Al Brooks is the man when when it comes to price action. His knowledge on price action is insane.
He has some videos on YouTube
Lol just another way, to say your bored of the argument
I just understood that quote when I read all of the 24 points over and over again, had to imagine the candles in my mind until I got it. Thanks for sharing your knowledge with us.
Iāve been learning for a couple of months and every bit of wisdom helps
Thanks
You can use technical indicators and chart patterns to identify downtrends. Moving averages, for example, can be used to identify the overall trend. If the price is lower than a moving average, the strength of a currency pair Is likely to be in a downtrend.
hey please whats IMO ?
Hey itās In my opinion!
In this case, my Price Action trading knowledge helps me a lot! I count the counter trend movements very carefully to understand the market sentiment!
Iām not a great user of indicators, but they can be useful in assessing a trend losing stremgth. Volumes (red ones) decreasing, RSI below 30 (for a while, not the second it hits 30) and hidden divergence of stochastic quite helpful. Also big volatility and agressive upkicks during the down-trend can be giveaways.
Actually, higher-high; lower-low levels work really well to understand the trend of the market! Besides, I use support/resistant areas so carefully!
An indication I use is to check the recent bars cut by an important EMA.
I trade on D1 charts but for example, over the last 3 months, note how many weekly bars -
have been cut by the 100EMA
closed above / below the EMA?
how many consecutive weekly bars have been cut by the EMA or closed above/below it?
how many times has the next weekly close shifted across the EMA in the last 3mths?
etc. etc.
Obviously you can vary the time-frame and EMA period according to your strategy.
Hereās another thought.
The volatility of a price chart often increases as price is trending strongly. Lower volatilities suggest price is consolidating, potentially even moving within a range. Look at the long-term volatility of the pair - letās suppose its something like 0.600, which is fairly middle of the pack amongst the major pairs, and is in fact the long-run volatility for GBP/USD. But the 20-day volatility for GBP/USD is 1.044, significantly higher.
This is useful to note in two ways - first, expect volatility to be under pressure (figuratively speaking) to decline, back towards its long-term average. Also, if you see the pairās volatility declining steadily over some days, probably any trend on the chart is likewise declining in power.
I basically use chart patterns with candle sticks movements, like when there is higher high and lower low movements you know there is the likelihood that the market itās gonna be bullish.
Developing simple strategies can really help.
[Edited for a Forums Violation]
Count the counter trendās strength so carefully; if you see consistent counter trend & new high and low; then maybe the current trend is losing its strength!
Thatās the perfect answer; high and low levels are so much important to identify the market trend!
Absolutely True
I donāt quite see as clear a separation regards lagging. For example, patterns are an important part of price action strategies and you need history to see patterns. Support and resistance lines involve historical movements. Even completed candlestick shapes represent summaries of past periods. Timing means making decisions between increasing certainties and acting now when placing trades.
Predicting the exact timing of a trend reversal or pullback in financial markets is challenging and often subject to uncertainty. And it is important to note that no indicator or technique can guarantee accurate predictions of trend reversals. Itās always recommended to use a combination of different methods, conduct thorough analysis, and consider risk management strategies when making investment decisions.
If a market roams in a range for a very long time or quite sometimes, the market becomes aggressive to break the range.
Although the weakening point or end point of a trend are not clearly identifiable in the middle of a good trend, donāt let these unknowns stop you taking the trade.
Letās face it, if the banks knew an uptrend was going to end at 3pm tomorrow, theyād already be selling today and price would already be going down. But they donāt know when the trend is ending - if they canāt do it, I canāt believe we can either.
My Ideal plan and analysis is solely based on price action. The ability to understand the trajectory of the market gives many hints when a trend is loosing its strength. Trend lines, the candlestick especially speak louder when a trend is loosing its strength.