A new way of visualizing the market.

1
well, for some time now I've been trying to use Price Action, but the subjectivity of the process always gets in the way of using it in the live market, for that reason I decided to start my own notes and ways of visualizing the market, so that After some time using this motodo I managed to have a good performance, so I decided to share it here on the forum.

The Setup

I believe that the only fundamental technical indicator is the candlestick chart itself, for this reason I do not recommend using anything other than a discrete 9-period exponential moving average based on the Median price, for starters it is good practice to put two moving averages 9-period exponentials based on the low and high of the price respectively, so seeing the area around the moving average is easy! Over time I recommend taking away the averages, as you will probably be seeing these areas anyway.

Other than the moving average, I do not recommend using any other indicators… as we are going to read candle by candle and no information is going to be more important than the details left on the candle itself.

Extra: we are going to use the modified fibonacci ruler tool using 0, 0.25, 0.5, 0.75 and 1. We are going to use it to measure movement and design some patterns.

Timeframe

To practice, let's start with H1, this is because each candle will bring us a huge wealth of details about the price movement and what decisions we should make, so we need to have time to observe, analyze, catalog and decide (these processes will be more important forward to study the method better), and on smaller timeframes this routine may be difficult at first.

How it works

Basically, the main objective of the method is to search for all possible opportunities, from what is conventionally called scalping, to traditional operations, as well as swings… .
In this method we will follow basic principles and clear rules to facilitate the operational process as much as possible, seeking to fulfill the adage: do the most, using the least.
An additional detail is the acronyms, we will use the acronyms of the patterns to help in the studies, however, later on I will provide a glossary with all the acronyms and their respective meanings.

Fundamentals

I have observed patterns in the market, these patterns provide clues as to the probability of future movement and it is on the basis of these patterns that we will observe, analyze, catalog and finally decide how the trade should be approached. Something that we will be using very often is fractal patterns.

The entire basis of the method will be based on the following initial principles:

  • Body
  • Rejection

The body the action of the strongest players in the market at that moment(We will see this both in long bullish and bearish moves, as well as in each candle itself.), rejection is the natural reaction to this action, so a body can be, a single candle or a set of candles, a crucial detail is that the body needs a certain movement in prices, so the most practical way to define a body is through vertical movement in relation to its own rejection, the market is composed of body and rejection all the time. Here we have a bearish body, identifying the first body is the initial step to start an operational session, then in sequence we need to identify the rejection of that body, follow the example. As you can see the reaction to the vertical price movement came right after, here these reactions are called rejection, a rejection consists of any reaction to a previous vertical movement, they will occur in the bodies, in the moving average, in supports / resistances etc. whenever there is a vertical reaction to the previous movement, this reaction will be called rejection, here are some examples: -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

initial patterns

Rejections will have multiple information functions and over time we will learn all of them. For now, let's focus on the initial patterns, something that can be seen and studied right away, these patterns are our movement patterns, a movement pattern must be composed of a body and a rejection, because they are the primordial patterns, they will be responsible for determining the current phase of the market. In a simple and summarized way we will have three initial patterns:
For the fast market pattern (FMP) the rule is that the rejection of the analyzed body cannot close below or above the quarter level of the vertical size of the reference body.
This pattern indicates that the market is trending and you should look for things like specific order types and take a different risk-return approach, but we'll get into those details later.
The lateral market pattern(LMP), on the other hand, needs the rejection of the analyzed body to be between the two quarter levels, with 3 possible variations:
Weak: When it is between the middle and the first quarter;
Strong: When it is between the middle and the second quarter;
Confirmed: When it gets close to the next whole level; A weak pattern may indicate that that movement is already starting to lose steam; A strong one indicates that the market is really close to entering a sideways phase; Already confirmed indicates that the market is in a sideways phase or will most likely reverse from that point.
Finally, we have a pattern that rarely happens, but indicates in addition to high volatility, a strong change in trend and approach for that specific session.
In the breakout market pattern (BMP) the rejection overcomes the analyzed body, closing above or below the next level.

The FMP, LMP and BMP will give us the initial bases to locate ourselves on the chart, giving us the starting point and the fundamental details, but first let's go to an important thing.

Finally, we have a pattern that rarely happens, but indicates in addition to high volatility, a strong change in trend and approach for that specific session.
In the market breakout pattern (BMP) the rejection overcomes the analyzed body, closing above or below the next level.

The FMP, LMP and BMP will give us the initial bases to locate ourselves on the chart, giving us the starting point and the fundamental details, but first let's go to an important detail

This thing is at the exact point that a "Body" goes to a "Rejection", as I said before a rejection is a vertical response to the price action that is exerted on the body, so whenever a contrary candle appears, that is the beginning of rejection, as soon as the first candle against the direction of rejection appears, that is the end of rejection. BB = BULLISH BODY
RT = REJECTION
BFMP = BULLISH FAST MARKET PATTERN
SLMP = STRONG LATERAL MARKET PATTERN
WLMP = WEAK LATERAL MARKET PATTERN

(an extra: the way we will read candle by candle, will use both the body of the candles and the wicks of each one, and we can even consider the wicks to measure the size of the bodies, but I only recommend doing this later on.)

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Moving on, let's see what information we can extract from these movement patterns, the first of these information is support and resistance, let's divide them into groups:

Minor S/R: formed from any rejection, they are short and can usually be used by people in binary options or scalps. BB-RT = BULLISH BODY REJECTION
EMA-RT = EXPONENTIAL MOVING AVERAGE REJECTION
MRES = MINOR RESISTANCE
MSUP = MINOR SUPPORT

Confirmed S/R: Confirmed S/R are Minor S/R that have already been used as rejection points, in these cases we can use them more safely, serving as a basis for more complex things such as assisting in a trade orders and entry setups. 2 RT = SECOND REJECTION
CSUP = CONFIRMED SUPPORT

Leveled S/R: They are supports adjusted by the whole price levels, those who know Key-S/R Level will understand better, but we will use the same logic of the fibonacci modification, let's say that the EUR/USD is quoted at 1.01000, this would be the whole level, the next level would be 1.01250, this would be a quarter level, the next one would be 1.01500, this would be the half level, the next one after that would be 1.01750, we would have the second quarter level here and finally, we would have 1.02000, the next whole level. These levels can be broken into smaller parts, but always obeying a division into 5 parts.

A good practice is to use a confirmed S/R and adjusted by the closest leveled S/R. LSUP = LEVELED SUPPORT
(In this case the leveled SR was already practically in place, but it is worth remembering that the leveled SR originally should be used in the most complete prices, adjusting a support or resistance is just a good practice.)
In these more complete levels, almost always some activity happens, we will see them in more depth later, however, for now it is enough to know that they exist and will be used.
Having seen the basics of support and resistance, we can now see the count of tops and bottoms and their interactions.

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T = 'TOPO' (Portuguese term for Higher High)
F = 'FUNDO' (Portuguese term for Lower Low)

The beginning of the first analyzed body will always mark the top or bottom zero, as well as the beginning of its rejection will always mark the top or bottom zero, this gives us the opportunity to count how many movement patterns happened, as well as it will help us to assemble some specific setups later on. It is worth remembering that as we personally define where the zero top or bottom will be, the traditional logic of waves 123 or ABC can be used here, but be careful, as in the method we will not use these concepts so intimately.

well that's it, having said these things initially I'll leave just that for now… but in case the friends of the forum want to delve deeper, I'll be more than happy to share everything else here;
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