Understanding Market Dynamics With Wave Analysis

Waves are the natural rhythm that price moves in and price waves is the foundation of every good technical analysis.
We will start slow with the absolute basics and then slowly build on top of that with the coming lessons. In later modules, you will see how price waves are at the core of every market structure, trend move and also market reversal. Thus, it’s important to have a deep understanding of waves, wave structure and what it tells you about price dynamics.
Because wave analysis is such an important concept, we have to spend a little bit more time on it. Here is another video that goes deeper into the wave structure, the analysis of swing highs and lows and we look into transitioning periods.

Let’s recap what we have just learned:
 
▪ During an uptrend, price makes higher highs and higher lows – and vice versa
▪ The beginning and the end of trend waves are called swing points
▪ Waves against the direction of the trend are called retracements or pullbacks
▪ As a trend extends and becomes ready to turn, retracements become deeper and stronger
▪ A trend weakens when price is not able to break significantly higher/lower during trending waves
▪ A transition happens once price breaks the wave structure