• 3 months ago
Transcript
00:00Tutorial, module 6. We are going to talk about price action and this will be a chart pattern
00:08based on price action. There are many chart patterns out there but I am only going to
00:12focus on a couple. They are the tops and the bottoms and the flag. And today's example
00:16we will discuss about the double top first and then so on and so forth. Let's go.
00:23Over here, you can see a chart based on US 30 also known as Dow Jones. It is in a one
00:37hour time frame. Remember the rule of the game. If you are on price action based on
00:46chart patterns, it has to be in a one hour time chart. Nothing else. No EMAs, no stochastic,
00:54no nothing. Just based on the chart pattern. What we are looking out for today will be
00:59a double top. So we will wait for the double top to form. We will not pay attention to
01:04anything else even if it is presented to us. Now we just let the market play and we hope
01:11to see a double top based on this example. We let the market run for a while and we are
01:17now spotting a possible first top and then we just let it run further. Now the next aim
01:26is to see where the next top is. The moment we spot the next top, we can start our action
01:34plan already, which is putting up the neckline, spotting where the double tops are and then
01:41we just have to wait for the market to break the neckline. There we go. I think it is going
01:46to form anytime now. So first top is already formed. Second top has already formed. Now
01:52the neckline also has already been formed. So what we have to do now, you can see that
01:58first top, second top plus a neckline. We have completed the whole criteria on a double
02:05top. As you can see over there, two tops formed along with a neckline. All criteria is met.
02:14In H1, yes. Two tops formed, yes. Neckline formed, yes. Now we have to mark out the neckline
02:22because that is the crucial point of our entry. We have to know where the market breaks
02:29the neckline and that will be our entry point. Based on this, the body to the bottom most
02:34wick is the neckline. Neckline is already broken. Now what is the next step? We have
02:41to see a possible retracement. For high risk entry, you may enter as soon as the market
02:50breaks the neckline. For a safer entry, like for myself, I will always enter where the
02:56market retests. Now at this point, the market is doing a retest. It is retesting where the
03:03neckline is currently at and we can make our order over there. I would say it is a medium
03:10risk now for you to place a sell over there. I would do it the moment it just enters or
03:15retest. I would do it because why? Double top is showing already. And then a retest
03:20happens there and then now we just have to wait on the reaction of the chart. The guideline
03:27would be the starting of the trend all the way up. This is where it begins. This is where
03:32the trend begins. All the way to the peak of the top. The first top is not the peak.
03:38The second top is the peak. And then move that pole where the neckline is. And where
03:44the pole ends is your possible TP area. So you are going to drag that TP. At this point,
03:52I feel that we should monitor and manage our losses already because we are already in the
04:00greens. What should we do next? Move the stop loss. Initially, that stop loss was not placed.
04:09By the way, my bad. It should be moved down there because the structure is broken already.
04:15So it is safe to put it there and then we hit the TP. There we go. That is an example
04:21on how a double top is done. Based on this example, a medium risk was taken over here.
04:28A high risk, the moment it breaks, you are going to enter already. But a medium risk
04:33would be where the market retests the neckline, you make your entry. A lower risk where the
04:38market breaks down from the retest, form a confirmation candle, and that is where you
04:43are going to enter. So that is how you do a double top. Till we meet again, nice and
04:47easy, Easy Trades. Let's go!