[00:01] In this video, I want to try to explain a little bit about price action, what the basics are, and what I like to trade. I usually focus on changes or failures in the basic structure of a trend. You
[00:20] but it's worth reiterating: a basic trend structure is always made up of impulses and retracements. Impulses, retracements, impulses,
[00:32] retracements. In this case, we have a downtrend, but the same could be true for an uptrend: impulse, retracement, impulse, retracement, impulse, retracement. This is the basic structure of a trend. Okay, so
[00:48] how do I do it? Well, in this case—let me delete this—what I case—let me delete this—what I do is mark impulses and retracements, and I always mark the lines where the
[01:06] maximum of the retracement occurred, not where the retracement was. And in the case of the beginning of the impulse, well, where the impulse started. So, in this case, it's the first impulse, retracement, the second impulse, a retracement. Here we put... Okay.
[01:21] And what the price can do is that it can even return to the can even return to the forming a... We'll look at the sections later, but basically what I
[01:36] like to see is something like this: a failure to reach the impulse, okay, sorry, the retracement, the maximum retracement. It's a failure to enter a retracement. It's a failure to enter a sell position, or, for example, here,
[01:50] this small retracement. Well, here it failed to go down. But if I had wanted to sell there, well, maybe the risk-reward ratio isn't so attractive because we have the end of the impulse here, and
[02:06] the price do? The price goes up again, tries to go up, is rejected, goes up slightly, barely manages to surpass this, and forms a high
[02:21] slightly higher than this one, but practically insignificant, and gives us practically insignificant, and gives us a bullish candle here, no, sorry, a bearish our trigger. That's what I call the trigger or the entry candle.
[02:37] Okay, so what I'm going to do now is go candle by candle. This is the Forex Tester. By the way, and to be honest, I don't know which bars or candles follow. I just set it to start.  There, and that's it. We're
[02:52] not going to trade live, so to speak, and we're going to see what happens. So, at this moment, it's one impulse, two impulses, a third impulse. Okay, statistically, and I invite you to review it, but trends, or at
[03:09] least the ones I like to trade, have a maximum of three impulses. Okay, there can be four, there can be five, there can be n impulses, but a good trend, when it's said to be extended, or for those who like to use
[03:23] indicators, oversold, overbought, is when it's already on the third impulse. Okay, after that, it's dangerous to try to sell. But well, let's see what happens in this case. So here we have these three
[03:36] resistances, which are the beginnings of the impulses. Okay, and we're also going to mark impulses. Okay, and we're also going to mark the supports. Okay, let's say it's the the supports. Okay, let's say it's the maximum where that impulse reached, the
[03:50] maximums of the impulses. Okay, so with those lines marked, let's see what we do, let's see what happens here. The price, well, it has a candle, and what I expect is that it will pull back here and maybe give us a
[04:05] second attempt, a failure, like in this case, a structure similar to this. To return to...  Entering a sell order, or a double top, let me draw it. What I'm hoping for is that the price will return, maybe it will do this, and here it will give us the entry. Okay,
[04:22] if it's not that, well, then the price can also return and do something like this and then go down. Okay, and the entry would be here once and the entry would be here once this level has been confirmed. Okay, or
[04:36] definitely the price. Well, since the price is what dictates the price, I can do this and suddenly break out and suddenly start a new trend. I can't do just anything, so that's why it's so important to follow the price
[04:50] and not try to anticipate it. Okay, so let's see what happens in this case. Well, the next candle. Well, nothing. Okay, the impulse continues. The impulse hasn't ended. This means it was just a small pause. Okay,
[05:05] the price stops. Look here, how it has already started to fail to continue going down. started to fail to continue going down. Let's see, it continues. Or, next candle, next candle, it starts to recede more slowly. Look at the verticality of this
[05:17] drop, and now what's happening is... Okay, the price is still here. It tried to go down but couldn't. It keeps going, going, going. I Okay, the price is still here. It tried to go down but couldn't. It keeps going, going, going. I
[05:29] me personally, they don't mean anything. Okay, they're in the middle of nowhere.  And at this time of day, basically... so for me, it doesn't say anything. anything.
[05:46] says no. Where are you going? It tries again, it says no. Where are you going? Okay, it hasn't reached the resistance, which is basically the last extension of the impulse. Let's
[05:58] see. Okay, there the price starts to go down, a Okay, there the price starts to go down, a little trap. Let's see. Okay, it reaches it, it reaches it, and then it breaks. Okay, well, it broke.
[06:10] What can we expect from this moment on? Well, since it's already broken, two things can happen: the price can return and give us an entry to
[06:27] might simply be a trap for this line, for this level, in such a way that it forms a red candle here, or a bearish candle, and then gives us an entry and we can go down. Only those two things can happen.
[06:42] Okay, well, it can also happen that suddenly it goes... I mean, from that suddenly it goes... I mean, from where it is, that the price simply can't be stopped anymore and goes. That's the third option, nothing more. But outside of
[06:55] those three options, there are no others. So let's wait and see which of the let's wait and see which of the three does the next candle. Okay, it's coming back. Okay, it's...  Making a little stick, let's see, the
[07:08] price stops, it stops. Okay, okay, no candle, no candle, no entry candle yet. I'm looking for an engulfing pattern, a good engulfing pattern, a good pin. Nothing, nothing, it breaks down. Okay, it's
[07:23] back now, so it closed down. This candle, let's wait for the return here to enter a sell position, or for it to stabilize, or for it to do something that gives me a signal, that tells me where the price is going. Okay, it's going back up. Okay, it's coming back, it's coming back.
[07:41] going. Okay, it's going back up. Okay, it's coming back, it's coming back. Look at this. This is important to always keep in mind: this is impulse, and it's going in a slow, slow, slow retracement, and it's practically forming a double top. No,
[07:55] here, if it were to draw a bearish candle, that would be my entry trigger. Let's see what happens. Nothing, nothing, nothing, it doesn't want to go down
[08:07] happens. Nothing, nothing, nothing, it doesn't want to go down yet. Nothing, there it is, it's already started to go down. Okay, so could be the continuation of this retracement, of this impulse. It's the retracement, and that it will probably have another impulse, but it doesn't yet give me my
[08:21] entry candle. Okay, that, for me, is already a good candle. Why? Because the price came, bounced, making a slight attempt, without much enthusiasm, to break up again, and Now I'm drawing a candlestick pattern that's
[08:38] engulfing this one and continuing this small impulse that closes below the support, and which will also continue this impulse. So let's dare to place a sell order there, for
[08:51] example, with a very tight stop loss, very, very tight, and let's see what very tight, and let's see what happens.
[09:04] careful with these. Here it stopped because of this accumulation here. The next accumulation is down here. Let's see if it breaks through. In this case, you can protect your positions. For example, I'm
[09:19] going to move the stop loss to zero. For example, it's not very close, really, and maybe it would be anyway with the AC above, but I like how these trades are done
[09:31] practically every day. So what's the harm? Better to protect day. So what's the harm? Better to protect capital and avoid losses. Let's see. Yes, definitely the price came and closed, but I didn't lose money. Okay, we'll keep
[09:45] waiting. Look at how the price, then, after the three impulses I mentioned, the price has already made: one, two, three. Now, what is the price doing? No, now the price is failing,
[10:00] failing to continue.  The next impulse. This is the flaw I'm telling you about, that's the turnaround. That's the price reversal I'm waiting for, okay? This is price reversal I'm waiting for, okay? This is a very good bullish engulfing candle.
[10:14] Also, because it engulfs almost all of these candles together. And also, as I mentioned a little, it was in this accumulation zone, it's bouncing, it's even
[10:30] accumulation zone, it's bouncing, it's even confirming the level. Okay, so we're flexible-minded. We already saw that analysis that the probability is that it won't continue with the next impulse, so what
[10:44] we're going to do is buy. We're going to put a limit order here with a stop loss put a limit order here with a stop loss below the support, and we're going to see what happens. It says buy.
[11:04] careful, it's reaching this zone again. We haven't removed it. What we can do there is... well, it depends a lot on you, on what you want to do, how you like to trade. But generally, I take part of my
[11:20] positions. Well, in this case, it's one lot. Let's take, for example, half. lot. Let's take, for example, half. I close half and move to break I close half and move to break even. Okay, and we continue there. I can't
[11:34] lose anymore.  I can't lose money anymore, in fact, I've already made money. Let's see what happens. Okay, it breaks up. Okay, that's a good sign. It means it will probably continue, and now perhaps a new trend is starting.
[11:49] We'll see. It still has to break this line. This line is important because it's strong resistance, given that it was the beginning of this strong impulse. Right? Here, the same thing we saw here where it went down here can happen.
[12:04] The same thing can happen: it reaches, touches, rejects, tries again, perhaps rejects again, or definitely breaks up. Let's see, it has good verticality. Look at
[12:17] has; it only has one red one here in the middle. This is a very good sign. It means the price has a lot of upward momentum and that it has already broken that resistance. Okay, with this little candle. There it is, reacting well. We're not scared
[12:32] is, reacting well. We're not scared yet. Okay, it reaches, it reaches. yet. Okay, it reaches, it reaches. That candle is very strong. It 's a very strong engulfing candle that is failing
[12:45] again. To continue with this, with this rise. No, if you notice, a micro-trend is forming here, or is already formed, which is basically an impulse, pullback, is basically an impulse, pullback, impulse, pullback, impulse, process, impulse, pullback, impulse,
[13:00] impulse, pullback, impulse, process, impulse, pullback, impulse, and now it has failed. No, to the next one.  Impulse. Why? Because it's already broken through this support level here. Okay. So what can we expect from the next candlestick? We're going to
[13:16] wait for several things, and it's a matter of observing what the price does. The price could be a trap, and it might definitely paint another bullish candlestick here, which would be the same case. I would expect it to make a small
[13:28] same case. I would expect it to make a small pullback so we can go buy. Okay, that 's one possibility. The other possibility is that it will definitely go down, more or less, that it will reach and touch this level,
[13:41] reach and touch this level, uh, that the price will retrace to this level, more or less continue. That's another probability. Or, uh, the third is that the price will definitely... well, it will go down. Or that's what
[13:57] I would expect to happen. Okay, so let's go for it. For now, let's close this position. This one already scared me, that's right. And let's
[14:09] mark this small support level here to see what
[14:21] confirmed to me that the price is definitely going down. Okay, so there we're going to sell. We put our order here and
[14:36] Well, it comes back. Okay, okay. back. Okay, okay. Here the decline definitely stopped, it came back and is now reaching these highs. Okay,
[14:49] as we saw, this level has already been broken, it was broken from here and it doesn't have much influence anymore, so we're going to update it and we're going to put now right where the price is reacting
[15:02] now, okay. Now, if we analyze the price again in the last movements it has made, we have an impulse, a pullback. Remember we said that the new trend is probably starting here, okay? Well,
[15:16] there it is, because this was the failure, if you remember. So part of the analysis is that, right? And if we look at the price structure: impulse, pullback, impulse, pullback, and within each impulse there are micro-trends: impulse, pullback, impulse,
[15:33] pullback, impulse, pullback, impulse, and then comes the big pullback. This combination of impulses with small trends inside, uh. This is where all the Elliott waves come from, right? I 'm not Elliott, not at all, I
[15:50] 'm not Elliott, not at all, I simply analyze the price, but I know that's where it comes from. Okay, so as I already said, we have a new structure which is an impulse, pullback, impulse, pullback. Okay, what
[16:05] can we expect? What can we expect?  Okay, another good impulse. I don't know how far it can go. We have this resistance zone that we've already marked, and the price is reacting there. What can happen? It could happen that the
[16:18] price simply stalls and then moves on. Okay, it could happen that breaks out higher.
[16:39] idea we have is that what follows is an impulse. Okay. And this is part of that impulse. Let's see what happens. happens. Okay. There it is. Look
[16:57] resistance, and now this giant candle. Okay, this candle was the failure. This was Okay, this candle was the failure. This was the failure. Let's continue. It's already with this impulse. Third good impulse. So what we can expect here
[17:11] are sales. I'm putting on my seller's hat now, and look, there's the sell. That was the one I was waiting for. That was the good sell, the one I was waiting for. Okay. Well, no, I didn't place the trade. But well, we're at this point. If I
[17:27] had placed it, well, I had placed my stop here, I would have sold, and this would have been the trade of the week. I can't see it here because I don't know how to remove it, but well, I think it's a
[17:43] good sell.  Anyway, we close the position, whatever it is, and we have the low so far. position, whatever it is, and we have the low so far. Let's see what happens. This is definitely a new impulse, okay, but it hasn't broken
[17:59] the low yet. If it breaks this low, we can expect a big drop. Let's see what the price does. It's an extremely vertical impulse. an extremely vertical impulse. Okay, it stops there. It's Thursday, okay,
[18:12] Thursday at 8 AM. This is the New York entry. Let's confirmation, even though we're in Asia, right, and on Friday. Also, I would
[18:27] n't trade this anymore. But notice how the price starts doing the same thing again: a strong impulse and a slow pullback. By the way, every time I post something like this, when I do an impulse and do this, it means a strong impulse
[18:41] and a slow pullback, okay, or a strong impulse and a slow pullback. Okay, which is basically what it's doing: a strong impulse and a slow pullback.
[18:53] Look at the number of red candles here, just this small pause, but only red candles. This drop was almost 90 grams, and look at the pullback. The pullback is red, green, green, red, green, green, green, red, green, green, red. Okay, well, we're...
[19:08] On Friday we're back to the same thing, I wouldn't trade. Okay. There, the price seems to be failing, it seems to be failing to continue with the next impulse, given that in
[19:20] theory the next impulse should start here and continue. Okay, that's why it's important to wait and see the important trading hours. Okay, let's
[19:32] see what happens on Friday. This pattern, I don't know if you know it, but it's called an inside candlestick. Generally, when this pattern forms, what's happening with the price is that, as we said, this was the next impulse. The
[19:48] specialists or market makers know that many people sold here, okay, and that the stops are generally placed here. So what do they do? here. So what do they do?
[20:01] our money. With this candlestick, they take out everyone who was here, both those who bought and those who sold and placed their stops here. They completely wipe out the market here and eliminate participants. Okay. And
[20:17] when this pattern forms, it's a gigantic impulse, a very fast impulse, breaking the trend logic, let's say, and placing a red candlestick—in this case, a red one—well, the stop here. Generally, what the price does,
[20:34] suddenly  Okay, let's see what
[20:46] happens. Well, the price fails, and there's the drop again. Okay, this candle should have been the entry, but I
[20:59] entry, but I think it was 4 PM. this is just the beginning of the session on a Sunday. What we want to see is 8 AM on Monday, which would be the
[21:16] opening in Europe, the opening in London. So, I wouldn't trade this, even though it's a good pattern. I would n't have traded it simply because of the time. So, what happens is that we see down here at 8:00 AM, that's
[21:29] 8 AM, the opening in London. And as soon as London opens and the first hour ends, it marks this candle. What is it? It's a very nice pin bar, and if
[21:41] we do a little more analysis, we'll see that it's more analysis, we'll see that it's right touching this support here. Okay,
[21:57] zones. If you suddenly see this little crook, well, if crook, well, if I put my zone exactly like this, yes, it's touching it. This is a very good entry candle, right? And we've already seen
[22:10] that it is. And they've already And they've already passed.  4 Ah, these are 4-hour candles, okay. These are 4-hour candles, and this is a very good candle to trade. No, we're
[22:23] not going to trade it because they'll say, " What a cheat!" So let's see here, this continues playing this support here since it hasn't been broken yet, but we have good trend logic, not an impulse, a pullback. Theory says that
[22:37] impulse, a pullback. Theory says that the impulse should break through this. If it doesn't, well, what can happen is that the price then reaches, stalls, breaks down. Okay, that's one probability
[22:52] down. Okay, that's one probability I would expect. The next is that it reaches, makes something like a W shape, and here it gives me the entry. Okay, you can
[23:06] see, as general knowledge, when the price reaches the end of a trend, it can only do four things, just four, and look it up, do backtesting,
[23:21] review the charts, and you'll see that the price only does four things when it's already at a given level, as in this case. The price can make a double bottom, case. The price can make a double bottom, which is the W I was telling you about, and then move away. That's
[23:36] which is the W I was telling you about, and then move away. That's one option: a double bottom. The second option is a climax, which is what it's called, which would be that it simply reaches, touches, and moves away. Okay, that's the...  The second option, the third option is a trap that arrives, passes, or
[23:55] surpasses this level, but suddenly, violently, it returns, rests again above violently, it returns, rests again above the support line, and breaks away. This is the failure pattern, okay, the end of the
[24:09] failure pattern, okay, the end of the trend. Okay, that's the third, and the fourth trend. Okay, that's the third, and the fourth is a trap. What does that mean? Well, the impulse arrives, maybe it returns, it pretends it's going to
[24:24] continue. Okay, here many enter to sell, but suddenly the price returns, surpasses this high surpasses this high here, and returns right to this new
[24:40] support formed here, and here it gives us the entry to go into a trade. Only those four things happen; there are no others. Okay, look here, for example, it
[24:53] arrives and forms a double top that doesn't work. Okay, although here they could have sold it, but oh well, no.  It works, and suddenly what the price does is fail to continue, or it makes a double
[25:09] top, so to speak, and well, it crashes. No, that's what happens. What happens back here? Well, let's see the price when this trend ended. What did the price do? It made the impulse to the level, it
[25:29] comes back, and it fails. Okay. Why does it fail? Because it simply didn't reach this level. So it fails at the level. That's why it's called a level failure. Okay, well, let's see what happens.
[25:45] So a very nice pip comes, touches the pip here. This makes me think it's a fundamental failure. I don't know what it was, fundamental failure. I don't know what it was, but let's see what happens. It penetrates.
[25:58] Okay, and it comes back violently. We don't know what's going to happen. Look, look at the shape, look at what the price is doing. Okay, all this is still noise, and it's Friday again. We expect Friday, Friday, Monday.
[26:14] again. We expect Friday, Friday, Monday. Okay, Monday, 0 hours, 4 hours, 8 AM. This is the start of London. The price hasn't been able to break through, it hasn't been able to. So basically, what it did was
[26:28] a failure pattern. It seems to be doing it. Okay, so probably the move we're expecting is that. Okay, it can make this move, or, being a little more conservative, what we can expect  It's that it does this,
[26:51] us the entry here, and when I say "here," I don't mean exactly here at this time, no, but at this level. But well, let's see, or maybe it's just a pause and it breaks down. Let's see what happens. This candle isn't very good, it's not
[27:06] engulfing, it's not a trigger, it's nothing. Let's wait for the Let's wait for the next one. Okay, there it broke down. next one. Okay, there it broke down.
[27:34] what happens, let's see if it goes down or comes back. And it definitely gives us a failure. It doesn't seem like it's going to continue down. Noise, noise.
[27:55] above the level. You see, what can we expect? A what can we expect? A pullback, and we go in a buy. It comes back, comes back, breaks. Be careful with this. It has already broken down. No, it wasn't a good
[28:10] with this. It has already broken down. No, it wasn't a good pullback, and it's definitely going down. Well, that's part of following the price. That's what I call following the price. What I'm looking for are suddenly those
[28:24] failure patterns, not in hindsight. What we see here again, here we've been for a while, is an impulse, a pullback, an impulse. Here we see the famous little flags, it doesn't break. Okay, making
[28:39] another impulse. A very slow pullback. Look at the faster than the pullback. Always look at the speed of this
[28:51] impulse and look at the speed of this pullback. How many candles did it take this pullback. How many candles did it take this pullback to travel from here to
[29:08] few candles to get from this level to this level, to travel the same distance in pips, so to speak, vertically from here to
[29:21] this level. Just look at how many candles it took. That's the speed. Okay, the impulse is always very strong, and a pullback is always slow. Okay, here we have another strong impulse, in fact, it's very strong. This candle
[29:37] is gigantic, this last V is very big, so the pullback, well, maybe it 's much lower. Let's see what happens. We keep running. Yes, indeed, it keeps going down. There it
[29:50] starts to pull back, it starts to pull back, a little pause, and it's gone. That blue level, I don't remember marking it, but anyway, there it is, and that's part of going.  Following the
[30:06] and that's part of going.  Following the price, it's just a matter of looking and searching for
[30:18] here. They noticed, so we'll wait a little while so we don't miss we'll wait a little while so we don't miss my purchase. Maybe we'll my purchase. Maybe we'll import that one. Ah, let's try a
[30:36] purchase with a very tight stop. There's the purchase, there's the purchase. Anyway, I hope this has been
[30:49] helpful and your comments are welcome. Thank you all very much. welcome. Thank you all very much. Goodbye.