Now, remember this chart? I purposely removed the price and the time frame because people make quick judgement about what they are seeing. This is the weekly chart of the ES, and the peak that we see here, with the big candles and such, many would say that there is no way to understand how to play that. The candles of 10/24 - 11/14. To tell you the truth that is how I thought before. Now as I've said, that change happens in the lower time frame first.
When did the distribution start for this same chart but this time in the 4hr time frame? It started at about 10/11. That is how the lower time frames can show you how change is happening. How the weekly candles from 10/24 - 11/14 was produced. People have to learn how to use their charts and time frames to their advantage.
Now why did this structure in the 4hr seems so huge comparatively to the weekly? Could it be that it is because the weekly is a huge time frame? Of course! You also have to get the proper timing of setups and must understand that the higher the time frame the more significant the setup is on the lower time frames. Quick question. If you are looking at a huge time frame like the weekly, does it represent more volume per candle and therefore more volume over time done that of a 4hr chart? If you can answer that, then maybe it will make sense, as to why it took so long.
Here is our leg down from 7/4. When we popped up to where you see #4. That is the fist test of that previous support that we lost the week of 8/1. And the rule is. First test you will fail. So what did the 4hr tell you? That since 10/11, it was already distributing to prepare for the move down. Was it the news? Do you need a phD to understand this simple concept? But then you will say. "Dood. This is on a weekly and 4hr basis." And I will respond back with. "Dood! I'm not gonna hold your hand. Do your own research in the lower time frames and see if it does it too!" If you do find that it does, there you can probably say, there is consistency in the technicals. And you will then scoff at the person who said. "T/A doesn't work because the fundamentals are too volatile."
Well that is first thing you should understand about price action.
How To Weee'd A Chart -- Part 3 by kewltech is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
Based on a work at kewltech.blogspot.com