third pillar: price action

Question 1

what is price action?

Answer 1

Price action is the art of the study of candlesticks

Question 2

what can we understand when analyzing candlesticks and their movement in the market

Answer 2

we are able to understand how are the big financial institutions positioning themselves

where are the retail traders traps

what are the buyers and sellers doing/thinking

We get to know the story of the charts, this is very helpful for our technical idea construction

Question 3

what is a a bullish candlestick?

Answer 3

an increasing candlestick (usually green)

Question 4

what is a a bearish candlestick?

Answer 4

a decreasing candlestick (usually red)

Question 5

where does a bullish candlestick close and open during a certain time period?

Answer 5

it opens at the fattest part of the bottom and closes at the latest part of the top

Question 6

where is the high and low of a bullish candlestick?

Answer 6

the high is at the highest part where it is thin, just above the close

the low is a the most bottom part where it is thin, just below the open

Question 7

where does a bearish candlestick close and open during a certain time period?

Answer 7

it opens at the fattest part of the top and closes at the latest part of the bottom

Question 8

where is the high and low of a bearish candlestick?

Answer 8

the high is at the highest part where it is thin, just above the open

the low is a the most bottom part where it is thin, just below the close

Question 9

what is the thin part of a candlestick called?

Answer 9

a wick

Question 10

what does a long wick equal to?

Answer 10

Long wick is equal to a heavy rejection

Question 11

what does a heavy rejection mean?

Answer 11

the price doesn’t want to go higher/lower because either we have reached the Take Profit of financial institutions

or there is an Agenda that the financial institutions want to respect

or it was a Retail Trader Trap

or it was a Fundamental Event

Question 12

what dies a big large full candlestick equal to?

Answer 12

Big large full candlestick is equal to a big position entered in the market

Question 13

what does a big position entered in the market mean?

Answer 13

the financial institutions have Entered their trade

or they are manipulating the price to Trap Retail Traders

Question 14

what does a large period of candlestick consolidation equal to?

Answer 14

Large period of candlestick consolidation is equal to financial institutions creating their game plan

Question 15

what does “financial institutions creating their game plan” mean?

Answer 15

they are either Gaining Time by not moving the price

or are Accumulating/Distributing their positions in a range of price

Question 16

what is a bullish hammer candlestick?

Answer 16

it has a long wick at the bottom but is short and fat at the top (with sometimes a short wick on top of that too)

Question 17

what is a bearish hammer candlestick?

Answer 17

it has a long wick at the top but is short and fat at the bottom (with sometimes a short wick at the bottom of that too)

Question 18

what does a bullish engulfing candlestick look like?

Answer 18

at a certain time period, the bearish candlestick is completely engulfed by the following bullish candlestick which is much bigger

Question 19

what does a bearish engulfing candlestick look like?

Answer 19

at a certain time period, the bullish candlestick is completely engulfed by the following bearish candlestick which is much bigger

Question 20

what does a bullish close and reverse candlestick look like?

Answer 20

a long ass bearish candlestick is followed by a similar length bullish candlestick

Question 21

what does a bearish close and reverse candlestick look like?

Answer 21

a long ass bullish candlestick is followed by a similar length bearish candlestick