How To Identify The End Of A Pullback/Exhaustion - Trend Trading TIPS

what's going on everybody welcome back to my youtube channel i hope you all had a great weekend and you're ready to smash it this week um today's lesson is just going to be on identifying pullbacks now a lot of you have been asking me can you tell me how i can identify when the pullback has ended so that i can get into these continuation trades because the whole concept or not the whole concept the whole theory behind trading with the trend is to trade when the market starts to continue in the direction of the trend meaning if the market's going down you want to take sales if the market's going up you want to take buyers now i'm just going to tell you there's not a concrete way to identify when the trend has exhausted and excuse me you can pinpoint exactly when the continuations are going to happen there are concepts that you can use and i'm going to teach you one of them today reason being because i think it's the easiest to learn and also at the same time it can be applied to any time frame which is a bonus for you and definitely a bonus for anybody using any strategy that they're using that falls in line with a trend continuation now there are indicators you can use out there but i personally don't rely on indicators simply because they lag i personally like to just use price action and identify market structure alongside behavior when you combine the two and then use patterns to enter your trades you have a winning combination that can really accelerate your results and also at the same time avoid taking trades that you shouldn't be taking so that will be the whole point in today's lesson i hope you enjoy it make sure you smash that like button subscribe if you haven't and turn on notifications let's roll the intro and get onto the screens okay so we're just going to understand this concept very quickly here okay when you're trading the biggest advantage that you're going to have as a trader or yeah the biggest advantage you're going to have as a trader is to trade with the direction of the market now the reason why we want to trade with the direction of the market when it's trading down or when the market is trending up is because the market trends all of the time now i know there's statistics out there that say the market only trends x amount of time and x y and z you must be patient and wait i agree with it from a high time frame perspective but as a trader that's been trading or trend trading for a very long time the market trends every single day if you don't believe me go on the 4h time frame go on the 1h time frame go on the 30 minute time frame go do you know what let me go on the 30 minute 15 minute time frame and all of that look 4h time frame trend to the upside one h time frame let's get away from that trend to the upside look at this trend to the downside let's go to the 30 minute time frame trend to the downside let's get away from that trend to the downside and let's look for trend to the upside let's go to the 15 minute time frame so we've done trend down we've done trend up let's continue to look for i think it's down that we're looking for trend to the downside trend to the upside five minute time frame let's take a look at this and this is just one pair you know this is pound usd we're just looking at here and that's the only power i trade personally i do trade others but more often than not just that still trying to get rid of this chest infection so five minute time frame we've had to scale back a little bit but always here we go trend to the downside trend to the upside trend to the upside now i hope you get my point here the market trends every day and like i said the statistics that say that it doesn't and it only trends you know now and again i'm just telling you trust the process the market trends every day now with that in mind understand this if you're a trend trader no matter what time frame you're trading the market will trend eventually so the whole point or what you should be doing as a trader and this is why we talk about patience and discipline so much is just wait for the market to trend now the concept about trading with trends or a simple concept is you only want to take trades when the market has pulled back the reason why you want to do that is because you want to avoid taking trades when the market is in a push phase and the reason for that is because if you take a sell when the market is in a push phase let's say you take a cell here or you decide to take a cell here now the odds of the market continuing down whilst it while sits in a push phase is still pretty high but you run into a problem or potential problem when you sell that market you never know if at this point it's gonna pull back or at this point if it's gonna pull back or at the point that it pulled back it was gonna pull back do you understand once you can eliminate that potential thing happening or event happening then you eliminate a negative expectancy when taking that trade meaning that if you identify a pullback you're only following what the market is doing and then you can take a trade with what the market usually does next which is continues now i don't know if i explained that very well to you guys and ladies but i'm sure you understand just a little bit of where i'm coming from here that's all that matters right so you want to eliminate the negative expectancy that when you take a cell in a push phase market the market will exhaust excuse me so that's why we wait for the pullback now when waiting for the pullback we don't know when this exhaustion is going to happen all we do know is that after it pulls back if it's going to continue in the intended direction it tends to go which is down or up then there's a higher chance that it will continue but now the point of today's lesson is to show you how you can identify when the pullback has been created and then identify structure that resembles that pullback and then also identify behavior that resembles that potential continuation so i thought we'd take a look at pound usd now there's so many examples on here but the one i wanted to show you is this one here now when looking at this you can clearly see that the structure of the market was pushing to the upside right we get that now we have something in forex that i call a brick wall you might call a trend line but i'm identifying this area in the market as an area if price stays above there's a higher chance we can take buyers and if price breaks it then there's a high chance we enter the reversal so looking at this error in the market you can clearly see that the rover look the reversal is in play or forget about that word reversal it's a nonsense word that the trend is now trending to the downside okay so we have this trend trending to the downside we can see price putting in lower highs lower lows lower highs lower highs whatever now the market has previously taken out previous structural low so these are the major lows in the market where price is finally broken below and once we have evidence of this what we're looking for the market to do is just simply pull back and look for a potential trading opportunity now when we look at this market structure i want you to see something here that's really important this is how we would see the market in real life the market would be pushing would see wick rejections to identify a potential pullback area now if you're a reversal trader then you've got one more thing to worry about if you're a patient trader that follows a trend then you just know there's a high chance of pullback is happening you just sit back and wait patiently for this pull back to happen and then what you do is you look for the signs of a continuation so let's say now we're looking at this let's remove this i do actually want that on the screen actually so we can keep up with what's happening with the markets from our analysis on sunday but let's say we identify this pullback now at this stage there is no sign none whatsoever to indicate that the lower high is forming a lower higher will form with price pushing pulling back and then eventually continuing down we want to identify this point here now how do we identify this point well all you need to see and this is the secret right here and i'm giving it to you for free the only thing you need to see is one wick rejection one wick rejection once you get that sign of that wick rejection price has resembled or illustrated or created structure that re that resembles a push phase and an exhaustion or a potential exhaustion this is where you start to whittle this down once you get that wick rejection i meant to say this is where the magic starts but you get what i mean right the wick rejection you drop in a level doesn't matter it could be this box it could be a rectangle it could be a star it could be a moon it doesn't matter drop it in what you then do is you scale down to one time frame below that and what you will start to see on the lower time frames is a clearer breakdown of what the higher time frames are doing as you can clearly see this is now our brick wall to the downside on the higher time frames we have a pullback on the lower time frames we have a very clear trend with that pullback but we now start to get more evidence of what wick rejections now the more wick rejections you get in the area the higher the chance that price is going to exhaust at that level and then continue down but this is the point well this is the secret you are not taking a trade just yet we now have structure that resembles a push phase and an exhaustion you now have here on the hourly time frame structure that resembles an area or behavior where wick rejections are forming to continue to validate what could be the lower high and then what you need to do is you need to find an area on the market where price is failing to break below now when you scale down to your entry time frame what you're going to see so that's just one time frame below that during this pullback on the higher time frame price is doing what it's ranging now as trend traders we don't take a trade in a range we wait for the market to do what break the structure re-test the structure and continue now because we're not sure still if the 4-h time frame has created a lower high yet we're only gathering evidence price could explode to the upside and price could explode to the downside so we need another confluence so so far we're working with two confluences the confluence being a downtrend a pullback and a wick rejection just one week you may not believe me but i'm telling you okay one week then you go for your second confluence based on behavior which is multiple wick rejections and then what you're going to do is you're going to wait patiently for that lower high to confirm that it's a lower high and what do you think would be looking for to confirm that that lower high is now a confirmed lower high because we're not going to sell now just in case price smashes to the upside still but based on behavior we can see prices creating multiple wick rejections and not making a new higher high based on the one hour time frame so the momentum is still in our favor and structure is still work i'm still in our favor but we don't have enough evidence to sell it yet because what is price doing is consolidating so my question to you was this what are you waiting for in order to take a trade think about this what are you waiting for to take a trade logical thinking you are waiting for momentum if momentum kicks in in your favor then that will confirm the lower high is has developed in line with the trend which is down and the behavior is validated and then you only enter a trade based on momentum what should you see the market do well eventually you will see the market either break to the upside and then you start your analysis again or eventually it will do this break to the downside and identify a continuation of that higher time frame structure which is bearish now just so that just so that some of you know if you're looking at this and like well it's broken the trend line or the brick wall that you keep mentioning on hourly timeframe ignore it what we're focusing on right now is the lower high that we drew in from one wick rejection identifying how price is failing to break above identifying the trend is down and now getting signs of the momentum shift now you have confirmation that that lower high is probably the lower high the exhaustion is over and the momentum to the downside along with the trend is going to continue what do you do at this stage at this stage you simply scale down to an entry time frame and all you want to see is confluence of the trend on the 4h down the momentum and behavior on the 1h down and on your entry time frame you are looking for what you are simply looking for patterns and those patterns can be represented by wick rejections retest double tops lower highs whatever the weather you are just looking for confirmation remember that consolidation look at the break look at the retest and then what can you do you can look for your entries based on patterns and then take your trade and i always go for one to free risk ward ratio and this is how you would take a trade based on identifying when the lower high or the exhaustion phase has ended and the continuation of that momentum from the higher time frames kicks in simple lesson simple concepts and principles it's not a strategy they're concepts and principles that you can now go and back test and identify and work out for yourself if this is something you can add as part of your strategy so i hope you found that useful everyone you know what i'm teaching you now is of my own opinion so it could mean nothing to a lot of you but for the person that this is useful for i hope you find success in it always be patient and always remember that not every trade you take will win but if you're patient you are disciplined and you trust the process get those 100 trades in eventually the numbers will play out in your favor i wish you successful trading everyone again smash that like button subscribe if you haven't turn on notifications and until next time trust the process you

Channel: RockzFX Academy

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Keywords: how to determine forex entry point, how to determine entry and exit points in forex, how to enter a trade, best entry point forex trading, best entry point forex, how to enter a trade in forex, how to enter trade in forex trading, how to enter forex trade, forex when to enter, forex entry confirmation, how to find entry point in forex, entry point forex, forex entry techniques, forex entry point, forex entry point strategy, forex, forex trading, rockzfx

Id: Vw8FO2dQFjs

Length: 16min 0sec (960 seconds)

Published: Mon Oct 12 2020