WEBVTT 0 00:09.170 --> 00:15.860 Let's continue the lecture having a look at the second part of the chart. We have here a very strong 1 00:15.860 --> 00:21.970 green candle, probably there has been a news at this point that also helped the price to go higher. 2 00:22.100 --> 00:28.360 And actually you can see that the price hit the top of the channel before going back, forming this upper 3 00:28.370 --> 00:29.730 shadow. 4 00:29.780 --> 00:31.400 What happens next? 5 00:31.430 --> 00:34.200 We have a red candle and a small green candle 6 00:34.220 --> 00:37.140 that has the same shape of a shooting star, 7 00:37.250 --> 00:44.300 even if it doesn't appear at the end of the uptrend because it is at a lower price. There isn't a clear 8 00:44.300 --> 00:48.420 signal at this point that sellers are taking control. 9 00:48.750 --> 00:55.250 Going on, we see that there are around five, six candles that express indecision after the strong 10 00:55.270 --> 00:56.430 up move. 11 00:56.540 --> 00:59.740 This candle can be considered as a master candle. 12 00:59.930 --> 01:04.720 I draw the lines and you can see that it is bigger than all the following candles. 13 01:04.910 --> 01:13.040 We have one, two, three, four, five, six, seven, eight. So seven candles with the eighth candle that is breaking 14 01:13.040 --> 01:16.320 the high-low range of the master candle. 15 01:16.340 --> 01:21.300 So this is a continuation pattern and we can expect the price to go higher. 16 01:21.800 --> 01:28.560 So I'm going to cancel these two lines and we can see what happens after this continuation pattern. 17 01:28.670 --> 01:31.830 The price actually goes higher as I expected 18 01:31.940 --> 01:34.560 and it is trading near the top of the channel, 19 01:34.760 --> 01:38.500 so the uptrend is quite strong at the moment. 20 01:38.690 --> 01:45.410 Then we have this candle that may be considered as a long-legged doji, even if it has a small real 21 01:45.410 --> 01:45.940 body, 22 01:45.950 --> 01:49.880 so the price doesn't close exactly at the opening level, 23 01:49.880 --> 01:57.200 but anyway the logic behind it is the same. It is quite easy to see that buyers and sellers were fighting 24 01:57.200 --> 02:05.030 a lot and the price closes almost at the opening price. The following session is a bullish candle that 25 02:05.030 --> 02:10.020 confirms that buyers are still on the market, pushing the price higher. 26 02:10.070 --> 02:14.450 So the market continues to trade near the top of the up-channel. 27 02:14.960 --> 02:16.390 Then there's a gap low 28 02:16.400 --> 02:23.690 and we have a very rare pattern that we have also studied during the course, that is the Harami pattern. 29 02:23.750 --> 02:28.910 I'm not going to consider this pattern, but at least I can say that with this gap low, 30 02:29.150 --> 02:33.800 I want to monitor carefully what happens in the next sessions. 31 02:33.860 --> 02:37.410 There is this long red candle that leaves no doubt: 32 02:37.490 --> 02:40.060 the price is starting to go down. 33 02:40.070 --> 02:43.410 This is also confirmed by the next candle, 34 02:43.430 --> 02:46.560 that is another long red candle. 35 02:46.580 --> 02:49.850 Let's go on to check what happens next on the market. 36 02:49.880 --> 02:53.980 The price seems to go a bit higher even if there is no strong move, 37 02:54.020 --> 02:58.830 actually you can see that here we have other candles that express indecision. 38 02:58.850 --> 03:01.760 This is also normal we are in the middle of the up-channel, 39 03:01.760 --> 03:05.180 so it's not a good idea to open here long positions 40 03:05.300 --> 03:08.520 and it's not convenient to open short positions. 41 03:08.540 --> 03:14.810 Of course if I still have my long positions I can decide to keep them because we are still in an uptrend. 42 03:14.930 --> 03:20.840 But maybe we are in a retracement phase and the price is going down to the bottom of the channel. 43 03:21.260 --> 03:27.200 The retracement seems to be real because after a short period, where the price goes up, there's another 44 03:27.200 --> 03:33.620 strong red candle that forms another bearish engulfing pattern that pushes the price down. 45 03:33.620 --> 03:39.600 So at this point I expect that the price continues to go down to reach the bottom of the channel. 46 03:39.980 --> 03:41.950 Then we have alternate candles. 47 03:41.960 --> 03:49.590 We have a small red candle, a green candle then another red candle followed by another green candle. 48 03:49.610 --> 03:51.440 And then we have a doji. 49 03:51.470 --> 03:58.240 So in this phase I'm not getting something significant from the market I'm not getting any strong signal 50 03:58.240 --> 04:00.290 to place my long trade. 51 04:00.470 --> 04:06.680 Then there are two red candles that push the price down to the bottom of the channel. You can see that 52 04:06.740 --> 04:09.860 this shadow hits the bottom of the channel. 53 04:09.980 --> 04:12.580 This is a good price to open a long position, 54 04:12.590 --> 04:15.210 but of course I want to wait for a signal 55 04:15.320 --> 04:21.350 and, unfortunately, all the following candles are not strong enough to let me think that buyers are taking 56 04:21.350 --> 04:23.250 control of the market again. 57 04:23.540 --> 04:26.470 So I wouldn't open any long trade at this point, 58 04:26.600 --> 04:33.910 I can't see any good reason except for the up-channel. Going on, we can see that the price goes up again. 59 04:34.010 --> 04:37.330 There hasn't been any clear signal to buy the couple, 60 04:37.370 --> 04:41.290 but most of the candles are green and they are also quite strong. 61 04:41.480 --> 04:44.950 So the price continues to follow the uptrend. 62 04:45.350 --> 04:50.110 Here we have a tweezers top with the second candle that is also a doji. 63 04:50.120 --> 04:56.450 So this is a double bearish signal and it actually worked because the retracement starts right after 64 04:56.450 --> 05:03.530 the combination of bearish patterns. Then the price starts to go up again, heading to the top of the 65 05:03.530 --> 05:05.950 channel. At the end of the chart, 66 05:05.960 --> 05:12.610 we have two candles that can be considered shooting stars, especially the second one because it has a very 67 05:12.610 --> 05:14.820 very small lower shadow. 68 05:15.130 --> 05:19.130 So we are at the top of the channel and we have two shooting stars. 69 05:19.300 --> 05:25.670 I would take my profit from my long positions and check what happens next because these two patterns 70 05:25.690 --> 05:31.540 are warning me that sellers are starting to step into the market and a retracement may start very 71 05:31.540 --> 05:41.020 soon. So we can go on and we can see that actually the price goes down and there are two long red candles 72 05:41.050 --> 05:47.230 with the first one that also forms a bearish engulfing pattern. After the pattern, 73 05:47.230 --> 05:52.180 we have another strong red candle, so the analysis was correct. 74 05:52.230 --> 05:55.760 The price is going to the bottom of the channel again. 75 05:55.990 --> 06:03.160 Then we have two small candles, another red candle that pushes the price even lower, then other three small 76 06:03.160 --> 06:04.090 candles, 77 06:04.090 --> 06:10.660 another one here and then the price goes definitely down, reaching the bottom of the channel. 78 06:11.020 --> 06:12.300 This is not a surprise, 79 06:12.310 --> 06:15.340 we were expecting the price to reach the bottom. 80 06:15.340 --> 06:19.110 Also you can notice that there is a master candle here, 81 06:19.270 --> 06:22.650 even if this shadow is going lower than the bottom level. 82 06:22.720 --> 06:25.230 But the logic is still the same. 83 06:25.540 --> 06:29.810 You can see that after this candle that continues to push the price down, 84 06:29.860 --> 06:35.660 there is a period of indecision with candlesticks with a very small real body. 85 06:35.920 --> 06:41.870 Then there is a red candle and another red candle that breaks the high-low range formed by the master 86 06:41.880 --> 06:42.850 candle. 87 06:43.150 --> 06:49.750 I delete these two lines and we can see the end of this chart with today's candle, that is still going 88 06:49.750 --> 06:50.290 on. 89 06:50.350 --> 06:57.920 For now, it looks like a doji, a long-legged doji to be more accurate. If it is closing like this, 90 06:57.940 --> 07:00.700 I'm going to consider a long position. 91 07:00.730 --> 07:07.310 I'm always happy when I find a good signal that also gets along with the main trend on the market. 92 07:07.390 --> 07:14.860 So I will have the chance to buy at the bottom of this up-channel. So I know I've been a bit repetitive 93 07:14.860 --> 07:16.020 in this video, 94 07:16.030 --> 07:22.570 this is also because we have sometimes found the same pattern like the bullish or bearish engulfing pattern, 95 07:22.570 --> 07:26.380 that is quite common in situation of a clear trend. 96 07:26.680 --> 07:28.770 But this was necessary. 97 07:28.780 --> 07:30.900 I want you to turn your brain on 98 07:31.030 --> 07:37.720 when you analyze the market. Many traders just have a quick look at the chart and say: "oh there is 99 07:37.720 --> 07:38.520 an uptrend, 100 07:38.530 --> 07:40.520 the moving average is like this, 101 07:40.540 --> 07:43.270 the stochastic oscillator is like this, 102 07:43.270 --> 07:44.830 so everything is fine." 103 07:44.980 --> 07:48.910 and in 20 seconds they have already analyzed the chart. 104 07:49.330 --> 07:51.490 I will never stop saying this: 105 07:51.490 --> 07:55.090 Forex trading is a real and a serious business. 106 07:55.090 --> 08:02.170 You will not make any money opening the chart for 20 seconds and use a pre-determined scheme without applying 107 08:02.170 --> 08:03.310 yourself. 108 08:03.400 --> 08:09.280 So I hope you are still focused after this long analysis because we are approaching the part of the 109 08:09.280 --> 08:16.060 course where we will see how to open a trade using different methods and different indicators. 110 08:16.060 --> 08:18.120 So excited to get there.