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PRICE ACTION MADNESS

PART TWO!

Starting 1900 CT tonight

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Goals for Tonight

• Continuing last week’s “intro” session on price action
• Focusing on rules/structure for single timeframe price action
• Exercises
• Questions
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1) The Single Timeframe Price Action

Framework
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Let’s define “trend” again….

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Three Different Trend States

• Uptrend
• Downtrend
• Chop/Trendless
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Uptrend State
• A series of consecutive higher highs…
• And higher lows
• This gets broken if/when the price prints a “lower high”
• And changes polarity if the price then puts in a subsequent
“lower low”
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Downtrend State
• A series of consecutive lower highs…
• And lower lows
• This gets broken if/when the price prints a “higher low”
• And changes polarity if the price then puts in a subsequent
“higher high”
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Chop/Trendless
• An uptrend pulls into a “lower high”
• But does not print a “lower low”
• Or a downtrend pulls up a “higher low”
• But does not subsequently print a “higher high”
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Once we identify the current trend we

need to anticipate what would have to
occur to make the price fall into a sideways
trend, or reverse.
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2) Uptrend Framing Example

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What type of trend?

What would need to
occur for the price to
change state?
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Notice how some of the pullbacks are deeper

than others. These pullbacks are occurring on
larger timeframes, while the smaller ones are
likely happening on a smaller timeframe.
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See anything now? What might be

happening?
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Can you see how the reversal

was formed?

What would have to happen to

change the polarity again?
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What is beginning to happen now?

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What needs to happen to fully

reverse the downtrend?
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Today….
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3) Downtrend Framing Example

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Here is a strong uptrend, but what

just happened?
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What can you say about the

“character” of the new trend?
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Notice “larger timeframe” pullbacks,

and the general nature of the
downtrend price action.
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Here’s an intraday NQ chart. What is

starting to occur?
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Can you now spot the change in

polarity? Now that the downtrend has
been established, what must occur to
maintain the downtrend and/or
change polarity to an uptrend?
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Now that the downtrend has been

established, what must occur to
maintain the downtrend and/or
change polarity to an uptrend?
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The downtrend is still in force, what

must occur to maintain the
downtrend and/or change polarity to
an uptrend?
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What just happened?

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Can you see why a short-squeeze

fires off from those shorting too far
along in the pattern, holding weak
hands?
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Let’s do some “hard right edge” on a live

chart.
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Questions?