Trading and Investing in Stocks using Technical Analysis | Learning District | Skillshare

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Trading and Investing in Stocks using Technical Analysis

teacher avatar Learning District, Invest in yourself

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

38 Lessons (6h 26m)
    • 1. Goal of this course

      1:03
    • 2. What is Technical Analysis

      1:00
    • 3. Why use Technical Analysis

      4:22
    • 4. Brokerages and Account Types

      6:03
    • 5. Platforms and Charting Tools

      1:02
    • 6. Example Platforms and Charting Tools

      13:13
    • 7. Chart Types

      6:19
    • 8. Candlestick

      7:57
    • 9. Candlestick Patterns

      13:05
    • 10. Candlestick Patterns Live Examples

      5:00
    • 11. Trendlines

      7:33
    • 12. Trendline Live Examples

      4:42
    • 13. Support and Resistance

      9:22
    • 14. Breakout and Breakdown

      2:50
    • 15. Support Live Example

      4:53
    • 16. Resistance Live Example

      5:25
    • 17. Drawing Support and Resistance Lines

      2:25
    • 18. Different Time Frames

      4:59
    • 19. Moving Averages

      8:52
    • 20. Moving Average Live Example

      17:58
    • 21. RSI Indicator

      6:16
    • 22. RSI Live Example

      10:11
    • 23. MACD Indicator

      15:57
    • 24. MACD Live Example

      17:34
    • 25. Bollinger Bands

      5:11
    • 26. Bollinger Bands Live Example

      13:36
    • 27. Gaps

      10:28
    • 28. Gaps Live Example

      14:47
    • 29. Triangles

      15:04
    • 30. Triangles Live Example

      8:00
    • 31. Volume

      12:21
    • 32. Volume Live Example

      14:22
    • 33. Risk Management

      19:19
    • 34. Risk Management Live Example

      13:16
    • 35. Entries and Exits

      15:29
    • 36. Entries and Exits - Long Example

      29:38
    • 37. Entries and Exits - Short Example

      14:44
    • 38. Finviz

      21:45
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About This Class

This course is your complete guide to technical analysis. In this course we cover what is technical analysis and why you might want to consider using it. We will cover how to read and analyze chart patterns, identify trends and support/resistance areas. We will then learn about the most popular and widely used technical indicators to help us with our trade confirmations. In addition, we will bring it all together and use all of the concepts we have learned through out the course to identify good entry and exit points for our trading opportunities. Covering risk management will also help us minimize the risk and maximize our profit margins.

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Learning District

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Transcripts

1. Goal of this course: Hi, Thank you for enrolling in my course. And welcome to technical analysis for the financial markets. Just a disclaimer that I'm not a financial adviser and materials covered in this course or for educational purposes only. I'm hoping by the end of this course you'll have the right education and skill set to help you get started with the financial market. You're interested in whether that stocks and equities, commodities and futures, currency and forex or crypto the topics covered in this course will apply and help you with all of them before going further. I like to set the correct expectation for this course. This course was not meant or wasn't designed to make you rich quickly. There's no formula for that. The main goal of this course is to give you the proper education, and the skill said you need to analyse charts and patterns, understand risk management and help you with proper entries and exits in the market. You're interested in 2. What is Technical Analysis: So what is technical analysis? Technical analysis is this study and analysis of trend so whether an equity is moving up or down or sideways price movement in different time frames volume, meaning how many shares are being traded at any given time, signals and indicators which can help you with possible entry and exit points. Historical data. So many technical analysts believe that history tends to repeat itself when it comes to the financial markets, and hence they use statistics from previous days, weeks, months or years. And also, technical analysts believe that the current price of a security reflects all from information about that security. So, for example, if there was a bad news regarding a company and the stock of that company went down that day, they believe that that price reflects the bad news. 3. Why use Technical Analysis: Now we can use this ah, historical data in conjunction with recognizing different chart patterns and using different types of signals and indicators to predict possible future price movements of a security. All right, So one thing you might ask yourself is, Why do we want to use technical analysis and why is this such an important topic? Well, as mentioned previously, one of the basis of ah, technical analysis is one of the most important ones is relying heavily on historical information. And also the idea of history tends to repeat itself. And if you can predict the future price movement of a stock, for example, well, then you can profit from some capital gains by short term trading that stock or equity. One good example of this is day trading day trading means you begin and you end your position within the same day. So, for example, um, after the market opens, if you buy into a stock, that means you have to sell your stock or that position before the end of the market hours . Financial institutions usually hired day traders who rely heavily on technical analysis to make profit and gain based on day to day market volatility. We also have retail traders. So these are the people like me and you who just trade on their own from home. But they do this as a full time job. Swing trading is another example, and swing trading is, ah, a little bit different from day trading, in a sense that the positions you hold are in longer time frames. So, for example, um, swing trading is usually for people who do have other jobs or can't really stay and watch the market full time eight hours a day, but still would like to profit short term. And, ah, these ah positions. Ah, they usually keep this for days or weeks or sometimes months. But, ah, they're still not considered long term investors. People who swing trade also heavily rely on technical analysis. Another reason to use technical and now, it says, is that he can help you with your entry or exit points for long term investors. So, for example, let's say you're a long term investor and you usually hold your positions or stocks you buy for 5 10 or even 2030 years. And ah, let's say you've done your research on a particular stock and now you 100% confident and you want to start a position and buying to that stock. Well, at the time you want to buy the stock, you don't really know if it's a good time to buy or not, because the stock could have gone up massively in the past. Um, a few weeks and you must You might have missed your entry point and it could have come down at any second or it's been running down. Has been down training for a long time now, and now it can start an op Trent, so you don't actually know at the time you want to buy this stock, so if you can actually utilize technical analysis, it can help you with your entry and gain a better entry for your long term positions. Another good reason to, ah, use technical analysis. Well, it's because everyone else is using it. And that's one of the main reason Ah, as to why it actually works. So I'll give you an example. Imagine a stock is, ah, cost $10 right now, and then it starts to down train downtrend, and it just goes down and down and down after days and weeks and then finally reaches about $5. Onda Previously from historical data You can see that every time the stock is actually reaching close to the $5 area, um, it's beginning to ah, bounce back and start an option. Well, guess what? Everyone else is actually looking at the same chart as you are. So when people think that that $5 mark when everyone thinks that $5 mark is a good entry point, everyone is going to buy in. So that's millions of people actually looking at the chart. And millions of people think that the $5 mark is actually good entry points that they all buy in. And by doing so, $5 mark actually holds as a very strong support, and that's what makes technical analysis actually work. 4. Brokerages and Account Types: in this section, I'm going to quickly cover brokerages on different account types. Now, before you can start investing or placing a trade, you need a brokerage account Onda. Depending on which country or region you live in, you'll have access to different brokerages or banks for the purpose of the discourse. I'm going to use U. S and Canada as example and talk about different account types using us as an example. There are many brokerages that he can't sign up with. For example, in us, most major banks let you sign up for ah brokerage account so that you can start trading. There's TD Ameritrade, where charges you 6 95 commission fee for each trade. So, for example, if you want to buy stocks, they charge you 6 95 portrayed. If you want to sell stocks, they charge you 6 95 Portrayed there is interactive brokers Fidelity Trade Trade Station. Ah, there's Robin Hood, which is a very popular up in the States, Um, when they're famous for commission free trading so he can invest in stocks without paying any commission fee. There's Weeble in Canada. We got the same thing. So all major banks allow you to, um, sign up for a brokerage account. So you have Tedy, which they charge you 99 Canadian portrayed their C I B C. Which charges you 6 95 portrayed. There's RBC, HSBC, BMO and so on. Now there's a broke it's called Quest Rate, which, um, has the same commission fee for stocks and equities like the ones above. But ah, they don't charge you any commission if you were to buy e t f. So if you're a long term investor and you like, ah index investing or index fund investing and your family with E T. F. So they don't charge you for, um e T efs, Then there's a new company called Wealth Simple and, ah, they don't charge you any commission. Once you decide which brokers you want to go ahead with, you have to sign up and register for an account so that he can transfer money into that account and start investing. And, ah, there are many different account types out there and you have tow, think and see ah, what your needs are and what you're trying to accomplish with that account. Ah, here's some examples for the U. S So you go your typical online brokerage account. This is a very simple account where you can just transfer money and start buying and selling stocks or equities on DA. Depending on your capital gains, for example, you're gonna have to pay some taxes. If you start making money, then you have your margin account. So margin account is a very similar, but it gives you different buying powers. So depending on the brokerage and the account, um, that you have with that broken the different morning, Jenna, count some brokerages allow you to borrow money on top of what you initially transfer in terms of cash into that account. So, for example, if you open a margin account, um, and you transfer of $10,000 on DA when you want to buy stocks or if you want to place trades, that AH brokerage will allow you to borrow up to four times, for example, or three times. So if you have the initial $10,000 invested, you can buy up to 30,000 or $40,000 worth of stock for that trade. Then you have your ah, for a one K, which is ah Taylor to retirement. Ah, and then you have your IRA accounts and so on. In Canada, you also have online brokerage account. And they call this a non registered account because, um, if you have capital gains, so if you sell stocks and you make money, you have to pay taxes on your capital gains. Um, also, if you have capital losses, So if you lose money placing trades, you can claim you claim those in your income tax returns, Then there's TFS a or tax free savings account. So this is called a registered account, Um, on any capital gains ah, that are made from investing or trading in this account. Um, you get to keep on there will be no tax applied on those gains. Then you have your RSP account, which is for retirement savings plan. And this was tailored for people who want to save for retirement. And it's a registered account. Onda, um, this is really ah what we call the tax deferred accounts. So every time you transfer cash into this account, um, you're actually going to get ah taxes back for that year that you deposit the money to the account and then later on at retirement age. When you want to take the money out, that's when you actually have to pay that tax. So I hope the examples I gave above gives give you an idea of ah, where to start, Um, and again, as mentioned earlier, depending on ah, where which country or which region you live in the brokers is an account. Types will be different, but the idea will be very, very much similar. And ah ah, a couple of recommendations I have in general, um, first of all, speak definitely speak with a financial advisor because they can really help you identify your needs and risk levels before you actually start investing in the stock market. And, ah, they can also help you choose the right account. So which account is best suited for your needs. So whether you are planning to, um, trade securities in a short term, um, you want to do long term investing or you just want to save for retirement. And the second thing is, always try and use a Brakhage that is popular and well established. Um is used by majority of people and also check that they're properly in shirt 5. Platforms and Charting Tools: okay, In this section, we're going to cover various platforms and different charting tools. Now, platforms, air. Usually, um, you can think of it as a place where you can actually go on place trades, Um or, um, start buying stocks that you want to invest in or sell stocks that you no longer want. Andi. Ah, basically a place to for you to place trades and also manage your assets and look at performance of your portfolio and things like that. And, um, platforms usually do have, ah, charting tools where you can also look at charts and so that you can see the movement and the price action of a given security or stock on charting tools are usually just that. So, um, usually have a chart in front of you, which you can place indicators on DA using charting tools. You can really just, um, analyze patterns and trends, but you can't really place trades. Um, and we'll talk about both of them in this section 6. Example Platforms and Charting Tools: There are many different platforms out there, and it's really hard to say which one is the best one for you to use. But in general, most major banks that allow you to open a brokerage account have some sort of platform where you can just go in and, ah, start buying stocks and start your investing journey. And, ah, sometimes ah, the banks or brokerage is that actually allow you to open accounts don't necessarily have very advanced trading platforms or systems for people like day traders, for instance. So in that case, what people sometimes do, and this is completely dependent on whether your bank or brokerage actually allow this. But sometimes what people do is they open their brokerage account and, ah, they install a advanced trading platform software on their computers and the link it to that account, which they opened with the brokerage. And then they placed their trades that way. Now, in general, there are, um, three different types of flat forms, and the 1st 1 is just the Web. So for this one, you don't have to install anything. There's no software, um, or APs to install it simply through the Web. So you open your Web browser, you navigate to your brokerages. Um ah, address. And you put in your user name and password and you log in. And now you're longing through the web platform and you are able to place trades or, ah, view your portfolio, your manager assets. Ah, the 2nd 1 is more of the advanced, um, trading platforms that we just touched on. So, um, these ones actually require you to download and installed this on your desktop or laptops at home. And, ah, these ones are usually for advanced traders people who actually day trade, for example, or people who swing trade. And they have their linked your account. And they have a lot of advanced charting tools and real time data feeds. Um, that a day trader would need, but not necessarily, um, someone like a long term investor. And the 3rd 1 is the app on your mobile. So ah, these days, everyone either has an android phone or ah, I O, um, iPhone and ah, some of the brokerages actually, um, have the APS that he can just go into the place or or the apple store and just download these on your mobile, so you can actually, um, invest through your phone as well. Now, for example, for TD, which is one of the major banks in Canada and the United States, Um, the once you actually open your, um, brokerage account through the ah tedium any Ameritrade and this is for the US once you open that account, um, they do have a web platform where you can actually go in and place a trade. But they also have the advanced one where you can install the software and that one is called Think we're swim and I'll just show you guys this on the next light. So here's an example of what TD's web platform looks like. Ah, this is not a real account. I just took this screenshot from TV's website so I can demonstrate to you guys what it would look like. And, ah, once you sign up for a Web brokerage account with Tedy, um and you have an account number and, um, you navigate to ah, you can navigate two TDs where brokers website which can also find on Google. You put in your user name password, you log in and this is kind of the view you would see and you can see some. Some of your index is up here, for example, as some p $500 Jones NASDAQ gold and oil. Um, your performance portfolios, some news, and this is what the weapons platform looks like. Potentially. So it doesn't, um, require any insulation. You just need a browser, and you can just manage your portfolio, um, and start buying and selling stocks through just the web. Now, this one is Ah, this is the advanced platform we were talking about earlier. And this is also from TD, and this is called Think or swim or to us. Ah. And this one is for advanced traitors or people who day trade. If your long term investor, I don't think you actually need something like this. But some people, um, they they wanted if you know, they're doing swing trades or they want to see how something is doing with advanced indicators and potentially you would need something like this. And he is just a quick again. I took this screenshot. So here's what it looks like. So here you have your charts with some indicators. Here, um, you have your this is your time and sales. So it's showing you really time data. How many shares at what price are being bought, bought and sold? Um, here's another charge with some indicators. Here's level two. Um, this Israel time data feed from different exchanges, which is, ah, sort of out of scope for this course. And here's your news feed. So this is kind of like a platform where everything is in one place, which is quite nice. But again, just to reiterate this is for advanced traders, um, and people who day trade, Not necessarily for long term investors. Now, um, that was for us. And this is for Canada. So quest Rate is one of the popular investing two brokerages in Canada and the platform they have, it's called I Q edge. So again, they do have, ah, both platforms. So here's the equestrian trading, which is their web platform. So when you sign up for an account and you log in again, this is a screenshot is not a real account. Um, and this is sort of what it looks like. So you have your chart here. Ah, here. You can look up a stock and I'll give you some very quick basic information here. You have your order entry where you can put in how many stocks you want to buy and sell at what price and so on. And, um, here you have your level two again Does just the real time data feed, um, from other exchanges again, out of school for this course. And there's a law you can do in here. Like, for example, we can set, um, alerts. So when a specific stock or equity reaches a specific price point, it can send you in a large through an email or SMS or what have you. So this is quest raise, um, wept trading platform. And this is the more advanced one, which is called like you edge again. This is something you would download and install will be linked to your account once you log in. And ah, these are again for day traders, um, or people who do short term trading and need very advanced indicators and, ah, you know, charting tools. Ah, and real time data. So you have your charting tool here. Um, you have some indicators, like wall human moment. Um, down here. This is your time and sales. And this is your level two. And this is your order entry? No. Ah, in general, um, you also have charting tools on top of platforms, as mentioned earlier. Charting tools are just charting tools. A za name states and you can't really You can, um, observe and analyse Ah, chart. But you can't really place trades. And for the purpose of of this course, we're just going to use a charging tool because we want to learn about patterns and indicators and trends and price movement, so we'll just use the free charting tool. And here's some of the popular ones, um, in terms of, ah, free charting tools. So one is, ah, stock charts dot com One is trading viewed All come and one is investing dot com. They're probably more out there, but these are the ones I use. And this these are the ones I know many other people use. And, uh, these are the ones I actually recommend. So for the purpose of this course, these are the ones will actually use. So I just want to quickly walk you through the three free charting tools that I just mentioned. So the 1st 1 is stock charts dot com. So if you just navigate to that website, I'll take you here and then here you can enter any ah, symbol. So, for example, um, let's take a look at Facebook. So as soon as you put Facebook the ticker symbol is that be if you click on that, um, load this chart and, ah, there's some ah indicators on here. They're being the moving averages. So that's the 50 moving average and 200 moving average again. Don't worry about that. If you don't understand, that will cover all of those later in the course. But, ah, if you scroll down here, um, you can also see that there's some attributes we can add. There's overlays and indicators you can actually add so that he can analyze the charge. So this one is a good one. Um, the next one is trading view dot com. So if you never get to trading with you, this is a very popular one. Um, what I like about it is it also has ah screener or scanner that some people call. But, um, if you just go over here and then you type in your ah, take our simple for the stock or equity or looking for. So again, let's do Facebook. Um, And then you can select that and, um, and load the load. The basic chart here. But what you need to do with trading view is click this button here called Full feature Chart. So click on that. And then, um, I'll take you to the advanced joining tools. So here you can see this is where it looks like. Am I look like it might look a little bit different for you than it is for me because I have customized mind to be like dark theme, for example, or I might have changed colors, but this is the charting tool here. You have your indicators. Like, for example, this is volume, um, and their tools here that you can work with. So, for example, this is a trend line tool. So again, just draw lines here on your chart. Ah, this is a very good one. And, um, the last one was investing dot com. So if you just go to investing dot com now, if you scroll Ah, actually up top on the top here it has the search bar. So here. We can just type in FB for Facebook, and I load that. So click on that. And if you scroll down, it has a basic chart here. Where you want to do is actually click technical chart. And once that Lourdes, if you just click this full screen board here now, you have the actual, um, technical chart in front of you again. There are many, many things you can do with this. It's free, which is Ah, what I like. So for educational purposes, this is perfect. Um, so and then you can also have the same thing here. So you have your trend line to which you can draw lines. You can go ahead and change colors. Um, you can delete that you can add different indicators. Um, you can change your chart. Type two different types. Ah, this is pointed. Figure it's a scandal. Um, and then you can, um, at ah bunch of, ah indicators here to analyze your charts. Um, now, the annoying thing is, somebody's free ones have as a so you can see here. So go ahead and close that. So you have more of the screen to yourself. And one thing I recommend for this, Um course is that regardless of which one you actually use, um, like, whether you're gonna use trading view or whether you're going to use investing dot com, go ahead and create an account for yourself because creating an account and signing up registering is actually free. But the nice thing is, if you actually sign up Ah, as you're going through the course or for example, once you start analyzing stocks, um, and the, um, different chart types, you can actually save them. So later on when you actually come in, um, you can actually if you save something previously from from two days ago, you can actually pull it up and look at it or take off from there. So that's one thing I like, um, that you can actually have that ability to save things you do if you have the account now, for the purpose of of this course, because this is a really nice tool. This is what I'm going to use moving forward. So we're gonna use investing dot com to actually look at charts. Ah, to analyze, um, different patterns and trends. And this is where we actually going to do our technical analysis on 7. Chart Types: in this lecture, we're gonna cover different chart types, so you can start by navigating to investing dot com on. Then, once the page loads, go ahead and ah, let's use Facebook, for example. So if you just type in Facebook, this FB taker loads so quick on that, it's just going to take a second to load. And then once that load, scroll down here, um, click on technical chart. And then once that rules scroll down here, you can just clothes, the's adds, if you have him and then click on the full screen mode. So this is the chart for Facebook. As you can see, this is the default chart, and this is called a line chart. Um, well, it's called area chart, because the bottom here is highlighted, but technically, this is a line chart. And ah, this one is one of the most popular ones, especially amongst long term investors because, um, for people who buy this stock and they're actually in it for the long term, for example, 10 to 20 years, this one is perfect because it filters out the everyday noise. And as you can see like, it's very clear if you're just looking at this you can is very clear to actually see what the price is doing. So, for example, this is just showing you the trend here. So from here, and if you look here on the bottom, you can see the dates. So as I over you can see the tool tip that gives you the dates. So, for example, is used this year. So if you look at the data, it says March 18 2019. So starting March 18 2019 the stock has been going up steadily and ah, it's reached around. So it went up from and on the right hand side. You can see the price on the bottom is the date and the right is the price. So over at that time, that price was 1 60 26 and ah, the price went up to 1 95 33 And that was around May 3rd. So it's very easy to see what the stock did is just going operate. And then starting May 3rd, it just started to go down, and then it started to go back up again, and now it's sort of just bouncing up and down in the same area, so it's kind of like going flat horizontally. Um, so this is this is a benefit of the line line charts. So it filters out the noise off what's happening on a day to the bases and, um, the other different George step. So if you click on this arrow here on the top, um, you can see their bar charts their candle charts there, hold a candle. Um, area baseline. Ah, line break and a point in figures or, like point and figure. Um, looks like this. So I'm going to go back to let's try bars. So bars look like that and basically shows you the like, the progression that the stock has made on a daily basis. Ah, One thing. I want to note that on top of here, these are your timeframes. As you can see, this one day is actually selected and, ah, the next one. I want to talk about this the candle charge. So Ah, some people call this candle charge. Some people call the Candlestick chart on DA. This is one of my favorite because it won't be on. Ah, contrary to the line chart this one shows you the actual price movement. Given the time frame, you're actually select thing. So for example, right now we have one day selected. So if you just zoom in here, you can scroll your mouth so it can actually zoom in. Um, we can see the price movement throughout the day very easily. So, for example, um, let's look at this green candle up here. So this was on If you look at the date on the bottom, this was on September 5th and, ah, we'll cover candlesticks in more details in a later lecture. But you can see that this is what the stock village in that day so you can actually see that it went up. If you look at the right hand side and the price, you can see that it went up from 1 80 88 55 all the way up to 1 90 90 So this one now I'm going to school out so you can see better. So this one is sort of like a line chart, so you can actually see that trend? Um, so you can see, like, for example, stuff starting here? Um, the stock started to go up. But then if you actually wanted to inspect, um, very specific day, you can actually zoom in into that day and actually look what the stock was doing in terms of price price. So what was the low of the day? What was the high of the day? When did it open? When they closed? All of that information, which is very valuable information, is over here within this, um, Candlestick and all that information is represented. And he can just figure it out by just looking at it, which is very powerful. And one other thing I want to mention is Ah, off on top here. This is also you have the information for each candlestick. So, for example, it shows you the open price shows you the higher the day, low of the day and close. So when you hover over that on top here in the top middle will show you that information as you're hovering over different candlesticks. Now again by default. This is on day. Ah, but you can change the timeframe here on this candlestick chart. So, for example, um, we can change that to one month. So as soon as you change that to a month now. Each of these candlesticks is representing a month. So this is Ah, very nice thing about, um The Candlestick chart on going forward for the remainder of the course will be using the Candlestick chart to do our technical analysis. 8. Candlestick: before we start talking about candlestick patterns, I like to do a quick overview and define what a candle steak is and how to interpret candles on a candlestick chart. In this picture, we have, ah, two candlesticks and on the left hand side you have the bullish candle and on the right hand side of the of the bearish candle. So let's start with the bullish candle now Bullish in the by definition just means that, um, the price is going up or its trending up. And ah, let's pretend that this is a candle on a candlestick chart with the time frame of one day. So this candle represents one day's worth off price action, as you can see of Ah, ah indicated some important points with arrows here. Now, this point here, which, um ah pointing with my cursor. This is the opening price for that day. So when the market actually opens, this is the opening price for a specific or a given stock that you're looking at and this is the law of the day. So you can think of this point that, um, at some point throughout the day, the stock actually went as low as this point and saying with this, this is the high of the day. So at some point, the stock went as high as this point in terms of price. But at the end of the day, the stock actually closed at this price. So again, this is the opening price, and this is the closing price. And this is the low and the high of the day, and the low and the higher the day basically just dictate the range for that day. So the stock price moved from between the low and the high. And as you can see with the candle, we can tell that which price it opened up and which prices closed. That and the ah, the difference between the opening and the close or this portion here, Um, some people call this the body of the candle or the rial body. This is our gain. So, um, that this is the reason why this is a bullish candle because the closing price is actually higher than the opening price. So the difference here is the gain that we made in terms of dollar or percentage for that day, and ah ah for the upper Ah part. Um, some people call this the upper wick, or some people call this the opera shadow. Whichever when you hear people talking about it. Usually normally everyone uses those two terms, and that's usually this area here, which is the ah is the range from the close to the high on the bottom part. Here, this is called the lower week, or the lower shadow, which is usually the range between the open and the low. And again, the difference is the gain for that day. Now, the bearish scandal is pretty much similar, except the open and the clothes are reversed. Says you can see here the, um Berry scandal. The opening is actually on the top here, So when the market opens, the stock actually opened. Ah, here. Ah, but at the end of the day, it actually closed at the lower play Laura Price Point. That's why this is a red candle. Ah, because the gain is now negative. So if if the price opens here at at a higher price and closes at a lower price, we actually losing money and that the all the other points are the same. So the stock tried to go as high as this point, and I try to go as low as this point. But at the end of the day, it closed here. And the body, the rial body of this book, Bearish candle is the actual loss. So it's the loss that we have to take in terms of dollar or percentage. So I hope I tried to make this as easy as possible. Ah, And now that we know, um, how to, ah, interpret candles and read candles, We can move on to ah, talking about different candlestick patterns. But just wanting to highlight is that, um, As you can see, there's a lot of information that you can extract by just looking at a candle. Um and, ah, like you can easily tell what the days range was, what the open and close was. And this is why the candlestick pattern is very powerful for technical analysis. Because just by looking at the chart, you can actually tell these things very quickly, as opposed to with line charts. You do not have these information. So let's quickly just take a quick example. Um, Mr Riel example together, Um, here I'm Ah ah Ah, basically, I mean investing dot com as we went over and the previous sections I have the apple stocks or just typing the taker. Simple A a pl and ah, let's just quickly go over and ah, let's look at the candle here. So I've said mine too one day here for the time frame, and I've said the chart type two candles And if you just zoom in here, I just want to show you guys a very quick example. So let's look at this very last candle here. So, as you can see on the right hand side, I got my ah, the I got the ax is on this side, which shows you the price. And as I just hover my mouse, you can see the price changes. So here, if they look just for this day, um, if I just hover my mouse over here, we can see that this stock opened at two. Um, approximately 2 33 and ah, it closed at 2 36 So the body of this, um, green bullish candle is actually ah, three like the difference is $3. So if he bought at the beginning off this day for 2 32 33 And we sold at 2 36 We gained $3 per share. And as you can see here, this is the upper wake here. So that was the high of the day, which was approximately 2 37 on then. This lower point here, um, this was 2 30 to 58 which is the lower wick or the lower shadow. So now we can just quickly tell these things by just looking at candles, um, on a candlestick chart. And this is why makes it such a powerful chart as opposed to the line chart. And one other thing I wanted to mention is that Ah, the nice thing I like about this tool or investing dot com is that when you just hover over the candle, um, you can see that the ah different price points that we just talked about They're all up here. So as soon as I hover over the scandal, we can see the opening price to hide the low and the clothes. So to 32 96 was the opening the to 36. 21 was the closing, and then the high was 2 37 59 the low waas to 30 to 48. So he can just hover all all of these candles or whichever day you're interested. Um, and l just quickly, um, you can give you that information. Just a glance and again, we're just looking at a daily charge. You can time. You can change the time period on these things or the time frame. But the information you get is exactly the same for just a different time frame. So now that we can actually easily read candles on the candles, the stick chart, we can just move on to start talking about different patterns. 9. Candlestick Patterns: all right. In this lecture, we're gonna talk about different candles, steak types and candlestick patterns. So as we talked about previously Ah, we quickly covered this decision. This is called the Bullish Candlestick. Um, so, as you can see, it might have wakes in my not have wakes, but this is typically what a bullish candles that looks like. This is the open. This is the close. This is the upper week. This is the lower week. This point here is showing you how high the stock was able to move for that day. And this shows you how low the stock moved. Ah, for that day. Assuming this candle represents one day worth off price action. Same thing. This is a bearish candlestick. So Ah, pretty much the same thing. Except that this actually is the open. And this is the close. So the body just tells us that this is how much money we have lost. Ah, and going back for the bullish. This is how much this body here is, how much money we have gained. And again, this is the upper week on a bearish candle. And this is the lower rates. So tells you how high and how low. Um, the stock actually moved down. And when the stock at which price the stock opened and at which price the stock closed, this is called the engulfing Bullish Engulfing pattern. And if you look up the word engulfing, its just means to eat or swallow. So as you can see here, um, this is a bearish candle. Ah, followed by a really big bullish candle. So it is. You can see the body. Um, if you look at the rial body off the bullish candle, it's it's bigger than the rial body off the bearish candles. So the reason they call this in golfing is that this candle can basically eat this. The green candle can eat the red candle because it's a lot bigger. So the body of the scandal, um, covers the entire it's it's bigger covers, and it's even mawr bigger than the body off the red candle. And this is the reverse. So this is called the bearish engulfing. So ah, you have a bullish candle. But then it's followed. Let's say if this is yesterday and this is today, um, this is actually a bearish engulfing candle because the body of this is so big that it can eat, uh, bullish candle, the body of the bullish candle. And these are just signs. So it doesn't mean that, um, when you see the candle the next day or during the next time frame, whatever this is set to, it doesn't mean that it will necessarily reverse. So if the stock was imagined, the stock is going up, and all of a sudden you see this, it doesn't mean that the stock will go down. It's just an indicator. So it's just a signal for you to keep an eye on and watch out, because it indicates that maybe this stock will start to go down. So this is again going back. This is a bullish. So imagine if the stock is just going down here and then you see this This could be, you know, like, sort of like a reversal point or might indicate that the stock might start to go up. It doesn't mean it will, but it's just a signal. So whenever you see these, it's just something to keep an eye on and just keep following the stock to see what is going to do next. Ah, this one is called the Doje. Um, on. The reason for that is that these air called, Um sorry. They're called Georgie, but their indecision candles. So, as you can see, Ah, they have a very small body riel body. But they have, ah, quite a large of upper wick and lower wick. And the reason these air called indecision is because Thea per week and the lower wick are equal or very equal in terms of range. So, as you can see here, this upper wake and lower week are very similar in terms of size, same for the bearish one. And, um, the reason for that Ah, the reason they call this indecision is because by looking at this candle, you can really tell what the stock is actually doing because the body is so small. Yeah, sure, it's a green. You know, you can say this is a green body, but then it's so small that this game is almost negligible. So what? Looking at this scandal, where you can interpret is that, um, people who were trying to push the stock down tried really hard, and it went as low as this point and then people who were trying to push the price up. Um, you know, and by people I mean retail traders or in institutional traders or just regular investors who happen to buy on that data or that time. So those people try to push the price up. Ah, but it wasn't able to keep it at this point. And also same for sellers, like people who were trying to sell the stock or short the stock it was not able to make maintained the closing price. And he just went back up. So again, um, it's called the dodgy because by looking at it, you cannot tell, um, Who has the upper hand? Are the buyers winning here or the seller's winning? You don't know its indecision Candlestick. And it's also called Doje. So the same thing for the bearish. Now these are called spinning top candlesticks. Very similar to George is with a little bit of ah, bigger, um, riel body. Um, and these are does ease and spinning tops or something to watch out for, um, in terms off it might these air candles that might signal reversal points, and we'll just, ah, go look at him in a few seconds, but the idea if we're spending top is exactly the same. So as you can see, the upper week and lower week are, um ah, the same in terms of size or range. Eso It's kind of hard to tell who's really actually, um, winning for that given time on who has the upper hand? Is the Stargate actually going up or down? It's really hard to tell. It's just might signal at reversal point. Now, this is called a shooting store. Doje, um, this is actually bearish, because if you look at this, um, the upper week or upper shadow is actually bigger than the lower one. So what does this tell us? By looking at this, Um, this tells us that, um, the stock or ah, buyers, um, it try to go as high as this point, So just look at the range. The lower one is a lot smaller than the higher one. So it means that there were a lot of people buying the stock on that day and the price tried to push as high as this point. Um, but it wasn't able to maintain his position. It came all the way back down. Ah, and that's a really bad sign for, ah, people who are waiting for the stock price to go up because it tried to go up, but he couldn't. So this could be a possibly a reversal point that might indicate that the stock might actually start to take a downtrend. Now again, just want to emphasize is it doesn't mean that it will. It's just a signal. These are all the things about technical announces. These are indicators or signals that you can take away by just interpreting the candle for a given time period. And this is a bearish for this reason. So the lower wick is really, really small. But the upper week is really large. Same for the bearish. This is called the Hammer Dorji. This is a bullish candle, so this is exactly the reverse of the shooting star Doje, because if you look at the this, the lower wick is actually a lot bigger than the upper way. And what does this tell us? It tells us that people who were trying to sell the stock or push the price down there were a lot of people who actually did that, and the stock actually went as low as this price. But the thing is, they couldn't actually maintain this otherwise, if it could maintain it the stock with close summer around this area. But they try to push the price down, and they couldn't keep it so that the stock actually went back up. This says that buyers or people who are actually buying this stock are actually technically winning because the sellers couldn't keep this point and the stock actually caused around here. So you can see this as a signal that if the stock is going down and all this sudden you see a hammer, Doje, um, this might signal that reversal is coming and ah, we can possibly see uptrend in the near future. Now, here we can look at recovers spinning top, and here we can actually look at a sample example. So now imagine a stock has been down trending and you see multiple red candles in a row and all the sudden you see a spinning top. This is why I mentioned earlier You have to watch out for these things because when you see a spinning top, um, after like seeing a whole bunch of red candles or down down trend for a while. This could indicate that because is in decision. Or, um, the spinning top actually tells you that. Hey. Ah, this might actually signal an op trend and this is a bearish spinning top. So if you see a bunch of green candles in a row and the stock precious goes up and up and up and then it's trending up and all this nothing. You see a red spending top coming up. This could indicator signal. A possible reversal is coming, or a possible downtrend is about to start. So this is what a berry spinning top is. Now, here's just some examples I took from some charts. So, as you can see here, um, this is a Dorji. This is a bearish Georgie. So let's just look at this. The the price started to go up here. So there we have a green candle. You have a green candle. As you can see, the price went up and then you see a Dorji here. So I look, just look at the upper week and the lower week. They're exactly the same, almost exactly the same size. That won't be always exactly the same. But they're very similar. Um, in terms of range and size. And the rial body is so small. And then look what happened as soon as this uptrend. Ah, was Ah when we saw the option, and then you actually see this? Um, Doje, look what happened. This dog just started going down. This is what I meant by watching out for as watching out for this as a signal of a downtrend. Now, it didn't have to do that in this case. It did, But this is a good indicator. This is a bullish Ah Doje and ah, as you can see here, Um, so we got actually, I pointed to here with the arrows. So, um, as you can see here, you we have a downtrend. So you have a bunch of ah, big red candles and all the sudden you see a dodgy here, and ah, this was called the Hammer Dorji. If you remember from the previous slide, this is called the hammer Dorji. So going back here, this is a hammer Dorji here. And as you can see after the downtrend, you see one of these and then look what happened it started to go up the next day. So it was a reversal. The downtrend Stop. You saw a dodgy the down trend Stop And then the price started going up. And then there's another one here so you can see that leg. There was a little downtrend. Not as big as the 1st 1 but still a downtrend from a technical analysis point of you see two red candles here than the price was dropping. And then you see a hammer hammer Dorji here. And ah, again the stock price, um, started to uptrend again because this is saying that the sellers, these people who are just selling the stock and pushing the price down um, they were successful in this day. They were successful in this day. On this day, they try to go on. They succeeded up to this point, but they couldn't maintain. So then this signals that there's a lot of buyers coming in and the buyers are actually winning. And then, as you can see, starting the next day, the store the stock started to op trend 10. Candlestick Patterns Live Examples: Okay, so let's take a look at some real charts and see if you can find some real life examples. So again, same same charge. We're looking at Apple here on investing dot com. Let's if we can find some of these things. So, um Ah, here we go. So there's one over here. Let's zoom in on this is again a daily chart on a candle daily daily timeframe on a candlestick chart for the ticker Simple apple A pl And as you can see here, um, now these are small. These are a very small candle, so it's just a duration of two days. But as you can see, the stock that was actually going up and then here. As you can see, this candle here is a shooting star dodgy. And when this happened, um, the next day this talk actually went down. So this river, this actually indicated that there was going up, you saw the dodgy, and then it went down the next day. Um, let's see if he can see something else here. Okay, over here. Like, Okay, this is a good example of this spinning top this red candle here. So as you can see the stock was down trading for, um, days here. Um, probably about 23 weeks worth of, um, down trending. So as you can see, you just went down all the way, All the way, all the way here. And over here, we're seeing a spinning top so you can see that there's the rial body is a little bit bigger than the Dorji, but the upper week and the lower wake are almost the same. And as soon as you see that, look what happened the next day, it just there was a bullish candle, and then it just the trend, like this down trend reversed. And then it was the start of an op. Trent, this is a perfect example of a spinning top. Now, one thing I just noticed here was that these Dodgers here and this is a good example of what I was saying earlier. This is the This was the hammer dodgy, if you remember, and this one actually is was going to signal an uptrend. So if you can see, the stock was actually down trending, and then you see this, Georgie. So from the examples I said was this was So this is a downtrend. And if he zoom in a little bit more so you can see that, um, it's actually again. This is Ah, the ah, lower bound. Here. This is the lower wickets. Hard. Ah. Which means that the seller were stronger on this day and they try to push down. Sorry, I don't mean the sellers air strong over that. They are. Ah. I mean that the sellers try to pushed down really hard, and they brought this stock price down up to this point, but they couldn't maintain because the star closed over here. And when you see that on a downtrend, this might signal that the stock price should go up. But see what happened. It didn't It didn't actually go up. So this doggy, this is a bullish Doje, and it should have indicated that the stock went up. But look, what happened the next day dropped and a drop in the continued dropping. This is what I mean. Um, the stock does not or the pattern does not have to do what you think it will do. And this is a really good example, because you see, two of these, um, hammered orgies two days in a row and it's still continued on, um, to downtrend until we saw this spinning talk. This is what I mean is very important to understand that those are just indicators and signals that the reversal might be coming. But it doesn't mean that it will 100% do that. So very important concept to grasp. This is why you as a technical analyst, you have to monitor the stock constantly to see what it's doing next. Um, here we have another. This is a good example of shooting star Doje again. So, as you can see, this actually gapped up here and we'll talk about gaps, but this actually gapped up. And, um, you can see that the shooting star Dorji um, the buyers try to push the price really high up to that point. But they couldn't maintain. So then look what happened the next day. This there was a red candle. And then starting the next day, everything just started down dropping. So these are some ah, good examples. Good real examples. So what I want you guys to do is just go on charts and look, just look at any takers. Simple look at any time frame on just practice identifying some of these candlestick patterns because this will really help you want your inter positions. Um, and you wanna you're looking for exit points or entry points. These are the indicators that could greatly help you, along with other indicators will talk about thes price action. Candlestick patterns will greatly help you with your entries and exits. 11. Trendlines: for this tutorial. I like to talk about trend and what is the trend trend lines and how to draw them on water channels. So let's get started. Trend is basically the direction of this stock, and they can really be three scenarios for the trend it can. The stock and other uptrends, or the price is continuously going up, that this stock can have a downtrend, which means that the prices continuously going down and the trend there could be, like no trend where the stock is not going up or not going down, but just moving sideways. So it's just bouncing up and down between a very specific range. And it's not really going anywhere is just sticking around in that range. I left very useful tip here. You might hear everybody mentioned this. Do not trade against the current trend. So if the crown e the stock is going up, do not try to short it. Or, if the stock is going down, do not jump in and hope that later on the stock will go back up. This is just a very important tips and advice that you'll read on the Internet or you'll hear from different people or different investors. So let's cover the uptrend first. Here, Uh, basically an option means that when you're looking at the chart and the candles, the chart is forming higher laws and higher highs. So what does that mean? So I quickly drew this lines here. So, as you can see here, the first high here I call this H one or high one this second high, which is the edge to is higher damage one and the first low here. L one is that lower than l two. So L two is higher than l one, so that means the overall direction is upwards. As you can see, I drew this with this big arrow here. So the next high, which is H two, is higher than Etch One, which was the previous high. And the second low, which is L two is higher than the first look. So always remember this higher laws and higher highs is the result of uptrend downtrend So the opposite. So the charge stars to form lower laws and lower highs. So you can see here Lower number two l two is lower than l one and etch do, which is high number two that's formed is lower than high one. And this results in a downward trend as I drew with this big error. So we just remember for downtrend. The charge forms lower lows and lower highs. This is very important to understand, sideways or flat. So basically the price just moves flat or and it's going sideways. So I drawn example here. So let's say, um, over here, this started line represents the A dollar more for any stock really doesn't matter. And this is the $10 mark and you can just see the stock is just bouncing up and down, up and out. But it's not really going higher that this $10 range and it's not really going, uh, any lower than this $8 range is just sticking around is going up and down, but it's not really breaking out of that range. So this is just the price. There's no price action, really. This is just moving sideways or flat trend lines. So how do we draw trend lines? Basically, it's very simple. You try your as you try your best to connect all the highs together or all those together. So for this slide here. I have an example where I've connected all the highs and you can see that this is forming a trend line, and you can also see that later on we'll get into supported resistant that this trend line is acting technically as a resistant. This is very important, and we'll cover this in the later tutorial, a Z, you can see the price is going down and it can't really reach that trendline there, which is, I think is a resistant. It's going down again, is trying to break above it, and it did for a second or for a day. But then this line acted as a resistance. I went back down again, try to break. Couldn't went back down again here, but for to just keep your focus for this. For this video, let's just focus on the trendline and how to draw them. So just connect the all the highs together and just do your best because you can never get a perfect so don't really get hung up on that. And for the when to start this previous light, the stock is actually down trending for this stock. The stock is actually the prices actually uptrend, Nick. So now you can connect all the lows together, so it's very simple. Just do your best and connect all the lowest. On Later, you'll see that this line is acting as supporters. You can see the prices balancing, uh, on this line. So I tried to go down. It never broke. This was balancing again. Try to break, Couldn't try to break, couldn't And it just the price is just slowly going on. And channels are basically arranged in between the trend lines. And as you can guess, you can have three types of channels. You can have a horizontal channel. We can have an upward general in a downward channel. That's pretty much all you can. So here is an example of a horizontal channel. So, as you saw previously, the stock, it's just bouncing in between this range. Here. I drew that trend lines to connect all the highs and all the lows here as best as I could, and that forms of horizontal channel, you can see the stock is going up and down, up and down. It really couldn't break this mine here, so it remained within this channel horizontal channel couldn't try to break it here, but it couldn't so went back up in the channel. And it's just bouncing up and down in the child. So this is what we call a horizontal channel. I hope that makes sense. Case, This is an open channel. It's not perfect. I drew this very quick, but as you can see, all I did was I did my best to connect all the lows together and then all the highest together. And as you can see, the price is technically trending upwards, so the overall trend and the overall direction is upwards. But as you can see, it's just bouncing in this channel. So this is what we call an upward channel straightforward stuff. And this is a downward channel again, it's I could have drawn this a little bit better, but I was doing this very quickly and just wanted Teoh industry it a point. I I connected all the laws here with this trend line here, as you can see, and then I connected all the highest. So this this is a downward channel because the overall direction of the prices downward the stock is actually falling and it's slowly down trending. And as you can see, it's trying to balance within this channel. But the overall direction is downward, so this picture you're illustrates a downward channel. 12. Trendline Live Examples: this is it for the definition. So I just know wanted to do a live example with you guys and show you how you can easily draw trendline. So let's jump into our charting tool. You have the, uh, stock, Tesla's ticker symbol TSL a pulled up and we're looking at the daily chart. The first thing I want a note is, if you look at this, let's talk about trend before drawing the trendline. So remember earlier we talked about trends and the downward trend, So obviously, as you can see, the overall direction of this price is going down. So the stock prices falling over time and one thing to notice is the, uh definition we covered earlier in terms off downtrend and having forming lower lows and lower highs. So, for example, if you look at this green candlestick stick, which is high if you compare this with the previous green candlestick, which is this high, this one is lower than that one. Okay, so this high is lower than this high, and this lower here. This red one is lower than this one, and this one is lower than that one, so you can just follow along and you'll just easily see that, Um, for example, this one this high is Lord. And that high this low is lower than that. Low this low is Lord and Daloa and so on. So that, as you can see, this is what we meant earlier. So now, um, I'm using a free platform here you guys can use which which over a platform you're more comfortable with or wish. But essentially they're all the same. You just need to find the tool for drawing a trendline. So here on the left hand panel, you can click trendline. And now I think this is a down where stocks were going to try to connect all the lowest together as best as we can. And there you go. And you can also see that later on, we'll talk about support and resistant. I'm not gonna cover too much. But when you draw this trend line here, it's actually acting its support. So, as you can see, the stock is actually as it's falling is bouncing off this line line. So it's going down, it bounces off, it's going down, bounces off is going down and here is touching it. So in the future. You can actually sort of predict that when it's touching this line in my bounce back up. This is, Ah, downward one. So now destroy the upward trend line here. So will connect the highs as best as we can, I guess on there you go. So we connected the highs here. So now, as you can see this high again, we'll cover this in the support of resistant child. Sorry video later on. But this is this trend line just quickly to cover. This is acting as resistance, so it's trying to break this line. I can, and it goes downwards, tries to break here that can and goes downward will probably try to come here, and they won't be able to undergo downward. So that's how you can print predict future price movement. And then now that we have the opera lower, as you can see, this is now forming it downward channel. So the price is actually bouncing up and down between this channel. I hope that's straight forward. That makes sense. Let's quickly look at another one. Let's look at Microsoft. Um, pull that shored up. So let's look at the overall direction So as you can see, Microsoft is actually up trending. And how do we know that? Because it's forming higher highs and higher lows. So, for example, um, this high here and this high here this high is higher than this high and all the previous highs basically so this size higher than this high. This I and this high this low here is higher than this low. So the overall direction is high because the shortest forming higher highs and higher lows . So I the overall direction I meant to save his upwards and it's going up. So now we can draw the trend line by connecting all the low point so we can start here and again. We're just doing this quickly and as best as we can. And there you go. So again mentioned earlier, this is acting as support as well. So know this can I told the highs and there you go. And as soon as we draw the lower trend line and a higher trend line, you can see that reform the channel and this is all for channel and the price is moving in between the channel and just bouncing up and down 13. Support and Resistance: for this video. I thought I cover supporting resistant because, in my opinion, on many others out there supporting, resistant or one of the most important concepts for any trader or any investor to grasp and understand. So let's get started. So what is support? Simply put, support is a price point or ah, arrange. So it doesn't have to be an exact price. It could be a small range Attn. Which the stock does not fall below. And why is that? Why doesn't it start for below this price? So there are many reasons for it. For example, I listed a few here for investors that have been watching this specific stock or ticker. They might think that this is a good time to open new positions or add to their existing positions for many reasons. For example, the stock is oversold, so it's just been down trending for days and days and days, and eventually it has to bounce back. So this is one of the reasons, and another reason is it's actually undervalued. So the Messers, or people who do fundamental analysis, they've been watching the stock and ah, they see that actually, the stock is now undervalued on its less than what the actual price should be in reality. So they find that good. They find this a perfect opportunity to actually take a position. And the other reasons are, for example, good news. That catalyst that's actually helping the price remain at a you know, imagine if something is down trending the news could help it essentially reverse, reverse the trend and actually pick up, so that could also help to start remain at level or price point for days or period of time . So that's very important. So, as an example, we can imagine Apple, for example. It's been down trending because they haven't had good iPhone sales, and you wanted to always take your position. That was expensive, so you actually never opened the position and you don't hold any Apple ships. So now, if you see that down trending and that's actually holding its price strongly at a certain value, this might indicate that this is a good time to actually take a position. Hope that makes sense. Now let's move on to resistance resistant. Simply put, is a price point. Or arrange just like support, but which the stock does not break above meaning that it tries to imagine a stock that's just trending upward. And it's, you know, starts of $5 it's heading towards 10 and it hits 10 and it just can't go above 10 anymore. No matter how hard the buyers push, the sellers are actually keeping it down on, uh, what is the reason for that? Why is it you know why is it just hitting that ceiling and coming back and can pass surpassed that price point? Arrange well. Investors think this is a good time to, UH, cell or secure some profits. And what are the reasons? Some of the reasons for that, as they might think like investors or traders, might think that the stock is overbought. So it had a pretty amazing run, and it's been going up days after days or weeks after weeks or even years after years, and now it's over boarded. Eventually you'll have to pull back or consolidate. So that's one of the reasons why they want to exit and just secure some profits realized gains as we going, and another reason is investors have been watching this rice, and now if they feel like it's overvalued, so something that should be worth $7. There's no war 10 or $15. So that's another thing. We're bad news, basically, like stock is having is having a good run up. And then the bad news comes out and it's just keeping that ceiling is just can break above it. So there are many, many reasons, and these are some. So let's look at some examples here. I drew Ah, there different types of resistance is so I'm trying to cover all of them here. So this is a horizontal trend line we drew. And as you can see here, um, this is an let's start from left to right here. So whatever this prices, let's just call this like, $100 or whatever. Let's call this red line $100. So first try here. It tried to break the $100 it couldn't and it started downtrend. And then it comes back up again. It balances, it tries to break it, and it does. It actually closes above. But you see, the next day it's actually starting to pull that. So it couldn't break this $100 mark and then comes back again here again If you follow my cursor on the right outside here, it tries to break the stock. That $100 mark the start tries to break $100 mark the third time and a four time and the fifth time. And it can't because this line years acting as a resistant. So think about psychology when people see this when people see this here, when they see this year and the stock has already reached $100 mark and drop and the $100 more drop the third time when they see the stock will probably exit their position because they're thinking based on historical data, the stock will drop. And, as you can see here, the start did draw. So people think this is a good exit point and for them to secure profits, Here's another type of resistance. So this one is it downward? We drew the downward trend line here, and as you can see, every time the stock actually hits this downward trend line, it falls down further. So here, let's start from the left to right. So we go down here here, couldn't even reaches when it goes down and then here tries to break above it and it does for momentarily. But then it you know this line is acting as a resistance. So it drops and then drops down again here, tries to break that again, Can't it? Drops here again? It can't. It draws here again. It can, and it drops and you get the idea. Now let's look at a support example. So here, this is a longer term range here. So I drew this area here this green line that's acting as a support. So if you can see on the left, let's go from left to right. So on the left hand side, you see, like the stock air. 12345 Candles here tried to break below, but this scandal but they couldn't go below. So this is acting as a really strong support, actually. So then this this talk and break up. So it starts to take in uptrends west slowly goes up, goes up, goes up, goes down, goes up, goes down and hear this candle here it tries to break their support line here it can't. So the stars start. The stock starts to go up. And here, as you can see, there are many, many candles, multiple candles that try to test this support. And they can't. There's about 567 candles that try to break or even touch the support line and then starts oven option. So I really hope you guys get the idea. Here's another support line, so this is an upward trendline. The truth. So as you can see that we're connecting the lower laws and this is acting as a support, So here, let's go from left to right again. So the stock was up. It comes down. It doesn't even touch this support. So this is a very strong support. So it goes up again, down, up again. Down now it's getting closer to this support, and it just it gets very close to us. So this red candle and this green candle it verifies it confirms a support line that's holding. So then goes back up again, was back up again again, can't touch or even break the support line here. It touches the support line. This candle here touches a support line but does not break it and then continues the op trend. Now you might say, Why do we care about supporting resistant. What's so significant about knowing these things are carrying about them? We're watching out for them. Well, as you saw in those examples we just covered, you can use them to predict the price movement, and also it helps you decide or make decisions based on your entry point. So say you're an investor. You've been waiting long time to enter a stock and you see a good you know, You see, a stock that's holding its support has been down trending. It's holding its support, and its not dropping any lower that this is a perfect time to enter and make a position or at your existing position and resistance. If you see a resistance, uh, this might be a good indication that if you see a price or a stock is moving upward towards a very strong or significant resistance based on historical data, then this might be a good time to actually exit your position or sub, because you can see that like based on historical data, it has touched it, and then it has started a downtrend 14. Breakout and Breakdown: it's time for us to look at some examples under real chart. But before we get into that, I'd like to explain a couple of important concepts. Ah, regarding supporting resistance. But ah, before that, I'd like to cover a couple of terminologies, which is really important to understand before get we get to the concepts and the 1st 1 is called Breakout. So what Breakout is referring? Teoh, um, is imagine you have a resistant line where the price cannot move above and ah, break out means that the price is after some time. Um, the price is actually able to move above that resistant light so it's finally able to break out. This is why it's called the breakout because it's able to break out above that resistant line. And the second thing is it has to remain the prices to remain above the resistant line if it doesn't remain above the resistant line and it's just momentarily goes above it and comes back down. This is what we refer to as a false breakout, and this is something we will touch on a later lecture. But I just wanted to quickly mention it here and the next thing. We want to talk about his breakdown. So this is the exact opposite. So imagine you have a support line and, ah, the price just keeps bouncing, um, up up on the support line because this is the line or the value price value where a lot of investors feel like this is great to actually buy the stock outs are a lot of people are buying, which prevents the stock from, or stock price or equity price from moving. Ah, down any further. So imagine you have the support line and, ah, finally, after so many tries, the price finally breaks below the support line and this is what we call a breakdown. And ah, another thing you have to watch out for is that if this is a true breakdown and it sort of false break down, the price has to remain below the support line. So this is very, um, important to understand. Don't know we can talk about the important concepts, and the 1st 1 is after a break out, the old resistant line becomes the new support again. This is why we mentioned that when, um, the stock price or equity price breaks above Ah, the resistant line It It has to maintain its price. And that main maintenance on remaining above the resistant line is the proof that the old resistant becomes the new support. Andi, the same goes for breakdown. So after the breakdown, the old support becomes the new resistant. And this is what we're going to Ah, look for in a second in ah Riel chart. 15. Support Live Example: Okay, We're looking at the Candlestick chart for Apple on a daily time range here. And our goal is to actually go ahead and look at the chart and try to identify some support than resistant lines. So let's go ahead and do that if you school out a little better zoo model, but we can see more of the time range. Um, and then we can see if we can figure out some supporter resistant lines. So here I I was able to just quickly find one here. So as you can see here, this this portion I'm going to zoom in a bet so you can see So these these three candles here. So if you actually follow along with my cursor, So the price here, if you look on the right hand side, the axis here is the price. So if you look here, we're looking at the price 1 93 24 this is ah, rough number. It doesn't have to be ill. Never be exact. Because everyone who looks at thes charts everyone has slightly a different number. So don't, um, spent too much time on trying to get it perfect. It's just the rough numbers. So for this one, let's just say in 1 93 and, um, if you actually follow along here, there were three candles here. Ah, and they were just barely touching this line here 1 93 But they weren't able to break billow that. So, as you can see, there were three candles in a row. We had a slight downtrend here on DA after this. Ah, four bread candles. The last one is pretty big, too. But then he couldn't break below 1 93 So then there was a sort of an uptrend after that. But, um, this is just three days. Um, what we want for identifying support, we need historical data. And this is what technical analysts look for. So if you actually go ah, back in time. Here. You can see that. For example, over here is where we have some support lines on a also here, this is this was a support line here. This is a support line. These are pretty. These air previous resistance is which is now. This is what we talked about in the last lecture. This was a previous resistant because as soon as it hit that it actually started the downtrend. But then over here, you can see that after it's starting to uptrend, it's actually starting to act as a support line. And then if you go further to the left, I'm just going to zoom out and just look for this. Here, look for the same price here, 1 93 And if you go, if you just go to the left, you can see here This was a previous resistant, which is the new support. And this is the previous resistant, which is Ah, then you support so you can see that this is actually 1 93 is actually a very strong support. It's a support right now for us, because this stock is actually the stock price is actually trending up. It's it's actually, um, trending up. And if it actually if whenever this breaks below 1 93 it's actually going, this 1 93 has become going to become a resistant line. So this is this is our first support here. Um, we can see another one here on this area. So 1 71 06 Or let's just call this 1 70 as you can see here the stock bounced here. This is the price where everyone thought this is a great deal to have or by Apple shares. So a lot of people were buying, and ah, also, you can see that this is also the another. This is a verification of the support because the stock tried to If there was a slight downtrend here, if he zoom in, there was a slight downtrend, but it couldn't break below this. Ah, 1 70 line. So it started to up train. It started the downtrend again, tried to break that line, it couldn't. So this is the verification or confirmation of the support, and this is actually the start of an option. So these are some of the things we actually look for. Ah, when we want to take our entries or buying to the stock so and we'll go into more details about that in a later lecture. So we found a lot of support. Um, here's another one here. If you If you actually zoom out, you can see that, um, this price here 1 40 to 64 you can see that the stock was down trending and then it bounced off this price 1 42 or six. If you go all the way back in time, you can see that over here. This is a pretty strong support because there's a lot of candles here which were trying to break down that price, but they couldn't and they remained at 1 42 and then started an uptrend shortly after that . 16. Resistance Live Example: So now let's look at some resistant lines on the ticker simple apple. So, as you can see here, um, if he if I zoom in a little bit here and I'm just finding these on the fly, So I just want to encourage you guys to go ahead and practice these with other ticker symbols whenever you have time. But as you can see here, um, the stock, the stock price is actually trending up, right? It trends up. And then this point here, if you look on the right hand side, this price was 1 75 90 Let's just call it 1 76 A Soon as it hit this price, it started to, um, downtrend. So this 1 76 is a possible, um, resistant point. But we don't know, because let's say you're just monitoring this stock for the first time, and it hits this and it goes down. You don't really know what's going on here, but then when the stock is actually, um, down trending and then at this point here, this is where the stock is actually starting to uptrend. So let's zoom in a little bed, so it's starting to go up, and then it hits the same line. It hits the same resistant line one seventies five and or 1 76 and then you can see shortly after it starts in downtrend. So this over here is the confirmation that it's actually confirming the resistant at 1 76 So what we saw here, this was the first time. Or let's just say this is the first time we're monitoring the stock, or it's the first time this dog is actually hitting this price and it's down trending. You don't really know. You don't have much information because there's no much history, right? So then if you the second time it happens, you actually have something relative to compare it to, which is this point. So then you can see that this stock is actually hitting 1 75 It's a confirmation of resistant, and then the stock starts to go down again. And then you can also see that this price here is actually a support. It's a confirmation of support because he came down here. This is on 1 68 and then it bounced back up. The resistant hit, the resistant here, balanced back down and Then they kept bounced back up the support again. So here, for the third time, it's hitting one 76 and then you can see again confirmation of resistant that it started to downtrend. So this is a good example of resistant. And again this will help us with our entries and exits. Because let's say that let's say you go in at this price, right? Let's say you buy in because it came down. It bounced one. This is the first time you're seeing the support. I 1 71 69 it goes back up. And then the second time is when you see, um, this candle here or this price 1 67 or 1 68 hours 1 69 It's actually going to back up, going to go back up. This is a confirmation of the support around this area. So you actually buy in and when you buy in here, you know that as you're approaching this 1 75 lines, are you buying a 1 69? You're approaching 1 75 This is where you might want to take some profits or sell your stock and ah, lock in some profits because Ah, you know that based on previous, um, statistical or historical data, this is where there was some resistant Sean previously. So this is where you might want a monitor. Or at least sell your stocks and lock in some gains or profits. Now let's go back again. Um, let's see here. So there's a lot of resistant here again. It doesn't have to be perfect. So you can see here, for example. This is this point here and this point here. That's another resistant line here. So you can see that around. Let's say this is around, um 2 14 So when the stock price hit 2 14 it started to go down. It bounced back up here, which is the support at 1 70 as we mentioned earlier, because this was the first port bounce. This is the confirmation second confirmation off this support. So then it started to bounce. But what we're talking about here is this resistance. So when it bounced and he went up, it approached this price again to 15 or to 16. Um, and then as soon as they hit resistant, it actually went, um, down. And one thing I want to mention is that previously we talked about previous resistant becomes support. So if you think of this as the, um, resistant line Now, look what happens. So over here we hit the resistant for the second time, and the stock price actually goes down. So it goes into a downtrend, and then there's there's a better support here, so it starts to uptrend again. But then look what happens here in this section. So we're not now above our to 16 resistant line. So we actually broke out. This is the breakout. Ah, right here. And we broke out and then see what happens. The if you look at the closing price of all of these candles. Ah, After that, they're all above the resistant line. And this is what we were talking about. This resistant line here is actually becoming. Then you support. So if you look here, this line is ah becoming than you support because it tries to break down. He can. He tries to break down. It can't. And then eventually it moves back up 17. Drawing Support and Resistance Lines: one thing that really helps me with analyzing charts and these ah charting tools is actually drawing the trend lines and drawing the support that resistant lines on. They've made it really easy. Especially this is a free tool investing the outcome that we covered earlier. Um, let's just draw the trend lines very quickly here. So if you click on this icon on the left hand toolbar here on what we want is, um, I want the horizontal line and you can see that there's a shortcut here for it all plus age . So let's go ahead and click that. And let's just, um, if all you have to do is just make one click here. And as you can see, it just drew a line for us. And there's some tools, some options here, so we can actually change the color. We can change the with. We can change the style. You can delete it. You can hide it into a lot of things, which is very Ah, nice and handy tool on. Let's say weaken because this is a resistant line. We can, for example, change the color to red. So now you can easily see um It's very easy to actually for us to see that. Um, this is Ah, you can see that this is a resistant line on the chart. So if you can log out Sorry, zoom out. And then you can just, um, look at this and you can see that this resistant here is now becoming the support here is very easy to visually see what's going on. You can do the same thing for support. So, for example, let's click the same thing. I'm going to select horizontal line. Let's find a strong support. Um So for example, um, this is a strong support here because of these. These two guys bouncing here. Ah, the first bounce on the confirmation of the second balance. So let's go ahead and click on that, and then you can see that it's still red. But let's say because this is support and this is resistant. I want to Mark Thea resistant as red and I want Oh, Marcus is greens. All you have to do is go ahead. And so, like green here and now, you can actually see your, um support and resistant lines and also has recovered in the trendline lecture you can also see that this is forming a channel. So, for example, it was previously going up and down in this channel, eventually broke out. Now it's in the future is going to form a new channel. And ah, the other thing I also wanted to mention is that Ah, just to reiterate is that once the price actually breaks above this resistant line here, it's now becoming the new support. So as we can see, it cannot break below this resistant and it's just going up. 18. Different Time Frames: one last thing. Ah, in regards to support and resistant that I wanted to highlight here is that you can really do this on any timeframe. So right now, um, we are actually looking at a daily chart. So let me go ahead and remove these. I'm just going to delete these lines here that we drew earlier. So, um, we can really do this on any time from, So right now, we are on the daily. So, for example, if you were actually, um, let's say a day trader that you also you buy and sell within the same day. You can look at the five or 15 minutes or one minute, five minutes or 15 minutes. Um, timeframe. Let's say we go on. Ah, five minute timeframe, for example. You can do this exact same thing here, so you can see that, actually, um, that's let's just look at this last day, um, where the market was open. So you can actually see that? Um, you can identify the support and resistant lines here. So this is over here, this one. So let's go ahead and draw a line, actually, so that we can see a better so here's a horizontal line. Let's just go ahead and draw that roughly so you can see this is a good support line. Initially, this was a resistant line, right? So, um, the stock opens a gap up and we'll talk about gaps later, but it gaps up on its, um actually tries to break this price here, which was 2 34 36 It couldn't. It started a downtrend. And then eventually, here on this candle, it breaks above it. Now, after breaks above it, you can see that it can no longer break below that price. With the new resist, the old resistant becomes the new support. And then he goes up again. So then these all these continuous five minute candles tells you that the none of them were able to break this price. This is a very strong sign. This is a sign very, very good signal that this line is holding as a very strong support. So it's a possible by entry for people who are day trading the stock on that day. And then you can also see that the stock price started up trending and it went up hit the new resistant line here or Resistant Point at 2 37 36 he went back down. But as you can see, it would never actually even came close to the support line. That's why this is very strong support and then went back up again. So this is Ah, this is a good example of the, um, like support and then, if he wanted on a five minute time train. Now let's timeframe. Now let's do another one here. Let's draw another line for the resistant. So the resistant here is what we talked about initially. So let's go ahead and draw one. So I'm just going to change the color to red so you can see so here, the very first time the price tried to go up, it's not a very strong resistant, but the price. Try to win a. It couldn't break out of that resistant lines. We went back down. A Khanna just went, um, sideways here with not much action. And then ah, over here it try to break it. Couldn't This was a bit of a false breakout, and you can actually tell because this was, um, As you can see, we'll talk about volume, but you can see the volume is actually very low here on the bottom. Here is we're looking at volume, which is the number of shares being traded at that moment in time. Ah, and it's very low. As you can see, these bars are very, very small company to this one. This one is very big. So, um, this was the resistant at this point, the prices going sideways, it kind of went above it for a few minutes and then it couldn't really, um it went down a bed again, and then it started going up. So at this point, it actually broke out off this resistant, and he went back up again. And then you can see here this big candle, let me zoom in a bit. So this candle here, the volume on this was very high. As you can see, there's two big volume green volume bars here. This is ah indication that this resistant is now acting as a strong support because it could not break um below this resistant, like he went there for surely, but then it closed above it. Ah, And then beyond that point, it was an uptrend. So the only point. I just wanted to, um, highlight. Here is you can really do find support and resistance on different time frames. We just did it on a five minute. If you are are, for example, a long term investor or a swing trader. You would be looking at a one day, Um Ah. For example, you can see the charge for one day and find support and resistant there. Or you can be looking at If you're a long term investor, you could be looking at one week. So each part over here is actually representing one week's worth of price action, or you can just score for one month. So that's all I have for, ah, supporting resistant hope that was helpful. 19. Moving Averages: in this section. We're going to talk about moving averages, what they are, how to use them and how they play a role in technical announces. So let's get started. So what is the moving average moving average is, as the name mentions isn't just an average price over a given period of time. So imagine that you have, um ah, nine moving average on your daily charts. What that says is that just using this as an example. What that indicates is the average price for the last previous nine candles or last previous nine days as off today, it's also a line that shows the price action without any noise. So there are a lot of, ah, giving a period of time. There's a lot of noise, good news, bad news, earnings, things like that that just drives the price up and down suddenly. But moving average ah, line basically averages Ah, things out, which means it actually smooth is all these noise out, so he can just quickly get an indication off what the price is doing or what the trend is doing. It is a lagging indicator and what that means that it is ah dependent on the previous or past price action. What that means is that And now, as we will see ah soon on the, um, charting to on our charting tool or platform when you when the moving average long line is drawn, it's always dependent on the previous candle being formed. So when the candle actually finishes forming meaning if you're looking at a daily chart, um, unless they were looking at today's scandal, when the market closes and the candle is formed. Dance D When the moving average, um, line is drawing, so it is that's what we mean by lagging indicator. And, ah, one thing to note is that most charting tools or platforms will draw this for you. You don't really have to understand, um, the math if you want, you can, uh, look in Google for the math and how it's being calculated. But the important thing to um, take away from this lecture is to understand, ah, what it is and how to apply it in technical analysis. And when we actually, um, as you'll see soon when we actually draw or ah put these indicators on our charts, all you have to do is really defined the type and the attributes, so they're two different. Two main ah type of moving average is ah, one is called the 1st 1 is called simple moving average or S M A for short on DA. They're the most widely used again. They're very smooth, Um, and they filter out a lot of noise and ah, they don't get their simple is meaning they don't get affected by the recent pricing price changes. So imagine you have, um you're looking at moving average of 100. So for the past 100 days, we've average the price, and we've drawn our moving average line. Now, imagine on the very first day off that time period, something bad happens. And this ah changes the line. Well, if that same bad thing happened on the 100th day or the 50 if they were the 20th they that doesn't really change the line. So no matter where in this time period, this bad news happened, the line still remains the same. So the emphasis is not on the recent price change. The second type of moving average is called the exponential moving average, and this is very similar to a simple moving average Ah, except with the emphasis on the recent price changes. So, for example, if you were to plot the, um, let's say, nine simple moving average and nine exponential moving average on a chart, let's say today there was a bad news. Ah, you will see that the simple and nine moving average line wouldn't change as much. But the nine exponential moving average would actually start Teoh point a little bit to the downside if the news was bad and this is affecting the price and a lot of shares are being sold due to that bad news. So again, the exponential moving average or E m. A. It is reflective of recent price changes. So why do we want to use moving averages? Well, first of all, they ah, help identify trends so we can see something is going up in terms, a trend or down trending or just moving sideways with not much action. And the slope of the moving average is, ah, what shows us the direction of the trend. And the second point is that they actually act as strong support and resistant lines as well as, ah, we'll see when we go through our examples on the charting tool. So how to use moving averages? Ah, there two main ways of, ah, looking at moving averages. When you're analyzing charts and patterns, the 1st 1 is the moving average break out and break down. So what does that mean when the price breaks above the moving average line? And ah, that is ah with, ah noticeable volume and we'll talk about volume a little bit later in the course. But when the price breaks above the moving average line, that is a signal, and that's an indicator of a possible, um, uptrend is coming. Now again, it's important to understand that it doesn't have to end. It could be a false break out, but it's just a signal that a possible uptrend might be coming. And it's something to watch out for if you're looking to enter, ah, or start your position and start buying that stock. If you're looking for a long term, um, investment given in that company and the same thing for the ah breakdown. So when the price breaks below the moving average line, this is a possible sign of a downtrend. So this is again something to watch out for if the price or the candle breaks the moving average, Um, line on the chart. This is something to watch out for, meaning that a possible downtrend is coming. And ah, the second thing is ah, moving average crossover. So let's say you are plotting the nine exponential moving average and the 20 exponential moving average them nine being the shorter moving average and the 20 being the longer moving average when the shorter term moving average in this case nine crosses above the long term moving average being 20 in our example, this is a possible sign of an uptrend. So again, this is a signal to watch, all for on your charts when you're analyzing that and then the reverse is true. So when the shorter term moving average being nine in our example crosses below the longer term moving average 20. In our case, this is a possible sign of downtrend. So again, this is something to watch out for. If you're in a stock and you're seeing that, or if you have positions oh, invested in a given company or a stock and you see that, um, the moving average denying e. M. A. Is crossing below the 20 year May or any any other respectable moving averages, which I'll mention in a second. This might be a time for you to sell your positions because it might mean that a possible downtrend is coming. But again, just to emphasize it doesn't mean it has to, because it could very well be false breakdown. And these are some of the most respected moving averages. So almost all investors, traders and technical analyst actually watch and respect the following moving averages. Meaning they actually have these plotted, Ah, whether they're using platforms or charting tools, they have all of these on their charts and they're constantly monitoring the price movement . Ah, between ah, these, um, moving averages. So the 1st 1 is nine exponential moving average. The 2nd 1 is 20 m a. Ah, 3rd 1 being 50 s, m A and the last one being 200. That sent me the 50 sme and the 200 SME. I know. Ah, amongst long term trade investors and traders is very important that these are the very two important moving averages to watch out for 20. Moving Average Live Example: Okay, so let's jump into our ah, charting tool and start looking at some moving averages. So just to search things up, let's take a look at Facebook here. I'm just going to load the charge for Facebook and, well, again, looking at the candlestick chart for a one day, um, time period. And okay, so let's start looking at some moving averages. So up here, um ah. In our tool bar on the top. Here we have something called indicators. So if you actually click that right now, this short is clean. There's nothing on it. Just a candle sticks. So if you actually go ahead and quick the indicator but and you'll see a list of indicators So now in the search, as soon as you start typing moving Ah, you'll see the moving averages. There's a whole bunch of indicators here. Um, the one I wanted to highlight is one is called moving average. So this is the same as the simple moving average or S m A. And the 3rd 1 here is moving average exponential. Um, so let's start by looking at just the moving average. So you just if you click that, I'll just add something by default. So let's go ahead and close that and on the right on the left hand side of the chart, you can see that it just added the moving average with some default values on the this is the ah moving average nine moving average. Simple moving average, I'd say. And ah, it's based on the close price. This is very typical. Um, most people have this unclos, but you can have it set two different settings. And, ah, there's a couple things we can do with the stool is this one is the show height. So if you can just, you don't want to look at it, you can just hide it or show it. And then this is the part I wanted to highlight. So this is a setting. So if you click on that gear icon, there's a couple attributes that I use a lot to change this. So the 1st 1 is the actual length. This is where you define the time range for your moving average. So, for example, we talked about the 90 m a nine e nine and 20 Emma and 50 and 200 sme. So, for example, if you want to be? If you wanted to put a plot the 50 s and maybe we just put 50 here. And then if you look at Thea again, this is the close here, Um, is what I mentioned earlier on the clothes. You can set it to all these attributes open, high, low. But we're going to leave it on clothes because that's the most commonly used one. And then if you quick on style Ah, one thing I like is you can actually increase the, um, line. Wait, so this make the line a little bit thicker, As you can see in the background as we actually schooling this, you can see the effect. So I like to make this a little bit more bold. Um, so I'm bringing it to this, um, the second setting here and then for the color. We can actually change this to let's say we want to change this to purple. So let's go ahead and save that. And ah, you can see that now we have plotted are moving average. And again, um, this moving average indicates this is the 50. So from here, if you're starting as for this day, this line is actually showing the average from here to the past 50 candles. Ah, in this case, each candle being a day day since we have it set to a daily time frame up here, So as you can see, um here Ah, 111 Think I mentioned earlier is now Look, if you look at the moving average line and again, this is the S m a 50. Um, if you look is this smh fifties actually acting as a very strong resistance. So you can see that the stock was down trending here, right? And, um, it's ah broke below the S m A 50 right? It bounced here because there's a bit of support here, so it's balanced, and it started to uptrend. But then, as soon as it hit the 50 s m a, it couldn't actually cross over and break above it. So what happened was that this SME is acting as a resistant and it was a start of a downtrend. It tried to break above that. So this is the downtrend, tried to break above the S and maybe 50 again, and it couldn't. So it started down trending again And then it was just basically going in this, um, sideway movement here or what we call consolidation. Um, and the price is just moving sideways is not doing much. And again over here is, um, trying to break the SME Couldn't goes down again, tries again, couldn't goes down again, tries again, and it could. It on over here is trying to break above it again. And it looks like from this candle. Now, this is how we would predict the future. And this is just, um, saying that First of all, let's zoom in here. So this candle here, this green candle, this is actually, um, as you can see here, this is the downtrend. Sorry. This is the downtrend here. There was a bounce up here for the support, and it started to go up. But if you look at this candle, um, by just analyzing this candle, this is, um, actually a bearish candle because you can see that the candle is green. But look at where the upper wick or upper shadow of this candle is. It's almost the same size of the candle. So on this day, um, all the buyers were trying to push the price from all the way up to Let's look at the price 1 86 Um and they couldn't and the price close at 1 84 But this is a huge upper WIC, which means that they tried to push the price up above the 50 s m a. And they were not successful. So it came all the way down so it couldn't be maintained here. So this is a very sign means the sellers might actually come and people might actually start, um, selling the stock or shorting the stock. And, um, shorting just means that you, ah, sell the stock and buy Sell your basically, um, underneath the hood. You're just borrowing shares from your ah ah brokerage and you actually selling them. And then you're buying back at a lower price. And the difference is your gain or, ah, profit margin. So just a quick note on shorting on DA. But yeah, as you can see, that he couldn't. The opera week is pretty big on That's a very sign. And the next day the candle was actually read and the close of that candle was below the, um sm a 50. So actually couldn't. It opened above it, but he couldn't hold it. Couldn't close above the 50 s m a and it closed below it. So this is a very sign. So we can say that now, this is a good indication that, um, going forward in the future or next week. This could actually start a downtrend because these two candles are indicating that, um, it was not able to break Ah, the 50 s and May with high volume. So I'm assuming that Ah, there's going to be a bit of a downtrend happening here. But the only way to find out is actually monitored this stock, which is Facebook and see what it's going to do in the upcoming days. And ah, so this is for the 50 s m a. You can do the same thing with Ah um e m s. So let's do any m a Let's do Ah, nine eso First of all, type in ah, moving average. We're going to select moving average exponential. Um ah, Let's go ahead again. It adds is adds it for us. Um, and by some default value, this one just happened to be 90 m A, which is what we want. I'm just gonna ah, change the color a little bit here to, um let's say let me just change it to read, for example, so that we can see easier. So, um yeah, As you can see, this is the, um e m a Here now. Ah, As I was saying, Ah e m and ah, moving averages are usually ah, act as support than resistance. So one thing I wanted to mention is just Look, um look at this section of ah, the price. So we're still looking at Facebook and look at the ah, actually, let me hide the sm a 50. So I'm just gonna click that I icon on now. Watch right now If you look at the 90 m a the price, actually, it can not, um, a break below the nine e. M s. So you can see these candles here starting here. Um, this scandal, the scandal, the scandal, this candle they're all close above the 9 a.m. A. This is a confirmation that the 90 m A is starting to act as support because the price cannot close below it. Look at this red candle. The if you look at the lower wicket. Actually tried to go below the 90 m A. And it did, but it couldn't maintain it. Couldn't close below that actually closed above. It is a very strong confirmation that 90 amaze acting as a support. And they look what happens going forward, going forward. This, um, like these candles, they're not even close to the 90 m a line, which means 90 inmates still acting as a support and then going down again. If you look all the way from here, um, this is actually if you look all these candles, they're just barely touching the 90 may, but none of them close below it. So from this time period, all the way till here, um, 90 m a is a strong indication off support, which is great. Now look what happens just a few days later. Look what happens. Ah, we have a candle. This is one of what we were talking about. Candle breaking down below the 90 m A. So we have the candles up to here. Everything is actually closing above the 90 m a. Meaning that 90 m a is acting a support. But then starting here the scandal closes below, right. It closes a green candle but is closing below the 90 m. A. This is a bad sign. This is a possible indication off a downtrend coming as we discussed earlier. So now look at the last candle. It's actually closing below and then going further, there's a couple of candles here which we are unsure what they're actually doing. But, um, if you look at this candle first of all, this candle is a bearish candle because it's first of all, it's read. The body of this candle is huge. If you look at the rial body, it's pretty big. And if you look at the volume down here, this volume is pretty big like compared to all these low guys here, this volume is really big. And, um, this is a bad sign. It broke the nine e m. A, which is a bad sign and might be a sort of downtrend on very high volume with the rial big candle and look what happens in below. It broke below the 90 m a and ah, starting the next day. Look what happens all these candles. The 90 year may now starts to act as a resistant this candle, Try to go above it, Couldn't maintain it. So it closed below it. This candle close below the 90 m made this scandal close below 90. Emma and so on. All these candles are closing below 90 m A. So as you can see, this one here is interesting because it it closed above 90 m a. But look at the volume. This is what we call a false breakout. This is not good. So that's something to watch out for as well. And ah, as you can see, the 90 year May is just acting as a resistant because all these candles are not able to break above. It tries to go. Ah, break and it can't tries again. And he can't on finally here. Um, it was able to break above the 90 Emma. And then as soon as it does look what happens now. 90 Emma is acting as a support. So I hope this, um I hope you guys understand that the whole point. I'm trying to make years that moving averages can act that support and resistance is Now let's look at some 11 other thing. We talked about was moving average crossover. So let's look it. I'm going to hide Hide the 90 m a and I'm going to bring back up the 50 and let's plot the 200 s m a. So let's go ahead and ah, type in moving average here, and we are going to bake. This'll, um, inputs will make this 200 because we want toe S m a 200 and ah, for the color. Let's make this, um, let's say black, for example. Actually, this is hidden, so you need to go. Sorry. This is ah, it's actually the software trying to render the e m A. But actually, you can see that now it was able to draw the line. It just took a second. Um, and one thing I want to highlight here is the crossover off the moving average. Actually, black is not a good sign. So let me use a lead. I'll just use red again. So click on settings Spring back, reds. Great. And actually, I'm going to ah, make the borders of a bit bigger here. So it's easier for you to see every go. So this is the point. I was trying to make this intersection here. So the purple line is our 50 s m a on the red one is our 200 sme. Now the thing I wanted to mention and I mentioned earlier, was the moving average crossover. So one is the price moving above or breaking above the moving average or breaking below the moving average. The second concept was the moving averages crossing each other. So right here in this intersection. As you can see, we have a bit of a downtrend rate or the stock price action is actually moving in a sideways channel here. So there's no much is going up, down, up, down But it's not, doesn't have a clear direction. So one thing is, ah, one thing I wanted to highlight here is that if you look here when the 50 s m A, which is the shorter moving average line crossing above the red line, which is the 200 sm a. This is a very strong indication, um, off a possible uptrend and look what happens as soon as this cross happened right here. Look at what happened. Just uptrend and just a possible uptrend at Sorry. It's just a long term up trend. So from here it's going up. And then it came back down here. As you can see, these candles just touched the 200 SME and 200 sm is acting as a very strong support. So it went back up again, But this point here just wanted to highlight the cross over here from here all the way up here. This was the start of an uptrend. So this is another thing to watch out for. And Ah, the other thing we talked about was the slope. So if you actually look at it long term, um, longer term time frame. So we can actually just zoom out together longer term time frame, or he can just switch this to a weekly timeframe. We're actually, um, looking at, let's say from here from this point on, even though ah, the price is going down here and the price is going down here if you look at the time for yet if you look at the longer time period. So let's say from here, uh, all the way to here, it's still in an uptrend. So even though it's coming down here, this is a shorter down train downtrend. Ah, and this is a short downtrend. But in the long run, this is actually an option. Because another way you can actually tell is if you draw the trend line, as we did earlier. If he just draw the trend line and connect these things together, you can see that this is still an option. So when it breaks below this trend line, that's when we start to see a downtrend like a long term downtrend. I me. So that's that's that's the thing from in a long term frame. This is actually an uptrend. And the thing I wanted to highlight and one thing we talked about is that this slope. So if you look at the slope just very simple if you just look at the slope is pointing up, right? It's pointing up, meaning this this stock, which is Facebook, is actually up trending right? If you look at the slope here, this is actually that pointing down award for so for this shorter time period is actually down trendy. So if a soon as you look at the if you look at this slope of the moving average line at any given point. I'll tell you what the trend is doing, which is very powerful because by just looking at it visually, within a few seconds, you can tell what it's doing Over here. You can see that it is slope of the moving averages pointing up so it's actually moving that its trending up, which is if you look at the candles, that's exactly what it's doing great. And, ah, if you look at this low Pierre, it's actually pointing down the slopes downward. So that means the trend is actually going downwards. So if you look at the Cannes this, the stock price and the candles they are moving in a downward direction, which is a confirmation off are moving average, indicating the correct trend. 21. RSI Indicator: they're probably tens or hundreds of, ah, technical indicators out there that people can use. But there are only a few that, um, I believe in or I myself used amongst a lot of other short term and long term investors out there and the relative strength index, or RS. I is one of them. So this is a very powerful indicator used by many, um, investors out there and ah, this take a look at what it is and how you can use it to your advantage. So, um, as mentioned, um, just rs I stands for relative strength Index, and ah, it is really a mo mentum indicator. And it's very simple. His definition is just is just a number. It reads from 0 200 But the important thing is understanding what the numbers mean, whether we're, ah there in different ranges from 0 to 100. So when ah, the or is I ah, on your chart, um, reads between a number that's between ah 0 to 30. Uh, this is indicating that the equity is, ah, oversold, which means it's undervalued. And, ah, if it's between the numbers 70 to 100 it means that the equity is overbought or overvalued . So why do we care if something is undervalued or overvalued? Well, when something is overbought, it is a possible downtrend signal. So if you see something that if you're looking at a given stock or equity and let's say the U A map, DRS I graph on your chart and you see that the number is, for example, 80. This is indicating that THEA Equity is actually overbought, and pretty soon it might actually start a downtrend, so that might indicate the exit signal to you again. It doesn't necessarily have to is just an indicator, and they won't necessarily start a downtrend when it goes into the overbought territory, which is 7200. But it's just a possibility, and it's just a signal to watch out for for the upcoming days. If something goes in that range and, ah, as mentioned, it could stay in the over body area for a really long time, and it might not sell off or start to downtrend. Same thing with oversold. So oversold is just telling you that something has been selling off very heavily. And then now the equities Ah, you know ah undervalue which makes it very attractive for investors to jump in and start buying that stock or equity. So it might signal it possible when something is oversold and the Earth are size shows between 0 to 30. So let's say 30 or 25 or 20. It could signal a possible uptrend, but again, it doesn't have to. So he could stay in the oversold territory for a long time now, just like a regular charges. Is that some of the things you wanna watch out for when you're looking at an RNC graph? So our psy has highs and lows, just like regular chart or moving average, for example. It has a slope, and then it has support that resistant points one concept, and this is a difficult concept to grasp. But one thing with artists, I, um ah, that you can actually indicate is the divergence. And the divergence, um, simply put, is just when the price and the price action or price trend and momentum are actually working against each other. So the price on moment, um, are going into the in the opposite directions or, for example, the price is falling. But the Mo mentum is going up. So there are two Ah different types of divergence is the 1st 1 is bullish Divergence. What this means is that the, um and this is ah, sort of hard to spot. So you have to say you have to pay very special attention to the arse. I ah, graph on your chart. But bullish star divergences when the price is actually down trending so it's actually falling. And the mo mentum, which in this case is the slope of the RC, is up trending. So when you have this situation, this is a possible sign of an uptrend, which means it makes it a perfect entry or by point for this equity. Now, the bearish divergences, the opposite, So the price is actually going up. But the momentum which again is the slope of the RC, is going down. So this is a dangerous sign, and this is if you have, if you own a stock or if you want equity, um, off you don't own something and you want to start shorting it again. Shorting means you sell at a higher price and you buy at a lower price, and the difference is the gain. You make some platforms that you do that some don't some account types that you do that some may count types don't. So just ah, quick note on short again. But, um, yeah, when the prices up trending and the mo mentum is down trending, this is a possible sign of ah, downtrend. So if you see this happening on our side and on your chart, this might be a good time to get out of that position. Or sell that stock or exit your, um position from on that point now. Ah, one note on divergence. It's It's rare. It's very rare occurrence in long term transfer of your long term investor. You might not even care if you're holding a stock. You know, for 5 10 15 20 years. You might not care about this because it's just a short term downtrend, and it potentially if you are investing in a good company, things will recover. So something that you might not even care about. If you're short term investors, this is something you might want to watch out for again. Technical announced. This applies to both long term and short term investors, and it's hard to find. So The only recommendation I can make is just practice, practice, practice, book. A different tickle taker. Simple is like a different time frames and try to identify divergence. 22. RSI Live Example: Okay, so let's look at some are sigh examples in real charts and I'm going to Ah, let's just speak. Ah, different stock here. So let's go for Alibaba. So the taker Simple Baba and ah, let's go ahead and load that short here. So again, we're looking at a daily chart. So now what we want to do is look at the RS. I so on the indicator here, quick on that and type in the world. Or s I And it's the 1st 1 relative strength, um, Index. And as soon as you quick it, you'll see that it placed it down here. This is a really nice thing. You don't have to specify any settings. Um, and it's just it It's very quick, like, I really like the fact that they just place it on here, and, uh, you can see that the, um, the range is actually from 0 to 100. But the thing we talked about earlier, with the range being 30 to 70 um and you know, 30 being oversold at 70. Being over what these are actually highlighted in the daughter line on the top and the dotted line on the bottom Ah, and one thing I like about this charting tool investing dot com is we can actually resize this to a bigger um, we can resize is to make it bigger, so it's easier to see on the screen. So let's go ahead. What I'm going to do is I'm just If you just hover over here, you'll see the cursor changed to this and you can just go ahead and make it over bigger. I can actually make it even bigger. So now you can see RSC And the reason I want to make this bigger is because I want to highlight some points on the actual Lawrence I. So if you first of all the the one thing I want to start with is the actual overbought on oversold territory. So as you can see this thing over here, this is the 70th line and this is the bottom Here. This is the 30th line on The numbers are here on the right hand side. If you want to follow along with me and ah, as you can see every time Ah, the r s. I has hit the overbought territory, which means it's overvalued. So every time it has reached the 70th line or the, um, actually crossed past it. So in this instance, it actually cross passes or if you hover over Ah, the curse on the right hand side, it's actually 76. So this is past the ah, this is in the overbought territory, but it's past 70 so it's actually considered really oversold. And if you look here, um, every time, um, this goes into the overbought territory being 70 and higher. If you actually look at the stock on the top here, it signals that a downtrend this coming. So if you can see when it hits that, it's followed by a downtrend. So this is a Momenta, um, indicator again. Are says Momentum's or the mo mentum is going down. And if you follow along on the chart on the up Harold, zoom in a bit to that area we were just talking about Ah, so here, this is their you were talking about. If you look at the price action here, Ah, when the are size overbought, it is starting it down. Trends or the momentum is going down on the price. This is a possible reversal points or the price is actually going down. This is what I mean. That this is Ah, very strong indicator. So again, here it went into the overbought territory. And there, as you can see, as soon as it went into this. Ah, it's at 73.59 here. So then if you just hover over up here, if you just hover up, you can see that the stock price is actually moving down. Um, so this is Ah, this is 40 overbought. Now, if weaken due, the same thing for oversold. So let's take a look here, for example. Um, actually, let's take a look at this one, because it's very clear to see. So as you can see, um, from this point up here, which was 61 the are size 61 here. If you just There was a moment, um, shifts. So the mo mentum is going down that price action, and the trend is going down. And then it reached the 2028 are say about 28 29 And then he went up again on the price went up and it went down again. So the rs I went down. But this time it didn't go as low as 30 but it was still 32. So that's still considered again. Numbers don't have to be exact. 32 is still considered over Sold Oversold. So it's, you know, whatever this prices. So right now the RSC is 32. So if you hover over here, the price at this point for ah Ali Baba was 100 thirties on the left hand side, if you follow along with my cursor was 130. This price is actually considered Ah, very low. Ah, and very undervalued in comparison to what this are size telling us, which makes a very attractive for the long term investors to jump in and start buying it at this price. And then, as you can see, when the are size actually hitting the over ah sold territory here close to 30 it's actually it's a signal, and you might as mentioned, might not necessarily have to. It will might. It signals that uptrend is coming. So then you can see that once it actually hits the 32 our side of 32 it starts to mo mentum starts going higher and people are starting to buy and buy and buy, which makes the moment, um, stronger. And then if you follow along with Thea Price Ah, as soon as it hit the ah oversold territory and actually this was a downtrend. And now it's a signal for reversal. And an uptrend starts, as you can see on the chart. So that is for the oversold than overbought. Now, um, the other thing I want to mention is that you can also, um, look at our side just like a regular chart. So arse, I has, um, slope as well. So it has slopes of meaning. You can actually use the same tools here for trend lines are in support and resistance. You can actually draw lines on the R side. It's not just on your charts. It's also on the, um, our side graph on the bottom years. Well, now let's switch to a weekly timeframe just to change things up, and, you know, it's the longer timeframe. So, um, make things about smoother year. So, um, over here, as you can see, um, there's not too much information here because I think Alibaba went public in 2014 so there's no much. It's about five years worth of the other here. So that's nice. Makes things easier to see. So begins to win a bet. But one thing I wanted to highlight is that you can also a look at our side, just like a regular tool. So if you grab a trendline here, what we can do is we can go from here and draw a slope. So this slope tells us that even though there's some noise here, so he's you can see there's up, there's down, there's uppers. Down there's up, there's down, there's up, there's down. But the overall direction off the mo mentum is upward. So if you filter out the noise, this is still going up and you can see that you can see that on the charts. So if you look from this point and if you draw the trend line on the chart itself as well, you can see that the long term trend is actually upward again. This is a weekly timeframe, so every candle is a week. So we're actually looking at a year's worth of data. It doesn't look that much on the chart. What it is actually a lot of ah, this is a long, long term time frame. So if you can see this slope is actually moving up, the momentum is going higher over a one year period. So, um, the price is actually going up as well. Another thing. So let me go ahead and delete that. That's one thing I wanted to mention about, Slope. Another thing is, um, just like a regular chart our site has You can look at it as support, that resistance. So, for example, um, let me draw a horizontal line. So over here. So this is this is in color red to just indicate the resistant. So, as you can see here, um, when every time the rs I let me zoom in a bet every time ari size actually approaching when it's going from bottom to top every time is approaching this red line, it shows the point of resistance. So it starts to, you know, bounce back down so he can break above it. So this is going up. It can't even reach that. So it goes down, it tries to go back up again. You can't reach it. It goes down further here. It touches the line. Exactly, but then it can break above it. So it goes down and then up again and down and then up again here, it can't break the resistant and down. And then here it goes, uh, you know, momentarily above there is this ah line, but he can really break it so it goes down. So, just like support and resistant on a regular chart, you can look at support them resistant, um, on the R side as well. So same thing goes for support. Um, you can Let's draw another horizontal line here, for example. And then we'll make this color green. Just two indicated support says he can see this over here. Um, it's trying to It's bouncing off the support line. So this green line is showing support things down. Ward trend here. It didn't even reach the green line, which again confirms that this is a good support. Um, over here it broke below the support on over here. It bounced from it, bounced again on the support. So these are the things I watch out for, and you should also watch out for when looking at the RSC graph 23. MACD Indicator: Another important indicator that is used by many investors and technical analysts is the moving average convergence divergence, also known as the Mackie indicator. So why do we want to use them? Acting indicator? Well, first of all, it helps us identify if the trend is getting more strength or it's becoming weak. It also shows us the relationship between two E. M. A. Lines, which will see in a second. And then it also helps the investors or traders to, um, spot, buy and sell signals on the charts. So the math of the Mac the indicator is as follows. The Mac D line is calculated by subtracting the 26 p. M. A line from the 12 e. M a line, and the result is the Maxie line. There's another line called the signal line. On the signal line is the calculation of the 90 m a line from the Mac D line. So the signal is the 90 m A off the Mac D line, and there's also a hist, a gram, which represents the distance between the Magny and the signal line, and we'll look at ah live example shortly. One thing I wanna iterated and focus on here is that try and not focus on the math and the calculation of Bhakti because most charting tools and trading platforms or investing platforms will plot Mac T for you. It will do the calculation, and it'll draw the graph and the chart or the indicator for you on the chart. Instead, try to learn, um, on how to actually plot the Mac, the indicator on the chart and also try to be able to read the Mac D line and the hissed a gram and try to interpret those ah, the Mac D line on the chart and try to identify, buy and sell signals from the Mac D. So here's an example of a Mac D line. And as you can see here, the blue line is the Mackie, as I've, um, mentioned here on the legend section. So the blue line is the Bhakti line, and the red line is the signal line. So again, the blue line is the Mac D, which is the 12 e. M. A. Minus. The 26 year May and the Red line, which is a signal line, is the nine e. M. A. Off this Maxie line And also one other thing to note in this example is the history Graham . So all the vertical bars that you see going up and going down here. This is the history, Graham, and we'll talk about how this can help you identify by cell signals and also helps with the um spotting the strength or weakness is off the momentum and the trend. So here's some of the signals that you can watch out for when looking at the Mac D. The 1st 1 is called the Bullish Crossover, and that's when the Mac D line and crosses above the signal line. And there's also the bearish crossover, which is the Mackley line crosses below this signal line. And I just wanted to take a second and explain the terminology here. So bullish means that the mass market or the entire market, I think that the trend and the price will go up. So imagine you buy something at a lower price, and over time it goes up that that is the definition of bullish or that's ah ah, meaning of bullish. So bullish crossover is imagine. The meaning of this ward is that imagine the stock has been down trending or the price has been dropping. And if you see this bullish crossover on the Mac D, it could signal a reversal point, and they could signal that the price and the trend might change. And it might change to start taking an uptrend and the price will start to go up. And same thing for Berries, so bearish is the opposite off bullish. So it means that, um, the stock has been going up for a while, and now a lot of people are scared or there's a bad news or the stock is oversold. And now many people are the mass market. Think that it's going to start going down. So the birds crossover. You can also spot that on the Mackley line, and that's when the Mac D line crosses below the signal line. So I just wanted to cover the definition of bullish and bearish. One means the price and the trend will go up. Bearish means the price, and the trend will go down. Another signal on the Mac D that could help you interpret the graph. Is the hissed a gram line? So the history Graham lines get larger as the distance between the Mac D line and the signal line increases. And it also tells you that the mo mentum is increasing. Now that could be a mo mentum of uptrend. Or it could be a mo mentum of a downtrend and the history Graham lines getting smaller that is signaling the decrease in momentum again that could be on the way up. Or it could be on the way down. Remember talking in terms of trend and price. So here's the same Mac D line, except I've tried to identify some points so we can use this picture as an example. So again, I know that the Mac is the blue line. On the red is the signal line. So let's start from going from left to right here. As you can see the blue line here, the Mackie is actually crossing below the red line, which is a signal line. This indicates a bearish crossover, and, as you can see as soon as it does that for them for sometime in the future from here to here is when the downtrend happens and there's also you can see the momentum in downtrend, and we'll talk about momentum in the second. But as you can see, all I just wanted to mention is that this is a bearish crossover because the Mac D line is crossing below the signal life. Ah, same for this one. So the Mac D line is actually crossing below the signal light. This is the bullish crossover. So here the Mac D line is already below the signal line, and here it's actually crossing above the signal line. So this is a bullish crossover, which means when traders and investors are actually looking at this, this could signal this could signal that by or going long, which means you buy a stock hoping that will go, the price will go up in the future, and you can sell for profits. So this could signal a strong buy here. And the bearish could signal either you can if you already have this equity, um, or stock, you could start selling it, um, so that you don't lose money when it's going down, or it doesn't lose value in your portfolio. Or if you don't have the position at all, you can maybe start shorting that equity or stock or currency. I'm hoping that will go down So then you can buy back here, and you can make some profits. So again, bullish crossover. Um, the Mac D line is crossing above the signal line. You have another one here. You can see that. The Mac, the here is already below the, um, signal line on at this point here. This intersection is that when the Mac is actually crossing above the signal, I So that's a bullish crossover as well. Now I want to talk about the history, Graham, in order to talk about the history. Graham, I drew this black line here. If you look at the exacts axes and I call this the zero line so just follow along with me, this black line here. Now, let's call this the zero line and the numbers here doesn't matter. It doesn't matter if this bar is a one or two or three. Doesn't matter. Just pretend this is our zero line or equilibrium. And ah, here you can see that the hissed a grams or the vertical bars here and read. This is what we call the hissed a gram on the back D And what you the way you can interpret the's is the same way as the Mac T. So, for example, um, let's look at let's let's look at the left. His a gram here So you can tell that right now the hissed a gram, anything that's below anything that's below the zero line. So, for example, this is all these verticals vertical bars on the hissed, a gram or below the zero line. All of these are below. These are all below. These are all below. So these all just indicate a downtrend. Um, and the stock will be good. The stock price will also be going down during this time period. So anything that's the 1st 1st thing, the very easy thing to spot anything below the zero line. This is a period of a downtrend in terms off stock price or equity price or currency price . Ah, another thing, um to note is that when the difference So imagine the, um, Mac T. There's a bullish cross over here as mentioned. So imagine the Mac is now crossing above the signal line. And if you go up, this is basically exactly on the zero line. Now, this is ah, reversal. So previously used to be downtrend. Now, this is a reversal on. We're going, You're starting an uptrend. And look what happens to the bars here. So we start at this intersection here we right at zero, and then as the lines. When we start an uptrend, there's a distance between the Mackey and the signal. So this distance here, as it gets larger, these bars become larger as well. So you see the 1st 4 small, the second and 3rd 1 are almost the same size because, like if you go here, the difference between the two lines of smaller here the delta is a little bit larger. And as you go on the Delta's, they're still very small, increasing by very small amounts of this second and third and fourth bar or very similar in size. And then as the distance increases, the length in these bars also increase. No, you can look at it this way so you can look at these bars in terms of, um ah, the distance. The difference between these The way I look at this, these bars here is that as as ah, when you're starting at the zero line here and as the bars are getting larger in length and they're becoming bigger. This is actually indicating as strength in a Momenta. So over here we had a reversal point where people can. It signals that Okay, we can be ready. And if this is a start of a new uptrend, we can start buying the stock or invest in it. And, um as these are actually getting larger. It's telling us it's just confirmation that the mo mentum of people who the mo mentum of the long or people who are long in the stock or people who are bullish on this dog is just getting, um, stronger. So people actually buying more shares are getting bought potentially by different investors because they believe that this is a reversal point and it's a good value. And this is when we want to actually entered our position and buy this stock. So as these bars get, um, larger, this is a confirmation that the mo mentum is getting stronger now you can say the exact opposite, so when the bars reach at this point, this is the max of where the bars could go. And then, as you can see, the boards are actually getting smaller, so they're actually getting, um, they're decreasing in size. Now, if you look at the Mackie, the slope of these lines or stay still going up so the price is still going up. But what this Mac is saying is that the number of people who are buying the stock is actually now decreasing. So this could be, you know, a potential warning for people who have been buying on this time. That be careful. The momentum is starting to decrease. Even if the stock is going up, the momentum is going down, which is something ah, investors and traders should definitely watch out for. So this is how I look at the history, Graham. And I hope that's kind of helpful. Now the divergence is very hard. Teoh detect. And it's not very It doesn't happen that frequent. Um, So I just grabbed this picture, and I just wanted to, um, highlight. Use this as an example and highlight what divergence will look like. We talked about it on the arse. I Now I want to talk about it on the Mac d example. And this is an example of the berry. This is a bearish example of Maki divergent zil. The um, the bullish example will be exactly the same, but just different is just ill be the exact opposite. So let's go over the bearish example here. So as we can see here, this is the candle steak for ah, whatever stock this is, it doesn't really matter what the tickles take. Her symbol here is, um I'm just using this to illustrate a point on demonstrate Mackey. Divergence. As you can see, that there's this is an uptrend, right? You can see that this is clear and uptrend. The price is just going up day after day. And you can also see that these highs are just higher than the previous size. Over example. This high over here is higher than this high. This high is higher than this high. This high is higher than this high. And if you just draw this line here, you can see that the slope is pointing upwards, so the price is going up. It's an uptrend. The price is going up if you draw the trend line and you can easily detect the slope is a pointed upwards. But if we look at the Mac D and you actually start connecting the highs of the Mackie and draw the slope on the Mac D The Mac is actually going down. So the mumps So what this tells us, and this is very important. The point I'm trying to you guys to take out of this is that the price is going up. But the momentum is going down, and this is a huge signal that in the near future the price might actually start to go down , Which is exactly what happens here, as you can see, like after some time, the prices starting a downtrend. If you if you draw the trend line here, you can see that, um, this is actually a start of a downtrend after we detected this divergence here. So this is Ah, this is just an example on divergence. And if you wanted to talk about the bullish divergence will be the same. It will be, um the price would be going down and, ah, the momentum will be going up. And that's a bullish a, um, divergence. It usually happens when we have a downtrend. Prices going down, mo mentum is going up, which means a lot of people are interested and potentially on I mean it doesn't have to do that. It could potentially be a start of a reversal, and the stock might actually take reverse direction and start an uptrend, and the price might go up. So now that recovered the basics of Mackey And look at some examples. Let's look at some real charts and, ah, identify some of these points. 24. MACD Live Example: Okay, so we're looking at the ah charge for Buoying. Ah, ticker symbol B A. And we're just looking at the candlestick chart for on the one day Ah, time period timeframe here. So each candle represents one day and ah, what I'm going to do is I'm going to start plugging the Mac d so over here again, it's different on every platform and charting tool. But as long as you know what it's called, you can figure out how to add it. So the joining to over using today is investing dot com. And if you just click here, indicator that, um and slash and if you just click on it and in the search box search for Mac D, all you have to do is selected, and as we can see, it does the calculation, and it draws the line for us on the bottom Here. Now what I'm going to do is I'm just going to bring this up a little bit, make that a little bit bigger and the volume a little bit smaller so that we can see more of the screen bhakti on the screen and, ah, let's start talking about it so let's go through some examples. And first of all, let's go with, um over here. So this is a very good example over here, as you can see, So on the top of the price on the bottom, you have Mac D, as we can see here, this line over here, this is a bearish crossover. So you can see that the blue line, which is theme Acti, is crossing below the signal line, which is a 90 m a of Mackey. And as you can see at this point, if I just go exactly above here and I can see like, this is that candle here From this point on, when the crossover happened. So from here to here, it was a downtrend. So this would have been a good place to sold your position if you had any, so that you don't lose more value by the time it comes here. Or you could have actually entered a short position. So you would short the stock here on you would actually buy it back here, and you would the difference you would have made profits over here. It's about 3 48 and over here it's about 3 23 20 So about $28 a share over it's a roughly about two weeks, So you would have made $28 a share in about two weeks. Um, $28 per share. Ah, in roughly two weeks. So that would have been a very good trade. And ah ah, so that's that's the example of a bearish crossover. So now let's look at a bullish one here, so a little bit further in time here. So here you go. There's a good example of a bullish crossover. So the Mac D line, Um, during this time where we were down trending the Mac DeLand is below the signal line on over here. The Mac dealer and actually crosses the, um signal line crosses above the signal line. So this is as we discussed earlier. This is a good buy signal for people who want to go long on the stock. And again, long means that you buy the stock, hoping that the price will go up and sell in the future of with some profits. So you would go along the stock here, and as you can see, if I just come up here and that's on this candle. So starting this day, the next day went down. But as you can see, overall, it started to uptrend. So if you just draw the slope here, So let's go ahead and actually do that. If I just draw, um, right from here, you can see that the the stock went up. So this is just a trendline showing you that trend is actually going up. And you could do the exact same thing for Ah, the Mac t. So that's what we'll do after I finish covering some of these things. But as you can see here, a soon as this crossover happened, which is bullish. So Mac D crosses above signal line. Right at this point, the this was a downtrend, and it was, ah, reversal signal. So people who bought actually, um, ended up profiting here, and he can actually do the prophet yourself. So at this point, it was about, um I don't know, let's say you bought here for ah, 3 35 and then you sold somewhere. Here is 3 83 So about, um, let's say roughly $50 worth of profit, which is really good again. This is a period off, Um, 2 to 3 weeks, maybe a month. So not bad. That's, Ah, $50 or 53 a share. That's a huge, um, gain. Um, even if you have a few shares, even if you have 10 shares, that's $500 which is pretty great. And that's all. You know, if you had them active, you were looking at the Mackie. Um, you would have been able to, um, execute that trait, which was great. So that's a bullish. Recovered the bearish crossover. Um, over here. Recovered the bullish. Now, let's talk about the, um, for example, the hissed a gram. So over here, you can see that the bar. So again, let's pretend, um, the black line I drew in the picture is not here. So let's say that the black line is right here. The zero line so you can see over here, um, that starting. So right now we're looking at this. So let's say this is zero. So this red candle here, which was as we talked on the crossover, um, it was zero and the bars started getting larger, which means people were actually the mo mentum off the downtrend So, as you can see, it was already down trending rate from starting this candle. It was already down training, but from here, this lines are actually becoming negative. So they're below the zero line, right? And then also you can tell that the lines are getting bigger, which means the mo mentum of the downtrend is starting to increase. And then over here, this line is the max Ah is the biggest. It's reached its maximum. Now it's actually starting to get smaller. So when it gets smaller, it means that the, um As you can see, the downtrend is starting to slow down. It's starting to come to an end. So if you actually, um if you look at the history of the lines are actually getting, um, smaller here I look at all these candles, it's not going down anymore. It's cottages going scoring sideways. Um, so that means the downtrend over here was a huge downtrend. And then from this scandal to this scandal, it was just kind of going sideways. It wasn't really going down anymore, right? And ah, over here, we're starting to get smaller. So the momentum of the down trends or less people are actually shorting the stock horse, less people are selling, and then we kind of hang around here for a bit. And then when the reversal on the Mac T happens here now watch what happens. We had the zero line and then the lines are starting to go above the zero line. So again, as I mentioned, anything above you can look at look at that as uptrend. And anything that's below is a downtrend. Um, I mentioned this earlier, so that's one easy way to interpret the lines. And then the other way is like as Did you see the lines getting increasing in size? The mo mentum, the buying momentum above the zero line? The buying momentum is actually getting stronger. And as their decreasing, the momentum is getting, um, weaker. So that's now We covered the hissed a gram, um, other things. There's a couple of other things I wanted to mention and just these air. We did this with the Orestes I. So the same constant supply is ah, other things you can watch out for On the Mac D is the two things. One is the slope and one of one are the one is the highs and the lows. So for the slope again, just like you can do with the charges like we did here. We drew the slow for the price to identify the uptrend. You could do the exact same thing for the, um, Mac D. So as you can see here this high eso This looks like a hill. Right? So this this high here is actually hired than this high. So if I were to draw that here, you can see this slope is actually negative. So and you can see that this is, um this is Ah, negative. Um or sorry, this is Ah, this is telling us that the mo mentum So it is going. The price is going downward, but also the momentum is supporting that factory. So the moment this is still going down. So the momentum is also going down, right? And, ah, if you this this confirms the price going down here as well. So if there's there's the slope of the Mackie that you can actually, um and so there's there's the slope that you can actually confirm, and then also, you can see that there is no, um, diversions here because you can see that the price is going down on the slope is going down , right? And the same thing for the up for the stop going up. So if I drew the line here, um, let's say let's draw the line here. So this slope, the slope of the line, we just drew it's actually going, um, up or one like this is actually going up and you can see the price is also going up. So this is actually supporting that rate. So pay attention to the slope of the, um, Mac the and whether that supports the price because that's the way you can actually detect divergence. So here the soap is going up. The price is going up. There is no divergence. If the price here was going down instead, you could have a possible divergence coming up and, ah, if the same So that's the same thing for the slope going down. So if the smoke was going down, but the price is going up, so kinda you can kind of see it here, depending on what time frame you're looking for, so that this is the stuff that that's actually going down but the price is going up. So this could be an example of a divergence of the Let me draw the ah trendline for this. So if you just go ahead and ah, draw this so you can see the depending on what time frame rate. So this time frame is shorter than this time frame all the way from here to here, Ray, Depending what kind of time frame you're looking at. But if you look here, the prices going up, then one winter is going down. So then you could have a possible divergence and then all this other and boom, the price is just going down. But over here, the Mo mentum is going up. So the slope of the Mac is going up and, um, the, um prices going up. So there's no divergence on again. One thing I want to mention is I use the Mackie like Maki is not really meant for mo mentum , but it could be used for mo mentum. Mackley just really tells you the trend. Is it becoming stronger or is it becoming weaker? So this slope like this tells you the increasing slope is telling you that if there is a start of an uptrend. That uptrend is getting stronger and stronger, meaning more people and more people are jumping in and starting to buy this stock. That's what the Mackie indicates, but you can also interpret that as momentum as well. Outrageous lie Karsay. So that's how I use Mac D. And that's how many people use Bhakti. Um also know, like it just tells you whether the trend is becoming stronger or weaker. So over here it's telling us the trend is actually becoming weaker. And, um so over here we have, like, a downtrend. If we were to look a little bit, here is a weird ah part because we have a little bit of sideways thing going. Um, but, um, yeah, that was this is a good example, um, telling us that the trend is actually getting stronger, which you can clearly see in the chart. Ray, it's starting to go up. And then we're what are we here at 3 35 that we reached the highs of, um 3 88 So that's a huge increase in, you know, 23 weeks. So that confirms our prediction, which is great, and one last thing that I wanted to mention, um, was the highs and lows of Mac T. So just like I mentioned that with the RS, I again he can do the same thing. So let me go ahead and remove these lines here for the slope and the the highs and lows are you can treat them just like we did for support and resistance on the ah charts here could kind of do the same thing. And you can interpret the same thing from the maki. So if I have, um, let's do, like, resistant for So, for example, let me go ahead and, um, going to grab the horizontal line here. So I'm going to There's two highs here rates so I can you can actually go ahead and draw that and let me change the color to red so you can see better. So as we can see here, there's a red line, and you can see that the, um if you draw the slow. First of all from here to here, this is an upward trend, right on the Mac D. Now, the mackie reached the maximum or high off this number here. Right? Whatever. That is, it doesn't matter. This is the maximum high, right? And then it started a downtrend. So the next time it started an uptrend. So when this down trend reversed and it's was trying to come up, you can see the icon ago close to this previous um hi. But then it rejected it and it went even lower. So this is kind of like showing a sign of resistance in umm for the mac d, just like we had for ah, you know, just like we had for our stocks, right? So, like, if I do this again here, if I go ahead and draw the horizontal line here so you can see that the stock was going up , it hit the highs. Here There's a 45 candles that could not break above this line. The stock started to downtrend. It tried again hit the same resistant point. It tried to break above. He couldn't and then again went down Trend, right? Same thing You can treat the same thing as that. So it came up, rejected it, came up, rejected and it just went lower, right? Same thing for support so we could do the same thing Now I'm going to grab the horizontal line and I'm going to. So now we're looking at the bottom of the Mac T. So let's try to connect those. And I'm going to change the color to green just so that we know it's support. Um, so you can see here the laws off the Mackie here, this is the first low. So there's down trending, right? The stock was going down. It hit this point. Now it doesn't matter. Whatever this number is, this is the low. This is the new low. And then it started to uptrend, right? It started to the trend of the Mac. D is starting to go up, right? And then it sort of went sideways. Here it came back down, but then when he came back down Look, look. Look at this. Lower previous little here, write it. Bounced right there. So it was actually support here, whatever that number is. And again, if you look on the right hand side here on the axis, you can see the numbers for Mackey, but I don't really pay attention to the numbers are just pay attention to the support and resistance. So whatever this is This was trying to come down. It couldn't break it. It bounced. So this is a strong support for the Mac D, and then he kind of reverse right. If it went any lower, it would have the price momentum on the downtrend would have continued. And the price would also have gone lower right again. So this is the 1st 1 So it bounced here at this point because this is the first time it's touching that low. We don't really know if it's a supporter, right? Unless we go back. So let's go back and see. So now we go back in time, and as you can see, here it is. So you can see that, actually, it's, um and we move this out of the way. So over here you can see that the Mac deal I'm bounced. Um, previous year, it bounced back again at the exact same spot. Now we're going to Ah, here it. This is the confirmation of this bounce at the same area. This is a confirmation off the bounce of the same area. So then you can say that like, you know, this is good to know because first of all. If you know where it's going to bounce, that could indicate a possible by signal. Or if you're short this stock from here, for example, and you know it's going down. This could be a possible point where you wanna, you know, Ah, close your short position and get your profits. So these are really good things to know. Um, and as you can see here again and try to come But they didn't. This was a strong supporter of the maxi. Didn't even come close. So this is another way, just like the chart you can look at. Um, just like you can look at supporting, resistant on charge. You can look at support and resistance on the Mac D by just drawing the ah trend lines and the horizontal lines for the lows and the highs. And that should also give you an idea of where the Mac D could bounce 25. Bollinger Bands: Another popular indicator is called the Bollinger Bands Indicator, or BB Indicator. Now, um, I and many other investors out there we used the Bollinger bands, um indicator, not necessarily for identifying, buy and sell signals. The BB bands don't provide that kind of information. Um, like our sey and Mak the indicators. But the Bollinger bands still provide some very powerful and useful information when you're looking at the charts. And some of those things are such thing is volatility and looking at average. And the standard deviations Bollinger Band is a statistical, um ah, indicator, as you'll see in a second. So it's made up of three lines or three bands. The middle band is, um, just a simple moving average. Typically the 20 sme Ah, the upper band. If you're familiar with statistics or statistical terms, standard deviation. The upper band is two standard deviations above the middle men. So when you actually, um, you'll see this when we look at the charting tool and the lower band is two standard deviation below the middle band. Now, why do we want to use ah Bollinger bands? Well, as mentioned earlier, Um, one thing. Bollinger Band helps us the indicator helps us with is to identify volatility. And the second thing is because it draws the average, um, and also the upper and lower the upper and lower bands. We can tell that by looking at a stock, we can tell that how far away from the average, whether it's above or below the average it is. Now let's talk about volatilities. So while utility, as you can expect, usually happens due to a major news or event. And, um, when something happens and ah, stock or the equity or currency starts to move, whether that's up or down, um, the Bollinger bands start to expand and the when, whenever you see the Bollinger binds, um, expand. And by expand, I mean, the upper band and the lower band start to move away from each other. And, ah, whenever you see this on the chart, it means this is the start of volatility. And ah, this is when the breaks out happened. So, for example, one of the candles could touch the upper band. Or he could even touch and break or open completely above the upper band, or vice versa. I could just touch the lower band or break the lower band. Um, this is what we refer to as the breakouts. And this is when the volatility is starting to happen. Now, in contrast, when the two lines start to contract, meaning the upper band and the lower bands start to ah, come together and start getting closer together. This is when um this is when we can actually tell by looking at the chart and the Bollinger bands that the volatility is starting to come to an end. I mean, for that time period, um, it means that things were starting to stabilize. Things are not as violent anymore in terms of price action. And this is also known as squeeze in terms of, ah, terminology for Bollinger bands. Another thing Bollinger band can provide is ah, sort of like our Siwei tells us when things are overbought and oversold. Bollinger Band provides the same information. So when the price gets closer to the upper band or even surpasses the upper man, this is indicating to us as technical analysts that the stock or equity is getting overbought. And when the price gets closer to the lower band over its allure ban and surpasses that their breaks at this is tells us that things are starting to get oversold now, as mentioned earlier again, Bollinger bands, ah Bollinger Band indicated, does not provide a buy and sell signal. And ah, what I recommend is you map it on your charge to to try and get information by just looking at it for things like volatility how far away you are from the average. For example, if you want to enter stock and you want to start buying it, are you really high at the moment? Um, if you're around, the upper daddy tells you that you're very high and worry away from the average. Or if, if it's low and it's hitting the lower band, you're very you're much lower than the average. So it gives you this information and also whether something is in a state of being overbought over over salt. Now that we know what Bollinger band is, let's start Ah, taking Ah, let's take a look at some charts in real life examples 26. Bollinger Bands Live Example: Okay, so I have are charting to open. Let's take a look at the, um taker. Simple G or G. Google. So this is the alphabet Class C or Ah, Google G. 00 geez. The ticker symbol. We're looking at the Candlestick chart on ah ah for a daily time frame. And ah, this is what the stock is looking like right now. So let's go ahead. A map. The or ah overlay the ah Bollinger band indicator over here. Let's go out and collect the indicator and let's search for Bollinger man. And as soon as I type INBio it, um, completes it. So let's go ahead and quick that Onda it applies all the defaults and you don't really need to change it. So, um, this is what the Bollinger band looks like. Of course you can hide it or show it, and also you can change the setting here. If you click on the gear icon as you can see the inputs, the length is 20. And that's what we talked about typically is 20 sm May. And then, um if you look here, you can just play around with the colors, um, for the opera band, the middle band and the lower band. And, um also, this is the multiplier is the standard deviation. So as I mentioned, the ah typical default numbers to standard deviation. So now if I just zoom in here, um, this blue area here, that's, um, that you see on the chart. This is the Bollinger Band. The middle one is this is the sm a 20. So this is the middle band. This is the upper band, and this is the lower about the upper band again. You're you don't need to understand the math because you're charting tool or your trading platform or investing platform calculates these for you, and they just draws it for you, which is really nice. You just have to understand what it means and what how to use it or how to read it or how to interpret it. So right now, as you can see, the, um, this upper band here is two standard deviation from the middle, and the lower man is two standard deviations below the, um, middleman. So, again, this is two standard deviation above two standard deviation below this main line here, which is also seen as the average. Um so whenever you're actually want to compare when you're looking at a tip one day like a typical day and you want to see how far it is from the average, you would be comparing it to this red line here. So let's go ahead and look for some examples here. Ah, as you can see, um, over, Let's see, is going to find an example here. So over here, um, this is a good example. Um, where you see things like, um, so the lower band and the opera bent If you look at the openings, they're actually starting to move away from each other, and the distance just gets bigger and bigger. So this is a good starting point of the volatility. So, as you can see, um, things are if you look at the, um, like, this is sort of the stock price, action is going sideways here. There's a little bit of consolidation, and consolation means that you know, the stock is pulling down, going back up a little bit going down, and it's just forming an area of side wade side ways movement until the next thing happens . Whether that's going up or going down or a break out or break down. So, um, here you have this stables. As you can see, um, the upper band and the lower band are very close to each other. And, um, they're not expanding their not contracting. So this is a stable area. This is where there is no volatility or the least amount of volatility. Um, but when you're looking at the middle, um, band here, which is the essay May 20 you can still see the slope is actually pointing upwards. So the overall trend and you can easily see that, right? Like starting here all the way to here. It's an uptrend, so you can see easily. This is an uptrend for this time period. But you can also see the slope of the red line, which is the SM. A 20 is pointing upwards. So that's another information you can get from the Bollinger Band. The trend is heading upward, and also these blue lines here also both of them are heading upwards. So if you look here, the slope here is upwards. So Bollinger Band can also help you with the trend by looking at the slope. No as you can see here, um, again, going back to this point. Here, let me zoom in. You can see that over here. This is the start where the upper band and the lower bands start to move away from each other. Right. So something happened, brought good news, broke out. Um, most likely. Or some company, some something some sort of improvement to the company or the business model or great sales earnings, things like that. Eso that happened. And now the stock is trying to go higher so you can see that the voluntarily starting these are expanding. And if you look at the difference or the delta here between the upper and lower body is getting bigger and bigger. So this is the sort of information you can get from Bollinger Band. Great. And, ah, over here. If you look at this period, um, as you can see, it's starting to come together, right? So it's starting to contract. So the opera band is starting to go closer to a lower band. The lower band is starting to go closer to the, um ah upper band. And you can see the area of consolidation here. So it's starting to go a little bit higher, Lord, a little bit higher until it figures out the next thing he wants to do. So if you see here and here, everything is pretty stable until the next thing here. So it starts to go higher again. No. Another thing you can get away. Um, take away from the Bollinger man is the statistical information. So how far away you are from the average, and actually over here, you can see that there was Ah, there was some sort of bad news here, and the stock actually gapped down. So all the way here, this was 1000. I'm looking at the price on the right hand side. Um, the price close at 1 1287 roughly on the the next day. It opened at 1188 which is a huge difference, right? This is per share the next day. This is what happens when something bad happened. And as you can see, even when it's a downward trend, it still does the same thing. The upper band and the lower band start to move away from each other and the distance between them gets greater and greater until becoming to an area of stability. Um, so the same thing works for bad news and downtrend right now again, the next thing I wanted to mention is getting information about where you are in terms of, ah, average. So looking at this here, um, at 1287 this is actually touching the upper Bollinger back and again. A couple things, as we discussed earlier. This is telling you that the stock is getting Google stock or alphabet stock is getting close to the overbought territory, which is something you should watch out for because overboard usually means a down trend or a possible reversal or a possible downtrend is comic. It doesn't mean it have to because, as you can see here, this candle was the first candle that touched that touched the upper ban. And this scandal was actually green right, and it broke the upper back. It doesn't mean the stock went down, and if you look the next couple candles go red, they didn't really go down on the next two candles were still going up, so it's maintained its uptrend, so don't think that it will definitely do that. It's just ah, signal, right? It tells us that Hey, this is getting overbought. Be careful. And the next day, um, this actually So another thing is telling you that if you look at the middle line here, right, if you look at the middle line and you look at this candle here, this is really far away from the middle line. So the this is really far, and that's another indication that this is not close to the average. So that's another indication that, you know, a possible reversal could becoming because things usually on a typical day, they should be close to the average. Um, And as things stabilized, it forms the new average, so things usually go around here. So if you look at this candle here when things are stable, most of these prices are on the red line or close to the red line. So these are very close to the average. So when you're actually buying the price, Um, let's say you were to enter Google and actually start buying positions were buying shares. Ah, when you're in here within this couple three days, you know you're buying it at a good price because you're very close to the average when you're here and you want to buy the Google stock, um, on shares, you know that you're getting him at a really high price because they're far from the average. Right now, The same thing can be said for the lower back. So, as you can see here, this one is actually touching the lower band, which means that this red candle here, which means that it's below the average. So when things touch the lower band, you first of all, you have to be careful because, well, it says that it could be a possible continuation of a downtrend. As you can see, that's exactly what this is doing. It touched it, and then it's starting to go down, right? It doesn't break the Bollinger band. It just follows this blue lower line here, right? And that the other thing is, this one is now telling us that Hey, um, this is touching the lower Bollinger band. So that means that the stock is ah in the oversold territory, which means a possible op trend is coming again. It doesn't have to do that. And it's exactly the case here. It's not doing that. Because when you see this touching this lower band, it starts to continue the downtrend. It's just it's the start of a downturn. Any continues, that goes up a little bit, continues the downtrend again. So it doesn't have to do that. Just a signal that this is oversold and things can stay in oversold territory for a long time. They don't have to necessarily go back up again. Or if they go back up, they go back up temporarily. For example, of these two green candles, um, they go back up there, no longer oversold to get oversold again Here, Right? No. Ah. One thing about the Bollinger band and the ah about the lower band for Bollinger Band is that, um it tells you that it's exactly the opposite rate, like it's below the average. So if you're confident in a stock, that's, you know, something very popular and blue chips such as Google or Apple or Facebook. Um, when you're actually here, when when you're below, especially below the Bollinger Band. Great, especially below the Bollinger. But you're not even broke it right. There's a gap down here again, and you completely broken. And you actually below the Bollinger band, just tells you that, um, this might be a good price to actually buy. This is discounted at this point, and it's really far away from average because after you know the bad news over and the company fixes the issue, whatever that may be, um, or next time they have very sales, but a revenue better profit, potentially or eventually, this should actually get closer to the average. So whatever this average line is, this will recover back up if things, you know, work out for the better for the company. So if you're buying the stock here, So let's say this was 1036. Um, and you hold the stock, as you can see when it gets closer to the average, which is here. This is 1094. So you're going from 1036 to 1090. Let's say 93. That's about $60 gain per ship just in this period of time, which is about, um, let's say, maybe 5 to 8 days, which is a pretty good game for, you know, this amount of time and ah, that's That's not anything Bollinger band tells you like if this is below, you're getting it at a sale. Now, you just have to be careful, because even if it goes here and it stops here, this is the case in here. But it could continue to go down. So you have to be prepared to average down or, ah, dollar cost average if you still believe in the stock. That's why I mentioned it's probably best to do this with the blue chip stock. Um, and so, yeah, this is this is pretty much Bollinger Band, um, on a hole and you can see it provides a lot of good information. I don't use it for, um, buying and selling signals. When I identify my by point on my sale point, I actually use Bollinger Band to actually confirm those points and then, ah, once again, my reassurance. That's when I go ahead and execute my trade 27. Gaps: in this section, we're going to talk about gaps, what they are and how you can use them and interpret them on the charts that can help with your analysis. So a gap is, ah, security, its securities price when it opens significantly higher or lower from previous the previous day's close, and there can't be any activity in between. So there's a huge, um, avoid or difference between yesterday's ah, candles, clothes and today's candles open. So there has to be a different and what? Ah, that's what the definition of a gap is. And ah, this gaps usually occur due to major news events. So when typically, something gaps up so the price, um open significantly higher tomorrow comfort to today's close. There's usually some sort of positive news or event about that company or currency or whatever security your, um, planning to invest in or trade and, ah, when there's a gap down, there is usually a negative news or event associated with that, and the gaps are very important because they could help you, um, with try to understand the trend, and it could also signal possible trend directions or trend reversals. So here's an example of a gap up. And as you can see, um, this is Ah, let's imagine. This is yesterday's clothes and it was a red camp candles or this was very bearish. Um, and the star closed lower than it opened. And to Morrow or actually today. This was yesterday. So this is two days. Ah, the stock open significantly higher. So imagine, um, this is yesterday's close. So this was $1 it closed at 50 cent. Right? And the next day it opened at $5 so that's a huge difference. And as you can see, as we mentioned earlier, they can't be any trading activities happening here. So there's nothing going on in between. It's just the next day it opens significantly higher, and this is what a gap up it's so this difference here that I drew with the arrow. This is what we call the gap, and this is what we call the gap up. So this usually happens due to a positive event or news about a company. And ah, again, this is yesterday's scandal. This is today's candle, and the difference is what we call the gap. And because this is a bullish pattern, and this is a We call this a gap up. Now this is the reverse. This is what we call the gap down. So yesterday's candle or previous days, candle or even whatever Whatever time frame you're looking at, this is ah, you're just using gave me as an example. So this was yesterday's candle, and as you can see, this is a bullish candle, right? It's green. Um, the stock closed higher than it opened, so everything is good. But, ah, today's scandal, which is the next day? Ah, from yesterday's candle, it opens significantly lower, and this usually happens due to some bad news or bad event about the company. Ah, or whatever anything that affects the security, something bad happened with the security or the sector. You're actually trying to invest in or trait Onda against same thing, right that there's no, um, activity or trading activity happening here. And there's just this void or empty space, and the difference is huge. So Ah, this is what we call the gap again. And this is called a gap down because it happens on a negative Ah, event or news and the stock, um, opens significantly opens and closes significantly lower than yesterday's candle. And ah, again these air someone somewhere definitions here for you. So gap up. This usually happens Ah, on a positive, newer event. And ah, what could Ah, the thing you need to watch out for is the signals these things provide. So they're gap is not a technical indicator. It's just something. It's part of the price action that you can actually see amongst candles on the candlestick chart that could visually help you and guide you towards where the trend is about to head so it could. And again, it doesn't mean it will, or it should is just mean that if you see a gap up, it could help reverse the downward trend. So let's say if things are just going slowly downward and then all the sudden you see a gap up, well, this could be a potentially be a start of an option. It doesn't have to so start can gap up the next day. But then you know that the after it could still continue the downtrend and it could reject that price point. But this is something to watch out. Four. So if something is down trending and there's a gap up. This could be potentially the start of an upward trend. And then if you're already on an upward trend and then you see a gap up, this could signal a continuation of ah, the uptrend you're already in, which is positive news, right? At least for the short term. And this is what a gap down means. So that again gap down happens on a negative news or ah, event, so same thing, but just the opposite. So ah, gap down could help reverse an upward trend. So let's say you're slowly going up and you're in a, you know, bullish uptrend. And then all the sudden, the next day you see a quick gap down so stock open significantly lower Because of bad news , this could signal a potential reversal of the uptrend and the start of a downtrend. And if you're already in a downtrend and then you see another gap down, or if you're just going down and then all the southern, you see another gap down. This could signal that continuation off the same downtrend. There's a couple other terminologies. I want you guys to take away from this now the meanings aren't that important. I don't really care about the terminology. I just wanted to put a here. So in case you hear people talking, talking about them, you know what they mean. But, um, I just wanted to mention these. Ah, the important thing is you understand what a gap is and how to spot them on the charts and try to understand what the trend is when that gap appears and what the security is going to do next. That's the important thing. And you can see all that on the chart. Andi. Ah, these. These are two different kind of There's more that there's There's mawr, different ah, type of gap gaps. I only mention the important ones. So one is called the breakaway breakaway gap. And this gap is when the gap actually helps re reversed the downtrend or current trend, I should say sorry. So, for example, if you having a downtrend and we'll see an example of this in a second, but if you're going to a downtrend and all the southern, you see a gap and then it starts an uptrend, this is what we call a breakaway gap because you're breaking away with the current trend and you're starting and reverse trend, right? So if you're going down and it gaps up and it starts an uptrend of your breaking away from that previous downtrend and the runaway, um, trend happens when you have when you're already in a trend, right? Like run away Gap. Sorry, when the runaway gap happens is when you're already in a trend and in the same direction the gap happens. So if you're in an uptrend and the gap happens, this this indicates that there's a huge amount of activity buying activity, and a lot of people are positive on it, for whatever reason it could be and other news. But you see an unusual above average activity on gaps up again While it's in the uptrend. This is called the runaway. Um, Gap at it could signal that possibly this uptrend will continue, at least for the short term, which is a great sign. It means we can still hold on to the security or a stalker currency you're holding. Ah, you're actually investing it. And here are drawing example to demonstrate these two types. So let's talk about breakaway gap first. So as you can see. Ah, we have a current downtrend. Right? So let's take a look at the left hand sort side. Clearly you have a downtrend candle to just decreasing, and it's just lower lows and lower highs. And ah, you can see that it's down trending. And then over here, this is the reversal point rate. So pay attention to this candle here. First of all, um, you can see that this was one of the, um, reversal candles when we talked about in the previous section. Um, that this is where the candle where people or sellers were trying to push down and they couldn't succeed. And look what happened the next day, right? Andi, I think I believe we call this the ah hammered orgy. And, ah, if I'm not mistaking Onda if you ah, look, there's a gap here, so the difference is not that huge, right? So there's a little bit avoid here low but of space with no trading activity in between. But nonetheless, it's still a gap, Right? So if this was $1 this is $3 there's a $2 difference. So this is still considered a gap and then look what happened. A soon as that the next day it gapped up. All the days to follow started to going higher. And as you can see, this was a downtrend. The gap happened, and now it's starting an uptrend. This is what we call breakaway gap, because there's a trend reversal here it was down trending the gap happened due to whatever news or event and now starting an uptrend. Um and then here's an example of ah, run away gap. So Ah, we gapped up the reverse trend and now we're in an uptrend. And look what happened here. You're still in an uptrend. And then look over here. There's another gap. So look at this huge difference. So this candle, whatever the price is here, look at the candle that opened the next day. This difference is the gap, and it's huge, and it's happening while you are in an uptrend. So you're gapping up on an uptrend, which is a great sign of continuation. As you can see, the stock did continue for the next 567 days. It started to still go higher and higher and higher. Um, and that's this. Is that This is the definition. An example of, um, breakaway gap and run away. Yeah. So now let's take a look at some real charts. 28. Gaps Live Example: There are many ah technical indicators out there that you can use, but we've covered the most important ones that I and many other investors and traders use out there, especially the RS I and Mac D, which provide good signals and also tells you if things are overbought or oversold and how the mo mentum is at any given in time now. Ah, I wanna in this lecture. I want to talk about gaps because gaps are not is not a technical indicator. It's part of your chart and your price movement and price action. But I know many, ah, investors and traders out there. There are a lot of them that like to, ah, trade with the trend or invest with the trend. And gaps are a very good indication or a possible indication off where the, um either near term or long term, at least near term, for sure. Um, trend is heading so their to to things that a stock and do in terms of gaps it could gap up or it could gap down. But the diff by definition gap means that the, you know, due to again due to some news or major event, or some sort of approval or bad earnings. Good earnings. The news could be bad. Then use could be good. So, um, because we really have three directions, right? We have the up direction. In terms of trend, we have the sideways direction, which is really no movement and step stability. And then we have two down, which is really bad, right? So according to you know, due to some of these, um ah, volatility points like bad news or bad earnings or good news or good earnings, Um, the price of the, um given company or a stock or equity or currency can open Ah, significantly hard because the market is not flooded with a lot of demand. And everyone just wants to get in because everyone knows this company did really Well, for example, um, at the moment we're looking at the chart for the company Alphabet taker, simple Google or sorry G or G on a daily chart. And ah, over here, I'm going to start talking about some examples here. So gaps are this is a gap. Onda Gap means that when the, um let's say this is a daily chart, right? So this is yesterday This is today, for example, And the the difference, um, that open and the clothes off the previous day or previous candle does not overlap with the , um, open and close of today's candle Or, you know, the president candle, that whatever that we're looking at the moment and there's a difference between them and that difference is typically huge. Um, and in this example here, this is exactly what we see. Right. Um and this is you know, for example, I'm not exactly sure what happened at this day, but we could just pretend for the sake of argument that Google had really good earnings and company made a lot of money with lot of profits. And now everyone is bullish or positive on the stock Google. And now people want to actually jump in there and, ah, invest with the company because the company is doing pretty well because they just released their earnings and it was great. So you can see here. This is called a gap up. So the open and close off this day. Um, you can see ah is indicated here and open and close off. This day is indicated here. And look at the difference. The difference is just huge. So we're looking at what is the Delta Year 1138 versus 1223. So massive. Right? So if you bought the stock on this day, I know obviously it's not possible to predict the future. But if you were to buy the stock somewhere here, um, on you jumped in or anywhere here, basically, you would have made massive gains just by that earnings report being positive, right? So the idea, Anyways, the idea is here is that this is a gap up. So the stock, um, the next day it gapped up, meaning it opened higher than the close of the previous day. And the difference is a huge difference is not, and it's not overlapping. So as you can see, the open of the next day or the next candle is not overlapping with anything, um, or the rial body or the upper and lower wick of the previous day's candle. Now this is the definition of gap up. You could have the opposite. You can have gap down. So over here, actually, let's Let's look over here. The stock was up training ready can easily see the trend. It's going up very sharply, actually. And then next thing you know Ah, the start closes here. And most likely again. I don't exactly know what happened, but if you look at the news for that day, um, it used can see the gap down. Right. So this day here, the stock opened significantly lower than the periods day which was here. So we're looking at, um the stock closed at 1287 over here, and it opened at 1184. So massive difference here. And, you know, if you were to buy on this day, you would have lost a lot of money if you were to sell. Understate Ray, If you kept your stock, you're fine. You haven't realized any gay losses are a But if you were to sold and you panicked and he sold, then you lost a lot of money. So this is a definition of a gap down now. There are many different gap types out there, and we won't cover them because I don't think they're that important. But there's a couple ones. There's a few things I want you to take away from this. And, um, first of all, um, usually, when there's a gap that indicates the near term, um, trend not the long term, but the near term rate to begin with. And then you'll see as you go on, you'll see if it's also affecting the long term. So what do I mean by that? So right now, the stock was, you know, up trending for a really long time. So if he draw the trend line here, you can see from here. Um, let me just select the tool here. Um, I drew the Sorry about that. I threw the horizontal line. What I want is the trend line. Um, so if I just draw that, you can see that this ah stock was going Ah, there was up trending for a month at their month for a really long time right now, what happened was that, um, the stock actually up to this point here the next day the stock gap down, which is a negative. This is a negative thing for stock and for the trend and for mass psychology. Right? Mass market psychology. Because as soon as the stock some bad news happened the next day. The market thinks that Google is now not worth $1286. It's worth a lot less because of some bad news. So this is a lot of people actually panicking and the market panicking and opening at the significantly lower price right now. Look what happens when when the star cap down, Um, you can see that this was actually, um, the end of the uptrend. And it's a start of, ah, very short downtrend. So now if I just go ahead and ah, draw this trend line here, you can see that this is actually going down right now. It wasn't very long until it started to reverse back up, um, to, ah, reverse back to an uptrend. But it's still this near term is a is a short term down trend rate. So the star gapped down and it's slowly started to go down again. If you look at the overall trend, right, there was another gap down here, so some other thing happened or bad news happened here. There was another gap down, right? And then the stock reached this price, which is about, let's say, um, want out 1036 1037 roughly. And this is a very strong support because, as you can see it, try to break that 1234 days it couldn't. So you can tell that this is an area where many investors think that Google is really good , valued or undervalued as a great price to actually pick it up for and then hence you can see that it bounced. They couldn't break beyond this point. And then it was the start of an uptrend. But what I want you to take away from this is that when there was a gap down, um, and again, this doesn't mean it will always do that. It just means that they just watch out for the gap down as an indicator or a signal. It's not this indicator. It's not a technical indicator, but you can make it, um, an indicator with just by with your eyes just looking at it right. There was a gap down and the near term trend was actually lower, Right? You can do the same thing for, um, gap up and ah, let's see if we can find a gap up here. There you go. There's one here so you can see that. You know, the stock is sort of going low, but of a downtrend here, Right? And for whatever reason, um, but it was good news or some sort of major event that was positive on the company's outlook . You can see that the next day, um, or the next candle. Whatever time frame you're looking at, we're looking at daily. So this is the next day, Um, the news broke out or whatever that was happening. Um, and everyone's outlook of the company changed because now ah, the near term. If you get if you can just follow along, let's draw the trendline year. The near term, Um, trend. This was actually ah, positive. Or it started to go towards an uptrend. Great. So this is an object. So if you look, if I zoom out a little bit more, you can easily see the uptrend. Even though there was downs and highs and downs and highs, the overall direction is high. So if you were, you know, if you bought somewhere here, um, this was around, I don't know, $981. Um, any point here you sold, You've made a lot of money. So this was $981. This is but the T care is 1100 $77. Huge huge difference and huge massive gains that could have been made. Right. If you're a long term investor, you might not really care because you're buying something and you're gonna hold it for years. It's just Ah, this is for more for people who want to swing trade or, um, if they wanna, you know, um, at to their positions and ah or, ah, if they just want to do short term trading from, you know, a few days to a few weeks or a couple of months, this is, ah, good indicator where the near term trend is heading. So this is ah, what I have for, ah, gaps and gap up and ah, gap down. And one other couple other things I wanted to mention is Let's go back to, um, the example we had. I just wanted to, um, tell the guys a little bit about the terminology as well, so that when you hear it, you know what people are talking about. So generally, I just call these gap down and gap up. I'm not really tired to terminology. I just try to look at the chart and try to interpret using you know, just what I know and the technical, um, technical analysis skills that we're learning over the course. But I know some people and some investors have different terminologies for Gap. So for example, this one here, things were, you know, um, if you see something that's up trending or there's a direction to the trend, it could be the reverse. But let's say this is up trending and you see a gap down. Um, most people or most investors called this the breakaway, um, Gap right, breakaway gap. And if you and then when the direction of the trend changes and within that downtrend, now you see another gap down. So this was the first gap town, right? So I just called this gap down or are Ah, breakaway? Um, Gap, Um, the 2nd 1 when the same directions over here, This is what I wanna when you got to pay attention to. This is the second gap down when it started to reverse and downtrend. No. Right. So This is uptrend gap down, start of a downtrend. And now there's a second gap down here. And ah, this is called the Some people call this the continuation gap or the runaway gap. So this is Ah, what I wanted to mention Ah, if you hear those terminologies, that's what people are talking about. And the last thing I wanted to mention is you might hear a lot of people talking about, um, gaps. Or a lot of analysts and investors out there talking about the gaps eventually filled themselves. Which means that when whatever gaps up, at some point, the price will come and ah, fill that void or the difference whether it's gap up or whether it's gap down. And here's an example. So you can see here there was a gap operate. So from here from this day to this day, there was a huge difference, right? But when it gapped up, you can see that the price slowly came down and it filled this difference, and then it started to go back up again. So that's what these analysts and investors are referring to. Ray. Here's another gap up, So things gapped up. There is a small void here. There's a difference, right? And then eventually the stall comes down. Um, there's a bunch of candles coming down here. They fill this gap right so you can see the bottom of this scandal matching the top of that . Gondo fills a gap, and then it goes back up again. Right? So if you look at this is again historical data, So here's a gap down here. Here's another gap, right? And then put it potentially or eventually this goes up again, it feels a little bit of gap goes down and these candles fell the entire gap here. Right? So if you go back in history, this is something um, people talk about based on historical data and historical reasons, that gaps always, ah, 10 or most of the time when what majority of the time tend to fill themselves 29. Triangles: all right, in this section, I like to cover, um, some of the technical patterns and you may have heard of, ah, many different patterns out there and how to draw them. For example, Double, top, double bottom, triple toe, a triple bottom head and shoulders Coppin handle different kind of penance flags and so on . Now, personally, I don't really use these patterns. And, um, I'm a firm believer that if you really understand the, um, concepts of trend lines and how to draw them and also supported resistance and how to identify support them resistance on the candlestick charts or different kind of charts then , um, I think you pretty much have all you need because, um, I mean, anyways, all these patterns out there are ah, really formed based on the idea of trend lines and support and resistance. So I don't really use these patterns myself. I just pay attention to the chart and, ah, you know, volume, which will talk about global later and also, um, supporting resistance, how to identify those how to draw a trend lines. And, um, that really helps you with your entry entries and exits. Um, and I think that's really all you need. You don't need to understand all these different. There's probably many, many out there that we didn't even mention. So, um, that those are my thoughts on it. And, Ah, in this section, I like to cover, um, one of the technical patterns that, um again, I don't necessarily use, but I feel like I do try to identify them myself and those air triangles. And this is, um, triangles give you an idea from a long term perspectives. If you're looking at a weekly charter, Ah, daily chart. It takes a law a lot of, ah, days or weeks for these triangles to form. So when you draw the trend lines, I'll give you an idea of long term where this equity or security is actually heading. And ah, it could give you enough time to get ready in case you were planning to execute a trade. And the other thing I like about triangles is there purely formed on the idea of trend lines and support and resistance. So let's take a look now, Ah, triangles or continuation patterns. So when you have your breakouts and breakdowns, um, they will continue in that trends of your break out and there's, ah, start of an uptrend. They'll continue on if you have a down trend. Will continue will cover some of the examples later. Um, in this lecture and they're triangles are also identified by drawing two trend lines, and they're three different type of or three main categories or types of triangles. One of them is called symmetrical. The other one is ascending and the other one is descending. No. Ah, for symmetrical triangles, they're consistent of the falling upper trendline. So that's what represents your resistance. And then they have a rising lord trendline, which is your support. Um, And then, um, the price action happens in between. So the prices bounces between these two lines that are converging, and then until you have your ah, breakout moment and again as I mentioned, one of the reasons are like triangles is because, um, it takes a long time to form Ah, for long term investors. So that's a good thing. And also, you can get ready. I'll give you enough time and indication. So if you miss the first, you know by ah signal, um, then there's more to come. So there's no reason to rush in case you're trying to executor trait and then for symmetrical triangles, they could be bullish or bearish pattern and that will cover them in the next light. So here we have the symmetrical triangle. This is a basic symmetrical triangle. So, as you can see, as mentioned previously, it has the, um Ah, it has a falling trend line here, which is this is your, ah, resistance. So this is your up and trendline, and as you can see, it's falling. Ah, and this is your low interest lower trendline, which is your support, which is rising now the thing you know, the thing again, the thing to, um focus on here is your resistant and support. So as you can see, your resistant here is getting lower and lower, which is not really a good thing, because if the previous resistant was, let's say this is $10 this high is lower than this high. So this is this. Could be $8 were using numbers were examples and this high could be $5 for example, so the highs are actually decreasing, so the resistance is getting tighter and tighter. But then, if you look at the lower trend line. The support is actually getting stronger. Because, let's say if this was $2 at this low is actually higher than this low. So this could be three or $4. This could be $5. This could be $6. So, as you can see, the support is actually, um, in increasing here. And, um so as you can see, one of the things I mentioned earlier about, um, triangles, Let's say, um, the start actually goes up, so it has a sharp It goes up very sharply. As you can see here within three days or four days, it goes up. Um, does that mean that you should buy the entered? The stock here are by the stock here? No, because you're approaching your resistance. So this is actually the worst time to enter the stock, and we'll talk about entries and exits of the later section and lecture. But this is a good time to actually point them up, because this is actually the worst time to buy because you missed missed this initial move up. So this is the place you should not be buying it, right? Um and then this dog goes down Now, when it comes closer to the support when you draw the trend line here, this is your, ah, lower trend line, and it's acting as a support. Is this a good time to enter trait? Yes, this could be and you need to wait for confirmation. So you need to make sure that this trend line is actually not broken because if it breaks, it could just continue to go down. Right? If this support is broken, it can just continue to go down. But as you can see here, this is an example. Line I drawing. I imagine this is a candlestick chart. So as you can see, the support held and the stock goes back up. So somewhere here, if you're planning to go enter the stock, this would be a good time to actually buy right as you're getting closer to the resistance is a good time to buy. No, but it might be a good time to actually exit to the, um, your trade. So sell the things you bought here at a higher price and take the difference, which is your profit, right? And then it goes down again up again, down again, up again. And this is another thing. Um, some people call this consolidation. So when ah, you know, when its stock has or equity or four X actually has a huge run up for huge run down, it's going to pull back a little bit, right? It's actually trying to consolidate and stabilize. So as you can see, it goes up, it goes down a bit low, but higher level or so, the highs and lows are getting smaller and smaller, and they're getting very compressed within this, um, symmetrical triangle. And ah, so here's the point I want to bring your attention to This is the breakout point. So once the ah breakout point happens, this is where you can start getting an ideas if it starts breaking, um, this trend line the upper resistant line. You can expect this equity or stock to actually continue the option and go higher and higher. Now, how much can it go higher? Well, in theory, there's no guarantees. I mean, in real life, there's no guarantees that how much you could go higher. But in theory, uhm, if you look at this height here, most investors and technical analysts believe in that. If you look at the initial move, so let's say this triangle started forming from this point. So if you take this point here and go all the way up, this is your height. So imagine this. Is that your height? Um so in theory, what technical analysts believe in that from your breakout point? Um, when you add the height, this is how much Ah, the equity could actually move up. So, for example, let's use some example number. So let's say the height from here to here is $5. Now, let's say the stock or the four X or whatever you're looking at crypto um, this, um, let's say at this point when it breaks out of the triangle is actually at $2. So if the height is five and the breakout is that to you, add to, um, to five and then that means that this is in theory, the star can go up to $7 right? But then again, this is in theory, there's no guarantees of what the stock will do after it breaks out, because you could go up and it will go down, and then it could go up to seven or even higher later down the road. So that's why I didn't really draw any numbers here or any heights. But I just wanted to let you know what technical analysts think and believe. But the important thing is you just need to watch out for breakout points because your breakout point could potentially be a good, um, entry point if you weren't on shore or if you didn't get a chance to enter the stock or equity within this trying. Also, breakout is good, right? This would be a good, um, starting Ah, every good place to enter the stock or start your position if you were to going to buy slowly. Now, with symmetrical triangles, you can also have, um ah break down so it doesn't necessarily start a bullish pattern. It could be a bearish pattern. So again, you got your operate trendline and lower trend line. But at the end here, instead of going up A so you can see the stock here is actually broke down. So it broke down on the support line, which is a bearish indicated that the stock will continue to go down again. How much will go down. Same theory. You take the height and you add it to the point here. And then that's how much it will go down. That's theory. There are no guarantees, but one thing you can expect is that the star can actually, um will continue to go down. So this breakdown point could be a potential entry for you if you were planning to short the stock and make some money when it goes down and, ah, the next triangle is ascending triangle. So this one is Ah, In theory, it's a bullish pattern triangle. So again we draw these by connecting the trend line. So as you can see, the upper trend line is just a flat trendline. And there's a lot of information hidden in this because one thing I want to mention is that , as you can see, a flat trend line means that the resistant is not changing. So this is a good sign because, um, if you actually let's go back, one slide and look at the symmetrical triangle. The resistant here is getting worse, so it is becoming less and less. I mean less in terms of dollar amount, which is actually really bad, because if this was five, your next resistant is going to become $3. So it's actually decreasing, which is a really bad sign. Um, but with ascending, the resistance is staying the same. So if this was $3 this is also $3. This is also $3 right? It's staying the same. So that's good news. That's good. Sign for your upper trendline. No, when you're going Ah, if you look at your ah lord trendline, which is acting as your support, this is actually ah, increasing. So if you look at the support here, this this low here is actually hard. And that though this low is hard and yellow and this low is hard and a low, so your support is actually increasing, which means it's getting stronger. These are all the hidden information. Why? Just trying drawing this trend line and just identifying the support and looking at the trend line and identifying that Hey, my support is actually getting stronger and stronger and stronger again. Is this a good time to enter the stock or enter your position and buy stock? Probably not. Is this a good point? Probably. Yes, because um, if the support held, you know that it will continue to go on, and when it approaches the resistance, it could break out at this point. Or it will probably bounds and resist at this point and then continue to go down until it reaches the support, right? And then, as you can see, this is a bullish pattern. So when you if you break this, resist in whatever this line is, if you break out, this is going to continue the uptrend. And that's why it's a bullish pattern again. How much you can go up for all triangles. The idea is the same. You just take the height from here and you added to the breaking point. There are no guarantees. That's why I don't have them in the slide. The important thing is to understand what a breakout is on a ascending triangle, so that if you were to actually start your position or enter the stock or buy the stock and expect that they will continue to go up so you can sell for a profit, you know, down the road. Now this is a descending triangle and ah, this is a bearish pattern. So um, it's sort of like the reverse of the ascending triangle. So as you can see the Lord trendline, which is our support, um, it stays the same. So this stays the same. Um, which is, actually, you know, good. It's not a bad thing. So our support is actually confirming that this line here, So if you the first time, you'll never know. Um ah. And then the second time you can confirm that. Hey, because of this guy, the second time is the confirmation that this is a support, and it just continues to stay along this line, so it's not changing. But if you look at the upper trend line, which is a resistant is actually getting worse. So it's actually ah falling, and the values are becoming less and less, which is a bad sign. And this is a bearish pattern. So I want to bring your attention to the breakdown part. So at some point, and it doesn't mean that they will do it near the end of the triangle, right? It could happen here like you could even happen here, or it could happen here. It could just break down. So the idea is as you're monitoring as you. When you draw your trend lines, you'll draw them into the future. Ah, when the actual candles haven't even been formed yet and you just save that and you monitor it right, and then when it comes to break down. So this is a good point to either exit your position. If you were thinking that the stock would go up or you started, you can start Ah, short selling the stock, which means you sell the stock here and you buy back here. And the difference is your profit. Right? So this is the again. This is the breakdown. So this is what the most important thing about the descending triangle and ah, that's all they have to say for this. Now let's look at some ah riel charts and try to identify some of these things 30. Triangles Live Example: okay, in this lecture, I want us to just, um, take a look at some livestocks and see if we can find some triangles together. Now, identifying triangles isn't very easy on charts. That's why when you guys who just practice and try to identify different type of triangles recovered in the previous lecture on different time frames so it could be hourly, daily, weekly monthly whatever. Just practice, because the more you practice, the faster and easier become, too. Just detect these things on the chart by just looking at him with a few seconds on drawing those trend lines and saving them in your charting tools or trading platform so you can always continue to mourning for them. Now I have are charting tool up. So, um, let's take a look at, um, let's take a look at Apple. So let's see what Apple's been doing in the past few days. Um, and let's just work together to try and see if we can identify some triangles. Okay, so I'm just going to zoom in a bit here. There we go. So I think this is I think I've identified a ascending triangle. So what? I'm going to do is on the left hand side. I'm going to grab my trendline tools, So I've identified some resistance years. As you can see, there's some resistance here, but as you can see, the resistant is not changing. So, um and then I'm going to This is our upper trend line. And then this is our lower trend lines. I'm going to start drawing are lower trendline. There we go. So I'm just connecting all the bottom of all the are ah, Candlestick charts, and I'm connecting all the upper ones. So now this is not perfect, but as you can see, um, if I zoom in a little, but you can see that this is, um, actually an ascending triangle. So you look at the resistant these three candles here, the resistant is the same. And then, um, here it briefly tries to break above that buddy couldn't succeed. So if he actually, um zoom men, um, to this triangle, you can see that this day, when I tried to break above the triangle, it actually closed below it. So and here a opened above it and it closed below it. And over here, you can see that these resistance. Just around the same line is rejecting it, and it's going down. Um, so as you can see, the resistance is actually staying the same from, um and I'm only talking about this time period, right? Ah, what is this? This is starting from May all the way to, um this is September, so May to September. And this is what I was mentioning earlier. It takes a while for these triangles to form. And, um, from May to September, it's formed this ascending triangle, and you can clearly see that I just connect that thea, um resistant lines here and I'm connected the, um support line or ah, lower trend line, which is rising. So as you can see here now, let's look at the support. So initial support was here where just was going down, and then it's reversed. And so this is our initial support. As you can see, um, I drew this line connecting all these things together. And then over here we see confirmation of support, confirmation off support. It was never able to break below that great. And then here's what I want to bring your attention to. So this over here is the breakout point. So on this day with this candle, this green candle is when it broke out of the, um ah, the out of the ascending triangle pattern. And it just continued to stay above this resistant line. So this resistant line now becomes the new support line, as against he never been back down again, right? So he kind of went sideways and help that support and then all the Southern boom, it just went up. You could see how, what a sharp turn that is, Right. So that's very important to actually understand and grasp. So this wasn't a very good example of the ascending triangle, Um, and then the breakout. So here the breakout is not as you can see, it's not instantly going up, right? As soon as it breaks out, it just doesn't go sharply up. You can see just moving sideways where they it's for a few days, and then it moves up up pretty quickly and again. I'm looking at that. If you look at the beginning of this, like the height here, um, you know, this is, um if you look at the right hand side, this is 1 72 over here. It's 2 12 So whatever this height is, if you add that to the breakout point, Um, in theory, this is how much will go up. Right? So this is an example of, um, Ascending triangle. So let's take a look at some other stocks. So I'm just gonna delete these. Um, let's take a look at Microsoft, see if you can find anything in Microsoft. Okay? Microsoft. Um, yeah, that's a little bit. It's sort of similar. So as you can see here, um, you can see the resistance is not changing. Right? So let me grab the trend line here, zoom in a bet on, let me draw these things. So let me go ahead and do that. And then, um, if he grabbed this thing here sort of the same thing, right? Like, um, another ascending triangle. The resistant is around this area, which is about let's look at the price is about 1 40 80 Um, and then on this day, it actually, um broke out. Right? So it actually broke out of the triangle, and it just remained above that triangle. So, in theory, Microsoft should also go out and height, so it has a lot of room to grow, um, and go up. But we know we never know what is actually going to do. Right? Um, let's take a look at, um say take a look at the Ali Baba, its ticker symbol Baba. Okay, so in the alley, Bob. Okay, this is good. As we can see, this is more of, um, symmetrical triangle. So let me grab this from here. So let's connect all the, um ah, the highs on the top. And then let's connect all the laws on the bottom here. And this is our, um, triangle. Right? So as you can see, the price goes down. It goes up a little bit and doesn't necessarily reach the resistant right. This is what I mean. Don't expect it to always go on. Hit that. Don't expect it to always go down so it could do. There's no guarantees. Right? But you can see is it is compressed getting compressed within consolidating within this symmetrical triangle. Right? So this is a symmetrical triangle goes down, it goes up Ah bounces on the support, goes up, goes on alot bed ah, gets rejected on the resistance and goes up goes down. And here's the important part. This is the breakout, right? This is the breakout. And as you can see, no. Now, if it broke out, it just continues to go up. This is a continuation pattern. So, um, we were able to easily detect, you know, three different triangles on three different charts again. Just wanna mention that the best way to actually identify these things, it's just practice. So I just heard you guys to continue in practice on your own time and try to identify these patterns. These are very good patterns because, um, you know, again, as you can see, like, let's take a look at this one. This one was from May, um on the breakout was actually end of October. So a lot of time to monitor a lot of time. You know, these are good for long term invest investors is not really for day traders because, you know, you have to make your decisions within seconds or minutes. Here you have lots and lots of time months to actually decide whether you want toe, you know, executed trade or not based on the pattern. Right? So I highly recommend you guys practice on your own and also definitely try and different time frame. So we were just are examples were on daily try to do on a weekly try to do with an hourly and try to do it on monthly and then see what you guys can identify. 31. Volume: in this lecture, we're gonna talk about thea volume indicator now. Ah, the volume indicators. Very simple. Um, basic indicator. But, um, it's the it's very powerful, and it's most often the, um indicated that most people overlook and don't really pay attention to and, um, he can definitely help you. Um, I highly recommend using the volume indicator. Um, and also so do many investors and traders out there because he can help you with many things such as, um, identifying the strength in a given trend or movement, all the sudden movements or whether you're trying to confirm your trade or your, um, breakouts or your breakdowns. So it does serve as sort of like a confirmation in your patterns as well. So let's take a look at what it is and how it can be used. So volume? Ah, the definition of volume is just the number of shares being bought or sold, given a period of time for a given security. So, um, the number of shares are basically being exchanged between traders. So when a company goes public and start selling their shares on the stock market on a typical day or average day, Um no one is actually introducing or reducing shares from the market. There's just the pool of shares. Um, for example, that's a company. A has one million shares out there, and then people just buy and sell shares. Um, out of the pool of this one million shares outstanding shares on dumb. The transaction is just between the buyers and the sellers. So every time you're actually buying a share, your buying from someone who's actually selling and every time you're selling someone else's buying your share. So the shares were just being exchanged within a pool. Um, and again, as mentioned, this is given for a period of time. So the transactions, the by and cells can happen within any time frame. So within a minute, within a second within a month, so you can look at the volume from, you know, ah, in a given time period on DA, the shares get exchange between traders and every transaction. So, as we mentioned, every buy and sell accounts toward the volume. So now when ah, there's strong buying volume. This is a good sign, a bullish sign so you'll see a green bar when we actually look at the indicator. And when there's strong selling volume, you'll see a red bar. Um, as we'll see shortly. This indicates book berry Sign, um, where you'll see very high red bars in the volume indicator. So one of the things that volume can help us understand when analyzing the charges how strong were significant? That move is so this is determined by looking at the buying and selling volume. So whenever there's good news or good event, something good happens. You know, in a certain sector or company or security or for X or crypto, Um, you'll see very high buying volume. Um, and whenever there is, you know, bad news, then you'll see a very high selling volume because everyone's trying to either get rid of their position and dumped the stock so that they they don't lose any more money that they already have and cut their losses. Or this is the time where actually, people start short selling this stuff to make profit, knowing that, um, guessing that in the near future they'll continue to go down on an average day, the volume shouldn't be very high. Um, it's just a typical day, So the average volume usually average volume is the last 30 days, so it scalp calculated the average is calculated over the last 30 days. And, um, that's sort of like a rule of thumb for average. Um, and on a typical day when there's no good news or bad news, the volume should be around the average or under low site. So another thing the volume indicator can help you is with your trades or pattern confirmation. So, for example, um, in one of our previous lectures, we talked about triangles, right? Um, and triangles have breakouts and breakdowns, or you have supports and resistance, or whenever you're trying to break above the resistant. That's sort of another breakout pattern. Or if it's trying to break down below a support pattern, that's another break breakdown pattern, right? So, um, the volume can actually help you with confirming these patterns. So whenever you have a breakout or breakdown, for example, given, you know in a, um, triangle pattern or any other technical patterns that you'll hear off or, um, you know this volume should be very high if it's very high. This is a good signal that the actual breakout is not false. It's it's a true breakout or it's a true breakdown, and that could help you. It's sort of like its secondary, um, guarantee that you can go ahead with your trade. Um, and also, you will see very high volume around support a resistant line. So this is, you know, if you see a break out near the support or a breakdown, um, sorry. Break down your support or break out the resistant You'll, um, usually, if it's a true breakout, um, you will accompany with very high volume on the The indicator itself is just a very simple bar graph, so it's just a bar graph. You'll see bar lines, um, and they're just green and bread. And then the green is indicating the buying volume, and the red is indicating the selling volume on the height in the bars. Just simply dictate how strong or how much, Um, visually, by looking at these barging and tell that how strong that buying or selling volume based. So, for example, on a day where, um, there's, ah, you know, a good news comes out on, um, the security makes a huge move upwards, and there's an uptrend. You'll see a very large green bar. And, ah, something by its first. Also, if you see, um, you know, bad news, very bad news that there's a lot of pressure on the company. You'll see very big red bars on the volume indicator indicating a lot of shares are being dumped or sold at this time or within the time frame. No volume. Another thing. Ah, that volume can help you with just psychology. So it can show you that there is a rising interest, right? So if a lot of if, you know, if a company is interesting and a lot of people want to invest in it thinking that the price will go up in the future because the company's being really good and has very good earnings Well, um, you'll see over time that the volume will increase right, And this shows the markets mass markets, um, rising interest in that company. And ah, also, when you have ah price increasing and volume increasing, this is Ah ah, sort of like a signal or ah, you know, pattern that it's a possible point of continuation. So, you know, if if the stock is ah starting an uptrend and you see that the prices increasing, but also the volume is increasing alongside it. This is a really good sign because it's showing that people are still interested. Lot of people are buying into the stocks are most likely within the near future. It'll still continue to go up. No, if you see the price increasing here is another very important fact if you see the price increasing, but the volume is actually decreasing. This is showing that, um, it's it might be starting to get exhausted. So this is actually representing markets falling interest. So people are not as interested that they used to be. So the prices slightly going up. But the volume? It's not as what it as high as it used to be, and it's slowly starting to decrease. So this is a very important, um, thing to grasp, because this could signal a possible point of reversal. So it could indicate that pretty soon since people are no longer interested in buying the price can really push any higher. So this could, you know, signal potential, um, reversal or start of a downtrend. So some of the key points I want to highlight in this lecture is that always watch out for high volumes around. Break out some breakdowns. So again, as mentioned when you have your technical patterns, when you draw your trend lines, I look a supportive resistant whenever you actually, if you're can't really tell whether you know your pattern has complete or whether the price action has broke out, you know, depending on what kind of trendline you draw or what kind of pattern you have in mind. Always look at the volume because volume is usually really high, close to the break out or break out patterns. Um, same goes with Portland resistance. So whenever you're actually, you know, if the stock is actually or securities actually up trending and it's getting close to ah, resistance, ah, line or resistance point that you previously have identified, you should see you will see some bread volume around that area. Um, and this is a good indication that it might not be able to break that resistant and start a downtrend or slowly pulled back a little bit. Um, same thing goes for support. So if something is down training and it's getting closer to the support area, um, if you know historically, ifit's going to keep and bounce that that support level, you should see some high green volume or above, Let's say, above average, not necessarily double or triple, but anything that's a little bit on average or above average. You'll see the green volume around the support indicating that this might be a good price that people will buy into so that you know the stock will actually start to go up or bounce from that support line. And another thing is gaffes. So as we looked at gaps every time you have a gap, usually the, um, you know, if it's gap up, you have a very high green volume with shows like the markets interest, Um, based on the good news in that sector or company, or security or crypto. So you'll see very high, um, green volumes, usually around gaps. So that's one thing to look for. Um, so the reverse is true if you have a gap down, so you'll see very high red volume bars on the volume indicator for the Gap downs. And another nice thing is that, um, volume can also help you identify false breakouts. So you know if something is actually, for example, if you draw your support line or resistant line and you know one day it's getting close to the let's say, the stock is up trending and it's getting close to the resistant line and for a moment, the price action or the candle breaks above the resistance, right, But it breaks above the resistant with very, very low volume. This could be a potential, um, signal that this is actually a false breakout and the stock will not go any higher than the resistance, even if the candle has closed above it. So that's another thing. Eso. Same thing is true for the patterns. If you see a triangle pattern and you see you know candle has broke above your triangle pattern that you've drawn, whether it's symmetrical or ascending, Um, then you make sure you're looking at volume because if it's on low volume, most likely it means that this is a false breakout, and it will not complete your pattern or it will not be as you expected. So now that we know a lot about volume and we've learned what it is and how to use that Leslie, take a look at some charts 32. Volume Live Example: Okay, so in this lecture, like to, um, use a really life chart to go over some of the points about volume and some of the things we can actually, um, look for that volume indicator can help us with when analyzing our charts. So I have my charting to loaded here. I'm looking at Alibaba, ticker symbol Baba, and we're looking at a candlestick chart on a one day timeframe. So by default, whenever you load your platform or charting to usually the volume indicators already plotted and that's the thing you see on the bottom here, if it's not, it's easy. You just have toe quickly figure out how to add it. In my case here, you're just going to indicator. You search for volume. Um, and then there you go. You can just go ahead and add it. And if you're using a platform, will probably be, you know, you can add a study called volume. Um, and it will be very easy to figure out. But most of the time, as I mentioned, volume indicator is being plotted by default, and you don't really have to change any of the defaults or anything like that. You can just use it as it comes. Um, so it should be good. And ah, one thing I like Teoh mention is that it's a very simple indicator. As you can see, it's just a bunch of bars, green and red bars with different heights. Um, and over here on the right hand side, the Y axis shows you, um, the number of shares being traded. So if I just go ahead and zoom in a little bit, you can see that on this day there was a very big selling pressure. So lot off shares were being sold for this company. Um, and you can see it's a very big bar here. The height is very huge. So if I just hover over it, you can see the actual number on the right hand side here. So just follow along with me. It looks like, and this is a rough number. It looks like there were about 44.194 million shares were traded that day, and, ah, because it's red. It doesn't mean that no one bought the stock were invested into the stock that they it just means that the selling pressure was a lot higher than buying pressure. So a lot more shares were sold than they were actually bought. That's why you see the red red bar here and as mentioned, that the height also represents TheStreet Inc tha and the pressure. So the heart, the bar obviously means the more shares that were exchanged or ah, within a transaction on the red means that most of those shares were sold. So that sort of gives you on idea about this strength. Um, off them move. Ah, going down as well. So, um, those are some of the basic things here on the bar. So you can just hover over whatever, um, lines. And you can see the actual number of shares on the right hand side and ah, Other than that, there's no much really to it is very simple, yet it's a very powerful indicator. So one thing, um, I'm going to do is, um I want to explain some concepts here. So, for example, let's zoom in in this area, OK, so you can see in this, um, area here in this about this is about 10 days worth of ah, trading or data here, and you can see Ah, the prices actually going sideways, right? It's not really going up. It's not really going down. It's just trading sideways. So it is maintaining that small channel there. And ah, there's no much movement. So, um, one thing we can do is that let's, for example, in this lecture, let's treat this as the average volume because it's not really going high. It's not really going down right now. If you follow along here and if you come down here, you can see the volume the boards air very similar. There's green and red bars, but the boards are very similar in terms of height. Which makes sense, because if there's no good news or bad news, the trading volume should be about average. Right. So, um, what I'm going to do is just like any other indicator lets I can actually increase the size here. Um, but just like any other indicator or ah, are actual main charge. Just like we can draw trend lines for these, we can do the same thing here, So I'm gonna take this area and I'm going to draw a line here. So I'm going to grab um actually, what? I'm going to do is I'm going to do a horizontal line and I'm just going Teoh, go ahead and just try to find the point where they're all close to each other's over here. And it's a blue line, so you guys can't really see. So what I'm going to do is I'm going to select this line and up top here. I'm going to make it black in color. And also, I'm going to increase the line ah, size or with so that it's more clear to see. There you go. So now you can see this, right? So the reason I'm doing this is I want to say that let's treat this black line as, ah, average volume. Right. So this is our This is our average volume. Eso anything below this is lower than average, and anything above this is higher than average volume. So we need this. We can use this as ah, reference so that we can actually start talking about some other things. Right? So let's start looking at the chart here. So, um, let's go ahead and look at, um so over here. Right. So we do have ah, over here as you can see, um, the stock was actually was a red day, so the price went down. And as you can see, this is the bar. So let me just zoom in a little bit more. We're talking about this scandal here, so you can see this candle is a lot higher than the average. So it is above average volume. But look what happened the next day when this stock actually gap down. Um, look at the volume here. This volume is huge. So it was even higher than the ah day before. So there was two gap downs here, right? So look at the first gap down. So over here, the volume is still above the normal about the average volume. Right? So the next day it gapped down. Um, it's It's a low, but higher than the day before. And then when it gapped down the next day, you can see this candle is bigger and also look at the volume. So the candle in sizes bigger. Um, so the you know, the value of the stock has dropped dramatically compared to the previous red candles. Right? That really body of the candle is less. But also the volume is a lot harder than the previous day's red when it gapped down the last two times. So this is a good indicated that the, um this is like there's something seriously going on or something really bad is going on with the stock or security, and it can signal that it will continue to go down. So if you wanted to cut your losses, this is the point you would actually sell. Or if you're short selling the stock, this would be a good entry point to actually enter, um, knowing that the stock will go down and you can buy back at a lower price and the difference will be your profit, right? So, as you can see, that's exactly what happens. A very high red volume again. Remember, the black line is our reference of average. So look how, um, it's almost tripled the size. If you look at this, um, it's much higher than the average way above the average with the high selling pressure. And as you can see, exactly what we expected would happen happened. So the stock actually continuously went down for days to come until they actually reverse back. So this is one example on volume and Gap and how he can confirm the pattern continuation. Here, Um, here's the Here's the reverse. So you can see that, um, this dog, after it was actually down trending it found some support around this area, which let's take a look at the price on the right hand side, it's about 1 48 97 around 1 48 97 Found some support and started to go up. Now look a here. So this green candle is above hire. Um, average volume. So this is a good sort of indication that this is near the support area, right? Um and as you can see, that as I mentioned in my previous lecture near support areas, um, the ah ah, the volume is actually high, so you can see these two green candles, um, and all the red candles and the green candles. These Let's pay attention to these green candles. They're much higher than the actual average. Their way above the black line. Right. So that was one of the confirmations that the support is actually holding because the volume is confirming our hypothesis. Right. So then, ah, if you look here um, the stock. The rial body is, ah, sort of big for the green day, right? And the stock is a little bit above average. But the next day, um, the stock gapped up and at a much higher volume. So the volume on this day was 35.45 million. On this day, it was 15 million. So, um, it's actually more than double the volume, so that's a really good sign. And, um, that's a good confirmation that this uptrend will continue to, um, go on for the near future. And that's exactly what happened. Right? So the stock was when a gap down the opening price was 1 62 And over the next 58 10 days, it went as high as 1 75 So it did continue on. Right? So that's an example of a gap up. And, um, another thing we can look out. Let's see. Um, Okay. So over here, one other thing that I can spot on this short very quickly by looking at it is Ah, over here, we can see that, um, like, there was a downtrend at this point, right? And then the stock, the price action just started to There's a reversal here. So, um around What's this 1 30 54? There was some support found so investors really like Ah, this stock at this price. So they started buying in and there's a reversal. They found some support in the stock reversing, and it started an uptrend, Right, So started in an uptrend. Ah, but let's look at the volume. So, um, when its source an option, you can see that the volume here is actually pretty high, which is a really good sign because it's signaling, as previously mentioned, that our uptrend will continue, which is exactly what it did, right? So this is a good indication if you found the support and you bought around this area and it continued, um, over here, seeing this green candle is a really good sign because it means that you don't have to sell yet. It will continue to go on right again. It doesn't mean it will absolutely do that, but it's a good in theory, it's a confirmation that it will. And as you can see, it did continue on right. But they look what happens. So this candle is huge, right? We're looking at 36.238 million on the right hand side. So this is a huge candle, but they look at the look at this one here. So after a few days, after about 10 days, um, there's a green candle here, which is above the average, but then it's much lower than this candle reprieves that looked at. So this was around 36.58 million. This one is 22.649 million. Right. So, um, this is a sign that the interest is starting to cool off, and people are not enthusiastic about this stock anymore, right? The price is still going up, but the volume is going down, right? And then look again. So if you look at these other green candles, these green candles are actually lower than this one, right? So you can see that the prices actually going sideways. And it stopped going making a huge move up. It's just going sideways, right? And this Lords, as you can see, this is high. This is a lower high. This high is actually lower than this one. So what we can do is actually in order to, um, show this a little bit hard. I'm just gonna draw a trendline and red. So this is one right. Um, let me increase the whip here. So this one here, um, let's draw another one here. And then this one here, I have to select the line, and then this is even lower a little bit lower. Right? So, um, you can see that it's starting to cool. It is very clear. So if you drew that slope here, it's a decreasing stop. If you draw the trend line on the volume, we can see that this is higher. This is lower than that one. This is lower than I wanted. This is lower than that one, right? So this is a signal that a possible reversal is coming because people are no longer interested in buying this. So the buying pressure is actually cooling off, and people are no longer as interested and the uptrend might be getting exhausted. So a possible downtrend or started down trade might be coming and see what happened Exactly what we expect. That downtrend is actually starting to comrade. And as the down trend stores look at this red volume this is a huge red volume that the downtrend. This is a confirmation that the down trend will continue on. Right? So this is another point. I just wanted to mention very important to be able to, um, you know, detect these things on the charts while you're analyzing it. Pay attention to volume. It's very important. And try to, ah, identify the things we're learning in this lecture and the previous lecture. Um, and that should really help you with technical analysis when analyzing different kind of commodities and securities. I hope this was helpful and see in the next lecture. 33. Risk Management: the most important topics in technical analysis and investing in general is the idea of risk management. And, ah, this is so important that I like to dedicate at least one lecture on go over some examples s so that we can cover the concepts and, ah, how individual investors or financial investors, um, pursue their portfolio in regards with risk management. So to begin with, what is risk? Risk is just exposure toe uncertainty in general, right? And, ah, in terms of, ah, financial markets, whether you're talking kryptos stocks, um, forex, um, it's just, ah, risk means potential losses. That's what investors or technical analysts or hedge fund managers worry about when they're thinking risk in terms of financial markets. And, ah, so the idea of risk management is to try and mitigate that risk as much as possible through different techniques. So, um, some of the topics or some of the things that you need to consider when talking about risk management, our tolerance. So how tolerant are you as an individual or as a company to risk that? Say you're an individual investor or a technical analyst and you perform trades or you buy and sell stocks. Um, can you risk 2% of your portfolio? Can you afford to lose 2% of your overall assets, or can you afford to lose 5% of your overall assets? So, um, that also ties into how big of an account size do you have? So you know, if whether you have a small account size versus, um, you have a big account size, your risk tolerance might very, depending on your account size. Also, diversification is another, um, important thing to consider in terms of, ah, risk management. Because if you're ah, portfolio is ah, like you're investing portfolio is ah, well, they're diversified, then you're actually exposed to less risk because if you're just exposed to one sector and that sector does bad, then your portfolio will take a huge hit and will go down by a lot. But if your portfolio is diversify their cross 10 sectors, even if one of them do bad and the other do, um, the other nine will do good. Um, you might actually outperform, um, that one bad sector, or at least break even on the another thing with risk management is hedging now. Hedging is an advanced top again. It's out of the school for this course. But hedging refers to the idea Is that, um if you want to think of it in simple terms, the idea is that you, um let's say hedge fund managers, um, basically have a portfolio, and they buy that for portfolio consists of several stocks. So, um, you can actually there several hedging, right? The idea behind hedging is very complicated. So there's several things you can do. Um, you can buy a collection off stocks and then, um, you can buy a collection of bonds because the idea is that the one the stocks or the stock market in general goes down. The prices of bonds should go up in theory. Um, another way to head your portfolio ism. And also for the 1st 1 you can decide on the percentage right, like you can have 80% stocks, 20% bonds, or 80% bones, 20% stocks, depending on again what? Your risk tolerances. And that's how you would, um, determine that ratio, um, so that they can best fit your needs based on your risk tolerance on another idea about hedging, Um, another thing that um, hedge managers do. Um, is that say you by, um, stocks that you think will go up in terms of price? Um, long term. Um, you will also ah, buy stocks, or at least a ratio or percentage of your portfolio stocks that you think will go down. So if one or the if both of them both of your predictions are correct, Um, you're actually making money both ways. Um, so your overall ICANN will go up, But then if one of them, let's say the stocks that you thought were going off, um don't actually go up. In fact, they go down, um, the stocks. But the stocks that you anticipate going down actually went down that gained from going down will might break even or outperform the stocks that you were anticipating to go up. Um, that actually did not go up or actually when he went down. So that's one way of hedging. Um, another way of hedging, um, is very simple. You basically start to positions for the same stock on and then you expect this stock to go up. So let's say, for example, um, let's talk about apple stock, right? So let's say you have, um, $10,000 you want to buy all 10,000? So actually, one thing you can do, um and this is completely up to you. And this is the whole concept of hedging is that one thing you can do is you can, um, instead of going long, which means you buy the stock and then you anticipated to go up in the near future or long term, you go 80% long. So, for example, 8000 you buy the stock and then toward the other 20% you go short. Oh, are there to to, um, 2000. That's $2000 with our example. That way, if the stock was up, you're losing a little bit money on the short portion. But then you are. Overall, your portfolio is winning because 80% of your portfolio is going up, and then 20% of your portfolio is going down. So that's another, um, way of hedging. If you just wanted to. If you were uncertain about, um, a stock, but you really wanted to open a position and you really wanted to jump in and again, this is an advanced ah pickets outside of ah school of this course. But there's, um ah, better courses that just focus on this topic. So if you like, you can research them, Um, and you should be able to find a lot of information throughout courses or ah, researching online now, Um, how do people? Um the question is, how can you actually manage risk in your portfolio or in your trades? Um, so one. Obviously, the 1st 1 is you have to identify your risk tolerance. Um, something we mentioned in the previous light, right? Um and then also, the next step is, Once you know your risk tolerance, you have to be able to calculate your risk reward ratio. And that depends. Ah, that's based on your trading or investing plan. Um, and then you also need this to determine your entries and exits. And you always have to remember this every time you plan a trade or planning to invest, and after you determine your risk tolerance and you calculate the reward, um, risk reward ratio, you have to protect your account by setting its stop loss and stop losses simply in order, which says, if my ah shares, let's just use stocks as example. It's the same for all all securities or for X or crypto. Let's say if the price per share goes below a certain amount and that's the amount you determine in your stop loss order, then you're want to exit your position, um, or certain number of shares at that price, or if it falls below that price. That way, you're actually if the stock falls down, um, the stock price falls down, for example, and you're starting to lose money. This is to protect you to stop losing uh, even more money as it goes as it continues to go down. So here I have a very simple example. You have a very basic channel, and the price is just bouncing Ah, back and forth in this channel between two and $4 like as we can see. So, um, Regis using this as an example. So, um, let's say we want to calculate the risk reward ratio for this example, right? And what I've done here is that so you can see this $2 here when it bounces. This indicates that this is a support here at $2 right? Um, and this $4 because it's rejecting it, and then it's going down. This is this $4 markets resistance. Our channel. This is a support. This is three resistant for our channel, right? And then, ah, the $1 line Here is what I've drawn because this is ah, are next level of support. So let's say that, um, the stock price went up, it came down, but then it didn't bounce. So it actually broke down from the $2 level, and it's starting to come down. So the next level of supportively of determined by looking at the charts, um, is a $1 mark. So knowing that information, um, now we can actually begin to calculate the risk reward ratio. Right? So let's say again, the stock is bouncing between the $2.4 dollar market channel, and now you want to identify good, uh, entries. Let's say you wanna, um, calculate the risk for your entries and exits right before you actually enter or take the trade. So what you can do is, um, when as the stock is approaching and this is this is something you have to do, um, you'll have time to do this because it might take it might take days or weeks or even months for this to come down here, right? We're not talking about day trading here. We're talking about technical analysis, So, um, more around, um, you know, swing trading or long term investing. So let's say, um, the stock is actually coming down. It's reaching the $2 mark. Right? So this is as it's coming down. This is the time you actually have to sit down and decide what is the risk reward ratio. And whether you like to take this trade right, because that is coming down and then it's, you know, it's getting closer to the $2 market. I think that it's getting closer to the support. So this is the good time to actually buy in anticipation that l bounds right and then go to the $4 mark. Right? So then, if you want to calculate the risk to reward ratio is very easy, because if you're buying around this area, I mean, obviously most of the time this doesn't happen. You know, you can really get exactly at $2 mark or exactly on the support line. Sometimes people wait for it to go up a little bit, just so that it's confirmation that it is bouncing off the $2 mark. So some people might buy here. Some people might buy here, depending on how comfortable you are or the level of risk you're taking. Some people want to take some people. Um ah. Would like to take the trade here, for example, as opposed to right at the support line because they're willing to give up alot better profit. Um, so whatever this and this number is here, they willing to give that up and just start from here and go to the $4 more knowing that they are missing out on some profits. But at least the confirmation, um, is there that this is now fully bounced and there's a soup port. This is has confirmed, um, the prices bounced off this line, and it's confirmation that this support has held over the next few days right from the bounce. So the way we calculate, um, the risk reward ratio is actually pretty easy. So if thinking, if this thing is coming down, right, So what you have to think is that if you're buying at this mark. Um, what are you risking? Right. So the your trade plan is that you want to buy at the $2 mark and you want to sell at the next resistant, which is the $4 mark. So your profit is actually $2 per share, right? Let's say we're talking about a stock here or inequity. So, um, let's say you buy here at $2 then you want to sell at $4 because those are the obvious support and resistance points in our channel, right? So now they were you calculate that is that Let's say that, um, your theory didn't actually come through, right? So let's say if it did, if it did approach this $2 line, you by right at $2. But the next day it actually breaks down. It breaks down, and it goes down to the next support line, which is $1. So what's gonna happen is that you're actually if you're buying here, what you're saying is that you're willing to accept $1 loss because let's say that, um, if if it breaks down here, let's say you buy over here at $2 it breaks down and it's reaching the $1 level. You just want to call your losses. So you're going to sell everything here knowing that you will lose $1 per share, right? But then you you don't want to wait. If, in case it goes down even below $1 because the lower it goes, the more money you're going to lose since you bought at $2 right? So your risk level here is that you can think of this as when you buy here. Um, the next support, you have to identify the next support in case the support breaks down. So the next support is $1 rate. So what you're saying is, from 2 to 1, right, the difference is $1. So you're willing to lose $1 in order to make $2 So that's very important. You're risking your money here, so you're taking at risk. And that risk says, um, you could potentially lose $1 in order to gain $2. So this is this is what I've outlined here. And it says risking $1 to make $2 of profit per share, right? And if you think about it. This is a 1 to 2 risk reward ratio and wanted to anything, in my opinion, anything that's 1 to 2 or higher. Like 1231251 to 10. That's a great risk to reward ratio. Right? Um and then, as mentioned here, I have this stop loss set. So if you do take this trade, so say, um, the stock is actually bouncing. The resistant here is confirmed that $4 mark, the stock has starting to drop. You said an order. Um, let's say you just said in order and you walk away and, you know, monitor things. So you actually end up buying exactly at $2. Um and then, um, let's say that this actually gets this order gets filled. So now you actually own the shares of that company at $2. But then it goes down, right? So then you have to set a stop loss order at $1 so that in case it goes down, yes, you're losing $1 per sure here by setting its stop loss. But then if he goes down, you're actually losing more and more because you until the you identified the next level of support, which I don't have on this diagram. But you get the idea, right? And then you can also set a sell order so that, you know, if this bounce confirmation comes through and we you actually buy a $2 then over the next few days or weeks, it actually goes to $4. You might anticipate that once that reaches that $4 they can really do two things, right? It can go up even higher and, you know, set a new high or you can just bounce back. Since this is a previous resistant point, right? So then you can if you want to lock in some profits or exit the trade. I would set my resistant here, right? So again, um, always set your stop laws to prevent you from losing more money that you indicated in your risk management or risk tolerance. Ah, and in your trade plan that protects you. Um And, um, that's the only thing I want to mention is very important. Always said your stop loss. But the idea here is that your, um has we mentioned with the example numbers you're risking $1 to lose $1 in order to make $2 per share. Now let's talk about a bad risk to reward ratio. In my opinion, it's a bad, bad, um, reward to risk. Ah, ratio. So over here, I just change the number 23 So from four, we went to three. So now I know these lines are not even but pretend they are, um so over here we have again our support. Our channel support is $2 are resistant, is now $3. So the difference. Um, I know it's not proportional, but the difference here is $1 the next support. It's still, um, we're still have $1 rate. So over here is the same idea, except we're risking so again from 2 to 3 is $1 from 2 to 1 is $1. So we risking losing $1 per share in order to make $1 per share. Ondas We can imagine, um, this is a 1 to 1 risk to reward ratio, and this is not that good. Um, and again, it depends on your risk tolerance. Some people are completely comfortable with taking the 1 to 1. I just think it's worth taking, um, 1 to 2 or higher risk to reward ratio If you're going to put in the time to analyze the charts, Um, and so that you can make more, um, you know, money, Um, with less of a seed investment, given the time you put it, right. So that's just an example of a 1 to 1 ratio risk to reward ratio. And ah, this is as this is just reiterating what I just said. So, um, I would suggest taking at least taking trades or investment. Ah ah, investment strategy on. Bake this into that for just the risk to reward ratio of at least 1 to 2. I think that's worth it. And then there's a rule of thumb out there that you might hear from many different technical analysts or traders or investors. Um, do not risk more than 5% of your account portrayed, um, or, for example, there's there's different levels to this rule of thumb. So how much? How many percentage you want to dedicate of your portfolio to dedicate to different sectors ? How much of that each sector we want to dedicate portrayed all those things, But in general do not risk more than 5% of your account for trade. Um, and us again, this number, it could be It could vary for different people. Some people would make don't want to take a risk higher than 2%. So then they planned their trades accordingly. So that, um, you know, their set their stop loss and profit targets so that they don't lose more than 2% in their trade plan. Right? So now that you've covered the basic idea, let's look at a really ah chart. 34. Risk Management Live Example: everyone. So in this lecture, I'd like to cover, um, live example with the rial chart so that you can see how we can easily calculate risk to reward ratios, Um, for one stock. And then later on, you can just, you know, learn from this and then go away and start practicing on your own by just analyzing charts . Whether that's, you know, in the stock market, crypto forex, whatever. So the idea applies to all financial markets, right? So this is a very important concept, and I just want to do a quick walk through, um, with one example and ah, I'm hoping that this would give you an idea of how easy it is. Um, but at the same time, how important it is, um, to understand and calculate these things because you have to bake this into your trade plant, right? So let's get started here. Um, using my free charting tool here investing dot com we're looking at ah, the Tesla stock. Ah, a candlestick chart with a one day duration. So each Canada represents one day. So just looking, looking through, um, saying what's good here to use as an example. So, for example, we can I can see some. Ah. Ah. Like a simple channel going on here so we can use this as an example. Um, and by the way, for calculating risk to reward ratio, you should just have a very clean chart. You don't need any indicator. In fact, we don't even need this volume. You don't need moving. Averages you don't need are in, so you don't need anything. You just need to pure chart. Right? Um and, ah, it's very easy. Um, that just takes practice, but try to keep a very clean chart. Don't put any indicators on their, um, because we're just working with simple numbers, and it's just very simple math, right? So a Z, we can see the stock has been down training in bed and then up training and just going into a channel here, bouncing in a channel. Right. So let's say, um you want him? Um, let's say you know, you start looking at the chart here. The thing comes down right here in the down trends while downtrend here. Right. And then over here, um, you're noticing some support being established, right? So the as the thing is down training is coming down the first. You can't really tell if this is a support you can by looking at, you know, going back in time and looking at historical data. Yes, that's a support because you can see all these candles here are holding holding that line. But let's say you just, um, as your down trending this is and you support. But there's no confirmation right on this red candle. There's no confirmation that this is holding. Um, the next green candle tells you that this support is actually holding because the next day didn't go down. Right? There's a little bit of uptrend goes down, and now this. The same support here is now actually holding within this four candles, right? So now you're getting starting to get an idea of this line is trying. It's starting to be, ah, good support line because one thing we you need to understand is that the support line on the strength of the support at that price point becomes more significant as more candles touch and bounce from that. Great. So over here we don't really know if it's a support, right? This scandal says Okay, this might be a support because the next day it didn't go down. It's It's a good confirmation, right? And it goes up a bit. It comes down. But here, um, these four candles are actually confirming that this is starting to become a very strong support because none of these four candles were able to close below that support. Right? So now we're starting to form an opinion about this new support line, and we're getting confirmation that it's becoming a strong support because it's been bouncing off of that and hasn't been able to break down from that support line, right? So knowing that let's say that this is the first candle. Second candle, third day. Now, fourth day, we want to start a position in the Tesla stock, right? So now that this is holding, we want to buy the stock knowing that this support will hold and in the anticipation of the stock going up. But pretend that these candles have informed yet, Right? Um, so now say the first year and second a or third day you don't buy. And then, um now you actually want to go ahead and take the trade. So you want to start buying around the support right support line. Right? So let's say and I'm going to round up than numbers. Um, and the numbers won't be exactly, um, it'll never be exactly 100% correct. But I'm just going around the numbers so that we can do the math easily. Right? Um so, like around this area, if you look in the right hand side that we're charting tool, you'll see the price. So around this area, we're looking at, like to 10 76. But let's just say to 10 just to keep numbers simple, right? So to 10 and what I'm going to do as I'm going to draw, like on the left hand menu bar here, I'm going to select horizontal lines so that we can see that you guys can see that easier on the video. And ah, just mark this to 10 line. Right? So now this blue line here is the to 10 line, right? Andi, I am going to actually let me change the colors so it's easier because if since it's supported, let's mark it with a green right? Um And then, as I mentioned in the previous lecture, we need to identify the next support as well. In case this one breaks now, right? That's how you calculate risk tolerance. So the next support is if you look back because from all the way from here to here, that support line is holding right, if you can see this green line that we drew based on these support is actually, um, you're getting confirmation in historical data that there was a support, he as well, right? But then that's still the same line. So we need to find the next one in case that will breaks down. Right. So if you bring your ah, if you bring your cursor down Ah, we can see that, um, this is the next one, so you can see this one. This one, This one. This one, Um, this was the next support Amanda's again, as I mentioned in previous Ah, lectures. Um, the support, when like the resistance wants the resistance broke and it becomes the new support. Or when its support, when something breaks down below a support that support becomes resistant, becomes the new resistance. So that's very important to understand. So over here, you can see that, um, like, over here, Um that Ah priced. So we're looking at two or five or three. So let's say this is two or five previously, too, if I was a resistant because it couldn't bounce and it started a downtrend when it was reaching that rate. This to green candles could not break 205 and it just started downtrend. So it was a previous resistant, which now, um, since we broke above it after this point, it becomes the new support. So let's say this is my going to be on the next support. And it's two or five. Um, so let's two or five or three. Let's call the two or five for simplicity reasons. What I'm going to do is draw another line. Um, so I've identified. So based on this, this two candles and these two candles, I wondered identified that our support is now 205 I'm going to greet draw another green line because these are both our support right now. What we need to do is go and identify the resistance. Right? So, um, are two or five. So to 10 is our first support here to a five is our next one In case to 10 breaks. Um, and then let's go ahead and identify another resistance. So, as you can see, like, um, you know, let's just stick with this timeframe here, so, um, I can see that, um, around the, um What is this? Around the to 30 Mark. Um, there's some resistant right around the to 30 and says 2 30 81 on the Y axes on my charting tool. So I'm going to say, Let's just call it to 30. Right? So I'm going to select. Um, I'm going to draw a horizontal line around the to 30 mark. Okay, around here. And I have now. I have Ah, I have my resistant pointed. But what I'm going to do is I'm going to select this as a red color because it's resistant , right? The 1st 2 are supports on this one is resistant, right? So now and you can see that, Like, you can see, this red line is easy to see. Like, you see this red candle here? It rejected it. Right? Um, you can see like, this red candle the next day. It rejected it. Right? Um and then now it's holding out support in these candles over here. It broke down. Right? So you can see that this is this is a good area of resistant, based on some of the previous historical data on the chart. Um, so now that we actually identified are, um, support and you can see there's a mini channel going on here, right? There's a channel here, and then there's a meanie channel here before it breaks out. So now the view identified our channel and our next support, we can start talking about risk to reward ratio. So if you zoom in, you can see that, um, over here. If you were to enter the stock, right, let's say I am planning my trade or investment here. Um, and if I think that this support is going to hold and I want to buy on the third or fourth day after this red candle, right, Um, and we get the support confirmation. We're looking at 2 10 right? We said it's to 10. So if I put in an order and by however many shares, that just depends on what my risk tolerances. Um let's say I buy ah 50 shares of Tesla's stock because 50 shares of Tesla stock is equivalent to, um, 5% of my portfolio, for example. Right. But let's say I've already, um, calculated all that and my risk tolerance. Now, we want to calculate the risk to reward. So if I buy this at 2 10 right. If you look at the numbers were buying to start get to 10 in anticipation of setting up a cell or there at 2 30 So our profit margin here is 2 10 to 2 30 is $20 profit per share. Right? So that's our profit. $20 if you follow this trading plan Now, if you actually, um ah. And by the way, you need to set your stop loss order as well here. So this is a tool five mark rate. So if you buy the stock at, say, you buy it on this day or this day at 2 10 and then the next day, it didn't actually go higher. It actually breaks down below the tool. Five. That the to 10 mark. Sorry. It breaks below. So now you're next. Support is actually two or five and two or five is where you want to say your stop loss. Because If it goes below to a five, you have to determine what is the next resistant. But you'll start to lose more money as it goes below to a five. Right. So since you're setting you since you're buying at 2 10 right, and you're setting your stop loss and cutting your losses at two or five, it means you're risking $5 per share it right. The difference between 2 10 and two or five is $5 right, so you're risking. So now, if you look at the overall strategy, you're risking losing $5 per share in order to make $20 per share. And this is what we call a 1 to 4 risk to reward ratio, which is actually a pretty good ratio. So if it was me, I would probably take this trade myself. So this is a very simple way. As we can see, there's no much you don't need any indicator. You don't need anything. You just have to be very comfortable identifying support that resistant lines when once you have that is very basic math, right? You just have toe. Make sure you identify your support and resistance. You identify your next support. Um, your support number two in case support number one brakes. And then, Ah, that's where you say your stop loss to prevent further losses to your portfolio. Rape. Um, And then if the trade goes according to plan, well, then you're actually making $20 per share, which is pretty huge. So this is like a 1 to 4. Um, you can actually, you know, losing $5 or willing to lose $5 dollars in order to make $20. So 1 to 4 ratio is pretty good. As I mentioned anything want to two or higher is good. So, um, 124 is actually pretty good. So if this was me, I would probably go ahead and take this trade myself on DA. As you can see, it's very easy to calculate this. So I hope this example, um, was helpful. So I just want you guys to go home and practice on different charts. Different securities, right? Try different stocks. Try different. Try crypto, try for X and someone as you practice more, you get more comfortable. So, yes, it took us a while to do this as we're doing this demo together But like once you do this for a few months, you can actually Ah, you will be able to identify and calculate these things within minutes or within even seconds. So I hope this was helpful and see you in the next lecture. 35. Entries and Exits: another important topic in technical analysis. If not the most important topic is, Ah, entries and exits. So where you enter the trays and when you exit the traits. And I think this is the most important topic because the whole point off technical analysis and analyzing charts, patterns and indicators is so that we can actually help you with your trade when you want it enter. So knowing when to enter and when to exit tom your trade so that you can minimize your losses and maximize your profit. So let's get started. And ah, these air some some of my ideas and some of my opinions. And I know a lot of investors and technical analysts or swing traders out there agree with these and these air I mentioned these because I also want to minimize the risk. Um um, for all, regardless of the market for all trading plans. Right, so the 1st 1 is an obvious one. Invest in a blue chip companies. So the nice thing about blue chip companies every time, if you want to, every time you want to invest or you want to place a trade, um, obviously your chances increases if It's a blue chip company. What is a blue chip company is just simply a well established company. So they've been, ah, well established. They've had good revenue for years. They don't have a very small, um, market cap. Um, they cannot be easily manipulated. So, um, you know, they have a good growth. They may be paid dividends, so there's a lot of things to look for. But blue chip companies in general are safe and safe, as it's a relative ward. It's, you know, they're safer. Um, compared to other companies, Um, you know, like, for example, companies, um that have their price is very low. So penny stocks, for example, right, So they're safer compared to does, but they are not prone 100% to risk, right? So they could still go down in price. Or they could have a bad event or a bad news, which will result in their price going down. But generally speaking, they're safer comfort to other companies. Right? Um and then, um, safe just means lower risk by definition. So, um, the other, um, important fact that I want to put out days that if you can try to invest in the sector, you understand, Because this is very important, right? And I've learned a lot of lessons in this, and I know a lot of people have had similar experiences to me. Um, you can go and read about this online as well. Um, there many articles on it, but you should always try to invest in this sector. You understand? Um And like, for example, if you work in technology, um, you should go him and invest in technologies. So, like, if you don't know anything about riel state Ah, but you work in tech. Well, then invest in tech. Don't invest in real estate because at least you understand, um, where the economy and the growth and the market are heading as a general in that sector rate. And, um, since you work in tech, you're probably dealing with, um, for example, your company might be dealing with different, um, tech companies in order to run your business. So, for example, maybe you work with Amazon, and you had a really good experience or, you know, um, Amazon ah, services that you're using Ah, in Europe software platform or performing really well. So just having that knowledge, you know that. You know, Amazon has a bright feature and, you know, the stock could go higher. So knowing that, um and it's just very basic fundamental, you know, common sense information, because you just have you have access to those information because you're just involved in tech because your day to day work is tech, right? So knowing that you probably want to take a trade in Amazon or invest in Amazon now, knowing that, you know, um, se, um, Amazonas servicing 10 companies. But because these companies are all having experience positive experience and, you know, good, um, relationship with Amazon, this number of 10 companies would grow to 1000 over the next 5 to 10 years. Right? Which means that Amazon's revenue will increase as their, you know, servicing more companies and getting paid by more on more companies. And that would just drive this stock prices higher because they have better revenue. And, um, that means just more money for the company, right? So very simple things. But, um, you know, is this also, um, sort of decreases your risk when you're investing in a sector you actually work in or you actually have a pretty good idea and understand, right? And then that that's that's what we said. Better fundamental knowledge and understanding, right? And you'll be able to assess the sector and future predictions from the example I just gave based on Amazon. So before entering or exiting the security, make sure you do some research. Right? So, um, don't just go in and buy. Ah, I mean, technical analysis does focus on charts very heavily. Ah, but in my opinion, you should still do some example. You should still, um, do some research. So, for example, um, for stocks. Um, let's not talk about everything, but the idea is the same, right? So let's just take the stock market. Um, here for this example that say, you should try and look at the recent use for the company or trying to invest in right. So, for example, if you were just talking about amazon, So if you want, you know, invest in Amazon stock well, then just look for some news. Like, um, has it had bad recent news or good recent use? Because if it has bad recent use and it started a downtrend in my just continue that downtrend for the next little while until the company can get out of that hole, right? Or if it has recent good trend, that might be good news. That might be a start of an uptrend or a continuation of an uptrend. So that might be a good indication for you to jump in and maybe starting. Best thing right. If it's bad news, you might wanna wait right? You might want to wait and then jump in a little bit later when the company resolves was issues or if you're short biased. So if you think it's continued, its it's going to continue to go down. That's the perfect time to actually start shorting the stock when the bad news comes out right, Um, and then also look for a very important things like dates. For example, earnings right every quarter. All the companies that are, you know, have I p o. Than our public, um, on our trading on the X different type of exchanges like New York Stock Exchange or NASDAQ . Um, they'll have to file and report their earnings so ever. That's every quarter, right? Ah, just make sure like you know, when those dates are coming because If you're planning your trade around those days, you have to be very careful. And you have to anticipate Is the company going to do good or bad? This, um, quarter? Because that could really mess up your trading plan. Great. If you, um, like you buy something right before the earnings date on the next day, they know it's bad earnings. Now your whole trading plan is it's no longer valid at all. Ah, because it's going to just get this demolished or destroyed by the bad news or bad earnings , right? Also such things that reverse splits. Um, sometimes stocks buy back their stock. Sometimes they introduce more shares. Sometimes it gets diluted. So the idea that just the simple idea is just do some research and look at look for news on important dates because, um, that could help you when you actually want to execute your trade based on a specific day and, ah, before executing a trade. Make sure you actually you have sat down. You've looked at the charts, you've analyzed the charts and you've identified the support and resistant points right as we covered in the earlier section of this course. Then, after you do that, you have to sit down and calculate the risk to reward ratio, right? Based on your trading plan. Right? And then. And the third thing is, um, think about positioning sizing, right? So positioning sizing is an advanced topic, and it's again outside of the scope of this course. But the idea is simple. The idea is, don't go all and great. And if I can find an example, I'll show you get assure you guys is in the next next time to cover a chart, Um, or if I just see it in a chart, I'll try to cover this. It's an advance topic, but again, the ideas don't go all then. So, for example, if you have $10,000 to work with and say now you want to buy Amazon right, you don't have to just put all $10,000 in Amazon all at the same time in one trade, right? You can slowly build up that position so you can start with 2000. If it goes down, you can, um, by another 2000. If he continues to go down to get by another 2000 store building until you run out of that 10,000 right or vice versa. If it goes up, um, you know, you might have to wanna wait for a small pool back before it's continues its uptrend again . And then maybe during that pullback is when you actually wanna go ahead and ah by, um or, uh, shares. And until you're done with your 10,000 right, another thing is like sometimes you want to buy in your support. Um, but you don't know if that support is going to hold. So let's say you have $10,000. You, Ah, as soon as it touches that support you by 2000 and then over the next 23 days, if the support holds, that's when you actually going to put in more money. Because now it's saying that the stock will bounce and continue an uptrend off that support . Right. So, um, here's some basic rules, um, for entries. So ah, what do you want to try and do is we want Oh, um, try and buy close near the support area. Um, and as mentioned, we won't always get the support exactly. Um, and they some position sizing. We might not go all the enemy might, you know, some people wait, um they don't even buy anything. They don't even start a position until they've had a few days after the confirmation for the support. So they're willing to lose out on some profits, but also ah, minimize their risk comfort to people who are going to buy exactly on the support and anticipate the support will hold. Right. And then some people Ah, will by on the support exactly on the support line. But then they won't go all then. So they'll our $10,000 example for Amazon, they might just go in with two or 3000. If the support holds, they might continue to buy more and more. Um, the other thing is, when you're buying, make sure you're buying um and you're seeing good volume when you're buying. So typically, what you should be seeing is around support areas or resistant areas. That's when you should see ah lo better than above average, um, volume or shares being traded right. And ah, make sure that the prices close to fair value or undervalued region when you actually want to invest, right? Because if something has gone up so much over the past few months or past few years. You don't want to be chasing that because at some point, um, it's going to have to pull back and come down gray. So if you're buying at all time high, um, you probably wanna wait. You don't want to take that trade. So definitely. Look, look at there's, um you know, there's different, Ah, platforms that you can tell if something is, ah, overvalued or undervalued. There's, you know, you can look at stocks. There's so many different websites out there like CNBC will give you a good rating. Um, there's Morningstar. Morningstar can tell you if something is fair, valued or undervalued or overvalued. I think Yahoo Finance might have this option. So there's a lot of different tools at your ex, you know, disposal so that you can actually tell if something is fair, valued or undervalued, right? And then ah, looking at indicators recovered in the score. So ah, if you're if you want to enter something, it would be really nice if they are size close to the oversold territory. So we're talking around 30 right between 20. Anything on the 30 is pretty good and is very oversold. But even their own 32 you know, 30 35 it's still considered oversold. Right? So, um, having that indicator on your chart when you want to enter is a good confirmation that this is a good buy signal, right? And then same thing with Mac D. Make sure Max is actually showing Ah, by signal. So making sure that, you know, you can tell that by looking at the history grams as recovered. Or you can just talk about the crossover of Mackey and second lines right now. Ah, let's talk about exits. Um, same thing as entries. But now it's sort of like the reverse situation. So for exits, we want to sell near resistant areas. Um, and again, we want to see good volume around these areas, right? A little bit of above average. Um, but we don't want to see something that's below average rate because that tells us that it's sort of like the pattern has been complete or it is close to the correct resistant and support that we've identified. Right? So let's try to sell. Ah, when you are actually trading your plan, try to sell near the resistant area on. Make sure the volume is good, right? And then, Ah, make sure and anything you can. Ah, you know, look into his. Make sure the prices actually close to being overvalued. Um, because, as I mentioned, if something goes high very quickly or a short period of time, at some point is gonna have to correct itself and pull back and come down, right? So if you're selling and selling near that high, that's pretty good because you're trying to maximize your profits. Now it's very hard to tell what that high prices. But at least if you're selling within the high region, somewhere in that range, you're still getting a pretty good profit, right? And then right after that in my pool bag, so it might provide you another by entry. And then for our two indicators we learned in this course, so make sure our size closed toe overbought territory. So we talking like somewhere between 70 to 80 or even 65. I would say 65 to eighties like, um, sort of overbought. So if we actually seeing that on our side, that's a good indication. And a good confirmation that this might be a good cell. Um, and then Maki also is showing cell signals, right? Other things you can consider is that, um you know, you you might not necessarily, um, Say you've defined the profit target for yourself based on, um, identifying good resistance and support lines. And you might not even want to look at indicators. Let's say you've hit your target, right. It has reached that resistant point. And you just want to sell even though if the Mac D or R a sigh, um are not showing those signals the cell signals for you. So it's completely up to you how you want to use the indicators and support them resistant lines, right? These are just some of the ways I use and other investors use. So, um, and the one last thing I want to mention, um, as I did multiple times don't forget to set your stop loss when you actually executing your traits. So now that we have a good idea about how to approach entries and exits, let's look at some real life examples 36. Entries and Exits - Long Example: Okay, So in this lecture, we're going to, ah, apply everything. We learned that throughout this course, um, to analyze the charts and try to find good entries and exits for our trade on Bring it all together. So I'm sorry this video is going to be a little bit long, but please watch it till the end, because we're going to cover a lot of different scenarios. So right now, um, I have my free charting tool in front of me. We're looking at the, um, Tesla's talk ticker symbol T s l A. And we're looking at a candlestick shored with a one day duration. Um, so what I want to do, um, you after we finish with this video, you can just go ahead and sort of practice. Um um, what we did with the stock to all the different stocks or for extra crypto and, um, just tried to do the same things we do in this lecture, right? Or throughout the course on. Just try to practice, because that's the only way you will get better and faster. Um, so let's go ahead and get started. So I actually did no plan this like you're So we're just gonna do, um, whatever received we're going to talk about, Right. So this is how you should be able to, um, do, um, approach analysis, um, of the charts. Um, by just looking at the chart. Ah, within a few minutes, you should be able to form a trading plan. Um, and you should be able to do it very quickly. And that just comes with practice. Right? So that's what I'm going to do here. So I'm just looking at the test. The stock. So, um, recovered gaps in the course. Right. So let's talk about gaps over here. I can zoom in, um, and to start with, please don't have any indicator on your charts. We just want to starve it with very clean chart. And there will being those in later on. So right now, I'm just zooming in here, and you can clearly see that there's a gap up here. Right? So, um, if you were, let's say you've done your research. You understand the Tesla stock and you've been monitoring it for a while. And you've been wanting to start a position and invest in it or trade the stock. Um, now that we see a gap up. Right? So what does that mean? Is this a good time to buy or or is this a good time to sell? So, as you can see, based on what we covered in the course and the gaps Action. Um, over here, the stock was, ah, global up trending. It pulled back a little bit. And then there was a massive gap. Right? So let's see how big that gavel. So the last day before the gap, the stock closed at 2 55 then it opened at 2 98 or $300. So almost 1/5. The dollar job, which is huge, which is massive. Right? Um, for stock that was costing $250 for two gap of $50 higher the next day in just one day. That's huge. Great. So what we talked about about gaps is that now, say, is this is the question you're asking is so obviously you didn't buy in this day. You see the star gap up the next day. Is this a good time to buy? Well, then let's cover what we talked about in gaps, right? So first of all. Um, you can see that it gapped up and the gap was massive. Right? Let's look at the volume. So if this was the average volume, so I'm just using this line here and on the right hand side on the axis, it tells me four so on. And these are just rough numbers I'm using. These, for example, says 4.3 1,000,000 shares on average are being traded right on this day. If you look it says 29.518 million. So this is way above the usual activity per day. Like this is way above the average ah, activity. So it is, um, a considerable amount of shares being traded. So the volume is super high company to the average right, The average was about four. Ah, point something. And on this day, it was 30. Rates so huge. And so, yeah, if this is ah, this could be, you know, if it gaps up with high volume, that's the first indication that this might be a good entry point. Right, Because the heart of volume you get a better confirmation that the gap might continue an uptrend, right? If it happened on the low volume. Then I would question the gap and say that this is also, um it might be a false breakout, right? Like, might be a false gap. And it might just come back down again, right? But because it's happening on such a high volume and it's a green volume. So this is a buying volume, right? Ah, this is a good indication that, um, this could be a possible good entry for you to start building your position in Tesla or for your trade to start buying, right? And then one other indications, Or if you zoom in right, you can see that this is sort of like a decision candle, right? Kind of like a Doje at the end of the day when it formed. So the body is very small. Um, there people or the seller's or short sellers try to push it down. Great. So, um, this is let's say it opened at 2 98 It went all the way down to two. 89 right? But then he wasn't able to close the in that rate, they brought it back upright, and then they also brought it up to three or five, but it wasn't able to hold that level and close. He came back down to 2 99 right? So it gapped up. That's what a good sign. The volume is really high. That's a good sign. This is a indecision. Candles, because the body is very low, right? So might not be the best day, um, to enter because we don't know what might happen the next day. Right? Also remember one thing we talked about There's an expression, um, or out there in the investing world that saying the gaps will eventually fill themselves. So you don't know that. Um, if this was to fill, this has to come back all the way down to whatever this gap was. So this was that? Ah, 2 56 or around there. So, you know, the next day could potentially or in theory, could come down. Um, not the next day. But throughout the next few days, it could come down to 2 56 area. Right? So maybe not the best day to buy right the next day. Let's look at the next candle, right. Huge body, right. Huge body, and also huge volumes of his zoom out if you look, the volume is almost identical to the last day. So still a lot of buying interest from investors and traders. So, um, that's definitely a plus sign. Right? So, um, if I were to take this trade, yes, I would take this trade. And if I were to buy, I probably would not buy on this day, I would probably by the second day, right, Because a soon as we passed the this was the clothes off the previous day that the gap happen is to 99.5. So let's say 300. I would probably set my order to pass above 300 knowing that we've, you know, crossed that resistance. And now we're past it. And I will probably set up by order for, you know, for this example, something over $300 right? Because that is the new high being set by the candle and on the chart. So it is a new high on, as you can see that I would said that. And that same day, this went all the way up to 3 27.93 So almost a $30 increase in price in one day, which is pretty massive. Right? So on the second day, I would send my order above 300. Right? This is again without any indicate indicators whatsoever. The only thing I'm looking at is the candlestick chart and the volume. Right. Um, now that we're on this, we're on here. Um, I promise you guys to, um, sort of cover something on position sizing. Right? Um, it's an advance topic, and outside of this course, But one thing you can do, let's cover a quick example. Here is Let's say you have $10,000 you want to buy this stock, right? So from what I just said earlier is you can set an order, um, to buy Tesla stocks at anything about 300. So let's say 301 and I set my order to buy, right. But then you have to determine the number of shares, right? So whatever him on the shares you can get with, um, $10,000. Um, the ideal position sizing is don't go all in at once, so I can place in order to buy $10,000 worth of shares, all in one order, right? But that won't be very smart thing to do, depending on how much money you have and how much risk you're able to tolerate based on your account size, Um, as an and as an individual. So, like, say, if you have $10,000 you don't have to buy $10,000 worth of shares at something about 300 right? What you can do is you can buy 2000 or 2500 right? Let's say, UM, you by $2000 worth of shit at 300 right? And then this stop is starting to run. So I would recommend not adding more right. I would recommend not adding more. Because now you're just chasing something, right? And remember where we said If something goes up really quickly ah, eventually it's gonna have to come down, right? And, ah, that's exactly what happens. So let's say you place your first order for $2000 worth of Tesla shares, however, many shares that might be depending on the price at that time. You're placing the order. Let's say, UM, you, by $2000 shares and then the stock starts to run right, and as you can see. Um, it's hitting this shooting star Dorji here because it tries to push up. It can't, so it pulls back down, right? So now it's start. The stock price is starting to pull back a bit rate, but they look what happens. It drops a low bed. But look at these candles. It's They're starting to form a new support level, right? So this is their own $313. If you look at the right hand signed on the Y axes. So this is their own $313 right? So you can see the 1st 1 This is a red candle, so the green candle is holding that line right the next day. It holds that line 3 13 The next day it's a red candle, but it's still holding the 3 13 And then the green candle is starting to move higher. Right? So the idea of position sizing is now that you you, you know, place the trade for two by $202,000. Sorry. $2000 worth of stock. Tesla's stocks, Now that you're seeing this ah, support being slowly established, this might be a good time to actually add to your position. So let's say knowing or seeing on the chart that this support level is holding, this might be a good time. Like like say, this day or this day or this day might be a good time to add another sets of Tesla's shares . So you started with 2000. Now you can add another 2 3000 again, depending on how tall in it you're right. Or and then this is Let's say you add another 2000. So now you have $4000 worth of, um, Tesla shares. Not all at the same price. Ah, but you're mitigating the risk by waiting for the confirmation off the support. Right. And as you can see, it starts to run again. So this is the idea of position sizing. So I just saw that example on the charge right now. Um, So that's why I wanted to quickly cover it, right? But the idea here, the gap. Yes. Um, based on what we talked about, this would be a good entry point right now. Um, let's find some other entries and exits for the same stock. Right. So now, um, let's say We're looking at this time range here. Right? So clearly you can see support, right? So whatever this line is again, we just have to determine something very rough. The numbers don't have to be very exact, but you can see that this over here is a support. Because when it was down trending it bounce and he came up. When it was down training here, it bounced and they came up right? Ah, and we're looking at daily charts, right? So let's go ahead and draw this horizontal line for the support. So I'm just going to set it somewhere here, right? Change the color to green because this is support, and it's easier to see. So let's say this is our support right now. Let's say that the so the first time it comes close to that support, right? So the stock is down trending for days, right? It hits the support, it bounces back up. Okay, Well, because it's the first time doing it. You don't really know if this is a support, right? So then the stock runs for many weeks or months or years. Whatever. Right? And then, for whatever reason, it starts to downtrend. right. So as is getting close closer to the support line, this is when you have to start thinking, okay, I need to get ready for my trade, because either I have position and I'm going to hold long term. And I want to add more because I really believe this company is going to succeed over the next 10 to 20 2 30 years. So I want to add more position. I don't want to sell anything. I just want to add more because I'm getting a discounted price for this. Right? So looking at this were let me zoom in a little bit. So now you're getting closer. So we're down trending. You're getting close. Closer. So you have tow figure out. Is this a good time to buy? Right. Um and yes, it is a good time to buy, because it is if it holds this support. So you don't have to buy this very first. Um, red candle here. Right. Let me, sir. Let me zoom in. So this very red candle that touches the support you don't have to buy here because you don't really know if it's going to break down or break up right. Look at the next one. It helped the support the next one. It helped the support. This won't help to support this one. Help the support so none of them were able to close below the support line. So as more candles are holding above the support line, it's a sign that this support is strong, right? It's very strong, and he can see you have multiple buying open so you don't have to buy on this very first candle you can buy on this one. This one, this one. Maybe these two right, and then eventually the stock takes off. So what we want to do is we want to enter near the support. As you can see, volume is good is above average right above all of these. So it is good sign, Tom. So and it is your support. So for myself, I would probably enter this stock here, right? I would enter the stock, and I would buy in anticipation that it's going to bounce from this support and go higher. I'll set my profit targets, whatever that may be, based on my resistance. Or, let's say, for example, there's a resistant here at 3 13 So what I'm planning my trade plan is by a to 51 sell at 3 13 Or maybe you just don't sell and see what the stock is going to do, right? But you still I still recommend you identify the resistant points, right? Depending on what you're, whether you're a long term investor or whether you're suing trader or whether you want. Just want to executive very quick trade, Right? So now let's say I've identified the support and I know based on the volume and the support level this is good. I got the confirmation from these 34 candles and now I'm ready to buy right now. What else can we do? Well, one thing you can do is you can use the indicators we talked about, right? So let's throw in and overlay the RSC indicator. So that tells us if something is oversold or overbought, right? So now when we're looking here, so around this area, the Orissa is 38 right over here section is 38. So this is a good sign because I would be a little bit worried if they are inside was 70 or higher or close to 70 maybe 65 60 68 70. Anything close to 70 or below, but worried because it's still it's It's in a downtrend. It's near support, but it's still overbought, right? But the fact that this is actually in in this area, we're just looking at this area, right? We're looking at that area, and we are the are size roughly around 38. Since reset 30 is, um, oversold. 38 is not bad, right? So it's still there's still a lot of room for it to go up and get close to 70 which is overbought. So this is a good indication that this is a good entry. So first we identified the support we looked at. The volume is okay. We looked at The candlesticks are bouncing from that support. Now, the precise telling us that this is a good time to buy, right, because we are still far away from the 70 which is the overbought territory. Right? Um, were low, but above over, um, like, it would have been really nice if this was around the 30 or even lower. But 38 it's still, um, pretty good, in my opinion, given the range from 30 to 70 in the are sites of 38 is closer to 30 obviously than it is to 70 right? So this is a good sign from the RNC. Um, And then now let's throw him the Mac t to see what Mac D is saying. So over here, let's quickly in this range. Let's look at the Mackie. Right, So we can see that. Um, over here. You see these hissed a gram bars, write the history. Graham bars are actually reducing in height, so that's already a bullish signal. They're getting smaller and smaller, and they're approaching the zero line. So that means because this increase of height, it was because of this downtrend. Right? So you can see over here the downtrend stars, the lines are getting bigger and bigger. But then in this area, as we moving forward in time, these lines are getting smaller in height. So that's the first bullish sign. And then the next bullish sign is the crossover off the Mac D line above the signal. Right, Right. That's another one. This the two moving averages crossing each other, right? So that's another indication that this is a good entry point. Right on. I know it's really easy to talk about this in hindsight, because the chart has already been formed. But this is the thing you're gonna have to do. Let's say, from this point on, let me just drag this year and say none of that has been formed. And right now, this is today, right? This is the type of analysis you're gonna have to do with the information you have at your disposal, right? Ah, with the indicators and previous Candlestick action of price action. Right. So now, um, you have you have the support. You have the candlestick bounce back, your artist size selling you. This is good. Mac is telling you this is good. And they crossover eso possibly potentially a good bullish signal, right? And, ah, if we actually look at, let's let's look at some of the other stuff, right? Like, let's look at the, um, nine moving average exponential. So if I put in, um, let's say exponential moving average exponential here, Right? Um, and by default, it's nine. Right? So, as you can see that right now, up to this point, this has been the nine moving average. Has been acting as a resistant in this time frame, right? But then as you move in time, it actually breaks above. So you see this candlestick, this green candlestick here? This is a good indication, um, that it's going to be a sort of an uptrend or a bullish sign, because this candle has broken above the nine moving average and our pre In our previous lectures, we said moving averages can act as support, and resistance in this case is acting as a resistant. And when the stock price or the price action breaks above the moving average, this is actually a bully sign because it broke the resistant. And now it's going to the nine moving averages going toe. Act as a support, as you can see exactly what it's doing here, Right? So another thing on position sizing as we talked about earlier, with gaps. So again, if you don't want to go all, then you have $10,000. Anyone invest maybe $2000 you buy in this scandal 2000 on this scandal, and then maybe when this scandal or whichever candle that breaks the nine moving average, the resistant then down might be a good time to add more position. So that say, you add another $2000 to your position, right? And you just continue to build it up. So, all, um, all the signs point to a buy signal Everything we talked about right for this area. So this was a good entry, Right? So now, um, let me just, um, go ahead and remove the nine moving average. So now we want to determine exit point. Right? We want to determine Ah, exit point, because now we've internal trade. So the way to do that is to identify resistant points, right? So the, um, Israeli should be very easy to do. Know if you guys have practice, identify supporting a resistance. So one thing we can see and again, these are very rough numbers, right? So one thing is, this is a resistant rate. So let's say, actually, this point is a good resistant, so I'm just going to draw a line here. Um, this one is a good resistance, this one, and by good, I mean strong, strong resistant rate. So let me go ahead and change the color for these because he's a resistant and these are our self targets. Right? So when you want to exit a trade, um, you want to look at resistant area, right? So, looking at this, let's say so. The the area of the identified for the by is around 2 51 55 So let's say we bought at 2 50 for example, that's around down and save about 2 50 flat. Right? So now we want us to know when to sell. Well, based on what we talked about, this is the first resistant coming up. So this is to 80. So this is about to $30 profit per share, which is pretty good, So I would maybe, um you know, um, sell my stocks here. The ones I bought a to 50. I might sell them in a long the profit here. Maybe I'll let it run. Right. But then also look it. Ah, look at Thea Rs irate. So we bought here right as we're getting closer, um, to this resistant line. Look, what happens to the are inside the R size starting to become closer to 70. So it's reaching the overbought territory right, which is a signal that a potential down trend might start or a potential uh, pull bag is on its way. So I'm looking at the our site and then saying with the Mac, the right look at the Mac did the Mac D line is now crossing below the signal line. That's another berry sign. So our side hitting 70 Mac bee crossing below the signal. Another berry sign, right and coming close to the resistant is also another indication that there might be a possible rejection right in this case when it reached the resistant it close by Lord. But the next day it went up right, because you just you never know. Ah, what is going to do when it's going to reach a resistant? It could break above the resistant, and it could reject and fall below the resistant right because you never know. So one good thing, just like similar to position sizing when you're buying. One thing you can do is you don't have to sell all of your position on that once you can divide the's right. So now let's say, um, just like you were buying 2000 at a time, you can also sell 2000 at a time, so let's say you bought three times at 2000. So now you have $6000 worth of stocks Tesla shares. Um, and one thing you can do is like, save. We've identified the re resistant points, right? So you can just sell. You don't have to sell all 6000 worth of shares. You don't have to sell all. Let's say I mean just for an example. Let's say you have 60 Tesla shares, right? You have to sell all 60. At this resistant point, you can sell 20. Then you can wait and see what it does if it breaks above. Well, yes, you lost on some profit, but then you only sold 20. You still have to 2/3 of your position open and you can still make profit. Right? When you reach the next one, you can sell another 20. So now you've sold 40 and you're sitting on 20 right? When you're reaching this one, you can just sell 20. Or you can just let it right and see what it does. So if you sell here, you vague. You've finished on. You've completed your trade. You've closed all your position. You've locked in profits at different price ranges. So, yes, selling at this one obviously has less profit that this one. But you're protecting yourself from potential further. You know, loss is your gain. So not that you're losing money. Ah, but you're losing on making more money is the way I would describe it. Right? So And you're also protecting yourself, um, and, ah, from risk and exposure. Just because you never know what the stock is going to do because the salt doesn't really have to follow any logic. It could go up the next day, could go down the next day. It could go down on you, could go down on good news. It could go up on bad news. I've seen all of these things happen, so it doesn't have to make sense logically. So the way you protect yourself is one by position, sizing when you're buying or building your position. And also position sizing when you're exiting out of the trade and locking in profits. So this was a good example of support and resistant. Right? Um, now what I'm going to do is I'm going to clear some of these lines, right. Um, and one other thing, we can cover. Ah, is we talked about, um let's say we talked about trend lines, right? So trend lines is another way you can use as indicators. Ah, for short term or long term, whatever. You feel comfortable. So trend lines will help you identify some entry points and exit points. So, um, se, um let me just see if I can find something good here. Okay, So let's use this, right. Let's let's say we want a executor short trade. So obviously this is the stock was gapping up. It went up, it came down. So this is the start of a downtrend, right? So now this down trending, we can draw the trend lines. So let me go ahead and grab this. So I'm going to draw, try my as best as I can connect all the highs together. So that's what I'm trying going to do here. So I'm just drawing the trend line here. So, as you can see, this is, um this is sort of like trendline, but it still is acting as resistance. So as you can see, the red candles are going down, and as is coming back up, it cannot break this trend line, right? So it continues to go down. So now this candle here, this green candle is actually is breaking the trend line, right? And if you look at the volume, it's considerably. So if, um if this is the average volume here on the right hand side, it tells me 4.46 million. Um, on the day that this candle opened or broke the trend line the volume waas 9.3 to 5. So this is more than I would say, double the volume or double the volume, or more than a little bit more than double. So that's a good indication that this is, in fact, a good confirmation for followed through of breaking this resistant, which is this trend line. So I would probably start a position here on this day. And, as you can see over the next few days, it went up so again you would set your Let's say this is ah resistant point. So let me set ah horizontal line here so I would buy on this day, which is to 81 as it's reaching the resistant, which is 3 13 I would exit my trade there and it would lock in some profit. Right? And this is a very short temptress. So this happened over, like in the probably span of 10 days. So but this is a good indication off, like finding good entries using trend lines. Um, a supposed to support and resistant Right? But at the end of the day, this trend line is acting as, um resistant. And similarly, you can draw the lower parts and see that this is actually forming it downward channel, and you can even trade within that downward channel if you identify thes support and resistant lines. So hope that was helpful and we will try to cover. Um, this was a long strategy. So this is US investors buying stocks or trading stocks at a price in anticipation that it will go higher in price in the future, and they will try to do a video on in the next video. We'll cover short position, which means we are going to sell a stock at a high price in anticipation will go down. Onda make money on the down trend 37. Entries and Exits - Short Example: okay, in this lecture I like to cover. Um, the concepts of entries and exits for people or investors or traders were interested in starting a short position. So, um, short position just simply means that you sell a stock on by selling. This is something I mean, that you borrow shares from your brokerage. So you have to research and see if your brokerage actually allows you to short, um on that might depend on the different account type. You have it, that brokerage, or if that brokerage have any available shares to lend to you so that you can short right, These are the things to research before we actually choose a brokerage. Um, and so, yeah, the idea of is shorting is that you actually short a stock by selling it and selling means you borrow, um, in anticipation that will go even lower. And then you can buy back, um, the shares at a lower price that the bank or the brokerage lend you. And the difference is the profit that you actually make from this trade. Right? So it's the opposite of long and for long, people buy something at a low price and anticipation that they can sell at a higher price in the future. So this is the exact opposite. So I want to cover entries and exits for, ah, people who are interested in shorting a stock or an equity or for X or crypto Um, using Ah, Riel chart. So right now I'm using the Tesla, um, ticker symbol. Tesla, a company. Um Staker. Simple T s l A. We're looking at a candlestick chart on a one day. Ah. What I'm going to do is I'm going to actually change this to one week so that each candle represents one week so that we can see more of the data. Um, in our charts, right. So more historical data. So again, um, the idea of entries and exist doesn't really change of whether you want to go long or whether you want to go short on a specific stock. We still have to start by and identifying support, Um, and resistant ah, points for our trading plan. Right. So we're just looking at different time frames right now. Um, let's say, um, like, let's let's look at this time frame here, So I'm just going to zoom in, right? So I'm just going to zoom in. And ah, we've identified some support and resistant lines, right? So what I'm going to do is I'm going to drive horizontal line here. I'm just looking at this section of the chart, and then we have some strong resistance along this point. Right, Al, Generally color this to green because this is our support. Um, and this is our resistant. Obviously, there's, ah, support and resistance in between. But for the sake of this example, let's just save user the exact supporting resistant lines. And these are the ones we'll be, um, demonstrating our trade with right. So Ah, one thing is, um ah, for the entries and exits so you can see that, um over here. Let's look at some historical data. So stock has kept the support. So you see, this green line broke above this resistant line. It kept it right. And then there was a candle here on each candle represents one week. So try to think five days in this one candle, right at the end of this week, it actually closed below the resistant line. Right? Which is a bad sign. This is Ah, very sign and you can see that the next day it continued the downtrend. Right, So this is not good. And it started the downtrend. And now you can see that this candle here it could not close. It did touch and when below, but he could not close below the support line. Um, so this is an indication that we might be coming close to, um eso support line. Right? Um so the next day, the candle went up. So this is a confirmation that this support is holding, and the next three candles you can see that none of them were able to break the support. So now we getting some ideas off. OK, guys, this is a strong support, right? Um and so this actually forms our support, right? And now we know that this is the resistance by just, you know, um, from previous or historical data. Right. So now if we're bouncing off that resistant point right as sorry bouncing off that support line as we're getting closer to the resistant line, this is where all the short sellers might want to start thinking about starting a position , right? Because as you're getting to the resistant line, there is a chance that it can really could do two things right. It could either break above and continue an uptrend, or it can reject and start a downtrend. So look what happened here. Let's say it held the support here. It starts to go up and then as we getting closer, So there's actually two rejections. If you look this candle here, if you can see the top or the upper shadow or upper take didn't even get close to touching this support line, right? And the next day it just continue to drop. So this is an indication that this is a resistant. This is a strong resistant right, because as soon as it got even close it him in touch. Two candles, two weeks worth of their Oh, so this is 10 days. It didn't even touch, and it already started the downtrend. So that's a signal that this is a resistant right? So the next time this is a channel we've drawn here in our supporters of reform the horizontal channel. So the next time the stock comes down and goes back up again, this is where the short sellers might actually start wanting to take positions, So this is a good price. So right now on the right hand side, we are at 3 49 43 This is a good time to actually start a short selling ah position. And again, just like position sizing, you don't have to short $10,000 worth of share. You can just short $2000 worth of shares. And if you get confirmation that this resistant holes and the storage stocks that the stock starts the downtrend, that's when you can start adding mawr to your short position. So let's say this red candle here. So as you can see it touched, the um, resistant lines will be by. We actually short 2000 shares over here. It's actually closing, so it didn't try to break the resistant it couldn't. So that's a good confirmation resistance holding up. So go at an additional 2000 shares and then, as you can see, it's starting to drop, right? Exactly what we anticipate. So then our my entry point for this trade would be this line here, right? And this is 3 49 around 3 49 40 So let's just say 3 49 I would start a position here. I would short the stock, and then my target would be the support, knowing that when it gets closer support it might start an option. So I would buy here. This was where with Enter. Enter. Now I could enter, depending on your risk tolerance. You could enter all of your money in here, which I don't recommend. Or he can go slowly and by $2000 worth here, $2000 worth year $2000 worth here. Um, And then, as you can see now, you have $66,000 worth of, um, Tesla's shares, right? And then, as it's getting closer to the support line, this is you can see it touched, but then he couldn't break below it. So this is a good indication that the support might actually hold. So I would set a cell or sorry, a buy order, because over here we're setting its sell order. That's how short works you sell. And then you buy back at a lower price. So you're returning the shares that the bank lent you. And the difference is the money you're making for yourself that your profits. Right? So here. Let's a listers for simplicity's reasons say, be bought at 3 50 and sorry. We sold at 3 50 we bought at 300 to 99 70 years, about 300. So, um, our profit is $50 per share, which is pretty good. Um, so my entry point would be near the resistant on my exit would be near the support. So this is for shorting the stock right on. One thing we can do is, um, Now, let's get a longer time frame rate. So that was just a short time frame. So let's look a long, longer timeframe. So, um, as you can see, if you're looking at a longer time span so we can see that clearly, we've established some support here and some support here. So what I'm going to do is I'm going to bring the support lines, say, like, summary here. It doesn't have to be exact. Right. So, um, and then let's say resistant is somewhere around here, right? So, again, this is another way, um, like another good point for, um, shorting the stock. One thing we can do is if you're looking at this is ah couple years worth of data rates. So let's school. Actually, let's play or let's look at all time resistance. Right? So if you're looking at all time high resistance, let's focus on that. Um, and you can see that this is around. Um, I don't know what that number is. 3 87 71 So that's a 3 87 Um, so, as you can see, let's look at historical data. So the stock was up trending, rejected, went down, up, trending, rejected, went down and he went even lower, right? Coming close. It didn't even touch it. Rejected. Right. So now over here, right. You've already had 23 confirmations that this is a strong support. 3 87 So this candle here, um, next time it touches that you might want to start a short position, right? You might want to start a short position and in anticipation that will reject this 3 87 again and started downtrend. Now you have to identify multiple support lines depending on how you want to take your profits on how you want to buy back the stock, you might want to do with all that once at a given price or you want to slowly get ready of your shares at different prices. Right? And one thing is eso for this one. For this example, I would say this price here 3 87 is a good price to short this stock, right and enter that position. So, um, how do we get confirmation? Well, let's put the Orestes I indicator on the chart and we are over here. Right? So we're over here. We're looking at this one here so you can see that, um, the Orestes I is not oversold. If it was oversold, I would be I would be worried if it's overbought, if it was moreover, But I would actually be pretty happy because if I'm shorting and something is overbought, that's a good indication that it's going to have toe come down for the artists I write because 70 is overbought and it's an indication that now it doesn't mean it has to. It could continue on being overbought for a long period of time or short period of time, but it's a good indication that it might start to come down from a technical analysis in theory and historical data rate, so over here. We're looking at about three or size about 57. So let's say 60. That's a good sign. Um, if it was around the 30 I would be worried because 30 means oversold so people might start to buy if the people more people by the stock price will go higher so that trade is actually working against my plant. Right? Because when you're shorting, you want the price to go lower so that you make profit. If it goes higher, you're losing money, right? So the artist's eyes Fine. Um, let's look at the Mackie for this one. And the Mackie is looking good because, as you can see, those hissed a gram lines are very small right there on the zero line. Um, and then over the next day, you can see next couple days you can see that you get your trade confirmation because the Mac the is Actually this is a lagging indicator, but the Mac, the does in fact cross below the signal sign, which is a berry sign, right? So I would say, probably support them resistant. Most important, um, indicators that you can detect and identify on your own. Um and then you can use our sign Mackey for confirmation. Volume is definitely important, Um, and in for this traits. Specifically, I would, you know, enter a short position at 3 87 and then I would identify different support lines. So, for example, let's say I have 10,000 worth of Tesla's shares. So let's look at this here. So I buy on this red line at 3 87 So there's a support here. Um, the next support could be here. The next support could be here. So let's say I have 10,000 worth of share. I short here, and then I can buy back 2500 on this one. I'll buy back 2500 and this one. I'll buy back 2500. This one. I'll buy back 2500. This one, right? Obviously, hindsight, you don't know if it's going to break those support. But if it doesn't, I might buy back on the same support. If I see it is starting to bounce up. So yeah, for this trade again, this is our channel 3 87 is the entry, and then you can decide you can. This is completely up to you. on a completely what you're comfortable with, How you want to exit that trade. So how you want to buy back those shares? You can just buy back all 10,000 shares here, Um, you can just break it down. You can just not sell anything here and in anticipation that it'll go to the support and sell everything here. You can divide that profit taking and, you know, by some here by some here, here and here. Right. So completely up to you. But this just demonstrates of what is a good or how to identify a good entry and exit for a short position. I hope this was helpful. 38. Finviz: Oftentimes I asked. I gave ask questions. Such as? How do you find information about a company? Um, or a stock? Um, in order to see if it's a good stock or not and whether you'd like to invest in that stock right on. Another question I get is how do you find stock? So not knowing a company. How do you find stocks? Um, based on, uh, different types of indicators. So whether it's fundamental or technical indicators, how do you find those things? Right. So they're a couple of good websites that I know many investors out there use, including myself. Um, and the 1st 1 is, let's say this is the case where you know a company name and you know it's public and it's being the stock or the shares for that. Companies being traded publicly on one of the exchanges, right? And you want to find some information, right? So the 1st 1 eyes called Yahoo Finance and a lot of people already know about this. I highly recommend it because it's free. There is absolutely no reason for you to pay to get information about a company that's public, right? So if you just go to Yahoo. Finance is what it looks like today. Um, so let's just use Ali Baba, for example. Take her simple baba. And as soon as you type that ill auto, complete this for you. So Alibaba Group Holding LTD. And if you click on it, um, you can actually a load this interface for you right below this interface. There's very, um, good information here, and there is a very quick information. So this is a chart for, um the sorry. Let me go back to summary again. So this is the information is a charge one day, Charlie, there's some quick filters here. You can change it to five day one month's Africans said that to five day, one month, six month year to date, um, one year, five years and so on. Right? So, like looking at five years by just looking at this very basic charge, we can say that it's been going up, but then it's been going up and down like if you get a one year, um, it hasn't been doing well. It's gone up. Its came down, the gun up came down. So it's kind of like going horizontally with no much action, right? If you look at five years, you can tell that it's gone up considerably rate. So like in, um, 2015 it was about $58 today's 186 or the overall trend is upwards. Long term, right? That's the quick chart here. There's some basic information here. So the price it closed today, Um, what is the market cap? What is the p e ratios of this tells you if there profitable or not, Um, what is the one year estimated target? Whether they give, um, dividend, this company doesn't give dividend, so there's no information available, and then this is the volume. So this is the volume off the day, and this is the average volume, and the average volume is calculated based on the last 30 days. So it's the average of the volume for the last 30 days, and this is the volume for two days. So you can say that you can see that today we are below average in terms of trading activity and the number of shares being sold and bought. So here's some basic information. If you want more fundamental, um um, information about the company. You can click on financial. And then there's a whole bunch of you know you can see the income statement, the balance sheet and the cash flow, and you can look at these yearly or, um, you can use Corley, right? So if you said the filter to quarterly, it's going, Ah, it's going to show you the information. So total revenue, costs of revenue, how much it cost to make that revenue and then grows profits right. And there you can do the same thing with balance sheet, and then you can look at cash flow. Now, this is fundamental analysis. It's outside of the school for the technical analysis core course, but I just wanted to show you how finance is a great tool. And it's also free. Ah, for you to get information on, um, a specific company's stock. Right? So now that we know that this is the case where you know the company and you actually want to, um, get information on it before you start investing, um, the next one that the next website I'd like to introduce you to. It's called Fenwick's. So ah f I n um, the eyes that dot com. Right? So if you go to Fenway's dot com, finbiz is a great tool and there's two tiers. There's a paid version, and then there is a free version. I highly recommend you just use the free version to begin with. You can see there's some ads you can close those. Ah, but I highly recommend you actually use the free version. Unless you really need the pay version, right? If you need riel time pricing, then that's fine. Ah, but you to start with at least, um ah, start with the free version and see what it ah provides for you. Right? So when you when you log in the interface, this is what it looks like today. It might change in the future, but like you can see that it's categorizing the top gainers and top losers. So, like, these are some of the ones that, um this is based on the last day of trading. The market is closed right now so that whatever the last day of trading was, um, it's actually showing you the top gainers. And then this is showing the top losers, right? So V I ve lost 57% that day, which is huge. Um, and then e y e g gained 48%. Ah, in one day, which is huge, right? So this is what Finn with shows. You can click on it to go into the individual stalking and see showing me a thumbnail of the chart. Um, but what I would like to focus There's a lot of things to learn on this website. Ah, and it's not that difficult. Um, up here, you can actually enter the symbol if you know it. But first, what I like Teoh focus on is, um, let's say I click on groups, right? The group's shows you the different sectors. Ah ah, within the economy rate and how well, they're actually performing given different time frames. So let me just close this year. Sorry, there's some ads or just, um, if you're not registered, it's going to be annoying. But then again, it So I think I feel like it's okay for a free tool. So right now, um, if this shows you the different sectors on a different time, frames, so one day performance. As you can see, services sector is performing pretty well, and this is performing really bad right now. Let's move on to, Ah, one week. So in one day, services is are performing well how health care is performing well, not as well as services, but it's performing well. Um, not too bad because it's not read, write and then you can see one week. Healthcare is actually doing pretty good company to everything else. So in a one week, um, Services is doing good in one day, but in one week it's actually in the red, so it's not doing so well. But if you look at health care, it's, you know it's green in the, um, one day performance. It's also Green. Healthcare's also green in the one week right now, let's go one month. Healthcare is still green, right? So if I was to perform trade or looking for stocks in a sector that are, you know, it might make up for a good swing trade plan, I would probably looking at this. I would select some stock from the health care section because when that sector goes up in general, it brings other companies up as well, right? And ah, this is like the three month performance, So it depends how far you want to go, right in three month industrial goods actually outperform. Not that health care is not good. Health care is still performed pretty well. Ah, but industrial goods actually beat everyone right in six month consumer goods actually beat all the other sectors, right? And then if you look at one year, performance technology has done the best out of all. Right. So depends on ah, what you're comfortable with as a swing trader or investor, the shorter you go, like this charge will show you all these different time frames. So one day, one week, one month, three months, six months and one year, right, and year to date. So this is a very good high level overview, um, for at least you to see where to start. And then, um, you can, you know, go on research, find stocks from that sector, right? The other thing, this is really nice. And for the group's, um, it just tells you which sectors performing, um, how ah, well or how bad Based on the time frame. Um then you can actually let's say you know a company's information. Besides Yahoo Finance. You can also find information on that. Give particular stock if you know about the company and you know the ticker symbol. So let's say we can since we used bubble issues. Baba here is an example, right? It auto completes there for you. You can click on it and then to begin with, it shows you a chart. And it's the really cool thing is it does some technical analysis for you, so you can see it drove that trend line, which is the resistant here. It drew the support again. There's another ad here which is annoying, so I apologize. Um, but it drew the support line here, Julie Resistance. Or you can see the upward channel, right. This is a very quick chart, and it apply some indicators toward which is ah, really nice. But I want to focus your attention on here. Right on the, um, on the bottom. If you scroll down all the way to the bottom of the page, there's a bunch of new. So this is where you would see news for Alibaba's on November 23rd. Um, this news came out Ah, this is the bottom section of the bottom of the page Is all news, and then the middle section is information about the company. Right? So there is ah, market gap. Um, here there is, um, you can actually short the stock. It says yes. Ah, Pi's 53. Um what else? Um, it shows you information about the e. P s. This is off fundamental analysis. Right? Um shares outstanding. So this is how much share there are out there to be bought or sold. Um, and then, um ah, this is how much you can buy. And then, um, there's, like, the short float. So this is this is the short interest on that company. So it's 1% is not that high, right? It would, ideally, would be less than that. But if something is 2030% in terms of short float, that's a bad sign, because it's saying the overall market outlook on that stock is being short. So there's a high chance that that might not perform very well in the upcoming days or weeks or months or years. Right. So lots of, um, this is again mostly fundamentals. So not going to we'll focus on this too much. Their statements here, if you click against the that statements very similar to information to what we saw on Yahoo Finance. Um, so I just wanted to show you that there is If you know the company's taker symbol, you can find more information here and then use on the bottom here. Right? So another resource. If you don't like Yahoo Finance and there's some quick filters here, you can choose daily weekly monthly for your chart, right? The one thing I want to focus in this video is the screener tool. So if you quick on the top here on the screener, there's tons of Ah, there's tons of filters up here, right? So it starts to list all the stocks. This is all the available, um, stocks here in the stock market. So you can see there's like a lot. So there's, like 300 more than 394 pages, and each page shows 20 stock, right? So let's no focus on that. If you hover over one, I'll show you like a quick chart. Um, and you can see the current price. There's some information, very quick information, this table. So, um, this one a a Alcor against, says the sector here, so the sectors will be covered in the group's right. There's a sector here. Um, there is industry, the countries of the cells, whether it's ust or whatever euros Ah ah. And then the market gap, the P ratio, the price that change for that, this is per day. And this is the volume. This is information for that day, right? So Ah, very quick information, which is nice and useful. But I want to focus on the filters. So then was allows you to do is to apply different sets of filters, um, to narrow down the list of stocks so that you can actually, um, analyze and find the best one for your need, whether that's investing or trading right and the type of different filters air actually different. So you have four times on the top Here we go descriptive from the mental, technical and all all just shows all three, but by default is set to descriptive. So, um, this kind of tells you which exchange the companies are being, um, traded on. Ah, what? What's the market cap is so like if you click on this, you can choose from mega, which is 200 billion or Maurin large. 10 billion to between 10 and 200 billion. Mid is two billion between two on 10 billion and so on. Great. So you can It's up to you. What criteria you wind. You want Teoh actually set? There's dividend like, does it give you any dividend If it's higher than like, if you're planning to, um, start your dividend portfolio and you wanna build a portfolio that consists of only dividend stock here, you can decide, um, on, um, like deciding. Um, let's say you don't know any stock, right? Let's say you don't know anything. Excuse me. Ah, any stocks that pay a dividend so this filter allows you to choose How many percentage? So, for example, we have high is over five. Um, anything above 0/1 percent. 2%. 10%. So you can actually set that rate. So it begins. Set something. Let's say we want to build ah, high. Um um performance dividend portfolio. Let me click. Hi. And then this is going to, um, narrow down the list to the company's, um that will pay out 5% or more dividend. What the Adam just gonna have to close it. Um, so this is 11 way to actually find out, right? So obviously, this is just one filter. You can apply Mawr, like you can apply a market cap and say, like, large. So between 10. And, um, you know, Ah, what was at 10 and two was a 202 100 billion. So right now we can see abbvie here. Like number one. It's a health care. It's in the healthcare sector. It's a drug manufacturer market. That market cap is 128 billion. So and this one is actually paying over 5% dividend. Great. Um, so this is this is one way to actually find ah, specific stocks based on your specific filter criterias. Right. So now, um, we talked about these things. This is this group descriptive, Which is Ah, Primi. Um, it Zagat some good filters in here. You can click on reset. So if you're quick on reset, it just resets everything and shows you the entire list again. We can go into fundamental. So if you bring out the fundamental this is for fundamental analysis. So it's outside of the scope of this course. I just wanted to show you that you can go in here and set fundamental filter. So, for example, P e um Price gash e p s over the growth over the next five years. Um, depth to equity ratio forward P E ah. Price to sales ratio. Payout ratio. Return on assets quick ratio. Um, there's lots of things in here, right? And it's really nice because it can help you, um, narrow down the list so that you can start your analysis on whether you want to start investing in a given stock or not. So this is for fundamental, and I just want to bring your attention to technical. So technical is what this courses, you know, focuses on. So if you want to find stocks to trade based on technical and allow says these are some of the filters you can apply, for example, performance. It tells you this is for two days. Or has it been upward down in general, right? Has it been less? Has it been down more than 15% 15% or less? Has it been down 10% or less? Um, lots of variables you can apply here. There's the same things for week. There's the same thing for month quarter, um, year. So there's lots of ah filters to just set for performance, right? There's 20 day moving average. So as we talked about in previous lectures, moving averages are actually act. Could act a supporter resistant, right? So now let's say you want to find the stock that actually broke the resistance for the moving average Will guess what? You can actually set this up, right? So it says, um price below sm a 20 So simple. Moving average 20 right? Um, or 10% below that rate. Um, there's other ones price crossed as some may 20 above. So this might be if you're looking for something to go along on and something that just breaks resistance. That might be a good thing to filter on because that tells you that the resistant is now broken and this might be a good entry point, right? So if I just click on this l, um ah, filter and show me the list of stocks that have those right? Obviously, this is a huge list. Still, as you can see, there's like over it 42 pages and each page shows you 20. So it's still a huge list. So we obviously you want to apply Mawr filters, Right? So, um, let's say, um, if you want, if you're looking for a good entry, you cross that, and then you want the RS I If you're entering something Iran and wanted to be over um, overbought. Right. So you want to go, like, maybe oversold 40. You can do 10 2034 days so we can do, like 40. Um, or you can just apply the ones that says not overboard less than 60 less than 50. So, um, so we can do less than 50 Not overboard, right? We can simplify the filter. So now it shows you're less stuff stocks that has just recently crossed over. Um, the price action has crossed over the 20 simple moving average. And also it's less than 50 in terms of our sign, meaning it's still there still room to move towards the 70 or inside, which is the overbought territory. Right? So lots of ah, filters and ah, I just the only thing I'd like to say. It's just go ahead and play around with these, um and then to see this is really this tool is to ah for two things. Really. You can come up here and entered the stock here to gain information on the specific stock alongside with a bunch of recent and use about that company. Or you can just use the, um ah ah. What was it called? Groups to kind of get an idea of how well different sectors are performing. Given the timeframes of one day, one week? Ah, one year quarter, things like that. And then also, the third thing that this website provides is the filter based on fundamental and or technical analysis. Right? So if you're technical trader, if you're a technical analyst or string traded, you might want to use these filters toe. Identify which stocks are in play right now and the ones you are you know, worth trading. Um, you can even apply patterns here, right? So you can actually, um, there's lot of things you can do. So there's some of the things recovered this channel up, channel up strong, channel down, channel down. There's a horizontal channel, right? There's, um, lots of technical indicators here, Right? Um, that he can actually do so they can go channel strong which is the horizontal channel. Um, and then right now there's nothing. So what I can do is I can actually remove. Um, I can let me reset the filter here and then go to channel cause thea ad and then sorry. Let me just find the channel here. Okay, So channel strong. So right now, if you just hover over this, and if you open the charge for this, you should see it strong, like a horizontal channel going for this stock. Right? And the last thing I want to mention is, um, these air the tabs. But then if you click on all, um, it just gives you all filters, um, in one place. So if you're comfortable with this view, these are more compact and just focus on those specific things. So fundamental focuses on the filter criteria for fundamental analysis and technical focuses on technical analysis filters, um, and then, um, all actually represents you with all the available filters within this website. So I highly recommend using Fenway's and just there's no much learning curve to this. It's just really setting filters and narrowing down the list of stocks that you potentially want to analyze. using maybe different charting tools or look at news for those. So I hope that was helpful. And thank you very much for watching.