In this educational video, I will explain how I determine reversal and continuation structures/patterns in the market. Many have asked me to break this topic down more in depth and in live, so I hope I can address all the questions I get on this.
So, in my opinion there is only 2 main type of structures/patterns:
Continuation Structures Reversal Structures
The key to find consistency in price action trading is to identify what kind of correction the structure is forming. Is it a reversal, or is it a continuation? Since after a correction is finished, we are likely to see an impulse move from that structure, and it's good to understand when and how likely that structure will either continue or reverse the current price.
Below I will list out some of the most commonly identified reversal and continuation corrections. To me, it's not too important what people call these structures/patterns, but what you need to determine is, is it a reversal or continuation structure? Because, the market is ever evolving, and price action structures/patterns are also evolving. Sure we can learn a lot from the typical “Textbook” structure and patterns, but they often or not won't be picture perfect, and we need to utilize what else the market is telling us to determine the structures.
Reversal Structure -wedge -ascending/descending channel -Double Tops/Bottoms (M and W pattern) -Head and Shoulder
Understanding how the price has been moving thus far, will give you a more clear understanding of what the structure is going to form.
For example:
-When we see price at the top of a HTF structure, slowing down and correcting itself up, you will be looking for reversal structure from the top, and looking for the sell.
-When we see prices broken out of the HTF structure, you will be looking for a continuation structure to form and continue the buy.
As always ,feel free to ask me questions or comments.
Always looks so easy when you explain it JoJo, then I look at real charts and find loads of confusing spots. Anyway, thanks to your education we are all getting better day by day. Much appreciated as always!
jojofang0901
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@Seandeleer, No problem. If you have questions ask me in our telegram chat group, I dont mind the interactions :)
Thanks for this very clear and infornative. What type of a trader are you please?
jojofang0901
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@ScorpioFX2020, Hello :) I think you are asking in terms of what style/preference of me a trader ? Thought I explain it more detail.
I focus only on price action structures/patterns.
For FX I would be as a hybrid trader (Day/swing) and for Equity and Crypto I will trade them swing.
Hope that answer you question. :)
ScorpioFX2020
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@jojofang0901, Thanks. Yes that answers my question. I was wondering if you were a swing trader. I am a day trader and even do some scalping depending on the time I have available. I want to et into longer term trading but sometimes find I do not have the patience.
Krischandra2020
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You are an excellent teacher, Jojo. You make the content so simple to follow. Thanks a lot for sharing your skills and experience with the wider community. Keep up the good work. Stay blessed.