🔍
Day Trading Price Action | How To Read Momentum On Forex & Stock Market - YouTube
Channel: The Secret Mindset
[0]
Hey guys, in this video I will show you how
I read the price action in order to determine
[6]
if the bulls or the bears are in control of
the market and we’ll also try to establish
[11]
the momentum of the market by analyzing the
bull and the bear candles during a trend.
[17]
So, what is price action?
[19]
Price action is a representation of a price
movement on a given chart and in its core
[26]
it’s basically a representation of the behavior
of the market participants, namely the bulls
[31]
and the bears.
[33]
The bulls want to move the market up, and
their strength is represented by upward bars
[39]
and the bears want to move the market down,
and their strength is represented by downward
[46]
bars.
[47]
Every bar on a given chart is basically a
battle between bulls and bears.
[54]
When we read the price action on a chart,
we don’t have to over analyze and complicate
[60]
our trading, we just have to determine whether
the bulls or the bears are in control of the
[65]
market.
[67]
How we do that?
[68]
By analyzing the bull bars- the green ones,
and the bear bars – the red ones.
[74]
Before we begin, let me be clear on something,
we will not look at candlestick patterns yet,
[80]
we will look at much simpler and clearer clues.
[83]
So, a market controlled by bulls is often
characterized by the following bar patterns:
[89]
First, then obvious one is that we have more
bull bars than bears bars.
[96]
When he see this on our charts, this means
that the bulls have more power and are increasingly
[105]
moving the market upwards
Also, we will see consecutive bull bars.
[117]
Consecutive bull bars is a clear indication
of a bullish momentum
[126]
In a bull market, the green bodies are bigger
than the red bodies.
[134]
When he see this on our charts that’s a
signal that the bulls have more strength than
[140]
the bears.
[143]
Also, during a bull controlled market, we
will see the green bars closing near their
[152]
highs.
[153]
This suggests a good momentum on the upside,
because the bulls are trying to maintain the
[162]
prices higher.
[167]
We will also see a lot of wicks below the
green bars.
[172]
This also represents a good signal that the
bulls are in control of the market and that
[179]
are trying to push the prices upwards.
[184]
When we see the green bodies getting bigger
this signals a clear bullish momentum.
[193]
This kind of price action suggests that the
bears are unable to compete with the strength
[201]
of the bulls.
[202]
Also, during a market controlled by bulls,
the red bars are getting smaller, as the bears
[213]
can’t drive the prices down.
[218]
Now, let’s look at the bar patterns for
a market controlled by the bears.
[224]
First, we have more bear bars than bull bars.
[231]
This means that the bears have more power
and are moving the market downwards.
[238]
Also, we will see consecutive bear bars.
[245]
Consecutive bear bars is an obvious indication
of a bearish momentum.
[254]
In a bear market, the red bodies are bigger
than the green bodies.
[262]
This kind of price action suggests that that
the bears have more strength than the bulls.
[271]
Also, during a bear controlled market, we
will see the closing red bars near their lows.
[282]
This price action suggests a good momentum
on the downside.
[292]
We will also see a lot of wicks above the
red bars.
[299]
This represents a good signal that the bears
are in control of the market and that are
[306]
successfully push the prices downwards, despite
the initial reaction of the bulls.
[313]
Also, when we see the red bodies getting bigger
this signals a clear bearish momentum.
[326]
This is a good indication that the bulls are
unable to compete with the strength of the
[331]
bears.
[333]
Also, during a market controlled by bears,
the green bars are getting smaller and smaller.
[343]
This price action indicates that the bulls
can’t drive the prices upward.
[355]
Now that we know what to look at when we analyze
a chart, let’s take a couple of examples.
[361]
Here’s a bull controlled market on the EUR/USD
on the daily chart.
[367]
For a better overview, we added a 50-period
exponential moving average to gain a better
[373]
perspective on the market.
[376]
Once the price action started to move in higher
highs and higher lows, and the price stabilized
[382]
above the moving average, the bulls took control
of the market.
[388]
We see consecutive bull bars, big body candles,
green bars closing near their highs, wicks
[399]
below the bars, green bars becoming bigger.
[405]
As long as the price continues to record higher
highs and higher lows this should be considered
[412]
a bull controlled market and the only trading
scenario will involve buying positions.
[420]
So only long positions during this kind of
price action.
[425]
Here’s a similar example on the pound/yen.
[428]
The same price action: market starts to record
higher highs and higher lows, price action
[439]
above the 50-period moving average, consecutive
bull bars, big body candles, green bars closing
[451]
near their highs, wicks below the bars, green
bars becoming bigger, red bars getting smaller
[463]
and smaller.
[465]
Here’s a bear controlled market on the EUR/USD.
[472]
First we see the price action making lower
highs and lower lows, as the price closes
[479]
below the moving average.
[482]
At this moment, the bears took control of
the market.
[485]
Observe the consecutive red bars, big red
candles, bear bars closing near their lows,
[499]
wicks above the bars, red bars becoming bigger.
[506]
As long as the price continues to record lower
highs and lower lows this should be considered
[513]
a bear controlled market and the only trading
scenario will involve short positions.
[521]
In this example, after a strong move downwards,
the bulls gained some strength and push the
[529]
market above the moving average.
[532]
At this point, this is no longer a bear controlled
market.
[539]
I hope you learned a few things from this
that will improve your approach when you trade
[546]
the market.
[548]
Price action is about simplicity and by analyzing
the market this way, you’ll have more clarity
[555]
about the general outlook of the market.
[559]
If you got any value from this, please consider
subscribing to our channel and leave us a
[564]
like as it would help us a lot in the future.
[567]
Until next time.
Most Recent Videos:
You can go back to the homepage right here: Homepage