Understanding What Really Moves the Market

[Igor Pereira]

Advanced Price Action: Understanding What Really Moves the Market

By Igor Pereira
Financial Market Analyst
Founder of ExpertFX School

Most traders observe the graph.
Few really understand what's behind it.

The price action goes far beyond candles, tops and backgrounds. It reveals institutional behavior, order absorption, hidden liquidity and structural imbalances.

In this exclusive article for ExpertFX School, we will deepen the advanced concepts that allow “look behind the scenes” of the graph and interpret what really drives the price movement — especially in gold (XAU/USD).

Exclusive analysis – Igor Pereira:
“The price does not move by chance. It moves to seek liquidity.”

---

What Really Moves Price Action?

Market movement is the direct result of three main factors:

1. Liquidity

2. Unbalance between supply and demand

3. Institutional flow

The graph is just the visual consequence of these forces.

Advanced Price Action Concepts

---

Liquidity: The Market Fuel

Liquidity represents areas where there is concentration of orders.

It is usually located at:

• Previous Tops

• Previous funds

• Maximum and minimum

• Consolidation regions

The market often “spreads” these zones before starting a real movement.

Impact on XAU/USD:
Gold usually makes quick moves to capture liquidity before setting direction, especially during the opening of London and New York.

Igor Pereira highlights:
“Where there is accumulated stop, there is institutional interest.”

---

Break of Structure

Clear change following tops and backgrounds.

Indicates:

• Possible reversal

• Change of control

• Start of new market stage

It's not just a breakup. It's a change in the structural narrative.

What to expect:
After a significant fall, the market tends to seek the last imbalance before continuing.

---

Order Blocks

Areas where institutions positioned large volumes.

They are generally identified as:

• Last high candle before strong fall

• Last low candle before strong high

Impact:
The price tends to react when returning in these regions.

In gold, Order Blocks in H4 and Diary have significant structural relevance.

---

Fair Value Gap (FVG)

Region where there was imbalance — fast movement without sufficient counterparty.

Visually identified when there is a “gap” between consecutive wicks.

What happens:
The market often returns to fill this void before continuing the main movement.

---

Volatility Compression and Expansion

Markets alternate between:

• Consolidation phases (low volatility)

• Impulsive phases (high volatility)

Compression usually precedes expansion.

In the macro scenario:
Before data such as inflation or interest decision, gold tends to compress volatility to then aggressively expand.

---

Institutional Psychology Behind Price Action

The market is driven by great players who:

• They seek liquidity

• They create traps

• Manipulate technical areas

• Execute orders in stages

The trader who understands price action ceases to operate visual patterns and starts operating intent.

According to Igor Pereira:
“Who understands institutional logic does not react to the market. He anticipates.”

---

What to Expect when Applying Advanced Concepts?

When mastering advanced price action, the trader can:

• Avoid False Breaks

• Identify manipulations

• Anticipate structural reversals

• Refine entries with lower risk

• Improve macro context reading

Especially in XAU/USD, where movements are amplified by:

• Dollar flow

• Interest expectations

• Geopolitical tension

---

Common Errors

"> Ignore accumulated liquidity
"> Enter before structural confirmation

The price action is not about guessing direction — it's about interpreting intent.

ACUMULATION IN A NEW TREND
When a trend unfolds, you will see an interaction between impulsive phases (trend) and corrective phases (against trend). The trend phases are generally longer and more pronounced than the corrective phases.

The screenshot below shows a downward trend that began with extreme left sales. The corrective phases were very short and superficial in the early stages of the trend.

However, this changed and the price was negotiated laterally for a long period of time. The trend did not continue as easily as before.

The distance between the two minimums I marked at the bottom is also very small, indicating a low impulse loss. During a healthy downward trend, you usually want to see if the price is reaching new minimums quickly.

Although previous signals already strongly indicated a change in market sentiment, it is essential to expect that the market emits a high sign before considering long trading opportunities.

The screenshot below shows that the price crossed the blue resistance area with strong impulse. This marks the first time the price has reached a higher maximum.

For an emerging trader, this would probably qualify as a long trading sign.

Soon after the initial breakup, the price formed a corrective pattern with a horizontal resistance level. Assuming reentry positions after breaking this pattern is another common trading strategy.

The two horizontal arrow lines mark the import offer areas that were formed during the initial downward trend to the left. These supply areas will often act as resistance in the future and traders can use these price levels to set goals.

Remove:

Long fixes usually lead to reversals
Weak minimums during a downward trend are a good indicator of a power shift
Higher minimums are a first high sign
An impulse break at higher maximums is often used as a break signal

RUPTURE ACCOUNT
The accumulation of breakup can be part of any price pattern and then acts as a complement, improving the overall quality of the pattern. Some traders may refer to this as a pressure pattern, but the idea is the same.

In the screenshot below, the price formed a double or triple top below the level of pointed resistance.

The trend line slightly tilted upwards to the right marks the pattern of rupture construction. While the price previously was able to sell aggressively after reaching the level of resistance and falling substantially, during the growth of breakup, the price was pushing for endurance earlier and earlier.

A faster return to a level of resistance indicates that fewer sellers are willing to sell at that price and buyers are buying lower prices earlier and earlier. Both are confirming a move to a market more dominated by buyers.

The breakup of a breakup growth pattern usually occurs with strong impulse. As the sale interest was consumed constantly before the breakup, the strong buyer surplus leads to a strong reaction when the sale side disappears and only buyers remain.

Remove:

Accumulation can be seen in most conventional graphics patterns
Accumulation can improve the quality of the standard due to the information content added
The key to accumulation is the continuously faster approach to a level of resistance (or support).
During accumulation, the interest of sale steadily decreases, resulting in faster returns back to the potential rupture level

STOP RUN
The stop run is another complementary pattern and many traders use it as a trading method to enter into negotiations that follow trends after an initial breakup entry. This can be especially beneficial if the first sign of breakup leads to a loss, but then the price chart develops favorably and presents the stop run sign.

In the screenshot below, we see a downward trend in which the price was negotiated laterally for a long period of time. This is identical to the first example of accumulation. We can also see the increase component as the price continues to return to the level of resistance earlier and earlier.

The breakup occurs and the price is pushed into a new wave of high trend. A tip that helped me in my negotiations is to ask me how the average trader would approach such a breaking situation.

Traditionally, Forex stock trading portfolios will tell traders to put their stop loss orders right below - or right at the breakup level for a stop balance - at this point.

The price soon after falls below the breakup level in the stop zone. Interestingly, as the market approaches the previous breakup level, the price accelerates to the negative side and the red candles get higher. This is probably caused by the fact that the price reaches many stops from the traders they bought on the market – in this case, these stops will be sales orders.

What we see in the image below is the effect of the stop-run pattern. As the price was pushed into the stop zone, more and more traders were forced to abandon their negotiations, leading to much volatility. At this point, negotiation can be quite risky because the price is swinging back and forth irregularly.

A common approach is to expect the price to reach a new maximum as indicated by the horizontal dotted line. At that point, the price has already begun to reach higher minimums and pushed resistance with extreme force.

The danger of the stop-run pattern is getting involved too soon. As the price reaches the stop zone, volatility generally increases. It is best to wait until the dust goes down and you can see clear signs that the optimistic participants have regained control.

Remove:

Ask yourself where most traders will put their stops in a pattern breakup
Wait till the market returns to the stop zone
Volatility should increase during stop run
Don't get involved so soon and wait for volatility to decrease
Wait for the price to break strength with strong impulse

Divergence and Exhaustion
Many price stock trading strategies Forex will make use of price differences. Generally, a trader would choose a momentum indicator such as STOCHASTIC or RSI to determine whether a price divergence was actually formed. However, by understanding the underlying principles of the market, we can capture the divergence signal by looking only at the price chart.

Let's understand the characteristics of the divergence exploring the image below.

The market was initially on a strong upward trend, but the price then showed clear signs of weakness:

The highest maximum barely exceeded the previous maximum. Observing the maximums and the distance between the maximums can help you to identify effectively the weaknesses of the market.
The liquidation before the last discharge was also stronger than usual. A change in the size of the corrective waves is another key component of a price divergence
After the highest maximum, the price entered a long lateral phase. As in the first example of this article, long correction leads to an accumulation where continuation is much less likely.

Just before the breakup, there were signs of an increase in rupture. The price was initially sold to the dotted support, but the next recovery was much weaker. The price also returned to support quickly.

The sequence of candles leading to breakup also showed extreme force.

Several signs of confluence unite to improve the quality of the pattern. In general, the more criteria you identify in a given graphical situation, the greater the probability of successful follow-up.

After the pattern was broken, a new downward trend began.

The divergence and the top of the accumulation provided clear evidence that the high-market period would probably end. However, a trader should always expect the price to enter the new direction of the trend with a higher level of impulse.

Then:

A divergence shows a weakness in the strength of the trend
Weaker maximums and longer than normal corrective phases are the criteria for valid divergence
In itself, a divergence should not be negotiated without further confirmation
One phase of accumulation after divergence is another clear sign that market powers are changing
However, waiting for the price to break the previous support with strong impulse is an absolutely mandatory signal before starting short negotiations.

CONTINUATION OF THE BAND
Flags are classic trend continuation patterns and are used in many Forex stock trading strategies.

A flag is a corrective wave with a specific format, as shown in the image below. The flag occurred within a downward trend and after a strong phase of downward trend. If you can put a trend line along the minimums without cutting the candle body, then you found a valid flag pattern.

But the flag involves more than just a correction with a trend line.

The difference in inclination is another critical component for understanding this pattern. In the initial wave of the downward trend, the price fell very much in a short time. But during the flag, the price failed to advance much further. This difference in inclination points to a global market dominated by sellers.

My tip to identify flags: add the weekly dynamic point to your graphics. Often, the price will return to the center point of the pivot during a corrective phase. The central pivot is a strong support and resistance tool during trending markets.

After the price broke the trend line, the next wave of trend began and the price continued trending towards the general trend.

Remove:

A flag is a pattern of continuation during trend markets
A valid flag has a trend line that defines the outline of the pattern
A flag shall have a lower inclination than the previous trend phase
Pivot points are often the final points for flag indentations and act as strong support/resistance
The flag is triggered when the price breaks the trend line

TRIPLO PLAY
The triple touch is another pattern of exhaustion that comes with a divergence. Some triple touches even have a double divergence when the last two highest maxims show weakness in a trend.

The example below shows a triple touch with three consecutive maximums. However, the height between each subsequent maximum is lower than the previous one, resulting in a double divergence.

In addition, settlement after each discharge shows much more interest in sales than previously noted. When corrective phases become more pronounced and stronger, it is often a clear sign that a change of feeling is taking place.

The application of the RSI indicator to the graph confirms the double divergence. However, by understanding the principles of what constitutes a divergence, we can identify them only by looking at a price chart.

The price is breaking the last level of support with a strong sales sequence. Note that the price also changed the Pivot structure. While during a high trend the price will normally be traded above the center point of the pivot, in a downward trend the price will remain below the pivot.

During the next downward trend, the price fell and retreated to the center point of the pivot during the corrective retraction phases. As mentioned above, using the dynamic point indicator can be a great complement to a trend tracking trading approach.

Remove:

A triple touch is a trend exhaustion pattern
The pattern confirms that the current trend is losing momentum
Strong corrective phases are a clear indication of a change in feeling
Breaking to a new minimum is a very important criterion because it shows the first lowest minimum
The central point can help in understanding the trend context

SUMMARY AND FINAL WORDS
I put a lot of emphasis on understanding the exhaustion, weakness of the moment and reading the changes in the dynamics of power, because this knowledge allows traders to leave their trend monitoring negotiations while preparing to anticipate the new direction of the trend in the most effective way.

In addition, being able to read the power dynamics between buyers and sellers on your chart allows traders to negotiate with greater conviction and gain a deeper understanding of price charts in general.

Although most price action trading guidelines Forex provides only a superficial understanding of the different names and pattern formations, being able to look backstage by interpreting the buyer's and seller's distribution can help traders raise the chart reading to a new level. Thus, traders are not limited to negotiating textbook patterns, but can apply their knowledge to all kinds of situations.