all of the different ways of reading price action that you see here none of them will actually make you profitable without the concept I'll teach you today trading was really really hard until I understood and applied this concept even though it's so easy to understand and apply however a lot of people decide to overlook it either you trade smart money Concepts or ICT Concepts candle patterns for examples or Supply demand a lot of people trade those patterns when it comes to supply demand wov Fibonacci or pure Market structure all of those ways will not work
without the thing that I'll teach you today that's what you need to understand and that's something that I discovered after years and years of trading because not a lot of people actually mention this what they focus on is the pattern or the strategy itself and not the concept I'll teach you today so make sure to stick until the end that's going to be a very valuable lesson to you let's get into it starting with consolidation versus expansion now let's imagine that you enter at this green box this is your entry area or Zone definitely you
had this experience before price comes to you know a specific Zone you enter from here and then price from nowhere start consolidating and you know ranging so price is basically not expanding in One Direction however it's ranging creating highs and lows highs and lows without going into One Direction and here what's going to happen is you either close your trade or you would you know go break even and it's going to hit your break even or go to your stop loss so it's going to take some time and then just go and take your stoploss
this happened for a reason as well as this happened for a reason when you just enter sometimes and you feel like oh you're getting those Snapper entries this is what I'll be teaching you today very valuable listen so price comes to a Zone what's going to happen is price simply coming here and then expanding higher and not consolidating the same as this so price will go higher go and hit your take profit that's our Focus now you ask yourself this question how do we actually differentiate between the two scenarios and the two conditions we're going
to cover all of this and there is actually a psychological relation for this a lot of people actually when they have this condition for example or this scenario what they're going to say is why when I enter a trade it's actually ranging and when I'm not entering it's expansion and it's not a psychological thing it's not about you because the market do doesn't really care about no one it's about where you enter and how good that area is so for now what we're going to do is go over trading View and show you this in
real chart and then we'll come back to the slides this is the Euro and US dollar chart what we can see is that a lot of the time price actually consolidating so you see here but at some specific zones and a lot of people actually get engaged and participate in the price action in The Market at those times and what is the result either losing or maybe go on break here even right so nothing here not the biggest move that we can experience however what happened here you see at this specific point as well as
this one and the same thing here and here there's actually a relationship between those points so it's not just randomly picking the highs and lows there is something that is there that caus the price action to expand and to be aggressive at that point not ranging and the same thing applies here so if you see if you go zoom in here what do you see is a lot of ranging but at this specific point what we had is expansion to the Lower Side as well as here only aggressiveness to the upside right here and then
retracement and then again same thing happening here you see as well as here we only get expansions from those point now how do we trade only based on those and ignore all of the noise and all of the ranging condition that's what you're going to learn on the next slide and the concept that you really need to up apply and add to your trading plan is topown analysis it's one of the most overlooked Concepts as well as one of the most misunderstood Concepts so a lot of people actually explain this in a wrong way and
one of the examples is just going you know randomly starting off weekly time frame then going to I don't know uh 4H hour time frame then daily time frame then 50 minute then trying to catch a trade on one minute time frame and trying to align all of those time frames fres together that's not the right way it just that it's almost impossible for all of those time frames to align at some point you know sometimes you'll see the daily go bullish while the 4 Hour is being bearish and then the 15 minute is being
bearish where do I go absolutely bearish because if we are entering on the 15 minute then we got to follow the 4 Hour and we don't care about the daily being bullish because it's a retracement on the 4 Hour and that's what we are trying to trade so the right way is what I'm going to teach you in this video first of all what is top down analysis it's analyzing the price action based on multiple time frames and in other words it's looking at the big picture first and then analyzing the details so you know
I have a big picture here I'd look at this and say okay I like this let's look at the details and then you know go from there why do we need it why we need top toal lists we need it to trade with the bias a lot of people actually explain including me I do explain daily buyas but what is daily bias at the end it's nothing but top down analysis we're trying to align our trade for example if we're looking at the daily bias and that's what we care about then we're going to try
to find alignment with the daily time frame we also need top to analysis to catch expansions and what is that going to result to high reward to risk if you see a lot of people just aiming for one to one using you know specific pattern actually if you use top analysis is also using the same pattern we can achieve 3 to one instead only by applying this concept now how do we perform the top analysis it's going to be using multiple time frames and we're going to look for the alignment we can use three time
frames or two time frames and each one has its own pros and conses we're going to cover that on the next slide and from there we're going to go to the chart and show you how to actually use it and how to take advantage of it so again we discussed what is it but in other words also it's catching small parts so let's say we're looking at 4H hour time frame right as our higher time frame and you want to look at 50 minute time frame to enter a trade then our reference will be the
4H hour that's how you see for example two candles on the 4 Hour and that's how you see multiple candles on the 15 minute so you see how what we are trying to do here is catch a small part of the 4our time frame so I don't need to catch you know the big part of the 4 Hour no just a small part of maybe something like this or one candle or two candle it depend on how big the candles are but you see small part of the 4H hour time frame maybe the 4H hour
candle and it's going to be a really big part on the 50 minute time frame you see we have 4our Zone this is how it looks on the 4 Hour we're using 4our zones in order to enter on the 50 minute and that's how you see big move tighter stop loss and then very nice entry and then big targets all of those things are going going to be there by using top down analysis now the 4H hour and the 50 minute is an example but we have different ones for all types of Traders so to
perform the TU analysis we can either go with two time frames or three time frames the one with two time frames would be just by using one time frame as a bias and another time frame for entry the three time frames would be using three time frames one as a bias and then two as a confirmation or to find a point of interest and the third is for the entry now even though this is more confirmation but this is more beginners friendly I really recommend people to follow the two time frames because you don't need
all the race that is involved with the lower time frame entry so maybe go with this those are the time frames now as we go up we have list trades because this is more for swing Traders the more we go lower or as a lower time frame entries and more as scaling trades so 15 minute 1 minute time frame for example it depends on on what do you prefer as your entry so start from your entri so let's say I really like to enter trade based on the 1 hour then 1 hour is your entry
it means that I need to look at the daily for my bias and for my higher time frame analysis and using the three time frames is going to be weekly 4 hour 50 minutes so that means on the weekly I'm going to be looking for just the bias maybe a Zone on the weekly on the 4 Hour I'll be looking for a Zone to be created at the 4our zone right and then I'll be entering on the 15 minute same thing here this one is more confirmation uh this is more for advanced Traders it doesn't
mean that you at this point need to follow the three time frames you can actually do much better with the two time frames but if you are Advanced and you think that you're already a good Trader you could go with the three time frames make sure to pick one time frame alignment now and start trading using that one and you will see a big big Improvement in your trading Journey I really promise you that otherwise you did not master the concept correctly those are the time frames it's much much simpler than you think that's why
we need to cover some examples now so looking at the current price action this is EUR dollar this can be applicable on any time frame I mean any time frame alignment because we discuss two time frames or three time frames it can work on any asset and any time of the day but you need to pick the right setup but let's now take the most stupid thing so let's say we're just trying to trade engulfing candle so for example let's say bearish candle just like this that was followed by a small bullish candle so something
like this okay that's a bullish candle and all what we're looking for is a strong bearish candle that's the pattern if we go look at the curent price action here you're going to see that a lot of the time and let's target 3 to one for example right and stop loss goes above the last swing high you can see that we have one that is here we have one engulfing candle we enter here but then you see price comes back maybe stopped out at break even we can also see that we have one engulfing candle
here we could have entered on this one stop plus below the low Target 3 to one this one is a stopped out we also have another one for example here we have this one this one might be working but do you see there are a lot of times where it actually doesn't work for example this one you see we have bearish candle engulfing the previous one if we enter from here stop loss above the swing High it gets to the stop loss sometime we don't get the perfect entry so how do we deal with that
one simple thing so let's say we are trying to find that engulfing candle at the 50-minute time frame what we're going to do is not do that but go to 4H hour time frame first we're trying to find this engulfing candle pattern in pois is in higher time frame in this time 4H hour time frame so for example we got this 4our bearish for Val gab we're only looking for bearish golfing candle in this bearish Fair Val gap on the 15 minute time frame same thing here you see we got this bullish Fair Val Gap
we're looking for the engulfing Candle In the Zone same thing here we got this big bullish Fair valy Gap we're looking for the engulfing candle at this when we switching to 15 minute time frame in this case in this time so we did not have an engulfing candle here but in another one for example here we can see that we get this one you see we're inside out of that higher time frame in this case 4our for Val Gap and we got this engulfing this is now a higher probability one if we go stop loss
for example above the swing High targeting 3 to1 this is where you get your 3 to1 otherwise it's going to be kind of ranging in other scenarios so if you just enter from any other engulfing candle it's going to be most of the time in a ranging condition that's how we only focus on the expansions and the aggressiveness you see same thing here we get this big one that's a valid one but in this case you know that's a very very big one it's not the highest probability we same thing here on this day what
we see is price com to that fair value Gap nothing here none of the patterns that we are interested in but do we get this one engulfing candle at a key level that's the one that should work all of the others can be in a range and condition you see easily 3 to one this is 4 to1 so 3 to1 is achieved here but if we look at another one for example this Engle and then stop loss above the high targeting 3 to1 we don't get even to one to1 in this case why because this
engulfing here is not part of a higher time frame fair value Gap or higher time frame POI any point of iny can use not limited to fair value gaps but it's just that fair value Gap is my favorite thing so you see no fair value Gap here even though we had a reaction a small one but you don't get that high reward to risk at least 3 to one now the same thing on the one minute so let's say a lot of people like to scalp based on the one minute time frame one way to
do some scalping for example based on highs and lows liquidity sweeps and T soup I mean I have a lot of videos about how to pick the right liquidity sweep and T soup opportunity but simply we got to look at the 50- minute time frame and a sweep of a 15 minute time frame liquidity level so you see all of those equal lows here so we of this we're going to look at the 1 minute time frame and enter base on this engulfing candle for so that's our entry and the stop loss goes somewhere below
the low almost can go to 5 to1 over the next high it actually went to the next high that's a 4.5 to1 that's how you get those High reward to risk that's all about top 10 analysis we keep it simple we follow the time frame alignment and that's it so I really hope you guys like this video if you do then make sure to share it with your friends hit the like button leave a comment with any video ideas or suggestion to do in the future sure that's it for today I really wish you the
best and I'll see you next video