This video explains the principles of trading in markets that are reaching all-time highs. The speaker, Michael, emphasizes patience and avoiding the anticipation of immediate reversals. He shares insights on how to interpret price action, identify potential traps set for retail traders, and maintain a bullish bias when markets are at new highs, stressing the importance of risk management and avoiding over-leveraging.
An "immediate rebalance" occurs when a market, after creating a significant price move (like a large up-close candle), trades back down to the previous day's close or even lower, then immediately reverses course and moves strongly in the opposite direction.
Its significance in trading is that it often signals a very strong move and indicates discount sensitivity. When this happens, the market tends to treat that level as a strong discount price delivery array, and price is likely to launch higher from there, often taking out recent highs. This pattern can trap traders who anticipate a reversal or simply a gap closure.
When markets are trading at all-time highs, Michael advises looking for the following price action patterns:
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