder at the end of the video would be not to trade these candlesticks in isolation because more the confirmations the better the key thing that I am trying to bring across is that you understand what each individual Candlestick pattern mean and afterwards you can use these tools and techniques that you have learned and make it a part of your trading plan when you consider different elements of price action which we are going to learn in the upcoming episodes of this training thank you in today's episode our discussion will

47:32 focus on one of the Hot Topics in this price action course the simple reason being this topic is what helps a price action Trader identify the critical price levels and decide with the entry targets and stop losses the support and resistance are one of the key factors that distinguish between your success and failure in trading starting off the support and resistance are specific price points on a chart which is expected to attract maximum amount of either buying or selling the support price is a price at which one expect more number of buyers than sellers likewise the resistance is a price at which one expect more sellers

48:17 than bios so as the name suggests the resistance is something that stops the price from pricing further this is a textbook definition that you can find in any standard trading book let's dig deeper into this topic let us understand why some price points behave in this particular manner we have talked about the fact that stock market runs on demand and Supply this very concept is what causes some price levels to behave as a barrier or some as a booster for the prices take an example of a stock trading at 125 rupees let us say that an institution thinks that the stock will do good in the upcoming quarters but the

49:02 fair price is 100 rupees and not 125 rupees in order to achieve the fair price they take the market down to 100 rupees where they slowly and steadily build their positions the price seems to respect the price level of 100 rupees this level where the demand for the stock is met and from there the prices will start to rise is called as the support level the support level can also be seen as a price level which holds the prices from falling further down it is also an area where the big buyers will buy the stock due to a large number of buy orders at the support level and the lack of sellers to match all the orders the price starts rising from the support

49:48 level a price level is said to be a support level when it is below the current market price now moving on with the same example the price rallied from 100 rupees to 200 rupees in a matter of months this is when the institution thinks of squaring of their position or selling the stock to make a profit they do this by placing a large number of small sell orders so that the supply meets the demand or in other words they ensure that there are enough buy orders at the same price at which they want to sell so that the profits are not reduced this particular price level will look like it is stopping the prices from moving further up so this level is known

50:35 as the resistance level the number of sell orders in this price level is higher than the number of buy orders or the supply is higher than the demand due to which the prices start to fall from this level a price level is said to be a resistance level when it is above the current market price as a Trader working in any time frame it is important to figure out the critical levels where there was some price action by identifying the important price levels you can make more successful trades using the price action technique let us learn how to draw supports and resistance in our Char by a simple four-step process in short these four steps are loading the data points and

51:22 zooming out identifying the obvious price action zones aligning the zones and fitting a horizontal line now we can take a look at each of them step one is to load the data points and zoom out after selecting your preferred time period for the trades you want to zoom out your charts this is because we want to see the bigger picture once you can see the big picture it is much more obvious to your eyes which key levels should you be paying attention to so if your objective is to identify the short term support and resistance for intraday trading then you must load at least three to six months of data points and if you want to identify the long-term

52:09 support and resistance for swing or positional trades load at least 12 to 18 months of data points so when you load more number of data points the chart looks more compressed moving on to the second step we have to identify the obvious price action Source a price action Zone can be described as sticky points on this chart this is because the 11th sticks out or is easily visible to your Naked Eyes so if the level sticks out the level matters or it is a level of importance but if you are doubting your eyes and asking if it is a level or not then it's better to ignore it because it is not an important level just to give you better Clarity you can

52:54 identify a critical level when the price has displayed at least one of the following behaviors that is number one the price hesitates to move up further after a brief and number two the price hesitates to move down further after a brief down move and finally number three when sharp reversals occurs at a particular price point these are some of the ways you can figure out the price action zones now moving on to step number three aligning the price action Source now when you look at a 12 to 18 month chart it is very common to spot many price action zones by the method that we have just discussed but we don't have to track down all these price levels the trick is

53:40 to identify at least three price action zones at the same price level but a critical point to note while identifying these price action zones is to make sure that these price zones are well spaced in time meaning there should be a good time difference between the two level spotter the more the distance between the two price action zones the more powerful the support resistance identification or we can say the support or resistance is a major price level now after identifying and aligning your price action zones we move on to the step number four that is a horizontal line connecting the price action source that we have identified with the horizontal line after Drawing the Line you have to adjust your level

54:27 to get the maximum number of touches the more touches the better because the more number of touches the stronger the price level will act as a major support or resistance so how do you tell that you have drawn a support or you have drawn a resistance as we have discussed if the market price stays above the level that we have drawn it acts as a support similarly if the market price is below the level that we have draw then it will act as a resistance here's an important mistake that most Traders make while plotting the support resistance levels the approximation risk generally when identifying the support resistance you run into approximation

55:14 risk the thing to understand is that the market will not respect just a single price level but rather a group of corresponding price levels or an area of prices so hence we have to give a room for error which means that the price level should be depicted in a range and not just as a single price point which simply means that rather than drawing a single line to plot the support resistance we should represent it as a zone or an area where there is a price action happen so this is a very important idea to remember when you are placing the targets and stop losses while trading the support resistance levels especially if you are keeping stop losses with respect to a single

56:01 support or resistance line we might end up eating your stop losses often let us talk briefly about how reliable the support resistance are the support and resistance lines are only indicative of possible price reverses that is by no means we can be certain that a reversal is going to happen which implies that the support and resistance alone are not the Holy Grail to success in price action trading rather a few optimization techniques will help us identify high quality traits remember the fact that when you see quantity the quantity will always be compromised but this compromise is worth taking the idea is to identify quality trading signals as

56:48 opposed to identifying plenty of worthless traits and ending up bursting your pockets this leads to an important idea so what if we have a checklist or a framework for every trade that we consider the checklist would act as a guiding principle before we initiate the trade the trade should comply with the conditions specified in the checklist if it does we take the trade else we drop it and look for another trade opportunity that complies with the checklist not only that we should not make a habit of just trading with a single confirmation that is if the price reaches a support or resistance we should not jump into the conclusion that the price would reverse the direction and we should enter the trade does not

57:35 work like that instead what we should do is that we should look for confirmations in the previous episode we have talked about price action candles which are very important it is generally a very good idea to use some of these price action candles along with the supports and resistance to actually make a trading system that is a Confluence trading system which is much more efficient than using a single indication or a single confirmation so make your own system and create a checklist because the checklist has another Advantage it helps you to be disciplined because discipline as they say makes up 80 percentage of the Trader's success so in my opinion the checklist forces you to be disciplined it will also help you

58:21 to avoid taking an Abrupt and Reckless trading decision so we will continue this discussion on support resistance in the upcoming episodes because it is an extensive topic requiring a deeper understanding thank you in the previous episode we have discussed the basic stuff regarding supports and resistances in this video we will go a step further seeking the depths of support and resistance levels we will talk about how to identify if a level will break or not how to approach our trades using supports and resistances that is if we should trade a

59:08 breakout or should we trade a reversal and finally we will learn to find trades that other Traders fail to notice let's get started right away without wasting any time the first and foremost question is how to identify when a support or resistance will break to get started when you see a series of higher lows into a resistance you want to avoid selling at the resistance the reason is very simple let me give you an example let's say you have a huge hammer in your hands and it's really powerful and right in front of you there is a brick wall now you take the hammer and smash against the wall many times over and over again now let me ask you will the brick wall hold or is it likely to break well Common

59:55 Sense tell you that the brick wall is likely to break and this is exactly the same concept when a resistance level is tested multiple times within a short period of time the chances are the resistance will break now I'm not 100 percentage sure that it is going to break because no one can be 100 percentage sure in trading but the odds of resistance breaking are high and likewise when you see a series of lower highs into the support the chances are the support level is going to break this is because the prices hit the support level multiple times in a short duration of time we will expand this idea further in this video when we will talk about breakout rates moving on to the most

1:00:41 important question how to find the best support and resistance areas to trade we can approach this question with two trade ideas the breakouts or the reversals we will understand when one should take a breakout trade and when to take a reversal trade now let's start with the idea of trading reversals the most important question associated with this type of reversal trade is how do you know that a purchase particular level is likely to hold only if the support or resistance level holds can you enter a reversal trade otherwise you will end up in the wrong side of the trade and you will incur losses in order to trade reversals I want to share with you a few tips to bear in mind the first and foremost thing is that you want to

1:01:28 see a power move or a momentum move or a strong move into the market structure now what this means is that if you have drawn a area of support or resistance you want to see a strong move into the level by strong move I mean big or large bodied candles which in turn means that for an area of resistance we want to see a strong bullish candle coming into the area of resistance and in case of a support level you want to see a strong bearish candle coming into the support now this is what I mean by a power mode or a momentum move I know this sounds counterintuitive as to why one should Trader reversal when there is a strong momentum move so you can ask me why do you want to sell when there is such a

1:02:15 strong bullish momentum into the resistance and also why do you want to buy when there is such a strong bearish momentum into the support level right now don't worry because as we move on we will find clarity as to why I am talking about this now the second tip that I have to give you is that you want to see a strong price rejection at the area of value that is the area of support or resistance you want to see a strong price rejection the price rejection can be in form of a pin bar the pin bar may be a shooting star or a hammer Etc the idea is to see a long Wick where the price gets rejected from the particular level that we are considering let's say this in case of resistance a big bullish candle comes into the resistance and

1:03:03 suddenly it gets rejected and the stronger the rejection the better and that is exactly what you you want to see let's take our discussion a little deeper and understand it closely initially I have told that you need to see a strong momentum or power move into the area of support or resistance let me explain why we want to see large bodied candles into an area of support or resistance now let's say when you look at the resistance and when you have a strong move coming to the resistance level at this point ask yourself what exactly a resistance is so in the previous video we told that resistance is a price level which stops the price from moving up or simply it is a level

1:03:48 where the supply is high now also think about the fact that where exactly will you face an opposing pressure or simply where do you think will the buyers come in so that they could buy at good prices so if you think about a good price that the buyers would come in and if you look at the chart the chances are that that buyers would always love to buy at an area of support so it is obvious from the market structure that the buyers would wait for the price to retest or reverse to the particular support level so that they can buy or they can go long further the price rejection at the resistance indicates that the buyers are not willing to buy at higher prices and this is exactly the best place to

1:04:35 initiate a short trade the other reason being the only place where you have to be afraid of the buyers coming back into the market is the support level the advantage of taking a short tray that the resistance is that you can leverage the difference between the support and resistance level so as to obtain a higher reward to risk ratio however on the downside if you don't get a strong move or a momentum move into the particular level instead what you get is a choppy move with a lot of swings like this then it is not a good idea here to short on the resistance we can ask the same question here also where will the opposing pressure come in that is where will the buyers come in so as to get a good buying price well this time around

1:05:21 the bias could potentially be at these swing lows what this means to a Trader who is looking to short at the resistance is that as the price approaches to these swing low levels we will be facing opposing pressure that could turn the tide against you and you would not get a good reward to risk trade that is exactly why you don't want to go short when there is a type of stair stepping price action or a swing price action into your levels the reason being all these swing low levels are opposing pressures where the buyers could potentially come in and push the price against your trade now another reason why you want to see large candles or larger momentum candles into a particular level is a very simple idea often when there is a strong price move

1:06:08 for example there is a strong bullish move into a resistance level most Traders just look to buy the breakouts I'm pretty sure that you have done it yourselves right so when there is a strong moment up you might be thinking let's buy the breakout the market is rallying and it will continue to Rally so the simple decision at that point of time is to buy now this is where the twist in the plot comes where will you put your stop loss now because you are taking a breakout trade it is pretty obvious that you will put your stop loss under the resistance or maybe in the middle of the range or somewhere in that close vicinity what is the importance of this now what this means is that if the breakout fails it is going to hit all these clusters of stop loss owners that

1:06:55 is placed under the resistance and what exactly are these clusters of stop loss orders that are waiting under the resistance level they are simply orders to exit the market or Square Off the positions which were kept by those breakout traders who went long on this talk this in turn means that these are actually sell stop loss orders which will induce further selling pressure in the market no more stronger the bullish move is into the market structure more breakout Traders will enter the trade and there is more buy and more buying in turn means more selling stop loss order behind the resistance and if there happens to be a price reversal or if the price reverses towards the downside it will hit all the sales stop loss orders

1:07:40 of these breakout Traders another key thing to remember is that the longer the price is away from the particular level the better the trade is and why is it so the thing is the longer the price is away from a particular level the more it would attract the attention from higher time frame Traders for example if a price has not retested to rupees 150 level on a daily time frame for let's say three months or six months or even one year then you can be sure that this particular level can be seen on the weekly time frame or even the monthly time frame and because of this reason it will attract more Traders from the higher time frame to pay attention to these particular Nevers and that is why you get a strong price rejection or a reversal at a level which has not been

1:08:27 tested for a long period of time alright now let's learn to identify breakout rates most newbie Traders trade more breakouts than reverses when they see a strong move they think that the market is going out to the space and they jump into buying the breakouts in The Next Movement there is a price rejection and there is a strong reversal in the opposite direction and all these Traders get caught on the wrong side of the trade which in turn resides in hitting their stop losses which forces the price to go even lower now when do you trade breakouts at supports and resistance this concept is actually pretty much the opposite of what we have just learned earlier in case of reversals so you know that price is likely to reverse at a

1:09:12 support or a resistance when you have a strong power move or a strong momentum move into a market structure with a price rejection when you are looking at it from a breakout standpoint you don't want to see a strong momentum move into the market in this case what you want to look for is a price action that we have discussed right at the beginning of this video we have to look for higher lows into a resistance which somewhat look like an ascending triangle or we should look for lower highs into the support which somewhat looks like a descending triangle or even a third type where there is a price build up which is supported by a moving average now let me cover each one of them starting off higher lows into a resistance looks something like this and you can see the

1:09:58 price looks somewhat like an ascending triangle pattern this is significant because it's telling me that the buyers are willing to buy at higher prices and the sellers are not interested or they are weaker the ascending triangle pattern tells me that the sellers in terms of their strength are getting weaker or they are getting feeble the thing is that the first time the sellers managed to push down the price by a good margin and in the consecutive times it got weaker and weaker and this is a sign of bullish strength that the market could possibly break out higher at this instance you don't want to be shorting at the resistance because number one you don't have a momentum move into the resistance structure and number two if you were to go short into the resistance

1:10:43 there are swing levels which have been formed where the buyers could potentially come in and result is that you will hit your stop loss now similarly let's look at lower highs into the supports which are the same thing and it tells me that the sellers are in control and they are willing to sell even at lower prices and top of it from a price action standpoint it is telling you that the buyers are also getting weaker because this is a condition where the buyers barely pushed the price higher and the subsequent times it only moves smaller and smaller they were not able to push it any higher similar to the previous case you should not be going long in this case as the sellers are the dominant force and there is a higher probability that the market will

1:11:29 break down and in case if you go long there are swing levels which were formed during the ascending triangle formation where there's a possibility that the buyers can come in which will in turn result in hitting your stop loss now you see the price action is quite interesting right where one side is getting stronger and stronger while the other side is getting weaker and weaker now let's discuss the third type where a build up is supported by a moving average in this case the price could just come to a key support or resistance level and it just console dates there now if you bring up the moving average like a 20 period or 60 period moving average you will notice that the moving

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