Trading Course Day 4 – Entries

Summary

This video breaks down a strategic approach to trading, emphasizing the importance of price action, support/resistance levels, and trend recognition. It highlights how to spot fake-out trades, avoid impulsive decisions, and use corrections to gauge future price movements. The focus is on understanding structure, identifying trend reversals, and managing risk with stop-loss placements. The speaker stresses patience and discipline, guiding traders through a methodical process for entering and exiting trades while ensuring they follow a clear and proven model for success in the market.

Takeaways

• 📈 The 'Continuation' concept is the key trading entry model, following 'Indication' and 'Correction' steps to confirm trend direction before entering trades.
• 🕐 Use higher time frames (like the 1-hour chart) to identify major levels and structure, then refine entries on lower time frames such as the 15-minute or 5-minute charts.
• 🔁 The market cycle repeats through 'Indication → Correction → Continuation,' forming new highs or lows that define the current trend.
• ⚠️ An 'Indication' occurs when price creates a new high or low, signaling potential trend change or continuation.
• 🧭 A 'Correction' phase typically represents liquidity grabs, where price retraces temporarily before resuming its main trend direction.
• 📉 'Continuation' confirms that price resumes the trend after correction, and traders should enter trades once structure confirms lower highs or higher lows depending on direction.
• 🧩 Traders should focus only on recent price action (around 3–5 days back) instead of analyzing excessive historical data to find relevant market structure.
• 🚫 Avoid trading during equal highs or equal lows, as these areas signal indecision and lack of clear trend direction.
• 📊 Always mark key support and resistance levels; a break of structure (especially lower highs or higher lows) provides confirmation of trend reversal or continuation.
• 💡 For safer entries, wait for price to move below or above major 1-hour levels, since higher time frame zones hold stronger influence and reduce fake-out risks.
• 🧠 Scaling between time frames is essential — analyze structure on the 1-hour chart, then ‘zoom in’ to 15-minute or 5-minute charts for precise trade entries.
• 🔒 Protect trades by placing stop-losses above or below structural levels created during indications or corrections, allowing room for volatility.
• 📊 Price structure and liquidity grabs often fake out breakout traders; waiting for the second confirmation move prevents premature entries.
• 🎯 Target profit levels should align with the previous indication point or major structural level where the trend initially shifted.
• 🗣️ The speaker emphasizes reviewing earlier videos (steps 1–3) for full understanding, as all concepts build upon each other to form a complete trading system.

Q & A

What is the main concept discussed in the video?

The main concept discussed in the video is 'continuation,' which refers to identifying when price continues in a new trend direction after a correction phase, forming the basis for trade entries.

How does the continuation relate to step one and step two?

Continuation is step three in the trading process and relies on the first two steps—indication and correction. Traders must identify an indication (trend change) and a correction (pullback) before looking for continuation (trend resumption).

What time frames are primarily used for identifying continuation setups?

Higher time frames like the 1-hour chart are used for identifying key levels, while lower time frames such as the 15-minute and 5-minute charts are used for refining entries and confirming trend reversals.

What is an 'indication' in this trading strategy?

An indication occurs when price creates a new high or new low, signaling a potential shift in market direction and the beginning of a possible trend change.

What role does a 'correction' play in the overall strategy?

A correction represents a retracement or pullback after an indication, allowing liquidity to be collected before the continuation move happens in the direction of the new trend.

Why is waiting for the continuation important before entering a trade?

Waiting for the continuation confirms that the correction phase is complete and helps traders avoid fakeouts, ensuring they only enter once the market resumes the new trend direction.

How can traders determine when a correction is over?

A correction is considered over when price fails to make new highs in an uptrend or new lows in a downtrend and begins to form lower highs or higher lows, signaling a potential reversal.

Why should traders focus on recent price action instead of historical data?

Traders are advised to analyze only the most recent three to five days of price action since current market conditions and liquidity levels are more relevant for identifying active trends and setups.

What is the significance of equal highs and equal lows in the analysis?

Equal highs suggest that price is struggling to go higher, indicating potential weakness in an uptrend, while equal lows indicate indecision or potential strength building in a downtrend.

How does the speaker recommend setting stop losses in continuation trades?

Stop losses should be placed above the most recent lower high (for sell setups) or below the most recent higher low (for buy setups), ideally around the 1-hour key level that defined the trend shift.

What is the typical profit target (TP) for continuation trades?

The target profit (TP) is usually set at the level where the 1-hour indication started—typically the previous major low in a downtrend or high in an uptrend.

What common mistake does the video warn traders to avoid?

The video warns against trading the first breakout or indication without waiting for confirmation of continuation, as this often leads to fakeout trades caused by liquidity grabs.

How does the 'doctor analogy' help explain analyzing price trends?

The speaker compares analyzing lower time frames to a doctor performing an X-ray—both involve looking deeper inside to understand the true cause or structure behind surface-level behavior.

Why does the speaker emphasize using higher time frames for marking levels?

Higher time frames such as the 1-hour chart provide stronger and more reliable levels because they capture more significant price movements and trends than lower time frames.

What are the three repeating components of the strategy?

The three repeating components are indication, correction, and continuation—this sequence repeats as the trend progresses, allowing traders to identify multiple trade opportunities.