3. Ms and Ws

Question 1

The first move away from a W needs to be what?

Answer 1

An aggressive move to the upside

Question 2

The first leg of a W has to have what?

Answer 2

Red vector candles

Question 3

When there are red vector candles, the market maker is trying to do what?

Answer 3

Trying to make us to believe there is weakness in the market while he builds his longs

Question 4

The guys who enter short on the big red vector candles think what?

Answer 4

Price is going through the floor

Question 5

The first rebound of the W does what?

Answer 5

Induces traders that were stopped out by the previous wick to re-enter a short trade, when resistance is given by the 50 EMA

Then he plays the same trick again (beginning the second part of the W)

Question 6

What is the signal that the market maker is shifting out of the zone and completing the W pattern?

Answer 6

A green vector candle

Question 7

The MM red candle’s longs are closed when?

Answer 7

There are corresponding green candles on the right, on the way back up

Question 8

Before you enter a long after the W pattern is observed, what do you have to wait for?

Answer 8

Price to cross above the 5, 13, and 50 EMAs on the one hour timeframe

You probably should wait for price to come back and retest the 50 EMA as well

Question 9

In summary, what do you need to see for a W pattern to be true? (4 things)

Answer 9

1. Strong vector candles to the downside
2. A retrace back to the 50 day EMA
3. Price is pushed down from the 50 but cannot go lower than the first leg (unless a one-off wick)
4. A strong move with green vector candle(s) to the upside