Understanding Price Action – How to Find Yo-Yo Bars

Let’s make reading charts easier by understanding what Yo-Yo Bars are and how they work. Firstly, the candles (or bars) on a chart can give clues as to how the marketing is feeling and what to anticipate in the near future. A specific grouping of bars can be an even greater indicator of what to expect. By being able to read a chart, you’ll be ahead of many traders.

Much of candlestick terminology is based on the Japanese language. Luckily, John Paul’s basic approach to candlestick interpretation is simple. Knowing a specific pattern is enough.

You’ve probably come across these candlestick terms: shooting star, doji, evening star, hammer, hanging man, harami, etc. Here’s a picture of the different types of candles that can appear on a chart:

Instead of memorizing each term and formation, focus on the following concepts. Remember that Yo-Yo Bars and Yo-Yo Candles mean the same thing.

Understanding Yo-Yo Bars

1. Markets can trend in either direction. They can also chop back and forth with no overall direction. Some days can exhibit both types of activity.

2. It’s better to focus on markets that trend. Trending markets have a more consistent direction.

3. Be on the lookout for periods where trending markets “rest.”

4. When a trending market rests, this is a Yo-Yo period. To clarify, a trending market will slow down and take a break. During this period, the buyers counteract the sellers, and vice-versa.

5. Yo-Yo-Bars appear in groups because they signify periods of resting activity. Price has stalled and has failed to move further.

6. Focus on a cluster of Yo-Yo Bars to catch the next move.

7. A single Yo-Yo Bar is inadequate – you will need multiple bars.


Click the image to see it larger

8. Look for Yo-Yo Bars on all times frames – 5-min, hourly, daily, etc.

9. Look for Yo-Yo bars on futures, currencies, and stocks; not just the E-mini S&P.

10. Charts with shorter time frames will produce groups of Yo-Yo Bars faster than longer time frame charts. A 1-min chart will require smaller profit targets and stops.

Overcomplicating charts with many indicators will only cause confusion. Price action is a much clearer way to gain and idea of what to expect. Less is more!

Hopefully, you will now be able to find Yo-Yo Bars. The next step is to understand exactly how to use them for entries. The upcoming Mentorship Program will teach you just that.

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