YT YouTube2Text

YouTube2Text → Transcripts → Market Mechanics Ep 2: How Price Really Moves

Market Mechanics Ep 2: How Price Really Moves — Transcript

by Brad Goh (The Trading Geek) · 6,043 words · 979 segments · language en · Watch on YouTube

Open in transcriber Summarize with AI Download SRT/VTT

Full transcript

0:00Most traders think the market move
0:02randomly. They think price just flies up
0:05and down based on news and emotions and
0:08chaos. When in reality, the market move
0:12in a very repeatable manner.
0:15And once you understand that, once you
0:17see the pattern,
0:19the charts will stop looking random and
0:22it starts looking readable. You will be
0:24able to read and understand price and
0:27trade price with extreme clarity and
0:30confidence.
0:31So, ladies and gentlemen, welcome to
0:34episode one of my Market Mechanics
0:37Mentorship Series, where for the next 30
0:39days, I'm going to break down the real
0:42logic behind how market move, how to
0:45actually read price action, and how to
0:48think and trade like a professional
0:50trader.
0:52Now, before we get into today's awesome
0:55awesome lesson, I want to set a few
0:57house rules for this entire series.
1:00Number one, watch every lesson from
1:03start to the end. Don't skip around
1:06because you have a attention span of a
1:08fly. Just watch it from the start to the
1:11end. Okay, because every single lesson
1:14builds on top of the previous one. And
1:16you also don't want to be missing out on
1:18even a single minute of any given
1:20lesson.
1:21That's house rule number two. Focus.
1:24No distractions, no TikTok, no junk food
1:28on your table right now, none of that.
1:29No music. Focus, right? Focus on the
1:33lesson.
1:35See what I'm about to say and take down
1:37notes as you go about it.
1:40Number three, practice and apply what
1:42you've learned.
1:43Information alone is not going to make
1:45you a better trader. Information alone
1:48is not going to make you profitable.
1:50Application of that information is.
1:52Implementation of that knowledge is the
1:55thing that is going to make you
1:56profitable. Right? So, please go and
1:59execute, practice, and apply all of
2:01these concepts I'm about to pass it down
2:03to you over the next 30 days.
2:06So, those are the house rules. As long
2:08as you follow these house rules itself,
2:10I guarantee you that by the end of these
2:1230 days, you are going to be able to
2:15trade the market with confidence and
2:17clarity.
2:19Now, before I show you all the fancy
2:21trading concepts, the trading
2:23strategies, you know, the entry models,
2:26the setups, the execution, you first
2:29need to understand how the market
2:31actually move.
2:32Because if you don't understand the
2:34logic behind price movement, you will
2:36always be reacting blindly.
2:38You will always be relying on external
2:41tools like chart patterns, indicators,
2:43signal groups to tell you when to buy
2:45and when to sell.
2:47You will never ever be able to become
2:50profitable by yourself because you
2:53haven't mastered the skill set that you
2:55need to analyze the charts, to read
2:58price for what it is. And that's what
3:00this lesson is about.
3:02Once again, the problem right now with
3:04most of the retail traders out there is
3:06that a lot of the beginners, they are
3:08focusing on memorizing candlestick
3:10patterns, using trading indicators, and
3:14just trying to read chart patterns.
3:17They try to memorize all of these
3:19formations without understanding why
3:21price is moving.
3:23And as a result, what happens is that
3:26every move that happens in the market
3:28feels too random, feels emotional, feels
3:30unpredictable, all because they don't
3:33understand price. They are looking at a
3:36chart, but they don't understand the
3:38mechanism behind the chart. They don't
3:41understand the heartbeat of the chart
3:43itself.
3:45So, here's what I'm going to teach you.
3:47This is fundamentally how the market
3:50move. This is why price move the way it
3:52does and it applies to every single
3:55asset class, every single market, be it
3:58stocks, indices, crypto, futures,
4:01options, commodities, forex, whatever
4:04asset that has a chart and has a
4:06candlestick chart, has a price in the
4:08financial markets, this logic applies to
4:11it.
4:12So,
4:14you must understand that price does not
4:16move randomly. It move because of an
4:19imbalance between buyers and sellers.
4:24When one side is stronger than the
4:26other, price tends to expand.
4:29Okay, so if you look at every chart on
4:30every single market, it always move in
4:32this particular sequence where it
4:35expands, starts contracting, and then
4:38expands again, starts contracting,
4:40expands again, and then starts
4:41contracting.
4:44When price reach a certain area where
4:46the other side becomes active, this is
4:48where price will react to it.
4:51Okay, this is why a lot of times the
4:53market tends to trend, starts to pull
4:55back, consolidate, and then reverse or
4:58continue in that particular trend
5:00direction, and then start to pause, and
5:03starts to consolidate, and then starts
5:05bumping to either the upside or the
5:07downside again.
5:08This is because the market is always
5:11moving from imbalance to balance to
5:14imbalance to balance.
5:17Now,
5:18just to show you why that happens, it's
5:21really because of this concept called
5:22fair value.
5:24You must understand that at the end of
5:25the day, the market always seek fair
5:28value.
5:30So, the markets are basically an
5:33oscillation of imbalance and balance
5:35because of the fact that it needs to
5:38find this thing called the fair value.
5:42All right?
5:43Let me just show you what I mean by
5:44that.
5:45So, at any given moment that's like an
5:47efficient market. Okay? Which means that
5:50there is a fair amount of buyers and the
5:51sellers in the market. But, at some
5:53point of time, demand tends to exceed
5:56supply. Which means there's going to be
5:58more buyers than sellers in the market.
6:00Or the other way around is supply
6:03exceeds demand, where there's more
6:05sellers than buyers in the market.
6:07There's more selling volume than buying
6:09volume in the market. And when there's
6:12this tug-of-war going on, and one side
6:14starts to win, you know, what tends to
6:16happen is that we got an imbalance,
6:18which is also known as inefficiency.
6:21Where the market tends to, you know, go
6:23from like a normal tug-of-war, just like
6:25this, where the market is just
6:26consolidating, going sideways, there is
6:28a equal amount of buyers and sellers in
6:30the market, and then boom, suddenly it
6:33bursts to the upside because demand has
6:34overwhelmed the supply, right? Because
6:37the buyers has took back control of
6:39price and kicked the sellers out of the
6:41arena.
6:42So, this is the imbalance, right? So,
6:44you can see the market literally move
6:45from efficient market to inefficient
6:48market, from balance to imbalance, just
6:51like what I've drawn out earlier. And
6:53then, because of the fact that this
6:54imbalance cannot occur forever, which
6:57means that price cannot go up forever,
6:59and price cannot go down forever, at
7:02some point of time it needs to look for
7:05balance. It needs to look for efficiency
7:07again. Which means that it's going to
7:10come back to balance again.
7:13And then, we all know that the market
7:14cannot stay in this balanced equilibrium
7:16state for way too long. At some point of
7:18time, either the buyers or the sellers
7:20that going to win the tug-of-war, and
7:21then price is going to move to imbalance
7:22again.
7:24Okay? So,
7:26understand that
7:28the market cannot stay efficient
7:30forever. Because eventually, due to new
7:33information, whether that's the economic
7:35factors, news, or sentiment of the
7:39market, demand will inevitably exceed
7:42supply, or vice versa, causing
7:45to occur.
7:47Once again, creating inefficiency in
7:49price.
7:50And then after that, price will look for
7:51balance again to form an efficient
7:54market. And this whole loop keep
7:56happening over and over again.
8:00This concept right here is what drive
8:03price fundamentally. This right here is
8:06what allow price to move.
8:09Okay? So, that's the concept of
8:11imbalance and balance. Your goal as a
8:14retail trader is to capitalize on the
8:18imbalance move because that's where the
8:20big money is at.
8:22Just think about it.
8:24If we know for a fact that price is
8:25going to move up by 100 pips or 100
8:28points in the next few hours, ideally,
8:31we want to position ourselves before the
8:34move actually happens.
8:36So, we can capitalize on this huge move
8:38to the upside and make a lot of money.
8:41So, once again, your goal as a retail
8:43trader is to get in before this big move
8:46happens
8:48to capture the imbalance.
8:51And that's what market mechanics allow
8:52you to do.
8:53What I'm about to teach you over the
8:55next 30 days will
8:57fundamentally shift the way you perceive
9:00the market forever.
9:01And it will allow you to really capture
9:03these sniper entries where you can get
9:06in before the market move to the upside
9:09or to the downside.
9:12Because right now you are entering after
9:14the market has already moved. Your entry
9:16is way too late. But when you understand
9:18market mechanics, you can get in before
9:21the huge move.
9:23So,
9:25you must understand that at any given
9:26moment, the price is always in one of
9:29these four stages right here. I call
9:31these the four stages of price. This is
9:35pretty much how order flow works.
9:38Expansion, which is a strong move in one
9:41particular direction, either to the
9:43upside or to the downside.
9:45And then eventually it's going to start
9:47pulling back.
9:48You know what? Let me just draw that out
9:49for you like maybe somewhere around
9:50here. So we got an expansion, which is a
9:52strong move to the upside, and as we
9:55know, price doesn't go up forever.
9:57Just like in the real world, gravity
10:00works in the market as well. Eventually
10:02gravity will pull price back to fair
10:05value. And that brings us to the next
10:07phase, which is the pullback phase.
10:09Okay, so as price starts pulling back,
10:12eventually it's going to start coming to
10:14a state of equilibrium, which is the
10:17consolidation phase, where there's a
10:20compression in price because
10:22right now we don't know whether the
10:24market is about to move up or down,
10:25right? There's an equal amount of buyers
10:27and sellers in the market. There's
10:29indecisiveness, you know, demand and
10:32supply is like still in a tug-of-war.
10:34They are at a stalemate. I mean,
10:35nobody's really winning, right? That's
10:37what creates the consolidation phase.
10:40And then after the consolidation phase,
10:43one of two scenarios can happen.
10:46Either the market can reverse and starts
10:48to actually start coming down just like
10:50this, where the sellers has overwhelmed
10:53the buyers, where supply has exceed
10:55demand,
10:57or it can
10:58go back to the continuation phase, which
11:01is the buyers overwhelm the sellers.
11:03Right now the pullback is over, and
11:05right now we are going to shift to the
11:06upside again.
11:08So that's the continuation, right?
11:10Because the market can either continue
11:12the existing trend, or it can cause this
11:14existing trend to reverse entirely and
11:18cause the market go from bullish to
11:20bearish.
11:22So those are the four stages of price.
11:25Once again, this is the heartbeat of the
11:27market. It moves from expansion
11:30to pullback, and then consolidation, and
11:33then it can either cause a reversal or a
11:36continuation in price.
11:40Now, let's go on to the chart and let's
11:42just quickly apply what we have just
11:44talked about, the concept of imbalance
11:46and balance. So, if I'm looking at a
11:48blank chart just like this, I can
11:50clearly see the phases where the market
11:53is in an imbalance state. And I can also
11:55clearly see the market where when is it
11:58all
11:59balanced state. All right, so just
12:01looking at this alone, I want you to try
12:04to identify the areas of imbalance and
12:06balance right now.
12:08Okay, just do that for like the next 10
12:11seconds.
12:13If you really understand the concept,
12:14you should be able to do it in 10
12:16seconds.
12:17So, if I'm looking at this chart right
12:18here, I can see that this is where we
12:20got You can see this imbalance move to
12:23the downside, imbalance, and then pull
12:25back. And then what happens after the
12:27pull back is the consolidation phase and
12:30then it's the continuation phase.
12:32Same thing happens again, right? After
12:34the imbalance, we got price pulling back
12:37to fair value
12:38and then starts consolidating around
12:40here.
12:42You know, just gathering more fuel
12:44before continue going down even further.
12:47This is what the imbalance and balance
12:50concepts looks like on a microcosm. On a
12:54macrocosm, this is where you can see
12:56like if you just look at this
12:58entire move right here, price did it
13:00came all the way down here
13:02and then make a drastic pull back and
13:04then started consolidating right here
13:07and then it will lead to another phase
13:08of imbalance. And then balance again and
13:11then this is where there wasn't enough
13:13supply in the market to cause price to
13:15continue going down. So, what happens is
13:18that the buyers has overwhelmed the
13:19sellers, demand has overpowered supply,
13:22which means that we're going to get a
13:24reversal to the upside where the trend
13:26direction has shifted from bearish to
13:29bullish. And then you can see after this
13:31imbalance, the market cannot just go up
13:33forever. No. It tends to pull back
13:35again, consolidate a little bit, and
13:37then go again, pull back again,
13:39consolidate a bit, and then go again.
13:41This is just how price move.
13:45Okay? So, yep, you can see price doesn't
13:48move because there's a freaking
13:49candlestick pattern right there. Price
13:51doesn't move because Bollinger bands
13:53cross over. Price doesn't move because
13:55you see a double top. No.
13:57It move because it's actively seeking
14:00fair value.
14:03Now, I'm going to put in one more
14:04concept for you, right? Just to help you
14:06understand the skeleton of price, which
14:08is market structure.
14:11Now, once again, we're going to have a
14:12lesson that is catered towards this
14:14where we dive deeper into market
14:16structure and the nuances of it, like
14:18the swing structure and the internal
14:20structure. For now, I just want you to
14:23apply like this concept of imbalance to
14:25balance to market structure.
14:28So, market structure basically states
14:30that at any given moment, the market can
14:33only move in three directions. You can
14:36either go up,
14:37down, or sideways.
14:40That's it. It cannot move in zigzag
14:43patterns or like, you know, circle
14:45patterns. No. It can only move up, down,
14:49or sideways. All right? That's it.
14:52Now, when the market move up like what
14:54you were just mentioned, it cannot go up
14:56forever.
14:58Same thing. When the market go down, it
14:59cannot just go down forever.
15:02At some point of time, it needs to have
15:03balance, and then imbalance again, and
15:06then balance and imbalance again. And
15:08that's what creates market structure.
15:10So, in a uptrend, since price doesn't go
15:13up just like this, what tends to happen
15:15is that price goes up, pulls back,
15:18and then goes up again, pulls back, and
15:21then goes up again, creating what we
15:23call higher highs and higher lows.
15:27The reason why that it's called higher
15:29highs and higher lows is because of the
15:30fact that this high is higher than the
15:33previous high. This low is higher than
15:36the previous low.
15:38So, if we see higher highs and higher
15:40lows in the market, this means the
15:42market is in an uptrend. Price is in an
15:44uptrend. And if we want to trade with
15:46the trend direction, which is the
15:48uptrend, we want to look for longs. We
15:50want to look for longs at all of these
15:52higher lows right here because we're
15:54expecting price to create a new higher
15:56low and then continue moving to the
15:58upside, and this is the move that we
15:59want to capitalize on.
16:01In a downtrend, it's the opposite. This
16:04is where the market will want to create
16:06lower highs and lower lows. This high,
16:09lower than the previous high. This low,
16:12lower than the previous low.
16:14So, we can expect this downtrend to
16:16continue, and we want to look for shorts
16:19at all of these lower highs right here
16:21so that we can capitalize on this move
16:24to the downside.
16:26So, if you see lower highs and lower
16:28lows being formed in
16:30the market, this means that the market
16:32is in a downtrend. And once again, if we
16:34want to trade with the trend direction,
16:36we want to enter the for sales. We want
16:38to enter for shorts
16:40to be in alignment with the
16:43institutional flow of money, which is
16:45the prevailing trend direction.
16:48The third trend direction is
16:50consolidation. Like what we've just
16:52mentioned, what is the consolidation?
16:55It is basically a state of balance.
16:58It's basically the market being in fair
17:00value. There's an equal amount of buying
17:03volume and selling volume, there's
17:05indecisiveness in the market, and the
17:07market doesn't know where it wants to go
17:08up or down, whether it wants to continue
17:10or reverse. So, as a result, it will get
17:13stuck in this consolidation.
17:16So, as much as possible, if you're a
17:17beginner, you want to stay away from
17:19trading consolidation because it's very
17:22unpredictable and it's very difficult to
17:24trade.
17:25We are going to discuss why over the
17:26next few lessons.
17:28But for now, just understand at the
17:30basic fundamental level, the market can
17:33only move in three sort of direction,
17:35up, down, sideways. That's it.
17:38Higher highs and higher lows, it
17:39suggests that strength. Okay, it's going
17:42to continue going up. Buyers are in
17:43control. Lower highs and lower lows
17:45suggest the market is weak.
17:48Price is just going to continue falling.
17:51When you understand market structure,
17:53you are able to see with your bare eyes
17:56who is in control of price, whether the
17:59bulls or the bears, whether the buyers
18:00or the sellers, whether the demand or
18:02the supply.
18:04So, once again, let's try to apply this
18:06concept onto a blank chart just like
18:07what you can see on the screen right
18:08here.
18:10So, over here,
18:11right, if you are confused, take a
18:12drawing tool just like this and try to
18:15draw and trace out and outline the
18:18skeleton of the market. Okay, just
18:21outline this. You can see when once you
18:23outline, you can see it very clearly.
18:26In this case, is the market in an
18:27uptrend or downtrend?
18:30Well, you can see it's clearly in a
18:31downtrend. Why? Because market structure
18:35says that in a downtrend, price is
18:37creating lower highs and lower lows.
18:41And in this case, is this high lower
18:44than the previous high? Yes, it is. Is
18:47this low lower than the previous low?
18:49Yes, it is. Since we are having lower
18:51highs and lower lows in the market, this
18:54means that the market is actually going
18:56down. As simple as that, right? It's
18:59just math. No rocket science here, guys.
19:02And then later on, what happened over
19:05here?
19:05Right, well, once again, demand
19:07overpower
19:09supply, buyers overwhelm the sellers,
19:12price went up, pulls back, goes up
19:14again, pulls back, and then goes up
19:16again. So, this time round
19:19is this high lower than the previous
19:21high?
19:22No.
19:24Not really, because this high is
19:25actually low higher than the previous
19:27high.
19:28Is this low lower than the previous low?
19:30Not really. This is the last low, and
19:32this high is higher than the previous
19:34low. So, right now we have established
19:36that the market is creating higher highs
19:39when this high is higher than the
19:41previous swing high, and higher lows
19:43when this high is higher than the
19:44previous low. Guess what? Do the math.
19:47Higher high plus higher low equal the
19:50market is going up. The market is an
19:52uptrend. So, this tell us that the
19:54buyers are in control of price. Demand
19:57is in control of price.
19:59That's the concept of market structure.
20:02Like I said, we're going to go into the
20:03nuances in of market structure. We're
20:06going to talk about how to combine the
20:07different market structure with
20:10different time frames later on when we
20:12get more advanced, where we have like an
20:14entire lesson that is catered towards
20:16talking about market structure. For now,
20:19just for the first episode, this is good
20:21enough for like the basics. Like this is
20:23good enough for the beginners to
20:24understand.
20:25That's how the market move.
20:27Now, not to get too complicated, but I
20:30want to just introduce one finer concept
20:34which ties in to the whole ethos of why
20:37price move the way it does. And that is
20:40liquidity.
20:41Okay, that is liquidity. Now, as we have
20:44established earlier on, the market move
20:46from phases of
20:49imbalance
20:50to balance, and then balance to
20:52imbalance again. So, in this case, you
20:54can see imbalance, balance, and then
20:56imbalance.
20:58And now you might be wondering, what
20:59causes this move right here? What causes
21:02the imbalance of price? We have
21:04literally just covered that the reason
21:06why there's an imbalance prior of price
21:08right here, where price go down so
21:11aggressively, is because of the fact
21:14that supply has overpowered the demand.
21:17The sellers has overwhelmed the buyers,
21:20kicked the buyers out of the arena.
21:23But, what
21:24is the terminology
21:27that actually causes these to happen?
21:28What is the fuel that actually causes
21:30this this move to happen?
21:32And that is what we call liquidity.
21:36Once again, not going to dive too deep
21:38into these. We are going to have lessons
21:40that is talking about this particular
21:41subject alone, liquidity.
21:43Liquidity is the fuel the market need to
21:46move aggressively to the upside or the
21:49downside.
21:52So, just like a car,
21:54the market cannot move up or like keep
21:57on moving forever. It needs to stop at a
21:59gas station to get more fuel, right? To
22:02get more petrol, whatever, before it got
22:06more fuel to continue on its way to its
22:09destination.
22:11It's the same thing right here.
22:13Liquidity is that fuel. Right, you can
22:15see the market paused, take a breather
22:17at a gas station, and then boom,
22:19liquidity step into the market, cause
22:21price to continue going down
22:23aggressively.
22:25Once again, your job as a retail trader
22:27is to capture this imbalance move. And
22:30how you capture this imbalance move is
22:32by understanding liquidity.
22:34Because the market is always constantly
22:37seeking liquidity. Because that's the
22:40fuel it need to move very aggressively
22:42in a particular direction.
22:45All right. So,
22:47now, where where to spot liquidity?
22:50It's going to be above the swing highs,
22:53below the swing lows,
22:54and above or below certain chart
22:57patterns or obvious zones or support and
23:00resistance levels.
23:02Once again, I'm not going to cover too
23:04deep into this because this is only like
23:06the beginner lesson. I don't want to
23:07confuse you. I just want you to like,
23:10you know, create that seed in your head,
23:12right? Just so you know, this is really
23:14why price move the way it does.
23:18Which is liquidity.
23:20Now,
23:21let's talk about why beginners
23:23fail in the market itself. Even though
23:25[snorts] some of them might understand
23:26this concept.
23:28The reason why they fail is because they
23:30tend to chase after price during an
23:33expansion.
23:34So, in this case right here, price has
23:36moved up so aggressively, right? So,
23:39this is where a lot of retail traders
23:41they look at this and they say, "Oh my
23:43god, this is a once-in-a-lifetime
23:45opportunity for me to get rich. I have
23:47to get in here for a long position. If
23:50not, I'm going to miss this move. I got
23:51to get in right now, man. If not, I'm
23:54going to be poor." All right, so they
23:56enter for a buy right here.
23:58And just look at what price does right
24:00after they enter for a buy.
24:02Price goes down and reverse
24:05literally
24:07right after they enter for a buy.
24:10And they wonder why this happened.
24:12It's because you are not trading price.
24:15You are just trading your ego.
24:18You are not trading price. You're just
24:20trading your pride.
24:23When you understand this concept that
24:25the market move from imbalance to
24:26balance, you will know that your goal as
24:29a trader is to get in during the balance
24:31phase.
24:32So, that you can capture the imbalance.
24:35Your goal is not to get in after the
24:38imbalance, but rather before the
24:40imbalance.
24:41So, if you succumb to the fear of
24:43missing out, you're going to get bad
24:45entries just like this where the market
24:47reverse right after you enter.
24:50And when that happen, you shouldn't be
24:51pointing your fingers at the market and
24:53saying, "Oh my god, the market knows
24:55where I place my stop loss. The market
24:57is manipulated. No.
24:59You're just coping.
25:01The market is doing what it does best,
25:02which is move. And if you did understand
25:04order flow, if you did understand the
25:06concept of imbalance to balance, you
25:08would have avoided this loss right here.
25:11So, that's why
25:13that's one of the many reasons as to
25:15like why retail traders tend to get
25:18trapped, right? Why retail traders tend
25:20to get a bad entry. Why that they tend
25:21to get stopped out.
25:23Another thing is that they tend to panic
25:25during pullback. For example, let's say
25:27they entered for a buy right here. You
25:29know, they managed to capture this very
25:30nice imbalance move to the upside.
25:33Right? So, maybe they place their stop
25:35loss below this low right here, and then
25:38they place their take profit somewhere
25:39around there.
25:40And when price starts pulling back
25:42against them, like you can see right
25:44here,
25:44okay, this is where maybe they're up
25:46like $5,000, and then now price has came
25:49all the way back down to where they
25:50entered the trade for the first place,
25:52and then now they're panicking. And then
25:54now price goes into the red. Oh my god,
25:56no. I'm like down $1,000 right now.
25:59Maybe I should get out early here.
26:01Right? They start panicking during the
26:02pullback. Once again, you're not trading
26:04the market, you're trading your
26:06emotions. So, as a result, what happens
26:08that they tend to enter
26:10and they exit the order right here.
26:12And when they exit the order, next thing
26:14you know, price continue going up in
26:16their way, and later on price went up
26:18there and hit TP.
26:20Right? Once again,
26:21all because you were trading your
26:22emotions. All because you don't
26:24understand order flow.
26:26Uh another common mistake is that they
26:27tend to enter way too early during
26:29reversal. Right? So, in this particular
26:32case itself,
26:33what happens that let's say they see
26:35price actually, you know,
26:38starts reversing right here. And then
26:40they're like, "Oh my god, price has
26:41reached a support level. I'm going to
26:43enter for a buy here and trade the
26:44reversal."
26:46And then what happened next is that
26:48price once again starts going down. Why?
26:51Because they don't understand market
26:52structure. They don't understand that
26:54right now the sellers are still in
26:56control of price. So, if you're entering
26:59over here, you're assuming that the
27:01market is going to reverse to the
27:02upside.
27:04But, is that what's actually going to
27:05happen? Did you actually got your
27:07confirmation that the market is actually
27:10reversing to the upside?
27:12If the answer is no, then my friend, you
27:14ain't trading the market. You're trading
27:16your emotions. You're trading your
27:18assumption of the market. You're not
27:20trading the market for what it is,
27:21you're trading the market for what you
27:23think it's going to do. You're trading
27:25the market for what you think will
27:27happen.
27:29Your perception of the market is not the
27:31reality of the market.
27:35And yeah, all of these mistakes could
27:38simply be avoided when you really just
27:40understand that price often needs to
27:43rebalance. It needs to retrace. It needs
27:46to seek fair fair value. It needs to
27:48grab liquidity first. It needs to cause
27:50the structure to shift first before it
27:53can get the next move to the upside or
27:54to the downside.
27:57So, that is why
27:59I actually spent a lot of less a lot of
28:01my time just working on this first
28:03lesson because I really believe that a
28:06lot of traders think that they are
28:08losing because of emotions. When in
28:10reality, they are losing because they
28:13are misunderstanding the market
28:14movement.
28:16Because they are just not trading the
28:18market for what it is.
28:21They're viewing the market from the
28:22limited lens that they have put on
28:25themselves.
28:26>> [snorts]
28:27>> So, that's why retail traders get
28:30trapped. That's the old lens. That's the
28:32old paradigm. That's the old way
28:35that allow you to to see the market.
28:38And what got you here will not get you
28:40to where you want to go.
28:42In order for your results to change, you
28:45have to change the lens in which you
28:47perceive the markets from.
28:50You have to change yourself.
28:52So, right now I'm going to give you a
28:54new lens. Change I'm going to have you
28:56change your glasses. I'm going to make
28:58sure that these glasses allow you to see
29:00the market clearly for what it is.
29:04So, from now moving forward whenever you
29:07open a chart just like this, a blank
29:09chart just like this, I want you to ask
29:11yourself these few questions.
29:14Is price expanding, pulling back, or
29:16consolidating?
29:19Once again, I'm going to apply this to
29:21the live market condition. You can see
29:22it right now we are looking at EUR/USD
29:25on 20th April at the time
29:29it's we are like 44 minutes left to the
29:33closing of this 1-hour candle itself.
29:36So, live market condition. I'm going to
29:38show you how to apply this framework
29:39right here.
29:40Ask yourself, is price expanding,
29:42pulling back, or consolidating?
29:44In this case, price is in an uptrend,
29:47right? Because we got price goes up,
29:48higher high,
29:50higher low, and then another higher
29:52high, and then this is potentially
29:53another higher low. Okay, potentially,
29:56not certainly.
29:58So, right now price has just gotten the
30:00expansion phase right here.
30:02And it has just gotten this fair value
30:05right here again.
30:06Okay, so it has just gotten from
30:08imbalance to balance, and right now we
30:09are in the imbalance phase where price
30:11has broke out of the consolidation.
30:15And in this case, since price in the
30:17uptrend, it needs to create a new higher
30:19low before it can continue going up even
30:22further. So, this right here is most
30:25likely a retracement for price to create
30:27a new higher low, and then later up just
30:29continue going up even further.
30:31So, in this case you can tell yourself
30:33that this is maybe the imbalance phase,
30:36and price is actually pulling back.
30:38Okay, price is actually in the pullback
30:39phase. If you want to get even more
30:41precise, you will see that this move
30:43right here, this was the imbalance
30:45phase, right? Where the market was
30:46actually going down very aggressively.
30:51And then right now, since the market
30:52didn't cannot go down, it needs to grab
30:54more fuel. Guess what? Now we are in the
30:56pullback phase, where the market is
30:58pulling back.
31:00And now you want to ask yourself, who is
31:01in control right now? Buyers or sellers?
31:05So at this point of time, we were in a
31:06consolidation right here, and then price
31:10broke to the downside, right? Bursting
31:12out of consolidation to the downside.
31:15So if we are looking at the overall
31:16structure, the buyers are in control of
31:18price because price is creating higher
31:20highs and higher lows. But if we are
31:21looking at right now, right? The most
31:25recent price action, the sellers might
31:27be in control because
31:29there was supply that overwhelmed the
31:31buyers,
31:33that overwhelmed the demand, that causes
31:34price to break out this consolidation to
31:36the downside.
31:38Right? So right now,
31:40the sellers must be in control of price.
31:43But then if you want to be even more
31:44precise and look at the most obvious,
31:46the most recent price action, which is
31:48this right here,
31:51you will see that the market is
31:52potentially shifting bullish. Now, why
31:55is it shifting bullish? It might be
31:56shifting bullish in the short term to
31:58facilitate the pullback.
32:01Right? Because like I said, imbalance,
32:03balance, imbalance again, and then
32:04balance, and then potentially we got a
32:06continuation or even a reversal.
32:10Now, where are the obvious highs and
32:11lows? Right? So obviously, this is where
32:14you can define a swing range. Once
32:16again, we're going to cover more about
32:18this in the market structure lesson, but
32:20for now, you can just look at the highs
32:23and the lows. Very obvious with the
32:25naked eyes.
32:27Let me just take a sip of tea.
32:30>> [snorts]
32:31>> Ah, you can't do a trading geek lecture
32:33without tea, man.
32:35>> [snorts]
32:36>> Okay, that's so good. All right, so
32:38where are the obvious highs and lows?
32:40So,
32:41in this case, high here, low here, high
32:44here, low here, high here, low here.
32:47Literally as simple as that. Once again,
32:49I'm going to walk you through the
32:50principles that I used to identify highs
32:53and lows in the market structure lesson,
32:55but for now, for the first lesson, keep
32:57things simple. Just go and identify the
32:59most obvious highs and lows.
33:02And where might price be drawing to it?
33:04Right? Once again, we know that price is
33:06moving from imbalance to balance and
33:08imbalance to balance. So, in this case,
33:10price might be potentially pulling back
33:12to this imbalance that we have on the
33:14left-hand side, come to a state of
33:16balance, and later on, it can just
33:17continue going up and just fueling the
33:19next phase of imbalance.
33:21Is the market continuing or preparing to
33:23shift? Right? So, right now, the market
33:26has been going down, and then right now,
33:28it's just shifted.
33:30So, what we can potentially have happen
33:31is if the sellers are in control of
33:33price, we can expect a new lower high
33:35being formed right here, which is lower
33:37than this high, and then just continue
33:39going down and then potentially creating
33:41a new lower low, which is lower than
33:43this previous low, and we know that
33:45price might be shifting bearish in the
33:47short term to have a short-term
33:50downtrend to facilitate the pullback to
33:53maybe some areas of demand, and then
33:56later on, demand step back into the
33:57market causing price to go up even
34:00further.
34:02Okay, so these are the five key
34:03questions that I want you guys to ask
34:06yourself moving forward when you pull up
34:08a blank chart.
34:09If you can answer these questions with
34:11confidence, you will be able to analyze
34:15the charts with a lot of clarity. You
34:18won't have brain brain fog, you won't
34:19have analysis paralysis, you will be
34:22able to understand
34:23what the market is doing right now, who
34:25is in control of price, and whether you
34:27should enter for a buy or enter for a
34:29sell.
34:32So, hopefully this lesson has really
34:35helped you guys see the market
34:36differently, right? Because my goal here
34:38over the next 30 days is to just rewire
34:41your mind. It's to reprogram your mind
34:44to stop trading like the retail trader,
34:47stop trading like how you've been doing,
34:49and start thinking, acting, and feeling
34:52like a professional trader so that you
34:55too can get the results of a
34:57professional trader, which is consistent
35:00profits.
35:02And you should understand by now that
35:04the market is not random, right? Price
35:06always move with logic, structure, and
35:09intent. Nothing happens by coincidence.
35:12And once you understand that, you stop
35:14reacting blindly, and you start reading
35:16the chart with more clarity.
35:20So, now that you understand how the
35:21market actually move, the next step is
35:23to understand the market you're actually
35:25trading, which is why in the next
35:28episode I'm going to break down how to
35:30trade Forex. I'm going to show you the
35:32introduction to Forex, what Forex
35:34trading is, how currency pairs move,
35:36what time to trade, and what you
35:38actually need to know before you even
35:41place a trade.
35:42If you guys want extra support beyond
35:44this free series, I will leave some
35:46useful links in the description below to
35:48the tools and platforms that I
35:50personally use and recommend, including
35:53my private mentorship program, my
35:55trading super app, and the broker that I
35:57use.
35:58With that being said, I look forward to
36:00speaking to you guys in episode two, and
36:02as always, remember you're just one
36:05trade away. Mwah.

About this transcript

This page contains the full transcript of Market Mechanics Ep 2: How Price Really Moves by Brad Goh (The Trading Geek), generated from the public captions YouTube serves with the video. The transcript has 6,043 words across 979 segments, with the original timestamps preserved so you can click any line to jump to that moment in the embedded player.

What you can do with it

Use the transcript to take notes, quote the speaker, build a study guide, generate a summary with ChatGPT or Claude via the YouTube Summary tool, or export it as a timed subtitle file with YouTube to SRT. You can also re-open it in the transcriber to choose a caption track available on the video.

Free YouTube transcript tool

YouTube2Text is a free YouTube transcript generator — no signup, no daily limit. Paste any YouTube link and get the full transcript instantly, with timestamps, click-to-jump, caption language selection, AI prompts for ChatGPT, Claude, and Gemini, and exports to TXT, SRT, VTT, or Markdown.