The Trading Industry Will Hate Me for This FREE 6 Hour Course

All right. So, welcome to the complete trading course for 2026 and beyond. This course will be over 6 hours long. And I expect that around 90% of people that clicked on this video won't even make it past the 20-minute mark. They will get bored, click off, and go look for another video, you know, a 10-minute video that promises that they will get rich, you know, tomorrow.

Why do I say that 90% of people will click off the video before the 20-minute mark? Well, that is because 90% of traders also fail and lose their money. If you don't have the focus and discipline to really sit down and go through a 6-hour, you know, free course on YouTube, you do not stand a chance becoming consistently profitable in real markets and when real money is on the line. Today I challenge you to be in the top 10% that will actually watch this course.

This video is built on my four best video courses here on YouTube and I have put them all together in a massive guide so you can learn trading in the correct order step by step from being a beginner to an advanced trader. But yeah, this course will be pure trading education. So, if you expect, you know, get rich quick schemes or rented supercars and all that you are in the wrong place. But if you really want to learn trading, you are in the right place. And yeah, this right here is the game plan for today's course.

So, part one or section one of the course will be all about trading fundamentals. So in this part we will talk about, you know, things like what trading is, how trading works, how traders make money and so on and so on. This part is super, super important if you want to get the most out of part two and eventually part three. Learning the foundations is something a profitable trader can't do without. So this part is really to get you guys started with all the trading basics you need in order to move on to the next part, which is the two core pillars of trading.

So part two will be about the pillars of trading, which is first of all, price action is pillar one and market structure is pillar two. If you can only learn two things in trading, I recommend to learn price action and market structure. And you will hear this throughout the course that I always, you know, try to hammer in that you need to use price action and market structure. So as I said, we will look at the two pillars of technical analysis. Uh, and price action is basically the study of the live price movements. So when we look at price action, we're looking at, you know, how is the price moving right now. And, uh, while market structure is the study of historical price. So when we look back and take a look at how the price has moved in the past, we're looking at market structure. So when we combine, uh, price action and market structure, we look at, we combine, you know, looking at live movements with studying the past, right? This is a very important mindset to have throughout the course.

Last but definitely not least, in part three, we will move on to something called order flow. This right here is a more advanced concept and will basically be your secret weapon because order flow is when we, instead of just looking at candlesticks, right? We will start to look at inside of the candlesticks. We will look deeper and take a look at what is actually happening inside the candles, what is creating the candles. But as I said, guys, in order to have a chance to understand part three, you need to, you need to, uh, watch part two. And in order to get the most out of part two, you need to watch part one. So, as you can see, this course is really built in a step-by-step manner.

And, yeah, because this course is more than 6 hours long, I actually recommend to not watch this full course in one go. What I do recommend is that you treat this video as a real course. So, I highly recommend that you already, you know, bookmark this course, add it to a watch later playlist or save the link somewhere with easy access. Basically, do anything so you can easily come back to this course and then commit to spend maybe 45 minutes to 1 hour a day, or at least 1 hour to 45 minutes, and then take a break. What I also highly recommend is that you, you know, actually take notes. And you can do this on your computer, but for me personally, I think there's something special about taking, you know, physical notes because I feel like when you take physical notes, there's something that makes me, at least for me, I remember things easy, uh, more easily when I write things down on paper. So, I do recommend if you have a notebook to grab a notebook.

Another important thing to mention is that I will have video chapters and timestamps for this video and make sure to really use them. Use them to maybe skip around if you need. Use them to rewatch and rewind the most important parts. And as I said, take notes and also make sure to open up TradingView. As you can see right now, I am on TradingView. And you, if you have two screens, I recommend to have, you know, uh, maybe this video on the main screen and TradingView on the second screen so you can start to practice concepts in real time while, while you are watching the video. And last but not least, trading takes time. You are not going to get rich tomorrow. But if you have the discipline to watch this full course, you will understand markets better than 99% of traders. So, go grab a coffee, log in, and let's get to work.

Welcome to part one of the course. Now, let's talk about what trading really is. What is actually trading? Well, if we strip down trading to the fundamentals. So, what is trading in, you know, the simple core terms, then we can actually see trading as a decision-making skill. When it comes to trading, we basically always have a decision to make. We either buy something or we sell something. And can you guess what the third option is here? This is probably the most important option. That is to do nothing. I see so many beginner traders losing because they can't sit still. They can't, you know, watch a chart for hours and do nothing. But as a trader, this is a very important skill because you need to be able to wait and wait and wait until your setup and your trading strategy actually appears because that is the moment where you will actually make money. So most of the time as a trader, you actually do nothing. And with doing nothing, I don't mean that you literally do nothing. You spend a lot of time just scanning charts for the best setups.

Um, so here, uh, I like to think about trading as you are managing risk and not predicting the future. So I like to think about the game of poker because when you are playing poker, you might have a good hand, you might have a bad hand, but at the end of the day, you might have the best hand possible, you might have double aces, and you can still lose the round. And trading here is the same. What we as traders can do, uh, by, you know, making better trading strategies and learning more about trading is that we can more and more often get better and better hands, but we can never predict with 100% certainty that something will happen. And this is something you, I want you to write down already right now. If you have been, you know, hearing, you know, maybe a trader say that they 100% know that something will happen, then that is, no one knows, uh, you know, that something will happen with 100% certainty. What we as traders do is that we want to increase the odds that we are being right, and that is all we can do as traders. But over, you know, a large amount of time, let's say we only have, you know, a 60% chance of being right, then we will, you know, make money. Or actually, it's a little bit more complicated, but we will talk about that later on in the course. Uh, so don't worry. As for now, you can think about it like this.

Another thing you need to consider is that losses are, uh, just part of the business. I like to also think about trading as a business. Uh, you know, no business will have no costs at all. You need to, you can think about losses as a sort of investment and as just a natural part of trading. You will, uh, if you're not willing to never lose, trading is not for you. And another very important thing here is that one trade means nothing, and the process means everything. Once again, you can think about poker. For example, the best poker player in the world might lose to the worst poker player in the world just by pure luck. But if they play 1,000 games, the best player in the world will crush, uh, the noob. It will crush the beginner. And you need to think about trading the same way. So, so here it's very important that if you want to be a successful trader, consistency is much more important than intensity. So, the trader who studies, let's say, you know, a little bit every day for a year will beat the trader that, you know, goes all in for just like a few weeks. Uh, I think consistency is key.

But all right, then. So now let's take a look at the trader framework. And this is a step-by-step process. You need to follow every single trade, especially when you are a beginner. Uh, so here, every trade follows the same structure, and there are three steps you need to follow, and you can, uh, look at the image right here. And the step, the step-by-step process is super simple. First of all, we need to find a market setup. And you might wonder, how do we find a market setup? Don't worry, we will talk about exactly that later on in this video. But in very simple terms, finding a market setup is that you look out for certain conditions. And if you check all of these boxes, you are now ready to go to the next step.

And the next step is to plan your trade. And here you need to plan three things. The first thing you need to plan is your entry. Your entry is, of course, uh, when to enter or where on the chart to enter, what needs to happen, uh, for us to actually buy a stock or buy a cryptocurrency. The next thing we really need to do, and this is one of the most important principles of risk management, is that we need to set a stop, uh, a stop-loss or for short, stop. So a stop-loss is basically a level that if the price, if the price falls below this level, we automatically sell. And this is so, so important, and we will talk about, uh, that more soon. Uh, but for now, all you need to do is that we need to have an entry, stop-loss, but we also need to have a target. You can think about a target as the opposite of a stop-loss. That is a level that, you know, when the price goes up to that level, we will automatically, you know, lock in profit.

And here, if any of these steps are missing, then it's not a trade. Then you are actually gambling. You're just guessing that the market will go in a certain direction. You don't really have a plan. Uh, at least for beginners, it's very good to think about it like this. We need an entry, stop, and target. For more advanced traders, there are some more advanced strategies as well. But I think that everyone should begin with this mindset: entry, stop, target.

But now, the process is not done here because what we then need to do is that we need to, uh, execute and also review the decision. So we have, for example, something called trade management, that is, you know, what do we do while we are in the trade. Another important part of execution is something called trading psychology. Uh, if you have been trading a bit, you're probably familiar with this, and that is that, you know, when, let's say that the market starts going against you a lot. The market maybe drops quickly, then you can start to feel, you know, lots of fear. You are, you know, it's only natural to be fearful about losing money, and that can, in turn, make you think that, you know, maybe I should, you know, remove my stop-loss because I really think the market will go back. So, uh, the, the emotions can basically make you, you know, go away from your plan, and that is a very slippery slope, that is a dangerous thing. So you really need to practice your trading psychology. And also for the upside, uh, you know, trading psychology can lead to greed. Maybe you win, you know, multiple times in a row, and you think that you have beaten the game of trading, and you start taking more and more risk because you get more and more greedy. That can also be a fast road to, you know, basically losing everything. So, very important trading psychology, very important to manage your trade. And also another important thing is that you want to review your trade. So after a trade, it doesn't matter if you won or lost, you want to take a look at, you know, did I actually follow my plan? And if you didn't follow your plan, what happened that made you not follow your plan? It's very good to write that down in maybe a trading journal.

But all right, guys. So now, in order to trade, there are a few tools you really need. But here, especially for beginners, I really, really recommend to keep it simple because there are only a few things you need. First of all, you need a charting platform, or in other words, you need a platform where you do all your analysis and where you plan your trades and where you basically do everything you need in order to make the decision of whether you should take a trade or not. Should you buy this or should you buy that? And for charting platforms, I highly recommend TradingView. And let's take a quick look inside.

All right. So now we are inside TradingView here. And TradingView is the platform I use for, you know, all my technical analysis. Uh, all analysis I need to do in order to decide whether I should buy or sell something is done here in TradingView. And nowadays, TradingView can be used for, you know, other things as well. You can use TradingView to find news about what you're trading. You can use TradingView to do, you know, fundamental analysis. So you can analyze, for example, you know, stocks, how are different businesses performing, and so on and so on. But TradingView is mostly a platform for analyzing charts, and this is also the platform I will use throughout this whole course. So what I actually recommend right now is to, you know, sign up for TradingView. And maybe if you have two screens, you can have TradingView on one screen and my video on the other screen so you can follow along, uh, during this course. And before you sign up, I have to mention that I do have a special link to TradingView, and I highly recommend to use that one, uh, because if you use that link, you can, first of all, uh, if you want to, you can try out TradingView Premium for free for 30 days. Uh, so you will not have any ads, and you can use, for example, multiple indicators and use all, all the features inside TradingView. Uh, but also if you use that link and then maybe later on decide that you want to, uh, upgrade, maybe you start with the free version and then maybe later on want to, uh, you know, as you get better at trading, you, you maybe want to upgrade, then you will get a $15 bonus. So I will make sure to leave that link in both the description and the pinned comment. Uh, so I actually right away pause the video and sign up to TradingView, and I will see you soon.

But right, so now when you have a charting platform where you do your analysis, the next thing you need is a platform where you actually buy and sell, whether you actually take your trades. In other words, you need a trading platform or a broker. And here, this will depend quite a lot on where you are from and what you are trading. So, for example, are you trading, you know, crypto? Uh, maybe you are focused on stocks. Uh, maybe you are trading forex. Um, you need to decide what to trade because the best broker will depend on what you are trading. And here for beginners, I would probably, you know, recommend stocks to begin with, or, uh, you can also trade crypto. But if you trade crypto, I highly recommend to, you know, start with the larger cryptocurrencies. Uh, I would actually probably start with Bitcoin, BTC. Um, and with stocks, uh, I also would recommend, you know, starting on, uh, starting off with the bigger stocks because the bigger cryptocurrencies and stocks tend to move, you know, not as, uh, wild. So, for example, a large stock might move, you know, something like this, while, you know, a small stock or small cryptocurrency might move, you know, very more like this. We call this move here to the right, we call high volatility, and we call this move to the left, low volatility.

Uh, but if you want some recommendations, if you're trading crypto, I can highly recommend, uh, Bybit. So Bybit is, uh, a crypto exchange. I think it's like the fourth largest exchange or something like that. I think it has a very beginner-friendly interface, and it has many different cryptocurrencies. Uh, I also for Bybit have a special link, and you can use that link. It will be in the description and the pinned comment. And the more you trade on Bybit, the more free bonuses you will get, and you can get up to a total of $30,000. But I can already warn you guys that most will not even get close to $30,000 because you will need, uh, only if you are rich and trade with lots of, lots of money, you will get that. Uh, but I think that most people will get like $100 for free. Uh, so make sure to check that link out if you want to trade crypto.

If you want to trade stocks, I think this one depends a lot on the country you are from. I'm from Sweden, so I mainly use a broker called Avansa. Uh, but as I said, this one is only available in Sweden, and I highly recommend that you do your research. You know, nowadays we have very good, you know, I would actually recommend using an LLM like ChatGPT, Gemini, or Claude to basically do some research on, uh, what broker, uh, uh, that fits the best for you. And the same thing is true here with, uh, with Forex.

Um, but here, uh, a question I get asked a lot is, you know, but what about TradingView? Can I trade inside TradingView? And the answer to this is actually yes, but only for certain brokers. So to check if your broker is available for trading directly in TradingView, what you need to do here is that you need to go down to where it says trading panel right here. And as you can see, uh, this bar, uh, this window right here will pop up, and you can see that we have multiple different, uh, brokers that you can connect to TradingView. So if you're using any of these brokers like O, OKX, that is a common crypto one, Binance, a common crypto one, we have some forex ones, we have some stock ones as well. We can also click show more here. For example, as you can see Bybit, that I talked about. Uh, if, if you use Bybit, you can connect Bybit to TradingView and trade, uh, uh, inside TradingView. Very useful.

Um, and what you also can do, and this we will talk about later, is something known as paper trading. Paper trading is a function inside TradingView that you can use to practice with fake money. And I actually have a video about that. So I will make sure to link the video in the video card as well as the description. Uh, add that one to a watch later playlist or bookmark that one so you can watch it after this course. So here, as I said, you also want a demo account for practice, and here I highly recommend TradingView paper trading. And what I also recommend, another tool that is useful, is some sort of trading, trading journal. This can be, you know, a physical, this can be, you know, a physical book. I, for some reason, I really like, you know, to write things down physically. I feel like it, you know, helps, I don't know, helps with my memory. But you can of course also track it, you know, in a digital, uh, way. I think that is for most people maybe the best way to do it. But I'm a bit old-fashioned when it comes to trading journal. But what I mean, what I mean with trading journal is basically you write down, you know, why you took your trade, uh, you know, how did the trade go? Did you win or lose? How much did you win or lose? And also maybe write down some comments, like, for example, how was your trading psychology? Did you follow your plan? And so on and so on.

But right, guys. So now the time has come to, you know, probably the most important skill you need as a trader, and that is, of course, how to read price. Reading price is, you know, the sort of heart of, uh, analyzing charts. And in order to be able to, you know, look at at a chart like, for example, this, and decide, you know, whether to buy or sell and sort of do your whole analysis. The very first thing we need to do before we can look at a chart as a whole is that, of course, we need to zoom in, and we need to be able to understand the individual candles. And here, and this is very important, the price will always tell you a story. So when you look at, you know, uh, the price, there are, you, you shouldn't just think about it as, you know, numbers on a screen. Behind every candlestick, so, for example, this right here is a, you know, bullish candlestick, and this right here is a bearish candlestick. Behind every candle are, you know, a battle between buyers and sellers, and there are, you know, emotions behind the candles. You know, some traders may be, you know, lost a lot during a candle. Some traders are, you know, uh, feeling euphoria because they are making a lot of money. Uh, so when we read candles, we basically want to think about it as we are reading the sort of collective psychology of the market, right? It's very fascinating. Um, but here, the very first thing we need to do is how to read candlesticks. And in simple terms, candlesticks show, uh, show us four things about the price. So here, let's take a look at how to read candles.

First of all, we have two types of candles. We have the green candle, which is known as a bullish candle, and we have the red candle, which is known as, uh, oops, which is known as a bearish candle. Uh, on some charts, the green candle will be white, and the red candle will be black, but green and red is by far the most common. And a bullish candle simply means that the price went up during the candle. And a bearish candle simply means that the price went down during a candle. And you can see that we have four points here. We have, you know, uh, let me change color here. We have the open, uh, right here. This is where the price started. And we have the close here, and this is where the price was at the end of the candle. But we also have something known as a low and a high. And the low is the lowest point the price reached during that candle. And the high is the highest point the price reached during that candle.

And now you might ask yourself, but okay, so I understand this, but what is the, you know, time period of a candle? And the answer here is that you can decide. So you can decide if you wanna, if you want one, every candle to maybe be, you know, one day, or you can choose every candle to maybe be one hour, or you can choose every candle to be five minutes. That is completely up to you, and I will soon show you guys how to do this in TradingView. Uh, but for now, now you understand how a green candle looks like. Uh, and the red candle is simply the opposite. Remember, the price falls during the candle. So it opens now up here, and before the candle is over, so, for example, before the day is over, the price is down here. The lowest spot the price reached was down here, and the highest spot the price reached was up there.

But right, so now let's jump back here into TradingView. Right now, as I am speaking, I am looking on a gold chart, and I will try to use this chart as much as possible during, uh, the course because when I create courses, I always try to use the same chart so that I can show you guys that the principles from this course can all be applied. Uh, but here we're looking at gold, and right now we're looking at, you can see it says D up here. That means that we're looking at a daily time frame. So, so in other words, every candlestick on this chart represents one day. But if we want to change the time frame, we can go up to right here. So we press right there. And now we can see that we have so many different things to choose between. We can choose that every, uh, candle is one day. We can choose that every candle is one hour, or I mean, four hours, or maybe one hour. Let's for now switch to one hour. Now, every candlestick on this chart will be one hour instead. Oops. Uh, let me fix that.

And now, just as a practice, let's take a look at, you know, how to read, you know, uh, one of these candles. Let's, for example, look at the green candle. Remember, the green candle opens right here. So the price started right here. During the candle, the price actually reached a highest point up here. Remember, the wick is the highest point, but before the candle closed, the price fell down to this point right here. So this is basically how the price moved, uh, moved in on this candle alone. And if you look at maybe all of these candles together, maybe the price looked something like this. Remember, it opened right here. It went up to a highest point down here. Then it went down here. Then it went, you know, something like, you know, something like this. Not really, but I hope you get the point.

So here, time frames show you basically, you know, the same story but with different details. So we can, for example, look at, you know, a daily time frame, but if we want more detailed information, we can zoom in to the one-hour time frame. And if we want even more detailed information, we can zoom in even more to the five-minute time frame to take a look at, you know, what is happening. So we can basically think about time frames as using a magnifying glass and, you know, investigating the price movements even further.

And also here, in general, markets move in something known as trends or ranges. So what a trend basically is, a trend is when we have a market, you know, going in a certain direction. The market always goes, you know, up and down, but the trend is sort of the overall direction of the market. So, this right here is, for example, an uptrend. You can see we have an uptrend right here. While a range is when we don't really have a certain direction. The market might go something like this and basically to the sideways. Um, and don't worry, we will talk more about, uh, uptrends, downtrends, and, you know, ranges very soon.

And here, and this is very key, uh, you know, one thing I hear so many beginners talking a lot about is trading indicators. And trading indicators can be a very useful tool. It can help your analysis, but it's very important that you know, as a trader, you need to really start by learning, you know, about something called price action. Price action is basically the study of how the price moves in the very short term. So what is the price doing right now? And you also need to learn about something called market structure. These two concepts are so much more important than learning about indicators. Before you even learn about your first indicator, you need to learn about price action and market structure. And we will talk a little bit about both price action and market structure in this course. And I also have, you know, long courses where you can dive even more deep, uh, that are more advanced on the channel. I will make sure to link my price action trading course both up in the, uh, pinned comment video card and the description. And I will also link my market structure trading course, uh, in the pinned comment, uh, I mean, in the video card and the description as well. Uh, so make sure to add these courses to a watch later playlist or bookmark them, uh, because you do want to watch them after this course. But for now, that is all you need to know.

All right. So now let's talk about one of the two most important foundations in trading, and that is something called market structure, or market structure and trends. And this is something you basically need to learn before everything else. And the very basics here of market structure is that you need to learn about trends, and you need to learn about ranges. And first of all, we have two main types of trends. We have the uptrend, and we have the downtrend. And in order to have an uptrend, we need to have both higher highs and higher lows. So, let me show you right here. So, when the market moves, the market might move something like this, something like this, something like this, something like this. Uh, this right here is what we call a high. We usually just write an H. And this right here is what we call a low. We usually just write an L. And in order to have an uptrend, we need to continue to print both higher highs. So, for example, this right here is a high, but it's higher up. So we call it a higher high. Uh, and this right here is a higher low because it's a low point, but it's higher up. And as long as this pattern continues, we have an uptrend. But it's very important to notice that we need to have both higher highs and higher lows to have an uptrend. So if we, for example, let's say we have a market that looks something like this. You can see in this kind of market, we are having, you know, one high right here. Then we have a higher high, and then we have an even a higher high. So some beginners might look at this and think, you know, this is an uptrend, right? Well, it's not an uptrend because we can see that the lows here are all on the same level. So this is not, uh, you know, an uptrend. Um, so this is very important to have in mind. We need to have both higher highs and higher lows to have an uptrend.

And the same thing is of course true for the downtrend, but the opposite. In order to have a downtrend, we need to have both lower highs and lower lows. So, uh, you know, let's say we have a market that looks something like this. This right here is a downtrend because we have a, we have a high, we have a lower high, we have yet another lower high right here. We have a low, we have a lower low, we have yet another lower low. But if this market stops printing, you know, either, you know, lower lower highs or lower lows. So, let's say that this market might go something like, you know, this. You can see now it has passed the point of the lower high. At this point, we are no longer in a downtrend. But it's very important to notice here that this does not mean, uh, when we break this point right here, when we break this point, this does not mean that we automatically go into an uptrend because we do have yet another state that you need to know, know about, and that is that we have sideways movement. So this is all the market conditions that are not an uptrend or a downtrend, we count as a sideways market. And when most, uh, you know, especially beginners think about sideways markets, uh, we think about a market that goes something like this. The market trades here in between two clearly defined lines. Uh, we call the bottom line here is known as support, and the upper line here is known as resistance, and we will talk about this very soon, support and resistance, very important concept to learn. Uh, but most traders, when they think about ranges, they think about a market that looks something like this, and this is true. This right here is one type of range, but we have many other types of market as well. For example, let's say that we have a market that looks something like this. This right here, uh, is a market where we're printing, you know, we have a low, we have a high, but then we have a lower high, and we have a higher low, and so on and so on. So this is neither an uptrend or a downtrend. This is actually one type of a sideways market. This is actually almost looking like a triangle, right? And this is, uh, a specific pattern we call a, we call it a symmetrical triangle, and that is what is known as a chart pattern. Um, we will talk a little bit about that later in this video, but I also have a full course on chart patterns. So I'll make sure to link that course up in the video card as well as the description. But for now, all you need to do, all you need to know is that ranges does not, uh, or sideways market doesn't have to be perfect ranges. They can also be, you know, triangles, and they could be, they can also be, you know, markets that maybe look, you know, something like this, right? Uh, actually, in real markets, you will many times see price movements like this because real markets are often not this, this kind of perfect markets that you see in textbooks.

And here, a very important principle, especially for beginners, is that it's important that you know, you should start by analyzing the trend because in order to, you know, take a trading decision, some trading strategies only work in uptrends. Some trading strategies only work in sideways markets, and so on and so on. So what we first need to do is to identify if we even are in an uptrend, downtrend, or sideways market in the first place. This basically filters out the bad trades.

All right. Okay. So now let's actually jump back here into TradingView. We are looking here at the daily time frame, and we are looking at gold. Uh, so every candlestick on this chart represents one day. And if you are still on this point in the course and you don't have TradingView yet, from now and, uh, you know, in the future, we will be using TradingView a lot. So I highly recommend to get TradingView right now. Uh, and as I said, I do have a special link, uh, that will be in the description and the pinned comment. Uh, so make sure guys to get TradingView.

And now, let's actually start to analyze this chart right here. And the first thing we can see if we analyze this sort of recent trend right here, we can see that the price sort of started down here. It pushed up right to this point, then it fell back. This right here is what, uh, what is called a pullback. And this first move right here is what is called an impulse or impulsive move. And trends are basically built on impulsive moves and pullbacks. Impulsive moves and pullbacks. So, for example, right here we have the next impulsive move. And you can see that we actually print a higher high, a slightly higher high here. Then we pull back once again. Then we have an impulsive move all the way up here, right? Then we pull back once again. We have an impulsive move that we are in right now, and we have a potential, you know, pullback coming. But remember here, as long as we are printing, you know, we have a low, we have a higher low, we have a high, higher low, and so on and so on. We have a high, we have a higher high, and so on and so on. As long as this, uh, uh, pattern continues, we are in an uptrend.

But when you also can notice, if we zoom out a bit more here, you can notice that this recent trend right here, this one was, you know, relatively simple to read. We had this nice impulsive move, pullback, impulsive move, pullback. But in real trends, in real markets, you will many times find much more harder markets to read. For example, this recent move right here for gold almost looks like a straight line, right? This is almost what we call a parabolic move to the upside. And these moves can actually be much harder to trade compared to these sort of perfect, uh, or this one is not perfect, but much more clear, uh, uh, trends.

Then if we scroll back even more, you can also see that here we have a very interesting thing here. It almost looks like we have some sort of, you know, pattern, right? We have some sort of a resistance, it looks like, and then we have some sort of upward sloping support. This is another thing you will often see in markets. Uh, this is chart patterns, uh, that I talked about earlier. But what you hopefully can clearly see is that the overall trend here is clearly to the upside. But we do have many sort of, uh, pauses in the trend. So, for example, right here, and we can also actually almost look like this part right here as a pause in the trend, and so on and so on. So we, as traders, need to be able to read both trends, but also these pauses, because these pauses can actually be very good opportunities to, you know, find trades and as a result make money.

All right. So now the time has finally come to learn about support and resistance. And this is basically where the decisions happen. Where the most important, I would say, the most important decisions on the chart happen. So another word for this is that they are key reaction zones. And this word right here, zones, is very important to have in mind when we talk about support and resistance. But in very simple terms, support is basically an area on the chart where the price stops falling, and resistance is an area on the chart where the price stops rising.

So the most common way to explain support and resistance is to, you know, let's draw a line right here and a line right here, and we draw a trading range. So as you can see, the resistance here, we can write resistance here in red. Every time the price reaches this level, you can see that we get a reaction to the downside. This is where the price stops rising. And the same thing, but the opposite, is true with the support. As you can see, every time the price reaches this level, the price stops falling, and we get a reaction here to the upside.

But one thing I dislike with, you know, explaining it in this way is that in real market, support and resistance will not be this sort of perfect lines. I really like to look at support and resistance more as areas or zones rather than lines. So it would be a much better, uh, you know, demonstration here if we draw the support as an area and the resistance as an area. So this is what, one thing I want to have, want you guys to have in mind right away here is that I want you to look at resistance levels as areas where the price is likely to stop rising, and I want you to look at support as areas where, uh, I mean, resistance as areas where the price is likely to stop rising, and support as areas where the price is likely to stop falling.

And I also want to really emphasize that a resistance level definitely doesn't mean that the price will not, you know, uh, go above it because in real markets, let's actually extend this resistance level right here. Let's extend it like that. In real markets, what many times will happen is that the price will break above, uh, the resistance, and many times the break of the resistance, this is what is known as a breakout, will actually be, uh, will actually be very good trading opportunities. So we, as traders, need to, you know, we can both trade the reaction to the support and resistance, but we can also trade the break of support and resistance.

And here, and this is very important when it comes to support and resistance, the obvious levels matter the most. A super common mistake that beginners make is that they draw way too many support and resistance levels on the chart, uh, and that just makes the chart harder to read. The reason we're even drawing support and resistance levels in the first place is to make the chart, you know, easier to read, not harder to read. So, a good rule of thumb here is that if the level is not obvious, ignore the level. It's better to, you know, most levels, especially for beginners, should be ignored. Focus on the most important levels.

So now to show you guys why the most important resistance levels matter, let's go back here to the gold chart. So we are once again in TradingView. We are once again on the gold chart on the daily time frame. So every candlestick on this chart represents one day. But what I want you to learn from this chart right here is that, you know, okay, so first of all, let's just look at this chart right here. Which level, support or resistance, looks most obvious to you? Well, for me, the answer is super, super clear. And I can already show you guys how I draw my support and resistance in TradingView. I use geometric shapes. If you go here to the left, you click geometric shapes, and then you use the rectangle tool. This is so we can draw, you know, then you press on the chart right here, and we can draw a zone. To capture the whole zone, to capture all of these touches, we would have to draw it something like this. So this right here is a resistance zone. And as you can see, this one is super clearly visible on the chart. We had, you know, one touch, two touches, three touches, four touches, you know, almost another touch right here. But then what I really want you to notice, and that we talked about earlier, is then the price finally broke above. And what happened after the price broke this level? Well, this was actually the beginning of a massive, massive move towards the upside. And if you caught this move, it could have made lots of money. And I'm not saying the only reason that this happened was that we had such a clear resistance level. But what I do say is that it's likely, you know, a strong reason why this rally had so much power was because we broke such an important resistance level that many traders have been paying attention to and that has lots of emotions behind it. You know, think about it. Many traders probably tried to short. Short is when you bet against the direction of the market on this break because so many times historically the price got reacted right there. So many traders thought, you know, if I short the market right here, I can make money. But when the price broke, uh, this means that the players that are short have to buy back the gold, and this leads to even more buying pressure. And there are lots of reasons behind why these sort of key support and resistance levels are so important. This is maybe, sorry if I'm rambling a bit right now. I'm sorry about that, but there are many reasons that make these clear levels significant.

To show this principle even more, let's look back, you know, far back here to one of the most important, I would say, one of the most important gold resistance levels of all time. Look.

At this zone right here. Look at this zone. For basically, let's see how long time this uh range lasted. It lasted from August 2020 to basically February 2024. So this was a multi-year uh sort of trading range for gold and the price was super clearly reacted one time, two time, three time strong liquidity grab right here. That is a bit uh outside the scope of this course. But you can see that when we actually broke above this resistance, this was the beginning of this whole massive massive explosive move towards the upside. And I hope this shows you know how important support and res resistance can be if you focus on the most important support and resistance. However, if you focus on insignificant support and resistance levels and try to draw uh you know support and resistance everywhere. This is as I said a super common mistakes for beginner. They try to draw you know support and resistance levels everywhere. then that can just make the chart harder to read and lead to, you know, worse decisions and less money, right?

So, real quick, I just want to mention that I have just recently, for the first time ever, released two physical products and this has been something that has taken, you know, way longer than I thought. It has been a long process in the making. Uh, but they are finally here and I'm super excited to share. So the first product, this right here is a sort of massive, as you can see, it's a massive mouse pad slash deskmat and it's actually kind of like a candlestick pattern/chart pattern cheat sheet. So you will find most of the important candlestick patterns, most of the important chart patterns and you also have things like you know indicators, what they do and the formulas, you have time zones and some more information as well. And we have been working really hard to not just make this, you know, a cheat sheet sheet. We also, of course, want it to be visually appealing. And I I don't know, I'm super happy here with the result. And I hope you guys will be as well. Uh but the other product is, you know, when it comes to trading, you know, one thing that is super important is of course to be able to be focused. So the second product we have created here is a device to consume caffeine and of course of course talking about a mug. And on this mug it's a pretty pretty similar you know print. You can see we have you know uh candlestick patterns we have some chart patterns time zones and so on and so on. And I really like this mug because this is a you know big big size. I prefer drinking from a big cup in the morning but we also have a smaller size as well. And to find the products, the easiest way to do this is just to scroll down on any of my YouTube videos and you can see that you can find the mouse pad and the cup here just under the video. So you just simply click on one of these or you can just go to uh as you can see right here, you can go to shop.mmindmathmoney.com. Press enter and you are here at the shop. And last but not least here, just to help you guys save a few bucks and as a sort of thank you, you can go here to promo code or gift cards and enter mmmmm 10 and then click apply. And just like that, you will have 10% off on all your orders. So yeah, guys, I really hope you will enjoy the products. Let me know in the comments what you get. But now, let's jump back into the course.

All right. So now the time has come to take a look at order types. And order types are something you know every single trader needs to uh needs to understand because no it doesn't matter if you trade you know crypto, stocks or forex. Order types is what you use to actually buy or sell. So you really need to learn about order types in order to trade efficiently. And here when it comes to order types, we have basically three main methods to buy or sell. And the first method here is what is known as a market order. And a market order is very simple. That is when you buy or sell for the current price. So let's say that Bitcoin is right now trading at $100,000. If you use a market order, that simply means that you will either buy or sell Bitcoin right now for around $100,000. Remember, the market is, you know, moving all the time. So, you might not get the exact price you are looking for. Um, your broker will basically find the the best possible price right now and either buy or sell. So, we have a buy market order. that means that you are buying for the current price and we have a sell market order and that means that you are selling for the current price. Um but here we have two more types of orders and the first order you need to learn about is something known as a limit order. And a limit order is when you enter or exit or in other words buy or sell at a better price. And what do I mean here by a better price? Well, a better price will be a little bit different depending on if you want to sell or if you want to buy. So, let me explain. Let's say that once again, Bitcoin is right now trading at $100,000. And let's say that you want to buy Bitcoin. If you want to buy at a better price, would you prefer to buy lower or buy higher? It can be easy to think about, you know, when you buy your morning coffee, do you prefer a, you know, $1 coffee or a $10 coffee? Well, when you buy something, you pretty much always want to buy it for lower. So, this is what the buy limit is. It's when you place a buy order below the current price. So, we might place the buy order at say, you know, $90,000. And what this means is that if Bitcoin, you know, drops down to to this level of 19,000, we will automatically buy uh Bitcoin. Uh and we can of course choose how much you want to buy. You definitely don't have to buy a full Bitcoin. But this is basically an order that sits at $90,000 and waits for the price to drop. Uh but then we also of course have the sell limit. And when you want to sell something, uh what is what is a better price when it comes to selling? Well, of course, you want to, you know, sell for as much as possible. So, a uh sell limit order uh is always placed above the current price. So, we might we might place a sell limit at 110,000. And this means that if the price comes up here to 110,000, we will automatically sell. And yeah, that is pretty much it for limit orders. But we have yet another super important order type. This one can be a little bit harder to understand, so make sure to really pay attention. And this is Oops. This is the stop order. And the stop order is when we enter or exit or in other words buy or sell after confirmation or you can actually think about this as that we enter or exit at a worse price. So a stop order is basically the opposite of a limit order. But an easier way to think about it can be to to think about it as enter or exit after confirmation because that is often how we use the order. So let's once again to just keep it you know uh simple let's say that we you know buy at $100,000 right here and let's begin here with the buy stop order. So the buy stop order is placed basically at a worse price. So we need to place the buy stop above $100,000. So we might for example place a buy stop order at 110,000 instead. And now you might wonder you know why would you want to buy for a higher price than the current price. And the answer is pretty simple. Let's say we have a scenario here where we have a resistance level and the price might be let's say that the price is currently maybe right here. So right here is is $100,000. But maybe we have a trading strategy that if the price goes up here and breaks the resistance, then we might want to buy right here. So we want want might want to enter right here, right? And this level might be the 110,000 level. So this is a perfect example of when a buy stop makes sense. You wait for the price to go up in order to buy. As I said, this can be a little bit hard to, you know, grasp in the beginning, but it's very important. The stop-loss is the opposite. This is when we sell for a worse price. So, it's called a sell stop or another name for it is stop-loss. And this is actually a very important order and a very common order. This is when you wait for the price to go down to a certain level and then you automatically sell. And sorry, I just realized my camera is a bit on the way. I hope it didn't bother uh bother you guys too much on the last slide. I might have, you know, uh my camera might have been in the way. But here, the stop-loss or sell stop is placed below the current price. So maybe we place it at 90,000 right here. And that means that when or if the price goes down to 19,000, we will automatically sell. And once again, I want to emphasize that this is a super important order type. And this is an order type that basically protects you. It's a very important riskmanagement tool because it automatically limits losses from not going too far. You know, it's often important to if the price goes against your strategy, it's often very a very good idea to cut your losses relatively quickly um and use a stop-loss.

And okay, here before we jump into Trading View, uh I want to show you guys how you can actually place some orders inside Trading View. Uh before we do that, I just want to once again emphasize that orders are tools. They are not you know strategies themsel um but they are basically uh you know buying and selling tools you can use within you know any trading strategy but right so now let's actually once again jump into trading view here because now I want to real quick uh just show you guys an example of how we can actually place buy and sell orders inside trading view. And to do that, you want to go down here to where it says open trading panel. And remember that if you use uh one of these brokers, for example, if you use, you know, Bybit, as I showed you guys earlier in the video, by the by the way, remember the special link if you want to trade crypto. Uh but if you use, for example, Bybit, you can use that one. But what every single trader can use is something called paper trading. So if you click right here on paper trading and then click connect what you can basically do is that you can simulate you can do a simulation of a real you know trading environment. So here you can practice trading with fake money and this is a very good way to just show you guys how to place buy and sell orders. So to place buy and sell orders in Trading View, you can either uh rightclick and go down right here where it says add order or you can also click up here. You can see it says buy and sell. So you can for example click right here. And now as you can see right here we have the three different order types you just recently learned about. So you know we have the market order which is that you buy or sell for the current price. We have of course the the limit order which is that you place at a level that is better than the current level and we also have the stop order. So let's for example say that we want to place a limit order and now we can choose to you know either sell or buy and since we don't have any gold right now we place a limit order and as you can see right now the price is at uh 4,596. I hope you can see it. 45,596 right there. So the buy limit order we want to place below the current price. So let's say that we place it at 45,500 right here. That means that when the price goes down to that level, we will automatically buy and then we can show uh choose how much here. So 10 units in this case is 900 $900. So let's just for simplistic sake let's just choose uh you know 10 units or we can use I think the standard is 15 units. So now the price will be you know exactly where we set our limit. Uh and here where it says exits you can see that we can set our stop-loss and take profit. So we can uh choose here to automatically if or when the price goes down to the limit. Remember that is when we actually buy our gold. But here we can trigger a stop-loss so that we can for example set the stop loss. Remember we want to set the stop loss below the current price. So we can set it at 4,400. And let's say that we have a target level here at 4, uh 700. Now if we scroll in, I hope you can see what this means. So this means that if the price uh goes down here to our limit, this is where we will automatically buy. And when we buy two things will trigger. First of all, this uh line right here is the stop trigger. So this will be triggered right here. Uh if the price goes down to our limit, then we will automatically place a stop order right there. And we will also place a target order up here. So we will have our our target up here. So, if it goes down to 4,500, we will automatically have a stop-loss at 4,400 where we will automatically sell. And we will also have a target up here where we where we also will automatically sell. But in that case, it's a target order, which means that we will lock in some nice profit.

But right then, so now I want to take a look at what makes a real trade. What do you need to do in order to actually you know have a trade in place and here this is pretty simple but every trade must include these four points. First of all it needs to include an entry price. So, you need to know where you either go long or where you go uh short, right? And if you didn't know going long, this is when you, you know, buy normally. You bet that the market will go up. So, you maybe buy at, you know, 100 and you want to the price to go up to maybe, you know, 120 and then you sell. But going short here, that is the opposite. This is basically when you make money from the price going down. And this is one thing that is so nice about uh trading is that you can make money in both bull markets and bare markets. Or in other words, you can make money when the price goes up, but you can also make money when the price goes down. So you need to have an entry whether you're going short or long. And what you also need to have is that you need to have a stop-loss. And your stop loss will of course be different depending on where you if you go long or short short. So for example, if you go long, your stop loss will be to the downside. But if you go short, your stop loss will be to the upside. And I will s soon show you guys this in Trading View. Next, we of course have a target level. You need to have a target. So you need to have a goal for when you will sell. And last but not least, you need to have a position size. So it's not enough to know, you know, at what price to buy. You also need to know how much should you buy. So if you check all of these points, you have a trade. And here it's very important. I emphasize this uh as the most important part and that is that you always need to set a stop-loss. To be honest, you should all always have all of these four points. uh but the stop-loss I would say is the most important part because that protects you from devastating losses.

But all right, so now let's once again jump back here into trading view. As always, we are here on the daily time frame and we're looking at gold uh right now uh because now I want to show you guys the long position tool and short position tool in Trading View. This is a great tool you can use to plan your trades whether you are going short or going long. Um, and also guys, if you are still at this point in the course and don't have trading view, as I have already mentioned, I'm sorry if I'm repeating myself, but I highly recommend it to to get trading view, I think, uh, you know, using an interactive interactive learning method is much better. It it really makes you learn faster. So, I'm sure you get trading view. And if you uh as I said multiple times as well, if you want to try you know, Trading View Premium, make sure to use the link below. But right, so now to find the long position and short position in Trading View. What you want to do is that you want to go up here to forecasting and measurement tools. And then you can see we have long position right here and short position right here. You can actually star both uh because these are very important. And now let's say that we think that the gold price will continue to go up. Then we of course use our long position. And how we use the long position is basically let's let's just say that we imagine that we have done an analysis right here and we think that gold will go up. Then we simply press right here. So we enter at you know the candle close of this candle. And then you can see here that we have a target level. So we can choose here where to take our target. And we can also choose here where to place our stop loss. And when we go long the stop loss will be to the downside the target will be to the upside. Let's say that we have done an analysis and that that we have you know came to the conclusion that we want to set the stop loss below here. Then you know a common riskto-reward ratio is that the target is twice as uh long as the stop loss. So you can see the distance from the entry to the stop is half the size of the distance from the entry to the target. This is just a common target type and don't worry we will talk about that more soon. Uh but this is simply how you use the long position and we will use that tool more in this video. Uh but for now all you need to do is where to find it and how to use it. And what you also of course need to do is how to use the short position. So the short position is when we bet that the market will go down. So you can see that now the target will be to the downside instead. So let's say that we have, you know, maybe we have the target just before this uh low right here because we expect maybe a bounce there. I don't know. Uh but here you can see that when when we when we uh short the stop loss will actually be to the upside. And this this creates something very very interesting and that is that if the market goes up here and you know goes to our stop loss that actually means that we will now have it's called buying back we need to buy back in this case gold and this can actually lead to more buying pressure and that is a very interesting aspect. It's a little bit outside the scope of this video. Uh but it is something to have in mind the sort of dynamic and the difference between going long and going short because that can actually have a big impact on how trading strategies work.

But right so now if I can only choose you know one thing you really really need to learn as a beginner. I know that I say this for I feel like I say this for every slide that it's very very important, but this right here, risk management is what prevents you from losing all your money. So this slide is so so important. I can't emphasize it enough. As you can see right here, risk is what keeps you alive. There are way way too many traders that goes into trading. Maybe they have a pretty, you know, decent strategy. uh maybe they are starting to make some money but they completely forget about risk management and be before they know it they lose either most of their money or you you will hear if you go to you know Reddit and forums you will hear many people losing basically anything and that is because the simple mistake that they didn't pay attention to risk management so this is so important and when it comes to risk management there are multiple things including included for example you know always setting A stop-loss is so so important. This you always have to do. Uh but some other things you really need to do is that you need to you know risk small. Even if you have a stop-loss, if you put everything into one trade, if you put all your net worth into one trade, that is super super reckless. So it's a good idea to risk small. Uh a good strategy for beginners is to risk a certain percent per trade. So this is not something you have to do but beginners can begin here with as small as 0.5 to 1%. And you might wonder you know how do we calculate this? Uh and I actually have created a you know risk calculator that I will show you guys soon. Here it's also important that the position size will depend on your stop loss. So the wider we have our stop loss you know the less the position size can actually be. And here an important mindset that I think I talked about a little bit earlier is that you should see losses as something that is inevitable. You will if you you know trade uh you know seriously you will have many many losses. Uh so you should see them as sort of a business expense. It's just part of the game. And another really important mindset is that in the beginning it's actually more important that you survive than that you profit. You know in the long run we as traders are almost we're pretty much more uh it's pretty much more important to manage risk and stay in the game than to lose everything. So once again you can think about this in poker. Let's say that you are you are a very good poker player. Even if you get the best hand possible, it's often not wise to go, you know, all in right away because you can just be super unlucky and get wiped out, right? Uh, you know, right away, maybe the first round. Uh, so it's very important to, you know, size your bets wisely.

But all right, so now I want to show you guys the riskmanagement calculator. And I'm currently here on the uh members section of mindmathmoney.com. So here on the members section, we do have some some you know exclusive guides and some tools and some uh you know some downloads and so on and so on. Uh but what I want to use right now is the trading risk calculator. So this right here is a tool that you can use to for example you can you know plan your trades. Here we have the position sizer. You also have something called expected value and we will talk about that later. You also have something called risk of ruin. Um, but for now let's actually focus on the position sizer. So as you can see right here you can enter information about your account. So the standard here is 10,000. Uh you can think about it as dollars or you can think about it as it doesn't really matter matter the currency you are using. But let's say that we have an account of $10,000. Now, you can uh add right here what you plan to risk per trade. So, if we enter one here, that means that we only want to risk 1% per trade. And 1% of 10,000 that is $100. And we can also choose here what we're trading. Let's say we are, you know, let's say we're trading crypto. And here to calculate the position size you need to uh enter you know your entry price. So let's say for simplistic sake that we enter at 100. Uh and let's say that we have our stop loss at 90. Then we can simply click calculate position size here. And here you can see that our position size is 10 units. So right now we are uh trading crypto. It means that in order for us to risk 1% we need to buy 10 of this cryptocurrency. You can also see here that we risk $100. You can see the stop distance and you can see the total account exposure. If we for example have our stop loss instead at 80, you can see that now because we have a wider stop-loss, we only uh our position size is only five units. If you click here on settings, you can also make it a little bit more realistic. So you can for example add you know commissions, you can add slippage and so on and so on to make the the risk a little bit more uh as I said realistic. Uh but yeah guys this uh trading calculator as I said is currently available for channel members gold and higher. Uh so if you're interested in you know getting this uh risk calculator and you know many exclusive videos and more guides and so on and so on you could consider becoming a channel member by clicking join. It should be a join button and next to the subscribe button on YouTube. Uh but yeah guys if you don't want to definitely don't feel any stress to do that. Uh but if you want to you know support my work and you know get uh bonus content as well you could consider doing it.

But right, so now the next thing you really need to learn about is something called expected value. This right here is something every single single poker player understands. And in my opinion, it's one of one of the most important uh things you need to learn as a trader as well. And the basics of expected value is that one trade actually doesn't matter. And you might wonder, you might ask, you know, what do I mean by this? Well, think about it like this. Let's say you have a trading strategy with a 60% chance to win $100 and you have a 40% chance to, you know, lose uh let me do it with red here so you understand it. to lose $100. This trading strategy, if we take this trading strategy again and again and again and again, we will eventually make money. But if we only take one trade, what can happen? Well, there's a pretty big chance that we will actually lose money. And even if we take, you know, maybe two trades, maybe three trades or maybe four trades in a row, it's still very possible that we just lose and lose and lose due to pure, you know, unlucky. We can just be unlucky. So that is why one trade does not matter. Even five trades does not matter. What matters is that profitability comes from the results that are average over multiple multiple trades. And here what matters is both how often you win, but what also matters and this this is what most beginners just focus on win rate. You know, how often do we win? But what is at least as important is how much do you win compared to how much you lose. So, let's say we have a trading strategy with, you know, let's say we have a 55% uh risk of losing, you know, $100, but we have a let's say 45% chance of winning $200, right? So, here the risk of losing is bigger than the chance of winning. But since we win so much more when we actually win, this is actually a good trading strategy to take. And I will show you guys very soon a calculator for this as well. But here in simple terms, you can lose often and still make money. And you can also win often but still lose money.

But all right, so now we are back here on the trading risk calculator. And now I want to head over here to expected value. So to calculate the expected value, you first need to enter the win rate. And let's actually use the example we talked about earlier. So let's use the example where we actually have, you know, a win rate under 50%. So we actually win less than, you know, uh we win less often than what we lose. Then you can choose here to use an input input mode. I'm going to use the dollar here. And let's say that we win on average 200 and we lose on average uh 100. And here the risk per trade is autoc calculated from earlier. So now let's click calculate expected value. And as you can see right here we have a positive expected value. So for every trade we expect to win around $33.80. And here I actually forgot to change some settings because now we have the commission uh and slippage. So let's just actually use zero for this to get the exact number. Save settings and then calculate the trade again. So here our real expected value uh if we don't count with with commission commissions or slippage uh is we expect to win $35 per trade. And you also get some some very interesting numbers. For example, you can see here the break even win rate. That means that as long as we win more than 33.3%, we will actually make money over time. So let's say that we choose here maybe 35%. If this calculation is correct, we should still have a positive expected value. So let's click expected value right here. And you can see even at 35% win rate, we still have a positive expected value. But let's say if we drop down to 30% and now calculate now it should be red numbers. And as you can see if we have a 30% win win win rate we expect to lose. And if you have a negative expected value this is a trading strategy that you should never use because over a large amount of trades you will eventually lose money. And that is why I think this uh that is why I think this uh number right here is so important important. it it is the expected, you know, value after 100 trades. So, if we trade this 100 times, we expect to have minus $1,000. But if our win rate is uh let me once again choose 45%. Now, after 100 trades, we expect to have $3,500. Um so yeah guys I hope this calculator is helpful and I hope this helped to you know teach the concept as well. Uh and as I said if you want this calculator you can consider becoming a channel member by clicking join down below.

But right, so now the time has come to trading psychology and this is something that is so easy to underestimate uh underestimate in the beginning of your trading journey. uh because you know it's of course very important to focus on how to build a trading strategy your risk management and so on and so on but when you are actually inside when you are in the heat of a moment and maybe you see the market crashing at that point it's not that easy anymore and you trading will basically test your psychology to the limits and this is what I tried to demonstrate with this image right here you can see that when it gets hard we you know are it's so easy to just become emotional And that is why it's important to have rules that basically protect you from yourself. We want to have rules that protect you from yourself. Very important. So a good trade follows the plan and a bad trade breaks the rules. So you know feelings like for example fear. This is one of the most common feelings in markets. But we have other feelings as well like for example FOMO. FOMO stands for fear of missing out. And this is basically that it can be you know it's still a fear but it's basically the opposite of the normal fear. This is when you see maybe you see you know a cryptocurrency pumping and you think that you know I I really I really need to catch this move as you know I need to jump in and then you jump in at the top the price falls and you lose a lot of money. So both of these uh you know feelings is super super important and here you know discipline is a super important skill as a trader and for all of this uh in this course you can really dive deep into trading psychology but but I don't think we really have time to dive deep but one of uh one classic book on trading psychology that I recommend reader reading is trading in the zone here by Mark Douglas. This book is far far from perfect. Uh but what the book actually is good at is, you know, really getting the mindset right. And I actually have a full video on both trading psychology where I especially focus on breaking down the most important principles for for that book. So I'll make sure to link that video both in the video card as well as the description. So make sure to bookmark that one and add it to a watch later because I think it's very important. uh but for this course I want to keep uh the section about trading psychology uh short because it's a long process and it does take time to learn but I can just give you the my main sort of uh rule here is that you will feel the emotions very strongly in the beginning. So that is just what makes risk management even more important in the beginning and you really need to stick to your rules.

All right. So now the time has finally come to put everything together here in a very you know simple and beginnerfriendly trading strategy. And the first rule for this trading strategy and this I want you guys to have in mind you know throughout your whole trading journey is that many of the times simplicity I think simplicity is very powerful. So try to keep it as simple as possible. Uh, of course, you know, later on when you get more advanced, you can start experimenting with indicators. Maybe you want to create your own indicators and create your own sort of automated trading strategies and so on and so on. But especially in the beginner, keeping it simple is in my opinion the way to go. And for beginners, what I highly recommend is to trade in the trade in the trend direction. So for most beginners, the way to go is to find a clear uptrend and trade in the same direction as the uptrend because when we have the uptrend, the odds is pretty much already in our favor. The next step here that I recommend, I recommend to trade pullbacks and especially you can wait for pullbacks into key levels or what you also can do is that you can trade pullbacks that are clear chart patterns. This is another clear and beginner friendly strategy uh that we will take a look at very soon. Next, what you know is that you need to define your risk before your your entry. So, you need to know where to enter, where to set your stop loss, and you also need to have a target. So, you have you need to have a logical target that makes sense. And this is enough. You need one clean setup and you need to execute the setup consistently.

But right so now we are once again here in trading view and we are on the daily time frame and we're looking at gold here and I think this chart actually gives multiple clear examples where we can trade you know both pullbacks but also you know chart patterns. One of the most clear example was from uh an example we we looked at earlier in the video. So let's actually use the replay mode. The replay mode is a tool we can use to look back you know how the price have looked like in the past. So let's actually jump back to this point right here. So when we are at this point there are a few things we can notice. The first thing we can notice is that the price first of all was in a pretty clear you know uh move towards the upside right. We printed higher highs and higher lows but then the price started to go sideways right here. So the price went from an uptrend to basically a sideways market. But here if we look closely at how the price reacted during this time, we could actually see here that we can identify a very clear resistance level. And remember, we don't want to draw lines here. We want to draw resistance zones. So in this case, I include this touch all the way up here. I include all of these touches and I draw a clear resistance. What we also can notice here is that we have one low right here. We have a higher low. We have yet another higher low. And you can see that the lows are sort of getting higher and higher into resistance. So this resistance together with these lows pretty much creates what we call an ascending triangle pattern. And this is a specific pattern that gets even stronger if it appears after a move to the upside. So if we have a move to the upside and then we have this triangle pattern then the odds is that the price will continue to the upside. But here and this is very important. You don't want to trade this pattern until we see a breakout. And you can see that right here the price actually broke out. And there are many rules we can use uh to you know make a breakout even more likely to succeed. And for that uh to to really understand uh you know both breakouts and sort of micro price movement I highly highly recommend to check out my course on price action. Uh I think it's already linked in the video card and the description. Uh so I do highly recommend to check that one out. But for now all you need to do is that we saw a you know breakout right here. And when we see a breakout, the most common way to enter is to enter at the candle close of the breakout. So remember, we use the long position tool we used earlier. So we can, for example, enter right here. And to keep it simple, let's set our stop loss below here. This is a common way to set your stop loss for the ascending triangle, below the most recent low before the breakout. And using a risk-to-reward ratio of two, meaning that the target is, you know, twice the size as the stop loss, our trade would have looked something like this. And you can see that this took actually quite a while, but eventually we locked in some nice profit.

But all right, so now I want to talk a little bit about practicing the right way. So how do you practice the right way as a beginner? Well, there are a few important things uh that I highly recommend. And two of the most important things here is to both back test your setup on chart and trade it on a demo account. So back testing here uh your the sort of first step right here step one that is when you b basically look at how a strategy have performed in the past and trading in a demo account is another great way to practice. That is basically when you practice with fake money. And I talk about how to do both of these things in my full trading view tutorial uh right here on YouTube. I will make sure to link uh that trading view tutorial in the video card and the description. So definitely check that one out to learn how to both back test and trade on a demo. The other thing as I said is to you know try to journal your decisions and trades. And as I said, I like to, you know, keep a physical uh physical block, but you can, you know, use a digital version as well. I might actually create a digital trading journal in the future. And another important thing is that you want to, of course, you you want to be, you know, databased. You want to improve based on data, and you don't want to listen to the feelings. And lastly, do not rush in with real money. That is such a I know it's tempting to want to, you know, really, you know, rush in with all your money right away. Maybe you have found a trading strategy that looks like it works pretty well in the back test. Maybe you have found that you have a positive expected value and feel like, you know, this is my time to get rich. Uh it's so easy to just, you know, start taking too much risk uh when you rush into real money. And it's also important to understand that when you use real money, the emotions you will feel will will be so much larger than when you uh when you practiced on you know with fake money on a demo account. So please guys have that in mind as well. And I highly recommend to you know not not rushing in with real money.

All right. So good job making it through the trading fundamentals. You now know what trading is, how to calculate risks and how to place orders. But knowing how to press buy and sell will not make you profitable. You need to know when to press buy and sell. So next we are diving into price action. I will teach you how to really zoom in to the individual candlesticks. This is where we stop guessing and start reading the live movements of the charts. Let's dive into it. So before we can start using price action to take better trading decisions and as a result you know make more profit, we of course first need to know what is price action in the first place. And here this is very important because price action is a concept that at least in my opinion is very misunderstood in the trading community. So make sure to really pay attention right now. So first of all price action is all about what the price is doing right now while another concept uh called market structure is what the price has done in the past. So when most people think about technical analysis they actually think about market structure. When you look at a let's say you look at a candlestick chart when you look at a candlestick chart what you see is actually mostly market structure price action is all about you know the character of the price movement so how is the price behaving right now is the price aggressive or not is the price maybe acting weak you know is it you know moving is it volatile and so on and so on uh price action is all about what is it doing right now and don't worry I will very soon show you guys a chart example of this. So what what I said here when you look at that chart what you see the trends the zones the support and resistance the supply and demand and so on and so on that is actually market structure price action is about reading the current candles and reading the most recent price movements. uh but here it's important to learn both structure helps you find where to look. So for example you might find a very important support level this means that I should look at this level you know in the future and when the price comes down there price action will actually give us more details. It will tell us for for example you know when do we need to exit uh I mean when do we need to enter when do we need to exit our trade and so on and so on. So preferably we want to use both of these together the market structure gives us good context uh but the price action gives us timing and this is why I say that you know price action is the most important thing to learn in trading. Price action is you know understanding how the price moves. How is the price moving right now? And that is something you can't do without as a trader. And now to really lock in what price action is, I want you guys to look at this chart right here. And remember what I said earlier. When you look at a chart as a whole, you're actually looking at the market structure. So, for example, right here you can see that see that we have a nice trading range. Right here we have like a strong breakout from the range. Here we have

A resistance level, and here we have a support. So, when you just look at this, you're actually looking at market structure. But now you might wonder, you know, what is what even is price action then? Well, price action is all about what the price uh is doing or was doing when the price reached a certain level. So, for example, when the price, you you can see that we had a resistance right here. When the price reached the resistance once again, you can see that this price action is very different, or in other words, the price behaved very different compared to the price action right here. Right? So, for example, right here we can say that we had, you know, a very calm price action. You can see that the candles were going sideways. The the market didn't react a lot. We can say that the price action was calm or non-aggressive, and so on and so on. While the price action, you know, right here, here we had a very sort of strong price action. We can say that we had lots of momentum, or we had aggressive buyers. So, price action is all about zooming in on what is the price doing right now. Uh, you can ask questions like, how is the price reacting to the resistance? How is the price reacting to the support, rather than looking at the uh, the price as a whole? I usually think uh about price action as micro. Micro, basically means that you're zooming in, while I look at market structure. So, market structure, MS, I look at as macro. Macro, basically means that you zoom out.

Now, let's talk a little bit about the different parts of the candles. It's very important to understand the different parts to understand price action. And first of all, the wide part of the candle. So, in other words, this part right here and this part right here is what is known as the body of the candle, or some people call it the real body. So, if you hear body or real body, u, this is what we are talking about. And what the body tells us, it basically tells us who is in control. And in general, a big or tall body means stronger control. So, for example, if we have a, you know, one candle that maybe looks something like this, as you can see, it has a pretty large uh, you know, real body. But the other candle might, it might have the same high and low, but the body might be, you know, much uh, much smaller, smaller, like right here. The candle with the large body means that the buyers, or in other words, the bulls, are in control. While the candle with the smaller body represents more, you know, hesitation, that you know, neither the buyers or sellers are in full control. It's a much more sort of hesitating price action.

The other part you need to know about is the wicks. And the wicks are the lines. So, both of these lines above the candles and both of these lines uh, below the candles right here are known as the wicks. Another name for this is uh, to call them shadows. But the most common name is to call them the wicks. And what does candlestick wicks tell you about the price? Well, wicks are basically all about, you know, reaction. So, uh, remember, a wick is that the price has gone up, gone up to a certain level, uh, but then have, you know, fallen down, or it has gone, gone down to a certain level, and then it has pushed up before the candle closed. So, wicks are all about reaction. So, let's say that, you know, let's imagine that we have a resistance level right here, and we might have one candle that looks like this. As you can see, this candle has a very large wick, and it might look something like this. While the other candle might, you know, look something like this. It has a long real, real body, and pretty short wicks. These two candles, as you can see, I tried to make them so they have roughly the same, you know, highs. You can see the highs here are roughly the same level. The lows here are roughly the same level, but they tell us very different stories about the price.

On the one hand, uh, on the candle to the left right here, we can see that the large wick really tells us that the buyers tried to push the price, price above the resistance, but we got reacted, and before the candle closed, uh, we actually uh, the sellers managed to take control and confirmed that we had resistance. While on the other candle right here, we saw a very different story here. Since we had a large real body, uh, remember we asked the question, who is in control? Well, this means that the buyers were in control, even past the resistance level. So, this is actually an indication of something called a breakout, that we will take a deeper look at later on in this course.

All right. So, now I want to switch the attention to take a look at one of the most important candle types you need to learn about, and that is momentum candles. If you want to master price action trading, momentum candles is something you can't do without. Uh, so make sure to really, really pay attention to this. And first of all, what is a momentum candle? Well, in very simple terms, a momentum c candle is simply large candles that stand out. So, these are candles that when you look at a chart, you will clearly see the candles and look, look at it and say, you know, wow, that's a big, that's a big ass candle. And uh, but here we need to have some rules for what a momentum candle is. And here, for me, I define a momentum candle as a body, remember the real body of the candle. I define a momentum candle as that the bo body should be at least twice the size compared to the previous candle. And preferably, I want the real body to be maybe three times as large, or even four times as large as the previous, maybe three candles. And don't worry, I will very soon show you guys uh, you know, my exact rules. And here, why do we need to learn about momentum candles? Well, momentum candles is often the very beginning. They can be the very beginning of trends. They can be the very beginning of breakouts, and so on and so on. They can be super profitable if you're able to spot them, and they are relatively simple to spot. So, it's definitely a win-win situation to, you know, learn to identify momentum candles. And here, momentum basically shows urgency. It shows that one side, either the bulls, if we have a green momentum candle, or the bears, if we have a red momentum candle. It clearly shows that one side is dominating. So, what we're looking out for is a big body, small wicks, and a strong close. This really shows conviction. And here, and this is very important. If we see real momentum, what we also want to see is that we want to see high volume. And in this course, I will be talking a little bit about volume. But if you want to dive much, much deeper into volume, don't worry, because I do have a full course on volume analysis. I will make sure to link that video up in the video card, as well as the description. So, I highly recommend to check, check that video out after this course. Uh, feel free to, you know, save it to a watch later playlist or something like that.

But right, so now let's switch the tension a little bit again, because now I want to take a closer look at how to identify momentum candles. And here on the screen, you can see that we have two chart examples. Uh, one chart is clearly going up, and in one chart, you can clearly see the bearish momentum candles. But first of all, to identify a momentum candle, as I said, you want to find a candle that is at least twice the size of the previous candles. And you might wonder, you know, how many previous candles are we looking at? Well, I recommend to look at maybe three to five candles. So, you want twice as large as the previous three to five candles. So, let's start by looking at the example to the left here. On this example, you can see that first of all, to identify a momentum candle, one of the easiest things to do is to simply look at the chart and take a look at the candles that stand out. And here on this chart, I think you can clearly see that these green candles right here are, you know, they are clearly standing out. But remember the rule, the rule here, twice as large compared to the previous three to five candles. If we apply this rule, the first momentum candle in this case is probably already this candle right here, or this one is a little bit on the fence. It depends on if this one is twice as large uh, compared to this candle right here. And remember what we're comparing here. When I mean twice as large, I mean that the real body of the candle should be twice as large. So, this one is, you know, on the fence of being a momentum candle. So, is this a momentum candle? Well, maybe. But the first clear momentum candle, at least in my opinion, is this green candle right here. In this case, we can clearly see that the real body, or it at least looks like the real body, is more than twice the size of the previous candle. Uh, so it's twice the size of this candle, which automatically makes it more than twice uh, the size of all of the previous, you know, uh, four candles as well. So, here we can clearly see that this candle is more than twice the size of the previous three to five candles.

But now, and this is very important. Now you might look at this next candle and say something like this, you know, uh, you can see that this candle is looking even stronger compared to the previous candle. But we can see that this candle is not twice the size of the previous candle. So, you might wonder, you know, in order for momentum candles to keep being momentum candles, do we need to double in size for every candle? Well, the answer to this, at least according to me, remember this is just, I'm not saying that this is the only way, or that this is the right way. This is just how I look at momentum candles. And according to me here, the momentum streak here continues as long as we are seeing candles that are either about the same size or even larger. So, if this sounds complicated, uh, you know, the streak here continues as long as the candles are about the same size or larger. So, remember, this right here was the first momentum candle. This candle, we can see, is even larger. So, this one is also a momentum candle. This candle is about the same size, right? It's maybe a little smaller, but about the same size. So, here, this is yet another momentum candle. We have three momentum candles in a row. But the next candle, you can see this red candle right here, is clearly, clearly uh, much smaller. So, at this point, uh, I reset the momentum candles. This is not a moment, momentum candle. Now, in order to get a new momentum candle, we once again need to apply the rule, more than twice the size compared to previous three to five candles. And by applying this rule, we can actually see that the next momentum candle was this green candle right here.

And now, if we look at the right side, it will probably be super easy to spot the momentum candle. If you want to, you can pause the video and spot it yourself. But as you can see, this candle right here, this red candle, is clearly the uh, you know, the momentum candle I'm looking out for. This one is clearly more than twice the size compared to the previous, you know, uh, three to five candles. It's even clearly, you know, uh, more than twice the size compared to this candle that was relatively large. And once again, this next red candle is also a momentum candle, because remember, the streak continues as long as the candles are about the same size as the momentum candle or longer. So, in this case, we have two clear momentum candles right here.

But all right. So, now when we know the basics of candlestick reading, and we also know about momentum candles, now we're ready to start learning about candlestick patterns. Candlestick patterns is an important part of price action, because candlestick patterns is when we zoom in on, you know, one to maybe a few candles, and try to figure out what is the story behind the candles. What are the emotions behind the candles? If we can analyze the emotions, we can, you know, hopefully make better predictions about where the price will go, and as a result, make more money. So, here, first of all, what is a candlestick pattern? Well, as I said, a candlestick pattern is a formation of one or more candles. It's usually maybe one to three candles that creates a recognizable shape. So, it's a shape we as traders can spot in the market. And what these patterns does is that these patterns show the psychology behind the price movement. It basically shows the battle here between the buyers and sellers. And if we can read the story behind the sort of psychology of the price movements, we can take better trading decisions. And here, the candlestick patterns are roughly divided into two categories. So, first of all, we have reversal patterns, signals potential reversals or continuation. A reversal pattern right here is simply a a formation that indicates that the price is reversing from either down to up, like right here. So, we might have down, then the pattern appears, and then it reverses up. Or the opposite, we might have the price going up, then a bearish reversal pattern appears, indicating that the price will continue to go down. While continuation patterns, on on the other hand, continuation patterns is the opposite. It's when the price goes up, a pattern appears. And if this is a continuation pattern, it indicates that the price will continue to go up. Or the opposite, if we have the price going down, the pattern appears. Uh, the continuation pattern indicates that the price will continue to go down. So, we have reversal patterns and continuation patterns. And these patterns work for multiple reasons. Uh, for example, as I said, the patterns themselves tell us about the sort of psychology behind the buyers and sellers. But another reason they work is because they have become super popular. So, traders around the world recognize these patterns, and because they see, let's say, they see a bullish reversal pattern, they might be more likely to buy, which basically creates a self-fulfilling prophecy. So, bullish patterns makes people identify the bullish patterns, which can lead to more uh, you know, buying pressure, which can lead to more traders learning about the patterns, and so on and so on. So, there's definitely an element here of self-fulfilling prophecy.

And here, and this is very important. Candlestick patterns are most reliable, or in other words, they work the best when they form at key zones. So, I'm talking about things like support and resistance, trend lines, even things like supply and demand, and so on and so on. And don't worry, we will talk a little bit about this in this video. But if you want to dive deeper, I highly recommend to check out my full course on support and resistance. I will make sure to link that video in the video card, as well as the description. Make sure to add that to a watch later playlist. Um, but here, the context. So, where the patterns appear, usually is more important than the pattern itself. Where the candlestick uh, pattern forms is super important, and that we will learn about in this course.

But right, all right. So, now let's once again switch the attention a little bit, because now I want to show you guys the most important candlestick patterns, at least the best candlestick patterns in my opinion, and also how to trade them. Uh, so I will show you some of the most important patterns right here and how to trade them. And I want to begin here by taking a look at the hammer pattern. This right here is a pattern you really need to learn about. You might wonder why. Well, first of all, this is one of the most common patterns. And in my personal opinion, it's also one of the best patterns. So, make sure to really pay attention. But first of all, is this a reversal pattern or a continuation pattern? Well, this right here is a reversal pattern. So, before the pattern appears, and this is very important, we want to see a move to the downside. So, in this case, we have, you know, one and two red candles before the pattern appears, and the pattern itself is actually just this candle right here. So, the hammer pattern is a one-candle pattern. This pattern consists of only one candle. But remember, as I said, it's very important that before the candle appears, we want to see a move towards the downside. Then the actual pattern appears. And the goal of the pattern here is to reverse the price to the upside. And now, to find the hammer pattern, we're looking out for two things. First of all, we want to have a small body. And remember, this part right here is the body of the candle. We want this part to be, you know, pretty small. But we want the wick. So, we want this part right here to be long. And preferably, we want the wick to be at least twice the size, and preferably even more, compared to the length of the body. So, at least twice the size of the body, we want the wick. So, we want a small real body and a long lower wick. The wick here, uh, the lower wick has to be long. And when it comes to the upper wick, so this part right here, we either want to see a very small wick, or no wick at all. The best is if we see no wick, but it is okay to have a small wick.

All right. So, now when we know how to identify the hammer candlestick padded, now let's actually right away take a look at how to trade the hammer, at least, you know, the basics of trading the hammer. And here I have a chart example. And when I create videos, many of you guys are asking, you know, what time frames are you looking at, and what, you know, chart are you looking out, uh, looking at. And it's very important to understand that pretty much all concepts I teach right here can be applied on, you know, stocks, they also work in forex, they also work in crypto. Uh, so don't worry about the time frame. You can find the hammers on daily charts. You can find them on one-hour charts, and so on and so on. Uh, but here, if you want to, you can try to, you know, pause the video and identify the hammers yourself. Can you find any hammers on this chart? Well, here we actually have lots of hammers. But remember here that in order to, you know, have a good hammer, we want to, before the hammer appears, we want to see a move towards the downside. And here, I think the most obvious move towards the downside is this massive red, uh, red sort of move right here. You can see that the price completely crashed right there. But after the crash, we had this pattern right here. And this might not really look as a hammer. It can be a bit hard to spot, but if you pay close, close attention to this green candle, we can see that the lower wick of this candle is clearly more than twice the size of the body. Right? And what you also can see is that the upper wick, so this part right here, is pretty small. So, this right here is actually a hammer candle. It can be a bit hard to spot because, you know, the uh, the real body is no, not super small, but as I said, the wick is still more than twice the size. And now you might wonder, you know, how do we trade this pattern? Well, the most common way is to enter. So, you have your entry point at the candle close of the pattern. So, your entry is usually at the candle close. And remember, for for a green candle, the close is above the open. So, the entry tends to be right here. As for your stop-loss, if you don't know, the stop-loss is the level on the chart where you will automatically sell. The stop loss is usually placed below the low of the pattern right here. So, right here is your stop loss. And when it comes to your target level, you usually use a fixed risk-to-reward ratio. So, you measure the distance from the stop-loss to the entry. A common uh, you know, uh, a common target level is to have twice the distance up to your target. So, maybe right here. And if we use this target, which is known as a 2:1 target, your trade would have looked something like this. And maybe you locked in your profit right here or right here. But no, if you look more closely at this chart, you will actually be able to identify many other hammer looking patterns. For example, right here, we pretty much have a hammer right here. This one, you know, is maybe considered a pattern. You can see the upper wick of this, this one is maybe a little bit too large. But we still see that the lower wick here is clearly more than twice the size than the real body. So, this one can also be considered a hammer. Uh, but this one right here is definitely considered a hammer right here. And you can see that after this pattern, we saw this beautiful green momentum candle. So, this was yet another nice trade.

But right, so the next pattern you really need to learn about is known as the shooting star pattern. And this pattern right here, if you look at it, it's actually pretty close to the hammer pattern. But in this case, it's a bearish reversal. So, before the pattern appears, we want to see a move here towards the upside. Then the actual pattern is, you know, one candle. It's a single candlestick pattern, and the goal of this pattern is to reverse the price to the downside. What we're looking out for when it comes to identifying the bearish shooting star is that we want to have a small real body, but in this case, we want to have a long lower, uh, upper wick. Uh, when it comes to the hammer, we want to have a long lower wick. When it comes to the shooting star, we want to have a long upper wick. And we want this wick to be at least, uh, once again, at least twice the size compared here to the real body. But preferably, we want the wick to be maybe three times as large, or even four times as large. Uh, the longer the wick, the better. As I said, the goal of this pattern is to reverse the price here to the downside. I can also just mention that in order for it to be a valid shooting star, we also preferably want to see either no lower wick at all, or this lower wick should be small. If you are wondering, you know, how do I trade the shooting star? The most common entry is to enter here, uh, to have the entry at the candle close of the shooting star. So, you enter right here. The most common way to set your stop loss is to set your stop loss just above the upper wick. So, this is the most common placement for stop-loss. And as for a target, you can use a fixed risk-to-reward ratio. So, you measure the distance from the stop loss to the entry. And then a risk-to-reward ratio of two means that you double this distance and you lock in your profits down here. But here, and this is very important. Remember that price action is all about how the price is reacting to certain levels. So, when it comes to all candlestick patterns, the context is very important. So, for example, if we have a shooting star that appears here at an important resistance. So, let's say that this right here is a resistance, it becomes much stronger compared to if the shooting star appears at no resistance, or even worse, if the shooting star appears in the middle of, let's say that we have a shooting star here in the middle of a trading range, then this shooting star might not even be, you know, important at all.

All right. So, the next candlestick pattern you really can't do without is known as the bullish engulfing pattern. The reason this pattern is so important is similar to the hammer pattern and the shooting star. The reason is basically that this is a very common pattern. You will notice that you will find this pattern pretty often. But that doesn't make the pattern weak. This is actually a pretty strong pattern. So, it both appears often, and it's also a strong pattern. So, you really need to learn about it. And this pattern right here is a bullish reversal pattern. So, before the pattern appears, we need to have a downtrend. Right? Then the actual pattern, in this case, consists of two candlesticks. The pattern is these two candles right here. And as I said, this is a bullish reversal. So, the goal of the pattern is to reverse the price to the upside. But now, then, how do we identify this pattern? Well, here you want to find two candles. And the first candle, when it comes to the bullish engulfing, should be a red candle. And the real body of the red candle should preferably be pretty small. But it's not that important. And there's no specific rules on exactly how small this candle should be. What is important for the bullish engulfing, and which actually makes it a bullish engulfing, is that the green candle should open below the real body of the red candle. So, here we have the uh, the low of the real body of the of the red candle, and the green candle needs to open below, and it also needs to close above the red candle. So, you can see it closes above the real body of the red candle, and it opens below. This right here is the rules for stocks. But when it comes to crypto, since crypto has no, you know, overnight trading, it is okay if the green candle opens at uh, the same level as the red candle. So, make sure to pay attention. What I mean here is that if we have, let's say we have a pattern that looks like this. First of all, we have a downtrend. Then we have a red candle up here, right here. In the crypto markets, it's definitely okay if you have the next green candle opening at the same level, as long as it closes uh, uh, above the opening of the red candle. So, and then of course, the goal is for the price to reverse. So, in crypto, it's okay to have a pattern that looks something like this. But in the stock market, we preferably want the green candle to open below the real body of the red candle. But all in all, what we're looking out for is a candle that sort of engulfs uh, the previous red candle. That is what where the name comes from. You can see the green candle sort of eats up the previous red candle.

And now, let's take a look at the bullish engulfing trading strategy. All right. So, now let's take a look at how to trade the bullish engulfing, or for short, B. So, let's take a look at the bullish engulfing trading strategy. And first of all, I want you guys to take a look at this chart right here and actually try to identify the bullish engulfing pattern on your own. Did you find it? Well, here the most clear bullish engulfing, at least in my opinion, is this pattern right here. Why is this a bullish engulfing? Well, you can clearly see that before the pattern appears, we have a down movement. Then we see a red candle with a pretty small real body. And then we have a green candle that clearly opens below, right, and closes above the red candle. So, this right here is a clear bullish engulfing. You can actually also see that this green candle together with the red one right here was also almost a bullish engulfing. Uh, you can actually, especially if this was a crypto chart, I would consider this a valid bullish engulfing. But this is something to have in mind that the the the higher the green candle closes above the red candle, the stronger the pattern appears. So, no matter the case, this right here was the stronger bullish engulfing pattern. And now you might wonder, how do we trade this pattern? Well, the first thing I want you to notice about this example is that this was pretty much a double bottom. You can see we had a low right here, and the next bullish engulfing came in at the same level. And this is something we really like to see because, uh, just as with, you know, pretty much all price action signals, they become stronger if they appear at key levels. And in this case, we have a key support level. This right here is market structure, but it makes the signal stronger. So, we have a bullish engulfing that is one bullish sign, and we also have it coming in at a support level, that is another bullish sign. So, two bullish signals at the same time can sometimes be enough to take our trade. And as for our strategy, the most common way to enter the bullish engulfing is to set your entry at the candle close of the green candle. So, a common way to enter is right there. As for your stop loss, many people will set it just below the lowest point of the pattern. So, setting your stop loss right there. Uh, now my camera is a bit in the way, but you can hopefully see stop loss right there. Or another way to set stop loss is if we have a support level like we have right here, is to set the stop just, you know, uh, a certain distance below the support. And once again, as for target levels, we have many different methods to take targets, but one of the most common ones is to use a fixed risk-to-reward. And what you do here is that you measure the distance from the stop loss to the entry. You take this distance, and many times, uh, with a risk-to-reward of two, you double this distance, and you would have locked in some nice profit right here.

All right. So, the next pattern you really need to learn about, uh, that you might have guessed already, is of course the bearish engulfing pattern. And the bearish engulfing is, you know, just like the bullish engulfing, but pretty much the opposite. So, this right here is a bearish reversal pattern. So, before the pattern appears, we need to see a move towards the upside. Then the actual pattern consists of two candles. So, this right here is the actual pattern, and the goal of the pattern is to reverse the price to the downside. And here, the first candle of the bearish engulfing should be a candle with a relatively small green candle. And here, what they actually try to demonstrate here is that the wicks are not that important. You can, for example, see that the green candle have, you know, a higher upper wick and a lower lower wick compared to this red candle right here. But the important part, just as with the uh, bullish engulfing, is that the red candle needs to open above the real body. It needs to open above the body of the green candle, and it needs to close below the body of the green candle. The red candle needs to engulf the red body of the green candle. And when you see that signal, the pattern confirms. And just as with other patterns, this patterns become, this pattern becomes stronger if it appears at a key resistance. So, let's say we have a resistance right here, then this pattern becomes stronger and more likely to succeed. One more thing I can mention is that if you are trading crypto, or if you're trading something where you know the candles don't have any overnight things, and that the candles always open at the same level as the previous close, it is okay to have, you know, a green candle that looks something like this, and then the next red candle will open at the exact same level as where the green candle closed. But if you're trading, for example, crypto, it's definitely okay if you, as long as the red candle closes, you know, far below the low of the green candle. So, this right here, let me add the wicks here so it doesn't look too ugly. This right here could definitely be a valid bearish engulfing pattern in crypto.

All right. So, the next candlestick type you really need to learn about is called Doji candlesticks. And as you can see here on the screen, we have many different types of Dojis. You, for example, have the classic Doji candle, which you can see right here. We have the long-legged Doji, the dragonfly Doji, and the gravestone Doji. But you can see that the common thing about all of these patterns is that the opening price, uh, so right here is the open, and the closing price is actually at exactly the same level. So, that is what a Doji candle basically is. It is a candle that opens uh, at one price, then it has, you know, uh, an upper wick and a lower wick. But the candle should close at pretty much the same place as where it opened. However, it, if you look at this candle right here, it is okay for a Doji candle to have a slight, slight, slight body. So, let's imagine that this candle looks something like this. Maybe it also, let's say that this right here is a bearish candle. So, a Doji candle might have a small, you know, either a small red body or uh, a small green body. Uh, but the important part here is that it should open and close at around the same level. And now you might of course wonder, why are candles so important to learn about? Well, what a Doji candle basically tells you is market indecision, or in other words, it tells you that neither the bulls or the bears are in full controls control. It tells you that the market is uncertain about its direction. Or at least this what I just said is true for the classic Doji. We actually have some Dojis, for example, the dragonfly right here, which is much more uh, bullish, and we have the gravestone Doji, which you can probably hear on the name, which is much more bearish. Um, but now let's just go over these candles uh, quickly in a step-by-step manner. So, first of all, we have the classic Doji. The classic Doji is simply a Doji candle where the upper wick here and the lower wick is around the same size. And this is one of these neutral Doji candles, right? That tells you that the market is hesitating. And these signals, as with many other price action signals, when we combine them with market structure, they, they can be very powerful.

The next Doji I want to take a look at is pretty similar, but this one is called the long-legged Doji. And what this basically is, it is a Doji candle but with longer wicks. So, for example, in this case, we have a Doji, but you can see here that the real body is a little bit higher up, and we have a very long, uh, we have a very long lower wick. And one principle you can learn about Dojis in general is that the closer the body is to the top up here, the more bullish the Doji will become. So, for example, this example of the long-legged Doji is a little bit more bullish than bearish. But if the, let's say that the the body of the long-legged Doji was maybe down here, then this would be a little bit more bearish than bullish. And let's think about why this is the case. Well, if we think about it, this candle opens right here. Uh, so let's imagine how the price could have looked like in this uh, in this candle. So, maybe, you know, it opens up here, and maybe during the candle, it went up to the highest point all the way uh, up here, but then the bears took control. They pushed the price all the way down here. But what you can notice is that before the candle closed, the bulls managed to take control and pushed the price uh, all the way up to this point. And what you can see here is that if the, if the uh, body was even higher, that means that the bulls had even more momentum, even more bullish momentum. And that is why the uh, placement of the body of the Doji is important. And this is a segue to our next Doji pattern.

This right here, uh, the next pattern is known as, it has a pretty cool name in my opinion. It's called the dragonfly Doji. And I think that is because, you know, this uh, candle, I guess, pretty much resembles a dragonfly. And this is an extreme example of the long-legged Doji, where we have the uh, where we have the open and the close of the candle pretty much at the highest point of this candle. So, this is basically an almost like a V-shaped recovery. This is when the price opens down here. During the candle, the bears managed to push the price down. But before the candle closed, the bulls re to retook the control and pushed the price up. This is a very bullish candle. And as you also can notice, this candle is very similar to the hammer. The difference between the hammer here is that for the hammer, the bulls actually managed to push the price even higher. You can see if we include a little body right here, you can actually see that this is a hammer.

The next candle is uh, as you will notice with many candlestick patterns, we often have a mirror version. So, the opposite of the dragonfly Doji is known as the gravestone Doji. This is where we have the open and close at the very low of the candle. So, during this candle, the price moved something like this. It started down here. The bulls started to take control, but before the candle closed, the bears regained control and pushed the price down. Uh, I'm sorry, my camera is a little bit in the way right now. Let me move to the other side because I do want to show you guys the last uh, the last Doji candle. This one is called the four-price Doji, and it's not, in my opinion, super important because this will be a very, very, very, a very, very rare candle. But I think it's pretty fun. So, let's include this one as uh, as well. This is basically when we have the open and the close at, you know, the same level, and we pretty much have no wicks. You can see this is pretty much just a straight line, and that means, you know, of course, indecision. Neither the bulls or the bears are in control because neither of them have managed to push the price in either direction.

But all right, guys. So, now it's finally time to take a look at how to use price action together with support and resistance. This right here is such a powerful tool that every trader needs to have in their toolbox to make money. But first of all, here, what is support and resistance? Well, in its most simple terms, the most simple way to describe it is that a support is an area on the chart where the price tends to b bounce up. Uh, while a resistance is an area on the chart where the price tends to bounce down. And here, what I'm saying here, I'm talking about support and resistance as areas or zones rather than perfect lines. Many new traders are very drawn to, uh, drawn to drawing support and resistance. No pun intended. Um, but here I think it's very important to right away think of them as zones, not exact lines, because in real market, uh, you know, you will very seldom have these perfect uh, support and resistance levels you might see in textbooks. It's much more, uh, it's much better to right away start to think about them, think about them as zones. And when we use price action together with support and resistance, what we basically do is that we watch how the candles behave when they reach important levels on the chart. And this is so important because we always have this micro-macro mindset in mind. So, when the price reaches an important level, we know that right now it's very important to look at what the price does. Then we analyze the uh, the price action, which tells us, you know, how should we act. Uh, the price action can reveal things like, how uh, is this support or resistance even real, or was it just fake? Maybe, you know, the price action might confirm or, um, you know, deny our previous analysis. This is super important. So, here are some principles to learn. So, for example, if we see sharp reactions with, for example, long wicks, this is usually a sign that the support or resistance zone is being defended by buyers or sellers. Another thing we can look out for, we have recently learned a bit about candlestick patterns. You can look out for things like reversal candlestick patterns at key support and resistance zones. Uh, this confirm, uh, this can confirm uh, that the level is holding. So, for example, you might see, you know, a hammer at a support level, or you might see a shooting star at a resistance level. This is two examples of uh, two very basic but important examples of combining price action with support and resistance. And here, and this is very important, the more clear the past reactions you see on the zone, the more traders tend to watch it. And this can be one of these uh, examples where technical analysis can be a little bit of a self-fulfilling prophecy. When more traders are watching a level, uh, that means that more traders are trading a level, and we can see stronger uh, reactions at these levels. But another thing that is important to uh, notice is that, and this is one thing that many traders actually uh, get wrong, at least in my opinion, and that is that too many tests on a support can actually weaken a support level, because each touch can make the breakthrough more likely. So, especially if we have a scenario where we have, for example, higher lows into resistance, or lower highs into support. Uh, so let's say we have, you know, a resistance level right here, and we can see that the lows here are getting higher and higher. We have one low, higher low, higher low. This is actually a sign that the resistance is getting weaker, and that we might break through.

But all right, so now let's dive a little bit deeper into price action together with support and resistance. And what I want you guys to have in mind throughout this whole thing is always the mindset of that price action is what the price is doing right now, while market structure is how the price have acted in the past. So, let's say that first of all, a support level is a type of market structure. So, in order to have a support, you can see right here on the screen, I have drawn out a support level. But in order to have a support, we need to have the price gone there in the past. So, let me draw out. So, let's imagine that the price, you know, in the past, it moved down. It touched the support like this, uh, and it moved down, touched the support like this. And then the price started to move down once again. So, we have a scenario that looks something like this. And here, what we as traders need to be able to do is that we need to be able to analyze how the price action looked like when we reached the support. So, for example, if we have a scenario where each time the price reached the support level, we might have seen, you know, bullish price action. And with bullish price action, I mean things like, for example, we might have seen a strong hammer the first time we touched the support, and maybe the next time we touched the support, we maybe saw a very strong uh, momentum candle. Remember, a momentum candle is a candle that is at least twice the size compared to the previous candles. So, we measure the previous candles, and we see that we have a momentum candle. The price action of the previous touches makes this more likely to be a strong support. So, this makes it more likely that when the price, or if the price eventually comes down to this level, we are really paying attention to this support level. But now, and this is even more important, when the price actually comes to this level, we need to analyze what happens to the price when we reach this level. So, if we see, let's once again take an example from earlier in this course. If we go to this level, and let's say that we see a strong, remember, a strong

bullish engulfing pattern. This right here, this right here would be a very good sign because this is h this is bullish price action coming in at a level where we have previous seen bullish price action. And as the saying goes, you know, history doesn't repeat, but it definitely rhymes. This is a good sign and a sign for us to potentially look out for a trade, right?

But if we instead let's imagine that we have a scenario where when the price comes down here maybe instead of having a bullish engulfing we maybe see you know let's say we see a doi candle right here we maybe see two doi candles in a row after that we maybe see you know a green candle that looks something like this. This is a candle known as a spinning top. All of these candles together, what does this candle tell you? Well, they definitely don't give you any confidence h about this support. It actually tells you that on this support level, the buyers and sellers, neither the buyers or sellers are in full control. And this can actually be or this is a bearish sign. And here it gets even more sketchy if you know if we look at the price action of the previous touches. Uh let me uh I accidentally deleted it. Uh but if we look at the price action of the previous touches and we notice that these touches as well maybe wasn't as convincing. Maybe instead of a hammer, we might have had, you know, a candle that looks more like, you know, a spinning top candle. And maybe the bounce also didn't have, you know, super convincing candles. Maybe it looked something like this. This is not as bullish as the hammer. And maybe next time uh during this phase, during this bounce, we maybe had also, you know, a few dogey candles and, you know, not as convincing candles. This will once again make this support less significant and less likely to succeed.

Uh so here I I hope you start to realize here the difference between price action and market structure. Price action we're talking about um we're talking about how the price moved. But we can talk about uh this is a bit hard to understand but price action we mostly think about how the price is moving right now. But we can also uh talk about price action when we zoom in on how the price has moved on specific points. It's all about, you know, really zooming in on the price.

But all right, so here are some rules you can write down in your notebook because you are taking notes, right? Uh don't worry if you don't do that. Uh but here is a few rules that you can look out for in order to find strong support levels. So the first thing we're looking out for is that we want to see a sharp reaction and preferably a long wick. So here we're looking out for, you know, the classic example would be uh, you know, a hammer pattern. But any kind of pattern where we see a strong uh a strong wick is a sign of, you know, if we're talking about support that buyers step in or if we are talking about resistance that sellers stepped in. What we also can look out for is other types of clear reversal candles. I'm talking about things like the bullish and bearish engulfing pattern. You can look out for things like uh the dark cloud cover. You can look out for piercing patterns, momentum candles. There are so many candlestick stick pattern patterns you can learn. Uh and if you want to dive even deeper into candlestick patterns, I actually have a a full 2 hour long course right here on YouTube. I will make sure to link that video up in the video card if you really want to dive deep. I actually highly recommend to check that full course out after this video. So, make sure to save it to a watch later playlist or something like that.

Um, yet another sign is that the price moves away quickly with strong candles. So, you don't only want to look out for the single candle that touches the support. You also want to look out for the candles that comes afterward. So for example, if we have a hammer like we see right here and after the hammer, we might see a strong bullish engulfing pattern. Then this makes the support even more bullish. It shows even more strength. And here the next thing is that quick reaction is strength. We're looking at remember price action is all about the character of the movement. So if we have the opposite, if we have you know slow hovering around the level. So if we have a resistance and the price comes up here and then maybe moves around the resistance for a long while this is a sign of uh this is a sign of weakness rather than strength.

And here let's quickly take a look at the opposite. What what are the price action that shows up before a support or resistance level breaks? Well, the first thing I'm looking out for is lower highs pressing into support. Um, so this is a scenario where we have a support level right here. And we see that the highs here coming into the support are getting lower and lower. This is a sign of weakness. And the opposite is true for the resistance. So if we have the resistance and we have higher lows pressing into the resistance, that is a clear warning sign that the resistance might be breaking. The next thing I'm looking out for here is small candles clustering near the level. So this was what I showed earlier. When we see indecision candles like dogey candles or spinning tops uh coming in at uh support or resistance levels, this indicates that you know uh the analysis wasn't what we thought when we draw when we drew out our support and resistance levels. What we expect is to see a strong reaction. So if we get evidence to the contrary uh this is of course a bearish sign.

And here and this is very important when we see rising volume during weak tests that's a bearish sign. But when we see rising volume during strong tests. So if you for example see a bullish uh hammer pattern or momentum candle that is a good sign. In general, you can think about volume as something that confirms the move. So the more volume we have on a candlestick pattern, the more strong it tends to be. So if you have lots of uh volume on a bullish move, it becomes more bullish. But if you have lots of volume on a bearish move, it becomes more bearish. Last but definitely not least and this we will talk about more soon is that if we see you know momentum candles breaking through uh you know with especially with conviction that is of course a very bearish sign.

But right so now let's switch attention and take a look at one of my favorite ways to trade and that is how to trade breakouts. And now you might wonder you know why do I like breakouts? Well, the exciting thing about breakouts is that you know a breakout is when the price quickly moves beyond a key level. So that is an opportunity uh because we see so quick movements that is an opportunity to make quick money. You can get in and out of the market quickly and make some nice profit. Um and these kind of uh breakout trades is very exciting and so on and so on. But because they are such violent moves and can be exciting times, that makes it even more important to, you know, really learn about them. And that also makes it very important that you have a good psychology, a good trading psychology before you start trading them.

Um, but now let's take a look at how to trade breakouts. Well, there are a few things we're looking out for. The first thing we want to look out for is a strong momentum candle breaking beyond a level. This is pretty simple. Let's say we have a resistance level right here. What we in general are looking out for is that we want to see a strong momentum candle with at least twice the size of the previous candles. Preferably when we see breakouts, I really recommend to see, you know, three times or even more um compared to the pre previous candles. But that is the first thing we're looking out for. And another key thing is that we want to see the candle uh it should close clearly beyond it. So the candle close which in this case is up here. It should be far above the resistance. We don't want the candle to look you know something like this. Uh even even if it's a momentum candle we don't want the candle to close near the resistance. We want to close it far above. The next thing we want to see is that we want to see lots of volume. I mentioned this briefly earlier in the course, but what a volume ba what volume basically tell us is how many market participants are supporting the move. So if we have a strong momentum candle and lots of volume, it means that many traders participated and agreed that this is a real move. But if we have a strong momentum candle and we have little volume, it means that, you know, yes, maybe we had a momentum candle, but we don't really have lots of people uh causing this move. So maybe it's not as significant. And the other point I want to talk about here, it's a very, you know, casual point, but it's actually very important. And I will show you guys a super clear example in trading view soon. And that is that the level being broken should be obvious to everyone. The more obvious the break is, the more likely it is that we see strong price action uh coming into that level. Uh so if you are uh and this is why you know trading maybe on the larger time frames uh like maybe the daily chart or the 1 hour chart can often be more you know basically more profitable or at least easier to trade in many cases because these are levels that more traders are paying attention to and it can lead to these uh strong reactions. The next thing I'm looking out for is followth through candles. So even after we see the breakout candle, what many traders like to do, let me delete. O uh let me take back the level right here. But what many people are looking out for is a confirmation candle. So even after the breakout, some trader traders wait for one more momentum candle before they actually enter the trade.

Here the next point is just one way to trade uh breakouts and that is that you can wait for a retest of the broken level. So this is basically when we have let's say we have a resistance right here and the price breaks above a common entry point is to wait for a pullback and then try to enter right here. And once again the same principles as with normal support applies because when we break resistance many times it flips to become support in the future. So what we want to look out for here is some kind of bullish price action coming in to that support.

But right guys, so now let's actually jump into Trading View. If you didn't know, Trading View is the platform I use for all my technical analysis. I actually also use Trading View for my fundamental analysis, news, and basically all things trading. And uh if you want to follow along for the rest of this course later on I will show you guys some indicator and much more good stuff make sure that you have trading view. Um, and if you want to uh you can definitely trading view has a good free version you can use and it does include most things I will cover in this video. But if you want to get access to everything don't worry because I do have a special link. Um, I will make sure to leave that link in the description and the pin comment. And you can use that link to try out Trading View Premium for free for 30 day for 30 days. And if you after that trial period decide that you really loved Trading View, you can, you know, continue that and get a $15 bonus. So, make sure to use that link uh if you haven't used it already.

Um, but now let's take a look at one of my all-time favorite breakout examples. Uh, but first of all, right now we're looking at Bitcoin. You can see it up here. And we are on a daily time frame. So, every candlestick on this chart represents one day. But the breakout example I want to show is actually one uh that happened a long time ago because I really this example is so so clear. Uh so and that example actually comes from breaking the all old all-time high from all the way back in 2017. And remember the rule we talked about just recently? One of the key uh rules we're looking out for when we're looking out for breakouts is that if we have an obvious level or in other words, we have a level that, you know, pretty much everyone is paying attention to, it's more likely that we will see a strong, you know, uh reaction at that level. And I think it's no better example than showing, you know, when Bitcoin broke the old all-time high. So you can see here back in 2017, Bitcoin got reacted here near 20,000. It was was at around 19,700. We got a clear re reaction two times and it took a very very long time before the price revisited this level. But you can see that eventually in 2020 the price tried to break this level again. And you can see that first of all we failed. The price came up to this level but we didn't see any signs we talked about earlier of a breakout. You can see uh that the price actually briefly pushed above. I hope you can see the wicks. We wked above quickly but this is no evidence of a breakout. And also remember that we're looking out for volume, but during this uh this try of breaking out, we didn't have lots of volume. By the way, if you don't know where to find volume, what you basically do is that you go up here to the indicators tab in Trading View and you search for volume. There are tons of different volume indicators. Some are built by Trading View and some are built by the Trading View community. That is one thing I really like about Trading View that uh it has a very large community. People are building indicators. Um, so you can you know use uh other people's indicators and strategies. But for this video I'm going to keep it simple and open up the normal volume indicator right here. But you can see that during the this time we had all of the signs that the breakout maybe uh wasn't going to happen. And it also got proven. We didn't see a breakout and the price actually dropped down a bit here.

But on the next attempt on this day right here on December 16, 2020, we actually saw all the signs of a strong breakout. First of all, right here, what type of candle is this? Well, this right here is a clear momentum candle, right? Because it's clearly more than twice the size of all of the previous candles right here. This is a super clear momentum candle. The next sign we're looking out for here is the volume. I think this was uh this volume right here, but you can see that we clearly have, you know, more than twice the volume of all the previous of all the previous days. Another sign here, remember, another sign we're looking out for is that we want the candle close to be far above the resistance. And in this case, the candle close was clearly far above the resistance. And the last sign that I talked about earlier was of course that this is a level clearly visible to everyone. Everyone was paying attention to this level. So when it actually broke out, we saw lots of strong bullish price action. And the reason I love this example is that after this breakout, we saw the beginning of one of the most legendary bull markets of all time. So this right here uh you know, the it's important to mention that every time you trade breakouts you will of course not find these kind of perfect examples but I do think this is a perfect example um that really demonstrate all of the principles I talked about earlier.

Right. So now when we know about the signs to look out for when it comes to breakouts, now it's easy to also learn about signs that a breakout will fail or in other words, signs of false breakouts. So what we can see here is that if we basically take a look at the opposite of what makes a breakout strong, we can actually find these false breakouts. So the first sign we're looking out for is a weak breakout candle. So if we have a breakout candle that is, you know, not a momentum candle, it's not convincing, that is a sign that a breakout will fail. Another very clear sign uh is if we only see a wick above or a wick below a level, that's a clear sign of reversal. So if we for example have a resistance and the price comes up and then we see you know a wick above this is of course a clear example uh of a reversal and as you can see this right here pretty much looks like a bearish shooting star which in itself is a bearish candlestick pattern. One thing that is very nice about technical analysis is that when you dive deeper, you will start to realize that pretty much all bearish patterns and all bullish patterns when you learn about the principles that makes the patterns bullish or bearish, it will all sort of pretty much make sense without even learning about the patterns. That is a cool thing. But um but on my YouTube channel, you will find everything you need to know about technical analysis. Hopefully I do constantly uh constantly create more content as well. Uh but that is one sort of magical thing about technical analysis.

But here another clear sign remember in order to have a good breakout we want to see lots of volume. So a sign of a false breakout is if we don't see an increase in volume because breakouts we want many traders to pay attention to them. And if we don't see increase of volume, it's a sign that not many people are paying attention and that we're not might not see the increase in volatility we do expect. Of course, another sign is if we see immediate opposite candles form, that is a clear signal of a trap. And one thing you really know about false breakouts is that these are not just uh moments where we should be careful about. False breakouts can actually be one of the best opportunities to trade and one of the best opportunities to make money. Some of my favorite trading strategies actually involves trading these false breakouts. So they are super important to be able to spot not only to avoid them but also to trade them.

But right so now let's actually jump back here into trading view. We are still looking at the exact same chart and same example as before. Uh, and now I actually want to go down to the same spot we looked at earlier because I do think this is a good example of a false breakout. So remember the point on the chart we talked about earlier. Bitcoin reached a new high uh right here. This was all the way back in December 2017. But what you can notice is that the price actually tried to break out right here. You can see that. I hope you can see that red candle. I can actually zoom in on it a little bit more. But this was an example for the price to break even higher. We actually wicked above here. So this was a clear attempt. But this breakout had many of the false breakout signs. The first sign is that we we wicked above the price didn't even close above the levels. That is a clear warning sign. Another clear warning sign is that if we look down here to the volume, we saw no increase in volume. We actually saw one of the smallest volume bars and that is a very strong warning sign. Um, you know, and because we only wicked above we also of course uh we didn't have a momentum candle. In fact, this was one of the weakest momentum candles of this whole rally. So, we had just so many signs that this was not a good breakout. And actually, after this pattern appeared, you can actually see that this was the beginning of the downfall of Bitcoin. After this period, we actually started a strong trend towards the downside.

But all right. So now I want to talk about something super important and that is why volume is so important when it comes to price action. It's not only important when it comes to breakout. It's actually one tool we can use for all price action. But first of all, what does volume actually tell us? Well, volume basically show us how many traders are active during a certain move. So let's for example go back to our examples of candlestick patterns. If we see a hammer pattern right here and we have you know lots of volume it means that many traders were active during this hammer pattern and it makes the hammer pattern more significant. So as I said high volume confirms that a move is strong and supported. Uh while low volume means that we have weak part participation. And the weaker volume the more you should be skeptical about what you see. This is at least how I think about it. I'm not saying that I'm correct. This is this is my my way of really understanding volume.

So here if we have rising price with falling volume or in other words we have a divergence between between the volume and the price this can be a bearish uh signal of trend exhaustion. And if we for example have big volume spikes at highs or lows this can make them more important points. It can you know be a signal that we as traders should pay attention to these points. And here when it comes to volume there is a little bit different when it comes to you know crypto stocks and forex in crypto and the stock market volume is pretty simp uh uh simple because we have you know very clear volume data you know for example the volume in stocks is how many stocks got traded during that period. In crypto it's uh how many uh of that specific coin got traded. In forex we use a little bit different uh a different measurement which is not as accurate but what I do want to measure uh we often use something called tick volume but what I do want to mention here is that you can use volume in forex as well but it's a little bit less um how how to put it it's a little the data is a little bit more tricky in the forex market.

All right. So, here to just dive a little bit deeper and to really hammer in the concept of price action and volume, I want you to just look at these two candles right here. And what I want to demonstrate is that we might have let's say that this these are two different worlds, you know, two parallel universes or something like that. And that these candles are exactly the same. uh you can imagine that this is you know let's say a stock uh a candle of a stock but in one scenario uh we might have you know let's say we have a volume of 10 while in the other scenario we have a volume of 10,000 and here even though these candles are exactly the same so if you only look at the candles you might say that these are two you know they are they tell us the exact same thing about the price. But this is actually far from from true because in one candle this might be you know in a very you know very small stock and let's say this was this candle might have been h created from only one trader buying you know let's say a very small stock just one trader bought a stock and it created the volume of 10 and this candle right here. So this candle was only created by one trader. But if we compare it to the candle of the right, in order to create the candle to the right, we would actually need to have 1,000 of the same trader in order to create this volume because you know 1,000 * 10 is 10 10,000. So, while the candle to the left might have been created from one trader, in order to create oops, in order to create the candle to the right, we would have needed 1,000 of that same trader. So I really hope this demonstrates the principle and it shows you the reason why the candle here to the right is more significant because you know there are more traders agreeing that this is a valid candle. There are more market participants participating and supporting that move.

But all right, so now let's actually jump back into trading view because now I want to show you some of the best price action trading indicators. And now you might wonder, you know, isn't uh isn't price action all about trading without indicators? And if you have been follow along throughout this course, you know that price action is all about, you know, zooming in and taking a look at what the price is doing right now. And we can actually there are a few indicators you can use that can help you with that. So now I want to show you uh some of my favorite indicators when it comes to price action. And I think most of these indicators are available on the free trading view plan. But some might be you might need Trading View essential or Trading View Premium for some of them. Uh, but don't worry because I do have a special Trading View link. You can use that link to try out Trading View Premium for free for 30 days. And if you after the trial uh think that you know Trading View is good enough and you want to continue using it, you will get a $15 bonus. So make sure to check out that link. It will be in the description and the pin comments.

But all right, guys. So now let's take a look at the indicators. And the first indicator I want to take a look at, let's actually open this one up right away. And to open it, you want to go to the indicators tab in Trading View up here. And then you want to type in you want to type in a star. And then you want to search for all candlestick patterns and then a star right here. And as you can see when we search for this, you will see multiple indicators appearing here. Some are created by the community, but the one we want to open is this one at the top called all candlestick patterns. And here one thing you need to notice is that or one thing I have read in for example YouTube comments is that some traders have problem finding this indicator. So if you for some reason don't find this indicator try to search for it in your own language. Um, that has been helpful to some people uh but hopefully you can find it right away. So now let's open this one up. And as you can see after open this one up, you will see multiple buy and sell signals appearing here on the chart. And you can see the red uh the red sort of dots right here, right here, right here, right here are sell signals. And we also have buy signals. Uh the blue ones right there. But now in order to use this indicator effectively, I like to change a few settings. So to do this, we want to go up here to the co cog wheel where it says settings. And as you can see when you open up the settings tab, you can see that we have tons of different candlestick patterns we can choose between here. And what this indicator basically does is that it automatically detects candlestick patterns. In this course, we have learned about a few and these are the ones I do want to choose here. Remember we learned about earlier we learned about the pattern. So I want to uh I mean earlier we learned about the hammer. So I want to choose the hammer but we also learned about the shooting star. So I want to make sure to have the shooting star. We already have the engulfing pattern right here. We can actually uncheck the dois for now because I do want to focus on uh reversal patterns. So we have the engulfing, we have the hammer, we have the the shooting star and I think that is good for now. The other setting I want you to pay attention to is that you can see it says detect trend based on. And this right here is actually a filter that filters out some of the false signals because remember from earlier in the course when we talked about candlestick patterns in order to find you know significant for example in order to find a valid hammer pattern you want to have a downtrend before the pattern appears because the goal of the pattern is to reverse the price to the upside. And what this uh what this setting can do is that it can help reduce some of the false signals because if we uh click on no detection right here, you can see that we will have many more signals appearing on the chart and it's more noisy. So I actually like to have this uh detect trend based on SMA 50. This right here is a simple simple moving average based on 50 days. And as I said, it helps to reduce some noise. So now I want to go down here and press okay. And as you can see, we have many nice signals appearing here on the chart. Some are better than others. You can for example see that this sell signal right here was beautiful because after this signal, we saw strong move towards the downside. This bullish signal right here was also nice. We saw a very nice move. This bullish signal was pretty good and so on and so on. But if you want to make these signals even more uh even better and even more significant, what you want to do is that you want to combine them with key market structure.

So now I actually also want to show you guys one of my favorite indicators to find uh important market structure. Market structure is a very in general a very broad topic and I do actually highly recommend that you dive deeper into market structure. I do have a full market structure trading course right here on YouTube and I will make sure to link that course both up in the video card as well as the description. Make sure to add that one to a watch later playlist. I highly recommend to watch it. But for now, let me actually show you this indicator that you can use that can really help you identify market structure. So once again, we go up here to the indicators tab in Trading View. And then you want to search for pivot points high low. And just like that, once again, you can see we have tons of indicators appearing, but the one you want to use is this one at the top that is created by Trading View. So you open this one up and as you can see after opening this indicator, you will see multiple points here appearing on the chart. And you can already notice that these points tend to be at pretty, you know, nice high and low points. But before we can use this indicator effectively, I need to change a few settings. So what I want to what you want to do now is that you want to go up to this indicator where it says 1010 and you click on the cog wheel tab. You click on the settings tab. And now the settings I like to use is to change the pivot height to 20. uh the pivot height to 2020 and also the pivot low to 2020. And since I'm using uh you know a white trading view, uh I really like to change this one to white black, this one to white black. This is just you know visual to make the signals much more clearer. And now I can also just mention what this pivot high and pivot low means. These numbers 20 and 20 are basically how many candlesticks this indicator use to make its calculations. So 2020 means that it it uses 20 candles to the left and 20 candles to the right to find these significant points. So now we're ready to click okay. And here this uh first of all you can now see that we have less points uh but at the same time these points will be more significant. And if we find areas on the chart where we have multiple of these points they tend to be key support and resistance levels. So for example, if you take a look right here, you can see that we have a point. We saw actually a strong reaction and strong selling pressure coming in. So what we can do is that we can actually try to see if we have some resistance from this level. If we include all of these three wicks from the three touches of this high and drag this one to the left, uh I mean to the right, you can see that we saw this massive reaction here. And remember when we see we saw you know lots of bearish price price action coming in and this can actually make this resistance becoming more significant in the future. So we saw this strong selling pressure coming in the price went down and then we actually came up and retested this resistance and what you also can notice is at the same time this candlestick indicator automatically identified a bearish engulfing pattern. And as you know by now the bearish engulfing uh pattern is a bearish reversal candle candle indicating you know a move here towards the downside. And after this move the price completely collapsed here. But now you might of course wonder okay so great you are using indicators but how could I actually have traded this? Well to trade this bearish engulfing since it is a bearish pattern what we're looking out for is actually going short. Going short is when you make money from the price going down. I do have a video about that if you want to learn more. But what I'm going to do is that I'm going to open up the short position right here in Trading View. The uh if you have been following the course, you know the most common entry point is to enter at the candle close of this pattern. As for your stop loss, you can either set your stop loss just above the pattern or above the resistance level. For now, let's keep it simple and set it uh set the stop loss just above the high of the bearish engulfing. And if we use a risk-to-reward ratio of two, our trade would have looked something like this. We would have locked in some very nice profit. But in this case, we could have used used a much broader stop. For example, a 3:1 stop as well.

If we look a bit more to the right, let's actually see if we can find another example here. This is actually super interesting because we do have a pivot point right here and we saw, you know, a move towards the upside from that pivot point. So, we can draw out some sort of support right here. And you can see that recently we actually saw a strong move towards the downside. Uh, by the way, I'm currently I think I forgot to mention it, but I'm currently looking at SMCI, uh, stock here, uh, an AI stock on the daily time frame that has been having a hard time lately. But what you can notice is that we actually saw just recently a potential I would actually say that this is pretty much like a dragonfly dogee. And you know that that is a bullish uh, candlestick signal. This is pretty much like a mix between a hammer and a bullish uh dragonfly dogee. And this actually indicates a potential reversal to the upside. This right here is a live market. So, we don't know if this one uh will reverse or not. Remember, and this is super super important. Trading is not about certainties. It's all about probabilities. We as traders try to get the probabilities on our side to take better trading decisions and as a result to make more money, but we can never be certain. So, we don't know if this one will play out. But we do have a bullish signal right here. And in order to find, you know, how to trade this one, uh, first of all, it's a bullish pattern. So, we want to use our long position here. So we use our long position where the most common way to enter is to enter at the candle close once again. Uh, the stop loss in this case I would definitely set below the extreme of the pattern. So we set it just below the lowest point of the wick right there. But here as for the target level I actually want to show you guys another indicator you can use to help find targets and where to lock in your profit. And so now we once again want to open up the indicators tab in trading view. And now I want to search for volume profile. Remember earlier in this course we have already talked about volume. We know that volume is all about confirming you know how significant is a move. But we don't uh what we have been talking about recently is how much volume do we have on each candle. But what you also can analyze is how much volume do we have on each level. And this is where volume profile comes in. And here when you search for volume profile in in trading view, you will see that we have tons of different indicators. We have also multiple indicators created by trading view. And these are all for slightly different reason uh for slightly different scenarios and reasons. But in this video, I want to use the fixed range volume profile. So, you want to open up this one right here. And what this indicator allows you to do is that it allows you to show you a range. So, you see you have two white dots here. And you can choose, for example, to measure uh, you know, this whole part right here. But for now, I want to analyze the most recent swing move. And the most recent swing move is from the pivot point here down to the most recent low. So you can see that I I put the first dot up here and then I drag down the second dot down here. So I analyze this whole mode. And the reason I want to do this is because as I suspected, you can see that during this whole part where the price was dropping down fast here, while we do have lots of volume on the indivi individual candles, we don't really have lots of volume on the horizontal level. You can see that most of the price uh this is actually around 70% of the volume got traded during that part. And this makes it I don't really have time to explain this in detail, but this makes it so that you know because the price went down quickly right here and we didn't have lots of volume. It means that if we get a bounce here, it's likely that the price can without much resistance push up to this point. Here is where it's more likely that we do get some more resistance. Often traders talk about that these sort of value areas on the volume profile can act as magnets. Uh this is you know a little bit you can argue if that is true or not but in general the price tend to move more freely where we don't have lots of volume. So one argument could be made here to you know set the target level below the value area of the volume profile. Uh but as I said, you know, this is a little bit outside the scope of this video. You know, analyzing volume can really help your analysis. But if you want to dive deeper into volume analysis and really looking at how the price is behaving within the candles themselves, then I highly recommend to check out my course on order flow trading. I will make sure to leave a link to that course up in the video card as well as the description below.

All right, so congrats. You now know how to read the micro movements of the chart and the battle that always goes on between the bulls and the bears. But here is the trap that wipes out so many beginner traders. Trading a candlestick in the middle of nowhere will lose you money. For example, a bullish pattern only works if you trade the pattern at the right location. So, what we now need to do is that we need to zoom out. And this is where market structure comes in. I'm going to show you how to find and map historical trends, ranges, and key zones. And this will show you exactly where to look for these key price action signals we talked about earlier in the course. If you skip learning about market structure, the price action signals won't work. So, make sure to really look in for the next part. Let's jump right into it.

All right. Okay. So, now let's start here with module one, which is just a fancy word for chapter one. And what you will learn here is what market structure is. And the key distinction between macro versus micro structure. This is basically as you can see right here the two layers of every chart. So make sure to really look in here. So first of all what market structure is. Market structure is basically the big picture of the market. This is when you zoom out and look at the market as a whole. Uh so you can see this is the big picture of the chart. It shows the major highs and lows. It shows you the trend direction. So are we in an uptrend, downtrend or sideways market and basically the overall path and as I mentioned earlier you can think about this as the skeleton that gives shape of the market. So when you look at as an example when you look at you know a market it might look like something like this you know right here you can see that we have an uptrend right then maybe the market starts to go something like this and maybe like that. All of this when you look at this right here, this is market structure. But then we have the details. The details here is what is known as price action. This is the small movements inside each swing. So things like you know candles, candlestick patterns, small micro movements, you know, are we seeing momentum or not? So for example, imagine that you look at this chart I have right here and you zoom in. So let's say that you zoom in on where the price is uh you know right now and maybe you can see that we have uh right here. Maybe we have a strong strong red candle. When you zoom in like this and look at you know the candle itself and the character of this candle this is price action. So the difference between market structure and price action is basically you know if we look at the market as a whole or if we zoom in and look at the character of the uh of the movements. So I really hope this makes sense. So to hammer it home here the key takeaway is that ma uh that market structure is basically the macro structure. uh it's uh maybe I should have used another word but it's where we are in the market and the overall picture of the market while microstructure shows what is happening right now. So we use price action to get you know more precise entries and maybe even get hints on where and when to exit the market and lock in some profit.

All right. So, let's actually right away jump into Trading View right here. Trading View is the platform I use for all my technical analysis, all my trading, and it is the platform I will use uh throughout this course. And if you want to follow along and be able to do everything I do in this course, uh I will have a link to Trading View both in the pin comment and the description. And you can use that link to try out Trading View Premium for free for 30 days. Uh, and after the trial, if you like it, you can continue or you can actually move to the free version. But the free version does have ads and have some limitations. But I think especially if you are a new beginner, the free version is definitely good enough to start off. Um, but here uh, as I said, I'm currently looking here at a Google chart. You can see that by looking up here, you can see we're looking at Google and we are on a daily time frame. So right here every candlestick represents one day but I can already mention that the concepts in this video you can use on the daily time frame but also on the 1 hour time frame even the 5 minute time frame they are basically universal. So don't really uh worry about the time frame but what I just simply want

To start off, by showing you guys is the difference here between market structure and price action. So, if we were to analyze the market structure of this chart, the absolute most basic, uh, and that you guys hopefully can see by just looking at this chart is that we are in an uptrend. You can see we are in an uptrend because the price is printing. You know, we have a high and low, then we have a higher high. We also have a higher low, a higher higher low. So, when we look at the market structure, we look at the market and say, we are in an uptrend.

However, if we want to analyze the the price action, we can, for example, analyze, you know, what happened just recently. For example, right here, we actually almost have a specific candlestick pattern known as a bearish engulfing pattern. Uh, I would say not a perfect one, but almost a bearish pattern right here. And included in in price action, you can also do things like analyze, you know, what happened at specific points. So, for example, when we broke out of this pullback right here, you might want to analyze, you know, the micro movement of that specific point. That is also price action. So, price action doesn't have to be only the last candle. Um, you can analyze things that happened in the past, but it's all about, you know, how you zoom in and, uh, that you look at specific micro movements.

All right, so now it's time for module two right here. And now we will learn about swing points and market extremes. These are very important points to learn about because these are basically the building blocks of market structure. So, first of all, let's define what a swing point is. A, when it comes to swing points, we actually have two swing points, as you as you can see right here. We have the swing high, which is basically a peak where the price turned downward, and this can mark potential, you know, resistance and reversal zones. And then we have the swing low. This is the opposite, a valley where the price turned upward. And this marks the opposite. It marks support and potential bounce zones.

So, when we have a market, let's once again draw out a market here. Uh, let's say we have a uptrend, as the chart we recently looked at here. It's super simple to find the swing high and swing low. For example, right here we have a swing high. We can mark it with an H. Right here we have a swing high. We can mark it with an H. And right here we have another swing high. Here we have a swing low. Right here we have a swing low. And so on and so on. And this is the basics of swing highs and swing lows. And it's super super simple.

And in order to have an uptrend, the definition of an uptrend is that we need to have both consecutive higher highs and consecutive higher lows. So, when we have, you know, two higher highs and two, uh, higher lows, we can consider an uptrend to have been started. But here it starts to get a little bit more complicated because, you know, markets, as you probably know, markets are very seldom this simple. You know, they they are not always, you know, perfect uptrends or perfect downtrends because within each swing. I can also mention that these are swing points and the actual act actual moves right here. So, for example, the move from this point to this point is what is known as a swing. And what you need to learn is that we have minor and major swings. And here the swings you can see on this image right here are actually major swings. These are the sort of big moves in the markets, the moves we think about, you know, when we look at a chart as a whole.

But we also have something called minor swings, and this makes everything more complicated. Minor swings are basically the small moves and the small turns inside each move. So, what you will notice is that inside of each move, you will actually see that each move has sort of swings themsel. So, you can see this red part right here is like a swing within this move. And this will be especially apparent when you zoom in on shorter time frames. And when you zoom in even more, you will also notice that this, you know, swing within the swing will have sort of moves like this as well. I hope this makes sense. It's what this is basically what is known as fractals. Meaning that when we zoom in on one part of the structure, you will see the same, uh, uh, you will see the same structure appear. So, let me try to show this. Uh, if we if we create the first part here as green, I hope you can see that the pattern here is the same for all of these colors. The green one, the red one, and the, uh, blue one is the exact same pattern where we have a swing, we have a pullback, we have a swing, and within each swing, we have the pattern itself. And this is very, very cool, and this is how market works. And this is also a reason why many things, pretty much most things you learn about technical analysis, actually works on all time frames because the market behaves the same, uh, you know, no matter how you zoom in with a small, you know, I wouldn't say exactly the same. There are some small differences between if you trade on the daily time frame or the one-minute time frame, but largely, I would actually say that it is the same.

And why does it matter? Well, swing points, uh, and understanding this makes charts so much easier to read. You know, as a beginner, it can often be super overwhelming to, you know, open up a random chart and you have no idea where you are in the market. By understanding these swing points, it becomes so much easier to read. So, here is a little tip and kind of an exercise for you guys. I want you guys to open up a chart and start by marking out only the major swings of the chart. So, uh, take up a chart on Trading View and, you know, mark up the large sort of structure of the chart. Don't worry about all the minor swings. Uh, mark up the larger swings.

So, here, let's actually once again jump into Trading View. And I'm once again looking at Google on the daily chart. And I will actually try to use this chart as much as possible in, uh, this video so you guys can learn that these concepts are very general. You can apply them to any kind of charts. But now, what I want to do is to simply mark up the major swings. So, as you probably can see, and don't worry, you will learn mechanical rules for how to do this later. But for now, let's just mark up the swings. We can see, first of all, this one is very clear. We see a swing up right here, but then we see a pullback. The next swing is also pretty clear. Then, this one is a bit harder in my opinion, but you can see that the price indeed pulls back. It's a little bit more messy. But then we see another move and then the price pulls back.

But now you can also see that within swings, especially some, uh, moves are very clear. So, for example, right here you can see that within this swing, we actually have like a move down here, a move up here, and then a move down here. Once again, in the next swing, we have a move like up here, then it goes down here, then it goes up here, then down here, up here, down here, and so on and so on. So, you can see that within the moves, we have these minor swings. And you can't really see it right now, but even on the parts where it looks like a straight line. So, for example, uh, right here, you will notice that if you zoom into the shorter time frames, maybe all the way to the five-minute time frame, you will actually see that this is a trend in itself with its own, you know, swing moves up and down.

All right, so now let's move on to chapter three right here. This is one of the most important chapters. Something short here to really pay attention because here we will learn about the impulse plus pullback pattern, and this is basically the sort of fundamental heartbeat of every single trend. So, this, if you learn this, you basically learn how markets move. And the core concepts here, the important concept to learn is that markets move in waves. Every trending market follows the same rhythm: strong moves followed by pauses. And if you, and understanding this pattern is the, as I said, foundation of all, uh, of all trading. And the two kinds of moves you need to learn is, first of all, the impulse move, and also the pullback.

So, the impulse move is a, the strong and fast move in the same direction as the trend. So, when we have, you know, a trend, we have an impulse move, and then the other type is the pullback, and the pullback, as you can see, or the small counter move against the trend. So, we have an impulse move right here. We can write just an I, so you know that this is the impulse move, and then we have the pullback. Then we have another impulse move. Then we have a pullback. Then another impulse move, and so on and so on. So, here we have I, and here we have P for pullback.

And there are a few very important things you need to learn about the impulse move and pullback. Let me actually delete the colors here so you can see more clearly. Oh, I actually realized that I deleted the drawing as well. Sorry about that. Let me redraw the trend. But here, what I want you guys to see is that within the impulse moves, we often have bigger candles. We have more candles of the same color, and we have something called clear momentum. So, within good impulse moves, uh, especially, you know, in this context, we talk about an uptrend. In impulse moves, in an uptrend, you will usually see sort of large and, uh, many green candles. You will, of course, find, you will, of course, find some red candles as well. But the red candles here will often be, you know, smaller. Uh, and, uh, and the overall sort of direction and the overall, uh, character of the price movement is that you see many strong green candles towards the upside.

While, if we look at the pullback, you can see that we will often have, uh, very sort of mixed candles. So, you will see candlesticks in, you know, uh, different colors, and you will usually have smaller bodies. You will see more wicks. So, a pullback might look something more like this. You might have a red candle, uh, pretty small red candle here with a wick. Uh, then you might have, you know, let's say you have a green candle, pretty small candle with a wick right here. Um, maybe you have a candle that, you know, opens up here, closes up here. Uh, then you might have, you know, a green candle again that looks something like this with wicks. Sometimes you have, uh, what is known as a doji candle. So, this is basically when we pretty much have no body. You have a candle that looks maybe something like this. Uh, this was not a perfect drawing, but I hope you understand that the pullbacks here will have much, uh, more sort of wicks. It will have, uh, much more sort of mix in candles, and in general, the pullback will be, uh, you know, not as steep.

So, many times you will actually see, uh, the fundamental pattern look more something like this. You have an impulse move, and then you have a pullback that might look, you know, something like this. Maybe it's often not as sharp as I showed you guys on the image right here. Um, but here, another thing you need to learn about is that we have, uh, two main types of pullbacks as well. First of all, we have the simple pullback, and the simple pullback is when we have a very, you know, one clean counter move. It's very easy to identify. So, if we have an impulse move and the pullback looks something like this, this right here is a simple pullback. But we also have something known as a complex pullback. This is when we have an impulse, wrong color. Um, this is when we have an impulse move, and then we have the price doing something like this, and then we have the next, uh, impulse move. So, this right here is a simple pullback, while this right here is a complex pullback. And both of these can be very good structures to trade. But for, uh, for beginners, I actually highly recommend to start with the simple pullback because many, uh, traders can easily get fooled to think that the complex pull, complex pullbacks are actually a trend change. Uh, but don't worry, we will learn much more about, you know, how to, you know, find out mechanically when the trade, uh, when the trend is about to to change, or you can never really say that you are sure of of something. You can never be 100% of the price direction in technical analysis. That is, you know, already important to mention. But what we as traders can do, and our goal is to flip the odds to be in our favor.

But here, if you want a note to write down in your notebook that I hope you have up, if not, go get it. Just kidding. You don't have to do that. Uh, but the key rule here is that impulse plus pullback equals the basic heartbeat of every trend. If you master this pattern, I would say that you know mastering the basics, mastering the fundamentals are so important, and you will be ahead of most traders by just, you know, mastering this concept.

All right. So, now let's move on here to chapter four right here. And here we will learn about market states. Um, learning about market states is very, very important because most trading strategies only work in a specific state of the market. So, in order for your trading strategy to work, you need to be able to identify what kind of market are we in right now. And here there are actually three states of markets, or four depending on how you look at it. And let's talk about all the states here. And the very first market state here is the uptrend. And, uh, you know, in order to have an uptrend, what we need to have is simply higher highs and higher lows. So, you already know what a high and low is. So, in order to have an uptrend, when we have, you know, we have one high right here, then we have a higher high. We can write HH for higher high and H for high, then we have an uptrend. And here we have a low, and here we have a higher low. HL. So, as long as we have both higher highs and higher lows, we are in an uptrend. And it is important that we actually have both. So, we can't just have, imagine that we have a market where we print, let's say, you know, one high, and the price goes like this. You can see here we have higher highs, but we don't have higher lows. So, this is actually not a, an uptrend. This is a sort of, uh, range or even a messy market that we will talk more about soon. U, but uptrends, we need to have higher highs and higher lows.

Then we have, you know, the downtrend. This is, of course, the opposite, with lower highs and lower lows. But before I show you the downtrend, let me actually show you the range market. This is when lows and highs stay at around the same level. So, we might actually continue this market. Let's say we had an uptrend. It might continue even more, but then we might enter a market that looks something like this. Uh, and here it's important that the highs and lows don't have to be at the exact same level, but hopefully you can see that at this point we have a market where the highs and lows are at around the same level. And this is what is known as a trading range or a range-bound market.

However, now let's take a look at the downtrend. The downtrend is the opposite of the uptrend. And this is when we have this is when we have lower, uh, lower highs and lower lows. So, when we are at, you know, when the market has done this, you can see that now we have, you know, we have one low right here, and then we have a lower low. We have one high right here, and then we have a lower high. So, after this high is confirmed, uh, we have a, uh, we have a downtrend started, and we will talk soon, uh, about, you know, how to, uh, more specifically and more advanced rules to identify this. But for now, this is all you need to know.

However, we do have one more state, uh, that, you know, you can consider, and this is a transition state. This is when we are in a market that is so messy that we can't really even say if it's an uptrend, downtrend, or sideways market. And in general, the general rule is that when you have a very messy market, try to avoid it completely. Don't trade it because we have to be honest, at tra, as traders, there are many times in the markets when the price is almost 100% random. It's very choppy. It's very, you know, hard to trade. And we, as traders, what we want to find is the markets that are very clear. For example, we might want to find a super clear, uh, uptrend, or a super clear range, or a super clear downtrend. We want to avoid the messy transition period.

And here, one important rule I want you to write down is that different market states require different trading strategies. And I already mentioned this, but you should never force, you know, let's say, force a trend trading strategy in a trading range, or never force a, you know, trading range strategy if the market is trending. You need to know what is your strategy, uh, what state is your strategy meant for.

But right, so let's move on here to chapter or module five. And now it's time to take a look at multi-time frame analysis. And don't worry if this sounds a little bit complicated because I will, as always, try to break this down in as simple terms as possible. And you will actually realize that this is not as hard as it sounds. Um, and the basic principle here is that big trends contain small trends. In other words, markets are fractal. And fractal is one of these sort of fancy words. You can see the fractal nature here. It's one of these fancy words that the structure and patterns repeat on all scales. So, for example, the same patterns you see on a daily chart also will appear on the one-hour chart and will again appear on the five-minute chart and so on and so on. And this concept we, as traders, can actually use to, you know, get better entries and basically, you know, increase our probability of success and making money.

And here, when it comes to multi-time frame analysis, you can either, you know, analyze it on three layers. So, you can see right here, I have a three-layer system. But for beginners, I think that two time frames is definitely enough. So, you don't have to do all of this, uh, all of these time frames. But the three-layer system is basically like this. You start with the higher time frame. So, this might be, you know, a daily chart or a four-hour chart. It doesn't have to be that. Day traders sometimes start, you know, maybe on the one-hour or even the 30-minute. Uh, but the point here is that you start, you always always start, uh, on the highest time frame, and on the high time frame, you, uh, find the sort of overall context and bias. So, you determine the overall direction. Are we, you know, bullish in an uptrend, or are we bearish in a downtrend, or are we in a sideways market? Uh, so, let's once again keep it very simple. Let's say that we are on the, uh, you know, we are on the daily time frame, and we have a clear uptrend like this.

But now, in order to find better entries, it's often a good idea to zoom in. So, we can zoom in a step right here. And on the next step, you can start to find the more sort of structure and levels. Here is when you mark, uh, you know, your key swings, break of structure. We haven't talked about yet that yet, but we will. So, soon, and zones, and so on and so on. So, in this case, we can imagine that this chart right here, let's say that this was actually a weekly chart on our first time frame, and then we zoom in to this part right here. So, imagine that we zoom in, and when we zoom in, we realize that this, uh, part we zoomed in on actually is an uptrend, uh, itself.

But now, if you are very advanced, you can zoom into yet another even lower time frame. And this is where you sort of find the precise price movements. So, you find, you know, how to enter, um, and so on and so on. So, you might zoom in on this last part right here, uh, to take a look at the micro movements. And within this part, you might realize that the price, let's imagine that we zoom in on that part, uh, in this case, that part is probably, you know, it's a some sort of down, uh, downtrend like this, right? And you might want to wait for the price to, for example, break out of this structure. By the way, this kind of structure is something known as a bullish flag, that is a bullish chart pattern indicating a move towards the upside. So, you might wait for a break of this pattern. And a common way to enter here is to have your entry point right here. So, this right here was the three-step process. But as I said, for most beginners, I actually recommend to start with two time frames. So, you have one time frame where you identify the sort of main trend, and then you zoom in on the last part of the price to get these better entries. That's actually what I recommend, uh, for most beginners. Uh, so here, I actually a little bit regret what I wrote here. You can see I wrote down that when all three, uh, time frames align, your probability of success increases dramatically. And this is very true. But what I do, once again, want to emphasize that if you have two time frames aligned, that is also very good. It increases your probability, and that is enough for most beginners. I think I went overboard with going with three layers here.

But right, so now let's jump back into Trading View right here. Now, as you can see, I have actually split the chart into two time frames. So, on the left here, we still are looking at Google. I will try my best to use to use this chart in as many examples as possible so you can see that all the concepts work here together. Uh, but here on the left, we have it on the daily chart, and here to the right, we have it on the one-hour chart. And now you might, of course, wonder how do I make the split like this in Trading View? And to do that, you go up here to where it says Layout setup. And you can press right here. And here you can see you have tons of different options. Uh, you can, you know, do so many splits. You can actually have up to 16, uh, different splits right here. But that is way, way overboard. Uh, so let's go back here to two. Uh, however, I do think I'm actually not sure, but I, I'm, I'm not sure if this is possible on the free version. But, uh, as I said, guys, I will have a special link to Trading View both in the description as well as the pinned comment, and you can use that link to try out Trading View Premium for free for 30 days. So, if you want to follow along here, make sure to use that link, uh, and then come back to this video. Um, if not, it might actually be available on the free. You can let me know down in the comments if it's needed or not. Uh, but now let me show you guys a very simple example of this, uh, you know, multi-time frame analysis.

So, once again, remember on the higher time frame, so on the daily time time frame, we take a look at, you know, what kind of market state we are in. And here we can clearly see we have an impulse move, pullback, impulse move, pullback, impulse move, pullback, right? We're clearly printing, you know, we have one high, we have higher high, we have yet another higher high. We have low, higher low, yet another potential low right here. So, in this kind of market, we are in an uptrend. So, we are looking to trade, uh, in the same direction as the trend. So, this is our overall framework. But in order to get better entries, we might actually, or we want to preferably zoom in here to the shorter term time frame. And what you can see here, and this is super awesome. If you zoom in on the last move right here, so zoom in on this part, you can actually see that this part right here is this part on the shorter time frame. And what you will notice is that this is actually a sort of small, uh, you know, a small downtrend, right? On the shorter term time frame. So, we, as traders, can use this shorter term, uh, downtrend to find entries. So, as I mentioned earlier, one very common way to enter right here, uh, is to, you can see we can define this trend by drawing a trend line like this. We also have a lower trend line. Uh, one very common and simple way to enter is to wait for the price to break above this downward sloping line. So, if we, for example, let's say we get a strong, you know, a strong green candle that closes above this downward sloping line, this would actually be a classic bull flag of, uh, I, I mean, this would actually be a classic entry signal of this bull flag.

So, a common way to enter this to do this in Trading View, you go to Forecasting and Measurement tool, and then you press on Long Position. Uh, if we imagine that this happened, this, of course, hasn't happened yet. And I also want to mention that even if this happened, it's not certain that this trade will work out. All we can do, as I said, is to try to get the odds in our favor. But the common entry point here would be to enter right here. And then, uh, one of the most common places to set your stop loss is to set your stop loss just below the low point within this pattern. So, you set the stop loss below right here. I hope you can see it. And then we have many different ways to set our targets. A common way is to use a fixed risk-to-reward. And for example, if you use a fixed risk-to-reward of 1.5, our trade would have looked something like this. So, if the price goes up all the way here, uh, our trade, we sell our position and we lock in some nice profit. Uh, but as I said, this is just one example of how to trade this. Some traders actually specialize instead of trading the breakout here. Some traders specialize to actually trade the sort of touches of the lower bound. So, maybe some traders are already within this trade trying to trade the support structure right here. And, uh, since we are on the larger time frame, uh, in a clear uptrend, uh, most traders probably expect, uh, or the price is biased to actually continue going up.

All right. So, now it's time for chapter six right here. And now we will talk about Fibonacci and measured moves. Uh, these are tools that we can use both to get better entries but also to find better exit exits. So, this right here is a very important, uh, two very important tools that you really need to learn about. Um, and as you can see right here, these are objective tools for both pullback depth and also profit targets. And let's begin here with the Fibonacci retracement. The Fibonacci retracement is a very popular tool. You might have heard about it, and it is for a good reason. However, I do think that many traders use the Fibonacci completely wrong. As you can see right here, the Fibonacci retracement is is used to measure pullback depth, and many traders use it as a tool that sort of magically predicts levels, and this is just not, uh, true. Uh, however, the Fibonacci can still be super, super useful because if we align the Fibonacci with, you know, other concepts, we can increase our probability of success, and that is all about, uh, that is what we as traders, uh, that is our goal as traders. Uh, but before we dive a little bit deeper, I want to jump into Trading View and show you guys how the Fibonacci works.

All right. So, now we are back here in Trading View. We are still on Google on the daily time frame. And to open up the Fibonacci indicator in Trading View, what you want to do here is that you want to go to the upper left corner where it says GAN and Fibonacci tools. You press right here. And then you have, you can see we have tons of different Fibonacci tools here. But the most common one, and in my opinion, uh, this is pretty much the best one, is just the normal fib retracement. If you want to, you can favorite this one. So, you have it saved, and you can also open it up automatically by clicking Alt F. Uh, but now let's just click right here. And to use the Fibonacci, you need to press on two points on the chart, and I want to begin by just doing that. So, I press right here, and I also press right here. And you can see by doing this, you will have multiple sort of lines and numbers appearing here. And in the beginning, this might look very confusing. You know, what does this number, you know, 0.382, 0.236, what does this even mean? Well, it's actually not that hard. And let me show you. Uh, so, first of all, you might wonder, what does these numbers even mean? Well, zero just means zero, and 0.236 means 23.6%. 0, 382 means 38.2%, and so on and so on. But what does these percentages actually measure? Well, they measure pullback depth. So, if we have an impulse move, imagine that this is an impulse move. What these numbers measure is how far are we pulling back compared to the original move. So, if, uh, the price pulls back to this line right here, it means that we pulled back, as you can see, 38.2%, right? And if the price pulls back even deeper, let's say we pull back all the way down here, then we see that the price pulled back to 0.618, 618, which means 61.8%, right? And this is, this is the basics of the Fibonacci. It's not harder than this. Uh, but there are a few rules here of Fibonacci. The first rule is that most pullbacks will end in this area right here. It will end in the 0.382 to 0.618, 618. This is what is known as the golden zone. Uh, we will talk a little bit more about that soon. However, in very strong trends, the pullbacks tend to end in this area right here, 0.236 to 0.382. And this trend right here, uh, the chart we're looking at, the Google chart, this is actually a very steep trend. So, many of these pullbacks will probably end in that area.

But now, how do we draw out the Fibonacci? Well, to draw out the Fibonacci, I first want to mark up the structure. This is a good, uh, rule of thumb to do. Uh, so, let me actually close this one and let's mark up the structure. We have an impulse move, pullback, impulse move, pullback, impulse move, pull back. And to draw the Fibonacci in an uptrend, you want to start at the swing low and then you draw it up here to the swing high. And as you can see, in this case, the price pulled back. It pulled back all the way almost down here to the golden zone. This right here is the golden zone. But it pulled back and pretty much touched the 0.382 before the next impulsive move. And if we want to draw out the next Fibonacci, we just repeat this process. We draw it from this swing low to all the way up to the swing high. And you can see in this case, the pullback is a little bit more shallow. But remember here that it's not certain that this pullback is, you know, done. Uh, actually, we don't really confirm the continuation of the up, of the uptrend until we actually break this point right here. And this is something I will talk about more soon.

But right, so now when you know the very basics of the Fibonacci retracement, uh, one thing you can write down right here is that the golden zone is the zone here between the 38% to 62%, and this is the zone where most healthy pullbacks retrace to. But as I said, this is not a rule that says that every pullback will retrace to that area. As I already mentioned, in strong trends, we actually tend to retrace, uh, more, uh, shallow to the, uh, to the zone above it. But as a rule of thumb, when we enter this zone, this is a good zone to look out for, you know, the beginning of the next impulsive move. Uh, but here we also have a concept known as measured move. And what we mean by this is that the next impulse often equals the size of the previous one. And we can use this to create targets. So, what do I mean by this? Well, if we have an impulse move right here, and then we have a pullback, the next impulse move, it's pretty common that this one is around the same length as the first one. So, if we measure this length right here, we copy that exact length, and then we draw it up right here. Now, I don't have enough space, but I hope you can see the point here. Many times the next impulse move would be the same length as this one. Uh, and this is once again, it's definitely not a perfect rule, but this is just more of a rule of thumb. And many traders will actually use this measured move as their target levels just because, you know, uh, the measured move, the impulse, the next impulse tend to be the same length as the measured move.

And what are the benefits of this? Well, a main benefit of, uh, these concepts is, of course, that we get objectivity. So, markets are very random. We, as traders, we want to find, uh, you know, rules that we can stick to, uh, no matter what. So, uh, the measured move gives us a tool for objective measured targets. You know, no more guessing when to lock in profit profit. But once again, it is important to emphasize that these are guidelines, and they are not, you know, perfect rules that work, that work all the time. And of course, the Fibonacci and the measured move, you always want to combine with the other market structure concepts we talked about earlier in the course and that we will talk about in the future. Never do the mistake that many beginners do and only use Fibonacci because you will, uh, I have to be honest, you will probably most likely lose a lot of money over time doing that.

All right, guys. So, now it's time to move on to some, uh, a little bit more advanced concepts. Uh, but as always, I will try my very best to break this down in a super simple step-by-step manner. Now, we will talk about, uh, three things called BOS, CHOCH, and MSS. And these are basically, uh, three signals that can keep your trend reading more objective and more mechanical. You know, this is one of the main problems with, uh, you know, beginner traders and basically with technical analysis in general, that it's so hard to get, uh, you know, objective rules for if we are in an uptrend, if we are in a downtrend, and so on and so on. You know, two traders can look at the same chart and, you know, reach different conclusions. And these are basically concepts that can help us make this more rules-based. However, even when it comes to these concepts, different traders have, uh, you know, some slightly different variations. But let's take a look at these concepts now step by step.

So, first of all, we have the BOS, and this basically stands for break of structure, and it signals that the trend is continuing. And a break of structure is when the price, it's when the price breaks the previous swing point in the trend direction, and this basically confirms that the trend is continuing and that the trend is still intact. So, let me actually right away try to, uh, demonstrate this. So, if we have an uptrend like this, the break of, uh, of structure is when we break, uh, the swing high of the trend. So, for example, when the price pushes above this point right here, this right here is a break of structure. And also, you can see when the price pushed above this high right here. Here we have a high. When we pushed above, so at this point right here, we have a break of structure. So, you know, this is, uh, this is very simple. But what can make this much more complicated is that in, you know, real life, in real markets, you will often not see, you know, the perfect trends like this. Most of the times, the price will actually move, you know, something, you know, something like this, and maybe, you know, something like that. But the important part here is that as long as the price is holding the low of the trend, remember here, uh, in order to have an uptrend, we need to paint both higher highs and higher lows. So, as long as we're holding, uh, this purple line right here, we are still in an uptrend. So, you can see that, uh, if you look at this chart right here, where is the next break of structure? Well, the next break of structure is, of course, once again, when we break the high, uh, of the trend, and we push, uh, we push above that high. So, the next break of structure is up here.

But here comes the point of the change of character. So, here, the change of character, or for short, CHOCH, is basically the first indication that we have a trend change. Uh, a break, uh, a change of character can indicate either, uh, a break, a change from an uptrend to a downtrend, but it can also indicate that we're changing the trend trend state from an uptrend to a sideways market. And of course, the same principles apply for the downtrend as well. Uh, as I said, this is the first meaningful break against the established tra, uh, trend, and it indicates, indicates that something is changing. And here, the change of character happens when the price breaks, if the price, you know, pushes like this and breaks below, you can see when we break below the last low here in the trend. So, this right here is a change of character. And if we have a downtrend, the same principles apply. If you want to, you can pause the video and try to find the break of structure and change of character in this trend yourself. Did you find them? Well, right here, if you look right here, this is the first break of structure because this is the point where the price breaks to a new low. This right here is the next break of structure, right? Because here the price once again breaks to a new low. But here we can clearly see that the price fails to maintain the, in this case, the high. So, here we have a change of character, and then right here, we once again have a break of structure. And this break of structure is especially important because this is the first, uh, break of structure, and this is the, you know, in the new uptrend, and this is the break of structure that will cause it will cause right here that we have one low and a higher low, and one high, and you can see that no matter where this move ends, ends, we will have a higher high. So, if it ends right here, we will have a higher high. If it goes even higher, we will still have a higher high. So, this breakout structure is important.

So, you know, if you just learn this simple principle of break structure and change of character, you are, I would say, you have a better grasp, uh, of market structure than most traders. But here we have yet another concept that you might have heard, and this is something called a market structure shift. And when it comes to this, this is actually a problem with trading terminology. Uh, because a market structure shift, most traders, as far as I know from my research, they use use it as the same term as change of character. So, for for most people, this is the same thing as a change of character. Uh, as you can see, most traders define a market structure shift the same as change of character. But, uh, as I said, there are a lot of confusing and conflicting info. I have been trying my best to research this, and that is why I highly recommend that we stick to break of structure and change of characters. These terms are clearly defined. Uh, but I thought it was important to include this that if you hear about market structure shift, they are probably talking about this, right? They are probably talking about the change of character. But for this course, uh, try to ignore market structure shift and focus on change of character and break of structure.

So, if you want to write something down, you can write down this quick reference right here. Break structure indicates continuation. Uh, and many trading strategies actually need break of structure. So, if you tra, if you're trading in the same direction as the trend, it's very important to be able to identify. And the change of character is the early warning, the indication that we are starting to see the trend change. However, uh, uh, remember that a change of character is no guarantee that the trend is changing. In order to actually confirm a complete train change, we need a break of structure after the change of character. So, here you can also write down the key takeaway. BOS and change of character are all you need. These two signals will keep your, uh, you know, your reading very simple and clear.

And now at this point, you probably already have a break of structure and shape of character locked in. But I thought it would be good to just show this on the same chart we have been using throughout the course. So, you know, once again, we have the impulsive move, we have the pullback, we have the impulsive move, we have the pullback, we have the impulsive move, we have the pullback. Can you find the break of structures? Well, right here we have a BOS. Right here we have another BOS. And where does the price need to go in order for us to have a change of character? Well, the price actually needs to drop all the way below this point right here, right? In order for us to actually have a change of character. So, Google is right now in a very strong uptrend, even though we have been seeing this, you know, this pullback recently.

All right. So, let's move on here. Now you need to learn about two more, uh, very important concepts, and that is strong and weak levels. And here, uh, we have learned about highs and lows. But it's important to notice that not all highs and lows are created equal because some highs are much more significant than others. And in order to know which high to pay extra attention to and which low to pay extra attention to, we need to know, uh, about strong and weak levels. And first of all, what is a strong level? Well, a strong level is simply a level that caused a successful break of structure. And these strong levels are more likely to hold as support when the levels are retested. And the opposite is true here for a weak level. A weak level is a level that failed to break structure, or I can also include here, failed to cause a change of character. And these are levels that are more likely to get taken out. So, let's continue here with our up, uh, uptrend example. So, once again, we have this clear and easy uptrend. And to make this simple, we can once again mark out our, uh, break of structures. So, we have a BOS right

Here and we have a BOS right here. And to identify the strong levels, we need to look at the start of the move that broke structure. So, for example, if you look at this break of structure right here, you can see that right here is where we broke structure. But the start of this move is actually at this point right here. This is the sort of origin of the move. So this red point right here is actually the strong level. And in this case, uh, since it's a low, we call it a strong low. And the same thing is true for this point right here. This is the start of the move that broke structure. So this right here is another strong low.

But what about the weak levels? Well, as I said, the weak levels are levels that failed to break structure or failed to change character. So, for example, if we take a look at this point right here, this right here is actually a weak high. Why is this a weak high? Well, because the move that started from this point, so this whole move right here, failed to change the character of the trend. So, let's actually continue this trend like this. In order for this high to be a strong high, the price actually needed to push all the way down here below, uh, below this point. If that move pushed below this low right here, it would have been what? Well, it would have been a change of character which made this high, which would have made, sorry, which would have made this high strong. The same thing is true right here. So this right here is a weak high because it failed, uh, to cause a change of character. But if the trend now does this, if the trend now does this and breaks below this strong low right here and causes a change of character. Now, is this right here a strong or weak high? Well, this right here would now be a strong, uh, a strong high. And knowing if, uh, you know, a high or low is strong or weak is important for so many reasons. You know, here are just some examples. Uh, if we have a strong low, as I said, it tends to hold. So this can be a good place for stop losses. It can also be a good place for entries. If the price comes down to a strong low, we can actually look to to trade the bounce of that low. And there are so many more strategies we can trade around this. And also looking at weak levels is very important because they, they often get taken out. So we can watch for continuation and perhaps trade, you know, breakouts of these trades and so on and so on. Many trend continuation trading strategies, um, can greatly benefit from understanding if a high or low is strong or weak.

All right. So now let's take a look at some of the best ways to enter the market. Or, in other words, let's take a look at some entry models. And here I have two models, model A and model B. And let's start here with model A. And this one is called the pullback entry. So what we're looking out for here is that we're looking out for a strong impulsive move. We wait for a pullback and then we join the next impulsive move towards the upside. So first of all, in order to have a good pullback, we first need to have an uptrend. And you hopefully know how to identify uptrends. Well, in order to have an uptrend, we need to make higher highs and higher lows. And we need to have break of structures. So, for example, right here we have a break of structure. Right here we have another break of structure. So let's say we are at this point in the chart and now the price starts to pull back. So a common way for the price to pull back is that it looks maybe something like this. What we as traders usually do is that we define this pullback. So we usually draw a line trying to define the resistances within the pullback and then we draw a support line as well. And the first way to enter here is what is called the aggressive entry and this is where you try to enter at the support level during the pullback. So this is when you try to enter basically at the support right here. But when it comes to, uh, you know, entry points in general, the exact entry points are actually a little bit more about price action. Remember, price action is when we zoom in here to the details and market structure is when we zoom out. Um, so I can already mention that I highly, highly recommend you guys to check out my full course on price action. I'll make sure to link that course in the video card and the description. Uh, so you can already save that c, uh, course to a watch later playlist. But what you, uh, want to look out for here, uh, preferably at the support level of the pullback is some kind of bullish signal. So you can either look out for, uh, perhaps a candlestick pattern. So let's say we get a hammer pattern here at the support. That is a very good signal. Or another thing you might see is just a strong momentum candle. A strong green green candle, but you want something that shows that the bulls, uh, take control of this support because that makes it much more easy for us to also set our, um, you know, stop loss and target and so on and so on. So let's say that we have a hammer pattern right here. A hammer pattern is basically a pattern that looks something like this. If we enter on this hammer, our entry would be at the candle close of the hammer and our, the most common way to set your stop loss is to set your stop loss just below the hammer. So this right here would be our entry and our goal with this pattern is because we are in an uptrend, we expect the trend to continue. We expect to eventually see another break of structure and for the trend to continue up here. So that is the first way to enter.

The second way to enter here is to actually wait for the break instead. So you can see here the, uh, a bit more, uh, you can call it more conservative entry is to wait for the breakout of the pullback structure. So we can instead of entering at support, we can wait for the break right here. And once again, when we see the break, we don't want to see, uh, preferably we don't want to see, you know, small, uh, and weak candles on the break right here. We preferably want to see a strong bullish candle, what is known as a momentum candle. And we haven't talked about this, but what I also really like to see on breakouts is that we see lots of volume. So we can add a volume indicator on the chart. Lots of volume basically means that we have lots of market participating, uh, market participants participating in the move and that makes the move more significant and it makes it more likely that we, uh, the trend will continue up here. And when we do this kind of entry, we usually set the stop loss below the low of the, uh, of the pullback. And when it comes to target levels, we can either use a measured move. Uh, a measured move is when we basically measure the impulse move right here. We take this exact measurement and we, uh, start measuring from the low of the pullback. Now, I don't have space to write it. But imagine that you copy the exact length of the orange, um, of the orange arrow and you start it at the low of the pullback. And then your target level will be, um, will be right there. And the other way is to use a fixed risk-reward. Let me actually try to show this. Let's say we have a line, uh, with entry right here and we have a stop-loss right here. A fixed risk-to-reward is basically when you measure the length to the stop-loss and then you use this length to take your target. So let me try to demonstrate this. So, for example, a fixed risk-to-reward of one means that the length is the exact same. So the length, the length to the stop-loss and to the target is the same. So this right here is a one-to-one risk-reward. Uh, a two-to-one is that the target is, you know, uh, two times as long as down to the support. A three, uh, risk-to-reward is, uh, you know, three times and so on and so on. I hope this is clear. This demonstration is clear. But this is yet another level, uh, way to take your targets and lock in profit.

But all right. So now let's take a look at model B. And this entry model is something called the failure test or it has many other names. Some people call it the 2B pattern. It's also known as the WOFF spring or WOFF up thrust. Um, but the name is not really important. You can call it whatever you want. The important part is that you actually learn about the pattern. So what this entry point is, it's basically when the price breaks a level briefly and then snaps back. So it's basically a trap for other traders. And here the entry is actually when the price recloses inside the range. Uh, so let me once again demonstrate this with a, uh, with an uptrend. So we have an uptrend right here. We have the other move and then we once again have a pullback. So in this case, we might have a pullback that looks something like this and we can once again define the pullback with a resistance and a support level. A failure test is when the price comes down here to the support and then briefly breaks the level and then snaps above. So a very good pattern to see on a failure test is once again the hammer. So we might have a hammer that, as you can see, snaps below the support and then before this, this candle closes, the price is once again within the range. So you can see the hammer goes below the support, it takes out many people's stop losses, which creates liquidity for, you know, often smart money to step in and push the price up again. So this right here could be a great entry because we are in an uptrend. We expect the trend to continue. So we can, you know, enter at the candle close. We can have our stop loss below the low and we can use, for example, a fixed risk-to-reward to get our target level maybe somewhere up here, right?

But here, the, uh, failure test pattern, we can also use for counter-trend moves. So let me actually delete this part of the trend and let's imagine that instead of this uptrend actually breaking, uh, structure. So remember, in order to break structure, we need to push above this point right here. But maybe instead of breaking, we might see the price failing to break this structure. And if we also at this point see a strong, uh, sort of strong candlestick pattern where the price briefly pushes above the resistance and then pushes below. This can actually be a case where we can enter a trade in the opposite direction. And how good this trade will be will depend on other things like how is the overall market context. So have it, have we been in a long and strong uptrend? We can also use indicators to improve our rate of success. But this is the general principle in this case. When you, uh, when you trade this, you want to enter a short trade. This is where you bet that the market will go down. You make money when the market goes down. So here you enter at the candle close. Now, your stop loss will, of course, be above the pattern. This is very important for the failure test. Many entry models have, uh, much of subjectivity where you place your stop loss. But for the failure test, the stop loss is pretty much always set, um, uh, above or below the extreme of the pattern that briefly, uh, you know, pushed above and then closed within. So your stop would be above that point, uh, your entry right there. And let's say you use a fixed risk-to-reward, then maybe your target is down here using a risk-to-reward of say, two to one. So here, if you once again, uh, focus on the text, you see that the stop loss we place it past the wick of the failure. And you might wonder why is this a strong entry? Well, one of the reasons it works is that failed breakouts will trap traders on the wrong side. So, for example, if you look at our example we have on the screen, when the price breaks above, uh, you know, briefly breaks above here, so many traders would think that we are creating a break of structure and that the trend will continue. So many traders will enter a long position on the breakout. But when the price, uh, eventually, you know, goes in the opposite direction, it means that many traders will be trapped in a long position and as the price goes down further, they will eventually hit their stop loss, which leads to more selling, which can lead to even more traders' stop getting hit. So this actually helps us create this selling pressure to the downside and the opposite is of course true if we have a bullish trade.

All right. So now let's switch the attention to a concept that can make your chart reading much clearer. Uh, but only if you use it correctly, and that is trend lines and trend channels. Uh, this is actually one of these concepts that I think it really depends on how you use it because many beginner traders are really drawn to drawing, you know, uh, trend lines and trend channels all over their chart. Um, but they are mostly done wrong. Um, especially for beginners. So make sure to really pay attention. Uh, but first of all, what is trend lines and trend channels? Well, when it comes to market structure, we don't just have horizontal levels. So far, we have been talking about mostly about, you know, horizontal levels, break of structures, change of characters, weak and strong highs and so on and so on. Uh, but trend lines and trend channels are basically levels that are sloped. So here, market structure isn't just, uh, horizontal. It can also be angled, and this is what trend lines show. Trend lines basically show higher time frame pressure and rhythm. So we can have an, uh, a rising trend line, which is basically when we connect higher lows in an uptrend, and we can have a falling trend line, which connects, uh, uh, lower highs in a downtrend. So when we have an uptrend like right here, you want to draw your trend line here by, uh, connecting the lows, and if we have a, uh, downtrend, you want to draw your trend line here by connecting the highs. And here, I actually, uh, realized a mistake. I, on this warning sign right here, I wrote "failing to reach a trend line," more so of a weakening strength. And this is of course wrong. I mean, failing to hold a trend line can warn of strength here. Uh, let me re, uh, draw this image right here so I can just show the concept. So let's draw out a clear uptrend right here. I try to draw it pretty symmetrical, um, so we can show this concept. And then we draw our trend line support, something like this. So here, one thing that a trend line can help us with is to understand if the character of the trend is changing. So, for example, if the price now goes down here and breaks below the trend line. So we break below right here. This means that the symmetrical nature of the trend is changing. Right? Uh, because, you know, in, uh, in a perfect uptrend, we often want the swings here to be around the same. Uh, so we want, you know, preferably, you know, this swing to be around the same size as this one, around the same size as this one. But when we break the trend line, we are noticing that something is changing about the trend. But here is a big mistake that many beginners, uh, make, and that is to think that the trend is, you know, over when we break this point right here. And as you know, if we use the break of structure and change of character concepts, we are not changing the trend until we break this point right here. So if you use trend lines, you want to use them as, uh, information about that something is changing about the trend, but not necessarily that a break of a trend line means that we're automatically shifting from an uptrend to a downtrend. That is a big mistake and that is not the way to use, uh, to use trend lines. It's much better to use them as information, uh, that something is changing, but not necessarily that, you know, you should trade based purely on trend lines. I actually strongly recommend against that. But one thing you can use is actually the principle that many beginner traders will use, uh, these trend lines. So you can actually take advantage of that and I will talk about that soon.

But before we do that, I do want to switch the attention and take a look at another, uh, thing that is very useful, and that is trend channels. So a trend channel is basically parallel trend lines. So this is when we take, you know, the exact, uh, slope of a line and we copy it and we place it at the top. So in this case, in this uptrend, let me delete some stuff to make it more clear. We can take this exact slope of the orange line and we can draw it here at the top. And here, I actually remade the image to make this a little bit more clear. But hopefully, you can see here we have the trend line. Let me actually draw this one. So this one touches up here, uh, like that. Here you can see we have a clear, uh, trend channel. And one of the main ways to use a trend channel is that you can use it as a sort of measured move, or, uh, or you can use it as a structure that if the trend continues the way it has done, you would expect, uh, that, you know, when we see the break of structure right here. So when the price breaks above this point, in order for this trend to continue being symmetrical, the price should push up here to around the trend line, right? Uh, uh, the top of the trend channel. So this is a way you can use trend channels that when the price reaches at the top of a channel, that is usually, you know, around the level where the pri, where we expect the price to reverse. But once again, don't use, uh, I, I highly recommend to never use trend lines and trend channels as, you know, as super clear and strict rules. These are just, you know, general concepts that can be, you know, a nice little spice to your analysis. It's not the, uh, sort of bread and butter, if that makes sense. Another concept is that of course, if the price pushes above here, so if we push even higher, what does that indicate? Well, this indicates that the trend is now shifting to become even stronger. The slope is starting to get even higher. Um, so that might mean that we need to shift our, uh, how we use our Fibonacci tool. Uh, and that might shift how much risk we are willing to take and so on and so on.

All right. So now let's move on here to chapter 11, and this is the fractal dimension and regimes. And don't worry about the fancy name. What this chapter is all about is, you know, the different characters of the market and which markets we should look for and which markets we should avoid. So here, you know, smooth versus choppy markets. Adapt or get chopped. Um, you will soon mean what chopped means. But first of all, I want to take a look at two, uh, of the sort of main market personalities. The first personality, and this is a market we really want to look for, is a smooth market. And don't worry, I will soon show an example of this. But this is basically when we have a market that, in simple terms, has easier structure to read. And what I mean by this is that we have long and clear impulsive moves, impulsive moves. We have cleaner pullbacks. We have clear break of structure and change of character and so on and so on. So once again, this is a market, uh, you know, in real markets, it will never be perfect, but, uh, this is a market that perhaps looks something like this in an uptrend, and the opposite, of course, in a downtrend. But the other market, and this is a market we really want to avoid, is what is known as a choppy market. This right here is when a market is very difficult to read. Uh, oops, wrong color right there. But it's difficult to read and it has noisy conditions. So it might have, you know, overlapping swings, many fake signals, trap traders everywhere. Uh, so this is more when we have a market that, you know, looks very much like this. You know, it pretty much is random price movements, and this is an important, uh, principle that you really need to have in mind, you know, as a trader, uh, and that is that markets are actually, uh, pretty random most of the time. Our job as traders is to find the moments and the conditions in the market when they behave in a more predictive manner. Um, and this mindset can really help you to stop, you know, overforcing trades. That is a very common, uh, mistake, uh, with beginners, that they try to force a trade in every market condition. Trading is actually much more about waiting. You wait and wait and wait for the perfect conditions, and that is when you trade. So the dangers here, the dangers here of these kind of choppy markets are that you will see many false signals. You will see fake break of structures and change of characters everywhere that are not significant. Um, if you try to trade these markets, you will notice that your stop losses will get hit all the time, and the structure seems to change, you know, every few candles. It can be hard to even, you know, see what kind of structure we are in. So here, and you want to write this down. Your job as a trader is to notice the regime or notice the condition we are in and adjust expectations and risk. And as I said, in choppy markets, I wouldn't even say that you should reduce, uh, size and so on and so on. Simply waiting is often the most, uh, the most logical and best option here.

So now let's jump back here into TradingView, uh, because now, uh, we are once again looking here at the Google chart, and as you guys probably know at this point, this chart is actually a very good-looking, clean chart. Why? Well, because we have, you know, this clear impulsive moves, pullback, impulsive move, pullback, impulsive move, pullback. This is exactly the kind of chart we're looking out for when we trade. But here, one principle you can also, uh, notice is that let's actually change the time frame. So to do that in TradingView, you click on the number right here. And as you can see, you can have all the way from daily time frames to minute time frames to even seconds. So you can look at a second chart here. This might be, I think seconds maybe is not available on the free plan. You might need Essential or even Premium for that. But as I mentioned earlier, I do have a link to TradingView. It will be both in the pinned comment as well as the description. And you can use that to try out TradingView Premium for free for 30 days. Um, so you can get the most out of TradingView, uh, for free and try it out. Uh, but let's actually change this market to a one-minute time frame because on the lower time frames, the markets in general tend to be more choppy. So let's zoom in here on the one-minute time frame. And as you can see right here, recently, the recent moves right here is actually relatively clean. You can see we have, uh, these sort of swings towards the downside, we have a very steep pullback. We have another swing. Now we are pulling back once again. But if you look a little bit to the left and you look at, you know, this part right here, this right here, I would say is a good example of a choppy market. You can see that during this period of time, you have, you know, the candles going up and down, up and down in a very messy manner. Here it spikes up for a bit and some traders might think, you know, oh, this is the trend change, but nope, we go once again back in the range, we go here, we shop. You know, I, you hopefully can see that this is a market that is very hard to trade, it's easy to get burned, and it's hard to know, you know, where should I even place my stop loss, where should I even enter, and so on and so on. So this is a good example of a choppy market, while this part right here is much cleaner, but this is still far from asking clean as, uh, you know, the daily time frame right here, which is currently looking, you know, uh, much, much better. So if you are focusing on trading uptrends, these are the kind of trends that you want to look out for.

All right. So if you made it this far in the course, you are already ahead of, you know, pretty much all beginners. You have come a long way. You know how to read price. You know how to spot trends. You know how to find key support and resistance levels, and you basically have a good understanding of both price action and market structure. But I'm sorry guys, but I have to give you a reality check. The big players, or in other words, smart money, think about the banks, hedge funds, and basically, you know, traders with lots and lots of money. They are also looking at the same levels, and they can actually use these levels against you. And if you want to prevent that from happening and, you know, really start making money, what you want to do is that you want to learn how to look inside the candlesticks and take a look at what is actually happening when a candlestick is formed. And this is where order flow comes in. The final part of this course will be all about order flow. And this is where we learn about concepts like, you know, what is an order book. We will learn about volume footprint charts. We will learn about volume profile and many other instruments that basically, uh, are used as an X-ray for the candlesticks. We get a much deeper understanding of orders and also how smart money is trading. This right here is some more advanced stuff. So, make sure to really lock in before this section. Grab another coffee. Make sure you have your notebook because now we're about to lock in to the final part of the course.

But, okay. So before we can start making money with order flow, we of course first need to know what is order flow trading in the first place. And in very simple terms, order flow shows you how candlesticks are actually formed. So you can basically look inside a candlestick and take a look at, you know, uh, it's, it's like a more detailed view of a candle. So you can see here it reveals what happens inside each candle. It re, it reveals the battle between buyers and sellers. Traditional charts only show the results. So if you have a normal candle, you only show, you know, the price result of that candle. But with order flow, we can dive even deeper and show the cause. Why did the candle form? And if we can understand why the candle formed, we can as a result make better trading decisions and, you know, hopefully as a result of that, make more money. So here, by studying order flow, we can see who controls the market and understand why price moves. It's super important if you want to improve as a trader to understand the reason behind price movements. So, one analogy is like it's having a, it's like giving our chart an X-ray and showing the real activity behind each bar. And now let's super quickly jump into TradingView here. I just want to give a little sneak peek on, you know, how the chart will look like after this course. And you might look at this chart and think that this sounds super complicated, but I promise you after if you watch this full course, you will understand exactly what's going on on this chart right now. You will be able to read it. But to do that, you really need to pay attention to this course. I can also just mention right away that the charting platform I use for all my technical analysis and the charting platform I will be using in this course is TradingView. And if you want to follow along and use all of the tools I use in this video, I think you might need TradingView Premium. Uh, but don't worry because I do have a special link that you can use to try out TradingView Premium for free for 30 days. And if you after the trial period decide that you want to continue using it, you will get a a $15 bonus. So, I recommend to use that link if you want to follow along with exactly everything I do. But if not, don't worry. You can use the free version of TradingView as well and follow along with most things.

But right, so now let's switch the attention to take a look at something super important, and that is how buyers and sellers set the price, or in other words, how are the buyers and sellers creating the candlesticks you see on the chart? Well, you can think about all markets, whether it's crypto, stocks, or forex, like auctions where buyers and sellers are constantly negotiating for prices. In simple terms, buyers always want to buy as cheap as possible, and sellers want to sell as high as possible. This is very logical. If you want to buy something, whether it's, you know, uh, crypto or maybe it's, you know, food, you always prefer to buy lower. And if you sell something, you always prefer to sell higher. And the price here where both sides meet, the buyers and sellers meet, are known as fair value. And fair value is something you can write down in your notebook. This is something that will come up again and again during this course. It is a very important concept. And here, when both sides agree for a while, so when they agree during a long period, the price tends to move sideways and you will see volume build up. This is what is called a balanced market. And when we for some reason have one side becoming stronger, this is what is known as an imbalanced market. So here you can see a simple example of a balanced market and an imbalanced market. Remember, a balanced market is a period of time when prices are roughly the same. So, for example, if you look at this period right here, this right here is a balanced market. And in a balanced market, you will often find trading ranges or consolidations. This is basically all kinds of movements when we have the price going roughly sideways. But then we also have periods like right here. This right here is an imbalanced market. This can be, you know, sharp moves or trends to the upside, or sharp moves or trends to the downside. And these markets are very important to be able to spot as traders because in these markets we can make lots of money. These are usually the kind of moves we are trying to catch because trading within, you know, trading with imbalance markets like right here is often, you know, much harder than, you know, trading and riding the waves of imbalance markets. And one more thing that can be a little bit hard to understand in the beginning is that, you know, you might wonder, okay, so what is the fair value? Well, the fair value of this market is all of the prices. So, when we are right here, this right here is the fair value because this right here was the moment where, uh, buyers and sellers agreed and a transaction took place, uh, took place. So it doesn't matter where we are in the market. If we are in a balanced or imbalanced market, all of these red dots here are fair value, um, are the fair value. But as I said, don't worry if this sounds complicated right now. It will get more and more clear throughout the course, the rest of the course. These two ideas are first of all, something known as the value area. This right here is the range where about 70% of the trading took place. And this 70% basically comes from, in simple terms, it comes from, uh, standard, uh, one standard deviation in statistics. You don't really have to worry about where this comes from, but this is a very common, um, percentage that traders use, and you will learn all about it. The next important concept we need to learn about is something known as POC, or for short, uh, or for long, I mean, point of control. The point of control is the exact price level where the most volume got traded. So it's showing the market, uh, sort of we can call it fair price. It's not really the same as fair value as we talked about earlier, but point of control is the level where most volume took place.

Okay. So to understand value area and point of control, I want you to look at this image right here. You can see the, the black line right here. Imagine that the black line is a price movement, and here the value area, remember, the value area is where 70% of the trading took place. So in this case, the value area is this yellow area right here. We can call this area the VA. And you can see that this tool we have, we have right here, is something known as the volume profile. And you will learn about it later on in this course. But you can see that the taller the bars are, the more volume got traded. So, for example, right here, very little volume got traded, while, for example, right here, tons and tons of volume got traded. And the value area, so the area between, you know, this point right here and this point right here. You can hopefully see that on this chart. This was the area where indeed pretty much all price movement happened. You can see only very little price movement happened outside of this area. And this is why this is known as the value area. But then we also have the point of control. And remember, the point of control is the exact level with the most volume traded. And in this case, we can see that the most volume traded was this bar right here. The tallest bar is the most volume traded. And so this right here is our point of control. And you can hopefully see on this chart that it does make sense that this was the point of control because this one touched the, uh, the price touched right here, right here, right here. You can see lots of trading has been taking place on this price level. And the concept of value area and volume, uh, uh, the value area and point of control can not only be applied to the volume profile, which we're talking about here. You can actually use this concept when you look inside candles as well. And that is one big reason why I wanted to talk about the value area and point of control already this early in the course.

But right, so now it's finally time to start diving deeper and take a look at how trading works behind the scenes. So now we will start learning about how the candles are formed. And first of all, what we really need to learn about is the different order types in the market. Because every candle you see on the chart is created by orders being filled and matched. So all of the candles are created by either, you know, players, uh, jumping into the market and buying or selling, or they can also be created by, for example, stop-loss orders where, you know, sellers, like for example, you and me, place an order that, you know, if the price goes down to a certain price, we will automatically sell, or if the, uh, you know, price goes up to a certain price, we will automatically buy. These kind of orders also are very important. Uh, so now let's take a quick moment and learn about all orders. And don't worry, I will show you guys a visual explanation of this very soon. Uh, but first of all, we need to know what the different orders are called. The first order is the most simple one. This one is known as the market order. And this one gets filled immediately at the current price. So if you, for example, place a buy market order, that means that I want to buy, let's say, Bitcoin. If you say, if you place a market order on Bitcoin, it means I want to buy Bitcoin right now for the current price. Or if you place a sell market order, it means I want to sell Bitcoin right now for the current price. Then we also have a limit order, and a limit order is filled at a better price. And remember, as buyers, we want to always prefer to buy, uh, at, uh, you know, cheaper prices. So buy limit orders are placed below the price. Sell limit orders are placed above the price. The stop order is the opposite. This one is filled at a worse price after it gets triggered. So, for example, a, you know, stop sell order is triggered below the price, and this is worse because you always want to sell high. But as I said, this is a bit hard to understand if you don't have a visual. So I will show a visual very, very soon. So, but two important things you need to know about market orders and limit orders is that market orders move the price. The market orders move the price because they take liquidity that is in the book. Limit orders, on the other hand, add liquidity because they are placed in the market and they will wait there until, you know, the price moves there. So, for example, if Bitcoin is right now trading at, let's say that Bitcoin is trading at $100,000, and you place a limit order at $90,000, this one will not affect the market right now until the price actually goes down to $90,000. And here a very important principle. Every trade happens because one trader buys and one trader sells. This is very important to have in mind. But it's still very different if you are, you know, buying because of a limit order or a market order.

All right. So now let's take a look at the different trading order types. And this right here is super important for the rest of the course. So make sure to really pay attention. And I think I hope this visual will really help. And let's begin here by taking a look at the long position. By the way, if you don't know, long here means when you long something, it means that you bet that the market will go up. So you want the market to go up. And if you short something, this is the opposite. This is when you want the market to go down. You make money when the market goes down. By the way, if you want to learn how shorting works, I do have a video about that. I will make sure to link the video in the video card so you can watch it after this course. Um, but for now, when it comes to going long, remember here that the limit order is always at a better price. So, your sell limit, because you always want to sell for as much as possible. You can see that the sell limit is above the price where you go long. So this is the case where you go long at market. You place a market order. Let's say that you place a market order and buy Bitcoin right now at $100,000. The sell limit is always at a better price. So maybe you set the sell limit at, you know, $110,000. And also remember that the sell stop, uh, the stop order is always at a worse price. So maybe you set your stop loss here at $95,000. So always have this in mind that the limit is better, the stop is worse. The limit is better, the stop is worse. But how does it work when you go short? Well, let's say that you go short here at Bitcoin, uh, at, let's say this is $110,000. Remember here that the stop loss is always at a worse price, and when you go short, the price is worse when it's higher because remember, when you go short, you want the price to go down. So, uh, let's say that you go short at $110,000, then your stop might be at $115,000, and your buy limit might be at around $90,000 because remember, the limit order is always at a better price. And when you short, you want the price to go lower. So in other words, in both of these cases, you can think about the limit order as a target, right? Because if you buy at $100,000, you can have a target at $110,000. And in the, in the short example, you can also think this as the target because you want the price to go down, and if it goes down, you make money. And also in both of these cases, you can think about the, uh, you know, the stop order as the stop loss. In the case of a long position, your stop loss will be when the price goes down. But in the case of a short position, your stop loss will be if the price goes up. I really hope this visual and explanation helped you guys understand the different order types.

But right, so now it's finally time to take a look at the order book and the market depth. And as you hear in the name of this course, it's called order flow trading. You already hear on the name that the order book is very important. And you're not wrong. The order book is super important here. So let's lock in and pay attention. But to begin here, what is the order book? Well, the order book is basically a list of all pending limit orders waiting to, uh, to be filled. And remember here, limit orders are orders we place in the market. They don't get executed right away. They will sit there and wait. And that is why they get placed in this book. And the left side of the order book shows buy limits. So this is, you know, uh, yeah, buy limit orders, and the right side shows sell limits. The buy orders tend to be green. The, uh, sell orders tend to be, uh, red. And don't worry, I will show you guys a visual very soon. But here, and this is important. The order book can actually be pretty hard to read. But there is something called depth of market or for short DOM, which is a more simple version of the order book. The depth of market uses, you know, clear colored, uh, bars to show how many orders that exist at each price. So the more orders we have, the longer the bar will be. And it's very, you know, as I said, visually appealing and easy to learn. And I will show you this very soon. And here we have two important concepts. First of all, we have something known as a deep market. A deep market is, in simple terms, when we have lots of orders in the order book. And this can make the market more stable because in order to move the price, we need to eat all of the limit orders. And the opposite of a deep market is a shallow market. This is when we have fewer orders. And because we have fewer orders, uh, a large player can move the market very easily. So this means larger and quicker moves. And here, and this is very key, the price rises when aggressive buyers clear the sell orders. Uh, because this is the only way for the price to move. Or it can, the opposite can of course also be true if aggressive sellers clear the buy limit orders, the market also moves. But now let's jump in and take a look at, uh, order book and depth of market.

But right, so now let's take a look at the depth of market or for short DOM. And you can actually think about the depth of market as the same thing as an order book. The only difference here is that the depth of market is easier to read because in the depth of market or DOM, the length of the bars. So, for example, if you take a look at the sell side, the length of the, the, the bar will correspond to how many sell limit orders that are in the market. So, uh, let's go over this in a step-by-step manner. So first of all, we have two sides. The green side here is known as the bid, uh, bid.

side, and this is where the buy limit orders are placed. So you can think about bid as buy limit orders, and the ask side is the sell limit orders. And what you also can see here is that you will have, you have the price here in the middle. So let's say that this is a stock, it right now trades at around 100. And you can see here at the price of, uh, 105, we have 85 sell limit orders. So 85 orders are waiting at that price level. And here at 104, we have 72 orders waiting. Uh, 103, 68, and so on and so on. And the same thing, but the opposite, is true on the green side, the buy limit side. So, for example, if we take a look at the price of 99, we have 24 orders waiting. At the price of 96, we have, uh, you know, an order to buy, uh, 92 waiting.

And let me actually be more specific. The numbers here are not how many orders or how many people that want to buy. The numbers are how many stocks, uh, or how large the total orders are. So this is, you add up all the orders. So, for example, this 92 side might be, you know, three orders in total. One that wants to buy 90, uh, plus one that just wants to buy one, and another one that wants to buy one. So it can be just three orders, but the orders should add up to 90. I hope I'm clear here.

But now, the next very important concept I want to talk about is the concept we talked about with deep and shallow markets. So remember, here a deep market is a market where we have lots of orders. So, for example, if we take a look at this part right here, we can see that this part is much deeper, right? So this part is pretty deep compared to, for example, this part right here, which is much more shallow. And remember, we call it deep and shallow because if someone wants to move this price and push the price up to, for example, 103, it's pretty easy to do that because in order to push it up to 103, you only need to eat up, uh, you know, all of these orders. It's not a lot of orders. It's like 90 or something. But if you want to move the market when it's deeper, like, for example, up here, you can see it's much harder. You need more money in order to, to move the market. And once again, the, the same thing is true, but the opposite, on the buy side. So, for example, this right here is a shallow market, while this part all the way down here, I hope you can see, is much deeper.

And yeah, guys, this is all you need to know, at least for now, about order books and depth of markets. Let's continue the course.

But right, so now we need to switch the tension here and take a look at a pretty big problem with real-time order flow, and that is that we are seeing tons of manipulation in the market. So, the order book looks pretty clear, but one thing that you really need to learn is that not all orders are real or honest. And there are many different types of orders and different types of manipulation tricks that you really need to learn about. So, make sure to pay attention.

Now, let's begin here by taking a look at some common manipulation tricks. And the first trick you need to know about is something called spoofing. This is actually a pretty simple trick, and this is where traders place large fake orders to trick others, and then they cancel the orders before they get filled. So I want you to have the order book you, uh, learned about earlier in the course in mind. What traders can do is that they can place massive amounts of, uh, you know, limit orders in the book to maybe give a sense that, you know, this is actually a deep market, or they can even give a sense that, you know, there are so many sellers right here. Um, there are so large, uh, let's say that they place very large sell limit orders. This can actually scare away, for example, small traders like me and you, because we think the market is, you know, so, um, it's so deep on the sell side, which can make us sell. That is just an example, but spoofing is a real thing. You place fake buy and sell limit orders in order to affect, uh, the price.

Another, uh, you know, order type you really need to know about is something called iceberg orders. And what is this? Well, an iceberg order is a big, a big hidden order that only shows a small part. And this is something that many traders, trader platforms actually have built in. And this is, you can place an order in the order book. So let's say that that you want to buy a total of 100, but instead of placing the 100 in the order book, you can create an order that places 10 at a time. So you place 10. When, uh, the 10 gets eaten up, you will immediately, uh, place 10 more. And when this 10 gets, gets eaten up, you will immediately place 10 more. And when this gets eaten up, immediately 10 more. And so on and so on. Uh, this is how iceberg orders work. When that part gets filled, a new part appears. And this is basically hiding the true size of the order. So this is also a way of sort of manipulating the market.

The last thing I want to talk about right now is something called layering. And layering is placing fake orders at several levels to create the illusion of demand and supply. So layering is basically, it can be either spoofing, or it can e, even be things like, you know, combining spoofing and iceberg orders. There are many different ways to manipulate the order book, and this is a big problem for traders like me and you. But don't worry, I will have the solution very soon, later on in this course.

Yet another problem with the order book and live order book trading is that not every trade has a, a directional goal. Different traders have different motivations and goals. And what do I mean by this? Well, first of all, speculators, and basically, this is basically normal traders like me and you, we of course care about the trading direction. When we buy, we really want the price to go, uh, go up, because if we do, if it goes up, we make, that's, that's how we make our money. Or if we short, we really want the price to go down, because that is how we make our money. But there are some trader types that don't care, you know, if the price goes up and down.

There's one trading type called arbitrage trading, and this is basically, in very simple terms, when you buy one market and sell another, and they don't really care about the direction. Uh, this is a very, this is a simplification. Uh, but don't worry, if you want to learn more about arbitrage trading, I do have a video about that. I will make sure to link it in the video card, as well as the description below. So, you can check that video out after this course if you want to.

Another type that don't really care about how the market moves is something called hedgers. And they basically use a market, uh, one market to protect another market. And by doing that, they don't really use it to predict the price. So they also don't really care about the, the direction. So we, as traders, have to be careful. It's very easy to look at an order book and think that every single order in this order book has a motivation. Every single order is, uh, you know, trying, trying to move the price, and this is not true because there are some traders, uh, like arbitrage traders, like hedgers, that actually don't care about the price movement. This is very important to have in mind.

Another thing that we need to consider is that not all volume is visible. This is once again, almost like manipulation, or, uh, it's like a way to not affect the market. We have something called OTC, over-the-counter trades, that basically happens in private. So these kind of trades never show, you know, traces in live order books or even in the market. They often get reported afterwards, but in live order books, they don't even show up.

Another similar thing is something called dark pools. And this is when, you know, large investors, you know, smart money institutions, not small retail traders like me and you. This is where they trade in secret until they reach a good deal. And this is also, at least, you know, uh, in the live market, this is also often completely outside the information of us retail traders.

But overall, what you need to learn from all of this is that real-time order books can often give a misleading picture. But now, the question, of course, becomes, if this can be misleading, what can we as traders do to get a more accurate picture of the order flow?

All right, so now it's finally time to take a look at our first order flow trading tool. And the first tool we're going to talk about is called footprint charts, or in other words, volume footprint. And this right here is a super useful tool. You can use it to, first of all, you can use it to find out what actually happened inside a candlestick, and as a result, take better trading decisions. But you can also use the volume footprint to find market structure, like, for example, support and resistance levels. Uh, but here, footprint chart is basically a chart that shows how much buying and selling that happened inside each candle. And don't worry, I will very soon show you this visually, and that usually makes it much more easy to learn.

But in simple terms, each price level has two numbers. So each price level inside the candle has two numbers. We have a left side, which is red, which shows the sell volume, and it's very important to notice that this sell volume is market orders. They are, um, orders that are taking liquidity from the book. While the right side is the green side, that is, uh, buy volume, or in other words, it's market orders. So we, on the green side, we are taking, we're taking from the sell limit side. U, if this, this sounds complicated, don't worry, it will be super clear soon.

And here are some of the most important terms and features you need to know about when it comes to the volume footprint. The first concept you need to know about is something called delta. And delta is, in very simple terms, the difference between the buy and sell volume. So if we have a positive delta, we have more buy volume than sell volume, which, which means that buyers are in control. And if the delta is negative, it basically means that the sellers are in control.

The next concept here is the point of control. And you already know about this, uh, concept if you watched, if you didn't skip over any part of the course. The point of control is simply the price inside the candle where the most trades happen. And this is very important to, to learn about because we can actually use the point of control to find, for example, support and resistance levels. I will show you how to do that step by step.

But here, we also have the value area. And this one, you also know about. This is the area, but in this case, inside the candle, where about 70% of the candle's total volume got traded.

But here, we're starting to get into some more new concepts. The first concept you need to know about is something called imbalances. And an imbalance, when it comes to volume footprint, is when one side trades three times or more than the other side. So, for example, if the buying side, uh, uh, buys three times or more, four, three times or more volume compared to the selling side, then we have a buy imbalance. And the opposite is true. If we have three times or more sellers, then we have a sell imbalance. This sounds complicated now, but once again, it will get cleared. And here, stacked imbalances is basically when we have multiple imbalances on top of each other.

But now, let's take a look at how a volume footprint candle actually looks like.

All right, guys, so now it's finally time to take a look at the volume footprint. And this right here is one of the most important tools we will cover in this course. So make sure to really pay attention. Now, the volume footprint is basically like having an X-ray on the candlesticks. Uh, before watching this course, you might have only been trading, you know, looking at candlesticks. But what the volume footprint allows us is to see what actually goes on inside the candlesticks themselves. And this might look, you know, super complicated in the beginning, but I will try to break this down in super simple terms, step by step.

So, first of all, the first thing we need to learn is that we have a buy side, which is the green side, and we have a sell side, which is the red side. And what these sides basically tell us is how much buying volume on the green side and how much selling volume on the red side happened at all of these specific points, uh, inside the candle. So, all of these specific, uh, price points inside the candle. So, if we just look at a random price level, let's, for example, take a look at the one at the top. You can see that it says zero on the buy side. I hope you can see it says zero right here. But on the sell side, it says 32. That means that we saw 32 of sell volume up here on the candle, while we saw zero buy volume. And now you might think, you know, you might be confused and think that, you know, for every, uh, every time someone sells, someone has to buy, right? And yes, you are completely true. But what this volume, uh, what, what the numbers here tell us is not the sort of total volume. What this tells us is the market orders. Because remember, market orders is when you take liquidity from the book. So in this particular case, we saw sellers, you know, taking liquidity from the buy side. This is what pushes the price down. While we saw no buyers taking liquidity from the sell side. It's very important that you notice that the buy volume is buy market orders, and the sell volume is sell market orders. The volume footprint tells us all about who is, who is controlling the price, who is pushing the price up or down. And you do that with market orders, not limit orders. Remember, limit orders are placed in the book.

But now, when you know this, you now know that volume footprint is all about who is pushing the price up or down. Is it buyers or sellers? And now there are a few important concepts you need to learn. The first one is called delta. And we already talked about delta. That is basically the difference between the buy side and sell side. So, for example, if we take a look at the delta here at the lowest part, you see right here, we have 14 on the sell side and we have eight on the buy side. So this right here is actually a negative six in delta, or in other words, we have six sell volume in delta. But what you can see down here, you can see that we actually have a total delta. And that is, if we add up the deltas of all of these blocks, we get the total amount of delta during the whole candle. And in this case, you can see that we had 1.4,000 bullish delta, which means that the buyers were actually in control over this candle.

The next concept you need to learn about is the point of control or POC. And remember, this was the level where the most volume got traded. And in TradingView, you can see super clearly where the point of control is, because the point of control will be marked with this black, uh, with this black bar right here. So, in this case, the point of control was right here. And the point of control is very important because we can use it, for example, for support and resistance levels, and it can give many other hints as well.

Now, the next concept we need to learn about is the value area. And remember, here the value area is where around 70% of the volume got traded. And in, when you look at volume footprints, you will see two markers. You can see it says Value Area High right here, or for short, VA H, and it says Value Area Low here, or for short, VA L. And it is between these two lines. So this area right here, which is the value area, or for short, VA, as once again, I can repeat it, that this was the area where around 70% of volume got traded. And it's very common that the value area is often, you know, relatively small compared to the candle. You can see, for example, in this case, 70% of all volume within this candle actually got traded on the upper side, and that can give, give a signal that this candle is maybe more bullish than if 70% got traded down here.

Okay. So now it's time to take a look at imbalances. This right here is very important, and this is when one side, so either the buying side or the selling side, traded at least three times as much as the other side. So, for example, the imbalances you can see by this little dot you have right there. You can see you have a little dot right there. You have a little dot right there. You have a little dot on all of these three right here as well. Uh, but one thing you can notice is that if you compare, you see it says 304 here, and here it says 118. And you might think, you know, 118 times 3 is actually more than 304. So how is this an imbalance? Well, the trick here is that you actually need to compare it diagonally. So you need to compare it like this. You can see 304 is more than three times as large as 87. And that is because the buy side will always be one step above the sell side. This is a bit hard to understand, but you will start to see a pattern. You can see here we have an imbalance because 141 is more than three times larger than 21. Once again, here we have another imbalance because 45 is of course more than three times as large as zero. Once again, here we have a diagonal imbalance because, you know, uh, 45 is more than three times as large as, uh, 14. And the reason we don't have an imbalance in the next one, in the next one, we don't have an imbalance because 104 is even larger than 88. You always need to compare the imbalances diagonally, uh, upwards when you do it from, uh, the buy imbalances. But the sell imbalances is the opposite. And here you can notice the same with the sell imbalances. Right here we have a sell imbalance, and right here we have a sell imbalance. Why? Because 87 is more than three times as large as zero. And 543 is more than three times as large compared to 157. So I hope this makes sense.

And you might wonder, you know, how can we use this buy and sell imbalances? Well, I will very soon show you a concept that is known as absorption and initiation. Uh, a little bit hard for me to pronounce, but these concepts can be super helpful in, in understanding the strength of each candle separately. But before that, I want to take a look at how we can use volume footprint as support and resistance and in our trading strategy.

All right. So now let's jump back into TradingView. Right here, I am currently looking at, uh, the daily time frame of Bitcoin. But you can use volume footprint charts in, you know, crypto. You can also use it for stocks. You can also use it for forex, but it's a little bit, the data in forex is a little bit more unclear. So volume footprint might work a little bit better in stocks and crypto, but it does work in forex as well. Uh, and here, as you can see, I'm looking on Bitcoin right now. And just, like, as a side note, we saw a big, big sell-off in crypto yesterday. But one very, you know, uh, cool thing you will notice is that Bitcoin actually bounced where we saw something significant happening on the volume footprint, and I will show you guys that very soon.

But first, let's, of course, take a look at how do we open up the volume footprint in TradingView. Well, to do this, you want to go up here to where it says candles. And then you want to go down right here to where it says volume footprint. And right now, I'm not 100% sure if volume footprint is available for free in TradingView. Uh, if you have a free account, please check and let me know down in the comments. But if it's not, uh, available, don't worry, because I do have a special link to TradingView. You can use that link to try out TradingView Premium completely for free for 30 days. And if you want to, if you like it enough, uh, I'm pretty sure you will, or at least I do. Uh, but then you will get a $15 bonus if you want to continue on your trading plan.

But to open the volume footprint, you simply click right here. And just like that, the, uh, candlesticks are transformed into a volume footprint. And now you already know how to read these footprints. Or here, your footprints might actually look a little bit different to mine. And that is because I do have another setting right now. So what you want to do if your candlesticks look like this is that you go to the settings tab. And right now, you can see that I have type delta. I think the standard type is to show both the buy and sell side. So let's choose buy and sell right there. Uh, and then press okay. So your chart should look like this. You should see, uh, you know, both the buy side and the sell side, just as I showed you recently. And when you zoom in here, you can clearly see, you know, how aggressive was the sellers, how aggressive was the buyers. You also have the delta, uh, explained right there. So was the sellers in control during the candle, or, for example, like right here, was the buyers in control?

But now, for this trading strategy, I want to show you one way you can use volume footprint to find support and resistance. And this is a very simple trading strategy, super, super easy. And what you want to look out for here is that you want to look out for clusters of point of control. This is super easy to spot. For example, right here on the chart, you can see that we have multiple black bars happening at the same time. And remember that the black bars are the levels within the candles where the most volume got traded. And these levels where we have lots and lots of volume traded can often act as magnets in the future. So what we can actually do here is that we can draw a support area. What I usually like to use is go to geometric shapes and use my rectangle. And then you can see we can draw this support area out right here. And you can see if we drag the support area out, you can actually see that this was exactly where Bitcoin bounced before we saw this beautiful move to the upside. And if we even look at the candle that happened just yesterday, you can see that we did see a beautiful bounce at this area.

After you have done your analysis on the volume footprint, it can often be helpful to go back to the candlestick charts and see how the price reacts. And you can see that in this case, the price beautifully bounced right here. We saw a massive move towards the upside. And the price also bounced at this key support just yesterday. And if you're looking for a super simple trading strategy from this support level, it could have looked something like this. You use your long position. So you're looking to make money from the price going up. And then you see the price coming down to the support, and you might enter at the first strong, uh, reaction from the support level. Setting your stop loss just below the low right here, and with a risk-to-reward ratio, your trade would have looked something like this, and you would have locked in some very nice profit.

But now you might ask yourself, you know, is this, you know, analysis? It seems super easy. It is. Is it enough to only have, sort of, one bullish sign, which in this case is support, and then take your trade? Well, not really, because in order to make the trades more likely to succeed, we preferably want to combine it with other technical signals as well. And this leads us to the next thing we're going to talk about in this video, which, which is absorption and initiation.

All right. So, now let's switch the attention and take a look at two super powerful concepts when it comes to order flow trading. And this right here is absorption and initiation. These concepts can seem a little bit complicated when you first hear about them, but I will try to break them down and simplify them as much as possible. And in very simple terms, absorption and initiation are simply concepts that help you see who is winning the battle between buyers and sellers within a certain candle.

And here, first of all, we have absorption. And this is when the price moves in the opposite direction of the imbalance. And this right here is a sign of a potential reversal. So I want you to already, you can write this down in your notebook, that absorption means reversal or weakness.

Then we have initiation. This is when the price moves in the same direction or with the imbalance. And this right here is a sign of continuation and strength. So absorption, weakness; initiation, strength. Make sure to write this down.

And from this, we can actually have four total scenarios. First of all, we have bullish absorption. And this is where we see selling imbalance up here. So we see selling here, but then the price goes up and closes higher. And this means that the buyers absorb the selling, and this is a sort of bullish reversal.

Then we also have bullish initiation. This is when buying imbalances appear, and the price pushes in the same direction, which means that buyers are attacking. So this is strength or continuation.

And then we have the opposite. We have bearish absorption. Um, and don't worry, I know this, this probably sounds like super complicated right now, but I will soon show you a visual, and it will be so much more clear. But bearish absorption is the opposite. We're seeing buying imbalances up here, but prices close lower. This means that sellers absorb the buying.

And last but not least, we have bearish initiation. This is when selling imbalances and the price go in the same direction, which means that the sellers are attacking.

All right. So, let's begin here by taking a look at the absorption. And remember here, when we talk about absorption, we are talking about weakness. And one thing that might sound a little bit counterintuitive here is that the red one is actually the bullish absorption, and the green one is the bearish absorption. And I'm sorry if the drawing here is a little bit ugly, but what I'm trying to show here is that the green dots right here, and right here, and right here, are basically buying imbalances. While the green dots, for example, right here, and right here, are, uh, selling imbalances.

And let's start here by looking at the red candle. The reason this one is bullish, the reason this one is bullish absorption, is because even though we saw selling imbalances right here, so we saw lots of selling coming in right here, we also saw lots of selling coming in down there. Even though we saw selling, the buyers managed to push the price up, and we actually, you know, the, the bears lost control, and the bulls managed to close the price above all of this, uh, above and despite all of this selling pressure. So, as you can see, this candle looks a little bit, if you have been studying candlestick patterns, it looks a little bit like a hammer candlestick. And what you will notice if you study hammer, if you study hammer candles, is that many times they will have this bullish, uh, absorption happening. So this is basically that sellers try to push the price down, but they fail. The selling pressure gets absorbed and pushed up. That is why this, this is a bullish sign.

But now, if we take a look at the bearish one, which is often a green candle. This is the opposite. You can see in this case, the seller, uh, you know, was super aggressive. They pushed the price higher. They took a lot of liquidity from the order book. But even though they took a lot of liquidity, the bears, before the candle closed, managed to push the price down, and we actually closed all the way down here. So I hope you're understanding why, you know, why the red candle in this case is bullish, and the green candle in this case is bearish. It will be important to have in mind throughout the rest of the course.

Okay. So, the next concept we're going to talk about is the initiation. And in my opinion, this one is often, uh, easier to understand because in this case, the bullish initiation is the green candle. Uh, you know, and bullish tend to be, you know, green, and the bearish is a red candle. And this is very similar to the absorption we recently talked about. But in this case, you can see that the imbalances and the direction goes in the same way. So, for example, if we, in this case, start with the bullish initiation. So the bullish initiation, you can see that we have buying imbalance right here. We have buying imbalance right here. We have buying imbalance right here. But what you also can see is that the price goes in the same direction as the imbalances. What is very important to notice here is that when it comes to bullish initiation, we want the candle to close here. You see the candle closes right there. We want it to close above the imbalances because what story does this tell us about the price? Well, it tells us that the, uh, the imbalances tells us that, you know, lots of aggressive buyers took liquidity from the book and tried to push the price higher. And what the candle close tells us is that the aggressive buyer succeeded with doing this. So, the aggressive buyer succeeded, which is a very bullish sign.

The opposite is true for the bearish initiation. So here, uh, we have selling imbalance right here. We have a selling imbalance right here. The aggressive sellers tried to push the price down by taking liquidity from the book. And by looking at the candle close, we can notice that the aggressive sellers indeed succeeded with pushing the price down.

And now it starts to get super interesting because we can use initiation and absorption together with, for example, you know, let's say that we have a support area, or maybe even a demand area right here. We might see, you know, let's say we have a trend that comes down like this, and then we might see some bullish, you know, let's say we see some bullish absorption coming in right here. So we have on the, on the sell side, we had some selling imbalances, but the buyers managed to push the price up. And then after this absorption, we might see some initiation, right? We might see a bullish green candle that looks something like this, that managed to see buying imbalances and close the price higher. When we're using initiation and absorption together with, for example, support and resistance, the trade gets stronger and more likely to succeed. And as a result, we are more likely to make money.

So if we now jump back into TradingView, we can try to analyze the trade we looked at earlier a little bit more in depth. So once again, we want to open up the volume footprint chart. I can once again remind you about my link in the description and the pin comment, uh, that you can use if you have no access to the volume footprint. Uh, but we open up the volume footprint here, and let's see if we can find any sort of absorption or initiation. Well, if we look at, first of all, you remember the support area comes from all of this point of control. So, it's good to have that in mind. But what you can notice is that we didn't really see any absorption right here. But what you can see is that on this green candle right here, what did we have? Well, we had a buying imbalance right here, which means that we saw, you know, aggressive buyers trying to push the price up. And we can also see that the price indeed closed above the imbalance. So, this right here is initiation. That is a bullish signal. You can also see from the next green candle right here that we saw, I hope you can see, it's a bit hard to see, but we had one, uh, imbalance right here, and two imbalances in a row. And once again, the candle closed above. So we had yet another initiation candle. So here we can once again, to make the chart a little bit more clearer, we can go back here to the candles. And because we had initiation on this green candle, right? It makes our, you know, that is yet another bullish variable, and that is an argument for taking this trade. Uh, but now you might of course wonder, you know, is volume, you, you might already think, you know, volume footprint seems like an amazing tool, but you might think, is this the only tool we can use, or can we use even more tools to become even better at order flow, order flow trading? And the answer is yes. So let me show you guys the next tool.

All right, so now it's time to take a look at our next tool. This right here is a super powerful tool, but it can be a little bit hard to use, and it can also be hard to actually find the right tool in TradingView and to set it up. But don't worry, I will go over everything in a step-by-step manner. Uh, but first of all, this tool right here is called the cumulative volume delta, or for short, CVD. And by this point, you already know what volume delta is. You know it's the difference between the, uh, buying volume and selling volume. But here, on the name, you can hear cumulative, that is basically that we add up the volume delta, or the volume difference, over time. So you can pretty much hear on the name that the CVD measures the total net buying or selling over time. So it basically adds up the volume, uh, delta of every candle to show if, you know, aggressive buyers or aggressive sellers are in control of the market.

And here, the interesting signals start to come when we compare, compare, uh, the cumulative volume delta to the price. So because when we do that, we can start to see, you know, who is actually in control of the market. So, for example, if the price goes up, and we're also seeing, uh, you know, the cumulative volume delta go up, we're seeing that the, uh, aggressive buyers are succeeding in pushing the price higher, right? So we have often have a strong, healthy move. And here, what you can specifically look, look out for is divergences between the CVD and the price. So two of the most common divergences, don't worry, I will show you, uh, every divergence you can look out for in simple terms. But you can look out for a buying exhaustion, and that is when the price prints higher highs, and the CVD prints lower highs. You can also think about this as, you know, bearish divergence that you, for example, see in momentum indicators like the MACD. Uh, and by the way, I do have a full, like, one-hour long course on the MACD, if you want to dive deeper, you know, into, uh, price, uh, you know, indicators that are based on the price action. Later on, I will make sure to link that video in the video card and description.

But we also have selling exhaustion. This is basically the bullish divergence when we see the price printing lower lows, while the CVD making higher lows. And both of these divergence types are great for spotting potential reversals or even some hidden absorption.

All right. So here I basically have made a cheat sheet of all the different CVD divergences you can find. Uh, and don't worry, I will go over all of these step by step. Uh, but if you want to get access to this image, and all of the images from this, uh, today's presentation, I actually release, uh, all the presentations to our YouTube community, our YouTube channel members, right here on YouTube. If you want to become a channel member, you can do that by clicking join down below. And as I said, all gold and diamond members get access to presentations like this one, but also more things like, you know, exclusive videos, uh, priority replies, you get some emojis, some badges, and at the same time, you support the channel. So, if you want to, if you like this kind of content and want to support the channel, consider becoming a channel member by clicking join down below.

But now, let's go over the divergences. So, first of all, the, uh, you have the orange, uh, side right here, that is the price, and you have the blue side, which is the CVD indicator. And when the price prints higher highs, like we're seeing right here, you can see one high and higher high. Let me actually change the color here so you can see clearly. And when the CVD at the same time prints lower highs, then we have a bearish divergence, and that is a signal indicating a potential reversal to the downside. But also, we have something called hidden divergence. This is harder to spot and a little bit harder to understand. But that is when we already have a downtrend. So we already have lower highs on the price, but the CVD prints higher highs. This is actually a, um, a bearish signal, but it's a bearish continuation signal. So it's a little bit different. Uh, but in this video, we are going to focus on the normal bearish divergence and bullish divergence. But I just want to include the hidden divergences as well, because you can definitely use them, and they can be super valuable. Uh, but now, the normal bullish divergence is when the price prints lower highs. So you can see one, I mean, lower lows. One low, and then a lower low, while the indicator prints higher lows, one low, and then a higher low. So lower low, lower lows on the price, higher lows on the CVD. That is a bullish divergence indicating a reversal to the upside.

Last but definitely not least, we have the hidden bullish divergence. This is a continuation signal. Continuation signal because the price is already printing higher lows. But then we see the CVD printing lower lows. And this indicates a continuation to the upside.

But now I want to take a look at how we can use the CVD and more importantly, how to find, you know, the best CVD in TradingView.

All right. So now let's once again jump into TradingView. And let's continue using the Bitcoin chart because in some other courses, you guys, you know, always wonder, you know, how can we really apply this to all markets and so on and so on. Uh, so to keep it consistent, consistent, I will try to use the same chart here, and just use, uh, Bitcoin. Um, but now, how do we open up the CVD indicator? Well, to do that, we want to go to the indicators tab in TradingView. So you press right here, and you want to search for CVD. And then you can see here, first of all, uh, you can first of all see that we have some built, we have a built-in indicator that is called cumulative volume delta. Some traders use that one, but that is not really the favorite indicator for me. What I like is one called cumulative, I think it's called cumulative delta volume, like this, and it's this one right here, created by Lonesome, Lonesome the Wolf, I think it's called. You can see it should say around 8.8,000, 8,000, as I'm recording this video. So, you press this one right here. And just like that, the indicator should appear here at the bottom of the screen.

But now, in order to make this indicator better, at least in my opinion, and easier to read, I want to change a few settings. So, what we do is that we go down here to where it says settings. And then I actually want to change the inputs here. And instead of using candles, I prefer to use a line. So I will change this one to a line right here. And then, so you guys can see it more clearly, I'm going to make it a bit more thicker, like that. And for now, I think we're ready to go down here and press okay.

But now, remember what we're looking out for. We're looking out for when the price prints, uh, when the price and CVD goes in the opposite direction. So, for example, if we look at this low and this low, you can see that the price clearly prints lower lows. But in this case, the CVD goes in the same direction. So here we actually had no divergence. Uh, so that is, you know, one sign that wasn't bullish about that particular low. Uh, but we still, you know, this was where we created the support, and this was where we saw the next bounce. But here, if we look a bit earlier, you can actually see a super clear divergence. You can see right here, we had, you know, one, uh, high right here, and then we printed a higher high. So the price prints higher highs. But if you look down to the CVD, you can see that the CVD creates a super clear lower high. And remember, when we have higher highs on the price, lower highs on the indicators, this right here is a bearish divergence indicating a reversal to the downside. And after this divergence up here, we indeed saw a reversal.

Let's actually scroll back even more, see if we can find any other kind of divergences. Let's zoom in a bit on the CVD. Well, right here you can see an example of the opposite. We have one low, then a lower low on the price. The price prints lower lows. But if you look closely at the CVD, you can see that the CVD prints one low and then a higher low. This right here is a bullish divergence indicating a reversal to the upside. And after this divergence, we saw a beautiful move up.

All right. So, the next order flow trading tool you need to know about is the volume profile. And the volume profile is actually pretty similar to the volume footprint, but you actually have a little bit more flexibility when it comes to the volume profile. And you will understand why very soon.

But first of all, what is the volume profile? Well, the volume profile shows you how much volume that got traded at each price across a range of candles. So instead of just zooming in with an X-ray on one candle, the volume, uh, the volume profile can make you look at multiple candles at the same time and assess the volume at each price level. So it's basically like turning your chart sideways to see where the most trading occurred.

And what you will realize here is that many of the key concepts for the volume profile are the same as the concepts for the volume footprint. So, for example, when, when it comes to the volume profile, we also have the POC, which is the point of control. And you already know that this is the price level where, you know, the highest volume got traded. Um, or in other words, the market's fair value. Then we have the value area. This is the area where about 70% of the total volume got traded.

But here are two new terms. We have something called a high volume node and a low volume node. And these terms are very simple. High volume nodes are tall bars. Um, and I will show you this exactly when we take a look at the visual. But they are basically tall bars on the profile, which represents lots of volume traded. And low volume nodes are short bars on the profile, which are levels with very little volume. And two key things to have in mind is that the high volume nodes are known as areas of acceptance, and they can actually often act as magnets because, you know, a lot of volume has been traded there in the past. It's likely that many market participants

will accept these levels and trade them in the future. So many times they can act as magnets and kind of become support and resistance levels. They are not strict support and resistance. It is important that you should not look at high volume nodes as you know clear support and resistance levels, but they can definitely be useful, and I will talk about that later.

But the opposite is true here for low volume nodes. Low volume nodes are known as areas of rejection, and this is, you know, uh, the price tends to move through these uh, low volume nodes very quickly. So you can use this, for example, to improve your breakout trades or just to find areas on the chart where the price is more likely to move in a quick and low liquidity manner.

All right. So right here, you can see an example of a volume profile indicator. And as you can see, compared to the normal volume where the volume bars are down here, the volume profile is actually right here on the side. And the first thing you need to know about the volume profile is that the height of the bars represents the amount of volume. So when we have short bars like right here, right here, and right here, that means that little trading volume and little trading activity appeared at that level. While when we have, you know, tall bars like, for example, right here, and right here, and right here, it means that lots of trading occurred at that level. And if you look at the black price line, you can see that I have tried to show that in this area, you can indeed see that the price spent a lot of time within this area. So the price had, you know, more opportunity to get uh, volume traded in this area. But what you also have to notice is that it's not only how long that the price spends within this area that matters. What actually matters is how much volume got traded inside the candles of this area. So you could, for example, imagine, you know, an area where the price goes up quickly, but tons and tons of volume got traded.

But now, let's take a look at the key terms you need to know about. And the first term is the point of control. And the point of control, uh, as you probably know by now, is actually this bar right here. So this is the POC, which stands for point of control, and that is simply the tallest bar. It is the area where the most volume got traded, and this is an area where, you know, we are likely, it's likely to often act as a magnet. So have that in mind.

The next concept you need to know about is the value area. And the value area is this yellow area right here. And this is the area where 70% of the volume got traded. So these yellow bars represent 70% of the volume. So this area is like a broader and a little bit less significant point of control. But the same principle applies. The price tends to move more slowly through this area compared to how fast the price tends to move uh, during the areas with less volume.

Two more concepts you need to know about are the high volume node and the low volume node. And this right here is an example of a high volume node, or for short, HVN. And this simply means a tall bar, a bar with lots of volume. While, for example, this bar right here is a low volume node, or for short, LVN, and this is a uh, bar with little volume. And as I have mentioned multiple times, the high volume nodes, the price tends to move more slowly, and the low volume, through the low volume nodes, the price tends to move more quickly.

But right, so now let's jump back here into TradingView. We are still looking here at Bitcoin, and we are currently looking at a volume footprint chart. Uh, but to make the chart a little bit more clear for now, I'm just going to switch to normal candles uh, for a while. And now we're ready to open up our volume profile indicator. And to do this, you want to once again go up here to the indicators tab in TradingView. And you want to simply search for volume profile. And here, as you can see, we uh, as usual, we have many built-in volume profile indicators. The difference between these indicators is mostly, you know, where on the chart should we put our volume profile. You also have multiple built-in indicators, and I do think these uh, these pre-built indicators, I do think they are available on the free plan, or maybe you need an essential plan. Uh, but if you need a paid plan, uh, as you probably know, if you have been watching this full course, I do have a special link. Uh, it will be both in the pinned comment and the top of the description, and you can use that link to get, uh, try out TradingView Premium or any other TradingView version for free for 30 days. So if you can't open up this indicator, make sure to use the link. Um, but here you have, for example, the visible range volume profile. This one will give you a volume profile for the chart you're currently looking at. So when you zoom in and zoom out, h, the volume profile will change. But if you want more control, you can use this fixed range volume profile. And when you click on this one, you will notice that nothing will happen. And that's because you need to decide uh, the range of the indicator. Let me see here. So you click on fixed range volume profile. And then you need to press on one point on the chart, like I did right here. Then you will see uh, two dots will appear on the chart. And this is where you can choose, you know, from what time period do you want to display the volume, uh, the volume profile.

So here, what I want to do here is that I want to analyze how the volume looked like during this impulsive move to the upside for Bitcoin because this was a significant move. So I want to know where did the volume get traded during this period because if we know the volume during this move, you can actually think about it as, you know, having, uh, looking at this part of the chart like almost like a volume footprint, right? Uh, you get instead of looking at one candle, you get a volume for the whole period. And one interesting thing we can notice, oops, one interesting thing we can notice right away. Remember that. Remember what the uh, volume profile tells us. When we have areas, for example, right here, you can see that we had no volume. And in these kind of areas, remember what I said, the price tends to move quickly. And what actually happened when the price came to this area, you can see right here, the price indeed sharply moved, you know, through this area. But once the price already moved through, through the next time, it didn't, you know, uh, move through as fast. So that was one interesting thing we could see about this volume profile.

Another super interesting thing is if you look here at the point of control, which in this indicator is this red line right here. Remember, the POC is simply the tallest bar, and you can see the tallest bar is right here. But you can see that this point of control, if we draw a support line right here, you can actually see that this was where we found support earlier in the course, right? This was the level where, you know, the price bounced the first time, and remember this was the level where we found support from our volume footprint. So that is super interesting that we have the volume, uh, point of control at the same level. And yet another thing we can see that Bitcoin, you know, as I talked about earlier, we, we recently saw a massive crash in Bitcoin. What you can notice here is that the price actually bounced at this level. So I think this demonstrates very clearly how the volume profile can give you both hints about when the price is about about to move fast, and we can also get get hints about, you know, where is the price likely to, you know, act as a magnet. And in this case, it worked out beautifully. We saw three bounces right here on the volume profile.

But right, so now you know about the volume profile. You know about the volume footprint. You know about the cumulative volume delta. I would say that you now know more than 99% of traders when it comes to order flow trading. So congratulations if you made it this far in the course. If you have liked the course so far, make sure to drop a like. You can also drop a comment. It really helps out with the YouTube algorithm and all that. But last but not least, before we wrap up here, I just want to give a quick summary of how to use uh, the tools together.

So remember here, the volume profile shows we are on the chart. We are on the price levels. The battle between the bulls and and bears appeared. We can see on this level there were, you know, lots and long battles on the chart, and in this level, you know, pretty much nothing happened, which means that the price can move quickly through that level. The footprint chart is when we give an X-ray to the candles. We can see how the battle played out inside the candles. The footprint is super, super important. Uh, if you still find the footprint hard, I highly recommend to go through that part once again because the volume footprint will build upon all of the previous, uh, or I mean, in order to understand the next chapters like the cumulative volume delta, you need to have a basic understanding of the footprint. So don't be, you know, shy to rewatch, maybe rewatch the whole course to really lock everything in. Uh, but the CVD shows who was who was winning the battle of the over time. Remember, the CVD were adding up the deltas over time.

And you can combine these tools in multiple different ways to improve your trading and as a result, make more money. So you can, for example, use profiles to find, you know, what zones that are worth uh, watching. You can use footprints to both look for absorption and initiation. And you can also use it to find better support and resistance levels. And you can use the CVD to find divergences and to sort of find see the overall bigger picture. Who is winning the long-term battle? And as a general rule rule of thumb, when price and delta agree, the move is stronger. When they diverge, it's weaker.

And here, and this is super key, you know, you now, as I said, you know more about order flow than pretty much everyone. But in my personal opinion, you really want to combine order flow with market structure and price action.

But all right, guys, so this course is coming to an end. And if you made it all the way through this course, I'm actually super, super impressed. If you want to, you can write down the code word full course down in the comment section just to prove that you watched the whole course. You know, nowadays when you know we have TikTok, Instagram, Reels, and the attention spans are so short, you know, sitting through a six-hour course is actually, it's actually quite impressive, and I really hope that you learned a ton from this course. And yeah, if you did enjoy this course, the most simple way to help out the channel is to just drop a like and of course, subscribe if you want to. Um, yes, this was a super long course, but even though you watched six hours, you are actually just scratching the surface. There are so much more to learn about trading. So, make sure to subscribe so you so you won't miss any of the more advanced lessons here on the channel in the future.

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And last but not least, guys, this is only the beginning of your trading journey. So, when you have the time, I highly recommend to check out this playlist right here. Here you can find all of my free trading courses right here on YouTube. I hope I will see you in another trading course very soon. But for now, take care. Ciao.