what is going on traders welcome to my channel in this video we're going to talk about the most popular setup amongst the price action traders and it is the two like a pullback now it would be weird if market just moved in these v-shaped one-legged formation this is not how market really moves market moves with corrections that are being printed on a chart this is something like what it looks like in real life and the tool like a pullback is exactly what the name entails and it looks something like this the first bullish lag is
just a series of bullish highs bullish bars making higher highs and higher lows and once the first bearish bar breaches this formation and creates a new low that is lower than the previous bullish bar low the first bullish lag is over and the first bearish lag begins bearish lag is just a series of bearish bars making lower highs and lower lows and once the trend resumes and the balls are strong and in control this the second leg starting to form it is a series of bullish bars making higher highs and higher lows now that is
also what it's called a first and the second entry first and the second entry is nothing more than just a first or second attempt by the bears to reverse the market and change the trend direction if this is the first bullish lag and it's the first leg working higher first trend bullish uptrend the first attempt the first bearish bar that breaches this formation is a first attempt by the bears to reverse the market as it fails and market keeps working higher the second bearish bar that attempts to reverse the market is a second entry so
we have a bullish lag working higher first entry working higher second entry short now why is this so popular and why does this happen about it this is tied down to human psychology when we fell at something do we just give up or do we study hard do we work harder do we come back and then try it again this is why the market moves in tools and why it is such a powerful setup now do we care about the foundation of why this happens no we really don't care about that all we care about
is that it's making us money when novice trader first look at the chart he'll go nuts he'll go crazy he won't know where to buy bearded cell because there's so many lags working up and down up and down and it's really hard to recognize the two-legged move correctly but here's the key why the two-legged move is so powerful and such a powerful entry it is because we need to combine it with the key entry points key entry points are trend lines support and resistance lines and exponential moving average this exponential moving average right here this
ema is a 21 bar ema and we use it as a supportive indicator let's go from the start and it will make much more sense as you guys will see right now the market started with the downtrend how do i know it's a downtrend because prices are making lower highs lower lows i draw this trend line this channel around this downtrend ema is pointing lower and prices are below the ema so we are clearly in a downtrend now why do i draw this channel and why are we looking for these channels which are key entry
points it is because the trend line rules that is in price action after prices will break the trend line the traders will attempt to make a new extreme this will happen if prices break the trend line don't just look for reversal straight up wait for at least attempt to make a new extreme by the traders so as we have this downtrend working lower and we have a first break of this downtrend remember guys we just talked about the tool like a pullback this right here is first legged move working higher this is the first leg
working higher we have three bars working higher and the first bearish bar we have four bars working higher and the first bearish bar that breach this leg so this is the first leg move higher and it is followed by the second leg working higher now the key entry points are important because that's where the high priority setups occur so we want to combine these two legged moves the second entries with the key entry point ema is one of the key entry points since prices broke this downtrend and i'm expecting for traders to make a new
low i'm only looking for reasons to sell but i'm not gonna sell in the middle of nowhere i'm gonna sell at the key entry point and this is the first leg working higher pull back second leg working higher so the two legged correction played out and it's now safe for me to look for reasons to go short the second entry triggered below this bullish bar but remember we are selling so we want to see a strong bearish bar so this was the first bearish bar that prices triggered below first like working higher second leg working
higher at the ema quick easy scalp here we have another instance we have a first leg working higher pull back second leg working higher now i'm only looking for these two legged moves when it makes sense when i'm expecting some sort of pattern at the key entry point i'm just not looking for two legged moves all over the chart no i'm only looking for two legged moves when i'm expecting a setup at the key entry point and as the as the highs here make a nice geometrical formation i found this bigger channel and this is
why i'm looking for this first leg move higher pull back second left move higher once i see that the two legged move finished i know that it's safe for me to look for short first entry short pullback second entry short at the ema and there is a little caveat to this the two like there are two legged moves inside the two legged moves there's a two legged move right here and there's a two legged move right here but also this can create one single leg working higher and the second leg working higher so there are
two legged moves inside the two legged moves but we're not going to complicate that to let it move right here two legged move right here at the key entry point at the key entry point now remember when i told you about the trendline rules when the prices will break the trend line there was going to be arenas of a new extreme so we have a two legged move that resulted in the break of a trend line i'm gonna show you guys this is the first leg working higher first bearish bar the bridge deformation and the
second leg working higher sometimes the legs are measured sometimes they're not that's okay if they are measured it's perfect if they're not measured that's that doesn't matter so this right here is the first entry short pull second entry short second attempt by the bears to reverse this bullish trend working higher and this is a high probability setup as we've depicted in the earlier part of the video and we are expecting prices to make a new extreme this is why i'm looking for the two-legged move because we just broke this bigger channel and i'm expecting a
new low so this is why i am i'm gonna show you once again this is why i'm looking for two-legged move and look what happened right here prices are broken lower broken lower but we didn't make a new low yet there is a strong support forming and there's a lot of buyers that are jumping into the market we're not interested in going long yet because the overall trend is down and we are waiting for a new low of this of this channel this channel was confirmed by the confirmation of here and here and here we
have a second entry long failure but we're not going to talk about it right now once again prices are working lower i'm not measuring these legs working lower why am i not measuring them because i am not interested in buying i'm only interested in selling and i was measuring the bullish legs working higher there is no point for me to keep measuring one leg working lower second leg working lower that's not going to make anything for me we are at the lows at the support and i don't want to go short directly into the support
so we're bouncing after at the support we have a first leg working higher pull back we have a second leg working high as the prices are starting to go sideways and we are starting to form a trading range remember i still keep that in the back of my mind i'm looking for a new low of this downtrend and i want to go short at the top of the trading range so what i'm going to do i'm going to once again measure the first leg put it here and here's the second leg but here we can
see that the prices are working sideways there's a lot of dojis a lot of stems this is what it's called congestion and we don't want to trade this congestion the better setup here is to wait for a lower high and a nice bearish move down this easy scalp but this two-legged move up we would skip it because there's a lot of congestion a lot of indecision in the market but i'm just demonstrating their first leg working higher bearish lag second leg working higher and once again i'm measuring it because i'm expecting a setup at the
key entry point which is this resistance because i'm expecting for prices to make a new low and remember guys when i talked about the trendline rules it doesn't just apply to these bigger channels it also applies to the shorter term ones as well this is why i have this all the shortened trend lines drawn here because it works as well for the shortening channels now price is finally made a new extreme of this bigger channel and after prices will make a new extreme according to price action there will be at least correction or straight up
reversal but we just don't want to be buying without a reversal pattern but we also are not interested in selling yet because we already have a new low and the downtrend played out as the market keeps making lower highs and lower lows you have to switch your gears a little bit because there is something changing we're supposed to go higher we're not and we keep making lower highs and lower lows what it ended up being you would be able to only find this channel after this confirmation because you have a you have a confirmation right
here confirmation right here and it works nicely now when price is made this confirmation there is once again first leg working higher we have this uptrend working higher we have a break and there is a second leg two legged move and there it is first attempt to buy the bears to go lower pull back second attempt by the bears to go lower this would be a second entry short at the key entry point but we're not trading high side hindsight this would be too hard to trade in real time once you see this confirmation you
can also take the second entries in the opposite direction meaning if we are in a downtrend we look for second entry short tool like a pullback to sell but we also look for a lot of buyers to be trapped because a lot of traders are trading against the trend and they're going to be trapped on the wrong side of the market so we're also looking for the failed second entries to go higher it's still part of the two-legged pullback think about this this is the new high this high is higher than this high or desire
so i'm counting my count starts over pullback pullback first attempt by the bulls to go higher this we triggered one tick above this bar and this bar made a new height that is higher than the previous one and it failed it's just the first attempt by the boost to go higher and it felt and it confirmed the downtrend we are still in a downtrend price is pushed below ema which gives more credence to the setup that we are still in a downtrend and a second attempt by the bulls to go higher first attempt pull back
second attempt good place to go short because we're looking for two legged moves and but we are not looking to go long once again we are in a downtrend we're looking to sell and the same thing happened right here you have this two-legged move up second entry short but this would be too hard to find in real time once this high forms you find the trend line you have a new high right here pull back first attempt by the bulls to go higher pull back second attempt by the bulls to go higher failed think about
it so many people are going along into this trend line to fail too like a move up good scalp same thing happen right here in this instance you just have a first leg working higher this is why we are not just selling we're not just selling this entry you could see and you could tell say to me that this would be a good scalp to take it is off the key entry point no it's not this is just first entry and the first entry can fail think about how first entry fell here even if you
have a break at a new low first entries are not high probability set up so we have a first entry short but we are not interested in selling because we are expecting the second lag working higher something like this since there is a key entry point i'm probably thinking that prices will struggle to break below so what i'm going to do i'm going to wait for the two legged move in the other direction to fail for the felt second entry long this is the new high of this move first century long pull back once again
below ema exactly this is what i want to see second entry long failure two felt attempts by the bulls to go higher into this key entry point failed we are in this downtrend and prices made easy scalp and once again we broke this channel so what is probably going to happen next you guessed it traders will attempt to make a new extreme so what i'm going to do i'm going to measure this first leg and i'm going to wait for the second leg working higher but we didn't get it and that's okay i'm not just
ready to sell yet even though i'm expecting a break and a new low i'm not going to just sell we can keep reversing from here and keep riling up we have a double top right here and i'm going to wait for the same thing i waited right here i waited right here and i waited right here i'm going to wait for the felt second entry in the opposite direction pull back pull back first entry long we just triggered above this bullish bar felt pull back pull back second entry long we didn't trigger about none of
these bars highs this was the first doji that we triggered higher so this is why it is a first second entry long and think about this once again we're below ema it is a good bearish pin bar in our direction and price is confirmed they're working to make their new low we didn't make a new low yet notice we are shy away from a double bottom so in case i'm still looking for a new low i'm going to do the same thing very high probability setup i'm going to measure this lag first entry pull back
perfect measured lag to the second entry i'm going to mark just this bar right here and this would be a two legged move up first century short pull back second entry shot we have this trend line working higher that break and a new high so the trend line rules work even on the smaller time frames and we finally have a new low right here we created additional lag to new low and prices are safely reversing from here if you're watching at this point on it means you're enjoying the content so i would kindly ask you
to hit the like button subscribe to the channel if you like to study day trading and remember guys the two-legged pullback is there and we're only looking at it one under the right circumstances at the key entry points you don't have to worry about two-legged moves when you're not expecting key entry point or a continuation of a trend so god bless everybody
