Everybody wants to know exactly when to enter their trade and in what
direction.
But I think it's equally as important to understand when not to trade.
So in this video, I'm going to show you how to avoid periods of
consolidation and how to actually spot when they're about to start.
Welcome back to the channel, everybody.
My name's already.
And this is the moving averages, shall we discuss everything day
trading to keep you profitable on a consistent basis?
One of the worst thing is when day trading is getting stuck in a
period of consolidation, you enter your trade and the candles do
nothing, but go up and down stuck in arrange for a long time.
Getting you frustrated having a complete loss of momentum and just
trading sideways.
And sometimes do you sideways trade last for 2 or 3 days.
So, let's jump into the charts and I'm going to show you how to spot.
I'm consolidation and how to avoid them and how to actually commit to
getting out of your trade when you're stuck in it.
So, we've got us30 up on the charts.
And obviously, as you can see, we had a beautiful nice strong trending
Market down.
Then once we hit that area of support, we got another big strong
trending market up.
Now, the one thing that I want you to keep,
In mind, look at the degree, the slope of this trend from top to
We've maintained a 45 degree angle when the market is trending at
about 45°, it's got a lot of nice momentum.
You can always trade with that Trend and be safe and secure in your
position.
This is why the number one rule of day.
Trading is the trend is your friend because when you get into a
position with the Trent not against the trend with the trend, you are
more likely to succeed in your trade.
You have to remember where the momentum is going.
You cannot individually.
Hold back momentum.
You will get stopped out every single time.
Now after two gigantic moves like this, that we just had on US 30 just
like anything in nature.
It needed a break, a break, usually turns into a period of
consolidation.
Humans, sleep bears hibernate and price action.
Goes into consolidation.
So, looking at this move from top to bottom.
We had a 1798 Point move after both this dump down and Spike up
happened.
We had another big movement down but it was about half the size of the
other one getting about 750 points on US 30 still.
However, maintaining that 45 degrees slope.
Now, there are two ways that I found helpful to help me determine
whether a price is going to start consolidating the first method.
Which I've explained in another video is when you start seeing these
Trends up and down at a 45-degree angle and then they start to slack
in and out, they get about, you know, 20 degrees, 15 degrees there,
very linear, very slow-moving that usually turns into a period of
consolidation, just low Market volume.
So it just kind of hold that Trend long-term and just slowly goes up
or down.
So if that were to start happening, we had all of these 45° slow.
And then the price would have done something like this.
You can see we had large large momentum.
So after a nice down move like that odds are likely that it's going to
sit and consolidate in this Zone before the market chooses a direction
that it wants to go in this slackening of the trend line is going to
be your first indication that the price is probably going to
consolidate.
So if you just gotten out of a long move like that, where the trend is
actually slackened, be aware, that a period of consolidation might be
coming up.
I'm going to link that video right here where I discuss this in
detail.
Now, the other way to tell when a price is going to start,
consolidating is looking at these major levels of support and
resistance.
You guys know, if you've been watching my live streams, that this area
right here at 35000, is a huge resistance Zone on US, 30.
Just looking at this chart.
The massive rejection that we had right here, another massive
rejection.
Right here.
And now we are at the same Point again when you are at a massive like,
push and pull of the market where buyers and sellers are fighting each
other at the two previous times that this had happened, the sellers
took over, and the market just took a big fat dump after that.
But now, we're at this level again, and in the buyers keep pushing up
these higher lows.
Now, one thing I really want you to consider is using volume to
actually show you these periods of pushing and pulling in the market.
As you can see right here, we had a large string of red volume
candles, bringing the price down dramatically.
And then as the price came up, we had a majority green candles right
here.
But look at this period of consolidation, it's up and down constantly
every single hour.
Just ranging in between these two levels and you're getting a nice mix
of red and green volume candles, you can see here, the market is
fighting there's pushing and pulling between the buyers
The sellers, it doesn't mean that there is low volume, and that's why
it's consolidating like, in the previous example, where the trend line
starts to slack and out, this is a massive fist fight between the
Bulls and the Bears.
And you could see that portrayed right here in the volume metric.
So when you're seeing high-volume and an even distribution between red
and green, these are the periods that you need to avoid.
So occasionally passing on a volume indicator just before you're about
to enter your trade just to make sure that you're not going to be
stuck in a period of consolidation.
Look at the spread of the volume, is it a mix of red and green candles
or is it a solid color in either direction?
If you're looking too short and you've just had a massive swing of
green candles, that is a good indication that you can go on a short
position after.
But if it's a big mix of red and green, these are the areas that you
want to avoid cuz you might get stuck in.
Something like this for 2 days, not hitting your take profit and not
hitting your stop-loss, making you frustrated, questioning your
analysis and usually that ends badly.
I know in the lot of my videos.
I teach you a specific strategy but none of them actually show how to
avoid periods of a consolidation.
So I really feel like I needed to make this video because when you're
doing your analysis and finding out which direction you want to take
your trade and you need to also think just as hard why shouldn't I
take this trade?
That's what makes a good Trader.
Just because Tuesdays and Wednesdays are your days to trade, doesn't
mean you have to place a trade, you need to be intelligent and manager
risk.
That's why they call it risk management.
Not risk avoidance, you cannot avoid risk being a day trader.
It absolutely cannot happen.
So managing your risk is very important, keeping your stop loss in
place and avoiding periods of consolidation are two of the primary
methods of man.
Your risk.
So just to recap if the trend starts slackening out after massive
movements up and down keeping that 45°, slope be aware that a period
of consolidation might happen.
And then the other way to recognize it is high-volume, but red and
green, a nice battle in between the Bulls and the Bears right now, if
you're new to the channel and you haven't seen how to draw support and
resistance lines, like I have here on US, 30, check out this video
right here, where I break down exactly how to identify Market
structure with support and resistance.
And if you guys got some value out of this video and you like, the way
that I teach consider subscribing to the channel by clicking this
button right here, thanks so much for watching and we will see you in
the next video.