Price Action in Day Trading by Dadas

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After many years of mentoring all kinds of personalities, for free, I have come to the conclusion that it leads nowhere.
99% of the mentored are either in big financial problems, or total losers who can't get their stuff together, or
just plain lunatics looking for the Holly Grail to do the job for them.

Thus, 99% are actually totally unfit for trading and bound to lose their money.
Why!
Because they, simply, can not afford to lose more money, or can not afford to lose any money at all!
They are emotionally compromised.

Over these years I have developed the complete DadasTradingSystem.
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The following information is for the whole Universe:

Following some demand for my own thread, I will, hereby, explain my understanding of Price Action,
and its application to Day Trading.

I have found that very many people do not believe they could understand Price Action, and
strain away from it considering Price Action some complicated method which requires
special skills and experience.

Experience, Yes, of course.
That is what Demo and Practise accounts are for.
Never start trading real - live, until you have gained enough experience!

People tend to look for something which, like traffic lights, will tell them
when to Go and when to Stop. They rely on indicators, and lose their money.

Why is it so?

Indicators do not get their data from a different source.
Indicators get the data from the chart.
The data is on the chart first, then it is processed by the written program.

Indicators do not show green and red lights, even though the colors might be such.
Indicators only blink the yellow light, telling us that there is a potential moment.
If we do not know, because we can not see it directly on the chart, no
indicator will ever tell us this!

Learning to read the information from the chart is not really hard, it only requires
repetition. It is repetion that makes us speak our language fluently.
It is repetition that gives us the ability to read this text.

It is repetition of bad habits that makes us lose at Forex.
It is repetition of good habits that makes the winners!

I will try to explain to the best of my abilities how Price Action works.
I will show you some simple step by step practise strategy which you can
excercise on a Demo account and then, after a time, apply your favourite indicator
and see if you will still need it. You must see this for yourself.

After some time you will see for yourself how useless the indicator had been.

I will start with the basics of Price Action and explain the very basic economic principle
of how the Forex Market works, in the first place.

Price Action is not about any setups, it is about Price Action, that is all, Price Action, which means
the ability to read the chart, like reading a text on the internet, like reading this text, ie.

PA does not work better on any Timeframe, it works the same on every Timeframe.
The only difference is in the detailed information in the given Timeframe.
The lower the Timeframe, the more detailed the information.
Timeframe to work with is only the function of the trading style:
Scalp, DayTrading, ShortTerm, LongTerm, etc., the longer the term, the larger the Timeframe.

In order to truely understand what Price Action Trading is , one must first realize the origins.
Some very inteligent Japanese invented the Candlestick chart - Why, what for?
Why did this person want to see all levels? OHLC?
Because he wanted to see what the price was doing, and picture Price Action on a chart.

When you study the basic construct of the Candlestick, and think about it, you discover
that the most important elements are the Shadows, not the Body, but the Shadows.
Why? Because the Shadows actually show where the price Consolidated in the given Period.

The even more basic element for understanding PA is understanding the basic economics,
which means - how the Market works.
In economics there are two sides: debit & creditors
Which translates in Forex to: Buy & Sell
The Balance is always = 0.

If you understand that:
When you want to Buy at price X, there must be someone who will Sell to you at price X.
When you want to Sell at price Y, there must be someone who will Buy from you at price Y.
then you begin to understand Price Action.

That is where you start to understand, that the Market is always in a Consolidation State.

When the price is going UP, there are Buyers and Pending Sell Orders waiting at some level,
which others call S/R levels, but they actually are Consolidation Levels.

Trend is the journey the price is making from one Consolidation to another Consolidation.

This is what we are aiming to catch and exploit. That is where our Pips are.

Now, when we have understood what Consolidation is,
that it is in fact the End of a Trend and The Begining of a Trend, of the price journey,
we can start to think how to recognize these moments on the charts.

By definition, Price Consolidation is the Equilibrium of Buy and Sell Volumes in a given period of time.
The Clue here is "period of time".
On the smallest level Price Consolidation is a Doji Candle on a tick chart.
Then, any other Doji Candle, of course.
Price Consolidation is also 2 or more Candles of about the same hight.
Price Consolidation is also a series of Candles oscilating between 2 extreme levels, several Pips,to
even hundreds of Pips apart.

That is clear, but are those the only signals or rather messages about Price Consolidation?

The Break Candle Pattern, why is it so important?

You should be getting the idea by now, if you understand Price Consolidation!

Yes, the Break Candle is showing us Breakout or Breakdown of the Price from
a Price Consolidation Zone. And Breakout or Breakdown of the Price from
a Price Consolidation Zone is showing us the building of a new Trend.

Thus, where is the Price Consolidation Zone?
It is the Candlestick preceeding the Break Candle.
And it is the End of the Price Consolidation.

Where is the Begining of the Price Consolidation, then?
All we have to do, is turn the pattern around.
When we see a shorter opposite Candle after a longer Trend direction Candle,
this is the the Begining of the Price Consolidation.

Now comes the tricky part!

We know how the Price moves, we understand Price Action.
We understand, that Price Consolidation is where Trend Ends and Begins.
We see, that Breakout and Breakdown are indications of the new Trend direction.

The MOST IMPORTANT thing to realize at this moment is that:
The Price can always do 3 things, when in the Price Consolidation Zone:
1. Continue Consolidating,
2. Breakout and form a Bullish Trend,
3. Breakdown and form a BearishTrend.
It can be a new reversal trend or the continuation of the former trend.
We must free ourselves of judgment or speculation.
It is Price Action which tells us which direction the Price is Trending inside
the Price Consolidation Zone.

And this applies to every Timeframe and every Trading Style.

1. Find 2 Timeframes most suitable to Your trading style (ie. M30 and M5 for DT EURUSD).
2. Watch for begining Price Consolidation Zones - the potential End of Trend.
3. Use the Rectangle tool and draw the Zone as follows:
http://charts.mql5.com/1/166/eurusd-...salt-ltd-3.png
4. Switch the Timeframe to the lower one.
http://charts.mql5.com/1/166/eurusd-m5-fxsalt-ltd-2.png
5. Watch for entry moments on the retrace to the zone.
6. Simultanuesly watch another larger Timeframe, H1, H4, D1, to estimate the general Trend.
Go along the General Trend, not against.
7. Set Your SL Close, a couple of Pips above or below the High or Low values as seen on pics.
8. With TP you can either set Your own target, or follow until the next Price Consolidation Zone,
and then decide upon the same rule - the Break Candlesticks and simple Trend recognition.

Important:
The signals from the larger Timeframe always come first!
So, if there is no Break Candlestick in the opposite direction on the larger Timeframe,
do not count on trend reversal.
Rather see this as potential retrace in Trend continuation and look out for the next Price Consolidation Zone in accord with the larger Timeframe Trend.
Then, watch for Break signals and Trend signals inside the Consolidation Zone.

2014-04-28 update!!!
For a better way to plot the Entry PTECZ Zone, please go directly to this post:
http://www.forexfactory.com/showthre...74#post7432274


The final decision and risk is on Your side.
Sometimes the market is completely unpredictable!


General rules for thread:
1. No predictions about future price movement.
2. No private opinions about future price movement.
3. Fundamental hints allowed, as long as in: "Watch PA on ..., because ..." style.
4. Critisism of my method and/or myself, and attempts to prove me wrong will be treated as
violation of Forum #1Rule: Respect the Fellow Trader.
5. People who take no interest in my method for whatever reasons are
welcome to post on my thread as long as they show proper respect to the
thread starter, other readers, respect the Forum rules, and respect the thread rules.

Anybody who fails to follow the above rules shall be added to my ignore list and cleanedup.


Rules for charts:
1. Only plain charts with the helpers and indicators supplied by me!
2. No Moving Averages, no Fibonacci, no Elliot, no other Moving Average
based indicators are allowed in this thread!
No indicators other than stated in point 1.
3. Trend lines and Andrew's Pitchfork are allowed.
4. There might be singular exclusions upon my decision for educative reasons
as negative examples or examples necessary for the context of the post.
5. No future price movement predictions or private opinions on charts.
6. Descriptions and indications of Price Action, Consolidation Zones,
CSCZ, TBCZ, PTECZ and Zone Candle are allowed on charts!

Rule for following posts which I can not edit:
1. The term "Engulfing" should be substituted with the term "Break"
as in the text above. Thus "Engulfing Candle" should be understood as "Break Candle".

Rules for learning:
1. You learn, first. Read the whole thread, study my charts, copy or mimick what you see onto your charts.
2. When you are ready and you know what is CSCZ, TBCZ, PTECZ, Zone Candle, and you know
what the meaning of Analysis from Top is, when you know what the whole method is,
make an appointment with me for a 2-3 hour SKYPE session.
You need a working set of headphones with mic and know how to SKYPE-share your screen.

The information included in this post is only the basics of the Method.
In order to fully understand the Method and its evolutions, you must read the whole thread,
no matter how many posts it includes and no matter how much time it takes you!

I am willing to help anybody who is willing to follow my rules.
Anybody who will post charts that do not apply to the above rules
will be reported and cleaned up, added to my ignore list, and I will not be able to help them.

Disclaimer:

All of my indicator-tools have been designed in order to assist the Forex Trader in the process of learning Price Action and
the Supply/Demand Trading concept on demo accounts.
Any other usage of these indicator-tools is solely at the risk and responsibility of the individual Trader.
As with any tool, the proper usage depends on proper training and experience.
Any tool can be used in the occasional amateur style, the proffesional skilled craftsmen style, or the artists style!
And, as with any other tool, it can be missused, as well.
It is the investor/trader who makes the final decisions and judges or diagnoses the potential,
and it is the investor who is the amateur, the proffesional skilled craftsman, or the artist!
Just like the manufacturers of the simple hammer can not take responsibility for the effects or damages
arrising from using their simple tool, the creator of the tools presented herein can not take any responsibility,
whatsoever, for the effects or damages arrising directly or indirectly from using theForex Trade Supporting tools.
Loss or Profit in Forex Trading is the sole responsibility and sole risk of the investor/trader, and has nothing to do,
whatsoever, with any available tool, indicator or other computer programme.
There are a number of different factors, other than the tools themselves, which lead to success or failure in any trade,
including Forex Trading. It is extremely important to understand, that it is the investor’s ability to make the right decisions
at the right moments which lead to success, and the tools, no matter how fantastic, are only the Supportive Aid,
and not the decisive factor.

It is strongly advisable to thoroughly learn Price Action in Day Trading by Dadas as explained in this thread,
before applying the tools to your charts and trying to use the concept.

Attached, some helping tools.

Also, a rar pack with all the missing pictures from # Post 3 & # Post 4.

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Understanding the chart

This is an article I wrote some time ago:

The chart is a set of data containing information about price action presented in a certain graphic form, a visual form. The chart is the history of price action written in a specific picture alphabet – Candle alphabet, Bar alphabet or Linear alphabet. Data containing information about price levels is sent by the broker’s server in information packs called ticks, and drawn by a computer programme as an element of the chart. The linear chart contains the least information about price action, because it is presented as a linear set of averaged price levels starting at the Open value and ending at the Close value of a given period of time (Timeframe).

http://www.fx-nvatc.comeze.com/chart...i/image003.gif

Pic. 01 Linear chart. Open and Close levels of a given period of time (Timeframe).

The linear chart shows the trend pretty well, however, it does not show any other information, especially, we can not see the High and Low price levels in the given Timeframe, and it is difficult to recognize the beginning and end of each time period, thus, we cannot see the price action in this period of time. We can only see the average run of the price from the Open price, to the Close price.

The Bar chart and the Candle chart contain the full information about OHLC levels.

http://www.fx-nvatc.comeze.com/chart...i/image005.gif

Pic. 02 Bar chart with OHLC levels

http://www.fx-nvatc.comeze.com/chart...i/image007.gif

Pic. 03 Candle chart with OHLC levels

The Candle chart provides a much more visualy clear picture of price action in a given Timeframe. As we can clearly see, a Candle consists of three areas: the candle body (from Open to Close), the upper shadow, the lower shadow. From the structure of the candle, we read the Open price level, the High price level, the Low price level and the Close price level. In other words, we can see what the price was doing in the given Timeframe. We do not need to read the actual OHLC values, it is enough that we can see, that:
Ø At such and such hour, the price tested a higher level, but found some Resistance (High) and began falling (upper shadow).
Ø The price fell down to a certain level and found some Support (Low), and there it stopped falling further.
Ø The price turned back upwards somewhat and Closed at a lower level than the previous Candle (lower shadow).
Ø Thus, the trend in this period of time was Bearish.
In the exact same way, we can read each Candle, on every or any Timeframe chart.
Reading each Candle, one by one, we get the whole story, the history of the price. We see the price action. We are able to read the chart. All other indicators, suddenly, become useless, because we can read the chart itself, and we can see it all. Indicators which, in theory, are supposed to show trend, take their data directly from the charts, not from another source. Since we can, now, see it for ourselves on the chart, what do we need any indicators for?
Ø In the following hour, the price dropped some more, created a new Low level, and Closed lower than the preceding Candle, thus confirming the Bearish trend.
Ø In the hour after that, the price still dropped, created a new Low level, and Closed lower than the preceding Candle. However, we notice that the bodies of the last two Candles are much shorter than the body of the Candle we started with, so, obviously the trend is weaker, though still there.
Ø In the still next hour, the body of the Candle is even shorter and we can see the upper and lower shadows. Thus, the price tested a lower level, found Support, tested a higher level, found Resistance, Closed lower than the preceding Candle, so the trend is still Bearish, but the price is, obviously, consolidating.

Let us take a look, again, at the Candle we startet out with.
The High price level is the Resistance level for that hour – isn’t it?
The Low price level is the Support level for that hour – isn’t it?
Thus, what are the shadow areas of Candles, if not Resistance and Support Zones for the given period of time?

http://www.fx-nvatc.comeze.com/chart...i/image009.gif

Pic. 04 Resistance and Support zones of a Candle

Following this trail, Resistance and Support Zones for a given Candle are nothing other than Price Consolidation Zones (equilibrium or balance of Buyers and Sellers) in a smaller period of time. There were still Buyers at the Open price, so the price went up. There were no more Buyers at the High price, and Sellers took over, so the price went down. There were no more Sellers at the Low price, and the price started to go up again. The price went up until the Close level, where, again, the Sellers took over. With the help of a simple MT4 tool, the rectangle, we can draw such Zones, and we see even more clearly what is going on, here!

We cannot see that on the linear chart. We can, on the Bar chart, but not as clearly.

Continuation in next post due to picture limitation per post.

Price Consolidation means an equilibrium or balance of Buyers and Sellers in any period of time. Price Consolidation is a period of indecision, lack of visible trend. Price Consolidation can be clearly recognizable on the chart as a Doji Candle (no candle body), as two opposite Candles (Bullish and Bearish) of equal or nearly equal body hight, as a series of Candles oscilating in a certain horizontal channel of, sometimes a few, sometimes even a couple of hundred Pips without a clear trend. However, the most important Price Consolidation Zones seem to be the ones not readily recognizable on the chart, yet, they are the beginnings, the earliest indications of a Price Consolidation! And they are: the Shadow Zones of Candles, the first negation Candles of a trend (meaning the first Candle to go opposite the trend and marking the beginning of Price Consolidation), and Candles preceding the Engulfing formation, marking the end of a Price Consolidation.

http://www.fx-nvatc.comeze.com/chart...i/image011.gif

Pic. 05 Examples of Price Consolidation Zones of Candle shadows, Doji also visible

http://www.fx-nvatc.comeze.com/chart...i/image013.gif

Pic. 06 Example of Price Consolidation Zone of nearly equal Candle bodies

http://www.fx-nvatc.comeze.com/chart...i/image015.gif

Pic. 07 Example of 160 Pips Price Consolidation Zone on the D1 chart

http://www.fx-nvatc.comeze.com/chart...i/image017.gif

Pic. 08 Examples of Consolidation Zones on first negation Candles

http://www.fx-nvatc.comeze.com/chart...i/image019.gif

Pic. 09 Examples of Consolidation Zones on Candles preceding Engulfing

Price Consolidation is the equlibrium period, it is the Zero Point. The balance of Buyers and Sellers. The absence of trend.
Price Consolidation can last one tick long, one minute, several minutes, an hour, several hours, a day, several days, a week, several weeks, even several months, and it can have a different span, from 0 Pips to hundreds of Pips, or even more.
However, the Price Consolidation is the Zero Point, the decisive point. The direction in which the price breaks out of the Consolidation, and then confirms, is where the price is going, is the trend. And that is the best moment to open a new order, to get into the best position. The following Price Consolidation, the one ending the trend, is the best moment to close our order!

Now, we can read the chart, we understand Price Action and we are able to read it from the chart.
We know how to recognize trend and Price Consolidation!

We have the complete set, all we need for successful trading and investing in the Forex market.

A simple practise strategy to help better understand Price Action in Action

In this strategy we will use the Candle Shadow Consolidation Zone (CSCZ).

Let us take a look at the following situation:
http://charts.mql5.com/1/174/eurusd-h1-fxsalt-ltd-9.png

On the EURUSD H1 we see that after a strong Bullish Trend the price, obviously Consolidated.
After a long Bullish Candle, practically without Shadows, the next Candle Closed with a short Body,
a long upper Shadow and a shorter bottom Shadow.

With the aid of the Rectangle tool we can draw the CSCZs on the H1 Candle, as seen on the above picture.
Remembering the rule that the price can always do 3 things when in the Consolidation Zone:
1. Continue Consolidating,
2. Continue the current trend,
3. Reverse the trend and go in the opposite direction,
we do not assume anything, wheather up or down, or any other direction.
We only assume that we do not know, and do not need to know what the price is going to do!
We only need to be able to read the chart, to read Price Action!

Thus, we watch the price:
- In the next hour, the price tried to go upwards a little, but it bounced of the green CSCZ and went down.
It created a new Low, ie. the Low of this Candle was lower than the Low of the previous Candle, and
it Closed below the Open of the previous Candle. Thus, we have a signal of a Bearish Trend.
We do not open any trades at this moment, because the long Bullish Candle has not been opposed, so
we do not know, or rather, the Bullish Trend is still valid. OK, OK, just a darn moment!

We are not supposed to assume anything! We are not supposed to predict!
The price can always do 3 things, remember?!

- In the following hour, the price created a new Low and Closed below Open of the previous Candle.
Thus, signaling a Bearish trend, again. At the same time we see that the price Brokedown the red CSCZ,
which tells us that the price has a tendency to go down.

- In the hour after that, the price created a new Low, and though it Closed as a Bullish Candle,
its High was Lower than the Open of the previous Candle

- The next Candle created a new Low and Closed as Doji (in the general sense).
A pure Consolidation in the given hour period.

- The following Candle, and here an important moment, was a Bullish one. It did not create a new Low.
Its High plunged into the green CSCZ, but it did not Breakout of the green CSCZ, and did not create a new High
in relation to the earlier High of the Bullish trend.
It Closed slightly inside the green CSCZ.

- The Candle after that, opposed the previous one and Closed below Open of the previous Candle.

At this moment we already see that the price refuses to go up, there is some obvious resistance.
However, the range of Price movement still suggests Consolidation. There is no visible Bearish trend,
nor a visible Bullish trend. That is where we need patience.
It has been 6 hours, and we have not opened a single trade.
But, that is how it should be done.
Patiently wait out the right moment, see it on the Closed Candles, without rush.

A very aggressive investor, taking the risk into account, and including the risk in the strategy,
could look out for a Short inside the green CSCZ just now, seeing what is going on, with a short SL,
ie. a few Pips above the green CSCZ, about 10 - 15 Pips.

A cautious investor should wait until the trend forms. Thus, until we see that the price has opposed
the previous long Bullish Candle, as seen on the picture below:

http://charts.mql5.com/1/175/eurusd-...rkets-as-2.png

Ok. but slow down, we still need more patience!
We can see that the price bounced of the green CSCZ.
We can see that the long Bearish Candle opposed the long Bullish Candle.

We remember the rule:
1. Go Short at the top.
2. Go Long at the bottom.

Thus, we wait for the price to retrace, to go back up.

On the left, we see that the price was Consolidating for a few hours at the very same level
it is now. We draw this CSCZ with the Rectangle tool.
In this way we visualize the potential Zone for opening a Short trade.
We aim to open the Short when the price plunges back up into the CSCZ,
or as close to the Zone as possible.
Our SL should be a few Pips above the CSCZ.
In this case, around 10 - 25 Pips.

Is the price going to go down, for sure? That, we do not know, and we can never know for certain.
That is why we use SL and set our TP at least 2xSL, thus keeping a positive Risk to Reward ratio, (R/R).

With the very same procedure, drawing CSCZs on Candle Shadows, we can watch Price Action
in relation to those Zones and make decisions when to close a trade and/or open a new trade.

http://charts.mql5.com/1/175/eurusd-...rkets-as-4.png

Before you decide to use this strategy investing real money, practise on a Demo account.
Take as much time, as you need to master the strategy, which means you are able to consitently
create profit over loss, and your account Balance is positive.

This strategy is the early stage of my realizations.

The next faze - The Zone Candle Concept - will be found here:
http://www.forexfactory.com/showthre...96#post6528596

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Just wanted to say thanks for opening your own thread, very intersting thoughts and so far very clear, looking forward to read new info tomorrow

Dadas

Thank you for helping me learn.

I believe that it depends on one's interpretation of consolidation.
Many consider that consolidation is simply a period of ranging and I am not saying they are wrong.
The way that I interpret consolidation is that it is a period or zone where bulls and bears are roughly in agreement and neither have much enthusiasm to push the price higher or lower.
A consolidation candle is usually seen as a spinning top and slightly contrary to Dadas's theory, I believe that the whole candle or series of candles is the consolidation period.
Because neither bulls or bears are willing to take control, they may decide to step out of the market for the time being.
The shadows on the candle are caused by the traders consolidating their positions, closing positions as opposed to opening new ones
Bulls close their longs, effectively a short and this action causes the price to drop and then the nervous bears will exit their positions, taking advantage of the drop to close out, maybe either at BE or limiting their losses. This pushes the price up a little and more bulls consolidate, etc etc.
So , in my opinion, consolidation is usually a tight ranging period that is caused not by traders entering new positions, but rather exiting their existing positions because they are no longer certain of market direction.
A period of consolidation on a smaller tf chart will tend to appear as a Doji , spinning top, hanging man, hammer or pinbar on a larger tf.

I hope that this makes sense

great thread, thanks for sharing

Thanks for sharing! Thread subscribed.

Dadas, thanking you kindly for your time. I am in on the ride

Hello

Subscribe

What is your question?

This is my first subscription in a very long time. I find PA in my trading repertoire to be a substantial part of my day trading. keep up the good work.

@smikester
I am writing for everyone and anyone who reads my posts!
What the reader-trader choses to do with this information, is up to him/her/it/whatever!
All traders know, not all traders understand!

@Gumrai, smikester about Consolidation:
The clue word you are using is "interpretetion".
You are entitled to interpretation and both your interpretations are correct.
That does not change the facts.

The human mind operates only on Models, because it is unable to see the whole picture.
The whole picture consists of an indefitine number of elements, which our logical Mind
can not grasp. Thus, you are stuck on a certain context.

The same with Forex and charts.
Charts are limited to a certain Timeframe context, but the Market is not.
Trading takes place any time, there is no regulation to say that trading must
take place from the Opening of a Candlestick until the Closing of a Candlestick.

Price Consolidation is just what it is - Equilibrium or Balance between Buy & Sell,
Demand & Supply in Any Period of Time, wheather it can be seen on the charts or not!

If the price reached a certain Low value and retraced back to the Close value - is it not obvious that
the price Consolidated inside the Low-Close levels?

If the price reached a certain High value and retraced back to the Open value - is it not obvious that
the price Consolidated inside the High-Open levels?

And in between there might have been lots of other smaller Timeframe Consolidations.

Interpretation has nothing to do here.
Interpretration is what gets people stuck on Buy when price shows Sell.
Interpretration is what gets people stuck on Sell when price shows Buy.
Because we see what we want to see, we see our interpretation, not the facts.

Price action is about Price Action, it is about Facts!
It is the Facts that matter!

Break free of your interpretation limitation!
Break free of just one context!

Then you will understand why the Shadows are in fact Price Cosolidation Zones.

I do explain that clearly in my posts - just read carefully, please.
And I am showing examples all the time.

@Gumrai
You do not realize how close You are to the full realization!
Yes - ultimately the whole Market is in a Great Consolidation in the largest possible Timeframe,
whose Open is at the beginning of Forex and Close will be at the end of Forex time,
whenever that takes place.

Let us make a rule for this thread.

In order not to get the whole information mixed up between discussion,
I will try to put the informational part at the beginning of the thread by editing
the already existing posts - as much as it is possible.

Let us leave the rest as discussion, questions & answers.

Look for the next valuable information begining my 3rd post on this thread.

@smikester, you have a very valid point in my opinion.

i would also like to add my thoughts to this. the first thing that came to my mind when i noticed the shaded areas on the charts, as provided by Dadas, are that these "shades" probably appear as some sort of doji bars on another time frame. that is just what came to my mind. i am not blaming anyone just saying what picture i got in my head.

i would also contribute with a picture. please disregard the fractals and the cloud. the logic is an engulfing bar at the same time as price appears to stall at previous level where it could not close at a higher level.

@smikester, thanks for the input

@smikester
Thank you for your contribution.

You are, obviously right.

That grey area could be one of the types of Consolidation Zones, which I describe.

It could also potentially prove to be an important one.

The ones you are showing are Consolidation Zones, as well.
I never said they were not, I said they were - simplifying to the term Doji.
I am not going to present all the Candle Patterns in this thread.
That is to be Googled up by anyone interested.

Either you are not reading the whole of my posts, or you are only seeing that
which is proving your point, an extracted piece of information placed in the context
that you want to see and present to others.

I am not asking you to change your thoughts or your interpretation of Price Consolidation.
I am not even asking you to waste your precious time on reading my post.

All I am asking you is that if you have decided to waste some of your time reading my post,
please be kind and read it all carefully trying to understand and freeing your mind of misinterpretation.
Try to free your mind of any interpretation, if you can.

Otherwise, please teach or present your way in your own thread.
This forum is open to anybody who wants to present their own vision, no matter
what it is, as long as it is about Forex Trading.

Not to mention that you got it wrong.
This is one type of Consolidation Zone I am talking about.
This is the Trend Ending Consolidation Zone.

http://charts.mql5.com/1/173/gbpusd-...salt-ltd-3.png

And if we zoom the picture out some:
http://charts.mql5.com/1/173/gbpusd-...salt-ltd-4.png
But this is yet to come.

Relating to your chart, this is what I mean:
http://charts.mql5.com/1/173/gbpusd-d1-fxsalt-ltd.png

Oh, and by the way, if have not read or understood your first language.
This is just the begining of the step-by-step journey.
There is still a lot to come, not to mention that I will be posting actual trades.