Reading the chart
3 questions read any chart: the condition, the phase and the levels. Then the candles show the turn.
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In this video
- Condition: trending up, trending down, a range, or choppy. Leave choppy markets alone.
- Phase: trends run, pull back and run again. The better entries come at the end of a pullback.
- Levels: support is a floor, resistance a ceiling, and in a clean trend an old ceiling often becomes the new floor.
- Smaller candles and long wicks against a pullback show it is running out of steam. Trade it only inside the macro direction.
Next videoMacro FirstOrders and position sizing1:44Get the instructions and the size right, and you avoid most beginner mistakes. The order types, the 1% rule and the math behind the size.
Key terms
- Market structure
- The pattern of highs and lows on the chart. It tells you whether a market trends or ranges, and where the key levels are.
- Pullback
- A short move back against the main direction before price carries on. Waiting for one often gives a better entry than chasing the move.
- Support and resistance
- Price areas where buying (support) or selling (resistance) stepped in before. Old resistance often turns into new support after a break.
- Choppy market
- A market without a clear trend that keeps swinging back and forth. Trend systems lose money here, range systems can work.