Transcription
All right, so this is going to be a quick, not even quick, this might be a long lesson on price action, just the beginning and the basics. Um, you're getting all this knowledge for free, so you don't have to worry about too much of anything after this. This is like, once you, once you watch this whole video through, you'll basically understand how to trade. I feel like personally, price action is one of the best ways to trade. There's no other way that I can be like, "Oh, this is the best way." I feel like price action is the best way. Anything else you see, honestly, I feel like it doesn't work. I don't care what anybody's saying. I feel like if your strategy, or because I don't like using the word strategy, if, if your way of trading isn't using price action, or some kind of price action, I feel like it is not the best way to trade and you shouldn't take advice from it.
So coming into this, we're going to be breaking down some of the basic ways that you can use price action. None of the YouTube crazy junk, just straight trading. Everything I'm saying is things I use, things I do, and what I know. So everything I say in this video is 100% what I've used, what I do, and everything I know. So let's get into it.
First, let's just, um, let's talk about what price, price action is, right? So, a support level, we have resistance, and we have support, right? Right, we have resistance and we have support. Let's just make this one as tall as this one, right? Now, a resistance, or resistance, is how far price can go up, uh, a certain point, right? And then this one is how far price can go down at the same point, right? So, if we come into the market and we see a resistance, always see a support. This is how price will react. Price will come into this area and continue to bounce. It might be one bounce and then head back down. It might be two bounces, three bounces, and then head down, or it's a couple and it could break. But this is a resistance. As you can see, price has leveled out at this point. Price can no longer go high. Some people can say this is a ceiling. This is how far you can go up. Support, same way. This is how far price can go down. So it'll bounce off, come back up to the upside, and that is the same thing. So remember this because these are important. So much. This is, this is like the most important part.
So, if we're looking also in detail of what a resistance and a support is, this is an area where sellers are waiting to push price down. Sellers. This is where sellers are. This is the seller's layer. This is where they like to camp at. Same way here, but this time, this is where the buyers are at. This is where the buyers are at, and this is where they are mostly camping at. So, what do I mean by this? If there are sellers waiting at this resistance level, every time price comes up into this level, there's going to be too many sellers, or the bulls, because it's going up, there's going to be too many sellers in this area and it's going to have a reaction by pushing down. Same way with sales. If it's selling, there's too many buyers sitting at this level waiting to push price back up. That's why price has these reactions. This is why this is a resistance and this is why this is a support, right?
Okay, next we have a downtrend, right? This is a downtrend. Now, how do we identify a downtrend? First, we identify the highs and lows. First, we identify the low in the market, then we ask ourselves, in this area, is price breaking either a high or is it breaking a low? So then it makes a high. So this is our high, and we've identified our highs and our lows. If price is breaking lows, this means price is in a downtrend. So price is breaking lows. This is confirming that price is in a downtrend. Price is still breaking lows. So this is also confirming that price is in a downtrend, along with the terms lower highs and lower lows. So this would be a lower high because this high is lower than the previous high, and this would be a lower low because this low is lower than the previous one. And it's a repeating pattern. This one, it never stops, it just keeps going down. We keep going down, the lows just get lower and lower. So this is how you know if price is in a downtrend or not by identifying these.
Same way with an uptrend. Uptrend. These are higher highs, higher lows. I don't know why it's copying that one, right? So this is how you identify an uptrend. You first find your high. Is this high being broken by another high? Yes. So this will indicate that price is in an uptrend.
All right, so now that we understand some of the basic parts, let's get into actually seeing it on the charts. Now, as we can identify already from what I was explaining earlier, we have a high, we have a low, you have a high, we have a low, a high, a low, highest point, lowest point, highest point, lowest one, highest point, and we could be continuing down to make our lowest point. So with all this being said, what trend are we on? This would be considered a downtrend, right? Because price is breaking lows in the market.
All right, so now that we got the basics, I'm basically going to start explaining how you can find trades, how can you find setups, how to use price action, how to use the basics in the markets, right? So I like to use this thing called ICC, and what ICC means is, I also give you an indication of where it's going, then a correction, and then it will continue later on. So I'm going to break this down, right? Let's go ahead and get it started.
So, we're in this downtrend. Price has highs in the market, right? These highs must not be broken if you're in a downtrend. I should not be broken, only lows should be broken in a downtrend, right? So we have price having highs in the market, lows. After price makes a low, you should always get prepared for price to make the high for you. So we're going to fast forward and we see price make a high for us, and then it's broken right here. So, in most people's scenario, this right here will be a break of structure. This right here is a break of structure, and price is now breaking above a high. This is our indication that above this level, price has potential to buy up high. But what I like to tell people is, whenever price gives you an indication, we never buy the breakout. We always wait because the breakout will end up pulling back in anyways. This is price grabbing liquidity as well. So, this, think about all the, all the traders that are new to trading. If they see prices going crazy and it's a breakout, they're looking to get in as soon as possible because they feel like they're missing out. They're gonna feel like they're missing out on this. But us, I'm gonna teach y'all, we are going to wait. See how high price goes. As it comes back down, we'll be looking to trade back above this level, and we'll be looking to target it here because we already know, we already know above this level, we already know a price is going to go to. So as effortless, once price is back above this level.
So we're going to fast forward until price breaks above this level. We don't have to take any trades because, and we don't have to worry about sales either, because we already have our indication of where price wants to go. Price would have never broke this high if it, if it wanted to sell off. If price wanted to sell, it would not break highs, it would continue the downtrend that it was on the whole time. Look at this downtrend, high downtrend, holidays. That price wanted to really buy, it will be breaking highs. So we're watching the fact that price broke a high, we got our indication, we have a correction, now we're waiting for the continuation above this level, right? And I'm going to press buy and sell whenever I'm looking to get into a position. So we're still not focused on anything. We have a support level here, we have a support level here, still not being broken. Let me just keep fast forwarding.
Okay, so as we bring this over a little bit more, price is getting ready to break above this level. I've been through this trade already, so I'm kind of basically going over what I've known. But let's break it down, right? So as price starts to build up, we finally get that break above this level, as we can see right above here. Now, in real time, we'll be able to see price come back above this level. So in real time, I'm just going to put, I'm just going to go back and I'm going to say we bought here, but just know what I'm saying, we buy here. I'm saying we're buying here. So really, our buy is supposed to be right here because we're looking for this same reaction that happened here because we know price is going to do the same thing. This is our indication, a correction, consolidation happened, and then we're looking for the continuation to happen later on. So as we continue, we finally get price to be above this level. This is where we're taking our entries. In real time, everything on the simulated is going to be a little bit off because real time, you have to be, you really have to be on the charts for you to understand price action. So we're going to be targeting this level here because we know this is where price likes to go. Above this level, we're going to keep our stop loss below the previous lows. Since we got in here, our entry technically would be our stop loss, but let's say we enter here because this is where our entry level should be coming from. Our entry level should be coming from here, and our stop loss should be below here. But like I said, since prices, um, not in real time, I can't show you, but in real time, I would definitely show you more trades.
So with everything being said, we'll be targeting this level. The reason why we're targeting this level is because price already showed us that it likes to go to this level once it's above here. So we're going to keep fast forwarding, and price is going to eventually hit its target. Now, this is also price giving us another indication because what is it doing after a downtrend? It's breaking the highs of the previous one. So this is letting us know price is bullish above this level. So wherever price ends at, that is what we're looking at. So we're going to continue to watch price, right?
All right, so this looks like this is the highest price wants to go right now for the time being. This is our highest point. So we know back above this level, price can come up to this next level. That's what we know just based off of price breaking its high. So we're going to pay attention to the fact that price broke this level and came up this high. So we know if it, price breaks this high, we know exactly where it's going to go. So let me mark all of this. This was our indication, this is our correction, and we finally got the continuation above because we was looking for the same reaction right here. So we got our continuation right here because it was waiting for price to break the support level of resistance, right? So we don't have to close our trade because price is still breaking highs, giving us bullish indication. We only close our trade when price starts giving us selling indications. But price made a new high, so we feel free to hold our trade. Now, like I said, after price makes a high, there will be a correction. This will be for anything. If price makes a move up, it will correct this off. If price makes a move up, it will correct this up. So with this new high, we're okay and we're comfortable with price correcting this up. So in this area, this is the previous high. Price can retest in this area and then continue back up if it wants to, or it can come below this area, faking out a lot of people, thinking sales, taking out liquidity, and then continuing higher.
Now, like I said, indications are more about taking out liquidity in general. So the first breakout, when we break out, traders and trading, they're getting in on the first breakout. Now, some people are successful with breakouts while some people are not, because people get greedy, people don't know how far price is going to go up, so they always TP in some impossible TP and think prices is going to keep buying up into that at that current time. So the time that people are trading, they think price is just going to keep going up to their target, but it's not like that. Price moves in a way that is trying to make money itself as well. So as we continue down, we're going to see price reject this level and start building this way back up. And as it builds its way back up, we'll be targeting the highs. I would go on a smaller time frame to explain, but I think this for this YouTube, um, video, I think I'm just going to stay on a higher time frame so you can get a concept of how the higher time frame works.
All right, so as price starts pushing back up, foreign above here, it targets what? The targets the high. So now we have a new indication that price is still bullish. Price is not breaking any lows. Our previous low was down here at this support level. Price made a high, corrected itself after the indication, there was a correction, and then a continuation. Now we have a new indication that above this level, price can go as high than it wants. So we're going to figure out how high it wants to go. So this looks like as high as price wants to go when it's above this level. So we know above this level, price can come up to here, every single time.
All right, so as it continues, price is above that level. Where is it going to test? It's going to test in this area, but looking for that same resistance level, then we get another push back down because price has the right to retest as long as it doesn't break any lows, we're okay. So as you've seen, price came above this level. This is a good area to get into trade as well. So I'm going to circle this as well for an entry. Everywhere a circle is going to be most likely where you get in for entries. I'm going to delete this one, I'm going to delete this one, and we're going to get entries on every circle that you see is where we get an entry at, or where you can get an entry at. So here as well, when prices breaking highs, like I said, I will break down a smaller time frame video for you guys as well, but as we're going to focus on the higher time frame for now.
So price targeting these highs right here because we already know above this level, it can come here. So above this level, where is it going to go? It's going to make its way trying to come here, fails a little bit, pulls back down, reattaches into this previous high, and then shoots back up, coming into him. So then we get another indication because even the smallest points above the previous high, it still counts as a new high, even the smallest points. So we have a new high, it will correct this. So now this is two things. After price makes a high, remember what I said, there's breakout traders trading. So this is going to be price trying to take out liquidity, taking out as many buyers as possible, and then getting sellers as well. So people are going to be like, lows were broken, so they're looking for sales. The buyers are getting stopped out here because they're putting their stop loss below the low, and there's going to be buyers keeping a stop loss above the highs as well, or even in this area. So price takes out both. We know that back above this level, we already know that price has the potential to go higher up into this level over here. We see these looks because this is a new high. So the reason why price sold off is because there's a new high, and price can react that way when something is new. So every time you have a new high, as you can see, there was a high here, it was broken, price made a new high, and then it sold off really hard. This is just price taking liquidity and trying to take people out.
So as we go back up, price is above this level. It feels free to retest the same level and gives us a new high. This is good on our hands because this means that we can still hold our trade that we're holding from down here because price is still giving us indications that it's still going to buy. So as we continue, price is still making highs. Like I said, after price makes a high, what's going to happen? It's going to give a little sell-off. It's trying to get the breakout traders. I was going to give the breakout traders all their money. Saw all the breakout traders are giving all their money away to the markets because they are using this with no pure indication. They don't know how high price is going to go. So it's taking them out, coming back in, taking sellers out as well, and then we're looking good from here. So as we continue, we see price is still breaking highs. No lows have been broken. Every time I'm, I'm a clo, I'm a market. So you can see that no lows have been broken, new high in the market. So what can happen to price? Price can make a sell-off. That's cool. And then there's another new high as well. So let me keep track of price. There's another new high, more new highs, and price is just continuing from here. I'm gonna keep fast forwarding until we see the reversal that is coming up soon. As you can see, price is still making highs, no lows being broken.
All right, this gets a little choppy now. Pay attention to this part. As we can see here, price is making a support level. We can tell that price is making the support level, all the wicks and rejections to the downside, and the wicks rejections to the upside as well for a resistance level. So this is the highest that we go, and this is another way that you can find your setups because if price, if probably no, oh yeah, I'm sick, oh yeah, I'm sick. All right, so I'm not gonna lie, I thought my mic wasn't recording, but let's get back to it. Um, we're just explaining this part where price had an overall high, and this is how I find most of my setups. Um, price found on here, and then we found the level of support. You can tell that this is a level of support due to the fact that price is staying steady, not like how we explained earlier, how far price is going down. This is as far as price wants to go down. Average, as you can see here, here, and here. This is the highest it goes. So remember, we're always looking for price to give us an indication, a correction, and then a continuation later on. So as we see here, we're going to fast forward, and price gives us an indication that under this level, price can go this long.
All right, so I like to pay attention to whatever happens first. So if we can continue here, as we can see now, price breaks highs. Now, this is one doing two things. It's doing two things. Price is one, taking out all of the sellers that are coming in right here. So there's people getting into sales and they don't know how to target, so they're getting into sales by Price breaking support because that is mostly what YouTube tells you to do. If price breaks support, then you sell. If price breaks resistance, then you buy. Where prices at, um, support, you buy, and then the price at that resistance, you sell. So just think about the people that are buying their support, sales, you know, buy a support, you know, break support because they're normally buying off the support and it moves or it goes up, buying the support, and then it breaks, or they're getting their stop loss hit because they're keeping a stop loss below, jumping into sales, and then also getting taken out as well. So this is why I stress that you need to be buying and selling the second time around. So this is probably grabbing people down here, wants to get everybody out from here. It starts to go up and breaks the resistance. People are selling at resistance and buying above it as well. Those people are also taken out. Then we come in by selling here. What I really like, I said earlier, it's not going to let me do it exactly, but in real time, we'll be selling as soon as price breaks back below this level, and we'll be looking to come here and more indications from there.
So we're going to continue to come here, waiting for that indication, a small retest in this area, and then price gives us another indication, letting us know that price is bearish under this level as well. So one, we have price come from here to here, and now we have price coming from wherever the new low is going to be out. So as we can see, price comes to build a support level here, it stops here, it slowly starts to make its way back up. A reason why we're not going to get out of our trade is because one, price made a new low, letting us know in ourselves that price is bearish and price can later on continue down. As you can see, and then here we have a new indication, small moves, and price is continuing down from here. Now, I'm pretty, it's pretty much, um, being repetitive now, as you can see that everything is just repeating itself over and over. So I'm going to continue to let price come down, and I want to explain overall moves.
Now, remember this option that was on this uptrend happened to break above another inside downtrend, right? So let's just break this down. I like to look over where I'm at in the markets all in general, sometimes. As you can see, price was on a huge downtrend, and then you start picking up these highs. So as we can see here, what I'm trying to explain is that price has been breaking highs this whole time. So if we're looking at a bigger picture, this is price giving an indication, a correction, and now we are looking for a continuation back above this level. Now, most people will never think this deep into it, but I love thinking deep into the charts. I'm gonna make another video diving deeper into the charts and how you can get understanding of what you could be looking at, getting some general ideas of what you could be looking for, because I like, I like trying to understand what is going on overall. I like to be the guy knowing what is the long-term move so I can catch everything.
So we're breaking it down. We have price tucking into the same level where this high was made. We're just going to go back to the four hour. I personally do all my trades on the one hour and lower, but I'm showing y'all the four hour on this video so y'all can get understanding because if we go to the one hour, it's going to be, I'm gonna have to zoom out a little bit, but as you can see, you can still see everything. You can still see the support level, it was broken, indication, correction, continuation. You can still see everything. Nothing changes. But I like to do is simply so you can see everything, real quick, real simple.
So as we start building our way back up, price is at this level now. If we go back onto the smaller time frame, we can see that price was on this downtrend, right? Prices on this downtrend, not breaking any highs, and then we finally get this high to be broken. So price made a low, price made a high. So now we know above this level, price can come up to every, how high it wants to go. So we're going to continue down, and it looks like price is going to just correct in these areas, and that's cool with me. We also have highs here, and we're just tracking wherever price wants to go. So with this being said, we'll be looking to buy. We're going to continue price, and roughly around here, we have a drop, and that is cool with us. That is perfectly fine with us. Now, I'm gonna explain why price dropped like this too, as well. So don't forget, let me just remove this for the time being. Don't forget that price over here had a new low. So price has a new low under here. So this technically was price having a new low in the market. This was the correction, and then price later on hanging back. Now, some of you guys will probably ask, well, how come this wasn't a full reversal? And how come we, we kind of ever took these bars or could we take these bars? Now, the thing is, price made a new low. Now, as we're going to see here, price failed to make a new low. So there's no more indications as price kept selling down. We kept getting more indications. There's an indication, let's give another indication, another indication that I just wanted to continue to keep going down until we get here, and it doesn't go any lower than the previous support level that was made. So now this is when price buys off of support. So we don't, we don't have another low indication to let us know, hey, price wants to continue down lower. So over here, this was the indication, a correction, and then a continuation under this level because we know under here, price will do the same thing down to this level, and then down to this level. So as we see, all right, so we have highs here. Anything above this level, we're looking to buy because we know we have an indication back up to this level to buy from here, right? So as we continue here, we're going to wait and see what price is going to want to start breaking above. So yeah, here we go. We get a break. In real time, we'll be on this candle right here. We'll be roughly on this candle coming up. We'll be able to buy from here, and we'll be able to target up to this level. I like to say, when price is selling, we sell to the lows. When price is buying, we buy to the highs. So as we see here, we don't have to worry about drawdown as well because when price is breaking these levels, it's having the same reaction, the same movement as it's doing right here. So then we have another indication, mark it. The reason we bought is because price had this indication already, correction, and a continuation, along with price having this full indication of correction and then the continuation later on. So as we see here, price is still giving us highs, and pretty much from here, we're going to let price go up because price is aiming for the overall highs, which happened to be here. There's a pullback as well, and then as we see here, we're looking for a price to come back above this level as well, and it's pretty much when it's a repeat. Price getting all the breakout traders, grabbing liquidity, pulling back, grabbing liquidity down here, and then back above this level, targeting these highs. This is pretty much the same thing over and over. This is price action. No, you're too difficult about it. You know, it's nothing, nothing too serious, but I hope you learned something of this whole session. I'm sorry there was a clip that kind of broke off, but yeah, it was my audio, and yeah, I hope you learned something. Comment down below if you have any questions, and yeah, I think that's pretty much it.