what's going on guys welcome back to another video of price session trading and today we're going to talk about this watch pattern and why i'm not a fan of trading watch pattern but before we get started let's quickly talk about the current price action and current market structure that was happening we started this is actually yesterday's price action and yesterday was a martin luther martin luther king day holiday whatever in the u.s so market was close and you can see very little price action was happening and i found through the uh throughout my experience that
a lot of times when there is a holiday and there is no trade day you can use the previous day's price action so that's what happened today i don't normally use previous days price action but when it's a holiday already is a no trade day you can generally use it it is because a lot of traders think that the day is not you know the day is not closed properly and the price action you know structure didn't really finish yet so it is still in continuation so we're training up higher we're trading up higher everything
is above the ema we're making higher highs higher lows a legit uptrend so everything is looking like bullish so i want everybody to be buying this we cannot be selling this because everything is about the ema this is how we use the ema it is you know supportive indicator and at this point on is showing us that everything is bullish right now rebounds here from the ema from here from the trend line it was very early to trade so i didn't mark anything but here we get to watch pattern and why i don't like trading
wedge patterns and i'd recommend you guys during which patterns either it is because during the wedge pattern it is very tempting to take the both sides of the wedge it is tempting to go long here look how it is bouncing from the lows and look how it is bouncing from the highest it's tempting to go from the highs as well shorting this look at so many traps here so when you see the prices going into the wedge pattern and you're not really sure what's gonna happen just don't trade don't take a trade sit on your
hands be patient a lot of traders will get trapped very quickly and they will jump the gun because they're impatient and you just want to trade they just want to make some money but you have to be patient and you have to be mentally strong because when you're trading you should be feeling you should be leaning more towards one side you should always be only looking when you're buying you should be focusing on going along and you should not be even taking shorts into consideration of course anything can happen and there's always it can go
up and down but my point is is here when the wedge pattern is looking like this it is tempting to go short and it's tempting to go long therefore you know it's a no trade for me and it should be no trade for you because when i'm trading i should feel like there's only one possibility that can happen this is how i know that i'm confident with my chart reading skills and using my rules so this is why i don't i'm not a big fan of the wedge pattern so just sit on your hands and
you can see it actually happened we broke higher we broke the wedge pattern and we turned back down and i had this support drawn here earlier from these two logs right here and we broke higher and turned down quickly and this is where i went long and was a quick easy scalp but here was the important thing that happened for the day with that shift all the gears for the rest of the day or at least the majority of the day this one big move down that's normal we just broke the badge and it looks
very strong but that's normal that's a fail break higher and we got back into this to the support so that's normal so i wasn't really that afraid of this trade but once we made it to the ema ema is holding prices and one it's more once again big gigantic leg down a lot of volume here this is now the indicator that everything has switched there the people who normally went long here and here they barely went long here and it was very few people that went along here i actually was one of the few people
that went along here and they instantly got you know got trapped almost this is why i go for 10 ticks and you know i'm a day trader i'm a scalper i like to take my scalp and be back and be back you know with no position and so this was a major indicator that we are going lower from here and i actually took a chance here and i bought this one more move so i was one for one to start the day uh because i was looking at it as a little bit fail break lower
it's not like ideal fail break lower and if you move the support even lower it is just bouncing off the support but i treated it like this and you can see i got trapped here i didn't have the trend line yet in play obviously this is all the trend line was drawn right after i got trapped here but i just took a chance here you know and you can see everything is below the ema you can see a lot of stems a lot of dojis big two legs down like this there's definitely some shift happening
here there's definitely the balls normally that we're going along right here they're no longer going along right here the prices are not rallying up to this resistance so this is not acting like a normal trading range and we were looking for a new height of this bigger trend channel so but obviously it's not happening because look how look at how hard it is like pulling a teeth to take it above the ema and this is why we use the this is how we use the ema we cannot make it above the ema you know this
was fairly small signal bar and i like to take these risks because the failed brakes felt breakouts a lot of times are the low for the day just like it happened right here if you took this field breakout you're holding a gigantic runner this is what i was kind of hoping right here nevertheless it didn't happen so once it didn't happen i drew the trend line you can see we are now working over and according to our price action rules we now are waiting for break and a new low so we have this bullish correction
working up higher draw the short term trend line the trend lines the bigger trend lines are as important as the shorter term ones they are both equally important and don't neglect the short term ones they will give you a lot of great trades a lot of times they'll give you more trades than the bigger patterns bigger trend channels and you can see one leg pull back second leg two legged pull back i'm going to show you guys quickly one leg on the gap second leg up not quite measured but very close second entry short and
you can see if you move the support a little bit lower it's now acting as a resistance and twice we touched it and we retested it i like this big bullish big bearish bar second entry according to our rules and we are waiting for new and new will happen right here if i'm eyeballing this correctly and if not maybe it definitely happened right here but right now we're kind of working up sideways we bounce from this support so draw the support definitely don't neglect the drawing this you can see quadruple bottom we're working up higher
we spike through the ema so gears are switching up we're shifting i don't think you want to still go long yet because this is quite looking bearish and it's not really clear we have a new low whatever it's not really enough signal enough indication to go long you know so far we're now a little bit working up lower so draw this correction let it play out break any new high it was actually it was same thing to taking this long because the fact that yemen is holding prices even right here nevertheless i don't like going
along into this resistance like here as you can see if you move it a little bit closer we have a break new high perfect price action trend line rules worked and now we have a new high first century long pullback second entry long according to our rules second felt second entry long that failed and it is also we can treat this as a second entry short we have a double bottom right here so you can treat it either as a first entry from this low or as a second entry from the previous low this is
what i was counting it as today second entry short and i felt second entry long and you can see the shortened trendline once again holding prices nicely we take it higher traded up lower we close a little bit above the ema but the context is so strong right here it feels second to long i like taking this as you can see we have a break and a new low so perfect price action right here and now we are definitely going sideways we are in the trading range now and we have a field break lower so
um looking back at this i didn't i didn't buy here but looking back at this it is very tempting to go long here um because it is a fail break low and most breakouts will fail first century short pull back a little bit of a sec too like a pullback to the ema if you if we trade it up higher and be close above the ema that will give me enough information that a lot of bulls are buying from here so i would probably go along here but since we closed below the ema you can
still make one little push lower but you know it was very tempting going along going along here i'm not gonna mark it because it is very aggressive but it is according to our rules most breakouts of trading ranges will fail and they will just they will just move the market slightly lower to trigger the stops of all the people that went long so they can go along so they so they fake out the weak longs and the weak shorts the short the strong shorts went short right here and the weak shorts are going short directly
into the support and they're selling the breakout which is wrong and the week longs they're panicking and exiting way too early so they know what they're doing institutions definitely know what they're doing so you want to be buying with them you want to try to follow them so this is what we do on this channel we try to follow the institutions but nevertheless i would play it safe here it is tempting to go long here fell break lower according to our rules i'm just not going to mark it because i feel like it's a little
bit aggressive here nevertheless we're working up higher once again trend line fitting prices nicely ema's point time higher higher lows higher highs only thinking going along now bullish momentum very strong and this was the last trade that i took for today uh we had a new high right here pull back first entry pull back second entry i didn't go long on this bar because it actually we triggered first lower and then ended up going higher but it is still we're quite away from ema but once this bar touched the ema this is the key entry
point so right now we are at the key entry point second entry long so now there's a two rules being met we have a break an attempt to make a new low the key entry point is so strong that we cannot make a new rules there is a third rule that is being met and we are waiting for a new extreme new high of this bullish correction working up higher not correction this is a very strong trend so there's a four rules being met there's almost all of these you know one thing that is missing
is just fill breaker lower but this is a perfect setup very beginner friendly setup and it is a key entry point you can see we have a break and a new high perfect price action and this is what the day ended up looking on the bigger picture just be patient throughout this batch videos it is because it is looking very tempting look how nice the short setups look and look how tempting it is to go long of course it looks you know in hindsight it looks like you should be buying but you know it could
have easily here it could have easily been lower and then go higher so you always just want to skip the wedge patterns because prices shouldn't be acting like this really we really shouldn't be going we shouldn't be this undecisive but a fairly good fairly strict dave according to our rules i took a chance here a little bit and but you can see where two big legs down stems below the ema everything's closing below the ema this is not how you wanna how you wanna trade this and i'm going to show you guys the way how
i like to trade this the fill break slower and the support and resistance i'm going to give you a little bit guys a little bit of a knowledge right here normally once let's say we are working up right here we're working up right here we're working up like here we're working up like here when it is this steep the moves are big and steep like this it is safe to take these longs but when the market is looking like this and the market is starting to look like this this is when you shouldn't or you
should be paying a little bit more attention and you shouldn't be going long here because there's definitely something happening and obviously i got trapped here so it may seem like you know hey thomas what the heck are you explaining us to you don't very far you lose yeah well i got a little bit i i jumped the gun that was a mental error but i instantly recalled you know that i made a mistake here but i just took a chance you know i sometimes take a chance even though i know i'm gambling a bit so
nevertheless this is much safer and it is much harder for the beginners because all they see is just this one big move down and it is looking like it's going to reverse because this big steep move down is very steep and it's looking like it has a lot of power and people are scared to go long here but once we start wavering here that's when people want to go long but you can see this is not ideal pattern what is ended up probably going to happen we're just going to make these few little corrections we're
going to have higher and higher lower and lower excuse me and what a lot of people will do luckily i didn't do this today but i remember doing this i once i blew my account when i started up i was trying to buy here and trying to buy here and trying to buy here and the way your psychology works is once you're trained once you're trying to go long each time here you no longer pay attention to the downticks you pay all the significance to the optics and why because the upticks are putting you away
from the pain each time the you can see the uptick you you're starting to feel i it's all over now oh the mark is gonna reverse you know i finally gonna get my winning trade and once again once once it turns red you're once again panicking and you're looking for every single uptick you you your mind is only paying attention to your upticks and why is paying attention to your optics because your mind is trying to shield you from the pain you're experiencing a pain right now because you're working lower the market is going against
your position and you keep buying here so your your mind wants to shield you from the pain so we have because we have a pain avoiding mechanisms inside our head just like when you put your hands on the stove you will move it up instantly that's how our mind works so when you go along here and you see an uptick that's how your mind works it is focusing you all you you put all your focus into the optics because the relief they're releasing you from the pain and you feel relief but market just keeps going
lower and lower and once when i was very beginner trader you know eight years ago this is how i blew my account because i kept going short i wasn't paying attention to this downtrend that was happening and i thought it's time to go long it's time to reverse and you know i didn't go along here and i was going to go along here typical typical you know typical beginner error and you know what's going to end up happening is market is going to end up looking like this but nobody is going to go along here
the people will go short here and here and here trust me and i saw this multiple times a lot of traders texted me and emailed me previously and many years back that they actually act like this so i guarantee one of you watching you acted exactly like i'm describing i guarantee you exactly like describing you took three longs right here you took a loser and you you lost so much money that the fear of losing money was bigger than fear of missing out than the fear of being wrong and the last long that you probably
should have taken to make all the money back you didn't take because you lost so much money and this is how trading works and i'm rambling on quite a lot now but nevertheless uh hopefully this is a little bit useful i got a live trading session prepared for you guys so hopefully you guys gonna appreciate this i'm gonna i'm gonna upload it probably let me see today's third and this juice i'm gonna upload a thursday because i'm gonna move my schedule just a little bit because there was no trading monday so don't be i won't
forget you know i make three videos a week normally sometimes four but you know just something to consider that monday was closed nevertheless hopefully you guys had a good trading day study your charts and i see you guys in the next video bye guys
