In this 8- hour long course I'm going to equip you with my trading methodology and my trading system that has made me hundreds of thousands of dollars and close to seven figures in my early 20s this course is going to cover everything from the basics to how to read price charts to all of my trading strategies what separates a lowquality trade from a high quality trade by risk management system my in trade management system and much much more it doesn't matter whether you're a beginner Trader who knows nothing about trading or a profitable expert Trader
I can 100% guarantee this course will open your eyes and will help you improve as a Trader first let me go ahead and introduce myself my name is Emanuel I'm a Georgia Tech graduate and I've been day trading stocks for 4 years the way that I learned trading and honestly I got pretty lucky was from my father he's been a professional Trader for close to a decade and when Co hit everything was on lockdown and I found myself back at home without anything really to do so my Dad decided to encourage me to start learning
how to trade and he was able to teach me all of the basics for about 3 to 4 weeks he taught me his trading system and the methodology he trades and then for the next 3 months I was sitting next to him looking at his every move and really trying to understand what drove his decisions in the markets and I was paper trading alongside of him after watching him trade and practicing next to him on my first day of trading with real money I made made $711 this completely changed my perspective about money because I
always Associated time with money working different jobs for example at a grocery store I also worked for a landscaping company I was paid hourly so I always correlated time with money but when I made that $711 in literally 2 to three hours of trading it completely opened my eyes I owe it completely to my father to getting me into trading into teaching me and honestly his mentorship was invaluable to me 4 years later I'm a full-time day trader today I just moved into my dream apartment in Boker Vuitton Florida I was able to buy myself
an M8 competition and I can proudly say that I have the ultimate Freedom I've made hundreds of thousands of dollars and close to seven figures with trading and I haven't had a losing month in over 3 and 1/2 years keep in mind I did all of this as a full-time 15-hour Georgia Tech Student studying Finance I'm not telling you this to flex in this video we're going to be talking about trading and making money with trading so it's important for me to share to you why I'm qualified to teach you in the first place in
the last 10 months I also taught my 18-year-old cousin how to trade I took him from zero not knowing anything about trading to now making between $8 to $15,000 per month consistently he traded with me every single day and he had his first $1,000 day only 3 months into his trading journey I have dozens of other students who are in my one one mentorship program who have seen incredible results just like Greg the information in this free Course truly has the power to change your life and help you take a massive step forward towards achieving
profitability with trading this course can be gamechanging for you if you take it seriously if you have a notebook a pen and you're distraction free every single time you watch one of my lessons and you're truly absorbing all of the information I'm teaching you unfortunately many of you are going to take this course for granted because it is free and a lot of people don't put value on free information regardless on how good that free information is it's really easy for people to look at this information and look at the course that I created see
that it's free and just disregard it and not really take it seriously and I don't want that to be you so I want you to make me a deal imagine that you just paid me $2,000 from your own personal bank account into my bank account for all of the information that in this course as you're going through this course I want you to keep in the back of your mind that you just paid me for the information that you are watching and that's my way of guaranteeing that you're actually going to take this seriously and
really digest all of the information I've had hundreds of students watch this course and I've seen personally them take tremendous strides in achieving profitability with trading so I can't wait to see your results all that I ask from you is to follow my socials on Instagram Tik Tok and YouTube YouTube and that you provide me updates on your trading progress as you're going through this course in my free Discord if you're watching this video from YouTube I want to show you how you can Get access into my free Discord so you can give me updates
on your trading progress or to ask me questions if you have any and to of course give you access to the other resources that I've attached to this course that I wasn't able to post on YouTube so in the description of this video you should see a link to my Emanuel trades University you're going to want to click on that and it's going to bring you to this page it's hosted on [ __ ] which is an excellent platform I have a lot of my education on [ __ ] and you're going to want to
have the free course selected I have other services as well like the trading University which is the free course on steroids it's about four to five times as long way more detailed way more thorough and I also give you assignments for you to complete and then I personally verify those assignments so it's a much deeper learning experience we also have my personal trades where I give you the trades that I'm taking on a daily day basis when I'm day trading you know the stock the entry stop loss Target and I manage the positions for you
as well and of course I have the one-on-one mentorship where this is a private group of students that I personally Mentor one-on-one and they trade live with me every single day I stream my screen and they're able to see me trade and we make money together so for this though we're going to click on the free course and just press on get access you will have to put in your email address and uh once you press continue it's going to send you a code to your email so go ahead retrieve that code put it in
and once you do that you'll be able to have access to the free course on [ __ ] once you do that it's going to take you to this [ __ ] dashboard Area and you should have also received an email where you can access the free course and access this dashboard as well and the first thing that you're going to see is the free live training this is a live class that I do every single Thursday where I give you the framework on how to make your first $10,000 a month with day trading I
highly recommend that you register it's completely free to go take notes in the class you're going to learn a lot of valuable information and make sure you stay until the end of the class because I do a massive Q&A where I'll answer all of your questions and I give you a massive opportunity to really take your trading to the next level so make sure you register up for that and make sure you attend this Thursday the next thing you're going to see is my trade insights and this is kind of like a forum where I
give you my thoughts as a Trader I post some you know different information about trading for example here um talked about boring trading equals profitable training and I posted a whole Forum about that and of course I give you reminders to attend the free class on Thursdays but this is where you want to really click on the free 8 Hour course it's a drop down and then you should see education and then you should see trading community so once you press on education this is where the course actually begins and you can begin learning and
there's also going to be PDF or Word documents under some of the classes that are going to give you additional resources that uh you know is definitely definitely going to be valuable for you and in order to access the Discord you're going to want to click on trading community that is under the free 8 plus hour course click on that and and it should take you to this Right here so just put in your Discord account press on claim access and then you could join my Discord and from there you can ask me questions you
can collaborate with the other students in the free chat and I also post lots of announcements in there for any updates that I'm doing so super great I'd love to have you in my Discord and yeah make sure whenever you join it to tag me and give me a quick hello or give me a quick what's up you can also personally DM me I try to always respond to all of my students so once you're in the Discord you're good and make sure you really start with the education here all right uh it's 8 hours
long so obviously it's a pretty lengthy course but it's really going to be game-changing for you so make sure you actually invest the time do not take it for granted and I truthfully can't wait to see your results and hopefully I'll also be seeing you in the free class that I am doing this Thursday now that you're hopefully in the Discord you're also watching the course from [ __ ] you've registered for my free class this Thursday let's get started and let's start learning what is going on guys hope you're having a great day in
today's class we're going to be talking about some super basic terms and some super basic concepts that you need to understand before you actually start with the trading section of my course I'm going to be frequently referring back to these terms throughout my course and you have to understand what they mean so you don't get lost and you're able to follow along this is super basic information so if you already more or less experienced as a Trader then you could really skip this video but if you're a complete beginner I would Really suggest understanding these
basic concepts before you continue on with the course okay so let's just get started so the first term is going to be price entry or entry it's the price you are entering the trade before we enter into a trade before we you know enter a position you always want to make sure you understand exactly where your entry price is the precise price that you're going to be entering the trade and we're going to be talking about entries and uh how to pick entries later on but just understand that entry is when you're entering the trade
PT or price Target is where you're aiming to take profits okay so that's just once you enter the trade you want to take profits at some some point the Target price or price Target that's where you're aiming to take your profits stop loss or uh you could say maybe you you'll see a SL that's the price where you're going to exit the trade if it doesn't go in your favor so before you enter any sort of trade you're always going to have a predefined entry price in a predefined stop-loss price right and maybe you guys
have uh heard of stop losses um May you know maybe you've heard that they're used to minimize risk and that's exactly what they're used for they're used for making sure you don't lose more money than you intend on losing okay and for every single trade that you were ever going to place for every position you're ever going to enter you are always going to have a predefined stop loss so just Understand a stop- loss is the price you're going to exit the position if the trade is going against you okay because you want to minimize
your losses TP is take profit that's where you're going to be exiting the position for a profit so now let's go into uh long and short so there's two ways to make money in trading right it's number one you could buy a particular asset stock a crypto and it goes up in value and then you sell it at a higher price that's when you buy something and it goes up in value and you sell it right everyone knows that that's called going long when you go long you buy okay so whenever I say going long
or you're going to go long here that means you're buying it in hopes to sell it at a higher price therefore making a profit now a lot of people are not familiar with going short so going short is the precise opposite of going long you are going to be making money if the stock or crypto drops in price so just like you can make money if an asset goes up in value you can also make money if an asset drops in value and you're going to do that by going short if a lot of you
are a little confused on exactly you know how that works we're going to get into in a second but just understand that going long is uh buying and going short well when you're going short you're technically selling we're going to get into that a sec but go when you're going short you're making money if the asset drops in price BTO means buy to open That's just buying in order to open a position and STC it's selling to close the position meaning selling to exit the position okay so those are some key terms that you that
you really need to know um another one is um I think maybe I actually have it on this guide but by the way guys um I have here a beginner trading guide prepared for you I'm not going to be going over the entire guide my recommendation is take some time out of your day to read this and to really understand everything this is super basic information so if you don't understand this stuff I probably wouldn't continue on with the rest of the course so make sure you read this but another term I frequently use is
bullish and bearish and maybe you guys have heard of those terms if you don't understand what they mean so whenever I say bullish right bullish that means that there's a lot of buying pressure right that word it's it's used to describe the market or a stock or a crypto and it means you know having positive Market strength right so if something is bullish that means I think it's going to continue higher there's buying pressure right my bias My overall bias on the trade or on the stock or crypto is that it's going to continue higher
so whenever I say something a stock or crypto looks bullish what that means is it looks higher it looks like it's going to continue higher in price Excuse me whenever I say bearish be so there's a bull versus be maybe you guys have you know seen stock market movies or Wall Street movies where they talk about the bull versus the bear that's that's you know that's kind of where these terms are derived from there's bearish so bearish um that's when it it indicates negative Market strength meaning Market weakness right it indicates Market weakness where if
something is bearish that means you foresee it Contin lower in price so whenever I say bearish it means I you know it's weak I'm going to probably short it whenever it's bullish I'm most likely going to go long right remember long is buy short is you know making money when it drops so if something is bearish I'm going to look to short it if something is bullish I'm going to look to buy it and that's basically uh I think that's most of the terms definitely go ahead and read this entire guide It's pretty useful it
kind of goes over all of the orders um yeah just make sure you go over this guide I'm not going to go through everything today I'm just trying to see if there's anything specific I really want to emphasize by the way guys if you're confused about going short and like exactly how that works go ahead and read my explanation here it'll be very helpful but just understand the shorting means you're making money if the if the price drops if the if the value of the asset drops okay and I might make a Whole separate video
when it comes to orders however I think I have a really good explanation here on how all the orders work I don't think I need a separate video for it so make sure you just understand this entire guide make sure you understand these terms that I just mentioned and you should be good to actually start the course and understand everything I'm saying so you guys are about to get into the you know meat and potatoes of the course so really excited now that you guys have learned these basic terms you're ready to start so see
you in the next video hey guys the topic for today's class is the differences between Technical and fundamental analysis and we're still super early on in the course so I figured it'd be very important to actually touch up on technical analysis and fundamental analysis and um if you guys haven't heard of those terms this usually these are the terms that describe how to analyze a particular security you know it mostly applies for you know stocks and it does also apply for crypto but I think it was coined mostly for stocks right and you know I'm
sure you've probably heard one is superior to the other so I'm here going to tell you exactly what they are what the focus on and how you can begin using them okay so let's start out with technical analysis technical analysis is focusing on reading price action okay That's what we're focused on reading historical price trends and price action in order to determine whether we're going to go long or short or determine our our outlook on the stock for whether it's you know during the intraday time frame whether it's you know few hours few minutes or
even you know few days even few weeks few months away okay so two the two buzzwords or the two Buzz terms are price action and price trends okay and technical analysis for trading specifically for trading and that's what this course is about we're here to learn about trading technical analysis is the only way to analyze a stock for the short term right cuz as Traders we're operating kind of in a short-term basis even if we're approaching longer term trades you know trades that are you know several months or you know several weeks um that's still
shortterm enough where you can actually where you're going to be using technical analysis okay if you're looking you know 10 years out 5 years out trying to figure out the value of a stock of course then we're going to use fundamental but I'm I'm I'm going to get into fundamental analysis in a second here I just want to finish up with technical analysis so the whole point the whole goal of this course is to actually teach you guys technical analysis and that's only one part of trading but it's it's one of the most important parts
because ultimately that's how we're going to predict you Know price action is is by reading a prior price action you know the way the candlesticks look the way the moving averages look we're reading all of this to make um Intelligent Decisions on where to put our money and what trads to actually take okay and that's why technical analysis is King if you guys aspire to be successful Traders you must innately understand technical analysis and this is what you should be focusing on technical analysis not and we're going to get into an fundamental analysis fundamental analysis
is basically looking and reading the intrinsic value of a security of a stock of a crypto the intrinsic value so you're going to be looking at um you know macroeconomic Trends you're going to be looking at financial statements of the company you're going to be looking at intellectual property you're going to be trying to read the company's Worth right and based off you know how valuable the company is you know what they offer whether um you know uh you know their products are trending you know for a longer term scale or um you know just
reading the actual value of the company you know we're able to establish you know if this is a good investment but this is what you have to understand fundamental analysis is you know for the longer term it's for 5 10 15 20 25 years down the road right we can't read uh you know we can't read shorter term Trends using uh fundamental analysis okay so For our purposes here for for you know purposes of trading actually before I get into that I just want to uh give you guys a quick example the reason why a
lot of people um you know unsuccessful Traders a huge reason is because they actually pay attention to news which at the end of the day you know news about a company news about a crypto at the end of the day that's fundamental information that's not technical information right that's not about price action it's about something the company did something the company acquired right um certain news going on around the company people focus on that and they actually enter trades just based off the news just based off recently heard fundamental information and this is the one
of the biggest mistakes you can make you know why would you you know buy something when um you know you're hearing about the news the last we're the public we hear about the news literally last think about all of the uh you know shareholders or people you know insiders in the company they heard about this news weeks ago months ago the news that you're hearing on a dayto day basis about stocks companies crypto it's already into it okay so stop relying on that information sorry for this tangent but it's extremely important stop relying on this
information okay it is pointless it will it will only lead to um you know bias in your trading and and a complete lack of objectivity okay and that's why you know in order to have objectivity in trading we have to read the price action we have to read what the charts say and the charts like this one here shows you price action okay and those are the main differences so key Points here is is uh focus on on technical analysis and you don't really need fundamental analysis for trading at all I mean I'll tell you
the truth I have never researched a company in my life for that I'm trading doesn't matter to me right I've never looked at news there's only the only news that could be interesting is like let's say the FED is having a meeting that could be impactful or looking at news that could affect stocks you know during the intraday time frames meaning like during the day let's say some news comes out and a stock drops super hard you that might be interesting to you for a potential trade but besides that you guys should not be focusing
on news or fundamental analysis divert um you know all of your attention towards technical analysis read and reading price action okay and that's where we're going to be teaching now you know so I hope you guys found this helpful okay hope you guys understand the differences and which ones to really focus on and let's get on to the next video in the course what's going on guys hope you're having a great day for today's class we are going to be talking about the three different trends that exist in trading and with price action okay so
these are super basic trends that you guys should know how to identify and you know you should know the implications of these Trends as well so let's get right right into it the three different Trends this is probably stuff that uh you've heard of you've heard of already so when we're looking at an uptrend it's characterized by two Different characteristics number one Higher highs and higher lows and number two a rising 20-day moving average so we haven't covered how to use the 20-day moving average but just always keep in mind that we want a rising
in a trending higher 20-day moving average okay so as you can see we have higher highs right we're making new highs and we're making higher lows right this low is higher than that low this low is higher than that low same with the highs okay and as you can see this line the black line which is the 20-day moving average it's under price and it's also trending higher and we're going to be doing the 20-day moving average class next so just stay tuned for that okay so this is what an uptrend is very simple stuff
we're looking at a downtrend it's characterized by number one lower highs and lower lows okay we have lower highs right and lower lows so low here low here low here and as you can see we have a declining 20-day moving average which is this line so as you can see during a downtrend we want the 20-day moving average to be overprice right and we see that during the downtrend it sort of retraces right during the it always Rallies right to the 20-day moving average drops rallies right to 20-day moving average drops but we're going to
be looking at the 20 ma uh during the next class so this is what a downtrend looks like lower lows lower highs okay and we also have a sideways Trend which is characterized by relatively equal highs and lows right we rally we make a high we drop right to the previous low we rally to the previous highs drop to the previous low okay and once we talk about support and resistance this is going to make a lot more sense but this is what a sideways trend is so sideways Trend it's not you know we don't
have um one particular bias we don't have a bullish bias or a bearish bias right overall we're just sort of fluctuating between the highs and the lows okay so this is what a sideways trend is um and usually sideways Trends they uh lack momentum right so with uh uptrends and downtrends we clearly know what the what the momentum is right for an uptrend there's clearly bullish momentum right we're we're Rising there's a lot of buyers right over with the downtrend there's a lot of bearish momentum there are a lot more sellers you know the sellers
are dominating the move but with a sideways Trend it's it's really there's no clear momentum we we don't know exactly are the buyers winning or the sellers winning just because you know we're kind of fluctuating between The highs and the lows okay here's an example of a of a uptrend this is a real chart with candlesticks as you can see right we can see that we made a high here we made a low here this low was higher than this low this high was higher than that high right here also make a higher high higher
low and as we continue going up you can see that we're continuously making higher highs and higher lows this blue line is the 20-day moving average okay and as you can see there's probably a ton of candlesticks that you're already able to identify whether it's a topping tail bottoming tail narrow range bar wide range igniting bar which is really good our dogee bar as well so if you're already looking at these candlesticks and you're able to identify the different ones that we've learned about that's fantastic looking at a downtrend or actually this is a perfect
example of an uh of an uptrend uh and that that's followed by a downtrend right we could see here this white line is a two is the 20-day moving average we can see we're making higher highs higher lows lows until we actually reverse and now we make lower highs and lower lows right so we're uptrending then we go into a downtrend and this is actually screenshot of the NASDAQ ETF the QQQ um so this is this is a very recent snapshot so you can see that we went from an uptrend to a downtrend right uptrend
is higher highs higher lows Downtrend is lower lows lower highs okay hopefully that makes sense so just make sure you're able to identify whether an uptrend or a downtrend or a sideways trend is occurring okay guys and during the next class we're going to be talking about the 20-day moving average which is this white line and I'm really excited to talk about that it's uh extremely important and hopefully this all Mak sense guys and uh so now you guys should be pretty familiar with identifying several different types of candlesticks and also identifi identifying different types
of trends that are occurring as well all right guys have a good day see you in the next class bye what is going on guys hope you guys are having a great day and I'm very excited that you're watching this video and that you have committed yourself towards learning this course and today we are going to be talking about a very very crucial element of price action and remember remember price action is the only thing we use to perform technical analysis and you know analysis for trading when when it comes to trading stocks or crypto
okay these are the very fundamentals that you have to innately understand if you want to succeed with trading this is the meat and potatoes of trading it's the absolute Basics so my recommendation is get get out a notebook grab a pen or a Pencil and make sure you take some notes so you really can digest this information you need to understand this to move forward with the course okay so I have the Pres presentation ready to go so grab the pencil grab the notebook and I'm going to turn off this camera real quick very good
and let's get started so we are going to be talking about candlesticks okay and why do we use candlesticks and candlesticks are the bars that you guys see on all of the price charts that you know we're viewing in the community or that you may have seen in the past and those bars are you know they're candlesticks and I'm going to give you guys a little bit of history of the candlesticks why we're using them and what they mean so number one we're using Japanese candlesticks and they focus on the open and the close of
a bar okay and we have to remember that you know when we're looking at a candlestick that represents a time frame so we're looking at the open of that time frame and then the close of that time frame it's going to make a little bit more sense in a second here so Japanese candlesticks what they present is they show a graphic representation of the supply and demand for each time period's price action and we have to remember that's what a that's how a market operates it operates off supply and demand Supply meaning the sell and
demand meaning meaning the buyers okay that's how a market functions there has to be buyers and there has to be Sellers and obviously if there's more Buyers than sellers then the price is going to go up and if there's more sellers than buyers the price is going to go down this is how a market functions okay and candlesticks they give us a representation of that you know supply and demand of those buyers versus the sellers okay and maybe a lot of you guys have seen bar charts um and versus candlesticks but or maybe you guys
have seen like ha kanashi candlesticks I always 100% recommend Japanese candlesticks which are just the regular candlesticks on trading view or whatever platform that you guys are using they're way more visual they give you a very clear picture on the price action that's occurring and like I said they emphasize the relationship between supply and demand okay if we understand the supply and demand of what we're looking at of the stock or crypto that that we're looking at then we could take advantage you know of that supply and demand and make a profit that's the whole
point and that battle between the buyers and the sellers right this supply and demand element that I'm talking about it's the most important part of technical analysis this is what makes technical analysis that's why it's so crucial for you guys to really pay ATT ition and understand how to read these candlesticks so how are they formed right and depending on which time frame you're looking at a Candlestick represents the price action that occurred during that time so if we're looking at a 5 minute chart right each Candlestick on that chart represents 5 minutes worth of
time right so for example you know we talked about kind of the open and close of the Candlestick let's say it's uh 10 10:00 a.m. right and a 5minute candle started forming at 10:00 a.m. the candle obviously the 5-minute candle started forming and then at 10:05 the candle stopped forming and then the next candle started forming at 10:05 and then at 10 and 10 that one closed and then another one starts forming so you can see that every Candlestick um represents you know a unit of time and obviously on F on 15-minute chart charts every
Candlestick represents 15 minutes worth of time and a daily charts every Candlestick represents one day's worth of time you guys get the idea and if you might if you're asking yourself why are we looking at different time frames I'm going to be talking about that later in the course but it's very important that we're looking at several time frames and reading the candlesticks that are on uh several different time frames and we're going to get into that a little bit later in the course so let's start with the absolute Basics on how to read candlesticks
like I said before candlesticks emphasiz the open and the close of a bar right so if it's a green Candlestick that means price went up in that time frame right in that Candlestick time frame so if it's a 5-minute chart that means price went up in that 5 minutes it's a 15-minute chart Price went up during those 15 minutes okay so the bottom of the candle or the the the body of the candle this is known as the body the bottom of it is where price opened the top of it is where price closed right
and these little lines here you can call them Wicks or tails they represent the absolute lows during that time right here and the upper Wick represents the absolute highs of price during that candle uh during that candle's time okay so if it's green and obviously it it closed higher than it opened that's why the you know this is where it's closing this is where it's opening and the Wicks like I said highs and lows if it's a red candle that means it opened at a higher price than it closed right that means it went down
during that time frame so it closed at a lower price than which it opened these Wicks they represent the the same thing the absolute highs of that Candlestick and the absolute lows of the Candlestick right here okay so if it's red it went up oh I'm sorry if it's if it's red it went down if it's green and went up okay and the one question we always have to be asking our eles here is who won the battle the buyers or the sellers okay so let's look at this diagram to have a better understanding of
what different candlesticks mean and how you know different candlesticks could form so first and foremost we have uh this is called a wide range bar and this is one Example where the candle opened at this price and closed at the absolute highs up here have if you guys see there's no tails right there's no Wicks meaning it opened at the absolute lows and it closed at the absolute highs that's why we don't have any Tails this is a very bullish candle remember bullish means indicative of strength meaning there's a lot of buyers so this is
a you know a buyer heavy or buyer dominant Candlestick if you look at this one we have here what's called a topping tail okay and we're going to talk about how topping tails are formed during the next slides but let's let's try to understand how a topping tail is formed here so we open at the absolute lows we rally all the way up here to form a high and then the sellers come in and they bring bring it all the way back down to close here right so we open here we went all the way
up then we dropped and and closed here so opened here closed here so you know this is a green bar right and a lot of you guys might be thinking oh it's green that must mean it's bullish it must means it's a buyer heavy candle right buyer dominant candle but in reality what happened here is we open here we got bought and then the sellers came in right and they brought the stock or crypto all the way back down to close here so although it's green right it's a very seller heavy candle right so this
Is a topping tail so if we go here topping tail it's a clue that the sellers have taken control right cuz the buyers brought it up to here and then the sellers are bringing it all the way back down the sellers have taken control if we look at this Candlestick excuse me you could see that the tail is actually on the bottom so this is a excuse me guys so this is a bottoming tail and bottoming tails are a clue that the buyers have taken control right cuz we opened at this price the sellers sold
it and brought it all the way down to here just for the buyers to come back here and bring it all the way back up right so the sellers tried to bring it down but then the buyers brought it right back up to finish at the highs okay and then right here we have a DOI bar right where it's kind of um the bad B between the buyers and sellers are even right because it opened here it went all the way up then it went all the way down and then it finished here so a
DOI bar shows kind of a uh a battle between the buyers and and the sellers in a battle that nobody really won they kind of finished even okay same thing with this bar obviously the buyers won a little bit but it's mostly it's kind of like a you know the sellers and buyers were very even so what I want you guys to ask yourself is looking at this Candlestick right we know that it opened here and closed here in this case it Opened here dropped and then closed here so I want you guys to ask
yourself and maybe even pause the video which Candlestick out of this one and out of this one is more bullish which one is uh more indicative of strength so pause the video think about it and uh come up with an answer and I'll go over it just just in a second here I'll give you guys a chance to pause it okay very good if you guys chose this one then you would be correct this one is a stronger candle than this one and the reason is is for this one right it opened here the sellers
came in and then the buyers you know then were like hold on you know you can't bring this any lower and they brought it all the way back up you can think of this bar as battle tested right the sellers actually showed up but the buying pressure was so strong that it negated all the sellers and it brought the stock all the way back up to make new highs in this case we opened here and we sold here right we opened here and we closed here we don't know if there were that many sellers during
this bar maybe the sellers were sleeping they weren't there right but this bar is actually battle tested right we had sellers shown up but they were irrelevant here we just kind of Clos at the highs after opening at the low so this one is way more bullish something to something to you know the buyers have really taken control it's very buyer heavy looking at the red candlesticks guys it's the absolute same idea we open Here and then we close all the way at the bottom there's no tails meaning we open at the absolute um you
know we AB opened at the absolute High we closed at the absolute lows okay if we have a topping tail here what happened was we opened at this price the buyers showed up they brought it all the way up here and then the sellers came in and brought it all the way back down so a toping tail guys is a clue the sellers have taken control so the sellers have really taken control there's a lot of selling pressure during this topping town here it's kind of the same thing it's a DOI bar the buyers and
sellers are mostly even right there's there was a battle but nobody really won the battle right in this case what we have here is we open we opened at this price we dropped all the way back down and the buyers came up you know they bought it down here they brought it all the way back up and we still closed under the open right so that's why it's still a red bar but since the bottoming tail guys it's a clue that the buyers have been taken control so even though this is a red bar it's
still a kind of a bullish bar and although this is a green bar it's still kind of a bearish bar because we know that a topping tail is where sellers take control a bottoming tail is where buyers take control hopefully that makes sense guys and let's kind of uh go into how they're actually formed right so if we have a five minute candle and and this diagram really shows that the importance of looking at different time frames because candles can form in different Ways right this 5minute candle is the same as as this 5-minute candle
but they were were they formed completely differently right here you know it's a right we have five one minute candles make up a 5 minute bar and here 5 minute or five one minute candles make up this 5 minute bar but in this scenario we have you know we have five candles that are going straight up right one after another right while here we have a big rally and then kind of you know consolidation up here meaning the candles they're just staying at the highs of this Candlestick right they're just staying here at the highs
so this just this kind of um proves the point that candlesticks form in different ways and that's why it's important to look at different time frames because these two setups are different right this has different implications than this does okay and we're going to be talking about that later in the course but I just want to stress the importance now of looking at different time frames because if you know the candlesticks have formed in different ways that's going to give you information of what it might do next okay so that's really what I want to
emphasize they could form in different ways and that's important so if we look at for example a 15-minute candle this is another example of how they're formed right here we have three 5 minute candles here we have three 5-minute candles you can see this one's a little different it's kind of a uh you know we have a rally and then we we just continue higher where here it's again rally then we just stay at the highs we don't really you know continue higher so They're formed in different ways okay and you'll see later on once
we actually start talking about different strategies you'll start to really understand the importance of how the candlesticks are forming and and the patterns that they're setting up in and how they look on the charts on different time frames okay but I don't want to overwhelm you with all that information now for now just understand that different candlesticks form in different ways when you look at you know the smaller time frames or the larger time frames okay so that's what's important so let's understand how bottoming tails are formed so like I said we open at this
price right this is where we're opening and we drop so right so this is a larger time frame and by looking at the smaller time frames we see more candlesticks we see exactly how this candle stick was formed and what went into it so we open at this price excuse me guys I'm just going to grab a sip of water sorry guys so we open at this price we drop all the way down to make absolute lows and then the buyers show up and they bring it all the way back up to make new highs
so this is a bottoming tail guys remember a bottoming tail it's a clue the buyers have taken control and this it kind of makes sense right the sellers came in but then the buyers dominated that brought it all the way back up to make new highs so the these are this is kind of how this gives you Insight on how a bottoming tail is formed and at the end of the day we see that the buyers have taken Control even if it's a red bottoming tail right we have a green one here even if it's
red you could still see that the buyers have taken control even though you know it's still uh closed at a lower price than it opened so we opened here we dropped all the way back down to make absolute lows and then the buyers take control and they bring it almost back up to the highs but you know not quite so you could still see that the buyers have ended the move the buyers have taken control if we look at a topping tail we open at this price we rally the buyers come in they it rallies
we make absolute highs and then the sellers come in they Dominate and they bring it all the way back to down to make new lows and we close at a lower price than where we opened that's why it's red and we could see that the sellers have taken control so remember a topping tail very important topping tail is when the sellers have taken control okay another example even when it's green we open at this price buyers come in they rally we make absolute highs just for the sellers to show up and they end the move
and although it's green we could still see that the sellers have taken control okay with a DOI bar we we talked about how doji bar represents a battle that neither the buyers or the sellers want and in certain circumstances the DOI bar is a very effective reversal and entry bar so that's really important they ad DOI bar is is an excellent entry bar and we're going to be talking about that a little later once we actually start going through uh through the strategies okay so that's that's the end of this beginner camp Candlestick class and
if you guys are a little bit confused on what these candlesticks actually mean how to read them in sequences or you know actually applying this information just stay tuned it's all going to make sense as the course progresses but please just make sure that you understand what a DOI bar means you know how topping tail what topping Tails mean what bottoming Tails mean right um and just understanding that candlesticks form in different ways and looking at how a Candlestick forms gives us a lot more insight on what's going on uh with that stock or with
that crypto but we're going to be talking and going more into detail as the course progresses just make sure you understand everything we talked about today okay guys uh let me put my camera up one more time so I would suggest also rewatching this video if you don't understand it completely guys let me know if you have any questions and looking forward for to seeing you guys on the next section of the course thank you guys what is going on guys hope you're having a great day during the last class we talked about the basics
of candlesticks and we learned some of the fundamentals of what candlesticks are why we're looking at them and what they really signify and just for a reminder They signify and they show the relationship between uh supply and demand between the buyers and the sellers and if we can understand the relationship between the buyers and the uh and the sellers and the candlesticks and we could see the patterns and the way that they form and understand what that means we could take advantage of it and find you know hopefully super lucrative trades so dur during this
class we're going to be going to uh going into the advanced Candlestick course so I'm going to share with you guys some additional details and some other types of Candlestick are that are important to uh recognize okay my recommendation is if you haven't watched the previous course if you're still kind of uh confused on topping Tails bottoming tails what candlesticks are how they you know uh show different time frames then definitely take a step back maybe reach out to me ask me some questions before you go into the advanced course okay so I'm going to
turn off my camera perfect and let us begin here so this is the advanced candlesticks course let's get right into it so for mastering candlesticks we have to really understand that some candlesticks are more important than others and they give us uh different types of information that we could use to base off of when we go into trades and there are very specific candlesticks that we are looking for when we time our entries into stocks or crypto right and later in the course when we actually talk about different strategies and different ways the candlesticks you
know the different patterns that they can Form um it's going to make a lot more sense and you're going to really see why we look for specific candlesticks in certain situations and there are also specific candlesticks that we look for when finding reversals and there are also specific candlesticks that can enhance trading strategies and increase the odds of success for a trade so something that we need to emphasize is the way the candlesticks form number one they give you different information about what's happening in the trade and they also make trades a lot more potent
where if you find a specific pattern or a specific strategy you know having some specific type of Candlestick that we're looking for can greatly increase the odds of that strategy working and you actually making money so that's why it's important to pay attention here and master the candlesticks that we're about uh to learn about so as a reminder topping and bottoming tail it's really important that you guys know this topping Tails right right here tail at the top suggests that the sellers have taken control right the sellers have taken control for both you know the
green and the red bar for bottoming tailes it's the opposite it suggests that the buyers have taken control really important that you guys that as soon as you guys see these sort of candlesticks you know exactly what they mean and these bars are are going to provide you lots of Insight on the price action that's occurring with stocks or crypto okay and it's really useful when we pair these sort of candlesticks with With the strategies that we're going to be learning it's all about pairing things together to create a more potent trading setup okay so
now let's go into narrow range bars and a narrow range bar they are bars that have a small distance between the high and the low of that candles meaning there really isn't all that much price action that's happening right there's not we're going to see an example in a second here it's going to make a little bit more sense um they're pretty significant when they occur after a multi-bar move because you know they might serve actually as a reversal Candlestick it gives you uh kind of more evidence that a reversal might take place right and
they're also specially use uh useful for buy setups one two three patterns and reversal setups and we are going to cover that when we actually start with the strategy section of the course so let's let's look at what they are here we have normal ranged bars right you see a big bar like this open at this Price Right dropped to these lows went all the way up to these highs and closed here same thing with this these are kind of normal range bars these are what narrow range bars look like whoops you could see that
there's not that much distance between the open and the close right the open and the close they're kind of smaller candlesticks right so these are what they look like so if you see a bar candle like this just know it's a narrow range bar okay make sure you you're able To identify that wide range igniting bars okay this is also really important to be able to recognize a bullish wide range igniting bar is an above average size bar that has its open price near the lows of that time period and it's close price near the
highs of that time period And it suggests that it's very bullish and that many Traders are playing long and we actually uh saw what this looks like during the beginner uh course however I'm going to show you guys another example in a second a bearish a bearish wide range igniting bar is an above average size bar that has its open price near the highs of that time period and it's Clos price near the lows of that time period suggest many player uh many Traders are playing short so this is a great example of what they
look like just give me one second I'm going to have a sip of water in one sec so why are they bullish wide r or bullish or bearish wide range igniting bars because here the open is near the lows right and the close is near the overall highs right we don't have a large bottoming tail we don't have a large topping tail same thing here we opened near the highs we closed near the lows and These Bars show you that there is um a new move that's being ignited especially when it's coming from a consolidation
and we're going to I'm Going to show you guys examples of that later okay but the whole point what you just make sure you recognize that these are igniting bars okay they're bullish or beish wide range igniting bars make sure you're able to spot one okay and that's really all we're going to talk about so for this class if you're still a little confused on how we're going to use these candlesticks don't worry we're going to address that the whole point of these two Candlestick lessons is to you know make sure that you guys familiarize
yourself with with you know identifying you know for example wide range igniting bars narrow range bars uh bottoming Tails topping tails you should know when you see a Candlestick on that's for example a topping tail you should be able to immediately say hey that's a topping tail I know what I'm looking at or if you see a narrow range bar uh it's important to look at that and be like okay that's you know identify it for what it is right so once you understand all of these candlesticks uh how candlesticks show you different time frames
right what's the point of them you're going to be able to move on to the next section okay guys so hopefully this makes sense please reach out to me if you have any questions and if you're uh you know if you understand everything we've done so far with the candlesticks you're finding it easy then that's great because you already just learned a crucial part of price action a crucial part of reading technical analysis and you're well on your way uh to finding trades understanding what the Candlesticks are doing to certain patterns and and it's going
to make a lot more sense once we go over the strategy section but proud of you guys for sticking with it so far and I'll see you in the next class thank you what is up guys hope you're having a great day I'm very excited for this section of the course because we are finally going to be going into some of the more exciting Parts about trading and specifically we're going to be talking about the 20-day moving Average today and a lot of people out there they trade with different indicators some people use macd RSI
Ballinger bands um and other super fancy indicators and frankly I don't use any of those I keep my trading extremely simple but one of the main I guess you can call it an indicator uh one of the main indicators I do use is the 20-day moving average and we're going to talk about how to use it and how to really take advantage of it because I personally believe it is the ultimate and most useful tool in trading okay so first let me show you guys how to actually put it on your trading view charts and
let me turn off my camera all right so once you have this blank chart you've selected candles right here on trading view you're going to go to indicators and you're going to type in moving average and you could just select the simplest one it's going to pop up up here it's going to say Ma just go to this settings tab Go to inputs and change the length to 20 and let's make I'm going to make mine white okay and there you go the 20-day moving average is now on my charts which is perfect now let's
go into how to actually take advantage of the 20-day moving average and how to use it so moving average this is one of the fundamentals of technical analysis this is I would say just as equally important as learning and understanding the candlesticks it's just as important understanding how to use the 20-day moving average so let's talk about what are moving averages moving averages they are lines that represent price action in a particular time frame okay so if we're talking about let's say the 20-day moving average that line shows you the average price within the last
20 days right if you have a 200 day moving average which is another one that I use that shows you the average price of that stock or crypto in the last 200 days so it's calculated by taking the average of a set of prices over specific number of days in the past so like I just said 20-day moving average it would be 20 it would be the average price of the past 20 days a lot of people also ask me about exponential moving averages That's calculated through uh emphasizing more recent price action so the equation
that you use for an exponential moving average it puts larger weight onto the most recent price action and it's much more responsive to new information that's coming out with that stalker crypto okay it's it just weighs more recent price action action heavier in the equation and it doesn't really matter which one you use you could use either or but just make sure you stay consistent with it if you have the simple day moving average right make sure you keep that um across all of your charts and if you use exponential make sure you use the
exponential on all of your charts so the moving averages especially the 20-day moving average it's the ultimate stock or crypto Direct guide it shows where a stock or a crypto is trending and how much momentum it has so it's a directional guide right and uh specifically I know a lot of people they use the 10 ma but I personally I only use the 20-day moving average and the 200 day moving average we're going to be talking about the 20 during this class so let's talk about some key guidelines a rising 20-day moving average is in
IND of positive Market strength okay that mean that means it's bullish there are more buyers than sellers we want to see price and the candlesticks above the rising 20-day Moving average okay that shows strength positive Market strength a declining 20-day moving average trending lower shows negative Market weakness and in that case we want to see price below the 20-day moving average and that would show bearishness or a you know negative uh you know it would show Market weakness the sharper the slope of the moving average the stronger or weaker the trend is and we're going
to look at examples of that during a bullish uptrend right we know what an uptrend is now during a bullish uptrend stocks tend to retrace or pull back to the rising 20-day moving average that's why we want the 20-day moving average above price because during bullish uptrends we see price actually pull back or retrace to that Rising 20 during a bearish downtrend stocks they tend to retrace or rally during uh to the declining 20-day moving average right so during downtrends they retrace to the declining 20-day moving average um so whenever you hear the term extended
when price is extended that means price is far away from the trending 20day moving average so if I ever say extension or extended it means price is far away from the 20-day moving average there's distance between price and the 20 ma and in general guys always trade in the direction of the 20-day moving average especially if you're a Beginner trade with the trend don't go against the trend so this is an example here where we have a rising 20-day moving average and it is under price you could see that the candlesticks are over price or
I'm sorry the candlesticks are over the 20-day moving average and we can see that during a bullish uptrend right we have higher highs higher lows price tends to retrace or pull back to the rising 20-day moving average and then from there it increases again pulls back to the 20-day moving average increases again pulls back to 20-day moving average okay and um so my question for you guys is can you find the different types of candles that we've learned about narrow range bars Tails or igniting bars take a look at this chart and try to pinpoint
some of the different candlesticks we've learned about go ahead and pause the video and just try to write them down I'll give you guys a second to do that okay so what we have here is we have a clear topping tail right here right huge tail the sellers have taken control price then dropped and then we have right here an igniting bar right where the uh opening price is near the lows the closing price is at the highs and it ignites a new move higher we also have one here right ignites a new move higher
and then right here we have two narrow range bars which you know are Kind of our entry bars dur in this uptrend and we're going to talk about entry bars later okay but if you were able to identify these candlesticks then perfect you're you're doing great so far let's look at the uh 20-day moving average when it's declining remember when we have a falling or trending uh a falling and trending 20-day moving average that's you know trending lower we see that price is under the 20-day moving average and whenever price drops it usually retraces to
the declining 20 drops retraces to the declining 20 drops and then now we could see that in this case it based into the declining 20 so the 20-day moving average for both uptrends and downtrends they could be kind of used as also support right it's kind of acting as support for the stock during an uptrend and it's acting as resistance for stock or crypto during a downtrend hopefully this all makes sense guys uh this is a sideways Trend right we have it's kind of fluctuating between highs and lows whenever we have a sideways Trend we
also usually have a 20-day moving average that is flat and moving through price meaning there's no noticeable Trend that's taking place and usually guys whenever you have a flat 20-day moving average it shows that there's a lack of trend and you should avoid that so don't trade if you see a a flat moving average it usually suggests That um there's no momentum there's no clear Trend and you know you generally want to stay away from stocks or crypto that are not trending right the whole point if something's trending it has momentum meaning we could take
advantage of big moves higher or we could short you know big moves lower okay let's look at some examples you could see right here this is the 20-day moving average we are trending higher right we are underpriced you could see that every time price touches the 20-day moving average every time it retraces to the 20-day moving average it goes higher so if you guys were to buy it every time price touched the 20-day moving average or got close to it you would have made money and once we go into the strategy section of the course
we're going to actually use the 20-day moving average and create a strategy right and the strategy is you know whenever it comes close whenever it pulls back to the 20 that's what we buy it's called a buy setup we're going to be talking about that later okay in this case we have a declining 20-day moving average this blue line you could see how how it's over price and you could see that you know price touches the 20 and drops price is the 20 uh touches the 20 drops bases into the 20-day moving average drops bases
into 20 drops so you could see that the 20-day moving average is acting as resistance here and it's declining it's trending lower and we would short it every time it touches the 20-day moving average let's look at another example You could see how well price is respecting the rising 20-day moving average right right here base right right as soon as it touches the 20-day moving average breaks out same thing here as soon as it touches breaks out and the main point here is that we could see that it's trending higher and it's under price okay
slope and extension of the 20-day moving average is significant and we have to remember slope right that is the uh the measure of steepness of a line right so if you guys have ever taken math classes you've I'm sure you guys have calculated the slope for different math questions before but we got to remember the 20-day moving average is a line right when we when we measure the slope of it we measure how steep it is so we want to you know ideally we have something that's 45° 45 de is ideal because it shows that
it's sustainable right the move is sustainable the uptrend is sustainable if it's higher than 45° right where if it's kind of like this is more or less 45° but if it's even steeper than this then it shows that the move the current move is not sustainable if it's less than 45° then it's going to be on the more flat side and you know it's not it's going to lack momentum we talked about before how we want to avoid trading flat moving averages flat moving averages specifically for the 20 for the 20 ma May uh when
it's flat it shows lack of momentum we don't want to trade stuff that doesn't have momentum and the distance or extension Between price and the 20-day moving average tells us if it's overbought or oversold so let's go into it you can see we have a solid uptrend the moving average is kind of it's a little bit it's not quite at 45° so it's a little bit flat but still price is respecting it and you can see how it's getting steeper and steeper and steeper and eventually we have a large distance between the candlesticks and the
moving average right here this is uh extension right this is distance between price and the 20-day moving average and you can see that um the moving average was getting steeper and steeper and steeper and eventually this move was no longer sustainable and we ended up I remember dropping after this you can see how well price is respecting the rising 20-day moving average uh same thing here I believe this is on bitcoin we broke out here 20-day moving average trending higher it's under price touched it here popped you could see every time it retraces to the
20 it continues the uptrend and right here is when we have extension so this is where you would want to look for short position right we have extension from the 20-day moving average and you can see the steeper it got the less sustainable the move was and we ended up dropping and base and you know starting to go sideways here okay so look at another example same thing here we're uptrending the 20-day moving average is under price trending higher every time price touches it it rallies you can see how well it's respecting it here it
got a little steeper you can see right here It starts to get steeper then we have extension right we have distance between price and the 20 here we don't really have any distance every time we have distance it pulls back but here we have you know pretty significant distance and extension and then we ended up dropping from there okay so we would look for a short in this position another example you could see how well it's respecting the 20 and then you can see the 20 is get Ste steeper steeper and steeper and from right
here this is no longer sustainable this is where we're going to be looking for a short especially with the extension that we have okay so another uh very useful way to use the 20-day moving average is for spotting price transitions when stocks or cryptos are ready to transition into an uptrend or a downtrend the moving average will begin to curl and hug under price for a transition higher or curl and hug over price for a transition lower this is really effective for the larger time frames and for longer term trades or swing trades and you
know usually the time frames you're going to be looking at is the hourly daily weekly or monthly let's look at some examples as you can see here this stock I believe this is actually AMC this stock is sideways right we don't have a clear Trend right it's not really going anywhere during this time period you could see the moving averages flat and moving through the candles through price until right Here you could see that we have a rally and the candlesticks were halted by the curling 20-day moving average they stopped here and that's when we
had the breakout the price transition as soon as we started curling under price and pointing higher same thing here when the 20-day moving average is trending higher you could see price is respecting it but as soon as the moving average becomes flat and moves um you know moves into price through price we could see doesn't respect it until right here we see price is starting to respect it we're seeing it curl higher and that's when we get the breakout and we go higher so you could see that right before these big breakouts the 20 ma
is curling under it and starting to point higher let's look at prta this is a really good example where um P prta we could see that the 20-day moving average is starting to curl under Price Right starting to curl under and point higher and we could see that this is clearly a price transition and this is the monthly chart so each one of these candlesticks represents a month and that's where we had the big break out as soon as it started curling under price like that but if we go to the daily chart of prta
so every one of these candlesticks represents a month if we go into the daily chart right then we see something a lot more interesting where uh when the moving average is going through price it's flat we don't have any moves but as soon as it starts to curl higher and Under pric that's when we get the transition higher okay same thing here soon as it moves under price and curls higher that's when we make a move up same thing here it's flat trendless nothing's going on right here it starts to respect the 20 ma it
starts to curl higher and that's when we have the breakout right and you can see as soon as it started trending that's when we started continuing higher and uh okay this is the last slide so trade with the trend guys your odds of success are greatly increased when you're playing in the same direction of the 20-day moving average the correct entry is when price is at or near the 20-day moving average not when it's far away let me show you an example of that right so we want to be buying it during this uptrend when
the moving average is below price we want to be buying it when price is at the 20 ma cuz when it hits the 20 ma it goes up when it hits the 20 ma it goes up when it hits the 20 ma it goes up so we want to be buying it when it's at or near the 20-day moving average just like we want to be shorting it when it's at right rallies into the 20 we short rallies into the 20 we short goes into the 20-day moving average short goes into the 20 short okay
and as soon as we see some price extension that's when we begin to Rally because we're extended okay hopefully that makes sense guys uh let's go and the 20-day moving Average becomes extremely useful when you pair it with tradable patterns and strategy so we're going to be combining this 20-day moving average with a real trading strategy later in the course so you don't want to just enter because you have a rising um or declining 20day mov average you want to have a pattern and there's specific things we look for in that pattern when you combine
it with the 20 we're going to we're going to talk about that a little bit later okay so main points here is that it's an excellent directional guide and it shows you what's going on with the trend if it's uh if we have a uptrend we want the 20-day moving average under price and trending higher if we have a downtrend we want the move the 20-day moving average over price trending lower if it's sideways it's not really that effective okay that's kind of the summary here make sure you kind of watch this class A bunch
of times and my biggest recommendation guys is go and put the moving average the 20-day moving average right on some of your charts and just start watching you know how price actually respects it during uptrends or down Trends okay and you'll just watch how price really trades off of it and that's what makes it such a powerful and useful tool so make sure you do that and this was an excellent class guys uh looking forward to seeing you guys in the next one thanks what's going on guys happy to see you here we're going to
continue our uh moving average class and today we're going to be talking about the 200 day moving average now we've already discussed the 20-day moving average Which serves as a you know shortterm to medium term moving average but today for the 200 day moving average that's that one's going to serve more as a longer term moving average and I want to really emphasize that I only use the 20-day moving average and the 200 day moving average as my indicators because I think the most brilliant things in life are often the simplest and I try to
keep my price charts and my price analyses very simple easy to understand I don't want to have random indic ators such as macd Ballinger bands RSI all these fancy indicators telling me different things and ultimately confusing me right I want to have my charts just a clear reflection of what's going on with price and that's what the moving average is due for you right the 20day moving average shows you the average price in the last 20 days while the 200 day moving average shows you the average price in the last 200 days okay so I'm
going to show you guys how to put it on your charts on trading view just let's go to indicators once again write moving average we going to select it it's going to pop up on the left over here we already you know adjusted this one to make it 20 so now we're going to adjust this one to make it 200 and there you go now you have the 200 day moving average on your charts and like I said guys this is all I have on my charts uh I also use volume we're going to talk
about that later but I only use the 200 and the 20 and it makes my trading simple yet get extremely Effective now let's hop into the course and let me actually um oh I think my camera might have been up while I was doing that so just to show you one more time moving average you press it comes on the side here change length to 200 and that's it okay now that I have my camera off let's start the class so the 200 day moving average let's get into it one of one of the uh
best uses of the 200 is it it acts as support and resistance for stocks and crypto right so when price is above the 200 day moving average the 200 is going to act as support for Price kind of like a floor for Price however when price is below the 200 day moving average the 200 is going to act as resistance or like a ceiling for price and this is especially true if the stock is extended and puts in three plus consecutive uh green or red bars to the 200 day moving average so if you have
three plus consecutive green or red bars that directly go into the 200 we often see a reversal because the 200 is going to act as support or resistance um and the 200 day moving average unlike the 20 is most effective when it's flat right we learned that the 20-day moving average whenever that one is flat it shows lack of momentum lack of trend and we want to usually avoid 20-day moving averages that are flat With the 200 is actually quite the opposite we want uh we want a flat 200 day moving average it's most effective
when it's flat okay and another thing I want to emphasize here is that in general if you have price above the 200 day moving average on several time frames you know especially if it's the larger time frames such as the hourly the daily or the monthly charts it shows that in general the stock has you know it's bullish right if it's above if if it's above the 200 on most time frames that's indicative of positive Market strength however if price is below the 200 day moving average on some of the larger time frames then that
shows that it's actually you know overall it's it's indicative of negative Market weakness right because if price is below the average of the last 200 it makes sense it's it's weak however if price is above the average of the last 200 days it's it shows Market strength okay hope that makes sense so just to show you guys some examples right this is the 200 day moving average as you could see it's kind of serving as a floor for stocks or for this stock um you could see that every every time it touches the 200 it
acts as support right touches rallies touches rallies touches rallies and we also see that the the 20-day moving average starts curling higher and and trending higher it's under pric and that's when we have a nice rally so this Is a good example of the 200 acting as support and then the 200 day moving average TR or the 20-day moving average transitioning and having the price go higher let's look at another example we talked about before uh this idea that this that if the stock is extended and we put in three plus consecutive green or red
bars into the 200 it usually kind of bounces this is a good example of that especially from here we have 1 2 three big red bars right into the 20-day moving average or I'm sorry right into the two yeah the 200 day moving average here we have a narrow range bar that's kind of like a reversal bar we have it higher and we move higher okay so drops right into this 200 access support moves higher this is another example of it um this of it acting like resistance we challenge it here we it drops challenges
again drops once again hits to 200 drops kind of gets near the 200 drops same thing here you could see that the 200 day moving average is kind of acting as resistance it's a ceiling for this stock or crypto and I believe this was like the the daily chart of the QQQ another example you could see the 200 even when it's not flat it's still can act as support you can see it gets near it gets near it pops right here it touches it every time it respects it same thing here so you could see
it acts as a floor or as support for this stock and you could see here as the 20-day Moving average starts curling under price and trending higher you could see how well the candlesticks are respecting the 20-day moving average when it's trending higher right same thing right right there another example it's acting as support here here there and then as soon as it breaks the support and we have this 20-day moving average that's trending lower and curling lower that's when we gap down and we continue lower so you're kind of seeing and noticing how I'm
combining both the 20-day moving average and the 200 so you're starting to see how all of these uh you know how the moving averages are coming together now let's talk talk about the 200 day moving average breakout so when you combine a rising 20-day moving average with a flat 200-day moving average it can create a very powerful breakout opportunity and we see that price oscillates between the flat 200 and the rising 20 until a breakout is imminent what is going on guys hope you're having a great day we have finally reached the strategies section of
the course where I'm actually going to be teaching you different trading setups that you can begin spotting on your charts and hopefully taking advantage of okay so this is finally the most exciting part of the course but before we go into some of the presentations that I have prepared for you guys I want to talk about a very important concept and this is going to Kind of preface the uh other strategies and the other presentations that I have prepared for you guys and that concept is price correction okay so I have a I'm going to
draw a diagram here for you guys so let's under what we have to understand is that with price action whether it's for a stock or a crypto or a for or Forex it really applies to any Financial instrument on the market what we have to understand is that price always corrects itself in some way right prices can't just go infinitely higher at some point we are are going to have some sort of price correction and that price correction could happen in two different ways it could either happen through a pullback or retracement or it can
happen through um a consolidation or a base so let's first talk about the pullback right so let's say we have a really bullish rally right we're in a we're in a very bullish stock there's a lot of buying there's a lot of you know strong momentum after a really strong rally right at some point we have to see some sort of retracement or some sort of Base some sort of uh price correction right so price can correct itself in the first way through a pullback where when a pullback happens right we get a minor drop
where perhaps the reason of this is there's a lot of buyers who were buying It down here or buying it over here and you know they're enjoying their profits as the stock or crypto is rising and at this point they want to start taking profits right so all those buyers start taking profits which leads to a drop or in other words a price correction or perhaps there's a ton of people up here who are skeptical that the stock or crypto is going to continue higher so what they do is they short it up here thinking
they're going to make money you know if this thing drops in price okay so that's one way way we could have a price correction and of course after the correction right ideally if it's if it's a really bullish uptrend right if there's a lot of buying pressure a lot of buying momentum we're inevitably going to continue higher right so our goal is to buy it where our goal is to buy it right down here right if we missed if we missed the opportunity all the way down here our goal is to buy it during the
correction right why like our goal isn't to buy it at the highs it's to buy it on the pullback right cuz after you would you would assume that price has corrected corrected itself we're ready to continue higher again this my friends is called a buy setup okay this is a buy setup so that is one of the strategies that we're going to be learning right buying you could think of it as buying the dip I know that's a really popular phrase but this is what that is and that dip like I like I mentioned is
a price correction so we are buying this price correction So that's one way price can correct another way price corrects is let's say we have the same rally we have a huge rally we can correct through time or in other words through a consolidation or a base right where we actually just stay at the highs of this rally right maybe at this point there aren't enough buyers to you know Propel this stock or crypto higher and there's also not enough sellers to you know cause it to pull back so instead we just sort of Base
we just sort of stay at this in this price range right where we don't have enough buyers to bring it higher but we also don't have enough sellers to bring it down so we end up just consolidating or staying near the top of this base right before we inevitably continue higher and our goal goal right our goal is to buy it as soon as it breaks out of that base right after you know as it's consolidating right right when the price correction has finished our goal is to buy it at this point and enjoy the
move higher and this strategy is called a breakout okay a and specifically a base Breakout okay so this is kind of the fundamental anatomy of the two strategies that we're going to be talking about first we're going to be talking about the breakout first and then we're going to be talking About the buy setup but something that's important to note from listening to everything I'm telling you guys in this presentation is this is how price corrects itself right and based on how price corrects itself we could find Opportunities okay we can find Opportunities to get
into the stock and enjoy the next move higher right because to be honest guys you're not always going to be able to buy it down here or buy it down here right sometimes you're going to be late to the party but you have to identify the points where price correction has completed and we're ready to continue higher where price correction has completed and we're ready to buy the breakout and enjoy the next move higher okay hope this makes sense guys and the next class we're going to we're going to be specifically talking about the base
breakout okay so make sure you understand this concept and understand that price cannot go infinitely higher it cannot go infinitely lower at some point there needs to be some sort of Correction okay and I'll see you guys in the next class guys we're going to be talking about the base breakout thanks what is going on guys hope you're having a great day today we are going to be talking about the base breakout and hopefully you guys understand what we talked about in the last class and how price corrects itself in two ways either through a
pullback or through a base okay and today we are going to be Talking about the base breakout or the base breakdown setup okay so let's get right into it so the base breakout what is it this is one of the most potent and fundamental trading strategies that exist in fact this is my favorite trading strategy that exists I make money off this setup every single day okay because I see it all the time it's a very you know well-known setup and if you know how to play this setup correctly I can promise you you are
going to make a lot of money trading you know either whether it's stocks or crypto or Forex okay it's that powerful of a setup and we talked about a base or a consolidation is a period of time when a stock or a crypto is trading in a particular price range it's not moving out it's not moving above or below that price range right it's sort of staying at the same price level and our goal as Traders is to take advantage when price breaks out or breaks down out of that range right we're timing our entry
when price breaks out or breaks down this works on any Financial instrument including stocks crypto and Forex okay this also works on any single time frame and it's a very good high reward to risk setup that's one of my favorite Parts about it so let's understand the anatomy of the base breakout and we kind of looked at this before but let's try to get a deeper understanding so like we talked about price corrects itself either through a pullback or through a base okay so in this case we're talking About the base so after you know
a large rally higher we have a base where price is sort of you know not it's not trading above or below this price range we're just sort of chilling at the highs of this rally right and our goal as Traders is to find the moment that price breaks out of this range and continues higher so we want our timer entry over here right here okay and we have to understand that in a bullish uptrend right if there's a lot of buying pressure in that stock or crypto after a large move higher often times it's going
to correct itself through a base so it's really important that you guys can identify when this is happening so you could take advantage of it and take advantage of this point right here so you can enjoy the next move higher and hopefully make a lot of money okay and uh I believe that's that's all so just remember guys during this process price is correcting itself and as soon as it's done with the correction we're ready to continue higher and this is where we're buying it okay so what's this is kind of a little uh graphical
representation of this we have a rally and then we have a bunch of candlesticks that are trading in you know at the highs of this rally we're trading in this price range and just understand that at the top of the base right at the highs of the base that Is an area of resistance right cuz the candlesticks are sort of respecting that high of the base so it creates a resistance and the same thing happens at the lows right the candlesticks are respecting the lows of the base right and that's going to be support so
if you ever see a base like this just understand that over the highs of the base we have an area of resistance there and under the lows of the base we have an area of support there okay so let's talk about the actual base breakout breakout setup and our entry and stop loss okay so we have the rally we begin to consolidate right we are going to place our entry over the highs of the base and we are going to be placing our stop loss under the lows of the base right so let's say you
have a base like this find the absolute highs right in this case would be over this candle and place your entry over the highs of that base and my recommendation is let's say the highs of the base is let's say it's $6 you want to place your entry at about 602 603 you want to give it two or three cents room okay so you you give this you give the stock or crypto the actual you know room to break out and truly break out of this resistance okay and the reason our entry is a above
the highs of the base is because that's when price is breaking that resistance right we're timing our Entry with the break of this resistance all right and for a stop loss we're placing our stop loss under the lows of the base because that's where we have an area of support so this is super easy guys if you see a base and you want to you know you want to play it you want to get into it entry is over the highs find the absolute highest point of the base and place your entry above that high
place your stop loss under the absolute low of the base okay that's your entry and your stop loss pretty easy stuff now let's talk about the 20-day moving average requirement we already reviewed the 20-day moving average and how important it is and we know that we want to see the 20-day moving average either trending higher or trending lower right if we're bullish we're in an uptrend we want to see the moving average trending higher ideally at a 45° angle and under price okay so that's what we need here for a base breakout we want the
20-day moving average to be trending higher and under price that is a requirement you need to have that if you want to play the base breakout it is the most crucial requirement okay and the reason we want it is because often times during a really bullish up Trend stocks and crypto they tend to base into the 20-day moving average they tend to just you know consolidate right into it and as soon as it's at or near the 20-day Moving average that's when it ends up breaking out okay this is just something that happens okay and
we're going to show you guys examples of it soon so something to understand is that at this point right here right let's say we're right here we are extended from the 20-day moving average right and by extended we learned about this prior is that we know that extension means distance there's distance between the 20-day moving average and price meaning price is kind of overbought right it's a little extended so what do we do we need to have a price correction so we end up basing and as we're basing into the 20-day moving average price is
correcting itself and it's getting ready to make the next move higher so our goal is to the time your entry when price has based into the 20-day moving average or we just want at least the 20-day moving average to be near price okay we don't want to be buying it here cuz right here there's still some distance between the 20-day moving average in price there's still some extension we want to be buying when it's at or near the 20-day moving average when there's no extension okay when there's uh we're not overbought at all okay hopefully
that Mak sense so overarching theme Here guys is for a breakout make sure the moving average is trending and under price and you want to be buying it at or near the 20-day moving average okay let's let's continue here and this is something that I often times see what I see often is a rally higher then we begin to base we begin to consolidate as soon as we hit the 20-day moving average we have that breakout and our price is going to be at this resistance level right it's over the base this line is directly
over the base this is our entry point so we would be entering as this green bar is being formed we would enter right there and then we would enjoy these profits going higher now often times what I see is after this primary breakout after we break out of this resistance and we continue higher I often see us having another another sort of price correction but this time it happens through a pullback so after this rally we actually pull back okay and we form a buy setup or a you could call it a secondary breakout we're
going to be learning about the buy setup later but often times after this initial breakout we pull back we form the buy setup and then we continue higher and you can think of this as a pullback pattern right like I said we're going to be learning about that in the next class but what I what I really want to emphasize here is often times this line right here this entry point this is serving as resistance right we're break we're buying it when it breaks the resistance of the base o over the highs of the base
but this prior resistance level right is now turning into support for the stock or crypto where we actually pull back to this prior Resistance which is now support so during this point it was acting as this resistance level was acting like a ceiling as soon as we broke out of that ceiling it's now turning into support and we retrace right back to that support level before we continue higher okay now this doesn't always happen but I think it's something to you know show you guys I think it's important here's an example of that okay where
we have a large rally higher right look at this we have a rising 20-day moving average we have a huge rally higher okay at this point right here there's significant extension between price and 20-day moving average price needs to correct itself in some way so first we have a pullback and it sets up as a pullback pattern or a buy setup right that triggers higher that goes higher but there's still there still needs to be some sort of Correction right this was a huge move it needs additional correction so what do we do we base
and we stay in this price range and we stay in this price range until eventually the 20-day moving average this blue line starts to starts to curl under price it starts to Trend higher and that's when we get the base breakout right here where this red line is the entry point this red line is the resistance we break out of that resistance and we enter right here we rally higher before we have that pullback and this prior resistance which was our prior entry point for this Primary breakout it now becomes a a support for this
pullback okay hopefully that makes sense guys all right okay very good next excuse me we're going to be understanding the base breakdown which guys the base breakdown is the absolute opposite of the base breakout it's the same exact exact thing except it's the opposite we're going to be taking advantage of shorting it okay but nevertheless I'll go over it as we know price corrects itself in two ways either a pullback or a retracement or a base so we have a drop right let's say we have this is a downtrend right it's clearly a downtrend we
have a lot of bearish momentum there's a lot of selling pressure we have a drop and we consolidate at the lows meaning right we have a drop it wants to continue lower but it needs to correct itself first so it corrects itself through the base we're chilling at the bottom of this of this drop before right here we have that breakdown we short it we have a nice move lower right we short it right here once it's breaking below this base that's why it's a break down right we have a drop and then we start
to base again at the lows of this rally right and we have another breakdown here where we're trying to enter when price is breaking down out of This bearish consolidation okay so like I said guys our goal is to catch the moment price breaks down and enjoy the next move lower and we're shorting it okay and we have to understand that in a bearish downtrend whenever we have a downtrend price tends to base after a large drop that's just what happens okay that's the way price tends to correct itself it tends to correct itself through
a base at the lows so the same thing here after we have a drop and we have this consolidation we have these candles trading in this price range at the bottom of the consolidation we have an area of support and at the top of the consolidation over the highs of the base we have an area of resistance the same exact thing as we discussed before except the opposite so what's the entry it's the same exact thing except the opposite our ENT is going to be under the lows of the base and our stop loss is
going to be over the highs of the base right cuz we are entering when price is breaking that level of support that's when we're timing our entry and we are placing our stop loss over the highs of the base because that's where the area of resistance is okay so yeah to emphasize we're we're trying to enter when it's breaking that support and that's where we enter and we enjoy this move lower okay so entry under the lows of the base Stop loss over the highs of the base when we have a breakdown okay very good
let's continue so just like the breakout we have a very strict uh 20-day moving average requirement like I said before we want the 20-day moving average to be trending lower and overprice when we're in a downtrend or when we're bearish right we want it to be trending lower and overprice so that's a requirement and often times stocks and crypto they base into a declining 20-day moving average this is the way they correct themselves cuz as of right as of right here at this point here price is extended from the 20-day moving average and by basing
into the 20-day moving average we have that price correction and we're finally ready to short it as soon as it breaks under that base and we want a timer entry when price has already based into the 20day moving average okay it's the same exact idea guys um and same exact idea here as well um we have a drop we base right our entry this is our entry point which is an right the area of support so we are timing our entry when it breaks this area of support right this is the primary breakdown that we're
playing we're at the 20-day moving average we drop right cuz remember we shorted it here below the base this is the primary breakdown and often times we have a Retracement and this retracement goes back to the declining 20-day moving average and also it goes to the initial area of support right our entry that's now becoming resistance for this stock or crypto okay and this is our first retracement to the 20 this previous area of support has now become resistance okay this doesn't always occur but I thought it was important to share it with you guys
and we're going to be talking about reward to risk in the next class what is going on guys we're going to be continuing the presentation exactly where we left off and we're going to be talking about reward to risk and this is one of my favorite Parts about the Bas breakout is the reward to risk aspect of it and my biggest recommendation guys is after you watch this class and later on in the course after you watch my risk management and share sizing course please come back to this section of the course after you understand
the risk management after you understand uh share sizing and I think this whole section of the breakout is going to make a lot more sense but nevertheless I'm going to introduce uh this concept to you guys right now but just keep in mind you may want to come back to this uh to this part of the video in the future so my question for you guys is out of these two setups which one is better in terms of reward To risk okay is it number one or number two right and take you know pause the
video take a second to think about it which one do I like better from a reward to risk uh uh standpoint point which one has a lot higher potential a lot higher potential to be lucrative right which one has the higher potential to make us a ton of money that's what we're here to do we're here to make money so if you guys have thought about it and you guys selected number one this one right here you would be correct let's talk about it so over the base we have our entry point right we always
place our entry over the base so for both of these setups our entry is at $3 right over the base is at $3 over this base we have $3 right but let's say our stop loss right it's supposed to be under the base in this situation it's at 290 right it's directly under we have 290 as the price of our stop loss however in this situation you know the base you could see it's a little a bit of a larger basee our stop loss is under it but it's at $22.70 right so this one's at
290 this one's at 270 okay so we have the same entries but different stoploss prices okay so what is the size of our stop well the size of our stop all we have to Do is uh subtract the stop loss price from the entry price right so $3 minus 290 is 10 the size of our stop is 10 cents so in other words if we enter this setup this breakout at $3 if that you know if our trade drops by 10 cents and hits 290 we are out of the trade right that is our risk
if it drops 10 cents from our from our entry we are out of the trade now in this case our entry is at $3 our stop loss is at $270 $33 - 270 that's 30 Cent 30 Cent stop size meaning if we get in at $3 that's our entry point and it drops 30 cents right to 270 the bottom of the base where we have support that's when we exit the trade okay so hopefully that makes sense stop size 10 cents here stop size 30 cents here if we are risking $100 on both of these
setups meaning $100 is the maximum amount that we could lose for this trade right $100 like we can't lose more than $100 right what are we going to do we have to share size accordingly right so if we're risking $100 with a 10 cent stop right meaning if this if we get in at $3 and it drops 10 cents to 290 if it hits 290 we're out of the position how many shares do you have to buy to ensure that if this drops by 10 cents and hits the stop loss price we only lose $100
and I'll make it easy for you guys the formula is take your risk your dollar amount risk which is $100 divided by the size of your stop which is 10 cents so 1,000 shares meaning we could buy 1,000 shares at $3 and if it drops 10 to our stop loss price at $29 we will lose $100 which is the maximum amount we are willing to risk in this scenario we're still risking $100 the risk is the absolute same we're risking the exact same amount in both of these setups however in this case we have a
30 Cent stop right because our stop loss is under the base at 270 so if we're risking $100 per trade with a 30 Cent stop well the risk unit $100 divided by the size of your stop stop size is 30 100 divid by3 is 333 shares meaning if you get in at $3 and if this drops 30 with and and you bought 333 shares and it drops 30 cents you will lose the maximum amount you're willing to lose the $100 so looking at what I've Presented you right now you must have an immediate conclusion and
that immediate conclusion is the tighter the base meaning the smaller the base right that you can see how this one is all sloppy it's all over the place it's it's it's a large base it's not tight like this one you can see this one's tight it's small it's there it's uh clean right it's not sloppy and uh you know with a lot of Tails and all that right the tighter the base the tighter the stop loss right in this case the tighter the base we have a smaller stop size here than there the better the
reward versus risk because think about it we're risking a $100 in each of these setups however because we have a smaller base here we have a smaller stop size with a smaller stop size we're able to purchase more shares right if we're able to purchase more shares well that means our reward is a lot higher right like if this goes up a dollar right we're going to make $1,000 however in this situation with this entry and with this stop loss if this goes up a dollar we're only going to make $333 okay so we're risking
the exact same amount but our potential reward with this tight base and this small stop size is significantly higher so guys always look for tight bases you know really clean tight bases uh as opposed to really sloppy bases that are all over the place because the risk to reward is Going to be way better and honestly the tight bases the clean looking bases that are not sloppy they tend to work a lot more often too okay and like we talked about we have the Shar sizing formula it's going to be your risk your dollar amount
risk divided by your stop size okay and in order to calculate stop size just subtract your entry from your stop loss Price Right $3 minus 290 and how are we setting how where are we getting $3 and 290 well remember the entry is over the base the stop loss is under the base so when you see a base like this draw a line over the base see what price that is draw a line under the base see what price that is okay and we're going to be talking about share sizing and risk management and we're
going to go a lot deeper into this reward versus risk concept a little bit later in the course now let's talk about the ShakeOut bar and guys I can guarantee you there is nobody else talking about this okay there's nobody else presenting this sort of information to you and the reason I say that is because I learned this by myself I learned this through experience okay and the ShakeOut bar is an incredible enhancer to the B to the uh breakout okay this is something that I have just seen through my years of experience and through
looking at thousands of different charts and looking at thousands of different breakouts and breakdowns so the ShakeOut Bar improves the quality of the base and it makes it a lot more potent of a base breakout or breakdown this increases the odds of success for your breakout or your breakdown and it makes the setup battle tested that might sound confusing you'll understand it in a second and what it does really is it makes a bullish base right remember if we have a bullish base at the highs of a rally it's going to make that that um
base even more bullish it's going to it's going to kind of give you confirmation that this is definitely bullish this is probably going to continue higher and it gives a bearish base right that's basing at the lows of a rally it's going to make it even more bearish it's going to show you that there's actual bearish confirmation and it triggers stop losses we're going to uh you know talk about that in a second and like I said it's a trading enhancer it's a trade enhancer it it makes me immediately more confident that this breakout is
going to work or this breakdown is going to work so let's look at it so in plain view this is the ShakeOut bar and a ShakeOut bar if you're looking at it you might recognize it immediately you might say hey listen that's a bottoming tail and you would be exactly correct this is just a bottoming tail you're absolutely right however what does this bottoming tail do for us and what this bottoming Tail does is picture when as this breakout is forming right let's say a bunch of people have already entered the breakout right or let's
say a lot of people they're in it long from here right they bought it down here they they haven't sold it here they're waiting to C capture bigger profits and let's say during this base all of those Traders all of those buyers they set their stop losses I mean where I mean they're going to set it under the base right that's that's where we're supposed to set it we're supposed to set it under the lows of the base because that's where we have an area of support and that's where they're going to be setting their
stop losses now when this bottoming tail forms and right we know that when a bottoming tail forms it you know drops in price before the buyers show up here and bring it right back up okay so it shows us that the buyers are taking taking control and what this bottoming tail does right as it's dropping it's triggering every single stop loss that is at this support level and by triggering all those stop losses right all those stop losses there sell orders right there sell orders to try to to get out of the position right as
you're triggering all those sell orders it brings the stock or crypto even lower right cuz if all of a sudden we trigger a bunch of sell orders that's even more selling pressure and as a result we drop even more but despite us Dropping all the way out and you know breaking down out of this bullish base if we end up rallying right back higher that is confirmation that this stock or crypto is indeed bullish and we will continue higher this is confirmation right this is showing you that the buyers they're they're not allowing this stock
or crypto to continue lower no as soon as it tried to drop it went right back up that is in essence what a ShakeOut bar what a ShakeOut bar is and this is when I say battle tested meaning the sellers showed up the sellers tried to bring this lower but there was so much Buy pressure that they brought it right back up and then it continued to base at the highs right and this is a very bullish uh sign right we want to we want to see this sort of bar when we are basing okay
just it's the same idea here after a drop right we have an area of resistance over the highs of this base and a lot of people are placing their their cover orders right let's say say people shorted it here right um and they're enjoying their profits and now it starts to base and they want to capture additional profits they Place their stop loss over the base as they should and as soon as you know buyers start to show up and they trigger that stop loss a bunch of buying happens right cuz that's where people are
covering their shorts so they're covering their shorts at this position and we see a rally higher however it Ends up just being a topping tail and remember guys the topping tail suggests that that the sellers have taken control so basically the buyers showed up the buyers attempted to bring this stock or crypto higher however the selling the sellers said hey not so fast and there was so much selling pressure excuse me that they brought the Stocker crypto right back to the lows and it continued basing and then eventually finally break under this support and we
continue lower okay and you can also call this kind of a breakout failure you can call this a breakdown failure it's a topping Tail as well so this is why it's so important for you guys to understand um and be able to identify the different candlesticks that exist because you'll be able to find information like this where if you see oh oh wow we have a a a topping tail during a a very bearish BAS that's a good sign that we're that's that's good confirmation that we're actually going to continue lower hopefully that makes sense
now let's talk about a breakout or let's talk about breakout and breakdown failures okay and a bullish base that has a breakout failure which is a in other words a topping tail especially on high volume and we haven't talked about volume yet but this is when we're going to begin discussing it when we have a bullish base as a breakout failure on high volume that is a sign that a reversal to the downside might Occur and with the opposite let's say we have a bearish base right at the lows of a rout at the lows
of a of a um drop right if we have a breakdown failure which is a bottoming tail right we try to go lower but we fail especially in high volume that's indicative that a reversal to the upside may occur and guys this is also information you're frankly not going to find anywhere else because this is this is these are strategies that I personally found through my years of experience all right so let's let's kind of uh walk through this we're first going to be talking about the um breakout failure with the topping tail so we
have a large rally and we begin to base at the highs right so far so good all of a sudden we break out right the buyers they bring this stock up or crypto up and we break out of the base however this is very shortlived and then the sellers take control at the top here and they bring the stock or crypto right back down right that's what a topping tail is it suggests the sellers have taken control so during this bullish base rally higher we're basing bullishly we're basing okay everything's looking good higher we finally
break out right but ends up leading to a topping tail like this this is a breakout failure and the market speaks loudest in its Breakout or breakdown failures it speaks loudest in its failure patterns right so we we uh base we have a breakout leads to a topping tail the breakout has failed especially if this is occurring on high volume we're going to be talking about that more in the volume class but this is usually in indicative that that this move is done this move is over it attempted to break out and failed what does
that tell us if it attempted to go higher and failed it tells us hey this is probably going to go lower and this is indicative that a a reversal might take place and this will actually drop just like here let's say we have a excuse me let's say we have a drop in price we are basing uh bearishly right we're basing at the lows which which is uh some indicative of weakness we attempt to break down however it leads to a bottoming tail meaning we we attempt to break down but we just shoot right back
up right leading to a bottoming tail what is a bottoming tail tell us it tells us that the buyers have taken control and it usually it's indicative of a reversal and uh reversal to the upside okay well I mean and it's really not too difficult guys think about it if we're we drop we're basing it's looking lower we attempt to go lower right we attempt to break down and drop lower however the buyers show up here they bring prices right back up and you know that usually means it Might mean that we're actually going to
end up reversing and continuing higher right I mean makes sense we we try to go down we fail it probably means we're going up if we try to go up and we fail probably means we're going down okay so key characteristics about the breakout basing at the highs of a rally is bullish if we make a rally higher and we're basing at the highs that is bullish it's a it's a it shows strength it shows that there is positive buyers like there there's buying pressure the longer it bases the more bullish it is okay so
we want if if we're basing at the highs we want a long base we want a base that's you know ideally longer than shorter because it shows that hey this is just taking a little bit more time to correct itself but there clearly Aren't Enough sellers to bring it down and make it break down out of the base so we're probably going to go higher uh basing at the lows of a drop is bearish and the longer it Bas is at the lows the more bearish it is I mean it makes sense okay if it's
at the lows and it's staying at the lows it probably means it's lower if it's staying at the highs for a long time it probably means it's higher um basing at resistance is bullish and indicates a break of resistance may occur if the breakout triggers okay so if we are at a previous resistance point and we're Basing at that resistance it probably means we're going higher right cuz if we're at a resistance level right usually you would expect us to drop but if it's basing at that resistance level it probably means we're going higher if
we're at a support level right and if you've already identified support on maybe the other time frames um if it's basing at support and it continues to base at support then it probably indicates that uh a breakdown is probably going to happen and we're most likely going to continue lower okay and let's just want to make sure okay let's just make sure uh we look at some examples so we have a a rally we begin to base we enter above the base we enter oh and now we have another base right we we're going to
enter at this red line which is over the highs of the base then we get that pullback we we saw a diagram of this earlier where this prior resistance is now becoming support right and this is a buy setup where we're going to talk about that in the next class we rally higher and this is sort of a little bit of a base and another buy set up here okay let's look uh here we have we had a rally before this um and another thing to note here guys notice how the 20-day moving average is
under price and it's trending higher okay and we didn't quite B what is going on guys glad you're watching this class and today we're going to be talking about the buy setup and the sell setup in other words the Pullback or retracement pattern and I know we talked about the base breakout and the base breakdown during the last class and I believe the stream cut off uh while I was actually looking at some examples so I want to go ahead and finish the examples that we were looking at before we continue on into the buy
setup okay so let's go ahead and do that um okay play from current slide so we talked about this example so looking at this example number number one the 200 day moving average is under price it's under the 20-day moving average that's a bullish sign you usually you usually want to see the 200 generally under price right you want the average uh the 200 day moving average to be below price and the price to be above that average okay um we had a a prior rally here and we ended up basing right our entry is
above the base our support is or our stop loss is under the base and notice that as soon as we begin to break out or right before we actually begin to break out uh the 20-day moving average starts curling under and trending higher under price okay and that's when we start to see the breakout and we're going to be talking about the buy setup today uh same thing here 200 is all the way below price and below the 20 we have the 20-day moving average notice that as soon as it starts to break out here
it starts to rise under Price it's trending higher right you could see that there's clearly bullish momentum with the 20-day moving average and as soon as we base into that 20-day moving average that's when we break out okay so our our um entry would be over the highs stop loss would be under the lows okay hopefully that makes sense so those are just some examples of it and um later in the course we're going to be looking at some charts and actually pinpointing different breakouts different buy setups and also looking at other the other patterns
that we're going to be talking about so let's go into the buy setup and the buy setup as you may recall is the one of the other fundamental strategies that I talked about we talked about how price tends to correct itself in two ways either through time or in other words you know base it consolidating we we already learned about that last class um now we have to understand that price can also correct itself through a pullback through a price correction okay so what is it and this is ultimately correctly buying the dip we always
hear that phrase buying the dip right I think it was coined in 2020 um when you know all stocks went up all cryptos went up during the co pandemic right or after it um and a lot of people frankly they lose money when they buy the dip most people most amateurs they lose money when they're buying the dip but what I'm going to show you today is how to correctly do it what characteristics you should be looking for when you're actually buying the dip because I'm making money buying The dip I know other Traders making
money buying the dip there's no reason reason you shouldn't be making money when buying the dip and I'm going to show you exactly how to do that this is one of the most potent uh trading strategies for day and swing trading it works on any time frame for any stock crypto Forex any Financial instrument that operates in a market and it's really important to develop the skill set required to identify when to be buying the dip right when or or identifying what is a high quality buy setup or pullback pattern so like we did with
the base breakout let's try to analyze the anatomy of the base breakout I'm sorry of the of the buy setup sorry about that so number one we have a rally right a lot of the people people who bought it down here they want to start taking profits so what they do is they start selling right they sell at this point and we see a minor pullback what we want to do and during this pullback actually um this is price correcting itself right that's why it's pulling back but what we want to do is time our
entry for when the pullback and the correction is finished so we buy here and enjoy the next move higher again we begin the pull back we want to you know we want to buy when the correction and the pullback is finished and enjoy the next move higher okay uh also guys for the buy setup this is kind Of a big uh you know this is a requirement you need to have an established uptrend in order to trade the buy setup you need an established uptrend especially if you're a beginner make make sure there is a
present uptrend before you consider uh playing the buy setup and the buy setup of course occurs after the pullback has completed right here so let's go over some key criteria for the buy setup and ultimately the buy setup really we're buying after a pullback right so following a rally higher right you want to have three three or more consecutive red bars in a row and you want to have three or more consecutive lower highs in a row on the pullback right so right now we're trying to analyze the quality of the pullback right we need
we want to be looking for specific types of pullbacks when we're um analyzing a buy setup okay so one of the criteria like I said just now it you have to have three or more consecutive red bars right we have a red bar Red Bar Red Bar Red Bar we have four in this case perfect and we you also ideally want to have three consecutive lower highs right what what does that mean right we have this is a high of this red Candlestick this is the next high of the next Candlestick this is the next
high of the next Candlestick and this is the Next high right notice how every high is lower than the previous one notice also how every low is lower than the previous one slow that's what we want to see we don't want to see we're down then we're up then we're down then we're up then we're down we don't want to see that we want to see three red bars in a row and ideally uh consecutive lower highs and lower lows okay key criteria number two and this one is very important we want to make sure
that the 20-day moving average is trending higher and under price okay I can't emphas ize this enough guys I keep talking about the 20-day moving average because it is extremely important especially for this setup okay we want it to be trending and under price and you're you guys are actually going to notice that price tends to retrace and it tends to pull back right into the 20-day moving average okay key criteria number three we have to look at the retracement of the pullback the retracement is the amount that a stock pulls back right it's the
measure of the amount or the you know I guess you could say the uh yeah I guess you could say the amount of the pullback or how large the pullback is that's what the retracement is and we want to be looking for a 40 to 60% retracement of the prior rally meaning let's say from the lows of this rally to the highs of this rally that makes up 100% we want this pull pull back to be in the 40 to 60% region of this rally right so let's see I would say this is about 60%
I would say this pulled back to around the 60% point right so in general you want it to be in this area right here that's between I would say 40 to 60% of this rally with 50% being around right here okay and the whole point of this is you don't want to really deep retracement right like let's say after this rally you retrace all the way down here that shows weakness right if we're really that bullish if we're in an uptrend if there's a lot of buying pressure why would we retrace all the way back
to close to the lows of the rally that shows a lot of weakness furthermore if we retrace um you know under 40% retracement meaning we retraced to only right here well that shows lack of price correction cuz we're still going to have significant distance between price and the 20-day moving average right so we want to have that golden spot of 40 to 60% retracement of the prior rally okay hopefully that makes sense key criteria number four let's talk about the entry stoploss and targets so first step is to identify the entry bar and wait for
it to completely form we're going to be discussing entry bars on the next slide but for right now this is our entry bar okay so as soon as this entry bar has finished Forming what we're going to do is put our place our entry above the entry bars high right like that's the whole point of the entry bar this is where we base our entry off of you want to put it over the entry Bar's high and you want to put the stop loss under the entry bars low or under the rising 20-day moving average
okay so basically once this bar is finished forming and the buy setup like you see that there's a buy setup you're going to want to just place your entry right above the highs of this bar and place your stop loss once you're in the position under the lows of that candle so you would be entering during this green bar as soon as it hits this entry and you would enjoy the move higher okay and your target one is the previous High right so we rally we make a high right this is a pivot High cuz
we start pulling back and our first Target is the previous High because this previous high is now resistance right we go up we drop this now becomes resistance so it acts as the first Target okay so let's talk about entry bars the ideal entry bars that you want to see at the end of a pullback look like this they're either narrow range bar s or their small bottoming Tails we want to see small bars right either small narrow range bars or small bottoming tails and this is where you know really understanding uh the types Of
candlesticks that exist this is where it becomes really important so if you still don't know what a narrow range bar is or what a bottoming tail is take a step back and go back to the reading candlesticks section of the course so after a pullback we always want to see one of these entry bars because it enhances the buy setup okay excuse me so let's understand why when looking at these two pullbacks which one of these pullbacks is much higher in quality in terms of reward versus risk which one is better in terms of reward
versus risk this one or this one and if if you're looking at this one well obviously this is the correct answer the reason this is a better pullback than this one is because first the bars are becoming continuously smaller that's another thing we want to see if the bars are becoming right these are red bars if they're becoming continuously smaller well what does that mean the red bars are becoming smaller that means the selling pressure is diminishing right remember we're trying to play long we want the selling pressure to diminish the other thing is we
also have an entry bar you can see this is a kind of like a dogee bar very very small bar okay we could see that the selling is weakening we have a clear entry bar in this case the selling is not weakening we have three large bars in a row and we don't have an entry bar right there's no clean entry for us for us to actually go into the buy Setup so let's understand why we want entry bars and this once again guys is going to touch up on the reward versus risk aspect of
this setup and and like I said with the base breakout video later in the course when you're looking at my risk management in my share sizing videos make sure after you watch those you come back to this section of the buy setup and it'll give you a lot more perspective it'll help you understand what I'm talking about here but I think if you guys went through the Bas breakout understanding everything you guys should be good for this so entry bars improve your reward to risk why well with an entry bar we have a tighter stop
loss and just like the uh base breakout video with a tighter stop loss we have a higher reward to risk ratio this is why we want small entry bars right so let's understand this remember our entry is always over the entry bar our stop loss is always under the entry bar right we talked about this here once we get this bar by the 20-day moving average our entri is over it are stop loss is under it so in this pullback we have an entry bar in this pullback we don't have an entry bar so what
do we do so in this case you know in both of these setups our stop loss is under the lows under the lows it's 590 is 590 in this setup we have the entry bar So remember our entry is above the entry bars high so it's at $6 meaning after this bar has completed forming we are going to be entering during this green bar and as soon as it hits the highs of this entry bar that's when we're going to be entering and enjoying this move higher in this case we have a very you know
the we have a we actually have an entry bar so our entry is at $6 however in this case our entry has to be over this candle cuz we don't have an entry bar so in this case we have a you know a larger entry it's at $620 compared to $6 our Targets in both of these scenarios is 650 right so our stop loss is our stop losses are the same our targets are the same however because we have an entry bar here we have a you know we actually have a clear entry price compared
to this one so in this case we are risking 10 cents right because that's the size of our stop $6 minus 590 we're risking 10 cents meaning if you enter here and it drops to 590 you're out of the position it hits your stop loss it hits your risk you're out of the position right uh you're risking 10 cents in this case if you enter at 620 and it goes all the way to to to your stop loss at 590 that's 30 so right cuz 620 minus 590 is 30 so we're risking in this scenario
10 cents to make 50 cents cuz our Target is at 650 our entry is at 6 we're risking 10 Cents to make 50 cents in this scenario we're risking 30 cents to make 30 cents I don't know why this says 20 it should say 30 so you could see that even though we have the same exact risk because we actually have an entry bar here we end up having a tighter stop loss because we have a tighter stop loss we have a higher reward to risk because we're only risking 10 cents to make 50 while
in this case we don't have an entry bar we don't have a clear entry we're risking 30 cents to make 30 cents why would you risk $100 let's say to make $100 where in this case you're risking $100 to make $500 okay hopefully that makes sense now let's look at some examples so we right here we hit the 200 day moving average which is acting as resistance for the stock we Dro to the look at this the r Rising 20-day moving average that is under price you could see that uh the 20-day moving average is
halting prices from continuing lower it's rising it's rising we get a rally and boom We Begin to retrace and we have three red bars in a row we have 1 2 3 four red bars in a row we it retraces into the rising 20-day moving average so that's check we Al it's also retracing into the flat 200 so that's a bonus we have a 40 I believe what this is probably like a 50% retracement right if It rallied here pulled back to here that's probably 50% retracement I'd say right so that's a check it's uh
there's consecutive lower highs there's consecutive red bars perfect and we have a bunch of Entry bars here right we have a bottom uh bottoming tail then dogee bar then another bottoming tail and two other very small bars so we have a bunch of Entry bars here whenever you get into this situation just put your stop loss under the absolute lows right so this is the absolute lows of All These Bars put it at the lows so your stop loss would go here your entry would be over this bar and boom what a move higher okay
uh let's look at another example we have a rising 20-day moving average check we have a nice rally okay we have three consecutive red bars in a row check we have three consecutive lower highs in a row check um let's see this is probably yeah 50% retracement right of this rally check into the rising 20-day moving average good then we get a dogee bar/ bottoming tail check very good entry bar stop or stop loss would be under this Candlestick entry would be over this Candlestick and you would be entering during this green bar as soon
as it hits the entry over that dogee candle and boom nice move higher our Target is right here let's look at another example of this buy setup we have a rally it's kind of a deep pullback but given the overall context of the uptrend it's not a big deal we have a rising 20-day moving average great we have a really tight Entry bar really small entry bar perfect and look at that move beautiful uh we also have I you know two red bars in a row you know it's unfortunately it's two or maybe this might
be a red bar as well but you know it's not going to be perfect every time time sometimes there's going to be bits and pieces missing but it's important to look at the overall context of what's happening so beautiful buy setup here same same thing here we rally we retrace around I'd say like 45% Rising 20-day moving average nice you know it's not a perfect candle but it's a nice smaller Candlestick we can base our entry off of and boom what a nice rally entry would be over stop loss under and check this out guys
uh I believe this is the NASDAQ ETF the QQQ you could see that you know these are all buy setups you could see we have a rising 20-day moving average um we have a flat 200 that's under price every time price touches the rising 20-day moving average we go up so you guys are starting to see how we are combining different um elements that we are learning we are combining our knowledge we know that when the 20-day moving average is rising and trending higher price tends to retrace back to it right price goes up and
retraces back to it price goes up and retraces back to it goes up retraces back to it you guys get the idea and we're combining our knowledge of how to use the 20-day moving average with the buy setup with You know the 40 to 60% retracement with the lower uh consecutive uh red bars with the consecutive low lower highs uh with the entry bars right we're combining all of this information to produce a very potent setup okay we looked at this example earlier take a look at this we rally we have a rising 20-day moving
average right here nice DOI bar we rally we actually end up kind of basing and then retracing back another buy setup boom boom bam and what we have to understand guys not every buy setup is going to be perfect you're not always going to get exact exactly what we talked about in this class however just look at the overall context of what's going on this is not a perfect setup we had a bit more retracement than we wanted to however given that it's also retracing to the prior support it's an a really strong uptrend we
have a really nice Rising 20 it looks like a nice setup okay so not every buy setup is going to be perfect you have to look at the overall situation the overall context you have to look at multiple time frames okay and yeah make sure you take advantage of the setup guys and make sure you really understand everything we talked about today okay you can't have missing parts right and I'm trying to think of anything else I want to emphasize here something I really want to emphasize actually is play with the trend okay if we're
in an uptrend and several time frames are telling you that this is bullish we're in an uptrend on sever time frames we have Rising 20-day Moving averages that are trending under price right let's say that's happening on several time frames all the time frames are telling you that it's bullish that there's that there's uh buying pressure right then look for buy setups don't look for buy setups if we are in a downtrend if there is a lot of selling pressure if we have conflict on the time frames where one conflict says bullish one conflict uh
one uh or one time frame says bullish one time frame says bearish right uh one time frame is sideways don't play a buy setup in those conditions play a buy setup when everything looks bullish when we have a clear uptrend okay hope that makes sense guys thanks for the class and we're going to be talking about the sell setup in the next class which is the exact opposite of the buy setup what's going on guys hope you're having a great day we just talked about the buy setup but now we're going to be talking about
the sell setup which is the exact opposite of the buy setup except we're going to be shorting instead of going long so we're not going to spend as much time on the sell setup as we did on the buy setup since it's exactly the same concept except you know obviously it's the opposite so let's just get right into it and we'll do a quick little class Here Sell setup what is it it's the opposite of a buy setup we're going to be shorting the retracement rally right so we know how uh we have an uptrend
if we have a rally we have a dip same thing when we have a Downtrend like we drop we also have a little bit of a retracement rally it's one of the most potent strategies for day and swing trading Works in any time frame stocks crypto Forex and it's really important to just develop the skills required to recognize one and recognize um when you have a quality cell setup so guys same idea here we drop we need to correct in some way after this large drop maybe some people need to cover their shorts maybe some
people are buying it down down here in hopes that it's bottoming um but we have a retracement rally right and this is where we want to time our cell setup this is when we want to get in so we enjoy the move lower and then of course we could cover here um or um you know stick with the play and we see we have that retracement rally and we could we have another sell setup and we short it here enjoy the move lower okay we must have a downtrend in order to play the sell setup
just like we need we need an uptrend when we're buying the dip when we're you know doing a buy setup we need an established downtrend when we are trading the cell setup guys don't overthink this it's the exact same thing except that's the opposite key criteria number one um after a huge drop we need to have three or more consecutive green bars in a row with higher highs and higher lows right this high is higher than this high this high Is high is higher than this high and this high is higher than that high okay
three consecutive green bars and ideally consecutive higher highs and consecutive higher lows okay it's the same exact thing we are basically um analyzing the quality of the retracement okay same thing here guys the 20-day moving average requirement remember when we're downtrending when we're shorting we want the moving average to be trending lower and we want it to be over price trending lower and overprice so we drop from the 20-day moving average and then we retrace right back to it here okay same thing guys 40 to 60% retracement um if this retraces too much then it's
you know clearly too strong right we're trying to short we're looking for weakness if it rallies all the way up here then it's clearly not all that weak because otherwise if there was really that much selling pressure the sellers wouldn't allow there to be a retracement to here similarly um if we only retraced to right here there's still extension from the 20-day moving average and a full correction hasn't been made so we're looking to the 40 to 60% area in this case it's around 50% okay so we have a we drop 40 to 60% retracement
our entry and stop loss it's the exact opposite uh once our entry bar has formed we put our entry under the entry bar we put our stop loss over the entry bar since we are shorting so we would be entering during this red bar When it hits uh the lows of this entry bar okay and our T our Target as the previous pivot low same exact thing guys just opposite entry bars as we're aware it makes it an enhanced setup ideally we have narrow range bars or small topping Tails right before on the buy setup
we wanted bottoming Tails because a bottoming tail shows that the buyers have taken control with a topping tail it shows us the sellers have taken control which is what we want when we're shorting so we obviously want an entry bar it improves our reward to risk okay obviously here the green bars are becoming smaller um the B the buying is weakening compared to this we we have an entry bar here we don't have an entry bar there okay same thing and the exact same idea guys with an entry bar we have a tighter stop loss
we have a higher reward to risk this is why we want entry bars stop loss is at six bucks our entry is at 590 we're shorting it remember here our entry is at 560 stop loss at six bucks right same Target same stop loss different entries because we don't have an entry bar here and in this case we're risking 10 cents to make 40 cents I'm sorry we're risking 10 cents to make 50 cents in this case we're risking 40 cents to only make 20 cents okay obviously the reward to risk is a lot better
here because we have that entry bar we have a tighter stop loss and our risk to reward is a lot better okay okay Guys let's look at some examples right the 20-day move moving average is starting to curl over price and is declining now right especially it's curling over and we have a drop then we have a base we have a base breakdown here actually so we have a drop base breakdown we break down right then we have that retracement we have three or more consecutive green bars in a row we have a topping tail
right in fact we have a topping tail and a really nice small entry bar um in this case guys I know technically we're supposed to put our stop loss over the entry bars high but in this case since the topping tail is higher we're going to put our stop loss there okay we in general want the stop loss to be over the absolute highs of the cell setup right our entry would be under this bar as this bar is forming so as soon as it hits the lows we enter and the target is a previous
low beautiful beautiful sell setup um this is around I'd say 60% retracement so beautiful cell setup perfect um example of this and notice how the we it's right into the declining 20-day moving average it literally stops at the moving average this is why the mov the 20-day moving average is so important same thing here guys the 20-day moving average is dropping it's trending lower we have a huge drop three or more consecutive green bars in a row we have a you know kind of larger um a larger entry bar than we want however It's still
good we our our stop loss is right here entry right here and we actually surpass our first Target notice how it went right to the declining 20-day moving average that's when we had our drop and we actually did another one here where we rallied this is not a perfect sell setup but still entry bar entry bar and we continue lower okay hopefully that makes sense we also have higher highs on each of these green bars just really really nice setup same thing here this one's a little sloppy we have a prior support here that becomes
a a resistance for the sell setup we drop this one's a bit sloppy entry bar but nevertheless it's a sell setup right into the declining 20-day moving average it kind of went above the 20-day moving average but that's not a big deal it's never going to be perfect every time okay really nice sell setup and notice this is supposed to say sell setup but not every cell setup is perfect you have to look at the overall context of what's happening and remember guys if you're having troubles with this setup it's exactly like the buy setup
it's just the opposite you're shorting you're taking advantage of the and making money off the price moving lower a key idea here is guys remember use the 20-day moving average to your advantage and once again you're you're seeing that we're combining all of these ideas to make a to produce a really potent trading setup that has a high likelihood of success okay by combining different ideas and different elements of what we're learning in this course we're Going to be able to combine everything right and find setups that are extremely high quality and have a high
likelihood of success and high likelihood of you know making money that's what we here to do so hopefully this makes sense guys this is basically like buying the dip except you're shorting the rally right so you guys know the requirements and something I want to emphasize just like I did with the just like I did with the uh up with the buy setup class is make sure there's an established downtrend okay don't trade the cell setup if you have an uptrend don't trade the sell setup if the charts are looking bullish if the sharts the
charts are showing buying pressure look at several times frames look at the daily right look at the hourly look at the weekly maybe look at the smaller time frames such as the 155 or 1 to two minute charts and see what's going on are we bearish do we have clear selling pressure do we have a downtrend or do we have conflict on the time frames do we have some time frames looking higher some time frames looking lower some time frames maybe sideways you don't want to trade that you want to trade the sell setup when
there's clear bearishness on on multiple time frames and when you have established downtrends on multiple time frames okay that's something that's really really important and same thing with the base breakout and the the base breakdown as well I Didn't really cover it before but um you you want to trade the base breakout when you have an established uptrend on several different time frames when several different time frames are showing that it's bullish just like you want to trade the base breakdown when several different time frames are showing bearish showing that they're selling pressure If you
guys don't get the idea at this point uh definitely go back and watch my multiple time frame analysis video you guys get the idea here you want the multip you want multiple time frames to all be in agreeance and once they are and then you could start finding these setups that we're learning okay awesome guys we have now learned two different strategies right the buy setup and the breakout and the respective sell setup and base break down and boom now you guys are ready to begin trading them so maybe try to look for some on
your charts try to practice maybe come to my live streams and ask me questions about whether you found one or not but perfect make sure you guys really understand the requirements that go into the strategy anyway guys we're going to be discussing the one 123 pattern next see you there what is going on guys hope you're having a great day today we're going to be talking about another strategy that we're going to add to our trading arsenal we already talked about the breakout SL breakdown and the buy setup and sell setup but today we're going
to be talking about another type of strategy and the best way to sum up this strategy it's uh a continuation play Okay so we already discussed and looked at a diagram showing how price Corrections occur and how we take advantage of price Corrections through either buying you know after a base or through buying a pullback or you know shorting a base or shorting a retracement okay but let's talk about what happens if let's say you miss the initial breakout or you miss the buy setup right so let's say we have a breakout or let's say
we have a rally first and then we get a base we get a consolidation and of course we're looking to play the breakout right and similarly let's say we have a rally and then we get that price correction and we get a pullback okay so what happens if you miss this initial breakout and you miss this initial buy setup right let's say maybe you weren't at your trading desk maybe uh you know you're coming late to the party and you weren't able to catch the initial breakout okay the initial breakout here or the um the
buy set up here right what do what do you do right maybe you know you still want to take advantage of the play and you may ask yourself okay I missed the initial entry is there any way I could get into this position through a secondary entry okay right so maybe you missed this initial breakout but you get another opportunity here before inevitably continues higher or maybe you get an opportunity right Here to get in before it continues higher right so the whole point of this setup is to talk about the 123 pattern that's what
it's called and it's a continuation play this setup is basically trying to catch the continuation of the move it's a secondary entry okay so let's get right into what it looks like okay so the first requirement that you need for the 123 pattern is a and a bullish one two3 pattern right one where we're actually going to go long is we need a bullish wide range igniting bar first right so remember we talked about what an igniting bar is okay so we need a bullish wide range igniting bar we don't want to see a large
candle up here right or I mean a large Wick we don't want to see a large Wick or tail on this bullish igniting bar and this igniting bar the reason it's called an igniting bar bar is that it ignites the move higher right this is the first bar that is igniting the next move um so it's going to indicate the direction of the move in this case it's Tire right shouldn't have a significant topping tail we talked about that and the next bar we have here is a resting bar and this resting bar it's usually
a narrow range bar or sometimes a dogee candle okay and this resting bar has to form and stay in the top 33% of the igniting bar meaning it has to be ideally in the top third of this Candlestick you're not always going to see that sometimes the the resting bar is a little larger it's not a big deal if that's the case but ideally you know if we're just talking about the textbook The Textbook version of this pattern you want to have a resting bar that's in that's you know in the top 33% of this
igniting bar you could see this one is you know in the in the top third of this bar it doesn't matter if it's green or red or if it's if it's a dogee candle that doesn't matter and ideally you want it to form an equal or near equal high with the igniting bar meaning you want the high of this resting bar to be near the high of this igniting bar right in this case we're kind of near the high because what it ends up forming is a double top or an area of resistance okay and
the reason why we want to have an area of resistance is whenever we get the triggering bar right this is the bar that where we would actually enter this pattern right we want the trigger to happen when it breaks that resistance right and as soon as it breaks that resistance that would be confirmation that we're going to go higher and that's when we enter so you're entering above the highs of the igniting bar and the resting bar whichever one is higher right so if it's equal highs between these two bars great but let's say in
this case um the igniting bar is a little bit higher than the resting bar right you're going to place your entry above the highs of either of these two candles so whichever One is higher that's where you're going to be placing your entry and you're going to be placing your stop loss uh under the low of the resting bar okay or under the low of the triggering bar whichever one is lower right so let's say that there's a maybe a large tail maybe there's a tail here in your triggering bar you're going to be placing
it at the lows so at the lows of either the resting candle or the lows of the tri uh of the triggering bar so this isn't really hard stuff guys you have an igniting candle right then you get a resting bar a narrow range bar uh or perhaps a dogee candle and right so it's a one two and then we're on the third bar that's where we're going to be actually that's a triggering bar that's where we're actually going to be entering and placing our stop okay so let's look at the opposite the bearish setup
where we're going to actually be shorting the one 123 pattern we first have the wide range igniting bearish bar ignites the move lower it indicates the direction of the move we shouldn't have a significant tail here right we shouldn't have a significant bottoming tail right when it's a bullish wide range bar you're not going you're not supposed to have large Tails right so you you definitely don't want to have a large bottoming tail here okay so that's the igniting bar the next we have the resting bar that's forming and staying in the bottom 33% of
the igniting bar so it's has to kind of form and stay in the bottom third of this igniting bar it's Not always going to do that in trading nothing is ever really you know exactly perfect but ideally the textbook version you want to have this a resting candle being the bottom 33% of this igniting bar it doesn't matter if it's green or red and ideally you want it to form um near equal or equal lows with the igniting bar right you want the low of this bar to be near the equal or or near the
low of the igniting candle cuz that's going to create an area of support and once that support is broken during the triggering bar that's where we're replacing our entry right so the entry is going to be under the igniting bar or under the resting bar whichever one is lower so find the absolute low of the igniting bar the absolute low of the resting bar whichever one happens to be lower you're going to place your entry under that okay and you're going to short immediately when the bar goes below the no below the lows of the
igniting resting bar we just talked about that entry we just talked about that stop loss is going to go over the highs of either the resting bar or the trigger triggering bar whichever one's higher usually it's going to be over the highs of the resting candle so you're going to place your stop loss um over the highs of the resting candle right so you have a one you have a two so you have an igniting one a resting two and then the third candle is going to be our triggering bar and the 123 by the
way whether it's bullish or bearish um it could really be played on any time Frame uh yeah it it works on any time frame for crypto or stocks so you shouldn't have a problem you know beginning to uh immediately take advantage of using the setup uh so let's talk about what I meant by it's a continuation pattern okay so you guys should immediately recognize what we have here we have a rally we have a rising 20-day moving average that is under price perfect we have a rally stemming from the 20 right it's coming from the
20 perfect and and we begin to base we have our ShakeOut bar remember what does this ShakeOut bar tell us during a bullish base it gives us confirmation that the stock or the crypto is indeed higher okay it's an enhancer we talked about that uh during one of our classes so we have a bullish base at the highs and of course we have our base breakout so the initial entry for this trade is for the base breakout right this is our entry point it's over the highs of the base that's our entry that's the first
setup for this stock right but let's say you missed it you weren't able to take advantage of the entry for the base breakout maybe you know you were you weren't really confident that this stock or crypto was actually bullish and you wanted to wait for the next setup maybe that maybe that's what happened or maybe you just missed it you didn't see it but the SEC the one 12 three pattern then gives us uh an option to get into the stock or Crypto after the break out right so where then we have the igniting bar
the breakout happened right we broke out and then all of a sudden we get the resting bar we get the one two3 pattern and now you can enter over uh you know the highs of the igniting bar here enter over the highs and you put your stop loss under the resting candle and boom now you have a one two3 pattern so this is going to serve as a secondary entry into the stock or crypto in case you missed out the initial breakout okay and in general guys the igniting bar right we talked about the igniting
candle this usually has to stem from either a base or from a buy setup okay that's why it's igniting a new move right this this can't we're actually going to talk about in a second here but this can't you know you really can't have an igniting candle unless it's coming from a consolidation or a buy setup you need that right and here we have a one 123 pattern stemming from a buy setup right so let's say you have the rising 20-day moving average that is under price you have the rally you begin to pull back
you have your buy setup where your buy setup entry would be over this candle right stop loss under this candle or under the 20 we have our initial um igniting bar right the buy setup worked it triggered right our entry was right here it worked but let's Say you missed this entry or maybe you were skeptical that it was really going to work and you decided to pass on the setup then it gives you a resting bar let's say and now you're going to be able to play it as a one two three pattern where
your entry is right over these two candlesticks stop loss is under this Candlestick and that Candlestick okay so you could see that the igniting candle right it it's always it always has to stand from either a base or a pullback right cuz the igniting candle ignites a new move higher and this kind of brings me to this point look at this Candlestick is this considered a one two three pattern what we have here right we have this green bar and then we have the resting candle right and let's say we continue higher is this considered
a one two3 pattern and pause your video and really think about it okay so I'll give you guys the opportunity to do that okay and it's not right the move was already ignited a one 123 must have an igniting bar that starts the move we just talked about it right this move has already been ignited we're already up four green bars in a row before we get this one two three this is not not an igniting bar this is just I mean this is really just continuing the move higher but that's not what we want
here we want the first bar to be an igniting Candlestick it has To stem from either a buy setup you know meaning has to stem from a pullback or from a base and ignites it's really important you wouldn't believe how many questions I get about this and they'll give me an example like this and they'll be like is this a one 123 no it's not a one 123 because it's this candle is not igniting a new move higher okay so let's continue what's the benefits of this trade well number one it creates a higher reward
to risk setup right we talked about reward to risk um but you know it usually gives us a pretty tight stop loss which is really really nice we know that the tighter the stop the better reward to risk and like I said if you miss the breakout or the buy setup you could use the one 123 as a secondary entry it gives you another opportunity to take advantage of the trade and it also you know it kind of gives you confirmation the stock has already proved that it's bullish due to the successful breakout and you're
just trading the continuation of the move right this has already proved that it's bullish right we broke out we have the igniting candle this the trade is telling you hey we're bullish we're probably going to continue higher here and then you get the 1 two three and boom you can take advantage of the continuation higher okay let's look at some example here uh examples here we have the 200 day moving average it's flat and underprice perfect we actually have a buy setup here which is it's not a clean buy setup because of the 20-day moving
average right it's not under price it's kind of like moving through price but nevertheless we have a rally we have a a retracement notice how right here the 20-day moving average starts to Point higher and boom we get an igniting bar we get our resting bar and then we get our triggering bar and our entry would be over the highs of the igniting bar and the resting bar so it' be right here our stop loss would go right below the resting bar and this is a 1 two three right 1 two 3 perfect we could
see also the resting bars in the top 33% of this candle awesome let's look at another play we have a rising 20-day moving average right it's starting to curl higher we get the wide range bar we get our resting bar and then we get the triggering bar completing the one two three so you guys could see this is the definition of igniting bar right we're kind of sideways here where there's it's trendless right we're not really doing anything and we boom ignite right out of that sideways Trend and we begin to start a new trend
right so I guess you can call this a Bas it's a really sloppy base like I know I said that you T you want to have the igniting bar um stem from a base or a buy setup but some sometimes you're going to have a sideways Trend like this where you know price begins to break out of that sideways Trend with a large igniting bar I mean notice the size of this bar this bar is bigger than any other bar on this chart and that's what makes it such a strong igniting candle here we have
a resting bar it's not you know perfect Ideally this would be smaller but you know nothing's ever perfect our stop loss would go right here our entry is over the highs and we have the one we have the two and we have the triggering bar number three perfect let's look at another example this is a really pretty setup we have our wide range igniting bar uh really really bullish Candlestick right here we have our resting bar and we have our triggering bar and this was actually in the beginning of the day um I I don't
I forget which stock this was but this ignited this igniting candle um you know ignited the entire move for the entire day so we could see that off this 123 we continued higher the rest of the day we have our resting candle we have our igniting we have our triggering candle so let's say you missed the initial breakout down here you were able to capitalize because it gave you a one two three you were able to put your stop loss under the resting candle and entry over this is literally I mean this is a perfect
perfect one two three pattern right here we also have a rising 20-day moving average we have kind of a flat 200 not it's kind of trending but not a big deal all right so let's let's take a look here okay and this is a really great example of what what I what I said um the 1 123 is the best continuation pattern right we have a base right here we actually break under that base right so we have a base breakdown with this Candlestick but let's say you missed this initial entry short right it gave
You a 1 2 3 4 actually so all a 1 12 3 4 is the exact same thing exact same thing as a 123 except you're going to have two resting candles so we have our igniting candle and then we have two resting candles before we have our triggering candle that triggers under the lows of you know basically all of these preceding candles and boom you could have taken advantage of this right um You would have placed her entry right under the lows here your stop loss you can either place it up here or you
could place it over this candle uh whichever one kind of fits your risk management um I would have probably placed it over this candle just because I like the reward to risk it makes it a better reward to risk setup and we actually ended up you know having a huge tremendous drop before we formed for a sell setup right here and we had another drop so there's a lot of patterns in here we have a base breakdown short then we have a 1 12 3 4 which is like I said the same thing as a
1 123 then we continue lower we actually have a climactic buy setup reversal play which we haven't talked about that yet but we have that here uh and that's where you actually play a reversal then we have a sell setup we have a declining 20-day moving average we have the sell setup that worked and wow I mean there's a lot of lot of strategies that's in this screenshot and you could see that this 1 two 3 for 1 2 3 4 served as a secondary entry just in Case you missed this initial breakdown okay hopefully
that makes sense and that's really it guys so the 123 is not a difficult setup guys it's just a continuation play and you could just see from these examples that it's not that hard um they're pretty easy to pinpoint remember we have to have an igniting candle right um we can't have something like like this right this is not a one 123 it needs to ignite a new move higher that's the whole point and this works in any time frame and hopefully you can begin seeing one two 3s on your charts and you can begin
um applying them right and start actually trading them all right guys perfect let me know if you have any questions on that and have a great day guys what's going on guys hope you're having a great day today we're going to be talking about another trading strategy and another trading setup that you guys need to add to your Arsenal and this one is going to be focused on picking reversals it's called the exhaustion and the climactic pattern and what this strategy is all about is you know picking reversals with Precision so far with the base
breakout with the buy setup with the 123 pattern we've learned how to play with the trend right if we're in a solid uptrend we've learned how to find setups in that solid uptrend or how to find setups in that downtrend So we could push short but today we're going to be talking about how to go against the trend okay and before I hop into the presentation I want to give you guys a little diagram of exactly what I mean showing you guys this so let's go to my little drawing area okay let's say we have
a 20 day moving average that's let's say trending higher just like that let's make this moving average that's orange and let's say we have price let's make this actually yellow let's say we have price you know respecting the 20-day moving average and continuing this uptrend okay so let me just draw this real quick very good so right now and we could even make this a little flatter maybe make it more like 45° perfect okay so what we have here is a gradual uptrend we have an uptrend that it's just grinding higher and it's gradually continuing
higher okay so this isn't where we're going to find a reversal why because price is near the 20-day moving average we talked about in some of the other classes that extension means extension is when we have distance between price and the 20-day moving average and we're really going to be diving into this idea of extension during the strategy but let's say all of a sudden we talked about how the slope of the 20-day moving average matters right And you know the uh the higher the slope is the more unsustainable the move is right so right
here let's say we have what let's just call it a 45° angle and let's say all of a sudden let's make this same color yellow the 20day moving average starts to you know uh it becomes basically steeper right it starts to kind of curl even higher and and and you know making kind of a higher angle this is 45° maybe at this point this is more like 60° right and we see price start getting really extended from the 20-day move moving average to the point where there's even let's say even even higher right right and
you see that there's a ton of distance between price right let me make this a different color let's do make this like orange let's say there's a lot of difference between price up here and the 20-day moving average down here you can see this is the price that this is the distance that's representing that so what do we do up here well we don't want to play long up here right why because number one we're extended from the 20-day moving average remember we talked about we want to take entries that's at or near the you
know trending 20-day moving average we're at this point we're really far from the 20 right the other thing is we had a huge move higher and we don't want to buy at the highs so what do we do this is Actually the exact point where we're going to be trying to find a short where we have extension in this sort of acceleration so now that you guys get the general idea of what I'm talking about and how we're finding this reversal setup let's actually go into the presentation and talk about details and specific things that
we're looking for so this is called the exhaustion play you could also call it the climactic pattern and this is honestly the most potent reversal setup this is the only way to pick reversals right I think this is there's amazing idea um where Traders they just want to pick the tops they want to pick the bottoms and stocks right there's just this like idea behind it where it's just like oh you're buying it at the absolute bottom or you're shorting it at the absolute top and that ideal idea is so appealing so if you're one
of those traders who is really trying to find reversals and that's just what you're inclined to do that's just like what makes sense to you then this strategy is going to really help you with that and help help you take you know your trading to you know your training to the next level especially with the strategy so something to understand guys I think truthfully this is the most difficult trading pattern if you're a beginner I would say stay away from this pattern until you're a little bit more experienced and the reason it's the most difficult
is because your odds of success is all always greatly increased when you play with the trend you us want To be going with the trend right if the charts are saying bullish if there's an uptrend on several time frames right and everything is screaming bullish well you should play long right you should go ahead and look for buying opportunities because everything is telling you that there's a lot of buying pressure so going short in an environment where there's a lot of buying pressure that's difficult and a lot of times you're going to you know you're
going to take some trades with the with the exhaustion or climactic pattern and it's not always going to work out they have a lower likelihood of success right especially when you don't know the specific details that you need for the setup so it's it's difficult just stay away from it as a beginner and start doing it when you're a little bit more experienced I would say but it's up to you obviously so like I said you don't want to you typically don't want to play against the overall trend however you should still be equipped with
the knowledge of how to do it correctly and the thing is guys since we're trying trying to catch tops and bottoms this setup might take more than one try right like if you're finding one of these setups you might have to enter it more than once because you have a high likelihood of getting stopped out if it continues like in that direction you know what I mean and and that'll make sense in a little bit here so let's talk about the setup so first requirement is we have you know in this case this is a
climactic buy setup right or exhaustion buy set up um because we're going to be buying in this situation so number one you need A declining 20-day moving average right and ideally it's we talked about slope ideally you know the the slope is very steep with the 20-day moving average so declining it's overprice perfect acceleration so let's talk about acceleration we kind of mention acceleration and I kind of showed that idea oh where did it go did my I guess my drawings got the lead no problem um so in terms of acceleration notice here that these
red bars are becoming increasingly larger and for the climactic pattern for this pattern you need to have at least five or more red bars in a row actually let's start over here before we go onto acceleration um so yeah you need ideally five or more red bars in a row and you need five consecutive lower highs right so 1 2 3 4 five that's five red bars in a row even six actually and you could see we're making lower highs on each Red Bar those are requirements and we're going to be looking for Clear extension
and acceleration and the whole idea of the setup is we're trying to buy the stock or crypto when supply is about to run out like there's a lot of selling at this point right here we can be confident that Supply is starting to run out and that's when we're going for the long and that's when we're trying to buy it because e like there doesn't need to be a lot of demand to bring this stock or crypto up from here because if there's zero Supply if there's zero People selling it down here because they already
sold then any amount of buying pressure will bring this back up so we talked about acceleration notice how these red bars are becoming increasingly larger and larger notice that the distance between price and the 20-day moving average is becoming increasingly larger right like here there's not that much different uh distance here there's more distance here there's even more distance and all the way down here there's a lot of distance that's what I mean by acceleration the candlesticks are becoming increasingly larger so we need to see this acceleration it cannot just be a steady and gradual
decrease okay this is a really a lot of people get this wrong where they'll see a very steady and gradual downtrend and they'll try to find a reversal no you need to have this acceleration um we also talked about you know extension from the 20 these are kind of connected the acceleration the extension as is it as it's accelerating it's going to become more and more extended and the larger the distance between price and the 20-day moving average the more oversold old the stock or crypto is so if there's a lot of distance between price
and the 20-day moving average like in this scenario you could think of it as this is oversold and there's probably going to be a correction higher we also talked about volume already um or if we haven't talked about volume yet it's going to be in the next Class and you can think we also need a large volume Spike here and the volume Spike uh we talked about amateur and professional volume or igniting volume so we want to see a ton of amateur volume down here okay and so hopefully those are the three requirements there we
have acceleration that causes right the acceleration increasingly larger red bars that causes the extension from price and the 20-day moving average we have a huge volume Spike indicating a reversal and once we have one of these entry bars that we talked about we talked about that with the buy setup um once you get one of these entry bars you place your entry over the entry bar and your stop loss under the lows of the move so that's what's key it has to be under the lows of the move so let's talk about the importance of
Entry bars we already talked about this with the buy setup you guys should already know this we're looking for narrow range bars or we're looking for dogee bars or for bottoming Tails cuz remember if we get a bottoming tail right here it's suggests that what that the buyers have started taking control so an entry bar it provides us a clear entry and a clear stop loss right entries above the entry bar stop loss below it and increases our reward to risk and uh we're always going to put our stop loss under the very lows of
the drop so Which wherever the lows is of the drop that's where we're putting our stop loss so if it continues lower it'll hit our stop loss and will exit immediately let's look at the opposite this is a climactic cell setup or an exhaustion cell setup um you could see here we have a rising 20-day moving average you could see price number one we need um ideally five or more green bars in a row and five consecutive higher highs you can see we have higher highs okay five green bars in a row we're looking for
acceleration notice how the green bars are becoming increasingly larger andar larger causing extension from the 20-day moving average you can see the distance here okay obviously the larger the distance between price and the 20-day moving average the more overbought it is so if you see a lot of distance between or you see a lot of extension between price and the 20 you could assume that it's a little bit overbought and the a correction might take place and of course we have a volume Spike at the highs indicating a reversal here okay it's the same exact
thing except obviously the opposite our entry in this case would be shorting shorting under the entry bar stop loss is over the absolute highs of the move okay so you know whenever you have a huge rally like this n and you get narrow range bars or topping Tails or even bottoming Tails DOI bars small bars like this those are entry bars they Enhance the shorting opportunity it gives you a clear entry and stop stop loss obviously better reward to risk and we're always going to put the the stop loss over the highs of the of
the rally okay hopefully this makes sense for you guys now let's look at some examples and let's let's kind of check off everything we need to know here so number one number one uh do we have a rising 20-day moving average yes is the 20-day moving average is the slope increasing well you could see it's curling it's curling you can see this the slope is slowly increasing to the point where here you can could see that you know this is much greater than 45° this move is probably you know based off this moving average the
move is probably not sustainable right now looking do we have well acceleration okay well first we move up then we kind of Base then we start to grind higher grind higher until eventually we start to see some clear acceleration right the bars are becoming bigger and bigger and bigger we kind of had two little breaks with these bars but right after that we get one huge bar another huge bar and with this topping tail this was being bought before the highs was up here right so you could see clear acceleration the bars are becoming increasingly
larger there's clear acceleration right we also have extension I mean look at this point we're kind of close to the 20 we're close to the 20 we're close to the 20 until boom huge rally at some point we were all the way up here look at the distance Between price and the 20-day moving average clear extension and we also at the top right here right huge spike in amateur uh buying volume up here huge spike in volume suggesting a reversal where would our entry be in this case under this Candlestick that would be entry and
then stop loss up here okay we also get a topping tail by the way which shows that the sellers have taken control let's look at another example here we have we started from the 20 huge rally higher right um this might have even gotten halted because we have a gap here um oh yeah by the way guys for this setup the target is always the 20-day moving average so this would be the that this is Target be the the bars are becoming increasingly larger this is not a perfect setup but I kind of want to
show you guys you know not the best setup just to show you guys that you know you don't need a perfect setup like this to play this pattern entry is right here stop loss is over the highs um we have the extension as well so nice uh this is a really really beautiful setup here so let's take a look at it you could see move starts from the declining 20-day moving average you can see the 20-day moving average is curling starting to curl lower and lower and lower and lower right and we drop we Kind
of Base here we drop again little retracement we start to drop base and all of a sudden you could see the acceleration right here really starting where we really accelerated right you can see the bars are becoming larger and larger we don't get the volume Spike so in this case we didn't get the volume Spike that doesn't mean that this is not a good pattern just because we don't get the volume Spike everything else the acceleration the extension from the 20-day moving average it was telling us that it was climactic and it was exhausted and
the reason it's called exhausted right the reason I say exhausted is because in this case the sellers have been exhausted in this case the buyers have been exhausted up here there's no more demand up here causing it the sellers to bring it down here there's no more Supply causing the buyers to bring it all the way back up to the 20-day moving average is Target entries over the highs stop loss under the lows let's look at another example we have a so guys what if you guys are looking at this you should immediately be able
to identify the the the setup that this is stemming from this is a a breakout right we have a rising 20-day moving average that's curling under price we base into the moving average we start to break out we start to get the acceleration right huge volume Spike up here showing amateur buy volume and then professional igniting volume right because we that that's when we started To move lower we have distance between price or price and the 20-day moving average right uh there's clear acceleration really nice shorting opportunity these are uh incorrect this should say stop
loss this should say entry okay and that's our Target same thing here guys clear we have a basee breakdown curling 20-day moving average pointing lower really nice breakdown here huge drop right we see clear acceleration there's clear extension from the 20 in price we get a bottoming tail suggesting the buyers have taken control the 20-day moving average is our first Target huge volume spikes up here showing a reversal this is a really really nice setup here we play it long entry here stop loss here uh let's look at I think you guys have seen this
before in our other classes several setups here we have a uh breakdown right under this base breakdown with a 1 two 3 4 pattern 1 2 3 4 setup we drop clear acceleration clear extension huge volume Spike indicating a reversal first Target is 20-day moving average and this actually formed a sell setup okay this formed a sell setup and then we ended up going lower okay same thing Here um what happened here is um we have a rising 20-day moving average we kind the acceleration wasn't very clear but it is sort of climactic because the
20-day moving average started you know the slope was pretty huge rallied we got a double top making a higher low right here and boom nice setup here as well same thing here we dropped into the 200 day moving average in this case on large volume okay reversal setup boom so guys let's talk about multiple time frames for the setup using multiple time frames is key and why is it Key Well if you don't have a clear entry on the time frame you're looking at you should shift to a lower time frame and you can even
go down to the one or two minute charts for a potential entry okay so let's kind of talk about this let's and let's let's go to a an example uh let's look at uh let's look at this example you might be saying to yourself hey you know I understand this setup the one thing I don't understand is we talked about entry bars right how we want entry bars but on a lot of these setups like for example this is not a great entry bar this is a huge topping tail right if our entry is over
here and our stop loss is over all the way up here that's a huge stop size and you might be thinking there's no entry bar here like there's a topping tail but this is not a small bar like this so in Those scenarios let's say we're looking at the 15minute chart here right this is the 15-minute chart if you see something like this on the 15-minute chart and you're saying to yourself I I I want to play this but I need a better entry bar what you would do is you would drop to the 5
minute time frame or the one minute time frame or the 2minute time frame and see if you can spot a potential entry bar and then you know play the setup off the lower time frames wherever you could find an entry bar however always place your stop loss over the absolute highs or uh absolute lows of the move hopefully that makes sense though right so let's take a look at this example you can see we don't have an entry bar right our entries here stop loss is here but in this case go to a smaller time
frame and see if you could spot an entry bar off the lower time frame okay and if you can't then you're just going and you really still like the setup despite it having not having an entry bar then you're going to have to just have a larger stop loss than you want to um you could even just sometimes when they move really fast and I can't find an entry bar I'll I'll just short it right here right and I'll just place my stop loss above the highs right like you could even do that and it's
technically not a textbook but let's say it's over you're over here you could just and you think it's this is the reversal is coming just Buy it calculate your risk make sure you're not risking too much buy it wherever and just place your stop loss under underneath the lows and if it hits the lows and continues lower well you're going to be already out of the position okay so you could do that as well same thing here we have a large large entry bar go to the smaller time frames and try to find a better
entry bar a better uh you know entry into the trade okay so hopefully that makes sense and looking at the climactic and exhaust exhaustion pattern um something to note here if the daily chart and the interest day charts are both climactic meaning let's say on the daily chart you also see that there's clear extension there's clear acceleration right and on the on the uh lower time frames right like for example on the 15-minute chart or on the hourly chart you're also seeing that it's uh that there's acceleration we have extension right and if both the
daily and the intraday time frames are both exhausted and climactic that makes a much more potent setup right because all of the time frames are climactic all of them are exhausted and that setup has a much higher likelihood of working out okay hopefully that makes sense hopefully you guys understand what what I mean about the multiple time frames um I'm trying to think if there's anything else I want to mention with this setup so yeah guys this is a difficult setup but it's really not that hard if you think about it there's not that many
you know requirements we need we Need acceleration that's pretty easy extension pretty easy as well just distance um and yeah and just make sure you're following all these qualities make sure you're looking at several time frames um don't make the mistake of just finding um a gradual uptrend and just shorting that that's not correct you need that extension you need that acceleration you need you know hope ideally you also need the volume Spike as well this can work on the smaller time frames for scalps as well for one or two minute time frames if you're
scalping or five minute so this works for scalping swing trading whatever doesn't matter I will say one thing guys um before I forget and there was this example um so I see this mistake a lot let's say you have a climactic move that we have that acceleration we have that extension right usually the first sell setups after that move right we drop remember a sell setup is when we retrace back to the 20-day moving average right and then we short it again usually whenever you have a cell setup after a huge drop like this they
usually never work okay so let me kind of paint that out on on here real quick let's say we have a huge drop climactic drop and then we retrace this shorting this position right here Right doesn't work don't do this it works right here but this is an anomaly it usually never works okay so if we have that climactic drop right we have that acceleration that extension the volume Spike that we talked about it's a clear climactic pattern and you buy it let's say down here right right remember our first Target is the 20-day moving
average so let's change this color let's make this white let's say you know it got to the 20-day moving average uh I know it's kind of sloppy but that's the 20 right and you you took profits off this long you bought it here and you took profits there don't short it right because this rarely ends up continuing lower it this usually fails and let me show you what what that looks like going long let's say you have a climactic long right where huge increase some you know we have literally picture of this picture of this
right we have that here okay and you decide to short it up here right you you're shorting it up here and it drops in your favor right and remember the target is what the 20-day the target is a 20-day moving average so let's say that's white and you go and you you know remember that that's where our Target is Too the 20-day moving average you took profits right there this is technically a buy setup right because we're retracing to the rising 20day moving average this doesn't work this buy setup after a climactic move does not
work right you could see it here we had a climactic move higher we dropped we retraced right technically to the 20-day moving average the first buy setup after a climactic rally usually doesn't work you could see tried to move up and it failed okay um let's see if we could find another so this is an anomaly it working here let me see if I can find another example like here right we have a this is technically a sell setup right we buy it down here right climactic retraced to the 20-day moving average this is a
sell setup you could see the sell setup did not work we ended up continuing higher same thing right here a lot of people are going to go ahead and buy this and be like okay we have a rally we have a pull back into the rising 20 this is a buy setup but remember buy setups after climactic moves like this where we have that extension they never work and this never and this ended up failing okay say same thing here technically over right here is a buy setup these don't work don't so in summary after
a climactic rally where after you know exhaustion or climactic Rally or a climactic or exhausted drop and we get that retracement to the 20-day moving average here or the 20-day moving average here this sell setup doesn't work and this buy setup never works so never take buy or sell setups after exhausted or climactic patterns okay that's basically the last point I wanted to make now you guys should be able to also play reversal patterns and understand what to look for specifically remember multiple time frames is key and that's basically all I wanted to talk about
guys so thanks see you in the next class what is going on guys glad that you've made it to this section of the course and today we're going to be talking about multiple time frame analysis and I've mentioned this in previous classes the importance of using several different time frames while you're trading and that is an extremely important Concept in fact I will say that it is probably one of the biggest beginner mistakes that I see is that Traders are not using multiple time frames when they're analyzing a specific stock or crypto they're only using
one time frame and then they're making bad decisions from it because they're not considering the overall context overall landscape of what's going on with that stock right so let me turn off my camera here and we're going to get into multiple time frame analysis so key concept here guys like I said like I just mentioned not checking Multiple time frames when you're trading one of the largest largest beginner mistakes you can do you are literally trading blindly if you're only considering one time frame prior to taking a trade you really are and the probabilities of
a trade working in your favor significantly increases when there is multiple time frame alignment when several time frames are all saying the same thing about a stock or a crypto that's when you could look to take advantage of a potential move either higher or lower and you don't want to take trades where there is a conflict between the time frames right so let's kind of talk about that so what is multiple time frame alignment it means it's when you know several time frames are aligned they're all saying the same thing they're either all saying that
it's bullish or they're all saying that it's bearish or they're all saying that oh there's no momentum it's actually a sideways Trend okay so let's go over one example here the daily chart is bullish it's up trending and the 20-day moving average average is trending higher and is under price the hourly chart is also bullish with a rising 20 ma under Price Right the 15minute and the 5 minute are also both very bullish with Rising 20-day moving averages and the 15-minute chart also has a breakout pattern which we haven't learned about that yet but uh
we will learn about that so it also has a beautiful breakout pattern right so let's compare This example to example number two where the same thing the daily chart is bullish it's up trending the 20 ma is rising and uh trending under price however the hourly chart has a declining 20-day moving average that's curling over price right and remember when it's declining and when it's curling overpriced that suggests you know bearishness it suggests that prices are going to go lower the 15-minute chart is sideways and has a flat 20-day moving average and remember when it's
flat that means it's trendless there's lack of momentum and the 5-minute chart however looks bullish with a trending 20-day moving average that's underprice which trade has a higher probability of succeeding right the example one where every single time frame you know doesn't matter if it's the larger time frames such as you know going at the uh daily or hourly chart or the lower time frames that's the 15 minute or 5 minute chart all of them are screaming bullish all of them are the you know are giving you the same information that the stock or crypto
looks higher or are you going to choose example two where you have one time frame showing higher another time frame showing lower one time frame showing that there there's no momentum at all and then this time frame saying that it's higher right you could see that there's we don't have multiple time from alignment in example two and we obviously we would prefer seeing example One so you can quickly see the importance of having multiple time frames all giving you the same information and here we have a great example of uh of conflict between the time
frames right we have different time frames telling us different different uh types of information okay so obviously example one has the higher probability of succeeding so let's talk about what time frames you should actually be looking at and we're going to be talking about crypto uh day trading first so something to note crypto markets are 24-hour markets meaning they don't close they operate on a 24-hour schedule there's always buying and selling in the crypto markets so step one always check the higher time frames meaning the daily and the weekly charts to see the overall context
on how the how the crypto trading you're looking at the lar larger term or longer term Trend right step two you're going to move on to the hourly chart see what's going on there and then step three you're going to go to the five and 15 minute charts and if you're scalping which is taking really really short trades really quick trades then you're going to be looking at the one or two 2 minute charts so the point is here guys we're starting at the larger time frames and we're moving to the smaller time frames right
we're seeing what are the larger time frames telling me and then we're going to go to the smaller time frames and see if those time frames are telling you the same thing and if we could potentially find a Strate a strategy or an entry okay so hopefully hopefully that makes sense for stock day trading um it's a little bit different because the stock market in the US equities Market is open from 9:30 a.m. to 400 p.m. Eastern and that's eastern time okay so as a result of that there are going to be price gaps that
occur and we're going to be talking about price gaps a little bit later but just know that in the US equities Market you know it opens and closes at a specific time okay so step one what you're going to be doing is always look look at the daily chart first to see if the stock is gapping and for overall context on how the stock is moving so once again we're starting at the larger time frames then you're going to move to the hourly chart for further context to see if you can get any information from
that to see if the hourly chart um aligns with the daily chart that we did in step one and while you're you know keeping an eye on the larger uh on the higher time frames and this is of course Eastern Time Zone from 9:30 to 10:00 a.m. you want to be looking at the 1 to 2 minute charts from 10:00 a.m. to 11:30 a.m. you're going to want to be looking at the 2 minute and the 5 minute charts and from 11:30 a.m. to 400 p.m. you want to be looking at the 5 minute and
15minute charts okay so just write this down and keep these time frames in mind but even if you're trading at let's say 2 pm and You're looking at the five and 15 minute charts you want to always have a look at the daily chart to see if it's gapping and what's going on with the daily chart right what overall trend is is seen and you know how is it trading for crypto and stock swing trading you number one you you're going to want to look at the daily chart and the weekly chart okay and identify
potential setups so go to the Daily and the weekly chart see what's going on see how it's overall trending try to find specific setups and step two then look at the hourly to find potential entries so once you found the strategy or the setup that you're playing on The Daily or the weekly chart then go to the hourly to find some potential entries so you can take advantage okay so main time frames are the hourly daily and weekly charts okay so now we're going to practice now we're going to analyze some more stocks and crypto
for you guys so you guys can get the hang of hang of it on how to of how to practice multiple time frame alignment and we're going to be kind of showing you what it looks like when multiple time frames are aligned and what it looks like when we actually have conflict between the between the different time frames okay so hopefully this all makes sense guys this is a this is a very very important topic okay so make sure just please make sure you're always looking at different time frames Okay and just follow the framework
that I set always start at the larger time frames and then move to the lower time frames and when you have the larger time frame saying uh bullish and then you have the smaller time frame saying bullish and the 20-day moving average looks good and the 200 day moving average looks good and you have an actual playable pattern which we're going to learn about soon then you could actually take the trade and make some money off of it but you could see the multiple time frame alignment part of it is key it's crucial that all
of the time frames are telling you the same information it increases the likelihood of success for that trade all right guys we're going to do a practice session next so see you then and we're going to actually uh you know learn how to do this not just in theory but in practice as well so thanks guys what's going on guys hope you're having a great day and today we are going to be talking about another tool that I use on my charts okay we already talked about the 20-day moving average we talked about the 200
100 day moving average and we talked about how to read candlesticks but I also use another very important tool and that's called volume okay and a lot of people kind of overhype the utility of volume they say that all you know they kind of come to these random conclusions about what's going on with the stock or crypto based on volume well or they'll say oh because we see a volume Spike this this and this Is going to happen and most of what you're going to hear about volume out there is complete nonsense okay but I'm
going to give you guys the actual way you could use volume to your advantage and the situations where volume is actually pretty useful okay and by the way guys before I start the class I just want to tell you a lot of what I'm teaching doesn't only apply to volume this is stuff I've learned through experience okay so you might catch me throughout this class kind of citing specific instances of you know different things that have happened to me when with volume and it's very experience-based okay this isn't stuff that I'm just finding on Google
okay this is stuff that I've actually gone through through you know taking on thousands of Trades and through my years of experience so how can volume be a powerful tool and there's there's really only a couple ways you could use volume and what is volume in the first place it shows you how much a stock or a crypto is being bought or sold it's showing you how many shares are being B bought or sold okay and volume is one of the primary ways of predicting price reversals okay and using volume will greatly increase the accuracy
of picking tops and bottoms with Precision okay there's this really interesting idea of finding tops and finding bottoms right where you're buying at the absolute lows Or you're shorting at the absolute highs a lot of people want to do that and if you're one of those Traders where you just have uh you know Affinity towards finding those type of reversal plays you're going to be using volume and looking at volume a lot all right and another thing that you know another uh you know way you could use volume is that it can indicate when a
move usually it's a rally or a drop in price when it's beginning ending or continuing okay and we're going to get into that so first I want to kind of classify different uh I guess you could say different um versions of volume I guess that's the best way to put it so the first classification is amateur by volume okay where let's say we have a multi- move move or a multi bar bar move towards the upside where we have 1 2 3 4 5 we have five green bars in a row and we start to
get a spike in volume towards the end of the move right towards um like after you see the five green bars in a row and you get a huge spike in volume that suggests that that is the end of that move and a reversal might take place okay and you can think of this increase and this spike in volume and the re you can think of it as the last group of Buyers who have finally bought the stock or crypto and that stock or crypto is running out of Demand right you could see that they
green candlesticks and the reason we call it amateur volume and you know specifically amateur buy volume is because what do the amateurs want to do what do the novice Traders want to do right they hate missing out on moves when they see a stock or a crypto go up 1 2 three four green bars in a row right what do they do they're like oh my God I don't want to miss out on this rally this this stock or crypto is going to continue higher I don't want to miss out and what do they do
they start buying at the highs right that's what amateurs and you know people who really don't do this professionally that's what they do they buy at the highs and they sell at the lows losing money so you could think of it these candlesticks this is amateur volume these are the amateur traders who are buying it at the highs with the fear that they're going to miss out on this move but they already missed out on the move right the professionals are buying it down here before the move right the amateurs are the ones that are
buying it at the highs right so you could think of this as the last group of buyers they're finally getting into the stock and this is really also effective when this rally is right into resistance if this rally is directly into a resistance level it's much more potent right if you see this amateur buy volume it suggests that we're probably you know going to see a reversal here and like I said think of It as novice or beginner Traders finally buying their position they saw the move already go up without them they're finally buying the
position up here when they you know when the professionals are actually selling it up here right someone you know someone is selling um their shares or their coins right right their crypto coins to these amateurs and those are the professionals the professionals are buying it down here and they're selling their shares or their coins to the amateurs up here and you could see that that's when we get the uh sharp reversal lower right so let's continue we also have amateur cell volume where let's say we have a multi- bar multi- Red Bar move lower and
we start to get that amateur volume uh you could you could you know this spike in volume at the end of the move suggests that a reversal might take place and you could think of this as the last group of sellers who have finally sold their stock or their crypto and the stock is running out of Supply or the crypto is running out of Supply okay and it's very effective if this uh if this is actually kind of dropping into support and we also get that amateur buy volume with you know multi multi uh red
bars lower okay and think of it as novice or beginner Traders they're finally selling it right they were these beginner Traders these amateurs they were down on their positions here right they were losing money here but then they see the Stock or the crypto continue going lower continue going lower and their losses are increasing they're increasing inreasing they're increasing until eventually they can't stomach right that huge loss and they're like you know what I'm going to exit the position and as soon as they're exiting the position right they're selling their shares to the professionals who
are buying it down here okay hopefully that makes sense and that's why we get that sharp reversal higher okay so quick summary guys if you have several green bars in a row or several red bars in a row and you get a huge volume Spike um towards the end of that huge move higher probably means that you're going to get a reversal right and these are the amateurs who are buying it at the top right because they they have the fear of missing out on the move but remember we're trying to be professional Traders we're
the ones who are either shorting it up here or selling our positions that we bought down here okay same thing with amateur cell volume uh maybe the people who right they're lose they're they're taking big losses on their position it's dropping it's dropping and dropping they can't stomach their losses they end up selling it down here and those are the last you know group of Sellers and then we get a pop higher okay um so another um version of volume it's called igniting or classification of volume is it's called ignite in volume right and We
talked about an igniting wide range bar an igniting wide range Candlestick we already talked about that okay so what you want what you guys want to do is couple the wide range igniting Candlestick with igniting volume okay so this volume is igniting a brand new move or Direction the professionals they don't enter a stock at the end of the move they enter at the beginning we talked about this the professionals they're not buying it up here they're exiting here and if if anything they're shorting it up here they're not selling it down here right if
anything they're buying it down here okay and so it makes sense right the professionals they're entering at the beginning and this is also a very potent reversal signal where you're often going to see amateur volume right followed by a igniting volume right so this is amateur volume right here where the sellers are trying to get out of their position and the professionals start buying it here and this ignites the move higher the reversal higher there's also something called continuation volume and this really only applies to a base right so we already learned about the base
breakout or the base breakdown okay so this is something that you want to uh combine with the base breakout where let's say you have a Rally higher right you have pretty high volume during the rally and then you start to get a base right you start to get a base what you want to see during that base is very low volume it indicates that there's not that much selling pressure so when the stock does have a breakout and that igniting volume it's it's more likely to succeed right so you don't want to see high volume
during a base you want to see very low volume during a base cuz that is continuation volume and then when the stock breaks out over the highs of the base that's when you want to see igniting volume and this igniting volume it Sparks a new move higher after you haven't really had any volume or any buying and selling at all during the base okay hopefully that makes sense so if you have a base you want to have low volume when you have that breakout you want it to you want it to have igniting volume okay
uh we already talked about the ShakeOut bar uh but let's kind of talk about it again why not so what happens when a stock attempts to break down from a bullish base on large volume and fails to break down right so you can combine volume with the ShakeOut where you have a base with low volume all of a sudden you get that ShakeOut bar right this bottoming tail it triggers everyone's stop losses we get that drop right we have large volume during the ShakeOut and then it comes right back to the highs to finish here
and then we continue basing and then we have the real breakout where we have huge Igniting volume okay why is it called a ShakeOut most people who are in their long positions who are expecting the rally to continue higher they're placing their stop losses under the base right when the stock attempts to break down the stop losses are hit propelling the stock lower right all the sell orders those stop losses are hit it causes an influx of selling the stock or crypto drops and if the stock is still able to get bought in return all
the way back up to the highs then there's clear confirmation that we're going to continue higher we already talked about this guys but this is kind of a reminder so it's okay to see large volume during a ShakeOut before we have the igniting volume during the actual breakout uh let's also talk about um potential reversals when we're looking at a base so this is something I can guarantee you you're not going to learn anywhere else there's really I don't I would highly doubt there's any other course in existence that teaches this very topic because this
is something I personally learned this is something that over over the years I saw this so often that it's almost it's almost become just like its own trading strategy almost right so if you have a base right we have a a rally we have a base we're setting up for a base breakout right that's you're looking at it you want to play it as a breakout and you have a sudden volume Spike that does not lead to a breakout this can be indicative that a stock or the crypto Will reverse in price and this usually
applies more to intraday trading meaning the smaller time frames right so we know about we want to see igniting volume during the breakout right when we actually make the move higher we want igniting volume but let's say we all of a sudden get igniting volume we get that volume huge volume Spike and you're seeing hey this this stock or this crypto it's not breaking out what's going on here when you see something like that you should be very cautious cuz it usually means that we're going to actually end up getting a reversal because right if
this is a volume Spike if this is igniting volume these are people buyers they're trying to get in and buy the cry stock or crypto and Propel it higher right and if this is buying pressure it's a green volume Spike and it doesn't go higher well why right like there has to be something going on and just be cautious it usually ends up leading to a um reversal so if you're if you're in a position right and all of a sudden you see a huge volume Spike and the stock isn't going in your favor it
probably means it's about to go against you okay so keep that in mind um so let's now talk about breakout and breakdown failures if you have let's say a base breakout right you have a rally and you're you're basing you're trying to go for the breakout let's say you get the breakout Right it hits your entry you're in the position it breaks out okay and you get that igniting volume but let's say this igniting volume doesn't leave lead to a continuation move higher and in fact you end up failing and you end up starting you
end up getting a red bar that's going lower right with a huge volume spike it it basically confirms that this is a failed breakout if you get a rally and then a sudden drop right like let's say you're in it it goes up and then it drops against you on huge volume then you should maybe immediately exit that position and maybe even play it short okay it's considered a failed breakout and it suggests that the prices are going to actually continue lower so just just understand that if you're if you're in a position and it
breaks out on igniting volume but then immediately starts to drop and come back in also on huge volume it suggests that that's a breakout failure and get out of the position okay so a lot of the times you can pinpoint uh failures by just looking at volume and let's say all of a sudden um you know we have a huge a huge volume Spike and then it starts going against you in huge volume you can maybe exit before it hits your stop loss right because then you're like oh this is a breakout failure let me
get out okay so let's look at some examples here uh on how we could use volume right you could see that uh we dropped right into the 200 day moving average we know that that acts as a floor acts as support for our stock crypto we drop oh boom we got a volume Spike right here this led to a reversal right all of a sudden in here check this out this volume Spike correlated with this reversal we drop right we don't really have a rever uh any volume reversal here okay it's not going to happen
every time then we drop we uh we rally again on large volume we start to get a big volume Spike right we drop it's not too prevalent here I think this is the best example because we actually have a multi bar move lower like here it's it's green bar Red Bar we have a bunch of dogee candles there's not that much momentum here but here're we're getting you know huge red bars in a row and you could see that you could see the clear amateur volume and the clear igniting or professional volume right we drop
right we're getting that big amateur volume all the people they're finally selling their position after they took a huge loss and then boom we have an igniting move higher we have ignite on green volume and boom we continue higher so you could see how this is really you know it's it's really hand it comes in handy when you're picking reversals let's look at another example we have a large move lower right aside from this green bar this is all straight red bars in a row we drop hard huge volume Spike we reverse right right here
huge volume Spike we end up dropping um I think it's really Prevalent here right we have a huge 1 2 3 4 five five red bars in a row with with we also have a bottoming tail here which suggests that this was you know this was selling off at some point we were all the way we were you know selling off to down here before the buyers started coming in right so we made a huge drop on huge volume right so notice that whenever you're seeing huge huge volume right you could see this is much
uh greater than any other volume that we've had here drops huge volume that's when we get the reversal right and you could see these red this red volume that's amateur volume and then you can see the green volume that's sparking the new move higher those are the professionals buying down here so look at another example I mean this is perfect we have a huge move lower we have a double bottom we have a bottoming tail on huge volume we get the reversal so we didn't really get amateur buy volume here or amateur volume we kind
of did maybe with this candle but we get a lot lot of igniting volume that ignites the new move higher same thing here we drop huge spike in volume and ignites this move higher okay um so let's let's go over the example where we talked about continuation volume and igniting volume notice we have a rising 20-day moving average we have a really tight base beautiful base that's a based right into the 20-day moving average uh as it's rising we get that breakout notice how during this base look how low the volume is it's Beautiful and
then boom we break out on huge volume and we continue higher Sparks this new move higher beautiful so look at another example let's let's not only talk about volume there's a bunch of stuff stuff to talk about here Rising 20-day moving average that's under price check mark right here we have huge volume igniting this move right we end up getting a pullback and we get a buy setup right we get a buy setup right here um it's right at the 20-day moving average really nice buy setup right we have one two three red bars in
a row um kind of a deep retracement but it's right to the 20-day moving average really nice entry bar we rally to resistance right cuz the previous highs is resistance we start to base at resistance and where do we base into we base right into the 20-day moving average the rising 20-day moving average beautiful with continuation volume um you know really really low volume um and then we get that huge spike in volume during the breakout right we continue higher and then we get a buy setup right here right pullback pattern beautiful right to the
20-day moving average dogee candle really small entry bar really nice risk uh reward to risk rally Everything Is Beautiful about this chart let's look at another example here this is actually a gap up so this happens with stocks we'll talk about that later but you could see right we're kind of down here we're we're we're kind of just sideways down here we get a gap up and a huge volume and this is Professional volume right this is these are these are the professional starting the new move higher it gapped right to the 200 day moving
average and ignited a new move higher another example we get a drop it ignites a new move lower you could see huge volume Spike okay so some that I really want to emphasize here guys is like I said volume is really useful for reversals especially when it's a you know when you get a huge move like for example you get a huge drop that a big volume Spike usually means we're going up right huge drop volume Spike usually means we're going up same thing right here I mean this is a perfect example huge drop me
1 2 3 4 five red bars in a row nice amateur volume and then boom we get a igniting volume volume um so notice how sharp increases in volume during major sell-offs or rallies lead to sharp reversals as well okay and if you guys have noticed especially looking at this chart right you're starting to notice how we're putting everything together in this course we're putting the 20-day moving average right we're combining it with the strategies we've learned we're combining it with volume we've we're combining it with the 200 day moving average we're combining it with
reward to risk okay so towards the end of the course I'm going to try to give you guys more practical kind of tests or practical uh quizzes on this stuff but yeah volume very very useful guys um hope you guys kind of understand the theory behind amateur volume and igniting volume um this is important stuff here but just understand that it's Mostly used for reversals and if you have a base make you want to see a base on very low volume okay guys hopefully that makes sense have a good day guys this was a great
class see you all right today we are talking about support and resistance lines and as Traders I'm sure you have heard plenty and seen plenty about support and resistance and how you could potentially use it to your advantage however during this class I'm going to be teaching you exactly how I use support and resistance and some of the theory that you need to understand before actually applying it to your trading okay so what is actually support what does it mean so support can be defined as a price level or area or you could think of
it as a price Zone where historical price action has shown that in that area there's way more demand than Supply so in other words in that area there are way more buyers than there are sellers okay and when a stock actually hits support you can either buy it or you can either Look to You Know buy it or you can even look to short it you know using support and we're going to be looking at both of those examples so the key thing about support is that you in resistance as a matter of fact is
that we have to make sure that price is actually retesting that support level so looking at this we have one rally okay And as we are dropping down price actually retests this support and then rallies from there as well okay so as soon as we have two tests of support where both you know both tests actually rallied from that support level then we could actually use and uh trust that support level okay so that's what we need we need two tests of a support or resistance level before we can actually trust that it's actually serving
as resistance or support supports and this is an example of buying using support where a price level actually or Price touches the support level you could look to purchase it right obviously this is a super basic understanding of it you know if it hits a support we're going to buy there's obviously other uh strategies other factors that we're going to use as well um in order to justify actually buying it at support but I think and I think the number one mistake people make using support and resistance levels is that they solely base their decisions
their entries their exits off support and resistance and I think that's a mistake I think using support you know you have to use support and resistance to your advantage but that shouldn't be the only uh you know indicators the only factors in trading that you're looking at and that's what Traders do they they tend to just use support and resistance to base their entries off of you kind of have to use support and resistance with The other Knowledge and Skills that you possess in trading and when you combine you know you know the other strategies
you know with support and resistance that's when you can make you know a lot more higher quality decisions so don't just use support and resistance use it alongside the other strategies you're going to learn in this course okay so this is one example where you could buy using support where a retest the support you can look to purchase it an example example of actually shorting it support is let's say we have a you know huge drop and we start to kind of Base kind of consolidate at this level we can kind of think of the
top of the base as resistance and the bottom of the base as support and whenever you know it actually breaks the support level we could actually look to short it right and because breaking support suggests that there are now more sellers than buyers right because during this support level we could see that during you know in that area it keeps getting bought right like once price touches that zone it gets bought but right when price decides that okay you know once it actually tears through that support it suggests that okay there are no more buyers
left right the sellers are really dominating like there's way more sellers and buyers now in that zone so we're going to actually look to short it and make money as it continues to fall okay so you can either you know you could use support to either buy or short in this case we're buying it when it retests the support in this case we're shorting it when price uh you Know goes through support okay and I'm not saying that you should be buying whenever we do have a retest or shorting every time it breaks support these
are just two ways you can actually play support okay and you might be thinking okay then how what you know when do we know when to short how do we know when to buy well that's when we combine the other strategies that we know in this course such as you know such as the some of the skills we took from the breakout or breakdown or the buy setup or sell setup and the other knowledge that we've learned in this course level two as well okay so let's continue on and we're going to be talking about
resistance okay so resistance is a price level or area or Zone where historical price action has indicated that there's actually way more Supply than demand when price actually reaches that point so in other words there are way more sellers at that point than buyers right and once again you could either buy or short using resistance so for example you could look to sell your position at resistance let's say you bought it down here you could look to sell your you know you you bought it at support you could look to sell it at resistance or
let's say hits a resistance level you could also look to short it right and you have to make sure there's two tests right price test the resistance level twice before we could actually uh determine that it's uh it's a viable resistance level okay hope that makes Sense and this is another way where we can let's say we have a huge rally and then we begin have a consolidation the bottom of the consolidation can be looked at as support the top of the consolidation could be looked at as resistance and we're going to purchase it right
purchase when price actually breaks the resistance level okay because it suggests that now there's way more buyers than sellers at that resistance point right we had a lot of selling pressure when price hit that resistance before but now that selling pressure has seemed to disappear it's no longer there and that's when we actually buy it because now we have confirmation that there are actually way more buyers than Sellers and you can kind of pair this right away using uh the breakout method right this is a breakout we are playing above the cons validation so you
can kind of see how res you know support and resistance can help you with your breakouts and breakdowns and how they kind of relate to one another okay now looking at another example when let's say we actually have an uptrend right so let's say we have a rally and then we have a pullback that high the previous rally high right here is now going to serve as resistance right so now this is resistance okay and then let's say we you know from there we also continue we have a pullback right and then we break the
resistance we continue to Rally okay and we begin to actually pull back again what we want to see is we want to see This prior resistance from here right this prior resistance now turn into this pullbacks support right so here the resistance level right this resistance level from this high is is now turning into the support for this low right so this resistance is becoming this support now so this is really what we kind of want to see during um during uptrends okay so exactly like I mentioned this is this resistance level it turns into
this pullbacks support and during these retracements right like this pullback is technically called the retracement we want it to retrace 40 to 60% of the prior rally right so we have this rally we want this retracement to be you know we want it to retrace 40 to 60% of this rally which it has I mean this kind of retraced around I would say probably probably right around 50% okay and we want to see that retracement be between 40 to 60% we don't want to see deep retracements we also don't want to see super shallow retracements
okay and we kind of talked about that during the buy setup classes okay and right and the whole idea of this turning you know this resistance now turning into support is that we want price to actually retrace to the prior resistance level which is now being considered as support right we want this we want price to retrace to this resistance and once it does retrace and respects that resistance it be it becomes support same thing here we have a rally right we have this prior Resistance and we have we retrace back to that prior resistance
now therefore Mak making its support and we rally again so this is something we want to see this um during uptrends or downtrends right we want to see the prior we want to see retracements that retrace to the prior resistance okay just like and we're going to examine a downtrend as well right where we have you know we have a drop then we have a we kind of have a retracement here a rally higher and this support level right this support level right here is now becoming you know this retracement uh resistance level so this
support here right is now becoming resistance for when this stock you know after this drop it's going to become resistance for um for this retracement or this rally higher right so it's the same thing this support level becomes resistance here and we want price to retrace to the prior support level right this was the prior support level we want it to retrace to the prior support level here and now it will it's turning into resistance we also like I said just like uh same thing we wanted 40 to 60% retracement right this this is a
drop we wanted to retrace 40 to 60% of this drop right straight to this new resistance level which was the prior support okay and it's basically the same idea this is what we want to see during a downtrend we want to see retracements to the prior support which is defined by you know this low right same thing here we have a drop right and then the Retracement and the retracement it it goes right into the prior support level which is now resistance okay hope that makes sense and we are actually going to head into the
conclusion here so support and resistance is a very important tool and resource that you can use to benefit your trading right and what we should do is combine support and resistance with other strategies with the other information that we are learning in this course and a huge mistake Traders make is that they solely trade and rely off support and resistance levels right they they only use them which is foolish right support and resistance is incredibly useful when we actually pair it with other strategies that's the key that's the key here we're pairing it with other
strategies we're not just using it by itself okay we should not be trading anything in a vacuum we shouldn't be using one piece of information we should be using a collection of different factors different strategies that we're learning in this course and once you know using that collection of strategies we're able to make a lot more higher quality decisions a lot more higher quality trades so please use support and resistance to your advantage but don't solely use it and and you should be right combining sport resistance knowledge with other strategies for the best results and
I'm going to include a video next actually looking at stocks in practice looking at real stocks drawing Support and resistance lines and kind of trying to analyze what we learned during this presentation in theory we're going to try to bring it into practical knowledge okay and into you know into um you know more practical application of support and resistance so that's in the next video okay and I will see you guys in the next class thank you all righty let's dive in into more ways we could actually use support and resistance to our advantage and
we're going to kind of get into the more practical elements of using support and resistance so I've made a few examples in the slides and in the next class I'm actually going to be looking at real stocks and showing you how you can apply some of these support and resistance um you know teachings all this education that you've been seeing how we could actually apply it into real life charts okay so key points you know and specifically for you know determining Targets in this case we're going to be talking about how to use support and
resistance to determine targets some key points is that you know determining targets and determining you know where you think a stock is going to Rally to or where you think a stock is going to drop to it's based completely off support and resistance right and if you're playing long right you're you're buying a stock what you're going to want to do is check the next resistance level and use that as a potential Target okay And if you're playing short you're going to want to check the next support level and use that as a potential Target
right so our targets are simply based Bas off looking at support and resistance all right and what you know what you're going to want to really do is look at several different time frames right because let's say you're trading off the 5 minute chart and you don't see any resistance above let's say you're playing long right and you don't see any resistance above on the 5minute chart well what you should be doing is looking to H you know looking at the higher time frames and then seeing if there's resistance because you might not see resistance
on the 5 minute chart but if you go to let's say the hourly or the daily chart you might end up seeing resistance and that's going to affect whether you're actually going to take that trade or not okay so like I said we're going to be looking at higher time frames to check if there is support and resistance above or below and you're going to in general you're going to want to you know look at the higher time frames so specifically the daily chart and the hourly chart I wrote daily chart here but you could
also check the hourly right um so always check the daily chart first right or you could check the hourly first and then the daily it's really kind of up to you um but you're going to want to check the daily chart and determine if there's enough room for The stock to Rally or drop to the next resistance or support level ultimately when we're let's say we find a trade that we like and we're trying to figure out targets and we're looking you know let's say we're playing long and we're trying to figure out the next
resistance level and so we take a look at the daily or hourly chart and we determine what the next resistance level is we have to then ask ourselves based on you know the size of our stop loss or the size of our risk is the trade worth it is there actually that much room for the stock to go up before hitting resistance right or is resistance literally directly above right and if resistance is directly above well that's when the stock you know assuming it hits resistance that's when it's going to have a tough time you
know continuing higher right because if it's hitting resistance you can think of that as kind of like a ceiling right for the stock so or if it's hitting support that's kind of like a floor for the stock so it's going to need you know additional I guess you can call it effort or a lot more additional buyers for it to actually rip through resistance right so our goal is to make sure there's an ample enough uh room before the stock actually hits resistance right so before there's actually enough uh you know room for it to
go up for us to make a profit before it hits our Target or resistance so just To reiterate if you're playing long and you see that there's a resistance level directly above you should reconsider taking that trade right or you know maybe you know rethink the trade a little bit because if there's resistance right above right directly above there's really not that much room for the stock to go up before it hits it right and that's going to you know that's going to uh decrease your reward to risk and if you're playing short and you
see that there's a support level directly below well you're going to re want to reconsider taking the trade cuz if there's support directly below and there's not that much room for the stock to fall until it hits support the your reward to risk might be affected and this of course all depends on the actual what your actual stop loss is okay and I kind of uh I went a lot more into detail with this in the risk management video so definitely go back to that if you're having some confusion around this but and another something
else I want to talk about is what what what I want you guys to do is check for overlapping candles overlapping candles or you can call it maybe a consolidation or a base that represents resistance or support so let's look at this example let's say we have a stock it drops then it begins to consolidate and after this consolidation it continues lower right and let's say here you know we're looking at potentially playing this long this is just an example right I'm not I'm not saying it only applies to this situation this is just an
example you know we're playing along from the bottom and we wish to determine the next resistance Level right we're playing long and and we're asking ourselves what's the next resistance well we're going to look at the next area of overlapping candles and these overlapping candles they can represent support or resistance because it kind of represents an area of uncertainty right where we have a drop and we have a have a we kind of have a consolidation some people played ended up playing long here some people played Short and you know let's say someone who played
long they ended up getting stuck in the position and it ends up going against them as soon as the stock ends up you know reaching back to their entry point CU remember if they're playing long from here and they're and then ends up dropping they're down on the position let's say they don't exit and the stock goes right back up well you know they might end up looking to get out of their positions break even and there's a lot of different uh details a lot of different there's a lot of uncertainty that occurs during these
consolidations so that's why we use it as support or resistance so when looking at something like this if we're playing long here we're looking at our next Target is the next resistance which is these overlapping candles so this is just an example of you know what you what uh how to determine if something is support and resistance it's check for overlapping candles okay so this is definitely one way to look at resistance or support this is another example here where you know I kind of talked about assessing your risk using support and resistance well this
is a really good example where we have a consolidation right we have a bunch of overlapping candles then we get A tremendous drop then we get a rally and all of a sudden now we have a breakout or you know a base breakout potential for a base breakout uh and our entry is over the base or stop loss is under it and where our next Target well it's going to be the next resistance area which are these overlapping candles okay so this is going to be our first Target right so what we have to assess
when looking at a trade like this is okay what's our entry what's our stop loss right then determine the size of the stop which we would you know subtract the stop- loss from the entry point right so let's say our entry is $4 our stop loss is 390 that's a 10cent stop and let's say um right so our entry is $4 our stop loss is 390 let's say our Target is um let's say 4 410 right this resistance starts at 410 well our entry is at four our stop loss at 3 is at 390 and
our res the next Target the first the next resistance area our first Target is at 410 well that point we're risking 10 cents to make 10 cents right so obviously that wouldn't be worth it because you know after watching the risk management video you guys should know that our risk should be 2 to one right so let's say our entry is at $44 our stop loss at 390 that's a 10cent stop we want to make sure that we that there's at least 20 cents of room before it hits The first Target or the first resistance
area okay I hope that makes sense like I said watch the risk management video if you're still kind of confused on that but now that we know how to determine our targets right how determine what the next resistance area is we can now you know um manage our risk a little bit better we where we're trying to assess okay what are we risking versus what's our potential reward and our potential reward is well however much room there is between our Target right or resistance area from where our entry is and you know I just want
to reiterate here this is a base breakout right we play long over the base and we place our stop loss under the base so long over the base stop loss under the base the target is the next resistance level which are the overlapping candles above we must consider whether our Target is worth the risk of taking on the trade we just talked about it assessing the stop loss assessing where our targets are and refer to the risk management video we want the potential of making two to one return uh or two to one reward on
our risk okay so I hope this makes sense uh this is just a an example of how we could apply resistance and support where we're we're looking at the next resistance level for our Target and then we're determining whether the trade is actually worth it dependent on our actual entry and stop loss okay and another uh thing that I wanted to another topic I wanted to discuss is if a stock is rallying into all-time highs there is no resistance to the left right it's into all-time highs the stock has never been at that point before
because it's like I said it's alltime highs so There is no resistance to base our targets off of so we cannot accurately accurately determine our targets just like if a stock is dropping into to alltime lows there's no support below and to the left there is no support cuz the stock has never been at that price before so therefore we cannot accurately determine our targets right so if it's an if the stock isn't is into all-time highs or all-time lows we're not going to be able to determine targets that well just because there is no
support or resistance to base that off of right and as a general rule this is really going to help you understand where there is support resistance is always look to the immediate left for support and resistance and that's a key word look to the immediate left right and this you know this this is one of those things that you it's all about practice it's all about actually looking at some charts and looking at support and resistance but like I said we're going to be looking at the immediate left for support and resistance and what I
want to do is actually go through a bunch of real life charts and you know give you guys some examples of all of the theory that we've learned about support and resistance you know looking for overlapping candles looking for targets trying to look at you know trying to assess risk to reward using support and resistance right looking into some all-time highs or lows and and like and also looking to the immediate left when um you know when Analyzing support and resistance so the next class I'm going to be looking at specific stocks and we're just
I'm just going to analyze draw some support and resistance lines and show you some of the theory that we have learned so far see you in the next class all right guys we're going to go over some real life examples some real life charts showing you guys how to apply some of the support and resistance Theory and knowledge that you've just obtained okay okay and we're going to be first looking at Facebook I kind of picked random stocks so um these weren't pre- selected I kind of just found a list of random stocks that we're
going to go over here today and um just one example looking at this let's say you're looking at this and you know you're looking at potentially taking a short right let's say it dropped where you know we had a big drop here it's kind of consolidating here and let's say I'm not saying this is a great short opportunity but let's say you intend to play this short you want to play it short under the consolidation right so you short it when it breaks the consolidation and you want to put your stop loss let's say above
it just like that so this is just an example um just out of just to show you um how to apply some of the theory so let's say that's your ENT this is your entry this is your stop loss okay and our goal is to assess uh you know what's our Target what's the next support level cuz remember we're shorting it so like I said the general rule is look to the left right and in this case when you see something you Know we're on the daily chart here if you're seeing the stock and there's
nothing absolutely nothing to the left what you're going to want to do is go to the higher time frame so we're going to go to the weekly chart now okay so now all of a sudden we actually have a little bit more clarity on where our next support level is like on the daily chart when we looked at it well there was nothing to the left right we can keep scrolling for a long time time and we might not get anywhere with it but we go to the weekly chart we can immediately see you know
what's to the left right so we're taking a short position here right and Facebook does look lower we have a declining 20-day moving average right we have a huge drop it does look lower however how you know when's where's the next support how much lower does it look well looking at it our next support level is right around here you you want to say this entire area right so you want to say this is our next support area right I don't want to I don't I don't want to say it's one line but you know
this general area right so let's let's kind of draw it maybe here okay so this is our next support level all right well let's see if the trade is actually worth it right so this is our next support and this is our stop loss this our entry so now we're going to do some calculations we're going to see okay what's our stop we're going to subtract our entry from the stop loss see what our actual stop is see what our reward is and we're going to determine if the trade is actually worth it right so
that that's a Really good example of uh you know try how to figure out whether it's actually worth uh you know the the risk of taking the trade so this is our next support level and if we look to the left again our next support level is right here right so this is our first support level our next one we're going to look to the left is directly above below is right there so that's a good way of figuring out where support is we're going to you know and when in doubt when you don't see
support or resistance to the left like in this case go to the higher time frame go to the weekly chart or if you're on the 5 minute chart go to the 15minute Chart or go to the or go to the hourly or daily chart in order to analyze what the resistance or support is okay so that's a great example um another uh example here let's see if we're looking at this uptrend right we we kind of talked about in the first Resistance video how um how you know resistance and support is used during uptrends or
downtrends where our you know previous resistance right becomes the new support right so let's let's look at an example here uh you know we we could uh I guess we could actually use this as an example right here right we have a consolidation right here we have a rally consolidation so this is our resistance right this level right here right cuz we had it it retested that resistance basically Ally almost three times and the third time it actually went through it but notice how when we actually had a pull back it pulled back maybe not
exactly to this resistance right but around in that area So this is a great example of resistance you know now becoming support on the pullback and that's what we want to see we want to see the pullback you know actually pull back to the previous resistance which was right here so this is a great example right um let's look at another example here where oh whoops another example here where our our resistance is actually right here right oh sorry for theuh text guys but our resistance is right there and our pullback occurred to you know
we we had the rally and it pulled back to the previous resistance and now that is the new support So this previous resistance became the new support for the stock okay I hope that makes sense and this relates to the first video where we talked about you know resistance becoming support so these are two pretty pretty good examples I think actually this this is even better example right here we have a rally then a pull back right notice how the pullback it pulled back to this previous supp this resistance area so this was res resistance
and now it became support here right this is now the new resistance and this new resistance notice how the stock pulled back to this resistance now becoming support right and if this sounds a little confusing go back to the first Resistance video and that's where I really talk about it um more you know it's it's a more of a theoretical approach but it's it's definitely I give a a bit more detail But the general idea is is that the previous resistance level right like this previous resistance level becomes the new support when the stock actually
pulls back so it pulls back to the prior resistance and that now becomes support okay so those are two good examples of that um another example that I want to just show you here is this kind of relates more to the 200 day moving average but um this uh 200 day moving average right here is acting as support right we have the stock pulled back here retested it that's one then it retested here and ralli that's two and again it retested actually here so now this has been proven support level so this is a really
good example how you can use the to the 200 day moving average as support to your advantage okay and uh I guess we could talk about one more thing let's say all of a sudden uh we're looking at let's say we're going to reverse back in time and we're here right let's say this drop hasn't this drop right here hasn't occurred yet and we're here in time if you're looking at this and thinking okay do I want to play it long well either way you're not going to play it long because we have a declining
20-day moving average it's a downtrend but let's say you decide to play it short and you want to short it here well you know if you're going to you're going to be looking you're right here you're going to be looking directly to your left which is these candles and then these candles right so right away if you're trying to short it from here We have support here and here and here right we have a support level here we also have support down here so you know if you're looking at this and you're thinking okay do
I want to play it short well you got to ask yourself is there a lot of support below and in this case there was a lot of support below you had all these candles then plus you had these candles right and then you had this low so the answer is yeah there was a lot of support and you would now consider that you're like okay there's tons of support below do I really want to short it you know am I that confident that's actually going to go through the support okay okay let's look at another
stock real quick we can look at pltr and kind of uh look at what's going on in this case you know if we're if we're looking let's say let's say for example we actually want to short this right because with the 20-day moving average is above if the 20-day moving average was to theoretically start to curl over price we could actually probably look for a short position in theory right not saying we should do that but you can now if I'm looking at this right I'm looking directly to my left we have this entire support
right cuz remember we look directly to the left if we're here we're going to look to the left we have this entire support right not only that but we have this low right so we have two kind of support levels right in front of us right let's say let's say it actually breaks through the support right it ends up going lower it it actually breaks through this entire support level our next support is right there so the question is does it really have that Much that much room to drve to before it hits support right
and that's something that you're going to have to figure out like it does it have enough room like if you put your stop loss here entry here well it doesn't really make sense from a reward to risk standpoint because our this the next support level is directly below directly below so you would probably be a little more hesitant on actually taking this trade because of that because support is right below because you know and let's say it hit support well the likelihood that it's just going to rip through the support level and continue low is
kind of low it might you know go down to support and then bounce and stuff like that maybe rally a bit off support we want to have you know let's say our support level is actually down here instead then we would have ample enough room for the stocks to drop before it's actually hitting that support level okay I hope that makes sense I hope that makes sense this is a good example right here uh we have a a uh we have a drop then this is a clear support level you can see how much it's
retesting and boun saying so this is a support level and as soon as it broke this support level well this is our short position right we short it right there as soon as it breaks this support because it's kind of like a consolidation here right we probably put our stop loss around right here right and you could see that ended up really dropping but if we're looking if we're in this area right and we're looking at uh like let's say we're we're looking to short it here maybe actually wouldn't have been the best position because
we did have this support to consider consider right cuz if we're looking at this right we have to look directly to The left at the next support level the next support level is right here luckily it ended up actually completely breaking through it but still that's how we're going to be looking at support resistance look directly to your left and look at the next support or resistance level okay let's uh see if there's any other examples that I can make from here uh not really we we can move on to the next stock we'll probably
do one or two more here right um I think this is okay this is interesting what we can we can kind of go through this right here if we're looking at right let's say we're looking at this point right here and we're looking to play long right well if we're looking to play long our next support level is going to be right there right because if we're buying it down here let's say it's a buy setup we're buying it here our next support level is the previous highs right so that's our previous resistance I'm sorry
I keep saying support this the resistance level so the previous we're going to look to the previous resistance level which is right here that's going to be our Target number one right after that we're going to look at the next resistance which is basically you know we're going to look to the left it's this next high so this is our next resistance level and as you can see the stock actually went up to that resistance level and ended up dropping down okay so I hope this I hope this is starting to make sense and and
we could you're you're beginning to understand how we could apply support and resistance right so if we're playing it long from here our we're going to look to the left this is our first resistance level the next one we're going to look even more to the left okay This is our next resistance level and it ended up rallying straight to that resistance and dropping so that would have been a perfect Target okay so in general guys um I'm not going to go through all of these you guys get the idea it's we're going to be
always look to the left always look to the left and to to specifically the immediate left to check for support and resistance and you're going to be using it as targets right if there's a lot of support below and you're shorting it maybe reconsider the trade right you don't want there to be tons of support below because the likelihood of that trade actually working is a lot lower just like if you're playing long right you don't want there to be tons of resistance above because it's going to be you know the likelihood of the trade
actually working out your favor is a lot lower okay cuz there's tons of resistance above resistance resistance is going to stop the stock it's going to stand in the way of the stock really continuing higher right and that's why I personally like trades that are going into alltime highs right so let's say uh we have a um stock that you know it pulled back right I'll kind of paint out like this okay boom let's say we have a rally then a pullback and then another rally and it's basing at resistance at the all-time highs that
is extremely bullish right so I'm going to actually write that this is going to be kind of another quick little lesson here a consolid base At the alltime highs is a very bullish quality okay okay and similarly a base at the alltime lows is a very bearish quality okay so let's say like I said this is here I I'll even write it I'll even write it here boom right so let's say we have a rally then a pullback and then we have another rally and it's basing at the all time highs that is very bullish
and we like that we want to see that and the reason it's very luring is that let's say it actually ends up breaking out let's say it breaks out well there is no resistance to the left meaning this has unlimited room to go higher excuse me and that's the great thing there is no resistance to stop the stock from actually continuing higher right the since there's no resistance the stock could easily continue higher as much as it wants okay just like in it it it work the same way if it was the opposite if it
was a base at the alltime low and it started to break down under the base there's no support below so it in theory has unlimited room to continue lower right and we and that's that's a great quality cuz since there's no support below I mean on the one hand we can't really pick targets all that well but There's no support to you know stop it from going lower which is great if we're shorting it okay hope this all makes sense I'm going to try to find maybe an example here uh we could find an example
here let me look H maybe let's see let's look at this one no okay this is actually a nice a fine example we could look at hood for example okay let's say we were shorting Hood under this base just as an example I'm not saying would do this but let's say that's what you were going to do right well there's no support at all under this base there's nothing to the left of it so this in theory there's no support to base our targets off of but there's no support that's going to stop it from
continuing lower so this can in theory go lower all the way to zero if it wanted to obviously it's Robin Hood it's probably not going to do that but you guys get my point there's no support stopping the stock from dropping which is great if we're shorting it or just like the opposite if we're playing long and there's no you know and we're into alltime highs and there's no resistance above well there's no resistance that's going to stop the stock from continuing higher so the point is is that a base at the alltime highs or
the all-time lows is a very bullish and bearish quality meaning if it's at the if it's a base at the all-time highs it's very bullish if it's a base at the alltime lows it's very bearish right and we want a break break out into the all-time highs Because there's no resistance to the left stopping it from going lower and similarly we want to short under the all-time lows especially if there's a consolidation at the alltime lows we want to short under that consolidation right because there's no support stopping it from continuing lower all right and
let me know if you guys have any questions about that and uh hope this helps we've kind of took some of the theory we already learned and put it into more practical information okay let me know if you have any questions thank you what's going on guys hope you're having a terrific day today I want to talk about Market relative strength and this applies for stocks crypto uh and Forex as well but you know mainly for stocks and crypto so if you're trading stocks you should always keep an eye on the market and what is
the market well you can look at two main ETFs okay so I'm going to turn off my camera so and we can look at it so for stocks right if you're a stock Trader I would always keep an eye on the QQQ or keep an eye on the what's uh or keep an eye on the spy and most of the stocks that you're probably trading is either in the QQQ or in the Spy ETF and maybe if you're trading really low price stocks you should also keep an eye on the iwm in iwm has a
lot more lower priced Securities so let's kind of write that down here for stocks and maybe put this down in your notes Here for stocks you should be looking at the cu's or the Spy or three iwm maybe I mean iwm honestly I trade a lot of lower price stocks and I personally just look at the cues okay so I yeah I just look at the cues personally that's what I do I trade stocks so that's for stocks for crypto right if you're someone who trades crypto I would be constantly looking at Bitcoin right so
if you're trading crypto you really always want to keep an eye on bitcoin so let's go into why are we looking at you know Bitcoin or the q's or the Spy right they're going to act as overall markets right if we're trading stocks or crypto okay and we should always keep an eye on what the overall Market is doing because that could have a huge there's a lot of implications on that that could affect our trading let me give you an example I know a lot of you guys that are in the server in our
community trade crypto let me just give you a quick little example um let's say you're trading um I don't know let's say Gala right just as an example and you you're trading Gala and you find a buy setup right we have a Rising 20-day moving average we have a rally we pulled back to the rising 20-day moving average we have a pullback setup right and we have a rally or you know you're kind you're going for a rally right you're going for the buy setup right hopefully to capture this move higher okay but let's say
before this move even happens as this buy setup is setting up at this point you're looking at Bitcoin and Bitcoin started just randomly tanking and it like just hu a huge drop on bitcoin Bitcoin is tanking you could see that there's a lot of selling pressure on bitcoin you may want to reconsider this buy setup because with Bitcoin dropping this buy setup now might fail and it might not even work out just because the overall market and for crypto that's Bitcoin is tanking okay so you could have found an excellent perfect buy setup on Gala
but because the market and big Bitcoin is tanking that buy setup may not work and without keeping an eye on bitcoin and seeing that it's tanking you might end up playing this long and then losing money and they're going to be like oh wait hold up though like why did I lose money it was a perfect setup and then you look afterwards and you're like oh it's because the entire Market tanked Bitcoin and ethereum both tanked right so you could either and you could also look at ethereum as well um with Bitcoin but Bitcoin um
I should say ethereum usually just follows Bitcoin anyway Bitcoin is the most uh widely traded crypto so that's why it serves as the market so there's really you just you should just always keep an eye on how Bitcoin and and how or the cues if you're trading stocks how it's trading what's going on with it right and let me give you another example of how to use Market uh Market relative strength to your advantage let's say the market whe whether it's Bitcoin or for crypto or the cues or spy for stocks let's say it's tanking
right the entire day it's moving lower lower and lower but you find a Coin or a stock that's actually basing at the highs right where you're seeing that the the entire Market is dropping right bitcoin's dropping hard or the q's or spy are dropping really hard yet this stock or this crypto is basing very bullishly at the highs and it's not being affected um by the market right with the market tanking this is you know this is not breaking down this is actually just continuing to base you could you know you could actually use that
to your advantage and say okay the Market's dropping whenever I see the market starting to have a reversal hold on um let me whenever you see that the market is starting to have a reversal you can keep an eye on this coin or stock and be like Okay whenever the market has a reversal there's a solid chance that this is probably going to break out as well because it was holding so bullishly during the massive drop of the market or Bitcoin okay does that make sense so if you if you're in a situation where you're
seeing a stock that's you know it's not following the market where it it's actually just acting really bullish as the market Market is you know trending lower that whenever you see that market reverse you could see that breakout as well so same thing if you have a huge Market pop but there is a coin or a stock that's basing bearishly where it's basing at the lows whenever the market starts to drop you could see this also start to break down right so you want if you're playing short you want to see a low of the
day base while the market is rallying really really hard right because if this was you know if the think about it the bearish the bearishness is so prevalent that it's not reacting to the market and saying oh the market you might be continuing higher you might be you know pumping but I'm there's so much selling pressure here that the Market's not even going to move me and whenever the market starts to drop it gives it that extra boost and you know some probably cause it to start to break down okay so in general guys always
keep an eye on the market if You're trading crypto stocks always keep have a separate chart where you could refer to the overall market look at Bitcoin or the q's and see what's going on how is it trading right and you know usually I'll give you another example if the market let's say is based ing bullishly right like this the this is what the market is doing and right and you find other stocks that are also basing bullishly you might notice that as soon as the market begins to break out those other stocks or those
other crypto will also begin to break out okay hopefully that makes sense so always keep an eye on the market there's really no strategies you could uh create from just relative strength to the market but you could use relative strength to your advantage when you're considering some of the strategies we already talked about such as the buy setup sell setup breakdown one two three exhaustion or climactic pattern you could use that um you know really to your advantage and kind of combine it where if the market is rallying hard and it's super bullish right if
the if the market is really bullish you tend you want to buy you want to look for bullish setups in other stocks or other cryptos if Bitcoin is tanking right and it looks like it's going to continue lower you want to find shorts right because you're playing with the overall trend of the market right hopefully that makes sense So always just keep an eye on what Bitcoin is doing if you're a crypto Trader and what the Spy or the q's are doing if you are a stock Trader always just keep an eye uh and just
you know you'll start to to notice different patterns of what's of how different stocks and different coins react to the market or to bitcoin so just keep that in mind always keep a chart of the market on your trading setup okay and yeah you'll start to notice patterns so I just wanted to point this out so you guys could consider that as well and I'm trying to think if there's uh any other points I want to make about this um that's really basic Bally it I don't want to say this is a Make It or
Break It indicator you know uh relative strength also I don't use RSI by the way a lot of people are going to ask me hey do you use RSI for relative strength I don't I just look at whatever I'm trading right and then I look at the market right and make sure you're you're like if you're trading off the five minute charts 15 minute charts or hourly charts make sure you have you know that those time frames for the market as well right if you're Trading off the hourly chart make sure you're looking at um
the hourly chart of the market right you don't want to be looking at the weekly chart of the market while you're trading the hourly chart of whatever you know crypto or stock you're trading you want to keep the time frames more or less similar okay um but yeah that's really It guys uh I don't use RSI I just look at the market as I'm trading I try to notice if anything's going on and I try to use it to my advantage and that's really it guys so hopefully that's beneficial there's not too much to take
from this just keep an eye on the market okay and that's basically it guys see you in the next class thanks all right the recording is started and I don't have a presentation for this class because um this class is going to be strictly application we are going to be looking at charts and we're going to be answering questions about them and specifically I've been getting a lot of questions asking you know how do I pick targets on a trade so that's going to really be the topic the main topic how to evaluate where you
should take profit uh where you should start you know even thinking about taking profit and just you know try to evaluate your targets okay and I like I said I don't have a presentation we're just going to be looking at charts and you know at potential looking at potential trades we could have taken off the charts and then seeing where should we begin looking at taking profits or where you know where should where's the appropriate place to start even thinking about it right so let's I guess we could just get this going right away I
have a bunch of different stocks that I picked out that all had kind of interesting setups as of late right um so we're just going to be looking through them and you know deciding looking at the setups looking at uh the targets we just trying to apply some you know apply some of the Principles that we've been learning in the other videos onto this because a lot of people have been you know I think in my videos um especially with the you know teaching the trading strategies I've been pretty uh transparent about where you know
where your entry should be and where to put your stop losses I definitely detailed them in the videos but um in terms of picking profits or not picking profits but you know evaluating where should I look for potential targets I haven't really discussed it that much and I'm definitely I think we should definitely uh get that going and watch so let's start with for example um we could start with mmm okay now first of all I'm going to ask you guys you know do you guys see any potential setups with mmm and if so what
are the setups that we potentially may see and this is kind of a tough question cuz I'm going to be honest this doesn't look that great right now but what do you guys have in mind in terms of what it's doing so I'm going to give you I'm going to what I'm going to do is I'm going to leave around 1020 seconds for you guys to look at this and then give me your thoughts about it and then we could talk about the setup the entry if there even is an entry you know and honestly
if you guys don't like this setup you know just say this isn't good like that's totally an option too I I I didn't only pick good setups I picked a bunch like bad setups good setups so what are your guys what what are your Thoughts okay Val saying long I don't like the set not much volume not a rising 20 probably not either you guys are right honestly um there's not even a point of picking profits or picking targets here because I I don't like the setup either we don't have a rising 20 um even
if this was like let's say you know for argument sake uh we played this as a breakout like in terms of targets we have resistance all right here so we don't have that much room to actually rally before uh we're going to hit resistance does that make sense make his 20 before going short again I mean yeah oh if it got up to here maybe I mean I I I doubt it even gets up to here that'd be crazy that'd be a pretty crazy move yeah I I'm with you guys I agree but so there's
not even anything to look here so let's go on to the next one okay interesting nxd nxgn what do we see here do we see any setups that that occurred here or anywhere and if so what setups have you guys seen and in terms of if you guys are confused what I mean by setups is it a buy setup is it a breakout is it a reversal play is it a one two three I want you guys to kind of tell me that right and if you guys don't know what those setups are then definitely
start watching the educational videos so what what do you guys see here let's see will this be recorded yes it Will be recorded got 25 people nice yeah what do you guys think I'm really curious about this cuz there's a I think there's there's a bunch of answers that you guys can get here there there's a bunch of different answers so I'm really curious what people are going to say here can you show the chart yeah let me here here's the chart sorry okay let's see what people got Rising 20 May 1 2 3 strong
okay okay way bullish for consolidation before ENT okay it could be the one 2 three but the but and the reveral okay interesting yeah yeah I mean I I I I'm with you guys Rising 20 we can say this is even a buy setup right here this is a buy setup we have a rally then a pullback it's not a perfect one but it's a buy setup uh we can also say this is a one two three we have one green bar up resting bar like that I'd say this is I I'd say this is
the primary um I don't think I would have played it just because we have a topping tail here which suggests that the sellers kind of took control here and pushed it back down I'm not saying it's a great one two3 but this is definitely a one two3 let's cut the circle right here definitely a one two3 um and yeah so what about targets now let's say you took this 123 let's say you bought it here what Targets are you going to be looking at right and there's several an here I mean or what okay actually
yeah what targets would you guys look for first and if you need more information that's also a potential answer but I want you guys to give me your reasoning I think this is a Target because why I think we need more information here because why I want you guys to tell me that so think about it and you know if you guys are watching you know if you guys didn't actually watch this like you know for anybody who's watching the recording of this right now I want you guys to think think about it yourself maybe
even pause the video if you're if you know if you guys are watching the recording to see what you think cuz this is really going to be uh I want you guys to think about this one this is the best way to learn is by doing it and then me correcting it okay so what do y'all think okay uh I set okay sure scale out percent B look for air prev resistance okay place right below theer okay well uh looks like it's going to breakr look looking bigger time frame okay I I like these answers
basically from what I understand you guys are saying there's not resistance here like look if if I go to the left right there's no resistance anywhere so there's nothing I can even base my targets off of and you know that leads me to the basically the essence of the class is that when we're looking for targets we are going to be looking at The next support and the next resistance levels depending if we're playing short or long so if we're playing long and we're buying it we're going to be looking at the next resistance levels
as potential targets if we're shorting it right we we're going to be looking at the next support levels for potential targets so you guys are saying okay I'm looking to the left there's no resistance right and that may be true but we have to consider we're on the daily chart so what I'm going to do is I'm going to say okay well let me look at the weekly okay boom now we're looking at the larger picture of the stock right and look at the daily we looked at the daily there's no resistance right but looking
at the weekly the larger picture we see yeah we have a lot of resistance here we literally have a double top right here so in terms of picking profits you know I think the appropriate place is you know maybe look to take profits here or I'm not saying definitely look to take profits there but this is a reference point this should be an idea of a Target right and that's a good amount of room right or maybe maybe this is not where you should take profits but this is where you should consider alternative forms of
trade management right and if you guys uh don't know what I mean watch this video the trade management video where you know you guys could look to either take small maybe take half profit or maybe take Trail the position and if you guys don't know what trailing the position is um then definitely watch this video does that make sense though do we have any questions about That okay set a trailing maybe yeah you could leas some free that is that is totally true yeah in terms of act like the Free Runners and the way uh
the way you're managing it um wait maxco are you here maxo it's all right here in the right here in the premium education all of the classes are here right here so these are all where all the recorded sessions are um but yeah in terms of like so we're just talking about picking profits or I'm sorry not picking profits picking targets once we have reached Target that's when trading management comes in that's where you're saying do I exit the entire position do I exit half do I maybe raise my stop or do I you know
that's where that comes in but the first part is picking your picking targets okay so that's that's I think this was a great example let's let's go on to the next one so this is the weekly chart interesting okay first let's look at the daily all right so in terms of potential plays here you know let's I'll tell you guys first of all we could say this is a buy setup right uh I guess this is probably the play the buy setup but you know let's say for argument sake we're we're going to play this
as a breakout and we are going to right play it over this base this is the entry we put our stop loss down here it's not an ideal it's not a tight base it's not an ideal breakout but let's say that's what we do so I'm looking to the left on the daily chart and what do we see well okay we see here's an area of resistance but we already broke it we're above it so we're in the clear that's fine right so what do we do we of course then Let's go to the weekly
chart okay interesting now on the weekly chart it's a little bit more clear so we had a really large resistance level right here we broke that already so when's the next one I mean presumably the next one would be in this area about right here so that's our next resistance on the weekly so if we're looking that's where we're going to probably put Targets on a potential swing trade at 56 buck and a really a really important um idea to understand here is guys resistance and support is not a level right it's not one level
it's an area of levels like it's an area of price there like I put this line here but this line doesn't represent this like this is not the absolute resistance level this I could have put this line here here this whole thing is resistance that's something really important to understand it is a it's not one price it is a range of prices so that's something to consider so many times people are like oh this is hitting resistance I'm I'm going to or this is hitting support I'm going to buy it it's like yeah but a
support is an area of price like where are you going to buy it are you going to buy at the top of the support at the bottom of the support like how do you evaluate that makes sense we good with that we good With this stock and guys like it's a really super easy concept too like that's the thing like a lot of these trading Concepts you're going to notice that you're learning it's like yeah like this all makes sense it's intuitive almost like this is kind of Common Sense and it's supposed to be like
that like this is not hard stuff the harder you're making it for yourself like stop that that's why I literally use the 20 ma the oh I'm sorry the 20 ma the 200 Ma and candlesticks I make it as easy as possible for myself so I don't need to be like confused make trading simple right and and the simpler it is the more successful you'll be because you don't need to focus on 10 different indicators telling you different things okay just focus on the raw price action anyway let's move on aui okay we're looking at
the weekly chart so what do we think here what are we thinking what are this is the weekly chart what are our thoughts let's go back to this what are our thoughts about this give me your thoughts okay so I'll leave it up for a few seconds and we're going to do this I'm going I I have to kind of hurry this up a little bit we're taking I think too much time per stock but cuz I have lot of stocks here but the idea is we're you know I want you guys even the ones
that are watching the recording to think about it even pause the video think about what you think you know what are your opinions all right do we have any Answers I think a short position prob interesting okay we have a short position okay interesting I I think don't chase a green kingin already up nice play of 200 may but extend it away from fire right now okay interesting came to micro resistance we'll see if it breaks out okay yeah you know I I'm starting to really like your reasoning here nice play extended away so he's
saying it's w he's saying he's arguing that it's extended from the 20 ma it's tough to get a long position right now he's right that's a really good that's a really good way of thinking of it right I think don't chase a green candle it's already up that's true I agree short position I don't know about a short position I'm not sure I mean it's up a bunch of green bars in a row there's not really a candle we can play off short right and let's say you know let's say we want to play this
let's go to the lower time to the lower time let's look at the daily chart looking at the daily chart does this look like a short I mean guys if anything I mean what does this look like on the daily chart like what we have to understand here is that the weekly is saying extended sure right it does definitely have some room to get up I mean there's an area of resistance but it is a little bit extended does it look lower it certainly doesn't look lower if anything would I think it would rather it
it's probably going to go higher than lower definitely but if we go on a you know smaller time frame we could see that you know there there's a potential trade here just because the 20 You could see the 20-day moving average on The Daily is right up hugging price right it doesn't look extended right so in theory I mean this is a play here you could do this right put your stop uh entry above the you know above the highs stop loss below the lows does that make sense yeah like and someone Wally brought up
a good point it's extended on the weekly it is extended on the weekly like you're definitely right but it could still probably go higher you know and that's when we look at the daily like if the daily looks like crap and then it's also extended on the weekly then it's like yeah like I'm not going to play it but that's okay cuz the daily looks good the daily looks really good to continue higher so and what are our potential targets well let's go back to the weekly I mean potential targets I mean to be honest
it's tough to say like I mean in theory this could be a Target I mean again it's an area of resistance distance it's hard to pick profit to to pick Pro uh targets here what I would do in this case since it's a little more difficult let's say we get right we have the breakout we have a breakout what we could do is just manage the position let's say we're up a few green bars in a row that's when we we can look to raise our stop loss right and Trail the position does that make
sense we good we are we good on that yeah and like it's not perfect guys there's not always going to be a time Where you have perfect targets perfect entries trading is often times imperfect but the key is is taking advantage of like imperfection to uh to make it into like a good play like obviously like there's no picture perfect setups all the time sometimes you're going to have to take setups that are you know they're not perfect but they look good enough to play this looks good enough to play play this looks like I
might even call this trade come Monday let's look at tap tap what do we got here I mean to be honest do we see a play here do do we see a play and if so what's what's the play I mean does it look good what do you guys think does this look like something that we want to be interested in could be a potential short um so what what makes you what makes you say that why do you why do you think it's a potential short yes long but last candle Bulls took over true
TR sport R over R growing in size that's true but let me ask you this syntax geek um let me ask you this and I know I know um I think this could be beneficial for you um yeah I mean I suppose okay we do have a red bar but my question is what is the general Trend here is the general Trend here bullish or bearish and when I say General I mean Yeah basically yeah is the general trend hear bullish or bearish okay bullish so let me ask you this why are we going to
it's not look there's no extension from the 20 it's bullish clearly why are we going to play something short that's bullish you know I mean I mean it makes sense why why would we you know it's bullish so why would we short it we would if anything play with the trend so that's that's a really important that's what I want you guys to do if you guys are beginner Traders always trade with the trend do not play reversals if you're a beginner Trader guys I'm going to be honest I barely play reversals because they're really
really hard don't look for the crazy cuz I don't see where it's bullish okay well well the question is do we have an uptrend I mean starting from basically here we basically have an uptrend here I mean we it's not perfect but we have lower lows and we have high higher highs and lower lows I'm sorry we have higher highs and higher lows this is a low this is a higher low this is a higher low higher low same thing so we have higher highs and higher lows so it's uptrending does that make sense yeah
exactly it's textbook textbook bullish now it's not an ideal pattern in terms of playing long like if if I'm seeing this my only my only um my Only how do I say intention is to play this long but I don't see a great entry you know I mean yeah maybe we could play the breakout but then we're going to put our stop loss all the way down here and it just doesn't make sense like I don't even need to look at Targets right like let's say let's say our stop loss is down here entry here
so our entry is at 55 our stop loss is at 51 so that's a $4 stop right let's say or let's say it's 52 for some liity so it's a $3 stop cuz 55 minus 52 is $3 now let's look at potential targets potential targets are up here let's say right the next resistance so that's at 59 right so it let's say we did take this trade and let's say it did in fact go to 59 is that worth it we're risking $3 to make $4 is that worth it right cuz we're entering at 55
we're putting a stop loss at 52 our targets are around 59 let's say 60 is it worth it from a r from a reward to risk standpoint it's probably not worth it what we're we're risking $3 to make what we're to make five I mean that's almost 2 to one almost but like that's the best case scenario best case scenario would hit 60 bucks more likely it's going to hit like 58 59 Before it pulls back so that's not a trade we're going to look to take and that's the way our thinking has to be
like that's that's the way we have to think about these about taking trades from a reward to risk standpoint okay I is the reward enough for me to bear on this risk and that's the problem a lot of Traders what they do is they um you know their losses will be the same as their wins or even their losses might might even be larger than their wins and that's absurd right let's look at the next one okay PFE on the weekly chart okay it's kind of pulling back interesting we have a good rally now let's
see what's going on okay what do we think about this I want to see if you guys like this I I I already know exactly what I think what do you what do you guys think bullish okay interesting now there's a reason that I wouldn't play this long can anybody tell me that reason and I want you to look in this area actually no sorry not in that area in this area oops I want you to look in this area why wouldn't I play this long I I'm like really I want to this is kind
of a tough question I really want To see if someone gets it why wouldn't I play this long really think about it look at what's happening look at the last moves okay wait what do you mean by what do you mean by descending you're you're you're warm Regina's warm too okay hyper hyper hyperx gamer I mean you guys basically got it really good it went up but came only to a lower high twice absolutely correct why wouldn't I play this long it went up and look here's a pullback this is a buy setup right here
this is a actually a nice looking buy setup the buy setup triggered right but with a buy if this was really bullish then the buy setup would have produced a higher high instead it produced a lower high so now in theory it's actually downtrending it's starting a downtrend that's why it would so that's not bullish at all if this was actually bullish this buy setup would have produced a higher high it didn't does that make sense so there's no point I mean let's and let's but let's say for argument sake that it did that we
played this buy setup we bought it here where would our targets be I mean number one I mean first of all we have a bunch of resistance here first of all Targets first I mean on a typical buy setup our targets are the the the ne the recent high so off a buy setup here are the my first Targets in terms of Second targets I'm looking at this entire area right here right that should be a reasonable Target it's not perfect but around here does that make sense yeah exactly syntax that's what I thought I
knew you meant that very good observations that's really good like a lot of you guys got that a lot of you guys got that so that was really that was really really good I'm really I'm I'm really happy about that you guys are clearly learning with that set up my stop loss would be hit well why in theory it wouldn't it shouldn't be hit I mean what like okay let's really go into it if you played it right here we have a dogee bar that's a really nice bar for a buy setup you would have
put your stop loss under the lows it would have never got hit I mean unless it would have got hit here but in theory you should have you I mean yeah obviously it wouldn't have worked you it would have got hit here right so it wasn't the best trade but you know it would it definitely went up a little bit if you were going to play along you would want to keep a tight stop loss yeah I mean well you it wouldn't be it would be a very tight stop loss because it'd be right under
the lows we have a pullback the stop loss would be placed under the lows of the pullback right here and our entry would be where would our entry be on this buy setup tell me that tell me that where would our entry Be on this buy setup over what sorry guys I'm still a little bit under the weather but where would where would our entry be yeah Ernest there is there is uh definitely yeah this is actually recorded So above red candle open interesting above red candle open you're talking about this candle um I disagree
I it's it would be over the entry for this would be over this dogee bar and if and if you're a little confused by that uh go back and watch the buy setup video it would be over that this is an entry bar right we have a pullback we have a pullback let's say this is a pullback then we get a do bar or I mean this basically describes it we have a pullback then we get a DOI bar we play it long over the DOI bar not over the red candle that's the open on
the red candle though yeah it actually oh okay yeah that is true that is true but I don't want you to think that it's because of the red like it coincidentally is there coincidentally but like let's if this DOI bar was lower it wouldn't be at the open at the of the red candle it' be over the DOI bar you know what I mean coincidentally in this case it is the above the DOI is exactly yeah I don't even know a fib retracement is I really don't do that at all over 5525 5525 no no
no that's oh I see I see I see yeah I mean I I mean then again that'd be targets I mean if you're buying it here that's 5525 is your target let's look at the next one okay interesting what do we we got here all right so what setup is this and I'm not talking about here like I'm what where does this move is already triggered which from what rally um or like not what rally what a setup did this move trigger from Riddle Me That one okay break out from base buy setup returnal okay
yeah all right yeah I mean yeah you could say this is a buyas setup you could say it's a base I mean I personally you guys are all right I would personally play it as a base breakout like that put our stop loss right here so what's where are our targets what do we do what do we do I don't see any Targets here I go to the left there's no B there's no reference point what do I do what do I do when I don't see a yeah exactly go to the weekly and if
the weekly isn't giving me much we go to the monthly look the okay this is the weekly is the weekly giving us anything nope so we go to the monthly oh interesting so we are at alltime highs okay guys what do we do when it's all-time Highs so what does that mean we don't have we don't have any resistance so what do we do here what do we do when we don't have resistance at all mhm okay that's tricky Dave is right that is tricky there's no right answer there's there's a bunch of different right
answers uh definitely not fibo I don't use fibo extensions at all I'm excited oh whoops uh use a stop loss create okay typ stop loss let scale out going to start okay look for yeah I mean you guys are all right I agree I mean in this case in this case we're going to have to manage it probably bar by bar I mean in this case you know what am I doing I mean it depends how tightly I want to manage this if I don't want to manage this that tightly I'm probably going to going
to put my stop loss right here if I want to manage it super tightly I'm probably to go to the hourly and I might even Trail it hourly bar by if I if I if I'm trying to take profits I might Trail it hourly bar by bar and oh guys look at the setup what is this setup right here what is this setup this is like a really beautiful setup actually this is really nice what setup is This that is I mean look at that that's a really nice setup why is this a nice setup
why do I like this a lot um yeah I mean it's that is true yeah it's a good rally drop we have a bottoming tail nice wrist to reward uh it's really nice I mean let's see I mean we would we would enter Above This Bar put our stop loss under that bar and it's a nice move so in terms of targets like let's say our targets would be the previous highs which right here but it surpassed that so maybe we could look to Trail it maybe put our stop loss at right at the prev
at the you know trailing bar by bar hourly bar by bar or if you want to give it a lot of room again like I said go to the Daily and put it under this the daily bar like that and you could put your stop loss there so what does this do putting your stop loss here it gives you it gives the stock enough room to come in a little bit if it wants to but then continue higher cuz let's say you put your stop loss like right here this might come in Shake you out
of the position you know make hit your stop loss get you out of the position right like it might do this it might come in get you out of the position and then immediately continue higher and then you're like damn like I got out way too early so you want to give it some room in this case if you put your stop Loss here you can let's say this comes in a little bit the next couple days right you're you know it's not going to hit your stop loss and then it continues higher boom you've
maximized your potential profit while you also are securing some money you know you're limiting your risk too I mean you're securing some money if it cuz right like let's say it does drop and hits your stop loss well you're already in the money you're in the money already cuz you entered here so you would still be making money you know You' still be making a profit does that make sense yeah we could do Apple yeah I mean this kind of looks like a buy setup only thing is it's only down two red bars but looks
like a buy setup to me you know I might even buy Apple long term I might just do it stop loss there put our entry here targets well our targets would be the all-time highs which is right here but if this is a long-term position obviously you're hoping that's it's going to break the all-time highs any questions so far uh can you look at salana Daily and weekly sure uh yeah DA's up a lot up a lot hitting resistance maybe might hit the 200 day moving average weekly yeah okay so this is a really great
example of what not to play long look at this we're we're up three huge G you know three increasing green bars Into the weekly right into the declining 20 ma this 20 ma is declining and we are straight into it that probably means that it might you know be done moving higher maybe may I probably if it does go higher it probably hits to 200 and then drops maybe even if it hits to 200 and then gives us a dogee bar we might even be able to short it does that make sense okay very good
WMT okay interesting okay WMT guys this is a really nice buy setup really nice buy setup really like this setup and and then this can answer your question syx geek we have a pullback but then we get two DOI bars you could play it over the dogee bars and put your stop loss below like that boom what are potential targets potential targets well I'm not okay I do kind of see potential Targets on The Daily right here boom this is our first Target which is literally about to hit that Target actually yeah this is the
target these are targets right here and it's about to actually hit the target so this was a really really really nice setup that worked weekly yeah I mean and then next one's obviously here basically this it's like a triple top it's about to challenge it too make sense yeah I mean the thing is I Wouldn't be watching it to break out because let's say it does break out right let's say you buy it over the highs over the breakout so you're going to buy it up here right you're going to buy it right let's say
another green bar it breaks out so you're telling me you're going to buy it after it's up 1 2 3 4 5 six green bars on The Daily with this large of an extension from the 20 day moving average definitely don't do that if anything wait for it to break out then wait for a pull back and then you could play the pullback higher make sense did I answer your question syntax geek by the way web 200 Amazon uh yeah Amazon really large rally into resistance kind of pulling back now the thing about Amazon and
apple and Tesla is that they really depend on the market they really depend on the quees so these are market stocks so you're going to have to be watching the market with Amazon as well so if the market drops on come Monday Amazon's probably also going to drop make sense I'm a waste I'm a waste of time to large caps when you try to vix watch vix for large caps oh wow that's down a lot down a lot a lot all right guys I'm probably going to End this in around like 9 minutes so maybe
get a few more questions here maybe we can look at a few more stocks here CNC not don't really see anything resistance right here so I wouldn't even consider it docu I like what I like about doc U is that um maybe for a potential breakout over the highs right now but the issue is that we have a lot of resistance Above So makes it kind of hard for me to do it what is going on guys hope you're having a great day today we are going to start with the risk management section of the
course and this is going to be a very exciting lesson and let's just hop right into it okay so risk management this is truly a key to your trading success there isn't a single successful Trader out there that doesn't know how to manage their his his or her risk okay I don't care if you're able to find the best trading setups you're able to find the best breakouts the Best Buy setups right you're able to rechart perfectly the fact is if you can't manage your risk you're never going to succeed okay okay so make sure
you really pay attention to this so why does it matter like I just mentioned it doesn't matter even how much money you make right it doesn't matter how many winning trades you have if you can't manage your risk and limit your losses you're never going to succeed okay and let me kind of give You guys a story of uh my personal trading journey I remember when I first started trading um my father of course he's a professional Trader so he was the one that was mentoring me in the beginning and he told me your first
goal in trading shouldn't be to make money right and that sounds kind of crazy like we're we're you know that's why we're doing this we're here to make money but he said no your first goal should be to break even consistently because by breaking even consistently what does that mean that means you're not losing money consistently right and once you're able to limit your losses and be able to not lose money every single day you're already 80% there to actually making money okay so the goal here your your first priority as a Trader is how
can I manage my risk how can I limit my losses the wins and the profits will come but make sure at first you you you know really take care of your risk that's what you want to focus focus on the last thing that you want to do as a beginner Trader is start trading in the markets and because of your inability to manage your risk you end up blowing up your entire account before you're you know before you even gain any sort of experience right so your win rate does not have to be very high
to make money a lot of people talk about oh I have such a high win rate oh you know I win 80% of my trades that's great you could have a High win rate and lose money believe it or not and you really don't need a high win rate to make money okay and we're going to talk about that later your first thought when you enter a trade and this is what your thought process has to be your first thought should not be how much money can I make off this trade how much can I
profit how lucrative can this be no that's not the mindset that you want to have the mindset you want to have is how much can I lose if this trade does not work out right if this trade hits my stop loss how much am I going to lose right and if you enter every trade with that mindset with how much am I actually going to lose if it doesn't work out you're going to immediately start limiting your losses and a lot of risk management it's not really something you can physically do it's not about physically
finding setups or looking at the quality of certain trading setups no it's literally it's more about discipline it's more it's more about the mindset that you have and you're going to notice that the road to profit profitability right you don't need to make more money to become more profitable that's one way to become more profitable is to make more money but you can also be more profitable by limiting your losses so just like you should be focusing on H you know making money on your trades you should devote equal um you know mind space Towards
you know figuring out how do I limit my losses on all these trades okay so number one the first step that you have to do first step is determine your risk sit down on your bed or wherever you want and think about what is the maximum amount of money I am willing to lose per trade TR okay and what I mean by maximum amount of money you're willing to lose per trade specifically how much money can you lose without being psychologically or emotionally affected right like for example for me I usually risk anywhere between $100
and $300 per trade maybe a little more sometimes right if I lose $100 I'm not worrying about the next trade right that doesn't hurt me psychologically I accepted that I'm okay with losing $100 and when let's say that loss occurs when I do lose the 100 it doesn't affect me right it doesn't affect my psychology or my disposition it doesn't make me uh make emotional decisions but let's say for example if I lost $1,000 well that's going to make me feel uncomfortable right that's going to make me feel a little emotional because I'm not really
prepared emotionally and psychologically to lose that much money right and that sort of loss is going to affect my trading it's going to affect my psychology and maybe you know you guys have taken a few trades and if You've noticed after some of your losses you begin to you know think you know you're not thinking rationally anymore now you're starting to think emotionally you're starting to think oh I have to make back that money that I lost I can't believe I lost that much oh and you start you know making bad decisions that's not what
you want to do you want to risk the exact amount that you're comfortable with risking where if you lose that amount it's no big deal right if you like for me if I lose a 100 bucks it's fine I'm not worried about it big deal it's okay but if you're a beginner right and you know you don't know what risk you should go with start with $10 or $20 I don't even care if you have thousands of dollars to trade with you might have a $25,000 account and I'll still recommend you to start with $10
to $20 risk or maybe even less start with $5 doar right because in the beginning right your goal isn't to make money it's to develop consistency and perfect your trading plan and the money will come afterwards okay so stop worrying about the money I can tell you right now if you're just starting to trade and you're taking this seriously if your goal is to make money right away on the first couple trading days it's not going to happen focus on the consistency and per affecting your plan right in practice don't worry about the money and
in general if you're a beginner you guys should be paper trading anyway but this class is more about you know once you're done paper trading and you're going into trading real money okay because with real money comes real emotions comes real psych Real you know human psychology right and your risk should be the absolute highest amount you're willing to lose per trade if your risk is $100 per trade the maximum amount you could lose is $100 okay so let's say you've determined your risk let's say for for our sake it's $20 okay that's that's our
risk actually no let's not do $20 let's do $100 our risk is $100 because that's what we're using in this example your strategy should be this on every single trade that you take right if you're risking $100 you have to make sure or you have to pick trades that give you the opportunity to make at least $200 or more right so if our risk unit our our R is $100 your return to risk has to be two to one two RS to one R right two RS is is $200 one R is $100 right so
number one step one figure out your entry price right whether it's a base break out a buy setup a breakdown um a climactic pattern or exhaustion play or a sell setup or a one two three you guys should know how to find your entries for each one of those setups by now find your entry price number two find your stop loss price right you guys should be able to uh be able to know how to do that as well by now and step three figure out your Target price and uh we're going to have classes
in the course talking about figuring out your Target price and it's Usually comes down to checking your next resistance or support levels okay and step four ask yourself based on my entry and and the size of my stop loss and the next Target right your your Target price is there two to one return on risk right do I have the potential to make at least twice the amount that I am risking okay and if yes then go ahead and take the trade and if it's a no then pass on the trade right if this only
H if you're if you find a trade and you're seeing that it only really has the potential to make you $100 well why would you risk $100 to make $100 that doesn't make sense we want to risk $10000 to make $200 or $300 or $400 and over time if you keep taking setups that give you at least two to one risk to reward you're going to notice that you don't need a high win rate to make money so let's say we take 10 trades and only four of these trades are winning trades right if you're
following this risk management strategy where you're making at least two to one return on risk right if you're winning if your winning trades make 2x what you're risking you're going to make money okay so we have our first six trades let's say all they're all losing trades right and we know that our risk is $100 so we lose the maximum amount that we can per trade which is $100 so we lose 100 100 100 100 100 100 right we're down 600 but then we have four winning trades that make us at least two to one
return on risk so we make 200 on four what's our profit well it's going to be 800 minus 600 we have a profit of $200 right so even with a 40% win rate as long as you're following this strategy you're going to make money okay and imagine some of these winners right like we talked about 2 to one uh return on risk what if some of your some of your winners are actually you know huge winners right let's say you make three to one let's say this is a $300 trade this is a $300 trade
right then that's when you see your profits go up up and up but the point here guys is as long as you're making 2X on your winning trades and you then on your losing trades right then you're going to make money even if you don't have a high win rate even if you're not winning 60% of your trades okay hopefully that makes sense so keys to understanding risk management it's important to understand how to share size your share size depends on the size of your stop loss you guys should already have some um experience you
know looking at and understanding share size through our through our strategy videos right but to remind you guys share size equals your risk right your dollar amount risk divided by the size of your stop loss Okay so let's give an example let's say your risk is $100 your entry price is $6 your stop loss price is at $590 let's say this is a breakout right it's a 10cent stop your stop size equals 6 minus 590 that means the size of your stop is 10 let's say your Target price is 640 right how many shares should
you buy to ensure you don't lose more than $100 how many shares should you buy well if you're risking 10 cents right you don't want to lose more than 100 well that's 100 divided by 10 cents you're going to be buying 1,000 shares that's how many Shar shares you can buy at the end of the day if you oversize your position and you buy or you short more shares than you want to if that position becomes a loser you're going to end up losing way more than you want to that's why share sizing is so
so important to risk manage management so make sure before every trade you take calculate the the the correct amount of shares okay make sure you calculate the correct amount of shares so you don't end up losing more than you want to one simple mistake and you know and you know you buying more shares more shares than you wanting to to you're going to end up losing way more money than you want to and then that's going to affect your trading psychology we also have the percentage approach where let's say you have $1,000 portfolio and you
decide to risk 5% of your account per trade right so 5% of your account for trade that's just an Example usually maybe it should even be 2 to 3% but let's say you decide to risk 5% just to make it easier for us how many shares should you get per position well ,000 portfolio you're risking 5% of it let's find the dollar amount 1,000 * 5% 05 equal $50 so $50 is the amount that you're willing to risk right that's 5% of $1,000 right then your share sizing is going to be your risk $50 divided
by the size of our stop let's say for this example the size of our stop is 5 cents $50 divided by 5 C you're going to end up getting a th000 shares and if you're uh Curious oh well how do we know the size of our stop well you know that's why you know when you're picking your uh trading setups whether it's a buy setup or or a sell setup or a breakout you're going to know the exact entry the exact stop loss and then you know stop size equals entry uh price minus stop loss
price okay Golden Rule here's a golden rule when you are in doubt lower your risk if you're in doubt lower your risk if you're not feeling comfortable lower your risk okay it you know it never hurts to lower your risk if something is going on if you're not feeling yourself if you're kind of com you know compromised psychologically just lower your risk Okay that's a golden rule okay if things aren't going well lower your risk you guys get the idea whenever there's anything that's going bad in trading the last thing you want to do is
you know have a huge loss so lower your risk that's what I personally do sometimes when I have a few losing trades in a row what do I do I lower my I lower my risk uh keys to to success here as you guys know the tighter the stop loss the better reward to risk so that's why you want to find trades that have tight patterns that have tight stop losses at the end of the day guys risk management is all about discipline everything that I taught you today this is not this isn't anything that
difficult it's nothing that you have to you know aside from maybe that formula um but none of this stuff is difficult this is all just discipline making sure that you're disciplined with your stops you're disciplined with your risk and just keep you know just always keep in mind that you know you don't want to take on bad losers okay so be disciplined when it comes to your risk make sure you're never oversizing your positions and by limiting your losses through risk management you will become more profitable we talked about that and guys just understand now
that you guys are Traders you're also Risk Managers you are managing the risk of your personal account okay and we talked about the psychological aspect of it but if you're not comfortable with losing x amount per trade what's the Golden Rule lower your risk if you're feeling sad or uncomfortable after taking a trade Golden Rule lower your risk losses can um emotionally and psychologically affect you don't let your need to make money affect the amount you risk I understand you want to you want to make money we all want to make money we all want
to profit but don't let that need to win and that need to be profitable end up being your downfall cuz that might happen okay and you're going to become profitable and more you're going to make more and more money over time okay understand this might take time okay but that shouldn't discourage you anything in life that's you know makes money or that's worth anything you know usually takes time for to acquire those skills or to acquire that accomplishment so understand that this is all going to take time it's not a problem you will become profitable
over time as long as you manage a risk and you don't blow your account on some stupid trade because you completely oversized your position okay and understand that you're as a Trader you know as a Trad your psychology and your confidence is everything taking bad losses for no reasons will affect you I can tell you that personally it will affect your confidence and without your confidence without without that psychological comp uh composure you're not going to be able to take advantage of really good trades okay so please guys manage your risk be disciplined with it
don't you know try To go for huge winners always think about how much money can I lose if if this doesn't work out okay and that's really it for risk management I might include another little motivational risk management clip but that should make sense guys let me know if you have any questions thanks a lot hey guys how's it going thanks for tuning into this video the whole topic of this video is going to be share sizing how many shares should you be purchasing per trade and before I go into to it this concept is
very important it is a critical part of managing your risk if you guys end up buying too many shares on a trade you're going to end up losing you know way more money than you intended to if the trade goes south of course on the flip side you're probably going to make way more than you intended to if the trade you know ends up working out however share sizing it's it's important because you need to minimize your risk and you need to buy or short the amount of shares that you're comfortable with because trading is
not really about how much money can you make of course you know we're all in the game to make money but a critical question really is how much money are you willing to lose okay managing your risk is probably one of the most if not the most important you know uh elements of trading okay and share sizing is a you know huge factor In that so let's get right into it step one and before I actually go into the steps it's extremely simple this is something if you guys know basic math which all of you
do this is extremely simple all right step one you're going to want to ask yourself what is the maximum amount you know dollar amount I am willing to lose on this trade so um if you're comfortable with losing $100 per trade then that's your answer it's whatever you're comfortable with personally I do anywhere from one 100 to 300 uh you know sometimes I risk a little bit more depending on how I'm feeling or depending where my confidence is at but that is what I'm comfortable with that is known as your risk for the trade okay
so ask yourself what am I comfortable with losing and figure that number out and the whole idea behind this is that if you lose more than you're comfortable with losing then that's going to affect you psychologically it's going to you know hurt your psyche in a away you know it's going to make you feel uncomfortable it's going to be like wow I lost way more than I wanted to it's going to hurt your confidence you don't want that to happen when you have a losing trade it shouldn't affect you you know and the key to
that is you have to make sure you're losing the amount that you're willing to lose or that you can with lose that you're comfortable with losing step two calculate the size of your stop- loss for the trade some examples is a 10cent stop or a dollar stop Etc and in order to correctly identify the stop loss for the trade you have to make sure you know exactly what strategy you're playing different strategies call for different stop losses or different Stop loss placement I should say so I would uh definitely look into the buy setup which
is a video that that's posted in the server the breakout another video posted in the server and the one 123 pattern I don't think I posted that yet however um I going to do a class on that shortly okay and make sure you know what strategy you're playing because if you know what strategy you're playing you know exactly where to put stop loss so that won't be an issue and step three you're going to apply the formula what is the formula I'm talking about it's really simple it's share size equals your risk divided by your
stop loss okay so whenever you are going into a trade I don't care if it's equities or crypto or Forex and you're buying shares or you're buying cryptos you're you have to ask yourself what's my share size going to be okay and it's really simple let's say your risk is $200 that's the most you're willing to lose on this trade and your stop loss happens to be you calculate it's 10 cents then you do $200 divided by 10 cents equals 2,000 shares so there you go you know exactly how many shares to buy and if
you buy let's say those 2,000 shares and the stock does hit your stop loss meaning you know it doesn't work in the trade doesn't work in your favor and it drops by 10 cents the most you're going to lose is $200 which is the number you agreed you can you kind of a made an agreement with yourself that that's the most you're willing to lose okay you lost it but at least you're comfortable with losing that amount same thing here your risk is $100 your stop loss is $1 risk divided By stop loss $100 divid
by $1 is 100 shares so if you buy it right 100 shares if it drops $1 you're going to lose $100 or yeah and it drops $1 you're going to lose $100 okay it's super simple guys again share size equals risk divided by stop loss and I'm to the point you know where this is kind of automatic in my head if I'm this is I'm automatically doing the math every time I'm looking or uh you know considering a trade I just immediately uh doing this calculation in my head to really figure out what my stop
loss or not what my stop- loss what my uh what my share sizing is going to be because again I I personally don't want to lose more money than I'm willing to on that trade that's why share sizing is extremely important it's a critical part of risk management and guys never buy or short more shares than you than you're comfortable with doing because trust me if it doesn't work out and the trade goes south it will psychologically affect you okay well not only that it might just drain your account you might lose way more than
you intended to but anyway guys let me know if you have any questions about this concept it's super simple but in the formula is super simple but it's extremely extremely important please direct message me in manual trades or type in the premium chat tagging my name if you have any questions regarding share sizing thanks guys and have a good day what's going on guys hope you're Having a great day in today's class I'm going to give you guys a quick little overview of what Leverage is okay so if you're a crypto Trader or if you're
an aspiring crypto Trader you've probably heard the term leverage quite often because a lot of exchanges they give you guys the option to use up to 200x leverage which is a tremendous amount and if you don't understand what that means that's the whole point of this video when you're trading stocks most Brokers don't give you um anything more than than 2x leverage okay and that's why you know using Leverage is a lot more popular in the crypto space so let's kind of talk about what it is when you use leverage you increase your position size
by increasing your position size you number one increase your overall risk of the trade and you also increase the reward as well so that's why people use leverage ultimately to have a larger reward to make more money okay but how does using leverage actually work so let me give you guys an example let's say you have $5,000 right that is your own money you have $55,000 okay so you can enter a trade with $5,000 let's say the trade goes up$ 10% well you're going to make 500 if it goes down 10% you're going to lose
500 right right seems pretty easy now when you use leverage what you'll do is you'll take your and let's say we're doing 2 x leverage you'll take your $5,000 and then you'll also borrow $5,000 from the crypto exchange so now since you're now you're using 2x leverage right your overall position size is $10,000 $5,000 of your own money and $5,00 ,000 of the exchanges money right so you're technically borrowing money to larg in or you know to enlarge to increase your position size okay and now I mean if you have $10,000 and nowright 5,000 of
your own money 5,000 of the exchange's money if it goes up 10% now you're going to make $1,000 if it goes down 10% you're you're going to make or you're going to lose $1,000 right so you can quickly see by using 2x leverage you double your position size so instead of 5K uh uh in a position you're going to have 10,000 in the position and as you can see it does increase the reward right you're if it goes up 10% you're going to make double but now if it drops 10% you're also going to lose
double and that's only 2x if you do let's say 4X leverage in that case you're going to you know put $5,000 of your own money And then you're also going to take $155,000 of the exchange's money right to fund your position now you have $20,000 and as you can see the more and more leveraged you are the larger the risk however with large risk you also get large reward okay so that's a really beginner's idea of how leverage Works you're basically increasing your position size by borrowing money from The Exchange so just to give you
a little bit more details guys let's say um you guys might have heard the the term Margin Call or getting uh um liquidated by the broker let's say hypothetically uh you did right 2x leverage right so now you have $10,000 in the position 5,000 of your own money 5,000 of the exchange's money as soon as that position or that crypto drops to the point where it risks the exchange's money The Exchange will actually automatically liquidate the position and liquidate just means exit the position it will exit the position position for you right so let's say
you're in the positions 10,000 and it starts dropping right it starts dropping and it let's say it drops to the point where your 5,000 is gone right your 5,000 is gone But as soon as it hits the point where their ,000 is now at risk The Exchange will exit the trade for you liquidating the position closing the position and at that point you would you just lost the $5,000 okay hopefully that makes sense so whenever you liquidate whenever you hear the word liquidate it means you get out of the position or you exit the position
close it okay so as you could see the more and more leveraged you are the greater uh liquidation rate risk you're going to have right because at that point if you're 20 50 100x leverag it's really easy um for the position to get to the point where it's starting to risk the exchange's money and the exchange is not going to have that right as soon as they're at risk at losing money they're going to close the position and you're going to lose really everything that you put into that position okay hopefully that makes sense that's
what Leverage is you are increasing your overall position in order to have a larger reward however you also increase the risk so if you're a beginner crypto Trader my biggest recommendation is don't go crazy with the leverage right if you want to use you know 2x fine 5x 10x okay fine just make sure you're you really understand the risk involved and make sure you uh calculate the risk right and we're going to talk about uh calculating risk and calculating share size and risk management later in the course but just keep in mind you know that's
how what Leverage is and uh just keep in mind you got to really really uh think about the risk because you're risking a lot more with more leverage okay thanks guys what is going on guys hope you're having a great day today we're going to be talking about managing your position right trading management and I got a cup of coffee with me and we're going to be learning some amazing stuff so let me get a quick sip before we actually begin okay so I know a lot of people struggle with this topic where they enter
into a trade and let's say they begin making money right they're in they're profiting and they don't know exactly what to do right they don't know whether to just take profit or you know they don't know how to exactly manage that position and you have to you guys have to understand that managing your position is an art it's not a science okay there isn't one way to do it in fact every Trader is going to have sort of a different trading management system right something that suits you know himself and you kind of find that
out over time through experience through experience you're going to learn what suits your personality and what sort of trading management works for your type of positions but let's just get right into the presentation here okay we got how to manage your trades let's go so let us consider two different Possibilities here we have outcome number one so let's assume you just opened a new position you have already identified your entry your stop loss and targets for the position right so if it's a buy setup if it's a breakout if it's a break down maybe it's
a 1 two three whatever it is you should already know exactly what your entry price is stoploss price and what your Target price is or approximate Target price now let's say the trade doesn't work out in your favor and the trade actually hits your stop loss You're Going to exit the uh exit the position and take the loss there's really no confusion here if it hits your stop-loss you exit the POS position okay there's there's only really one outcome if the trade doesn't work in your favor and it hits your stop loss there's really no
management necessary you've already identified your stop loss prior to you even taking the trade so if it hits your stop loss you're out of the position no questions asked no confusion okay now let us consider another outcome let's say the trade that you took is a winner right you get into the trade and it starts going in your favor and it's a winner you're the trade you know which it doesn't matter what security it is whether it's a stocks crypto Forex whatever let's say it's approach approaching Target right and this is assuming you chose a
Target prior to the trade there's going to be certain situations where you know before you Enter a trade you're not going to be able to identify a Target right and we're not I don't really want to get into that too heavy we're going to be talking uh about that during the you know picking targets class but let's say you know you the security is approaching Target or it's approaching the point where you want to start taking profits what do you do are you just going to exit the position once it hits Target completely what if
the position continues more in your favor and you actually miss out on some profits right like let's say it hits your target you completely exit the position but then the stock or crypto and your trade it continues going in your favor and then you end up missing out on all those additional profits you really don't want that to happen to you you don't want to miss out on more potential profits by exiting the trade too early okay and that's where trading management comes in that's when you know your distinct management system will come into play
and you'll know exactly what to do um once your position actually hits Target all right so before we go into it I just want to clarify a specific topic because I use this phrase a lot and I think you guys should know what it means so I usually call it just getting shaken out of of a position so if I ever say getting shaken out of a position this is what it means so let's say you enter a position and you set your stop loss before the stock or Crypto in your trade goes in your
favor and it eventually hits Target let's say it hits your stoploss force uh first forcing you out of the position and therefore missing the move right so let's say you get into a trade right the trade hits your stop loss and right after it hits your stop loss it immediately starts going in your favor and it you know and you would have you know you would have made money on the trade for the fact if it didn't hit your stop loss right so that's what's that's what's um getting shaken out that's that's what that means
okay where it hits your stop loss and then it ends up continuing in your favor anyway so how do you eliminate getting shaken out of a position well number one it's don't set too tight of stop losses and I know that's kind of contradictory right we talked about in the risk management videos that you want to look for tight stop losses right and now all of a s all of a sudden I'm saying oh you can't have too tight of stop losses cuz you might get shaken out of the position right and it's kind of
like a conflict you you kind of have to pick the perfect stop loss right and my recommendation is just pick pick the correct stop loss for that setup right if it's a base breakout we know that we always place the stop loss under the base right if it's a buy setup you know we always place a stop loss under our entry bar right so I would say just stick to the basics like stick to um stick stick to what I've taught you guys but this is kind of an issue it's Kind of uh they're kind
of like budding heads where you know you don't want to get shaken out of the position but you also don't want to have too large of a stop loss because then you're not going to really have all that much reward to risk okay hopefully that makes sense and so how to eliminate it yet don't set too tight of stop losses give the stock or crypto some room to fluctuate okay worst case if you'll set a larger stop loss it may mean less reward to risk but at least you're not going to get stopped out and
be forced to enter again or miss the opportunity altogether right so you might have to set a little bit larger of a stop loss therefore making your stop larger right therefore uh you know you're going to have uh a worse reward to risk because you're not going to be able to buy or short as many shares right but you know that sucks or whatever but at least you're not going to get shaken out and see that trade end up going in your favor anyway so keep this concept in mind that you never want to get
shaken out of a trade you never want it to hit your stop loss and then have it go in your favor anyway so let's take a look at this example here it kind of looks a little confusing but let's walk I'm going to walk you guys through it we have a rally and we start to get a base right and we know what setup this is this is a base breakout right and let's say your entry is right here right it's your entry is over the base right so you're going to get triggered into the
position right here with this green bar So it hits your entry and now you're in the position right and let's say for this position you end up placing your stop loss right here right under these candlesticks and remember according to you know the textbook theoretical version that I taught you guys you should always be placing your stop loss under the lows of the base right so the correct way to place your stop- loss would be under the lows of the base which is this bar so this right here is the correct stop loss but let's
say you wanted to have a higher reward to risk so you ended up putting your stop loss up here instead of here right so you place your stop loss here instead of under the absolute lows of the base because you wanted to improve your reward to risk now let's say you get triggered into the position and all of a sudden the next bar is a red bar and we get a drop and it actually hits your stop loss that you placed here right it hits your stop- loss here it liquidates you out of the position
before you know on the next bar the next bar completely explodes and it goes right back up and makes new highs right but unfortunately you're you're not in this play anymore because it hit your stop loss here right how to avoid this well you know you should have placed your stop loss correctly in the beginning and put it underneath the absolute lows of the base so as a result of you having your stop loss here you got shaken out of the position before the trade actually went Into your favor and would have produced very nice
profits so what's the conclusion here because you decided to use a tighter stop loss right use this stop loss instead of this one uh uh you got liquidated and you missed this move higher okay so the theme Here guys is Place correct stop losses don't try to place too tight of stop losses otherwise you'll get you'll have the risk of uh getting shaken out of the position before it ends up continuing in your favor anyway hopefully this makes sense guys I know I kind of repeated myself a bunch of times but it's important that you
guys understand this and hopefully this all makes sense if it doesn't either you know go ahead and ask me in the server or just rewatch this video okay so how do you manage positions that reach Target right so let's say your trade has reached your Target price right you were in it from down here and all of a sudden it hit your Target price what do you do from here well you really have two options option number one you take profits you just exit the position as it hits Target and you take your profits and
it's a winning trade perfect or number two you Trail your position and you raise your stop okay and we're going to talk about this in a second but this for number the the second option that's where the trading management comes in so let's talk about option number one Let's talk about the takeprofit option first so take profit you can either number one exit your entire position right where you just liquidate your entire position you're completely out of the trade or number two you take some profit here and you leave the rest of the position open
in case it continues higher in your favor right so by doing option number two here you're securing profit right it's at that point it's a it's 100% a profitable trade you're securing profits and then you're allowing um you know that other half of your position or the other um you know whatever whatever however much you left in the position you let that run and hopefully make you more profits so that ends up and and by the way you might be thinking okay but you know how much of the of the position should I take right
like if you want to take some profit how much profit should I take um my recommendation is take at least 50% of your profits if you made $200 take it secure at least 100 or even do you know 75% where you secure um let's say like $150 right out of2 200 and you let the other $50 kind of run in worst case if you lose that $50 well you you secured 150 already it's for sure a winning trade but when we you know when we're talking about leaving the rest of the position open right we
take some profits and we Leave the rest of the position open well that begs the question how do we manage the rest of the shares that you left you know how do you manage those shares that you left in the position what do you do with them when do you take profits for them for those shares where do you place your stop loss for those shares okay so let's get into it I'm going to take a sip of my coffee real quick so one second okay perfect so your first option um in trailing your position
right so the stock reached Target however you still think this this can continue higher right so let's say it hits your target let's say this is a buy setup right this is a it pulled back this is a buy setup and the buy setup hits your target right but you think this still has potential to move higher what do you do so what you could do is wait for the pullback to complete right I'm talking about this pullback and raise your stop to the new pivot low and this doesn't only apply to a pullback let's
say it ends up basing as well you could also raise your stop loss to the um to right under the lows of the base so like I said you wait for the pullback to complete and you raise your stop to the new pivot low so this is your original stop loss right we have a buy setup here and your stop loss is under this entry bar what you can do as soon as it hits Target let's say it pulls back or it bases you raise your stop loss to that New pivot or the new lows
of the base okay so by raising your stop loss what you've done here is you have 100% secured profits because remember your entry is right here right your entry is right here by raising your stop you have secured profits right because let's say you raise your stop here and it let's say it attempts to go higher but then it fails and then it hits your new stop well if it hits your new stop you know at the end of the day you're still making money because you know this stop is over your entry so what
are the pros of this well number one you give yourself the ability to aim for a larger Target while securing profits with this new stop loss what are the cons well the cons is the pullback can continue and you can give back your profits and it's talking about this pullback right where let's say you hit Target right here and you think this can continue higher and you're waiting for this pullback or you're waiting for that base so you could raise your stop loss but instead this pullback just continues dropping and dropping and dropping and it
ends up hit hitting your original stop that might happen and then you end up having a a winning trade go negative and hit your original stop loss you definitely don't really want that to happen either so at the end of the day guys it's kind of up to you you know what I mean I'm kind of giving you guys the different uh strategies that exist but it's up to you with for you know what you actually want to do but in general guys you always want to raise your stop loss it's a very Good way
of securing profits while allowing the position to continue higher so this is one way of doing it where you're raising it to the new pivot low or you're raising it to the new um to the new uh low of the base now let's talk about another way you can Trail your position so let's say the stock right this is a buy setup right we get a pullback you have a buy setup you enter here your stop loss is right here let's say the stock or crypto has reached your initial excuse me it's reached your initial
Target right however you still think this can continue higher what do you do what you can do is Trail the position bar by bar okay what does that mean so as soon as the target is reached you Trail the position to the prior bars low right so let's say you have you know th this is the bar that hits Target right this is the bar that hits Target what you can do is raise your original stop to this Bar's low okay you raise your original stop to this Bar's low so in that case if it
goes against you well it's going to hit your stop loss and you've secured profits right and once you know let's say this bar has finished forming then you're going to raise this stop to this stop to Under This Bar lows and then as soon as this bar finishes forming you raise it to that Bar's lows so as you can see as each bar is moving higher and Higher and higher you're continuously raising your stop your stop loss to each bars low and by doing that you're giving the trade you're giving the stock or crypto room
to fluctuate right it like let's say that you raised your stop loss here and this bar is already forming it gives this bar the opportunity to go up and down and up and down a little bit before it continues higher like you know like remember stocks and crypto they don't just go infinitely up sometimes they go up sometimes they go down by continuously raising your stop you're giving that stock or crypto room to fluctuate while also you know having a tight enough stop loss where you're able to secure profits okay so what's the pros here
well you give the trade some room to continue higher while you're maximizing profits however a con of this is if you're thinking to yourself okay cool I I get the theory of this right I get the idea when it when it hits Target you're raising your stop loss to the to uh you know the bars low but which time frames am I going to use which candlesticks am I going to use that's where the difficulty comes in it's kind of difficult to decide which time frame you're going to use but guys by you know either
trailing your position this way or by trailing this your position this way what you're doing is you're allowing the trade to continue um earning you more and more money even though it already hit your target right so by doing this you're giving yourself The opportunity to still have stop losses securing profit but also giving the stock or crypto the opportunity to you know make really big gains right to make to it gives you the opportunity to have huge winners right because you're constantly raising your stop loss as the stock or crypto continues higher okay hopefully
that makes sense so trailing bar by bar time frames now let's talk about the different time frames you could use right so if you're swing trading right remember swing trading that's you know you're looking at the uh daily chart and the weekly charts and then you're using the hourly charts for entries um if you're swing trading you can Trail your position bar by bar on either the hourly or daily time frame okay hourly or daily time frame so uh I I can actually go ahead and show you guys uh an example of that let's see
I don't have my charts up actually my trading view charts up at the moment but I can show you guys an example in a different class um showing you guys how to apply this but um right so you're going to Trail it bar by bar in the hourly or Daily Time framing for swing trading if you're day trading it becomes a lot trickier because you can either TR choose to trade it on either the one minute or the two-minute chart or can you could also use the 515 or hourly time frame you have a lot
of options when it comes to trailing it on uh trailing it if you're day trading right if you're looking for A tighter Trail right and what that means is you're looking for you know tight stop losses you're you know it's more likely to secure profits as soon as possible without giving the trade as much room to operate by using you know lower time frames right because on Lower time frames the uh the candlesticks are a lot smaller there are a lot more of them right it's a lot more likely that you're going that's going to
hit your new stop loss if you're trailing it on the one or two minute time frames okay but if you want to secure profits as soon as possible without giving your the trade right room to fluctuate um then use lower time frames however if you do want to like let's say you found a St or crypto and you're extremely confident that it will continue higher but you also don't want to get shaken out easily um if you're really really confident that it's going to that it's going to continue higher then use larger time frames to
Trail where you could even use the hourly or perhaps the 15minute time frame okay if you're day trading okay also let's talk about this um this concept here the speed that it hits Target matters right like let's say you have a base breakout you have a base and you're playing a base breakout if this immediately pops into your target right as opposed to you know putting in a gradual move to your target you're going to want to take at least 50% of the profits that you made in that trade Right if this immediately pops really
fast to your target you you either want to take at least 50% of your profits or honestly you might want to just take all your profits and don't even Trail the position just take all of your profits right because quick large and sudden moves um higher could also lead to quick and sudden moves lower okay and the last thing you want to do is have the position immediately reach Target right really fast and then you're like oh but you know maybe I want to go for a higher Target or whatever you want to keep this
trade because you think it's going to go higher the last thing you want to do is get out or I'm sorry the last thing you want to do is stay in and have this stock completely fail and go right back down okay so if it's a really fast acceleration into your target take profits right at least 50% of your profits okay and understand that context matters and this doesn't only apply to trailing this also applies to setting stop losses uh from the beginning of your trade when determining how to manage your positions make sure you
look at how the overall stock or crypto is moving right if it's whippy or if it's sloppy or if there's a lot of Tails right whether it's bottoming Tails or topping Tails make sure you give that trade more room to fluctuate in other words set a little bit larger of a stop loss okay and yeah you might minimize your reward to risk but at least you won't get shaken out the last thing you want to do is get shaken out of a position that makes a huge move in your favor And understand guys like I
mentioned earlier trading management is um is difficult it's an art not a science once a trade is working in your favor and it it's uh you know hit your target or you're making good money on it and you want to start managing that position and you know making sure you maximize your profits while securing some profits in case the trade you know ends up failing after all then you know you got to really kind of try to master what works for you what what Trad uh trade management style works for you okay um and over
time of developing experience like I say you're going to find different trading management strategies that work best for you every Trader is different and unique okay guys so hopefully this makes sense all right uh I'm going to have one last sip of my coffee so cheers to you guys okay so if you're kind of confused on this understand that it's normal okay this is kind of a difficult concept so make sure you come to my live streams make sure you ask me questions on how you can Master this but the general idea here just to
give you guys an overall summary of what's going on if a winning trade right hits your target you could either take all the profits right and just take the position liquidate the position take your profits or you could Trail the position right and by trailing you're going to be raising your stop loss to either uh a new pivot low or maybe the under the lows of the new base that was Forming um or perhaps you're going to Trail it bar by bar where as soon as it hits Target you place your stop loss under uh
the most recent Candlestick okay so whichever way you do it make sure uh make sure that you're kind of experimenting with it because you kind of like I said you have to find something that works for you and last thing I want to emphasize here you know last thing I definitely want to really I want you guys to really get this if you enter a position and it fails and it goes against you and it hits your stop loss exit every time always respect your stop loss and if you're share sizing correctly right by calculating
right risk dollar amount divided by the size of your stop right that that will give you your share size if you're share sizing correctly and you're respecting your stop losses you're never going to lose more money than you intend on losing right if if you're the maximum amount you could lose is a $100 then through share sizing through risk management and through following and being disciplined with your stop losses you're never going to lose more money than you intend on losing so just this should be a rule this should be like a golden rule if
it hits your stop loss exit the position Don't Let It Go more and more again against you and to do that honestly my recommendation is as soon as you place a trade don't do mental stops just put a heart's physical stop into your broker into your exchange just place the order where you know if you buy if you once you're in the Position place your sell stop loss order at whatever the price it is and if it hits your stop loss the system you know your broker your exchange will immediately take you out of the
trade in that case you're not going to lose more money than you intend on losing therefore are limiting your losses I know this was a lot of information I know I'm talking a lot guys but I really I understand this stuff is difficult that's why I'm really trying to um you know give you guys enough context and really explain everything very thoroughly okay I hope this makes sense see you guys in the next class what's going on guys hope you're having a great day we are approaching the end of the course and now our goal
is to create a trading plan okay every Trader needs a plan and this doesn't really only apply to trading if you want to be successful in anything you need to approach it in a systematic way you can't have random decision making you have to have a plan and you have to execute that plan after you execute that plan you have to review it and refine the plan and continue forward okay everyone's trading plan is you know everyone's trading plan evolves over time all right so today I'm going to be helping you create your own trading
plan and I'm going to be talking about how I created my trading plan back when I started trading and even though I have three years of experience now I make money basically every single day I still don't deviate from my plan and I still Refine my plan over time even though I'm already profit and I'm already you know experienced so this isn't just for beginners even if you're you know a profitable Trader already you could still find Value in this class so let's go ahead and begin so building a trading plan why do you need
a trading plan so like I said guys to succeed in any Endeavor especially trading you need to have a plan you need to have you know a list of actions that you have to take and a you know a list of rules that govern your behavior and with a plan you're going to be trading in a consistent and systematic way with no random decisions as Traders we want consistent profits we're not going to be able to make consistent profits unless we're operating in a consistent way right if we're consistently doing the same things then we're
going to have some sort of repetitiveness in our trading and and especially if we're doing the right things consistently we're often times going to make money consistently okay but how can you expect to develop or or develop as a consistent Trader consistently profitable Trader that is if you're doing random things every day you have to remove the randomness from your trading and as soon as you remove that Randomness and you're trading in a defined a predefined way you're going to notice your consist and your results start to improve almost immediately so over time you're going
to be adjusting Your plan based on what's working and you're going to eliminate from your plan what's not working okay so in the beginning I would really suggest to start with conservative smaller goals and create strict rules create strict but easy to follow rules I should say right and with the plan guys you're going to be a accountable for your actions and there's going to be times in your trading career where you go against your plan it's happened to me it's happened to every Trader where you have developed the plan but then you go against
it and you lose money or perhaps you know you don't do the right thing and that's going to be an ego hit you're going to say to yourself wow why did I lose this money it completely went against my plan it completely went against what I planned for yet I still did it and I lost money because of it and you know it's going to feel bad you're going to have an ego hit but that's a part of the journey you're inevitably going to you know kind of go away from your plan and take stupid
trades and make stupid decisions but that's a part of the growth process but with the plan now you're going to be accountable you're going to have some sense of responsibility where you don't want to disappoint yourself and take trades that go against your plan and go against your predefined reasoning okay so what we have to understand now Is every Trader is different every Trader must trade to his or her own personality so what that means is you could take 10 successful Traders put them in a room 10 random s really successful Traders and if you
look at each of their strategies right and how they make money you're going to notice that they all make money in completely different ways right and they trade based on what works for his or her own personality everyone's going to have a different style what I like to trade excuse me you're probably you know you're probably not going to have an affinity for that sort of trading just like what makes sense to you what trading setups work for you and how you like to trade that's not going to work for me so your goal through
this entire learning process is to slowly figure out what works for you what style do you want to adopt it's totally okay in the beginning to kind of copy someone else's style as you're learning but you're going to quickly notice that you if you don't resonate with someone's style right it's just it's the trades are not going to make sense to you and you have to find maybe one of our analysts find um what analyst style works for you what resonates with you what makes sense for you and start taking his trades and then over
time you're going to be taking your Own trades that work for you so play on to your individual strengths so let me give you an example uh and I'll give you my own example when I started trading I was going through the process of figuring out what works for me what I like to trade what's my own style and knowing my personality I'm a very uh high energy I'm very I don't want to say I'm impatient but I'm high energy I don't like to lose money right like I know losing money affects my psychology sitting
and seeing myself losing money affects my psychology um I know that for example like I said I'm high energy I like to I'm kind of like a Twitchy guy I'm always moving right and I've developed a trading style that kind of fits my own personality where excuse me I'm less of a patient Trader and I'm more of a scalper I'm more I'm more you know kind of get in and out of positions I go for quicker profits than most but I do that a lot of times right and you might be thinking and hearing uh
you know myself talking about it you're like oh I'm actually a patient person I would never want to just take profits right away well there you go now you know what style you know you have to adopt but for me that's what works for me and I've been able to I I was able to figure out that very early in my trading and then play on to my strength right develop that strength of mine because I'm really good in high press quick situations where other people are Better in you know very low pressure uh you
know letting the trade play out over time giving it the room to play out for me I like to do high share size in high pressure environments with where where it's really quick In-N-Out scalps right quick in and out getting in the trades you know getting in entering really fast exiting really fast that's just what I prefer it's what fits me and I play to that strength so building a trading plan the first thing you want to do guys and we've talked about this before is uh figure out your risk determine your risk figure out
what risk you're comfortable with losing if you're a beginner even if you're like an intermediate Trader re my recommendation is risk low amounts focus on consistency okay and I can't emphasize this enough but if even if you're paper trading use the same risk and try to make it as realistic as possible I paper traded for four to five months before I started trading with real money but I didn't play I didn't play around with paper trading right like I didn't just treat it like a video game I really tried to you know go into it
and paper trade as if it was real money and because of that you know and when I lost paper trading money I felt bad about it like you know like I I kind of had the same reaction um as if I lost real money right and I had to force myself to really make like I want to think about It like it's real money because that will actually prepare me for what I'm actually trading with real money later down the road so even if you're risking $10 to $20 right like if you're if you're just
beginning risk $5 a trade $10 a trade and that risk that's the maximum amount you could lose on that trade risk a low amount $5 $10 even a dollar who cares right just get just start developing the right habits with low amounts of money and my recommendation is paper trade okay paper trade and when you're paper trading they're going to give you like in your account since it's fake money they'll probably give you like a million dollars to paper trade right don't use that like don't like make it realistic think about how much you're actually
going to be trading with when you're trading with real money and then paper trade to that account size right like if you know you're only going to have $1,000 account size when you're paper trading assume you only have $11,000 to paper trade and practice realistically uh risking realistic amounts of money like if you're make if you risk $200,000 and you make a $100,000 on paper trading you're like oh wow I made $100,000 like imagine if it was real money you would have never done that if it was real money because with real money it comes
to risk right and that's going to affect you you're not going to be risking $200,000 in a random trade right so take it seriously rule never deviate from your risk never deviate from your risk never um increase your risk randomly never just if you're if you set $10 as Your risk don't randomly increase it to $20 or to $30 okay so let's talk about strategy requirements you should only be trading when you when you see a distinct strategy that we learn here don't trade random setups don't make random decisions for each strategy what you want
to do is create a little template of requirements of what the stock or crypto must have so here's just an example you want to have the pattern I chose the buy setup you want to have a must have and a cannot have and this is just an example okay so must have it's if it's a buy setup established uptrend okay Rising 20-day moving average multiple time frame Alignment 40 to 60% retracement your musthaves might be different than mine maybe you're a lot more of a strict Trader and you want to include all the other conditions
we talked about for the buy setup right if you don't remember go back to the buy setup class um but this is just an example so this is what you want to have must hav right and then cannot have where if it's let's say there's no Market alignment don't trade it if it's a deep or shallow pullback on the buy setup don't trade it there's large amounts of resistance above the buy setup meaning there's limited targets don't trade it right so this is a little template you want to have for every setup all right guys
sorry the stream actually cut off so we're going to continue on here so the whole point of what we're doing here is we're we're creating a template where we have must haves and cannot haves so what you do is Once you have your template created you can go back to my classes to figure out the exact requirements what you do is you know you write this either on your computer or on a notebook and whenever you're you know finding a trade let's see let's say you're on your charts and you see a buy setup right
you see a buy setup or a potential buy setup and you go to your charts and you say okay does this have an established uptrend on multiple time frames okay it does check mark does this have a rising 20-day moving average that's trending under price okay it does check mark does this have multiple time frame alignment do we have confirmation on the other time frames that everything looks bullish okay we do check mark how's the retracement looking okay check mark very good how's the pullback looking do we have an entry bar check mark okay great
do do we have a tight stop loss with good reward to risk we do check mark okay does it have now let's see what it cannot have does it have a deep pullback no do we have good targets or do we have bad targets no we have pretty good targets right and you're going to go down the list like that and if if the buy setup matches all of your requirements or most of them at least right like it it kind of depends on you how picky you want to be then then you take the
trade and if it's a let's say a breakout you do the same thing you look at your template right and if you're wondering what should I have in my must haves what should I have in my cannot Haves well you you have to look at the class look at my classes and create a plan and just look at the requirements and make a template like that okay so that's that's kind of the work that you guys have to do let's talk about entry requirements um only enter a trade that has a distinct entry point B
based off what strategy you're trading right if it's a buy setup you know where the entry is it's above the entry bar if it's a breakout it's above the highs of the base if it's a climactic move then you know it it's above or below the entry bar right so make sure you have a distinct entry and maybe put that in your trading plan I I have to have a distinct distinct entry I'm not entering randomly I have a distinct entry place a stop loss exactly where you should for the strategy you're playing right you
know where to set your stop losses for each strategy make sure you have an exact price that you're setting it it's not random okay it's distinct you know what price you you put it into the system right you're setting your stop loss in the system if it hits that stop loss you're you're out of the trade no questions asked asked right and you can make that a rule where if it hits your stop loss you're out of the position right you're not going to allow it to go against you more than where you placed your
stop loss right if it approaches Target you look to take profits or you Trail the position right so building a trading plan let's talk about protecting profits so this is a really important idea and this you know I've seen successful Traders completely lose their Confidence and lose their Mojo just because they failed to do this let me let me give you an example right let's say I make I made $1,000 on the day or you let's say you made $1,000 right so you're up $1,000 you have to ask yourself how much am I willing to
risk now right like if you you're already $1,000 in the profit are you willing to lose all of that $1,000 where you're going to end up finishing with zero like you want to protect some of the money you made on the day right so let's say you have $1,000 and you say to yourself okay I want to protect at least $800 I can't lose I can't you know lose more than $200 on this trade i h i have to protect 800 right if you're at a th000 I have to protect 800 I'm not willing to
lose um more than $200 okay cuz th000 minus 200 is $800 okay so in that case that'll be your that you put that in your plan right you're not you have to protect 80% of the profits you made on the day once you hit a certain Target or something so if you risk $50 per trade $50 is one risk unit or one R so one risk unit is whatever your maximum risk is that's one R in this case it's $50 remember we talked about that we always want to have two to one reward to risk
in other words two two RS to one r or a $100 profit at Least for $50 risk so per here's one strategy you could do if you're up five hours in the day you have to protect at least four hours in other words if you're up $250 in the day right cuz 5 * r one R is $50 that's $ 250 you must protect 4 RS which is 4 * 50 is 200 so you have to protect $200 if you made 250 this is one strategy and let's say you're in an open position you're in
an open trade and you are up two RS you are to either Trail to break even or Trail to secure some profit with the management strategies we've already discussed so the whole point of this is let's say you know it hits your target you're up already two hours on the position which is you know that's what we want we want at least two to one reward to risk you can't lose money on that trade either Trail it to break even or Trail it in a way where you could secure 100% some profits right with the
management strategies we've discussed or or just take profits completely right it depends on you so let's talk about some rules that you have in your trading plan at the end of the day guys it's all about the rules it's all about the discipline right it's all about following these rules staying disciplined okay that's that's you know and each rule everyone's uh list of rules is going to be different based on your own psychological flaws you have to figure out what is standing in the the way of your trading from really taking the next step what's
psychological flaw Specifically and then create rules addressing that flaw so I kind of listed a whole list of examples so if you lose X number of consecutive trades you step away or lower your risk if you lose five trades in a row lower your risk from $50 to $25 until you gain your confidence back or just step away from Trading completely for the day if you lose four hours after being up five hours Stop trading for the day so let's go back to this example let's say you're up 250 if all of a sudden you
lose four RS so you lose $200 and now you're only up $50 on the day you lost four RS step away okay you don't want to Snowball the losing I think a lot of Traders um actually I'm going to make this point after we get through all the rules real quick cuz it's kind of an important one but so predefine your risk and reward for each trade before you enter each trade make sure you know what your risk is where the stop loss is where the entry is what your tar what Target you're looking for
and make sure it's predefined you know the exact prices of your target your entry and your stop loss another Rule and this is more of like a guideline you you're trading to acquire skill not to make money okay don't worry about the money worry about you acquiring the skill if you focus on acquiring the skill the money will come I promise you I can guarantee you if you're focusing on the skills and Learning how to become the best Trader you can the money will come I guarantee you and it will come in Spades okay you
will make a ton of money the fact is trading is not a linear process success is often not a linear process right you're usually kind of I can't really draw it but you know usually your success is kind of flat flat flat until it goes exponential okay so just focus on developing consistency focus on becoming a better Trader I promise you the money will come and a lot of it will come as well if you feel emotionally compromised step away and lower your risk if you're trading and you're and you start to feel that you're
trading off emotion step away okay that's that's a big rule for mine for me don't make random decisions every decision should happen for a reason that you could justify okay don't have any outside beliefs you only listen what the charts are telling you that's a big point I'm probably going to make a separate class on that uh just to listen what the charts are telling you understand like I said you guys are going to have different rules based on your your psychological flaws every Trader is going to have different rules you have to figure out
what set of rules fits you okay so that's really key okay and guys you have to understand that in the beginning don't be focusing on creating a perfect trading plan there's no such thing your plan is inevitably going to Evolve over time so what your goal is is create a plan right first uh determine your risk then make a little template like this for every trading strategy you're looking to play then create some management rules right when are you going to take profits right how much profits are you willing to get to to uh sacrifice
if you're are to trade right uh how are you going to protect your profits right all this stuff create a plan at the beginning make it simple right just make a beginner's plan then execute go in for 2 to 3 days or 4 days maybe a week execute that plan record every single trade you take and at the end of the week you're going to go back and review every single trade that you took or maybe you could do this on a daily day basis as well review every single trade that you take and see
what's what's where are my mistakes right where do I need to improve what am I really actually doing wrong right and if it's a question on okay I'm taking bad setups then review and be like okay what makes this a bad setup what would a manual say right and if you're confused that's what the live streams are for come to my live streams and ask me questions right and you're I'm sure you could probably I could help you a lot with evolve helping you evolve your trading plan right and after you ref after you review
right you're seeing What you're doing wrong you refine you fix up your plan you change your plan you make some adjustments and then what do you do the next week or the next day you execute again then you review then you refine then you execute again you review your find and this is a process that will take time and you're going to notice all of your negative habits from your trading are slowly going to go away and guys in trading it's really about it it's not about what you are doing in trading a lot of
the times it's about what you're not doing in trading what you don't do in trading right like if you minimize all of your stupid mistakes all of your psychological flaws that are leading to unnecessary unnecessary losses If you eliminate all the garbage that you do in your trading right you're going to become more profitable like for me guys personally when I was first starting out my number one goal wasn't to make money it was just to figure out what I shouldn't be doing what should I not what should I stay away from in trading and
once you understand what you should stay away from in trading what setups to stay away from what charts to stay away from right what maybe psychological mindsets you should stay away from right once you know what not to do it's really easy to flourish and what you know you're Supposed to do if that makes sense just focus on what to do eliminate all the stupid garbage from your trading and you're going to see your trading go to the next level okay that's really it for the presentation guys just understand that this is an evolving plan
and I think we talked about I mean guys just go step by step here follow everything um I really want to emphasize that at the end of the day everyone's different okay everyone is completely different your your your plan is going to be different from someone else's plan but always create a plan do not procrastinate put it pen to paper write it down and think it through stop trading randomly make this plan and execute off your plan okay don't procrastinate write it if after this class take out a a piece of pen a piece of
a notebook get a pencil or pen write down your plan okay and once you do that you're ahead of the 95% of Traders the 9 5% of all the amateurs who don't know what they're doing you're going to be ahead of them because none of those guys have a plan they're trading randomly they are effectively gambling like at the casino why cuz they're not doing anything consistently they don't have a plan of execution they just do Randomness and I can guarantee you if you're just going to be a random individual random Traer you're not going
to ever consistently make money which is the goal all right guys hope this makes sense please come to my stream if you have any Questions what's going on guys today I'm going to be talking about one of the biggest mistakes and one of the biggest misconceptions that exist in trading okay and that misconception is following and listening to the news okay and this kind of touches uh a more broader concept of you don't want to allow outside beliefs and outside opinions to affect your objectivity and your trading okay so once you are a competent Trader
once you understand how to read charts how to read price action right you should be able to trust your own ability to read the price action and see what it's telling you okay I want you to forget about the news right because at the end of the day guys all the news that we hear is already priced into the stock or the security we as the public are the last ones to hear about any news or any recent developments we're the last ones to hear about that all the shareholders uh of big companies all of
the big whales who are trading crypto they already know about what's going on they've already traded you know based on that news so stop listening to news stop listening to outside information when you're trading the charts and price action they give you all the facts they let you know exactly What's going on so when you're reading the charts if it's telling you that it's bullish and you have some news or maybe your grandmother told you that oh this is actually bearish you should be shorting this stalker crypto don't listen to her okay not to you
know no offense to Grandma but listen to the news I mean I'm sorry listen to the charts gez now I got myself all messed up listen to the charts listen to what the price action is telling you don't allow what your friend Billy told you about the stock oh you should buy the stock my friend told me that it's going to go up don't listen to that it's all garbage listen to the price action that the charts are telling you listen to the facts don't let outside information affect the way that you are looking at
the charts and you're decision making because at the end of the day the charts they tell us what's actually happening right now what the bias is right now okay so when you're Trading guys don't let any outside noise or any outside opinions change your thought process and affect your objectivity ignore all of it I have been trading for 3 years I have not once looked at the company that I'm trading what they do what um you know Financial State that they're in what the uh what what news came out about them like I never look
at that it doesn't matter I only look at price I only look at what's going on at the ground level what are the facts telling me and the charts tell you everything you need to know so don't make the mistake of listening to outside information only focus on the charts and What price action is telling you okay the the news often times is completely useless unless you're an Insider who's you know very close to the company and you're the first one to hear about the news and you trade on it and honestly usually that's Insider
uh trading so you know you can't really do that either but just focus on the facts guys don't listen to the news don't listen to outside information hope this helps um yeah don't make that habit okay guys thanks what is going on guys hope you're having a terrific day I'm very happy to finally teach this session of the course and today we're going to be doing a very practical um overview of the charts we're going to actually look at some charts and review everything that we've learned so far in this course so just as a
review we learned candlesticks how to read candlesticks right uh how to identify different looking candlesticks and what they mean and we've also learned about the 20-day moving average and the 200 day moving average now that you guys have learned these three concepts we are able to now actually look at charts and begin understanding how to read charts so before I continue with the strategy section of the course or looking at risk management I just want to look at some charts together and help you guys just evaluate them and Point out different candlesticks point out uh
what the different moving averages mean on the charts so hopefully this is going to be really really helpful for you guys to solidify that information that you've already learned earlier in the course okay and I my goal was to make this course as practical as possible so that's what I want to do for you guys so let's look at some charts take away my camera so we are on trading view.com right and first off let's just review how to uh actually you know create your charts so number one you want to make sure you have
candles selected you go to this tab candles selected right and once you have candle selected go to moving average or I'm sorry go to indicators and write moving average just click on it twice so one just appeared right there click on it again another one just appeared and by the way guys you can do this on any single broker that you're trading on this isn't just exclusive for trading view you could do this on any broker any crypto exchange so once you have the moving averages up go to the settings change the length to 20
okay and I'm going to make mine white that's just a you know personal preference and change the other one from to 200 and I'm just I'm going to keep that one blue perfect so now that we've done this we're able to read charts and so as you can see we have the 200 day moving average here the 20-day moving Average here and our candlesticks we are ready to begin reading charts now let me quickly talk about looking at multiple time frames when you're beginning to analyze charts and we have a separate section later in the
course really going over which time frames you should be focusing on so I'm not going to get into that too much now I just want to give you guys the idea and give you guys you know just kind of the the background information when you're looking at time frame so usually guys I always start with the daily chart um so the daily chart every single one of these candlesticks represents one day worth one day's worth of price action right so for this day let's say for this day right here that's Friday January 13th price opened
at 18666 you can see there on the on the right and it closed at 196 19860 okay so that's just an example this represents one day's worth of price action right now if I go to let's say the hour chart now every single one of these candlesticks represents 1 hours worth of price action so the last 24 candlesticks on this hourly chart represent one Candlestick on The Daily time frame okay I think that makes sense right if this is a Candlestick this is a daily candle then if you go to the hourly chart right 24h
hourly the previous 24 hourly candles are going to make up that one daily candle okay so Hopefully that makes sense now I always like to start on the daily chart I like to look at the larger time frames meaning the daily and the weekly chart first and the reason I like to do that and I'm going to discuss this later in the course but the reason I like to do that is because I like to look at what the overall context is of that stock or crypto I like to see what it's doing on the
larger time frames how is it trending you know how was the overall context of the stock or crypto trending and then I like to go into the lower time frames and then I where I like to find uh entries and look for my specific strategies that I that I do okay so we're looking at Bitcoin here on the daily chart so I think actually let's let's go ahead and uh go to the hourly we're we're going to be able to see a lot more price action here so right off the bat how am I going
to how am I analyzing this chart well number one from here all the way to down here we see we have a declining 20-day moving average right it's trending lower and right here the slope of it changes and it becomes a lot more uh kind of steeper going lower you could see how well price has respected right the 20-day moving average basically every time it retraces into it it drops okay so every time we get a drop and we Retrace back into the 20 we drop again right here we broke it but we immediately Dro
back down and here we based into it declining right here perfect short right so quickly you're seeing that you know in real life examples when the 20-day moving average is trending and in this case it's trending lower you could see how well price respects it you can see how well price is retracing back to it during this downtrend specifically okay um another example here is we have the 20-day moving average going through price right here so you know I'm not seeing any significance here I kind of ignore it while it's doing that but here I
see you know we have the 20-day moving average trending higher right here I see the moving average kind of halting prices from continuing lower you could see right that like it's price is respecting the 20 and eventually we actually get a breakout right we have a rising and trending 20 and then we get the breakout so this is this is actually a strategy that I would play this would be called the breakout right and we're going to be looking at strategies a little bit later in the course okay we could see that as soon as
Bitcoin hit the 200 day moving average right like I said the 200 acts as resistance it uh immediately dropped so in this case it was acting as Perfect Resistance and we dropped so you could see quickly how these moving averages are affecting the charts and how they're affecting the price action of Bitcoin Okay you could see here the moving average is moving through price and it's flat right the 20-day moving average is flat it's not trending and we don't have any really you know significant price movement but as soon as we the 20-day moving average
starts trending lower right because we always want a trending 20-day moving average that's when we see price retracing back to it and respecting it okay if we go further back um let's Identify some candlesticks so uh give a second to yourself and try to identify what this one is right that's a topping tail obviously right and we can see what what does the topping tail mean it means that the sellers have taken control so we rally the sellers have taken control and then we end up continuing lower okay so that's an example uh right here
this is kind of an igniting red bar right we didn't end up continuing lower but nevertheless it is an igniting Red Bar uh this of course is igniting Red Bar as well um let's let's take a look at what else we got here by the way guys I'm doing this absolutely candidly I never set up I did not set up these charts beforehand we're just analyzing right off the right off the top of my head okay um so okay this is a really good example right here of um we talked about the the uh Squeeze
Play The Pinch play where we have the 200 day moving average breakout right uh we could see here that basically starting from right here the 20-day moving average starts trending higher we also see the 200 day moving average kind of flat right it's not perfectly flat but it's flat and we could see that as soon as the 20-day moving average starts trending into the flat 200 we can see price begins oscillating between the two right the 200 is acting as resistance while the 20-day moving average is acting as support right price is going to the
200 and dropping retracing back to the 20 and then eventually as soon as we intersect we get that breakout that we talked about and notice that during the breakout and during this huge rally we have the rising 20-day moving average right and if you guys have if you guys really think about it we talked about how the slope matters right the slope the degree of steepness you could see that right around right here the degree of steepness of the 20-day moving average started you know it started increasing it started getting much much steeper right and
eventually we ended up you know because it was so steep the move was unsustainable and we ended up having that big drop okay and also right here we could see that price perfectly retraced right here uh perfectly retraced to the 20-day moving average and then we had a uh kind of a buy setup we're going to learn about that later we have a rally we don't actually follow through with this rally we rally and then immediately drop but nevertheless you can see that how well price is respecting the 20-day Moving average okay hopefully that makes
sense right if we look back again we could see it's trending lower here we could see how well price is respecting it okay so the main idea here guys is what what I'm I what I've been trying to emphasize we want the 20-day moving average to be trending right we don't want it to be flat we want it to either be trending higher or trending lower and we can also see the usefulness of the 200 day moving average okay um so when you're analyzing these charts you never want to give too much emphasis on one
particular Candlestick right so just because let's say you look at uh you know you don't want to judge the entire chart off one candle you want to kind of H look at all of the candles and how all the candles are moving before you come to a conclusion about what's going on okay so uh let's let's continue looking let's go actually on a different time frame now let's go ahead and look at the 15-minute chart and the 15-minute chart right it is um you know every single one of these candlesticks represents 15 minutes worth of
time and right off the bat you could see the 20-day moving average as soon as it becomes flat and it moves through price we don't get any movement right we're kind of just fluctuating back and forth but as soon as the moving average begins trending higher and curling under price right here that's when we get the Breakout and we also have significant extension from the 20-day moving average here which led to a drop right so we're going to talk about um you know Finding different short setups when we have that extension from the 20-day moving
average and remember extension from the 20 it just means distance from the 20-day moving average so right here there's plenty of distance from the 20 we could look for a short here but we're going to be discussing strategies like that a little bit later okay hopefully that makes sense let's Also let's go ahead and look at the weekly chart okay so now we're looking at the weekly chart um every single Candlestick represents one week one week's worth of price action so one of these weekly charts let's say this weekly bar that represents 7 days worth
of price action meaning if you go to the daily chart the last s days of price action represents this one weekly candle hopefully that makes sense so looking at the weekly candlesticks or the weekly charts we could see that once again when the moving average specifically when the 20-day moving average is trending lower you could see how well price is respecting it right you could see that it retraces back to price or Price retraces back to the 20 right you could see how well it respects it even during this uptrend here we could see here
the moving average halted prices from from continuing lower started trending higher under price we went to a Breakout So guys I I'm constantly talking about the 20-day moving average um especially here I mean check this out guys um check this out during this uptrend every time price dropped to the rising 20-day moving average we continued higher and this is Bitcoin this is the Bitcoin weekly chart right every time you could see when when the moving average is trending you could see how well price and how well Bitcoin is respecting it right and we could see
uh this obvious solid uptrend we can also see the 20-day moving average becoming steeper and steeper and steeper until the point we have some extension and that's when we drop okay hopefully this makes sense right and so now that we understand how the 20-day moving average works right it works when it's trending either higher or lower right and we understand the slope and we understand the 200 day moving average and how to read some of these candlesticks now we can begin to formulate strategies from it right so that's what we're going to be doing soon
is forming strategies right and my biggest recommendation is to put the 20-day moving average on your charts put the 200 day moving average on your charts and begin looking at Price action and be begin trying to find different patterns and trends that are occurring you're going to notice whenever the 20 is trending higher and under price price tends to bounce off of it it tends to retrace to it when it's when It's in an uptrend and just like if it's going lower right right here it's going lower and the 20-day moving average is declining lower
and trending lower you can see price retraces back to the 20 right even during a downtrend okay so hopefully this all makes sense guys hopefully you have an innate understanding of how to use the 20 now right and you have some idea of how to look at different time frames right we know that we have to be looking at several time frames we have to be looking at the daily the weekly chart the hourly chart and don't worry if you don't understand which time frames to use yet we're going to be going over that uh
later in the course all right guys so hopefully that gives you some insight on how to practically look at the charts okay I might actually make one more video for guys to look at over some charts just to really solidify that understanding okay but at the end of the day guys this isn't hard okay using the 20-day moving average isn't that difficult using the 200 day moving average not that difficult right um understanding what candlesticks mean what it's not that difficult it's all about memorizing and just being able to recognize what you're looking at this
isn't hard stuff guys it's all about applying it in the correct ways and I think the hardest thing about this is really trying to apply it on several time frames and I'm going to you know cover that later on the course so hopefully this helps you and I'll actually probably create one more for you before we continue on with the rest of the course all right guys thanks so Much hopefully this made a lot of sense let me know if you guys have any questions and see you on the next module what's going on guys
today we are finally going to test our knowledge and test everything that we've learned so far in the course so I'm really excited uh to kind of go through some uh questions for you guys it's going to be kind of like a quiz type presentation so my recommendation is really take this seriously uh try to actually do the quiz yourself and I'll just show you guys what it looks like so quiz time um I'm going to give you guys a bunch of these sort of diagrams with uh different numbers right with what's this what's that
what's this and you guys just have to identify it so my biggest recommendation guys is to take out a pencil or a pen get a piece of paper and pause the video okay pause the video whenever you get to this point pause it and write down one two and three write down exactly what it is and write down some qualities of it for example if you find hyp hypothetically a buy setup or a breakout or um whatever whatever strategy is a 1 12 three write down what makes that buy setup or breakout good right like
we talked about all the qualities that we're looking for in these setups try to you know write down why it's a quality setup uh what are Some deficiencies in that setup okay and then I'm going to show you guys the exact uh you know what we're identifying here and I'll give you guys my explanation of it okay so just pause it right now go ahead and tell me what 1 two and three are write as much information as you can and I'll you know we'll go over it in a sec so pause it and uh
we're going to carry on here in 3 two one so first off we have a buy setup number one right we rally we pull back we have a really nice entry bar to the rising 20-day moving average it wasn't quite successful that successful of a buy setup because it didn't reach the previous High which is Target but nevertheless it's a buy setup so hopefully you guys um spotted that number two what do we have here we have another buy setup rally pullback we kind of get this little entry bar it's not the best entry bar
we have a rising 20-day moving average which ends up being number three three is a rising 20-day moving average here we become a little bit climactic and we have we're a little bit ex you know we have an exhaustion pattern similar here because of the distance between price and the 20-day moving average we also here have a we have another buy setup here right rally we pull back to the rising 20-day moving average I don't know if I would have played this buy setup that's why I didn't like you know put it as one of
the uh put it as one of The um identification you know I didn't put a number here so hopefully Mak sense let's continue okay guys so I want you guys to identify 1 2 3 4 and 5 go ahead and try to identify everything that you see here pause the video okay and hopefully you guys did that we're going to go ahead and start here so number one we have a base breakdown right we kind of have a sloppy base we have a declining 20-day moving average we begin to break down we drop we drop
what do we have here we have a sell setup we have a drop retracement to the declining 20-day moving average sell setup number three well this is the declining 20-day moving average that is overprice four we have another sell setup right retracement to the 20-day moving average that's trending lower sell setup number five we have a climactic buy setup and this isn't a pure you know if you didn't get this one no problem it's not it's not a perfect climactic buy set up by any means but it is a little bit climactic it's a little
bit extended okay so hopefully you guys got all those if you did perfect let's continue all right guys go ahead and pause the video now and try to identify 1 through 7 okay and let's go ahead and look at it number one we have a base breakout we have a rising 20-day moving average we have a break out over this base over That resistance we continue higher what do we do we kind of pull back a little bit beneath the uh 20-day moving average so this is not an ideal buy setup by any means it's
not that high quality but nevertheless you guys should have spotted that and said hey this is a buy setup or you could have even called it a base breakout in a way however it's not a good quality buy setup because it's you know the 20-day it went below the 20-day mov mov average the 20-day moving average right now is kind of flat we don't have a clean pullback we do have an entry bar but it's not a clean buy setup by any means number three we break out of this so this is a breakout of
this resistance level four is we broke out then we pulled back right this resistance is becoming support for the stock now or crypto so for is a buy setup we retraced to the rising 20-day moving average it's a buy setup we start to Rally we all six is obviously uh Rising 20-day moving average under price five is obviously the 200 day moving average and seven as well is a buy setup we rally pull back really nice entry bar not quite to the 20-day moving average it didn't quite reach it however it's still a buy setup
okay hopefully that makes sense uh let's see here so go ahead guys and try to identify why through five go ahead and pause the video okay let's continue so number one we have a wide range igniting bar hopefully you guys Got that we rally then we have a pullback so this is a buy setup we have a rising 20-day moving average that's under price four is a retest of this support level and we also kind of double bottomed right leading to this rally and five is the 200 day moving average okay let's continue try to
identify 1 through three okay so pause the video let's continue uh rally we have a we actually have a breakout right here cuz we broke out of this base we I kind of missed that we also have a buy setup right here breakout right here Rising 20-day moving average which is number two Rising it's under price we have a buy setup right here rally we pulled back bottoming tail so we have bottoming tail the buyers have taken control buy setup triggers higher perfect number two um we also have a breakout right here this is a
base breakout right we rally we base at the highs we kind of based right into the decline uh right into the trending 20-day moving average that's under price so this is a breakout we uh have a pullback here so this is kind of a bottoming tail and also kind of a buy setup SL breakout so you know this is whether you want to say this is a pullback you could say that or you want to say this is a breakout here no Problem we have a bottoming tail saying that the buyers have taken control okay
let's continue here this is a little you know looks a little different can you guys identify 1 through 7 go ahead and pause the video try to identify all the characteristics about it okay well let's continue step one we have a breakout right we have a base into it's basing into the trending 20-day moving average you could see the 20-day moving average starting to curl higher here forcing prices higher that's when we get the breakout so nice base breakout we have a rally what do we do we pull back in into the 20day rising 20-day
moving average this is a buy setup right this it's a pullback pattern and we have a couple of Entry bars here into the rising 20-day moving average we rally then we kind of Base number three this is a topping tail so we actually broke out and failed we and then we you know dropped further into the rising 20-day moving average right here this is kind of like a buy setup so buy setup right here we rallied here we have a climactic cell setup because because we have extension and acceleration from the 20-day moving average we
have extension we have the three Accel we have the acceleration we kind of have a base breakdown too right this is a a sell setup but you could it's also kind of a it's basing up here and we fell after the base right so kind of also a base breakdown as well then nothing really happens the 20-day moving average is moving through price nothing happens and then the 20-day moving average starts curling higher trending higher here we have a base breakout we also have an igniting bar notice how the 20 is under price and trending
and curling higher igniting bar then we pull back and we have a buy setup here okay so pullback pattern buy setup right here trending 20-day moving average hopefully you guys got all that let's look at the next one okay pause your video okay hopefully you guys got all of these so let's take a look at what they are so all of these are basically I mean number one guys the overall um you know bias here is that this is an excellent downtrend we are downtrending we're making lower highs lower lows we have a sell setup
drop we have a sell setup drop remember sell setup is it is when it retraces to the declining 20day moving average so you see how many sell setups we have here right we drop base into the 20-day moving average breakdown or sell setup retrace right we base into it we drop as soon as it touches the 20 Here Sell setup drop we broke through here we tried to continue higher we didn't continue higher so this fa this uh breakout failure we have a breakout failure here bases this is a base breakdown right here at six
so base Breakdown we drop right here we're kind of at the 20-day moving average uh so declining 20-day moving average we drop another sell setup we drop sell setup here as well okay so you're seeing that during this downtrend you could see how well price is respecting the 20-day moving average and how many sell setups we have let's continue right here let's try to identify 1 2 3 4 what do we have here pause the video okay okay so number one is a failed buy setup this one was a little bit challenging we have a
rally and then we retrace right we retrace right here this is a buy setup however it never ended up triggering so this buy setup failed we based kind of sloppy here broke out now we're basing at resistance right this is a resistance point right here so this is a resistance point and number two is a base breakout so base breakout three is a rising 20 moving average that's curling higher and under price and here we have a base breakdown and we're a little bit climactic climactic cuz we have that extension we kind of have that
acceleration as well so this is a base breakdown and usually I would say don't play base breakdowns when a stock or crypto is up trending but we are a little bit climactic here so that's why let's look at this one pause the video and try to identify 1 2 3 4 5 6 7 and eight okay pause the video number one we've rall retracement we have a buy setup Rising 20-day moving average that's under price here we have a topping tail okay we tried to break out and failed we continued to base right so this
breakout it wasn't quite quite ready to go higher we still needed to fur their base and correct in price so topping tail the sellers have taken control we continue to base into the rising 20-day moving average right here that's when we have the breakout when it's at the at or near the 20-day moving average we break out right now we kind of are basing at the highs it looks higher here but this ends up being a base breakdown we continue lower we have another base breakdown here cuz we drop we base then we have a
huge igniting bar going lower right here we have a sell setup cuz we drop then we kind of retrace Right Here Sell setup we have a declining 20-day moving average and yeah hopefully you guys got all that okay so um those were 51 um you had to identify 51 points go ahead and you know keep score try to see how many you got and if you got anything under 47 out of 51 points so if you got more than 47 correct you're in great shape and you're in really good shape if you have under 47
correct you're fine like If you're between like 40 and 47 you're still fine but if you're really under 40 I would say go back and review because these are really easy questions these are basic you guys should all have gotten all these the buy setups the bottoming tails and if if you didn't get them you should have at least like understood exactly what it is and what your mistake was but if you're looking at all these and you're confused with what it is then you got to you got some serious review to do so hopefully
you got all of these if this is easy guys then you're well on your way towards being a really really good chart reader and really good at identifying different setups and what's really going on with the charts and price action so good job guys I hope you got these correct I'm going to try to post another uh chart session and review kind of like a quiz type uh review um in the next video so hopefully you guys found value out of this thanks a lot this class is the first class in our psychology or our
trading psychology Series where we are going to address how to deal with your own psychology and and the way you guys should be thinking in order to become successful Traders right and to be honest I would say trading psychology and understanding your own Psych ology is maybe 60 to 70% of your success in trading it's really that significant and people they don't really think about it they don't really Like address it right they they uh they think it's just the charts just the technicals obviously that's a huge part but the way you know at the
end of the day we're we're trading with real money our real Capital right and sometimes especially when it's our own money we can get quite a emotional and one of the emotions one of the you know most powerful emotions that we feel is fomo and for anyone who doesn't know what that is it is the fear of missing out okay so let's get started if we look up the Google definition it is an anxiety that is that an exciting or interesting event May currently be happening elsewhere right so in trading purposes what where it really
applies is that people tend to to fear or develop anxiety when they feel like they're missing out on a really potentially lucrative trade right they tend to you know they and what they do is they base their entries and they base their uh their how do I say this um not the understanding their they base their reasoning of entering a trade based off their emotions based off just fearing to miss out right so we're going to try to help you with this and before I continue I want to ask you guys who and guys what
I want you to do is be honest with yourselves right like the point here the point here is to improve be honest with yourselves who here has experienced the Fear of missing out where you enter a trade because you're you're genuinely worried that sometime like you're going to miss it oh this is the next big move move I'm going to miss it it's a very common you know feeling it's a common emotion right so and I think a lot of people what they don't realize is that these emotions for example like fomo are stopping them
from becoming successful I'm sure a lot of you guys already have the education already the skill set you know to trade more profitably or make more money in the markets right but your own psyche your own emotions are are in the way so you know our our my job our job is to break through those emotions okay I still have it sometimes it's for me it's the fear of entering incorrectly okay I'm quite procedural my entries and exits it's okay okay got you okay interesting but let's continue with this so let's understand why does this
happen in trading right and honestly I think a lot of it is because of the constant bombardment of trading successed videos and posts that we see on social media when you're scrolling on Facebook on Instagram on Twitter and you're seeing hundreds of people posting their profits right 200% gains 1,000% gains them trying to um you know convince you to join their program and then or or just just just seeing people um doing really well right but we have to understand that that isn't the majority of of people that is literally first of all Most of
them are lying just know that right and these post on social media and this doesn't even only apply to trading this is just in general they tend to alter our like our ways of actually interpreting the world right so we're you know when we're seeing all this trading information on social media we're interpreting it as oh my God everybody is successful but me where it's really not the case 95% of Traders lose money 70% don't last for more than a year 6% of people who attempt to become professional Traders succeed right and you might be
thinking to yourself wow like those statistics are you know they make uh you know okay those those statistics and why why should I even become a Trader right if 95% Traders lose money and what we have to understand is that a huge percentage of those people do extremely silly mistakes that lead to them failing like Trading off news like not educating themselves like uh trading because they're off their emotions or because their friend told them to buy a company right like we have to understand that a lot of people are dumb right and what's the
statistics that I want to see is what is the statistics of success when you're actually committing yourself to educating them to to learning the material to actually learning risk management to actually learning trading psychology to be fully committed in practice ing every day right and I'm Sure the success rate is much higher if you're fully committed into how do I say this uh fully committed into practicing the habits that create a successful Trader I think truly 95% of people just don't have the right habits that's why they fail right and what we have to understand
is don't let social media don't let news don't let any external pressures affect your trading okay you have to trade with objectivity focus on the charts the charts tell you everything everything you need to know okay the charts and price action price data okay and stop listening to other people like you're on your own road to success you're on your own road to uh making money trading right so who cares what other people tell you about what you're doing right or tell you oh you have to do it this way right for example even for
me when I when I was learning how to trade I had family members that doubted me basically everyone except like my dad because he trades right but everyone else oh trading you're going to lose money everyone loses money in trading don't do it oh try this try that it's like yeah you got to block all that out cuz all of that is noise that's noise that's just going to affect your psyche block it out be in your Tunnel right you guys know what it takes to be successful and I'm helping you guys get there right
you just got to continue on the path don't let anybody any social media anything affect you okay anyway The fast and honestly part of the other reason why we're experiencing fomo is just the nature of trading it's a very fast paced environment and the emotional impacts of trading can very much lead to fomo and most of those emotional impacts are stemming from the fact that you're trading with real money these are real results like these are this is your money that you worked hard for and the fact that you can lose it that's I mean
it's kind of terrifying in a way wow like I might lose money on this right and it and it like really screws up with a lot of people's heads right and what we have to understand too is as human beings we experience emotions we're not robots anybody any Trader any person who says oh you have to trade like a robot yeah you are full of [ __ ] excuse my French but it's true you are because we're not robots right we have to deal with emotions the people who tell you to trade like a robot
are the people who probably don't have their their stuff figured out who don't have their emotions in check cuz they it's such a default answer it's like an easy answer to everything oh just trade like a robot okay like that's not how it works right like we have emotions we deal with them right it's not about blocking your emotions it's about taking your emotions and figuring them out right trying to like compromise with them almost right and another really interesting thing aside from the fact that it's fastpaced it's there's a lot of emotional impacts we
experience So many different types of emotions in trading like think about it greed right we want we all want to make money so of course there's greed there's hope we're all hoping our losses or our gains right will become or our our losses will become less or our gains will become more right or there's fear jealousy of other people making money in patience when your trade is not going your way frustration when you just can't seem to get anything right we experience all of these and these are affecting your trading these are in the way
of your success okay so what do we do we learn to deal with them that's the answer and that might not be the magic answer you know a lot of people oh trust this one-step process it's not but and it takes time and I'm telling you that honestly and I'm not telling you that because I think it it's because I've had my my psychological demons for months but what do I do you learn to deal with it you learn how to embrace them okay and the other thing I really want to bring up about fomo
and in general every single Trader out there I don't care if you are the best Trader of all time you are missing out a 99% of every single trade out there it's impossible to catch them all except that right it is literally impossible to catch all the trades right so instead what do we do we focus on the trades that we're actually doing that the ones that we're actually taking focus on the management right your entries you know whether you're picking the right plays in the first Place right and the actual facts and where do
the facts stem from Price action and charts which I've been teaching you guys how to do that so that shouldn't be a problem anymore right so Focus instead of thinking about all the trades that you missed that day focus on the trades that you made say ask yourself right right well ask yourself why did I choose this trade was it because the charts looked good or was it because of my own emotions right ask yourself where when you're in a trade or let's say you know when the day is over and you're reviewing all your
trades ask yourself this okay I understand that I definitely missed some opportunities I'm okay with that say to yourself I'm okay with that right however let me look at the trades that I did take did I did I like uh play them correctly did I get the right entry the right stops the right everything right and if the answer is no then okay work on that part of your trading stop worrying about all the other trades that you missed what's the point of it and this is something that I'm guilty of literally almost every day
I there's always these opportunities that I'm like oh my God how did I miss that right and most of the time I get upset with myself because I would be I would find the stock right I I find a setup that I really like I'm like wow like this is amazing and then I'm watching it and boom it randomly goes without me it randomly pops up right and and it feels it sucks I get upset about it right so of course I'm not like nobody's perfect here like I literally The same thing happens to me
but I just I've learned how to not let it affect me in the future it doesn't affect me anymore you know yeah the thing is it's a part of the profession okay it's a part of what we do like for example uh let's say you go let's say you become a dentist this is maybe a strange analogy you become a dentist and you get spit on your hands or perhaps even on your face do you get upset no it's a part of the profession you signed up for that when you became a dentist it's the
same idea you're signing up for all of these feelings when you're becoming a tra accept it and learn how to deal with it okay oh whoops and another thing that you guys you know don't ever worry about not taking the right plays or or missing out because being selective is literally probably the number one reason of why I am successful I am extremely selective with my trades I'm very good with limiting my losses you know and as a result sometimes my gains aren't as huge but you know I I take that because I'm very good
at selecting which stocks or not even which stocks which setups to play does it look good enough for me I don't settle for bad setups right if there's not a good setup I don't do it period and yeah you're going to miss on some really huge moves but being a picky Trader will save you more money than you IM than you can imagine right it's not and often times with trading right it's Not about being more profitable it's about limiting your risk more or you know saving more money per se right like you don't need
to make more money to be profitable you could learn how to limit your risk better and as a result you'll be more profitable right I think a lot of people they're focused on Wow catching the big plays making the big you know the big money when in reality if you just learn how to contain your losses and limit them you'll be much more profitable right and guys lost opportunity is much much more ideal than trading losses remember that and and ask yourself this question you guys are here to become professionals right we're not amateurs here
we're you know I'm trying to teach you guys how to approach trading in a professional way because why because professionals are the ones that make money not the amateurs and that's with any Prof that's anything regardless of what industry professionals are the ones who make money right the professional Trader do you think he is basing his decisions off social media off other other people's decisions off the crowd no what is he basing his uh decisions on his own objectivity his own um knowledge and his own experience and you guys are are are becoming more knowledgeable
becoming more experienced trust yourself right learn to be a professional you have to we have to approach this in a professional way okay and it's really really important Because you know a lot of people who lose money they're the amateurs they're the oh I'm just going to get into trading I think I can make money right away like no okay that's that's the end of the presentation guys uh I kind of talked a lot there but let's let's talk about some questions or are there any questions uh did was that helpful for you guys I
hope that was helpful I hope you guys took something from that though you know because like truly people always say you change your mindset you change your life it it really applies like that for tra for trading change your mindset and you will change your trading it's really that simple seriously like you guys you guys are a lot of you a lot of you have shown incredible Improvement right but if you're still struggling like syntax geek uh we could talk about your situation right uh if you don't mind like change the way you're approaching trading
and you and you'll succeed seriously I hate when I see profits post where someone made 1K but they use 30k to do so to me that's terrible risk to reward uh always just post tiny 100 PS but I'd rather see percent gains of money use profits yeah I mean that's true syntax but in my case that's how I make money you know like I don't have I don't have um huge gains I don't have huge percent gains what I do is I go for Small percent gains a lot like a 100 times 200 times I
literally do between two to 300 trades every day or I would say one to three 1 to 300 trades every single day you know so it depends on your strategy you know um it really yeah it really depends on your strategy my strategy which works you know and really really istically I do need more Capital but I I would I do have a slightly larger account but I would be able to do what I'm doing with the the bare minimum to have um to to be able to day trade which is 25k you give me
25k I could do exactly what I'm doing now you know however I do need 25k because I get margin and I do need margin for my strategy yeah exactly how long did it take you to get to the point you're you're at now it took me uh like two years two two and a half years or so you know uh to to where I'm at now yeah which is actually kind of like really optimistic for you guys because two years is not that much like think about it think about learning a complete like you people
go to college for four years think about it like this people go to college for four years to maybe if you're lucky depending on what school and what you study to get a job and you're telling me two years to invest in yourself and trading is a lot and honestly I was profitable 7 months in I paper traded for 5 to six months right I paper traded for five to six months and as soon as I got into Trading with real money I was immediately profitable like I've never had a losing stretch in my career
except I would say in Sweden when I was in Sweden I was trading on delayed data I over a 3mon period I broke even I think or maybe I made like a th000 bucks over 3 months and that was like that was like horrible for me like that was like I was like questioning my entire everything like it was really stressful but you you overcome it see you've earned the title of Professor I think I might CH I might change my name to that listen I'm I'm trying to help you you can do it like
Ser guys I'm serious like this information all these classes like I'm I'm like you know I'm doing all all of them like this is everything you need to know seriously like from a technical analysis perspective like this is everything all right seriously like this is going to be complete like hopefully by the time I'm done with all this whole series of videos which I don't even think I'll ever be done cuz there's always something to be made but like you can get a beginner and they'll learn almost you combine that with experience and y'all will
y'all will be profitable um great was helpful requireed yeah so true I've experienced everything you said that gave me strength to learn how to do it yeah very good how long did it take you okay yes I worry a lot about losing momentum but I'll keep in mind the reducing loss is also gaining new investing model unlocked yep yep yep do you compound profits small start small and go bigger yeah I mean it's not even About compounding profits I I start the day risking a little bit to get comfortable right if I'm trading a brand
new stock I'm going to start risking just a little bit just to see just to get comfortable with the stock and then and then I go I go with larger size um I use TDM trade Jeremiah that one's really really good they kind of are in order klex like they basically are in order from top down like it doesn't matter which strategies you learn first like technical analysis that's one candles six that's two 20 ma that's three they're basically in order like yeah they're basically in order so I wouldn't worry about that the really really
the only big thing is you got the Candlestick Mastery is really like that's important like you can't do the other ones without without that one are you using thinker swi to find players b under specific criteria yeah I do use a thinker swim scanner as um I do use it um I find a lot of gapping stocks I I'm I'm I'm a gap Trader I like gaps today was kind of slow though not going to lie like I a lot of the chin I don't know if you guys are subscribed to my stock alerts but
I I I kind of post little uh morning watch lists and I post my swing trades and somay trades in there um so definitely subscribe or not subscribe but like pick that pick that Signal um no no no I use TDM trade to buy and view charts so like everything is done through thinker swim TDM trade thinker swim um but yeah I I I posted a a whole watch list today of all of the CH the St the Chinese stocks that were gapping up I thought they would be really interesting to scalp and a lot
of them actually rally like big time you know and I'm going to show you guys quickly uh the let me see uh I need to let me get my um let me get my um charts up uh one sec where are my charts at there you go okay nice let me get my charts up we can look at it together just what I posted today I I didn't post trades cuz a lot of them kind of went without me uh but like I think which one was it tme went up let's look at tme yeah
definitely pay attention to the watch list because there's a lot of really nice watches sometimes uh tme did it rally oh no why is this happening this always happens I'm probably going to stop the recording here as well
