Lecture Notes: Understanding Market Movements and Candle Patterns

Key Concepts

• Rejection Candles: Indicators of an extreme amount of shorts in the market.
  • Often lead to breakdowns due to over-leveraged positions.
• Failed Accumulation: A term used for rejection candles indicating a breakdown in a potential move upwards.
  • Represents the failure to hold certain levels within a trend.

Market Dynamics

• Breaking Through Trends:
  • Aiming to catch valleys and break through distributions.
  • Identifying compression and accumulation points.
• Shorting and Inverse Levels:
  • Excessive shorting leads to market breakdown.
  • Inverse levels are often targeted and tested.

Candle Patterns

• Rejection vs. Retracement Candles:
  • Rejection candles show inability to hold certain levels, indicating a potential failure.
  • Retracement candles show the market holding within the local level, indicating a continuation.

Analyzing Market Moves

• Identifying Leg Movements:
  • Important to mark the "legs" or stages in a move.
  • Breaking of legs indicates a failed accumulation or a rejection.
• Understanding Failure Points:
  • Failed accumulation occurs when the market back-tests hold levels but fails to maintain them.
  • Observing these patterns allows predicting market downturns.

Practical Application

• Market Analysis:
  • Look beyond the shape and type of candles; focus on their implications.
  • Recognize when a candle indicates back-testing and breaking of legs.
• Timeframe Considerations:
  • Analyze different timeframes (e.g., hourly vs. four-hourly) to understand broader market moves.
  • Recognize the impact of short-term patterns on longer trends.

Community and Resources

• Engagement and Learning:
  • Engage with trading communities for insights.
  • Access additional resources via Patreon and Discord.

Supporting the Content

• Consider donating or subscribing to support the free content.
• Participate in community discussions to further trading knowledge.

Note: The importance of understanding why certain market moves and candle patterns occur is emphasized over merely recognizing patterns visually. Understanding the underlying dynamics aids in making informed trading decisions.