Hey hey: what’s up my friend so in today’s video! You will learn the secret to reading candlestick charts. So whenever you, you know, look up about Candlestick charts, it seems there is always stuff like no the hammer candlestick pattern.
The shooting star, the doji, the engulfing pattern, yada yada right, so so those are, I would say, pretty elementary stuff, and today we are gonna. Take things a step further, because in today’s. Video, you’ll, discover right, candlestick, chats in a way that you might not have.
You know seen it before so number one. We’re gonna talk about. You know how to identify it. Alright, he didn’t strength and weakness in the markets. He also learned how to tell whether a trend it’s, making a normal pullback or it’s about to make a reversal.
Then we’ll talk about how to use candlestick charts to predict market turning points. We will talk about how to know whether you should be by selling or staying out of the markets. So all this and more in today’s, video, but first alright, here’s.
What I want you to do right, hit the thumbs up button and subscribe to my youtube channel. The link is all below just click on it. This way, whenever I publish a new video, you’ll always be updated, sounds good.
Then let’s get started. So the first thing that I want to talk about is what I call a trending move right. So these are basic concepts that you should know. So I’m, not sure. If all of you understand these concepts and to make sure we are all on the same page, I just want to walk you through these concepts before we get into the more advanced and exciting stuff later on.
So first thing is a trending move. So what is a trending move, so you can think of a trending move as a move in the market right where the Kendal ‘ S are trading in a direction of the trend, and this this time of Kendal’s are, are usually larger than usual.
So let me just walk you through what is a trending move? So if you look at this this market of gold, you can see that over here this is a trending move. This is a trending move. This is a trending move.
Okay, you can see that notice. The range of these candles right are larger than usual right. This is what we call a trending move, so here’s. Another example. Just to make my point dollar yen, you can see that dollar yen again we have the trending move.
Can you spot it a trending move lower and that trending move lower a trending move lower, so you can see that trending move generally. They trade in the direction of the trend and the range of their candles are larger than usual.
This is important right because later on, as you’ll see when you start to notice that the trending move, the range of the candles are getting smaller. That is one of the clues that the market is. You know making some significant changes underneath.
I will get to that part later, but for now just understand what is a trending move now? Moving on the other aspect that I want you to know, it’s. What I call the retracement move, so the retracement move is just the opposite of a trending move.
It’s, usually small range candles, their trade against the direction of the trend that’s, why we call it a retracement. This is what I call a retracement move and – and I’ll share with you some examples later on, but for now I want you to pay attention right whenever you look at a chance and you notice that the retracement move right has a large Range candle – that is a signal, a signal to you that the market right is about to undergo some major changes.
Okay, and usually, what happens is that the current market structure is likely to change after a large range retracement move right. What usually follows is that the market will go into a range followed by a breakout, so confusing don’t worry.
Let me just walk you through a few examples, and you see my point so for now let ‘ S. Have a look at the retracement move, Kay retracement move! Let’s, see if I can find it here. Okay, so you can see that on the pound yen, this is a retracement move right.
We have this. Trending move lower a retracement move, a trending move, a retracement move. So if you pay attention to the retracement move, okay, just I don’t know highlight it right this portion here and this portion here.
You notice that the range of the Kendall’s. They are smaller right, smaller than the trending move. So when you see such retracement move, it tells you that you know the trend is healthy, that you know the pullback is just a normal pet and the market is likely to continue lower okay.
So this one example: let’s, see if I can find another okay, you can see here on, go okay, go! You can see that over here, a trending move. Then we ‘ Ve got a retracement move. Another trending move then right now it seems to be forming another retracement move, so pay attention to the retracement Kendall ‘
S is smaller than usual. So now I want to share with you a few advanced things right. So when you pay attention to retracement move right normal times in a healthy retracement move, the range of the candles are usually small, but what happens when the range of the candles get exceedingly large? I recall I say that when this happens right it’s, a signal to you that the market structure has changed and let me walk you through what I mean by that.
So if you look at the SMP 500 okay, so you can see over here all along the market. All right seems to be in a healthy trend. Okay, a trending move, retracement trending retracement, a trending move, but at this point over here notice, the range of the retracement move got exceedingly large this one over here.
You know that by right in the healthy trend, the retracement move, shouldn’t be very large as you, it should be quite small, but in this case it’s very large. It exceeds right, the realm of normality.
So this should signal to you that the underlying market structure is likely to change. So what do I mean by that? So if you look at this underlying market structure, you’ll notice that I would say it’s somewhat.
Okay, I think the 20 amira it’s somewhat. Rest thanks. The 20 Amira you know has a had a nice bounce a few times and when this happens it breaks below that we near me it had a very large retracement Kendall.
It’s, telling you that this nice uptrend is about to come to an end right. This nice, strong uptrend, come about to come to an end. I’m, not saying that the long-term trend will be over, but I’m saying that it was this current.
You know nice swing up and swing down right, probably that market structure is about to come to an end, and if you recall the slides, I mentioned that what usually happens is that the market goes into a range followed by a breakout.
So when you see a large retracement Kendyl against the underlying trend, it tells you that the market is likely to go into a range. So in this case you see that on this market right, the market went into somewhat of a range right between these highs and this lows over here or even a descending triangle.
If you want to call it so you can see that the market went into a rage and then finally, it broke out and continued higher. So you can see that what happened is that when the market make a large retracement move against the underlying trend on market structure, you should expect that you know whatever has happened whatever.
Whatever time of trend that has you know existed earlier, probably is coming to an end and the market would move into a range okay. So this is what happened so here’s, another example. Okay, so let me just share with you what else palladium? Okay, let’s, so let’s, see so same thing for palladium right notice that again over here, let’s.
Mark it here, pretty nice. You know healthy trend, right, trending, move, retracement, trending, retracement training and boom over here. This candle, this retracement move it ‘ S is larger than usual.
It does not behave like a normal retracement candle in that should signal to you a sign right there. This earlier trend right the easy money of no buying the dips. Probably it’s over right, a market is likely to go into a range and then break out of it later on.
So you can see that what happened is that the market did went into a range and right now it’s. Gon na retest the high – so you it format this pretty much this this somewhat of this range over here, I think, between these highs and this loss.
So I’m not about to retest the highs, whether you can hole or break right it. It’s. Anyone’s guess, but a key thing that I’m trying to bring across here is to pay attention right so that first retracement in Kendall.
That is way out of normality. That is important. Okay, so have a look at one more example before we move on to the next concept dollar against the Turkish lira, so you can see that here again the same thing: okay, so this market is quite interesting.
You can see that notice. It got really bullish right. Just normal, you know, trending retracement, trending retracement move then goes up over here gets parabolic, and when you look at the retracement move man, you know something is wrong.
Something is brewing. Okay, because the science of the retracement move is as large as the parabolic swing up side, so this. What does this tell you well reno, says: is that when you notice the retracement move getting larger than normal, it’s, a sign that the underlying market structure has changed.
So, whatever easy money that you know has been going on, you’re buying the deeps every GTO loses, because, if you think about this, you get everything your losses and this type of trend and you’ll, still make money, because you Know the market is in a strong uptrend, but when you know this, the retracement move gets large way larger than usual.
You know that easy money is over right, so you would have to change your strategy right. You should expect the market will go into a range and then followed by a breakout of the range. So in this case the market went to a somewhat of a range.
This ending triangle kind of pattern, then he broke down, then form another range from another range right and then from another range over here. Okay, so you you get my point so moving on right once you understand this concept of the retracement move, okay and a lot of the large range retracement move, let’s, move on and talk about the break off structure.
So all these concepts are important because we later on, we’ll, be using these concepts right to identify. You know healthy trend to trade and how to actually know predict right when the market is about to make a reversal.
So all these concepts will come together and make sense to you later on, okay, but I want you to pay attention to the break off structure right now, so a break of structure, it’s quite straightforward, so you know in an uptrend right consists Of series of higher highs and higher lows higher highs higher lows.
So when you get a break of structure, it means that you had now have a lower Heights and well, oh so in this case right breaks this now you have a lower high and lower low. So this clearly has broke the structure of an uptrend.
So this is what I mean by a break of structure where the market structure has invalidated the previous string. Okay and likewise for a downtrend, a break of structure occurs when you get a higher high.
Okay, a higher high and a higher low. So now the downtrend break of structure occurs when you have a higher high and higher low. So once you’ve understood this concept. Okay, we are going to you understand right, come to know.
When is the best time to to treat the market so first, let’s, talk about when to create the trends or how to know when the market is made about to make a normal back or reversal, or rather how to train the Train.
Okay, so moving on, let’s. Have a look at a few examples. So first, what is go we talked about that earlier, but I just want to know bring this back to point. So if you understand the three concepts that I took, I spoke about earlier number one: the trending move, retracement, move and break off structure.
You can see that goal right now. Okay, it’s. Still in the healthy trend, you have a nice trending move a normal retracement move, a trending move and a potential normal retracement move over here. So this tells you that this trend is healthy.
There there’s, no signs of reversal or anything fishy going on behind the scenes. So if you want to trade, this type of trading set up, what you can do is to look right to trade in the direction of the trend.
So what I usually like to do is to see where the price is relative to the 20-period moving average, because if it’s too far away, then the market chances are is know somewhat of it. Overbought, okay and the market could reverse further.
So what I really like to do is to let the 20ma catch up higher right, where the price is not near that way near me, and once it’s there. I can look right to buy the breakout of this house because, if you recall in an uptrend, it consists of higher highs and higher lows.
So if this trend is healthy and if this trend is likely to continue, I could buy the break of this highs and then just have my stop-loss right below this swing low because, as we mentioned earlier, a trend is only invalidated when he has a break of Structure when it forms at lower highs and lower low, so let’s say I buy the brick of this house.
Okay, I buy the brick of this highs. Let’s say my stop-loss is somewhere below this swing low somewhere here. So now, if the market hits up higher okay and it comes down lower and hits my stop-loss at this point, chances are this market is invalidated.
The trend is invalidated, because now I have a lower low and I even might have a lower high as well. If the market comes down lower like this and then bricks, so now I have a lower low and lower high and chances are.
This trend is invalidated. So can you see how these are this different principles are coming together to let you know what you should be doing in the markets where they should be by selling or stay out of the markets? Okay, so this is one example for four go right in a healthy trade.
Another example is this one here: hey the treating trending move, retracement, move n, break off structure, trending, move retracement, move, trending, move, retracement move, so ask yourself: is there anything fishy about this underlying trend? Well, I don’t, see anything fishy about the trending move or it looks pretty healthy, retracement move, nice and small.
How it should be like break off structure has not happened yet there’s, no break off structure. So if you ask me there’s, a good chance that this trend is likely to continue. So what you can do is again to trade in the direction of the trend could shot the breakdown of this lows and you don’t.
Have your stops right above this high, so one ETR above it? Okay, so you can see if the market does break down lower and comes back up higher breakout at this point, your trend is invalidated. Now you have a higher high and higher low, and you know if the trend is invalidated.
You don’t want to remain shorting the markets right. Does it make sense? Okay and let’s, see alright. One more example: power against the Swiss franc. Is that it this one here, so you can see that power gives the street friend the same Poinsett right.
Look at a trending move, the retracement move and the break off structure. Trending move retracement move trending, retracement move trending chances. Are we’re gonna get a retracement move if the range of the candles are small, then here you might want to consider taking a short trip on the break of this lows: okay, okay and then have your stops again right away from this Heights, so if the market were to reach your stop-loss chances, are the down train right, has a break of structure, and you don’t want to stay in the Train any longer.
So this is how we actually use the three concepts that I shared with you earlier to know when you should be trading with the trend or not so one other bonus stick to share with you is that when you trade with the trend, you also want to Pay attention to whether you’re coming to any key market structure like support resistance.
So in this case you can see the price is coming to a key area of a support over here I’ll. Just do my thing is a key area of support. You might not want to be shopping into this key area of support. Okay, but I left that out because I want to confuse you, but this is an additional tip right there.
You want to consider when ever you are, you know, trading breakouts, for example, make sure you’re, not coming to any key market structure that could you know, go against your tree, okay. So with that said now let’s, move on into something something else.
Okay, we talked about how to trade is a trend. Now, how do you predict trend reversal? So in the earlier lesson we talked about how to trade. If the trend right, how do you know that the Train is healthy and how you can you know, sort of safely trade with the trend? Now we’re going to talk about trend reversals? How do you know when the market is about to make a reversal, so you don’t, you know still try to you, know trade if the trend and then get caught on the wrong side of the move.
So for for this right again, we’ll, be looking at these three things: the trending move, the retracement move and the break off structure. So in this case, when you, when there’s, a trend reversal about to occur, you’ll notice that the trending move it gets smaller and smaller right.
It won’t, be as large as how it usually would be. Training move gets smaller, retracement move, it gets larger okay. So let me just put some arrow: okay, Freddy move get smaller, retracement move gets higher and a break of structure right.
You see that there is a break of structure, so if it’s in a downtrend, you’ll notice that if the market goes into a rage or then afterwards, it breaks out higher higher and higher low. Okay, walk you through a few examples, so you know what I mean.
So let’s. Have a look at. I think. Bitcoin is quite interesting right, a lot of people following it. So let’s, analyze this so Bitcoin. You can see that over here massive massive sell down over here around the 6600 level.
Ok, so you can look at again. We analyze it. According to the three concepts that I’ve shared with you right, a trending move, retracement move, trending move retracement move, then over here wins went into a range.
So let’s analyze wave by wave. So, look at this trending move very nice and strong retracement move relatively quick over here this training movie. Now it starts to show sign of weakness. The range of this Kendal’s right.
It’s, actually much smaller compared to this wave over here right note: this is the region of a Kendall’s, getting smaller and smaller. At this point, it doesn’t mean that the trend is about to reverse, but it’s, a sign.
It’s, a signal tool at this market right, a market structure and the difference. Something is changing. First clue. Second clue, if you look at the trend, the retracement move. Okay, this over here right seems to be getting stronger right.
This retracement movies now actually for the first time stronger than this, a trending move over here right. This retracement move the Kendall’s. Getting larger and larger combat the previously raised relatively small over here and relatively small over here, so this again here second clue.
Third clue right that’s up close again, you can actually see right knee trending move now, but even weekly over here range of the Kendall’s, getting smaller and smaller compared to this portion here and this portion here.
Well, that’s, a signal that’s, a sign, okay, and if you look at the retracement move, now gaining momentum right, getting strange, getting range of the candles getting larger and larger. So at this point you essentially have a market right entering a potential accumulation stage or let’s.
Put it limit them into a rage. You can identify the range, the highs and the lows over here, and you can tell yourself that hey this trend, clearly the market structure has changed and if the market now were to break above this highs, you’re gonna get a break of Structure, higher highs and higher lows – and this is actually what happened on Bitcoin market broke out – okay and pretty much never look back, and you can see that you know how all this reading of Candlestick charts are.
It would give you a strong clue that you know you should be aware of this reversal coming. Okay, so again, this is all the concepts that I’ve, just shared with you right, the trending move, the retracement move and the break off structure, and if you actually notice this right at this point right, you wouldn’t, try to Be shopping Bitcoin anymore, because you know that it ‘
Ll underline the market structure has changed, you shouldn’t, be shopping, Bitcoin right! Maybe if you didn’t buy fair enough, but at least you shouldn’t. Be shorting Bitcoin and also, as a bonus tip right notice that you have this series of higher lows coming into resistance right, otherwise known as a ascending triangle.
This is a sign of strength. Tell me that the buyers are willing to buy at this higher prices. Okay, so this is a again how we can use candlestick charts to predict rise. So-Called quote-unquote predict market reversals.
Let’s. Have a look at another example: let’s, see dollar against the Chinese unit. Okay, I’m gonna I’m gonna talk about the same three concepts again. So if you look over here again, trending move retracement, move and break off structure.
Trending move retracement move. So at this point right, the retracement move right. It’s, a it’s, a it’s, a it’s, a signal ready because you notice that the range of the retracement move it’s. Pretty done much! These two candles compared to the previous ones over here, which is almost non-existent, and this one over here.
This two is much larger or even this one over here. These two sends you a signal that hey you know something might happen, so keep a lookout for it. Right it’s, not confirmed yet because the market is not brick have a brick of structure.
But this is a warning sign. Then. Subsequently, we look at the subsequent trending move and see how it fares. So when you look at his subsequent trending move, okay, I ‘ Ll, be honest right. It looks like there is still strike in fact over here when he broke down of this loss when he broke down this this two candles here it looks like you know: the market is about to hit down lower, but any did write.
It reverse up higher and then it starts to consolidate. So at this point now you have the range once again between these highs and this lows. Okay, so if you look at again the trending move at this point, the trending move seems to be getting weak because again, the the momentum, the range of the candles is getting smaller and smaller, and the retracement move is getting stronger and stronger.
Retracement move right over here it getting stronger right, look at the range of this retracement move getting stronger. So when does the break of structure occur in occurs when the price breaks above this highs over here? At that point right, you would have a break of structure and we had this reversal over here.
Okay, so again, this is a how you actually use the three concepts right to predict right market turning points and also for those of you who are familiar with chop. Etta’s. This looks somewhat like a cup and handle pattern right notice that this is the handle.
You have a nice tight, build up right before the price breaks out. Okay, so again, you do really have to memorize chop methods. If you can read right the price section of the market, if you can read the candlestick chart, it’s all down there, okay and let’s, have a look at another example: brand crude oil – okay, this one here, so you can See that this one is same laughs, I’m gonna sound a little bit a bit.
You know: Negi ragged, trending, move retracement, move, trending, move, retracement, move trending move boom; very strong, retracement move this one over here. This retracement move is very strong. Look at the range of the candles again doesn’t mean that the trend is over because at this point there’s, still no break of structure.
Yet then we look at a trending move over here. It got wick right. This is a trending move right. The range of the candles just got smaller and smaller compared to the earlier downswing. So this is what also I call a bill up right: a tight consolidation and this area of resistance.
So at this point, if the market breaks above this highs, now you have a higher high and higher look. You have a trending move take on week, you have a retracement move that got stronger. This signals.
Do that. Probably this is the end of the down move and the market is about to hit higher from here. Okay, so this for Bitcoin right. This is a sorry. This is a for crude oil. So again, the move is not very large before you came down back lower and now one thing to point out is that, like all trading techniques are there, nothing is certain right.
We’re. Just you know stacking the odds in our favor. By reading the price chart the candlestick charts right and then making a high probability trading decisions. Okay, so with that said, let’s. Do a quick! We kept okay number one! You want to pay attention to training, move, retracement move and a break off structure.
This gives you clues right to whether the trend is healthy or not. If the training move is healthy, the retracement move is healthy and there’s. No break of structure chances are the market is in a healthy train and you can continue to train in the direction of the trend.
But when you notice the training move getting weak, the retracement move right, getting stronger right. The range of the retracement move candles are getting larger and you have a break of structure. Chances are the trend, is it’s over and the market is about to reverse back in the opposite direction, and I’ve.
One bonus tip for you right. If you want to predict trend reversals right, you can stack the odds further in your favor right, especially when the price leans against higher time frame, support resistance.
What do I mean by that? Let me explain right so there’s, a bonus bonus tip. So if you look at the dollar against the Chinese yen, okay, one example, if you just zoom all right this reversal over here, okay, one thing that I’m, not sure if you realize, is that it was actually leaning against a higher time frame.
Support, if you just zoom out a little so you can see it’s, leaning against this previous resistance resistance. Now I can support all right, so this area now becomes an area of support and a key market structure, and on top of it right, you have the training, move, retracement, move and break off structure.
Then I spoke about earlier. This really greatly increased the odds of the reversal. Another example, okay, which one is it, I think, was the Bitcoin one as well right. If you look at Bitcoin again the earlier reversal – okay, this portion here, if you just zoom out a little bit, you notice that it’s, three thousand level, it’s.
Actually, an area of support right look left previous resistance. Now I can support, and this now I can support again and on top of it right, we have this whole portion where we analyze the price action earlier, tell you that the buyers are gaining strength, okay, so this is how you can actually identify really high probability Market reversals right the concepts that we spoke of earlier trending move, retracement, move, break off structure, plus the price leaving against higher time frame; support resistance, really really right.
It’s, a it’s, powerful stuff or I go go analyze. The chat study and you’ll, see what I mean and just one more final example. Before we conclude off today’s lesson another one is a Euro against the Swiss franc.
You can see that you know you can even do this on. You know a shot, a double swing trading, so, for example, the daily timeframe of euro Swiss franc is that this area of support right the price it’s over here.
When you, you can see that clearly, this is an area of support on the D timeframe, when you go down to the two hour time frame. Okay, you notice that this is the price action that you see here on the two hour time frame over here and again, the concepts can be applied across different time frame.
Let’s analyze it one. Last time, trending move retracement, move, trending, move, retracement, move, trending, move, retracement, move, trending, move, retracement, move, trending, move, retracement move.
So at this point, okay, something has changed. Right: training, move, getting weak right; small range candles down lower relatively small compared to the earlier trending move. Retracement moving away, he’s, showing a little bit of sign of strength.
Then a wick trending move and now retracement move even stronger. So now, at this point, the the the tiger is clearly you know. Shifting from the bias I mean the sellers to the bias okay, but one last thing that we are missing is the break of structure.
So where is the key level where there will be a break of structure? If you ask me, this would be the level right. This area of a resistance, so at this point, is you look through the charts right? You notice that over here we pretty much have a break of structure at this point where the market break up over here.
So now you have a trending move. That’s, getting wick retrace. The move is getting strong and a break off structure, and, on top of you right, if you notice this, we have a build up from just above this resistance again tell me, I know there are buyers willing to buy this higher prices and resistance and then, as They say right, the rest.
Is it’s, pretty much history? Okay, so so obviously I have you know cherry-pick all of these charts, but I hope that the concepts, the lessons that I’m trying to bring across to use your today right. It helps you in your own trading to know when you should be trading with the trend and when do you know anticipate trend reversal, so just a quick recap get training move.
We spoke about healthy x. Training move has a large range Kendall when it’s. Not so healthy. The training move, Kendall & # 39; s tends to get smaller, retracement move in healthy times. Retracement move the candles.
The range are small in unhealthy times right. The candles get larger and larger a break of structure. Bonus tip is when you know what the price leans against a higher time frame, support resistance that really help.
You enhance the ride, the odds of a trend reversal. Okay, so if you’ve enjoyed right this video here so far, he that thumbs up button and subscribe to my youtube channel. The link is on below and if you want to take your candlestick charting knowledge to the next level.
What I can do is go down to my website trading with Rainer comm. Are the links over here – okay, scroll down and download this book over here. The ultimate guide to price action trading click, this orange button and I’ll, send it to your email address for free okay.
So we that’s it. I wish you good luck and good trading feedback questions. Let me know below, and I’ll – do my best to help so with that said, I will talk to you soon. You