Complete Foundation Stock Trading Course Part 3 : Advanced Techniques & Trade Management | Piyush Rawtani | Skillshare

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Complete Foundation Stock Trading Course Part 3 : Advanced Techniques & Trade Management

teacher avatar Piyush Rawtani, Certified Trader / Mentor

Watch this class and thousands more

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

10 Lessons (1h 35m)
    • 1. Introduction To The Course & Course Contents

      2:25
    • 2. Advanced Tips & Techniques - Trends & Trading Ranges

      16:18
    • 3. Springs & Upthrusts

      5:40
    • 4. V Top & Bottoms

      7:13
    • 5. Laws Of The Market

      14:02
    • 6. Entry & Exit - Trade Management

      17:13
    • 7. Stop Loss Placement - Trade Management

      10:03
    • 8. Target Placement - Trade Management

      5:26
    • 9. How To Make A Trading Plan - Trade Management

      9:29
    • 10. Trade Structuring Of Gold

      7:33
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About This Class

This is Part 3 of the Complete Foundation Stock Trading Course where we discuss advanced trading techniques which can give us an extra edge while trading the markets .
We will also learn how to effectively manage our trades , how to enter/exit and place our stop loss levels and targets.

Hi!

My name is Piyush Rawtani and I am a certified trader based in India.

In this course , we take a deep dive into the theory and philosophy behind price action. Our goal is to help you build the solid foundation and understanding needed to reach a mastery level in technical analysis.

True mastery is the only way to reach simplicity on the other side of complexity.

The goal here isn’t to teach you some basic technical strategy that only works in the current market environment and falls apart with any small change.

We want to teach you why technical analysis can be effective in analyzing markets and how you can use that information to profit.

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”

This course is not all theory. It’s absolutely actionable. We’re going to show you exactly how techniques which are hundreds of years old are effective till today and will be in future.

We will equip you with the knowledge you need to take full advantage of those tactics and techniques. At the end of this course, you’ll even be able to create your own technical methodology.

Take this course now and learn from my 8+ years of experience. Avoid the most common pitfalls that catch 90% of traders!

This course is for complete beginners! All you need is an open mind and a passion to be successful!

Who this course is for:

  • Anyone who wants to get into stock trading.

  • Anyone who wants to brush up on their financial markets knowledge and fill in the missing gaps.

  • Anyone who wants to understand how financial markets work.

  • Anyone who wants to understand how to read charts.

  • Anyone who wants to learn Technical analysis.

Meet Your Teacher

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Piyush Rawtani

Certified Trader / Mentor

Teacher

Hi ! 

My name is Piyush and I’m a professional trader based in India.
In 2019, I successfully cleared the “NiSM Equity Derivatives Certification Examination” as required by SEBI(Securities & Exchange Board Of India).

With a sound knowledge of the financial markets,I have been an active member in the trading community,posting my thoughts on the markets on a regular basis.

I am on a mission to inspire and educate in the field of finance and marketing. 

Follow my page to know more about my courses , discussions and upcoming lectures.

 

For general enquires, you can email me at 

piyush.rawtani@gmail.com

 

 You can follow me on social media where I regularly post my tho... See full profile

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Transcripts

1. Introduction To The Course & Course Contents: Welcome to the complete foundation stock trading course Part 3. Did you know that the daily trading volume of the US stock exchange is close to $90 billion per day. The big banks to mutual funds, to pick institutions. They are all actively buying and selling securities in order to make money in the market. But why are majority of retail traders continuously losing in the stock market? Is it due to lack of planning? Know? Is it due to lack of intention? Maybe not, but most importantly, it is due to the lack of knowledge. Hi, my name is pews route Danny and I am a certified technical analysts based in India. And I am on a mission to educate in the field of technical analysis to help you build a solid foundation when it comes to stock trading. Concepts, which we will be discussing in this course, include actionable techniques, which are a hundreds of years old. And it's still being used. The topics which we will be covering in this course are as follows. We learn everything about the market, the market structure, the participants in the market, the phases of the market. And we'll also study how to determine who's in control of the market right now. We'll also learn the various types of price action patterns that form on the price chart. And what is the psychology behind its formation so that we can trade it better. We'll also learn correct and effective methods of entering and exiting a trade, managing risks, and protecting our capital successfully. This course also includes trading strategies, which are simple, easy to understand, but very powerful strategies which are dedicated to becoming the best trader you can ever be. So what are we waiting for? Let's get started. 2. Advanced Tips & Techniques - Trends & Trading Ranges: Welcome back for another video in this course. In this video we'll be discussing about some advanced training techniques after you have studied everything in this course and have a basic idea how to create these advanced techniques can help to give you an extra H. And some of these trading techniques have helped me personally in my trading career. And after a long experiment of hidden trial, spending several years trading by discussing these techniques, I can shorten your learning curve. So let's get started. So as we have already discussed about the concept of trends, will trend horizontal range and the Bertrand, this is our bull trend looks like the market is going up. Then it moves in range, and then it decides whether to go up or come down. And hair. In this case, the market decided to come down. I want you look at this chart and see how the candlesticks are forming in this pool trend. There are a lot of Polish candlesticks closing on the highs with tails on the bottom showing rejection prices at the lower levels. And you can see the candlesticks are not overlapping much. The market looks clear. And every time it takes support at a moving average, it bounces up. And this is a strong beer trend. As you can see in a strong bear trend, we are seeing a lot of candlesticks which are bearish, closing on the news. And every time the market comes to a moving average, it takes resistance and then the downtrend continues. I'm presenting these charts to differentiate between trending market and a non training market. Here, as you can see, the candlesticks are clear, there's not much overlap. Candidates can market has a clear direction to where it is going. Now, compare it with this type of market. Here in this case, you can see it's a range bound market. Look how the candlesticks are forming. A candlesticks have so much overlap between them. The candles are large, but if you compare it with the other candles in the chart, they are about the same size. So what is actually happening in the market is going up, facing rejection. It's coming down. And when it is coming down, it is finding buyers. And again, it is going up to there is no clear direction about the market. This is clearly a non-trending market. So you need to remember how a trending market looks like and how a non-trending market looks like. This type of market is very difficult to trade. And almost all the time the market is trying to break out. And most of the times the market fails to break out from the range and then trading takes place inside the range. This is called a barbed wire pattern, where the moving average is almost flat. There is no trend. And until, and unless you have some experience in trading, always avoid this kind of market because there is no clarity, as you can see, so many tails at each and every candlesticks and every candlestick is overlapped by the previous one and the following ones with there is so much confusion in the market. A similar chart, market is completely range bound. As you can see, the candlesticks are big, but they are bearish candle sticks, the bullish candle sticks. So there is actually an agreement of value between the bulls and the bears, both fields that the price is fair right now and it is really not clear which side is winning. And if you see how the market is breaking out, the market broke out here, quickly, returned to the range. The market broke out here, and quickly the breakout failed. A market tried to break out here by opening it and quickly came down. And in the same case as you can see, the market had a huge breakout from this particular range. But in the next session, the market just came back into the range. This is arranged bound market. A lot of confusion as to who's winning. But right now the bulls and the bears believed that the price is fair. And whenever the market tries to break out from the range, it usually comes back because the price is fair right now. So most of the breakout from arrange fail. So I want you to remember a trending market and the range bound market so that you can know what type of market you're trading. A correct way of creating these to wait for the breakout. And then when it pulls back and you can see some sort of reversal setup, as we discussed earlier in the course. Then you can take the trader in the favor of the trend. Here we can see the market broke out and quickly came back. So on a higher timeframe, this was just a very big candlestick with a huge tail. So if this happened on a 15 minute time frame, in the 10 year timeframe, market had a very big tail on top. One other question I receive a lot is where to take a trader after the pullback has been complete. This example, as we can see, the market is clearly trending suits. You are seeing the market here and you are waiting for the market to break out. And what happens is that sometimes we wait patiently for a move, and then the move happens and we are not able to position our self in that trading. For example, if you had been watching the trade here and waiting for a breakout, and suppose you missed who move, the market broke out. But a good sharp buying. And then there's a regret of missing the trade altogether. And when we are starting off, it is very common to buy when the move has already extended way beyond fear of missing out, good trade kicks in and we are usually forced to buy where the big institutions are booking their profits. So whenever you see a good break out and for any reason you are not able to be a part of the creative do not. I repeat, do not. Is the trader because in almost 50 percent of the cases, the market pulls back to the breakout point to test whether there is buying or selling. Attack breakout point. For example, the market broke out from this range. And as the candlesticks are forming, it is very common to get emotionally attached and the fear of missing out a good trade kicks in. And we usually buy at the, except that it has created and then the price starts to pull back. So how do you create this pattern? Once we see a strong breakout from this level, one thing is for sure that the market is going to go higher because these two candlesticks show a lot of buying pressure. So how do we position our self? There are two scenarios of pullback. One is a deep pulled back. As you can see, these candlesticks, the bullish candlestick, which broke out. They were really powerful with good buying. But look what happened on the next candlesticks. We see one bearish candle and then do and then three NBC for bearish candlestick patterns. This shows that the price is being rejected for the time being. Then on the fifth session we see good bearish candle, which is equal to the height of this breakout candlesticks. So we see a big surge in the buying followed by big falling prices. So if you compare these two candlesticks, they are almost equal in size. This shows that the buying most has good as the selling and the market started to replace back. If you compare the steepness of the breakout with the steepness of the pullback. Pullback is very sharp. The market broke out and the pullback is really sharp. The angle of a pullback a sharp. So now as we are wondering what to do, we need to wait before entering because the pullback is as wildland has the breakout. So when the price came here, and if we can see there's a flat pattern being developed. Now, the market broke out from the flat pattern and we could have entered on the breakout pullback of the flat pattern as we had discussed earlier in the course. So when you see a pull-back that is as sharp as the breakout wait before entering the trade. And when any kind of pattern forms like a flag or a which when it breaks out and you buy on the pullback for the redemption of the trend. In this case, the market saw deep basement back to the breakout point and then the trend resume upwards. In the same case as you can see, the market broke out from the range and had a deep pullback. See the size of the selling and the steepness of this trend. Hey, there as we can see, the market at a boil and pull back. So if you're drawn a trend line, you should have waited for a breakout of the clean line or a flag and then entered on the pullback of the flag. Here in this case, as we can see, the market broke out. And then look how it is consolidating. It is almost in a horizontal manner that it is consolidating. The pullback is not going down. This means that the price is being accepted at the higher levels. In whenever we see a market getting acceptance at the higher levels, it means that once it breaks out from that, give us a good move. With the market is consolidating at a higher level. Instead of pulling down, then you can go long with a stop limit order above the high of this flag. Similarly, as we can see, the market broke out from this. And instead of pulling back, a market is getting a replacement in a horizontal manner, almost like a horizontal flag. This means that the market is accepting these lower prices. There are no buyers to pick the market up. So when we see the market forming a horizontal consolidation pattern, it is usually a very good opportunity to get into the market when the price. Goes below. Now, I'll be discussing with you one technique that can give you an earlier entry when you observe this kind of patterns, you can enter before the actual breakout happens. I'll explain this concept by using a simple example. Suppose you go to a gym. It's your first day at a gym and you're doing any exercise, a bench press, for example, start lifting the weights, make 10 pounds. After a couple of minutes, the trainer comes and adds another ten pounds to your wait, no, you're feeling difficult to lift the weights and doing the exercise. After few more minutes, he adds another ten pounds to your weight. Now you're feeling the pain. It becomes really difficult to lift the weight. After a little bit of time, he adds another ten pounds to your wheat. Now a time will come when you ultimately give up, when you are no more able to take the pin. Using the simple analogy, I'll explain this concept about anticipating breakouts. So for example, the market is moving in a range and you start to see the market now forming a smaller range. Inside this bigger range. And you start to see the candlesticks closing inside this range. And then the range getting smaller. With time. Men, the range starts to get smaller with TI and the candlesticks start to close in a narrow range. In the bottom of the speaker range, you can almost anticipate that the breakout is going to be to the downside. So suppose you have been a buyer at these prices, you are not able to live. The price is higher and like the trainer in the gym, that bears are adding more weight and put every move, it becomes difficult to hold the prices and then the market eventually breaks to the downside when the Bulls gave up. This type of pattern usually forms in a flag. This type of consolidation pattern can also form in an ongoing trend. So for example, if this is a bull trend going on and you connect it with a trend line, and then the price starts to move, but it is not able to go higher and it starts to consolidate. At this price. With every passing of time, you can be alert in advance that the price might break to the downside because every candlestick closing near this trend line, tuples are finding it difficult to take the prices up. So whenever you see the price coming closer and closer to a particular support or resistance level, whether horizontal support or a trendline support or resistance level. And when the price starts to accumulate around that area, that means that the breakout can be expected. So if the price starts to move like this, and then the price starts to consolidate at this area. Almost all the times you can expect the break, the upside. This pattern looks like a variation of a cup and handle pattern which we have discussed earlier. So you can consider this larger range has a cup and the smaller range as a handle pattern. For example, here we can see a good break out and then the price starts to consolidate horizontally. It is forming a flat pattern. And then we can notice the price closing near the loose. We can see the prize not able to go to the upside. And then it starts to form a descending triangle pattern. Inside this flat pattern, it is always high probability to wait for the breakout of the pattern. But formations like these can help you expect the breakout to happen very soon. And when this breakout happened, a lot of buyers who went long at these prices, they started to give up. So you can see a smaller triangle pattern forming inside this bigger rectangle pattern here. This is an, another example. The price is moving in a horizontal range. And then later we can see the price closing had the lower range of this whole pattern. Compare the right-hand side of the pattern with the left-hand side. Here we can see the price moving in the complete range of the rectangle pattern. And then on the right-hand side we can see the price starting to close in the lower portion of the pattern. This can help you. And despite the breakout, similarly, the price had a huge breakout and then it started to consolidate. And then we can see a smaller flat pattern forming inside a bigger flat pattern. It almost looks like a coil. The counter trend traders are not able to push the prices down. They are feeling the pain and then they eventually gave up. This is another example, and the price starts to consolidate in the upper area when other very important thing that I've noticed with expedience in trading is that suppose this is the market movement right now, and if there are multiple layers of support or resistance. So for example, you see multiple layers of support or resistance level at a very small distance. For example, if we draw the support and resistance at these levels, then it would look like this. The market is facing resistance at this level, in the market is getting support at this level. So here we can see is that there are two layers of support at a very small distance. One thing that happens frequently is that the market, whenever it breaks out the first layer of support or resistance, there's a high chance that when the market reaches the second layer of support or resistance, it would usually fail to cross that. It always looks like it's going to break out. But whenever the market is clearly breaking out of the first layer of support or resistance, when it reaches the second layer, it usually reverses from there. So for example, here you can see a chart with multiple layers of support and resistance. This level and this level are already close by. So whenever the price breaks out from the first level, it usually faces difficultly preaching the second level, see what happened when the price broke from the support level here, the breakout fail and the price reversed back into the range. Price was able to breach the first layer, but could not breach the second layer. You can find these levels and almost all the charts on the timeframes when the price breaks out from the first layer, but usually the verses before bleaching the second layer. And a lot of traders are trapped believing that the Greek out will also clear the second layer, but it usually fails. The market goes to the opposite side. This is one of the concepts you need to keep in mind whenever you're trading and you can find these multiple levels of support and resistance, then you have to be prepared that the breach of the second layer would almost fail most of the time. 3. Springs & Upthrusts: In this video, we'll be discussing about springs and upthrust. What is the thought process behind them? Springs and upthrust are an essential part of price action trading. In fact, many Twitters simply rely on the concept of springs and obsessed to determine the entry for profitable trade. Springs and upthrust or a concept developed by Richard why cough is one of the legends and famous trader, the 9800. What do we mean by spring? It occurs when a price moves below a support level and quickly the Vs comes back into the range foreclosing. And what is an up thrust and upthrust occurs when a price breaks out about resistance level and quickly comes back into the range, trapping a lot of traders. Let's discuss these two concepts with the help of a shock. For example, the price has been moving in a range, as we can see here. So we can draw the resistance and the support levels currently in when the market opens next day. This happens, we see a strong peak out from this range. This is a daily chart and this is what is happening today. A lot of people are excited. They had been watching this 11 for a breakout. They have created their long positions while the market was breaking out by the time that they closes. This happens what was once a strong breakout candle breaking out of the resistance levels is now back into the range, as we can see, a long tail on the top. So a lot of traders who rushed into the trade creating their positions are now stuck. The prices back to this tune. And this is what we refer to as an up thrust. It is also known as a bull trap. This is what follows next. Once the price starts to create below the low of the scandal, a lot of people start exiting the long positions who had created while the scandal was breaking out. Smart traders know what is happening once they see this candle forming. They know a lot of people are stuck in this position. Once the market goes below this, a lot of people would start exiting their position. So smart traders start to build a short position once the price goes below. This provides an excellent entry for a profitable trade. Concept of upthrust and springs can be developed on any structure. Suppose the price has been moving in a bull trend. We can see it creating higher lows and higher highs. We can find this concept at any kind of support and resistance can be at a neck line level, at a trend line level. Anyway, we can see an up thrust being created here, tried to break apart the trend line resistance and it failed and the price came down. Similar thing happened here. As we can see, price broke down below this trend lines support and then reversed up and went back into the range before closing. Another example can be seen that the price has been making a small head and shoulders stop after a bull trend. So if we draw a neckline level here can see the price statements support at this level. And at this point of time the price picks out by the time the scandal closes. This happens, this is what is known as a spring. The price breaks out of a support level and quickly returns back into the range. This has trapped a lot of craters who created a short position while it was breaking out to the smart traders start to initiate their long positions once the price grates above the height of this. And this is what follows. We just discussed about the concept of springs and upthrust happening in one candlestick pattern. For example, the market has been moving in a range. It breaks out, but does not reverse immediately, spends some time at those levels at this price and then reverses. So this is the concept of an up thrust, which happened within a span of few candlesticks. It did not happen in the same candlestick, but within a time of few candlestick patterns. So if this was a five-minute chart, this whole session would have been an up thrust candlestick on a 30-minute shot. So this five-minute chart on a 30-minute chart would have looked like this upthrust. Breakout failure on a smaller timeframe chart might be an upthrust or a spring on a higher timeframe chart. So for example, let's have a look at this chart. Five minute time frame, the market has been moving in a range. So if we draw the resistance and the support levels, market has been moving in a range, and eventually the market peaks above this range. The market moves higher, meets resistance at this area, and then start to reverse from here. So in a time period of around one hour, the market went up and quickly came down. So if you go on a higher timeframe chart, this is the one hour timeframe and the market simply made an up thrust candle. On the 10 year timeframe, the market had been moving in a beer trend for a long period of time. It met resistance at the gap zone and the trend line resistance and a lot of sellers at this price. The whole purpose of explaining this concept of springs and upthrust on multiple timeframes is that a lot of times on a smaller time frame, a breakout failure is not visible. But if we switch onto a high timeframe, we can see a breakout failure happening when a spring or an up thrust candlestick forms. Similarly, if we look at this candlestick pattern that has happened on the hourly chart, if you go on the small time frame chart, this is the area on a five minute timeframe, the market probe below this level and quickly reversed back in a span of 15 to 30 minutes. And this is how the candlestick looked like one of 1500 time claim. The market tried to break below this, but quickly reversed. 4. V Top & Bottoms: Now in this video I'll be talking about we tops and bottoms. So what is a weak bottom? Uh, we bought them, occurs and the price comes down with a great speed and then reverses. Backup. With the same speed. Steepness of the downside is equivalent to the speed of the upside to the market comes down violently, and then the market comes up as sharply as the private move. Week Top occurs when the market goes up very sharply, and then it reverses back with the same speed, creating a v-shaped pattern. We tops and bottoms occur very rarely in the market. They do occur in the market, but the number of times they occur is very rare. The market does not become a pull trend from a bear trained immediately, and market does not become a bear train from a bull trend. It takes few sessions from the market, convert from a downtrend when uptrend and vice versa, the majority of times how the market behaves if a weak top or the bottom occurs is that the market comes down, Y-linked lead, the market stops, and then it tries to come back up. The market. In this case, instead of going up directly, the market forms are small, double bottom. In this case, it can be a perfect W bottom like this. And then go up. Or it can form a higher, low, double bottom, and then it can move up like this. So instead of market moving up and down like this, most of the times the market forms a small double bottom and then the market moves up. So if suppose this is a support level and then the market is coming at the support level very violently. The downside movement is very sharp. And if you have a trading plan of going long at the support level, instead of creating a long position at the first attempt rate for the market to create W bottom and then plan your entry here. So for example, in the first case, the market comes down and then it comes up. And if you create a long position here, believing that a market is going to keep on going up. A lot of times, what happens is that the downside movement is so sharp that instead of the market going up, the market forms of flat pattern, and then the market moves down and then you are caught in a losing position. So when the downside or the upside movement is very strong, and then you need to create against the first trend and wait for the market to form a small W dot or a double bottom and then Enter on the second attempt. Because as we have already discussed, whenever the market tries to do something twice and it fails, then it usually goes the opposite way. In this case, the first time the pairs are uncontrolled, and then the market finds buyers. Then what happens is that the bears tried to drive the market down the second time. And if they fail the second time, the market will usually go the other way. So it is usually beneficial to go long. On the second attempt if you feel the downside movement is strong. Similarly, if the market is going up and if you expect a certain resistance level in this area and you believe the price is going to find resistance. Price finds resistor and comes down. Instead of going short at the first attempt, if you believe the upside movement is strong, wait for the market to go up once again and then create a small tabletop. And then if the market tries to come down once again, then you can create a short opportunity in this area instead of the first area. So in this example, we can see the market forming lower highs and lower lows. And then we can see the market accelerating to a downside. And if we connect the lower lows with a train line, the market has went down and finds support at the bottom of this trend line. And now we can expect that the trend might pause for a little while. So now we are aware of the possibility that the downside is very sharp. We can see it sessions of continuous selling, which means that the selling strong currently. But we also expect that the market might take a pause and we can expect the market to go up. You should be prepared for the possibility that instead of the market coming up like this might come up from a small double bottom and then go up. So we can create long opportunity on the second attempt, instead of going long on the first attempt one. Similarly, we can see the market coming down like this. Went up, came down from a small double bottom and then went up instead of going down and then coming up. So you can create a long opportunity on the second attempt. In this example, we can also see the market going up. And then instead of making a we stop, the market, went up and then came down and formed a small Double Top, then came down to week tops and bottoms occur very rarely that to happen, but the app and rarely these types of wave tops and bottoms happen quite frequently. So you can plan your entry on the second attempt. Here in this case two, we can see the market went up and then it spent a little bit of time in this area before coming down. So if this is the current time frame on the lower timeframe, imagine what would have happened. The market went up, and then this tail shows that the market came down. This bearish candlestick shows that the market came down again. It went up again, and then came down. So on the lower timeframe chart, this would have happened. Market went up, came down, went up again, and then came down. And once again, it is a very efficient way of entering and planning your entry if you're trading against the first leg, for example, if the market is coming down and you believe the market is going to go up now. But the town site movement is very sharp. So wait for the second attempt for the market rate for a small double bottom to be created. And then you go long. 5. Laws Of The Market: In this video, we'll be discussing about some of the laws of the market. These are some important points that you need to keep in mind. While trading. The market is factual in nature. It means that movement of the market is the same on any timeframe, the market moves in exactly the same way on a five-minute chart as it moves on a 10 bar chart or a daily chart. If you remove the time from the chart, you will not be able to make out which timeframe it is. So the market is making a tabletop or head and shoulders, or any reversal pattern on a five-minute chart. And it makes the same patterns on the highest timeframe chart or on the lower time-frame charts, even the tick charts, the reliability of the patent is directly proportional to the timeframe. The higher the timeframe, the higher the reliability of the patents. So if a Head and Shoulders pattern is forming on a wiki chalk, then its impact and its movement, its reliability will be higher. On the other hand, if the same pattern is being formed on a lower timeframe, for example, on one-minute timeframe are head and shoulders drop is being formed, then that pagans reliability is less as compared to the higher timeframe signals are less effective and the chances of a pattern failing on the small time frame or higher. So you need to keep in mind the factual nature of the market. For example, if the market is moving in a bear trend on a daily timeframe with lower lows and lower highs. And if there is a pull back on the daily timeframe, the market is retracing back a little bit. And if you open up the early time-frame or the 15 minute time frame, it might look like a bull trend at that point of time. So pulled trend on a lower timeframe might just be a pullback on a higher timeframe, the reversal is valid only after a trend line break. All the reversal patterns which we have discussed earlier in the course. The most important thing about those reversals is that they are valid only after there is a trend line break in the ongoing trend will be discussing this concept in detail shortly. The volume within the pattern should be reduced with time. So for example, if there is a Head and Shoulders stop forming an Ableton, you must keep in mind that the volume, the activity within that pattern should be reduced. Pressure times volume shows the interest of the public and the institutions at a given point of time. So you want the interest at that reversal pattern to reduce with time. That increases the effectiveness. On the other hand, if there is a high volume, high number of shares are being traded within the pattern, then this serves as a warning that the pattern might fail. The institutions try every possible method to hide whatever they are doing in the market. And volume is the only way you can follow the institutions footsteps. So we need to keep good watch at the volume in any pattern of volume forming within the pattern should reduce with time what is a valid breakout from the pack and the price should break out with volume, high volume increases, the effectiveness of the pattern will be discussing this concept shortly. And the last, but not the least, is that a trend matures with TI, for example, a bull trend is going on. The steepness of the bull trend with time will decrease. So if there's a steep pull trend going on, you can expect the steepness of the Bolton reduce Quicktime. The market moves on from a pull trend to arrange and then decides whether the pull trend should continue or whether. Reversals should take place whenever you see the market becoming even a steeper trend. But time, this shows that the market is going parabolic, which is unsustainable, and it usually comes down after the market, gives a really steep move. So here we can see the chart of apple or a five minute timeframe. First, we have discussed about the fractal nature of the market. The market moves in the same way on any timeframe. So there is a bull trend on a five minute time frame. You can see the breakout, a double bottom forming a retest of the levels. And then the bull trend continuing. And if you go on a higher timeframe, like the hourly on the early time-frame, you can see the market is moving in exactly the same way. The patterns and the movement of the market and the flow of the market is exactly the same. You can see the market forming and arrange or rectangle pattern and the market breaking out to retesting, then the resumption of the bull trend. And for example, we can see here it is a very strong bull trend going on in Apple on the hourly charge. So if we see the sessions here on 27th December, and there is a pullback going on in the market is correcting. So a lot of times we see correction on the higher time frame. For example, here it is a correction on the 19 timeframe. And if we go on the lower timeframe, for example, on the five-minute timeframe, on the five minute time frame, you can see there's actually a bear trend going on. So you need to understand the concept. A trend on a lower timeframe chart could be simply a pullback on the high timeframe chart here, this whole session of five-minute chart, or simply a pullback on the 10 year timeframe, the market came back on the 10 year timeframe moving average. And then you can see the market resuming its trend. This factor legion of the market should be kept in mind so that you can be aligned with all the timeframes whenever you are taking a trade. So for example, if on a five-minute chart you are seeing this and you believe that it is a Bertrand. And if you go on the high timeframe chart, you know that this is simply a pullback on a 10 year timeframe so that you can be prepared that the trend, the uptrend, can resume at any point of time. The second we have discussed is about reversals. See, we have discussed every reversal is the tabletops that double bottoms, the head and shoulders, tops and bottoms. These reversals have a common condition that these reversals should only be considered after a valid trend line break. So for example, there is a bull trend going on. There's a bull trend going on. And we see sort of a head and shoulders top forming when we are now aware that a reversal pattern might be underway. But if this trend line has not yet been broken while the patent is being formed, then this is not a valid patent. For example, if you see a bull trend going on and you see a head and shoulders top forming. Without the trend line being broken, then this reversal is not yet valid. In this case, the trend line has been broken as the pattern is being formed. This is a very important concept that needs to be kept in mind. See the bull trend is going on and you see tabletop forming. But that has not yet been a valid trend line break. And this doublet nope, might simply come down and take support at a trillion and the trend will resume up. On the other hand, if the trend is going on like this and you see a double top forming with the break of the train line, then you can consider it as a valid traversal pattern regarding the breakout levels. Breakout from any pattern should be considered, keeping in mind how the pattern is being formed. So for example, there's a double top performing and yo waiting for the breakout to happen and eventually the market breaks out. Two things you need to keep in mind is that the volume of this session should be higher compared to the past sessions. The exact level of the volume is always different in every case. And you need to compare the volume with the pattern. And the second thing is that there is not a fixed formula to determine whether a breakout will succeed or fail. But a lot of experts in technicians with time have given the data for a breakout to be considered as a successful breakout, the price should pick out at least 3% from the neckline level. So for example, if right now at the neckline level the price is at a 100, so 3% of a 100 is three. So for a breakout to be considered as a successful breakout, the market must break out, at least to the level of 97 or below. And if the market breaks out less than 3% of the price, then it is not considered to be a successful breakout. So for example, there is a bear trend going on. You see a double bottom forming. After a trend line break, you see a W bottom forming and then you're waiting for the neckline to break, then the price breaks out. And for example, if the price of the stock is 1500, for example, right now at the neckline. So for the breakout to be successful, the price must close above the level of 45. So the price at which the breakout should be considered successful is at 15, 45, which is around 3% of the price of the stock. This is valid on the daily and the weekly timeframe. And if you reduce the time-frame, if you trade on the early and the five minute or 15 minute chart, you'll have to church and assess the strength of the breakout and use our judgement to place the trader. Because in that case, the 3% rule is not valid. The 3% rule has been mentioned in a lot of books, and it usually applies on the high time thing like daily and weekly. The last rule is that each and every trend matures with time. So if there is a bull trend going on, you can expect the bull trend to get less steep per time. So if there is a strong bull trend going on, you can expect the bull trend to go on like this. Now after a trendline break, you see the trend becoming less steeper with time. The steepness of the trend matures with time. The bull trend, eventually, after breaking the trend lines becomes less steep and then it goes in a range where it forms a reversal pattern. And then after going in arrange, it decides whether it will continue the ongoing trend or whether it will reverse and turn into another trend. And as we have discussed, the nature of the market discipline is on every timeframe. On the other hand, if you see a bull trend that is going on like this, and suddenly the steepness. Voltron starts to increase. You see a trend line that has been found like this. And now a trend line has become even steeper, and then the pull trend has become even steeper. This is unsustainable. So if the trend becomes more steep with time, then this is usually a sign that the trend is about to end soon. The basic understanding of the market is that it matures with time, but trend becomes less strong over time. And then it goes and arrange. And then after moving in a range, it decides whether it should go up or it should go down. Here in this case, the bull trend is going on and we can see the trend line has been drawn. And then with time the bull trend becomes even stronger. And this is not how the market works. See a lot of times the steep Voltron becoming even stronger bull trend, but that happens in very rare cases. So for example, if a bear trend is going on like this, and if you connect, it would train line. And then if the pair train starts to move like this, the steepness of the trend starts to increase with time. Then this is usually a sign that the trend has become parabolic and you can expect a reversal very soon. Here I've opened up a chart of Bitcoin and as you can see, billy timeframe, a bullet train was going on. And if we connect the bull train like this, you can see the bull trend, then it became even steeper. A bull trend became an even stronger pull trend with time. And if you compare the steepness and this trend is obviously steeper than this. And if a trend becomes steeper over time, then it is usually a sign that the trend is about to end. See at this point of time, everybody, including the news and the experts become bullish. And whenever you see even the general public talking about anything and the euphoria taking over directors, usually a sign that the market has reached. Oh, and you should be concerned that the trend is about to end and see what happened here. You see a market forming lower lows and lower highs and see what happened after the market moving like this, it became even steeper. The market was moving like this and it became even steeper. And look what happened. The market traversed up again. This is one of the most fundamental laws of the market. And this law can help you avoid getting trapped at the exact tops and bottoms. And the majority of the patterns we have discussed, like the flags, the veggies see a bull flag. We'll usually break to the upside and then continued strained up or down sloping, which will break to the upside and it will continue going up. A bear flag will usually break to the downside, and then it will continue to run to the downside. And an upward sloping wedge shape usually break to the downside and it will continue its run down. Very less chances of this flag breaking to the upside and then starting a new move. Because right now this flag is a pullback on a larger trend, and this is actually a bull trend if we have discussed the fragments of the market. So this is a pair train and now a bull trend is going on. And according to the market law or trend does not become stronger over time. So the market, if it's moving like this, you cannot expect it to go to the upside and become even steeper. The pull trend that has been going on in the pullback, it will usually pick to the downside and then the trend, the original trend will continue. 6. Entry & Exit - Trade Management: In this video, we'll be discussing about one of the most confusing but important aspect of trading. If you are starting off how to enter and exit trade. In the previous videos, we have discussed about various types of patterns and reversal structures that happen in the market. So when you find that structures, how do you enter and where do you put your stop-loss and where do you aim to take the targets for entering a trade? You need two reasons to enter a trade. The first one is a suitable candlestick pattern happening after the break of a structure. We have discussed a lot of structures like triangles, Head and Shoulders, tabletops, double bottoms. So when we see a break of those structures, for example, in a double bottom, we see a break of the neckline. In almost every structure. The price pulls back to the structure and there is usually a retest of the structure. And during the retest, you have to plan our trade. And FVC a suitable candlestick pattern, doing the pullback of the structure, we can place an order above the high of the candlestick. I'll be explaining this concept shortly to make it more easier. When the setup looks valid, we need to buy above the candle, stick with the stop-loss below the structure. And we need to sell below the candlestick to stop loss above the structure. When we see a strong breakout of any structure, it is usually hard to control our emotions. And then the formal kicks in, re-enter right on the breakout. And then we get into the market buying at a really high price. And then it starts to pull back and results in a waste of time and also the opportunity to buy at a lower price. So in any case, you miss a breakout opportunity and if you feel that you could have been a part of the street, wait for the retest of the pack and almost all of the time, the price retests the structure. And especially if you're starting in trading, it is always better to wait for the retest. Then when the price starts to resume its move, then to the suitable place to take created. So for example, at this point of time you see a really good candle, Polish candle, green colored candle. What is the point placing the trade above the height of this scandal and not right at the close of this candle. See details matter in trading. If you enter above the high of the scandal, when the price creates above it, then the market is actually going your way. And a lot of times, if you decide to enter on the close of the candle, the price does not create above it. Price starts to come back. Buying about the high of the candlestick, when you feel the premises valid, that is always, always better choice to enter into a tree. Because at that point of time the market starts to move your way. And if your trade does not get triggered, then you are saved from entering into a battery. This mall Thing can add a really good edge to your trading. These structures here mean trend line. The price is moving in a bullish trend. And here you see a reversal candle, good green colored candles like this. And then you can buy above the high of this candlestick, you will be paying a higher price for entering into this, but the probability of you earning money. Would be high if you enter above the height of this, instead of entering right at the close of this candle, this point of time, where do you think the stop loss should be? Stop-loss placement is really subjective in nature, unique to determine the importance of the structure. And you have to place the stop loss at the place where you think if the price goes, then the structure is no longer valid this point of time, if you believe that the bull trend is intact and you can place a stop loss below this candlestick pattern calls it the price goes below this, then the structure of the bull trend is no longer valid. Market is not behaving as you thought it would. One of the most reasonable places to put your stop loss is below screen glows in a bull trend. If the market is moving in a bear trend, it is very essential and an important place to swing highs in a bear trend that connect as really good place to put your stop-loss. So if the market is moving in a train like this, it does not matter where you enter your stop-loss. The most reasonable place your stop loss is above the swing highs in a beer trend does not matter if you enter here are a few, enter here or here, or here. Your NT place does not determine the place of a stop block. Your stop loss should always be below or above the structure. In a similar way, if the market is moving in a trend that it takes support at any moving average, for example, of 50 moving average or a 20 moving average. And in the past you see has been getting support at that moving average. And you see a reversal candle there and you can go long above the height of that candle. Stop loss below the structure as I discussed earlier. So for example, I have discussed about various types of triangles. And for example here a VC or descending triangle, which usually predicts to the downside and the market breaks to the downside. We wait for the pullback. And then if we decide to enter shot at the street, where do you think we should put our stop-loss? Most reasonable place to put a stop-loss. It's a place where you think if the price goes, their structure is no longer valid. So if the price goes above this place than the market is not behaving as we would like it to behave. So he's named stop-loss price can be this. So for example, this is a Head and Shoulders stock, this is a neck line. The price breaks down decisively. This is the place where we are looking for a sorting opportunity. As you gain experience in trading, you will be able to seek it out. And judge, if the breakout will succeed or not. This can help you to enter the breakout itself. Particular starting exceeding. It is always better to wait for the taste of this structure almost all the time. Price comes back to the structure to retest and check if they are still sellers this price. And if you see a suitable reversal candle here, bearish candle, you can sell below the low of this candlestick with a stop-loss. At this structure, placing a stop-loss is purely subjective in nature. You need to judge and find a place to put a stop loss so that if the price goes at your stop-loss level, for example, in this case, if the price goes above this height shoulder and the structure as we had expected, then the market is not moving as our expectation. So if the price goes up here. The market is not behaving as we expected it to behave. So you put your stop-loss at a place. They think if the price goes there, your premise of a reasonable trade is no longer valid. For example, there is a double bottom and if you enter a trade here, stop-loss below the structure would be a reasonable place to put your stop loss. Of course, if the price goes there, we thought the price would move like this, but the price went down. And it is not behaving as our expectations. So this is a reasonable place to put your stop loss. Now, I'll be discussing with you some important things you need to keep in mind when you are entering on pullbacks. For example, the prices have been moving in a range, and in this case, it is a horizontal boundary and the price breaks to the downside. Now, if we are looking for a short entry, we have a plan to enter on the pullbacks. There are some things you need to keep in mind that can give you a clue whether the breakout will be successful or the breakout will fail whenever the market is having a breakout out of any pattern or structure, a lot of time the breakout fails and the price simply returns back into the range. So when the price Greeks to the downside, unique to watch closely what happens after this if after the break to the downside during the pullback phase, the pullback candles must shrink as they progress. A lot of times the price comes back and tests this structure. The price pulls back to this point and then starts to cool down. During this phase, you need to keep a close watch how the candles are forming. When the price is going up, you need to see the candles shrinking in size. And in the case of downside breakout, you must see tails on the top of the candles, which means selling is more dominant than buying. So the first is shrinking bodies, candlesticks doing the pullback must decrease in size during the downside breakout, prominent tails should be visible on top. Shrinking bodies means that the buying is decreasing with time and there are no buyers left to support the price is higher, which means that the breakout is successful. Tails on the top means that the sellers are active and selling is more dominant than buying. Now where to place your entry after the pullback has finished, the price can pull back to the structure or other resistance zones like the moving average of 20 or 50. And if the price is not able to reach the structure and the pullback is not able to go even back to this level of structure. This means that the breakout is strong. So for example, the price has a break to the downside and then it starts to pull back. And it is not able to reach even back to the structure and starts to come down. This is a sign of a strong breakout. And when the price starts to reverse. You can look for candlestick patterns like hammer, inside bar or golfing pattern. These are very common candlestick patterns and they are very effective candlestick patterns. So for example, after the pull back, you see a hammer, a pattern forming with a large tail on top. At this point of time, Pamela candlestick forming, you can place a sell order below this to get shot. And during the pullback phase, if the price who's to the structure or goes to the moving average, and then you see shrinking bodies and tails on the top. So here in this case, if the price starts to pull back and we see the pullback candlesticks getting smaller in size as they go up, which means the buying is drying up at a resistance zone like a moving average or the structural resistance zone. If we see an insight bar with a bearish body, in case of downside breakout, we can place a sell order right below this. And in the third case, instead of an insight bar BC at engulfing pattern forming, we can sell just below this if the price starts to create down. And then effective way of entering during the pullback is to use a stop entry below this, using a stop entries will prevent you from entering into a bad trait because a lot of time the price will start to go up and then come down. So if we enter right at the close of this candlestick, the price might go up against us before coming down. So entering below this, using a stop entry is very effective. By using this example, I'll show you how important and essential it is to use stock entries. While placing orders. You will be amazed to see how many traits you can be saved thrown if the trait does not go in your favor. And if you apply this small technique in your trading, you're trading will improve by a huge margin. For example, as you can see, the market is going on in a bull trend. And there's a breakout, a good huge break out. And we are waiting for the pullback, for the retest. Back to the structure and hair. As you can see, the market had a pull back to the swing high point and has now formed a very good bullish candlestick. So it is an ideal trade, a strong breakout and with a good pullback and a strong reversal candlestick pattern. So this is one of the most ideal creates for a profit. So what we do is replace a buy order if the price goes above the height of this candlestick pattern and see what happens next. This is what happens next. So the price did not go above the height of this candlestick pattern and the market repost and fell by a great deal of margin. And we are saved from a bat trade. If we had taken a long position as soon as this candlestick would have closed, v would be in a losing position and a stop order will save you a lot of times from a bad trade. So use this technique and your chances of making a profit will increase. By a very good margin, it is always better to create only one timeframe, but it is equally important to know what is going on on the higher timeframes as well. So if you are trading on a five-minute chart, you need to have clear knowledge of what is happening on a one hour time frame and on a daily timeframe. And the most important thing is that the market always follows the higher timeframe. Consider that the market is moving in a bull trend on a daily timeframe forming higher highs and lows. And if you go on a lower timeframe, for example, this whole period on a five minute timeframe would look like a huge trend. So if this whole swing lasted for a month, then we had a beer trend that lasted for one whole month on a five minute time frame, if you had entered on a short position at this point believing that it was a bear train on a five minute timeframe. If the price takes support on a higher timeframe, then the chances of price getting buyers increased substantially. So if you take a short position here, and if this trend line is at the same area on a higher timeframe chart, then you are surely going to be in a losing trade. So you need to have a clear idea about the higher timeframe charts. One other example is that suppose this is a patron going on, on an hourly chart, for example. And you wish to take a short position whenever the price reaches the top of the trend line. We have already discussed how to enter with the help of candlestick patterns and other reversal patterns occurring. One other way to enter is to go on a lower timeframe charter. So if this is a one-hour chart, you can go on a lower timeframe chart to get an earlier entry. If you want to enter at this point of time, and if you want to enter before the other traders, you can go on a lower timeframe. You can go on a five minute time frame that it will always be some sort of reversal pattern happening on a five minute timeframe that can give you an earlier entry. So if you wish to enter at point a and this pink area, put simply look like this or this on a five minute timeframe or a 15 minute time frame. So to get an earlier entry, you can wait for the breakout and then you can plan your entry on pullbacks to get a better price. This is a pull trend going on right now. So if we wish to plan an entry when the price comes to the bottom of the train line, we can place our trades based upon the current time frame, or we can go to the lower timeframe to get an earlier entry. So these are the points where the price bounds of the 19 timeframe, if we go on the lower timeframe, for example, the five-minute chart here we can see price forming flat pattern on a five minute timeframe and the price at a breakout. And then it pulled back and then it started its trend up. So on the lower timeframe, we could have got a better entry. In the second case to the price started to form flag like pattern. And then we could see a small wedge shaped forming inside this big pattern. Then it had a breakout to the upside, and then the trend started to continue. So the lower time-frame charts can give you a better entry. This shows the importance of multi timeframe analysis. 7. Stop Loss Placement - Trade Management: In this video, we'll be discussing about the most important concept in trading, that is stop-loss. Using a stop loss is one of the most essential parts in trading. And a stop-loss guarantees that you will not lose more than a certain amount of money on any given trade. Majority of traders are losing money because they usually blow up their account on one single trade and using a stop-loss that is in the market and not in your mind is the prime importance. So using a stop-loss serves two purposes. One, it prevents you from losing more than a specified amount of money on one single trade. And the other thing is that our position size is determined how far the stop losses from our entry price. And in this video, we'll be discussing in detail where you can put your stop-loss after you enter in a trade. Stop-loss placements is very subjective in nature. There are no fixed formulas where you can put your stop-loss. And with expedience and spending time the market, you will be able to become much more precise in this matter. For example, one of the most important places in a trend, other swing highs and the swing lose. So for example, this is a bull trend going on. And this is the swing lose. And this is the swing highs in a bull trend. The swing blues are very important points and the swing laws are usually the point of last defense for the booths. So if you are entering in a trend, it is usually a very reasonable place to put your stop-loss below the swing lows. So if you are entering at this particular area, then you have stop-loss needs to be below this swing, Lou, no matter where you end up, if you enter here, if you enter here, or if you enter here, or if you enter here, your stop-loss placement is not effected. Bioenterprise the stop loss should be below the swing lose in a bull trend. And if this is a bare trend going on, a stop-loss placement is usually above the screen guys. So for example, you enter at this point in a trade, you keep your stop-loss here as the tree progresses. If a new swing high forms, you can train your stop-loss. At this level. You can shift your stop-loss from this level to this level. If the price comes and creates a new swing high in a bear trend. And if we discuss about this particular concept in detail, for example, if this is an ongoing trend and you want to create a long position because you believe that the price is going to go higher and the price starts to turn from here. At this point of time, you find that there is a good candlestick pattern forming and you are entering long at this position. So where do you keep your stop loss at this point of time, we cannot be a 100 percent sure that this is going to be a swing low. In this filtering, the price can go around and move like this before going up. So if you're entering at this point of time, if you keep a stop-loss at this level, a lot of times. The price will come down, get a deep pull back, and then start to go up. So if you believe that a new Swing Low has been found, a lot of times the price will come down or one more leg before starting to go up. So if the price is going up from a lot of times, the price will come down for one more leg before going up. So if you keep the stop-loss below this structure, a lot of times you are going to be stopped out. That is just the way of the markets. If you keep a tight stop-loss, you might get stopped out. So how do you overcome this problem? So if you believe that the trend is about to get started, is when you take an entry at this point of time, you can place the stop-loss. The last recent swing low point. This structure is not a swing Lu yet, so you can keep your stop-loss below the most recent swing loop, which can be here. I'll be explaining this concept by using a chart. That's the payoff of the market. If you're using a tight stop like this, then the chances of you getting stopped out are higher, but you will usually lose less amount of money. And in these cases, if you're using a wide stop-loss, the chances making money are higher, but so is the risk, that is how the market works. So for example, this is a very sharp downfall and the price has started to pull back. And it is now stalled at the moving average, and it is forming a double dot at around the 50 percent pulled back of this leg. So if you create a trend line and this looks like a flat pattern, and then the price root out from this pattern with three bearish candle sticks. This looks like a very strong breakout. So for example, if you create a short position here, believing that the prices are going to go lower. So at this point of time, if you keep the stop-loss above this structure, this is not yet a swing high. The last swing high is at this point. So a lot of times the price will go up and then come down. And this is what happened next. The price went over this structure because this was not a swing high point yet. And the price came lower per time. So if you had kept a very tight stop-loss above the structure, the chances of you getting stopped out are higher. But if you get stopped out, you will lose less amount of money. And if you keep the stop-loss above a swing highs in a bear trend and below swing lose in a bull trend, the chances of you getting stopped out are lower because Sweden highs and swing lose our defense points for the bulls and the bears. So using those points and your stop-loss placements are usually a safer bet. The amount of money you will be risking by putting our stop-loss here would be higher. That is the way of the market. And in some cases, if the amount of risk is usually high, if you put your stop-loss above the swing high and swing loads. And if you want to use a very tight stop-loss, like in this case, one thing you can do is that in any case, you get stopped out from a trade. And if the price starts to go in your favor, you can take a position once again. So if you are using a tight stop-loss, if you get stopped out. Like this, you must be ready to get into the trade once again, if the price starts to go in your favor regarding the stop-loss placements in a structure. So if this is a double crop farming and the price breaks below the structure. And if you are looking for a short entry here, the price pulls back and starts to come down. If you are creating a short position here. If you use a tight stop loss, for example, at this level, the chances of you getting stopped out are higher because the price can come back like this, take a deep pull back, and start to come down. So in these cases, if you are using a TI stop-loss, always be prepared to create a position. Again, if the price starts to go in your favor. On the other hand, if you are creating a short position here, a valid stop-loss placement should be at a place where you believe that if the price goes there, the pattern is no longer valid. So for example, if this is a valid tabletop, when can the pattern fill? The pattern can fail if the price goes above this tabletop. So if the price goes above this pattern, then this is no longer a valid double top. So you can keep a stop-loss at this level. So if the price goes above this level, then this is no longer predictable top, and there should be no reason for you to be in the trade anymore. For example, if this is a heading, shoulders, bottom forming, this is a left shoulder, the head and the right shoulder. And this is the neckline level. So if you want to create a long position here, where do you think this will stop being a Head and Shoulders pattern if the price goes down like this. And if it goes below that right shoulder, then this pattern becomes something else. This is no longer a Head and Shoulders pattern. So a very reasonable place to put your stop-loss would be here. So if the price goes below this, you will get stopped out because the pattern no longer a Head and Shoulders pattern. So as I said, with time and experience, you will be able to judge suitable places to keep your stop-loss placements. Stop-loss placements, keeping in mind about the basic structure of the market and the spring highs and lows are a very effective strategy because price is the only thing that is common on the charts of everybody who is trading. People might be using different indicators, different moving averages, or a combination of a lot of things. But the one thing that is going to be common in each and everyone's shot is going to be the price and the structure and how the price looks. So the price is supreme. Placing your stop-loss based upon the price action. Very effective strategy. And if you're using a tight stop-loss, the chances of that stop-loss getting hit are higher, but you lose less and you should be prepared to take a second entry if the price goes in your favor. Once again, on the other hand, using a white stop-loss beyond a structure increases the probability of you making a profit, but the amount of money you will be risking is higher. That is the pay off of the market, and that is how things work. 8. Target Placement - Trade Management: This video focuses about profit taking and where to book your gains. It is very, very important to always have a plan where to book your profits. Because believe it or not, the market takes back the gains, whatever you are holding really fast. And more often than not, it is always a painful feeling to give whatever you have owned back to the market. And it is usually because of the psychological reasons behind that. Whenever we are in a profit, greed factor comes into play and we always have the desire to gain even more. And that is one of the main reasons we don't put our profits. We have a belief that the market still owes us a lot of money because we are right. And this human nature or greed always turns of profit into a loss. For example, consider, you are in creative and I have made a handsome amount of profit. For example, you have made 1 $1000, and you see the amount of one hundred, ten hundred dollars in your profit and loss account. At that point of time, the market makes a height of $10 and you are making an amount of $100. Psychological factor, which plays with our mind is that once we see that amount, a profit and loss statement, we believe that we will not settle for anything less than that, even if the price is at a resistance zone or a support zone where we should be putting profits, we choose to ignore that fact. So in this example, after the price touches the high time, it starts to come down by a dollar or to refuse to book our profits. Because we have seen that amount in our profit and loss account and we will not settle for less than that. And slowly and slowly, we see our profit and loss account using from 1.900, $1000 to 800, and eventually comes down to a point where we have actually given everything we have earned back to the market. Now after the price comes down from $10 to a 27, agree with the fact that we were wrong in holding the trade. And now we want to put our profits at 10. And ironically, $10 never comes back. These are some of the emotions you will feel when you are in a creative. And it is always better to cook your profits by placing the limit order of atoms support or resistance area where you believe people will take their profits, placing an order in the market, you removed the factor of the creed. So if you're trading in multiple lots, it is usually better to book, have your quantity at a limit order and shift the price to break even. And if you are trading and singlets always look full positions at a predetermined target. And these are the places where you can book your profits. And you can expect some profit booking by the traders. So the price usually moves the equal distance of the prior pattern once it predicts out. So it's the price has formed a double top and it breaks to the downside. Then it usually moves the distance of the height of the tabletop. And horizontal support and resistance. Adrs are important places where creators, book profits. Areas with gaps are very strong support and resistance zones. We will be discussing these with the help of a chart shortly. We have already studied about the medius patterns and structures in the market. The price breaks out from a structural usually traveled the equal distance of the structure after successfully breakout. So if this is a W dot performing and this is the neckline level and the price bricks to the downside, you can always expect the price to move the approximate range of the prior pattern. So you can expect the price to come to this point after the pretty colors. And you can expect profit booking at these areas always keep on drawing the horizontal levels of support and resistance where you can expect the traders to put profits. And those are the places where you should also look to book profits if you are in a trick. Here you can see the market facing resistance at the prior swing high, which also becomes a horizontal resistance zone. This is also one of the places where the market faced resistance. And also notice how the market poke out from this level and when it came back, the background, it found support. So always keep on drawing the horizontal support and resistance levels. Always pay close attention to gaps. Gaps always act as a very strong support and resistance zones. We can see the market forming a gap area where the market opened lower than the law of the prior day and when the price reached here, found a lot of silence. Whenever the price is moving towards a gap area, it always feels like the price is going to move very easily through the gap area. But more often than not, you'll find people initiating their traits and the creators booking profits at the gap aliens. Here in this case, the price is finding resistance at the gap area. And once the price goes above it, you can always expect the price to find support at this gap media always pay close attention to gap areas. They are very deceptive areas always looks like it's going to break out successfully. Put the first breakout from that capillary. Most of the times fields. 9. How To Make A Trading Plan - Trade Management: In this course, we have discussed about the various concepts involved in trading. We have a clear idea about the patterns that form in market. How to enter, exit, and how to trade, how to manage those traits. In this short video, I'll be covering with you how to make a trading plan. Things to keep in mind when you are defining, are making a trading plan, things to keep in mind when you open a chart. So let's get started. So how to make a trading plan? These are the steps you need to follow. And we have discussed about each and every steps in the videos earlier, identify the support and resistance level on the chart. You need to mark the important support and resistance levels on the chart. And one thing that needs to be keep in mind is that always overestimate the importance of a support and resistance level. Never underestimate a support or resistance level. You must never consider in advance that support or resistance level is going to hold or break whenever in confusion, always believed that if the price is going towards a resistance level, the price is going to stop never in advance. Consider that the price is going to cross that resistance level. It is always beneficial to overestimate the importance that the support or resistance will hold. Because whenever we are starting off in trading, the biggest question is that which support is going to hold, which resistance level is going to hold, where to book your profits go. One mistake that I've made a number of times when I started trading is that I always use to consider that the support or resistance level is going to break. For example, if a bull trend is going on and I have created a long position in that stock. And if the price is reaching resistance level, a lot of times I used to feel that the price is going to easily cross that resistance level and I did not put profits at that point of time. What usually happens is that the price tried to go above the resistance level. And then what I noticed is that many times the price hits a resistance level and then quickly returns back. No one can know in advance which resistance or support level will hold. So it is always advisable to book your profits at the first support or resistance level. The next point is that identify the phase of the market. What is the phase of the market? Is it a bull market? Is it a bear market, or is the market going sideways? And a quick way to identify the trend is to check if the price is below the moving average, or is it above the moving average? And if the moving average is horizontal, it is not sloping much, then the market is usually sideways. Once you identify the phase of the market, connect the swing highs and the swing low. So if it is a bull market and uptrend is going on, Connect a swing lows with a trend line and connect to swing highs with a trend line. That way you'll be able to identify the strength of the trend. And if a pattern is being formed, is the market. In an over bought or an oversold condition. I'll be trading in an old bought or oversold condition. And we have already discussed in detail how to identify those conditions. So if the market is going on in an uptrend, you can plan your entry near the moving average of 20 or 50, or at the bottom of the trend line. So the market will find support near the bottom of the trend line. A lot of times in a bear trend, you can plan your entry near the moving average and on the top of the train line. And if the market is moving sideways, you can sell near the top and you can buy near the bottom and avoid trading in the middle of the range. So once you have drawn the support and resistance level on a chart, if the price is currently moving like this, it is an uptrend with swing highs and swing lows. First step you need to is to connect the swing lows and the swing highs with a trend line like this. And you can plan your entry near the moving average or the price coming at the bottom of the trend. This is a bull trend, but it is not a strong bull trend because the size of the swings inside this bull trend are large and the pullbacks are also very large. On the other hand, if the market is moving like this and it is going high, and if you connect the swing lows and the swing highs, the trend line. And if the size of the swings inside this trend are not very large, it is a very strong, bold trend. The market is moving in a controlled manner upwards. And whenever you are drawing a trend line, always pay close attention to the oversold and the overboard conditions. A lot of times the price has a strong breakout and goes in an over bought condition and the fear of missing out kicks in. And we create a long position here, and eventually the price comes down. So pay close attention to those sold and the overboard conditions. And when the swings inside the trend are large, always create your long positions at the bottom of this range. So if this is the top of the range and this is the bottom of the range of this bowl trend. This is the upper range and this is the bottom of the range. You have to plan your long positions at the bottom of the range. Similarly, if this is a downtrend going on, you connect the trend lines of the tops and the bottoms. And then you have to plan your short positions at the top of the range. If this is the middle of the range of selling zone is the top of the range. If the market is moving in a range and it is going sideways, and this is the top of the range, and this is the bottom of the range. This area is approximately the middle of the range. Avoid trading in the middle of the range, planning or short trades at the top of this zone and your long traits at the bottom of the zones. So what is the best timeframe to treat it as I've already discussed, trading is a subjective Profession. Each and every trader has a different style to create it. And the most commonly asked question. Which is the best timeframe for the best results, the traders are trading every time frame from the daily 24 hours of 1RM or even the tick chart, which is faster than a one-minute chart that traders are trading in every timeframe. So lower the time-frame. If you keep on decreasing the timeframe, it requires faster management. You need to identify what is going on and you need to be fast and it requires faster decision-making because the patterns and the market, the trends in the smaller timeframe are changing very fast. So that requires faster decision-making. You need to make fast decisions about entering and exiting. The one benefit of creating a smaller timeframe is that you can risk a smaller amount of money, but trading on a small time frame, like a five-minute timeframe or a ten minute timeframe. It requires experience. And initially, if you're starting off trading on a small timeframe, be prepared that it will take some time to get used to, on the other hand, a higher timeframe chart. If you keep on increasing the higher timeframe, you will get reliable signals. Effectiveness of patterns on higher time-frame charts are much more reliable than a small timeframe shock. So if a patent is being formed on a five-year timeframe, you see a double top or double bottom forming. It has a very high chance of getting filled and that requires you to enter and exit fast. On the other hand, if a double top or double bottom is forming on a daily timeframe or a one-off timeframe that has a higher chances of yielding a better result. For example, if you're trading on a one-year timeframe, each and every candlestick is of one hour session. So that gives you an ample amount of time to plan your traits, to manage your trades effectively. So you can get a lot of time deciding about your trading plan. So one disadvantage of that is that you have to risk higher amount of money if you are trading on a higher timeframe. But that comes along with the pay off of higher profit potential money-wise. So if you are risking a high amount of money on a high timeframe, you will also make a profit of that proportion. So if you're starting off in trading, the most effective timeframe for beginners is the one our timeframe, it is undoubtedly the most effective timeframe. And a lot of traders trade on the 10 year timeframe because you get reliable signals and as we have already discussed, is easier to manage and you can get sufficient amount of time to decide about your grade. So you can do your analysis on a higher time-frame charts, for example, the daily chart. And then you can plan your entry on the 10 year timeframe. That is the most effective strategy. If you're starting in trading, there is no problem in trading on a lower timeframe chart if you want to day trade and if you want to trade on lower timeframe chart, be prepared. You will have to spend a good amount of time in the market to gain experience and learn about the flow of the market to create profitably on the lower timeframe learning curve and the amount of time it takes to gain experience trading on a small time frame, it is usually higher. And if you are willing to trade on a lower timeframe chart, be patient with yourself because the results might come later and not sooner. 10. Trade Structuring Of Gold: In this video, I'll be showing you how I draw the structures and analyze the charts. Keep in mind that the more time you spend on the charts, the more experience you will again with time, it is exactly like playing music or learning a language. Initially, you'll find difficulty analyzing what is happening. But if you spend time watching the charts and checking them at regular intervals, you will become better and better with time. So the steps I follow analyzing this chart is that I check the overall trend on the daily timeframe. So here you can see the market is moving in an uptrend, the slope is upwards. This is the chart of gold. And for the past one year, cold has been moving in an uptrend and we can see the market breaking out from the zone. And then it created a horizontal flat like pattern. The first breakout failed, and then it went down again, and then the second breakout succeeded, and the prize stalled in the approximate range of the height of the pole. At this zone, we can see the price, stalling and traders booking their profits. And then the market had a pullback. And again, a flat pattern developed in the price broke out from that pattern. And if you watch closely this big flat pattern formed after this uptrend. So consider that this was the pole and this was the flat pattern. And after the flag breakout, the market usually goes the approximate range of the pole. So if we project the height of the pole from the flag, the market stopped at the exact point currently. So this was the first leg. And this second leg was the exact same height of the first lake. And right now the market has stalled at the height of that second leg. And let's have a look what happened recently in gold. Gold had a breakout to the upside and then it consolidated in this range. And now it had a break to the upside, went to all-time highs, but it could not sustain the higher prices. And now it went down a huge breakout to the downside, and then it stalled. At this prior support zone. This was the support zone. This is also a reliable support and resistance zone because we can see the market is stopping near this area. The market stopped here once, twice. And then the market stopped here once, twice. And we can see the market was trading in the zone for a long time and then the market stopped at the support area. So this can be considered a reliable support and resistance zone. So the market broke to the downside, then found support at the zone and then had a quick rebound. And we can see the market had a boiling brake to the downside and with the same speed to market bounce back. So if this was the daily timeframe, on the weekly timeframe, the market had a huge tail on the bottom. And right now, if you watch closely, the market has formed a Head and Shoulders. Bottom in an ongoing Voltron, hidden shoulders bottom are usually formed after a beer trend, but here it has formed after an uptrend. So we create the pattern the same way here, gold is trading at all time highs. And the market has formed a left shoulder, the head, and the right shoulder. And if we connect the highest, this is the neckline level. But at the same time, this is not a big pattern. The pattern looks very small, the pattern looks very compact. And in the earlier videos, we have discussed that a lot of time has to be spent while the patterns are being farming. Usually a Head and Shoulders pattern takes a few days to form, even weeks to Head and Shoulders pattern usually forms when the left shoulder is like this, the head forms like this, and the left shoulder forms like this. Haidt in this case, the market is making a sharp left shoulder ahead and the right shoulder. So this pattern has occurred in a span of a few days. Your shop down, a sharp up, and then the market is breaking out of an outline. So there are two possibilities that this pattern might fail because this looks like an unusual Head and Shoulders pattern. But at the same time we have seen a strong breakout to the highs. We have seen a breakout this level, and we also see a follow-through. They are signs that the breakout might be successful, but we must also see a very fine detail that the market was forming swing highs and lows at this point of time. This was the swing high. This was the swing low, and the market broke above the swing high point. So the market went into an old BAD zone and then quickly reversed. So right now my strategy would be to wait and watch, because the market right now is far from the 20 moving average and it has been disrespecting the moving average for a long time. So if it comes closer to the 20 moving average and it does not fall below the breakout point and it forms a good bullish candlestick, then I'll be planning to go long for the approximate height of this Head and Shoulders pattern that is around this range. So what is my strategy currently? I'll be watching this area. And most probably if the breakout is successful, the 20 moving average will slowly come to this point. And if the price bounces from this area than it has chances of going up. Because as we have discussed, gold is at all-time highs. And at all time highs there is no resistance whatsoever. So this is the analysis on the daily timeframe, go on the hourly time frame, because on a lower timeframe we can see better entries developing. So on the lower timeframe, this is the neckline level. And on the lower timeframe, the market is currently moving down in a beer trend is going down, and it is also below the moving average of 20. So if you wish to enter on the lower timeframe chart, we can connect the upper train lines and the lower train lines. And it is currently forming a flat pattern. And if the market breaks out from this on the early time-frame pulls back, we can plan our entry at this point so that we can take an advantage of entering on the earlier time frame. On the other hand, the pattern looks very small. Pattern does not look like a typical Head and Shoulders pattern and the market is moving quickly to the downside. One possible scenario can also occur at the market, might simply go down like this. Instead of breaking out the market might go down like this. That point of time, we have to consider the possibility that the breakout has failed and then we have to make a different trading plan. So right now the plan is to wait for the breakout to the upside on the hourly rate for the pullback and then go long.