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HOW TO IDENTIFY A BIG MARKET MOVE BEFORE IT HAPPENS
There are obvious reasons to look for big moves in the markets. For one, if you can get in on a big move, there is potential to make a large profit, and I’m going to show you exactly how to do it right now.
Finding these potential big moves is quite simple.
If you want big moves, you need big charts.
We’re talking higher time frames here. Big market moves start and end on the higher time frames so that is where you need to look for these setups.
Profitable trading is all about figuring out which direction price is likely to travel in, and then trading accordingly. Essentially you need to find high quality turning points in the markets. Identify these levels on a chart, and then trade away from them with confirmation.
Now when it comes to finding high quality turning points in the markets, there is only one methodology that I see playing out time and time again, and that is supply and demand.
Simply put, price moves because of an imbalance in supply and demand, in any and all markets. If supply is greater than demand, prices will fall, and if demand is greater than supply, prices will rally.
This is a really basic overview of the concept. There’s more but in all honestly it needed be more complicated than that.
If you can identify these levels on a price chart, then you can greatly improve the odds of your trades working out.
Now as I said before, if you want big moves, you need big charts; so add that to identifying market turning points, and we’re talking about using supply and demand levels on higher time frame charts to find high quality trading opportunities.
Let’s take a look at some recent examples.
In the image above, we have EJ on the weekly chart. Price left demand and was making its way up to weekly supply.
After testing some SR, there was opportunity for the rally to continue.
Here's the picture on the daily:
Now that's what I saw setting up. Here's what happened after:
That's a few hundred pips right there, and this was a simple trade.
This is one example. I have a few more for you to see as well.
GJ was slightly different. On this pair we had an SR flip on the weekly, then after testing an opposing level, price indicated that long play was possible. Here are the levels:
Price rallied on nice and strong with no sign of stopping till much later. Another great trade.
The other trade was also a yen pair and that was on UJ.
Here we saw price make a small move away from weekly demand with supply a good distance away. Price indicated a continuation of the rally on the daily so I entered long.
Here is the result:
This was a smaller move than the others but profitable nonetheless.
As you can see, I have a series of before and after pictures here. These are all trades that I pre-planned and traded in the live markets and they all worked out very well.
These are not isolated incidents. Enough of these types of setups happen in the market to make a tidy profit.
If price goes up, I sell and if price goes down, I buy.
Its that simple.
Now if you have come across supply and demand before, some parts of this approach will be familiar to you. However, there’s a big difference between how I trade supply and demand and the common methods that are taught out there.
For one, I don’t blindly place limit orders at supply and demand levels, hoping that the R:R and odds will work themselves out over time. I wait for confirmation for all my trades. This helps me stay on the right side of the market.
My approach focuses on “Reading Price”. So it’s more than just looking for levels. It’s about understanding how price moves to and from the levels and using that information to make informed decisions about when to enter and exit the market.
A big part of that is price action.
Price Action is Key
You’ll see that price action combined with, high quality turning points is a recipe for success in the markets. Reading the story that the chart is telling you is how you make money.
Now I know what you’re thinking. If you're using big charts, then you need big stops.
At least it's not true all the time. Yes you want to place your stop loss order in a decent place, but it doesn't always have to be miles away either. You can often get a tight stop on a large chart that’s keeps your R:R in check.
I'll show you what I mean.
The trades I shared above were taken with price action confirmation on the lower time frames. I'll show you what that looks like:
And price never looked back.
Waiting for confirmation really helps. If you look below you'll see there was barely any drawdown on these trades:
This is how I like to trade.
Now there’s a lot of information here and I know it’s a lot to take in.
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