Hey hey, what's up my friend, so in today's episode i want to share with you six things: six things to look for before you place a trade or you know six questions. I ask myself before i place a trade and this is coming from a price action trading context. So if you're a discretionary trader, if you're a price section trader, then this episode will be really useful to you. Question number one: what's the current market structure, so this question right, i asked myself right is to know what is the current market structure? Is the market in an uptrend? Is it in a downtrend or is it in a range and the reason i ask this is because if the market is in an uptrend, then i know that i want to look for buying opportunities.

If the market is in a downtrend, then i know that i want to look for selling opportunities and if the market is in a range, then i know that i can be both a buyer and a seller buy support, sell resistance, buy low, sell, yada, yada, okay, So this is the first question: what's the current market structure number two, what's the higher time frame trend, this is important because, let's say uh on the four-hour time frame the market might be in the downtrend or it appears to be in a downtrend, but on a Daily time frame it's in an uptrend, so what this means is that, on the four-wheel timeframe, chances are it's just a pullback against the daily timeframe. So this is important right because the daily timeframe will will uh will give you clue right to whether the trend that you're, looking at on the uh entry timeframe is likely to continue or break and reverse okay. So i asked myself right: what is the trend on the higher time frame so as much as possible? I want to be trading in the direction of the higher time frame trend and also right, if you recall earlier, one of the market structure i mentioned earlier is the market is in range. Let's say the four-hour time frame is in a range all right and you might be you know thinking you know i can buy support, sell resistance.

But let's say if you know that on the higher time frame, let's say the daily time frame is in an uptrend. Then, as much as possible, you want to be buying near the lows of the range buying near the lows of support, because if the daily uptrend uh maintains right continues itself chances are that range right. The price will break out of resistance and resume the up trend. So this is the power of understanding right where you are in the big picture.

What's the higher time frame trend and that's number two next one number three: where are the areas of value on the chart? So here's the thing right just because the market is in an uptrend doesn't mean you want to buy immediately, because you want to know: where are the areas of value on the chart it could be at support? It could be at the 50-day moving average, where the market has re-tested three times. It could be at the upward trend line, so there are multiple areas of value that you can define depending on the market condition, and this is the third thing i ask myself: where are the areas of value on the chart? Fourth thing: ask myself: am i trading near an area of value? Okay simply put, if you have identified support, are you trading near support uh, or are you trading far away from it and this matters? Because if you are trading far away from an area of value, your stop-loss all right will be white. Assuming that you said, use the logical stop-loss, you know, let's say you know, uh setting it below support if you're trading, far from an area of value, your stop-loss is going to be wide and when you have a wide stop loss right, it results in a poorer Risk to reward on your trade. Why is that very simple? If you have a 500 people stop loss, you need the market to move 500 pips in your favor, for you to earn a one to one risk: reward ratio.

If you have a 50 pip, stop loss. All you need is for the market to move 50 pips in your favor for you to earn a one-to-one risk. Reward ratio make sense, so all else equals right as much as possible. You want to have a tighter stop loss because it offers a more favorable risk to reward on your trade and to get a tighter stop loss.

You want to be trading near an area of value not far away from it right. So the fourth question asked myself: am i trading near an area of value or far away from it number five? Where might opposing pressure come in? Because you know everything is not all rules and you know and good stuff, if you buy it, support at some point. In time sellers are going to come in and you know shop the market, because maybe the price is too high, so you wan na ask yourself: where might opposing pressure come in so again uh, let's you know, take it the other way around. Let's say the market is in a down trade: you sell a resistance.

Where might buyers come in where my opposing pressure come in, because once you can so-called anticipate where my opposing pressure come in, it can help you better uh set a proper take profit level. So let's say you're a swing trader, you sold a resistance and if you know that you know 300 pips away, there is a swing low. Where buying pressure could come in. You want to have, you know, possibly a take profit at maybe 250 pips or 280 pips away from your entry price just before the swing low, uh bridge just before the price reaches the swing low, where buying pressure could come in and you know push the price In the opposite direction, so once you can, you know identify where my potential uh, where my opposing pressure step in this helps.

You know determine ahead of time right, where is a good place right to take profits? And finally, the last question is kind of like a bonus right. What is the volatility of the market? Is it increasing or decreasing, because here's the thing right volatility in the market? It's it's always changing. It moves from a period of high volatility to low volatility and vice versa. So if you see the markets right, let's say on the daily timeframe, the candles the range are very small, very tiny market seems to be going nowhere.

That's a sign! That's a sign that the market is about to make a move right, whether up or down. I have no idea. Nobody knows all right, but it's about to make a move, and this is important, because if you know right that the market is about to make a move, then what you can do is you can go down to a lower time frame to let's say the four-hour Time frame to get an entry point right, a good entry point and to enter a trade and to hold for as long as possible right and see whether the market does break out in your favor okay. So what what i do is that if i notice that, on the daily time frame, the market is in a low volatility environment, i like to go down to the four hour time frame and look for potential trading.

Setups right maybe to buy the lows of support or sell the highs of resistance, because that's when i know that you know the market, that's a good charge is going to break out of the range right and volatility could expand in my favor and you know, uh Offers right, favorable risk to reward on the trade again so again, right volatility, expansion and contraction pay attention to it right, yeah, low volatility market environment is where favorable trading opportunities are at, because your stop-loss can be nice and tight, whereas in a market in a huge, Crazy volatility, environment - those are, i would say, not as favorable, because at that point market is swinging widely up and down. Your stop-loss needs to be very wide to accommodate that wild swings and, as you know, when your stop-loss is wide right, it reduces the risk to reward on the trade, or rather it's not as favorable okay. So a quick recap right to the sixth thing. I look for number one: what's the current market structure, uptrend downtrend or range number, two, what's the higher timeframe trend number three: where are the areas of value number? Four? Am i trading near the area of value as much as i want to? I want to be trading near the area of value not far away from it number five.

Where might opposing pressure come in and finally, the last one six one: what is the volatility of the market contracting or expanding so with that's it? I've come to the end of this episode and i'll see you in the next. You.