Lesson 2: Price Formation
Welcome back to the Charts247 SmartTrader Training Series.
In this video, we cover one of the most important foundations of price behaviour trading: how prices form, how trends develop, and how waves give us ideal entry points.
(Quick note on the audio quality — apologies for the sound in this one. Don't let it stop you from getting what's being shared here, it's worth it!)
How Price Moves:
Price moves in trends, and trends move in waves. There are two types of waves: Impulse/Momentum waves, which drive price in the trend direction, and Corrective waves, which pull price back. Identifying these waves is essential for trading the market.

Your Ideal Entry Points:
In a downtrend, price gets discounted, creating a Lower HH — this is your ideal sell entry
In an uptrend, price gets discounted, creating a Higher LL — this is your ideal buy entry

Always look to trade in the direction of the trend.
Trend Changing Patterns:

In a downtrend, if the price breaks above the Lower HH, that's a trend-changing pattern
In an uptrend, if the price breaks below the structure, that's a trend-changing pattern

The most important question to ask when you spot a trend-changing pattern is: Is this the first one? If yes, you can still buy in an uptrend, you can still sell in a downtrend. Don't be too quick to switch direction.
The Truth About Trending Markets:
A trend does not change easily. It takes considerable time and effort for a trend to reverse. Respect the trend and trade with patience.