Closer look at Ascending/Descending structure price action
Hello everyone:
Let's take a closer look at the Ascending/Descending channel structure in the market.
Typical ascending channel will happen at the top of the overall price action, and once the correction is finished, we have a high probability to see the price reverse.
Whereas a descending channel structure will form at the bottom of the overall price action, and once correction is complete, we are likely to get a reversal from the bottom.
Smaller chances these channels will appear in an impulsive move as a continuation correction, but not as frequently as appear as a reversal correction.
These channel correctional structures are forming because there's currently a close number of buyers and sellers in the market that continue to go against each other, hence price isn't in the “impulsive” phrase, rather just in the “correctional” phrase. But, we know from the nature of the market, once the correctional channel completes, we have a high probability of entering the impulsive phrase, and the reversal move is likely to be sharp and fast.
The key is to identify these Ascending/Descending channels on the higher time frame analysis, and go down to the lower time frame to confirm the reversal price action. This will allow you to get maximum R:R. You want to find reversal price action on the LTF to give your extra confluence and confirmation that the Ascending/Descending channel is finished correcting, and an impulsive phrase will enter the market.
As always, feel free to ask me questions or comments.
Thank you
