This video teaches viewers how to use momentum in trading to reduce losses and increase the probability of successful trades. The speaker explains how to identify momentum using candle size and speed, and how to distinguish between good and bad pullbacks in uptrends and downtrends. The video uses chart examples to illustrate the concepts.
Identifying Momentum: High momentum is characterized by fast, large candles; low momentum by slow, small candles. The size and speed of candles clearly indicate who's in control (buyers or sellers).
Avoiding Bad Pullbacks: In an uptrend, avoid trades if a pullback is fast and equally strong to the prior bullish move. A slow, choppy pullback indicates continued buyer interest.
Identifying Good Pullbacks: In an uptrend, look for slow, choppy pullbacks as these show continued buyer support. The pullback should be significantly slower than the initial bullish move. Fast drops in price after a strong uptrend indicate weakness.
Good vs. Bad Breaks of Structure: A good break of structure is a strong, fast move that shows clear control (large candles, quick movement), followed by a slow pullback. A bad break of structure is a weak, slow move with choppy price action, resulting in a quick reversal.
Applying Momentum to Trading: The video demonstrates how to use momentum analysis to identify high-probability trades by finding strong directional movements followed by weak counter-movements, allowing for confident trade entry and exit points.
