1 00:00:00,000 --> 00:00:02,040 How can we analyze a chart from scratch? 2 00:00:02,520 --> 00:00:06,820 This is one of the first obstacles a novice trader must overcome when trying 3 00:00:06,820 --> 00:00:10,060 analyze charts from the point of view of price action and volume. 4 00:00:10,780 --> 00:00:15,100 The first thing to say is that when it comes to a chart, the cleaner, the 5 00:00:15,100 --> 00:00:19,160 better. There's no point in having lots of objects or indicators on it. 6 00:00:19,380 --> 00:00:24,400 The only thing this does is hide the most critical piece of information, the 7 00:00:24,400 --> 00:00:29,290 price. Our first goal is to determine the current long -term context to know 8 00:00:29,290 --> 00:00:31,390 the market is in a trend or in a range. 9 00:00:31,750 --> 00:00:34,870 There is no designated timeframe for each objective. 10 00:00:35,410 --> 00:00:39,990 I always say that it will be the chart itself that tells us which timeframe is 11 00:00:39,990 --> 00:00:41,330 best to use at each moment. 12 00:00:41,770 --> 00:00:46,070 For reference, the long -term context is generally best identified on either 13 00:00:46,070 --> 00:00:47,490 daily or weekly charts. 14 00:00:48,050 --> 00:00:52,650 Depending on the history of the asset, sometimes just looking at the H4 chart 15 00:00:52,650 --> 00:00:53,650 may be enough. 16 00:00:53,920 --> 00:00:57,800 While on the other occasions, you will need to look at the monthly chart, but 17 00:00:57,800 --> 00:01:01,440 a general rule, most of these analyses will be daily or weekly. 18 00:01:02,400 --> 00:01:06,260 Once on the chart, the first thing we are going to do is find where the latest 19 00:01:06,260 --> 00:01:08,860 sideways movements are with respect to the current price. 20 00:01:09,660 --> 00:01:12,460 This sign will give us the current long -term context. 21 00:01:13,000 --> 00:01:17,240 Here, there are only three options and each one offers us a different context. 22 00:01:18,090 --> 00:01:21,910 The identification of the context will answer the first and most important 23 00:01:21,910 --> 00:01:23,890 question for our subsequent trading approach. 24 00:01:24,410 --> 00:01:27,190 What kind of strategy are we going to look for? 25 00:01:27,390 --> 00:01:30,750 In other words, what do we want to do, buy or sell? 26 00:01:31,150 --> 00:01:33,950 In which direction is the greatest control of the market? 27 00:01:34,290 --> 00:01:38,310 These key questions should be resolved in this first context analysis. 28 00:01:38,550 --> 00:01:42,610 In short, it is about establishing the directional bias of the market. 29 00:01:43,090 --> 00:01:47,680 Once we are clear about the bias, The strategies we will implement must be 30 00:01:47,680 --> 00:01:52,180 aligned with it, so we always try to trade in favor of the least resistance. 31 00:01:52,840 --> 00:01:58,480 That is, if we see a distribution structure above, the context will be 32 00:01:58,480 --> 00:02:00,620 and therefore we should look for selling opportunities. 33 00:02:01,460 --> 00:02:06,020 The market is unbalanced to the downside and we should only be looking for short 34 00:02:06,020 --> 00:02:07,020 buys. 35 00:02:07,180 --> 00:02:11,260 Later, we will see up to what point. For now, we are sticking with the key 36 00:02:11,260 --> 00:02:14,180 concept that the path of least resistance is downwards. 37 00:02:14,780 --> 00:02:19,220 If we open a chart and do not see an accumulation range below, we will 38 00:02:19,220 --> 00:02:23,220 the context as bullets, and therefore we should look for buying opportunities. 39 00:02:24,020 --> 00:02:28,720 Unlike the previous example, in this case, the control is on the side of the 40 00:02:28,720 --> 00:02:33,480 buyers. Most market participants have agreed that the asset is cheap and 41 00:02:33,480 --> 00:02:34,480 higher prices. 42 00:02:34,660 --> 00:02:37,420 That is why we should only be looking for long positions. 43 00:02:37,820 --> 00:02:42,370 Finally, if we find ourselves within a sideways movement, The context will be 44 00:02:42,370 --> 00:02:46,130 neutral and therefore we should look for trades at the edges, in other words, 45 00:02:46,210 --> 00:02:51,010 look to buy at the lows of the structure and sell at the highs, or do absolutely 46 00:02:51,010 --> 00:02:53,070 nothing and wait for the imbalance to occur. 47 00:02:53,890 --> 00:02:58,230 It is during the development of these ranges that we put into practice all the 48 00:02:58,230 --> 00:03:02,330 analytical tools that the methodology offers us to try to discern what is 49 00:03:02,330 --> 00:03:04,950 happening and where the market is most likely to turn. 50 00:03:05,960 --> 00:03:09,900 Fundamentally, most of the participants consider that price and value converge 51 00:03:09,900 --> 00:03:14,280 approximately in the entire price range covered by the structure, and therefore 52 00:03:14,280 --> 00:03:18,720 a movement towards the high part is seen as an opportunity to sell, and a move 53 00:03:18,720 --> 00:03:21,580 to the bottom of the structure would present an opportunity to buy. 54 00:03:22,040 --> 00:03:23,180 Up to what point? 55 00:03:23,500 --> 00:03:27,640 Well, as we saw with auction theory, this will continue until something 56 00:03:27,640 --> 00:03:28,780 at the fundamental level. 57 00:03:29,100 --> 00:03:32,940 that changes the valuations of the agents and the price leaves this 58 00:03:32,940 --> 00:03:35,940 zone to look for another one higher up or lower down. 59 00:03:36,180 --> 00:03:40,720 As we can see, this first overall analysis to understand the current 60 00:03:40,720 --> 00:03:45,300 is fundamental, since it will determine how we are next going to proceed. 61 00:03:45,800 --> 00:03:49,940 The market can only be in two situations, a range or a trend. 62 00:03:50,340 --> 00:03:53,280 Within these, there are only three possible trading contexts. 63 00:03:54,200 --> 00:03:56,540 Look to buy if it is in a bullish context. 64 00:03:57,150 --> 00:03:59,710 Look to sell if it is in a bearish context. 65 00:04:00,230 --> 00:04:05,050 Look to trade at the edges or do nothing if it is in a range context.