All language subtitles for 8. Indicators Identify Opportunity And Separate Out Noise

All right, so we've got some foundational concepts here, but now let's get into some really the detail

stuff, that's the indicators, this is the tools, the things we're going to actually use to help us,

you know, make decisions around securities to buy or sell, for example.

And indicators are really at the heart of technical analysis and really our technical tools we're going

to use to help us be successful.

And the indicators are all based on things like math and data and trends and and all that is very focused

on trends.

Of course, you want to see you want to anticipate trends, then make your decisions based on where

things are headed or where the trend is headed and technical analysis and using indicators also all

about eliminating emotion.

You're not tied into why love that stock or I love that last movie from Disney.

So I'm going to buy Disney stock or or whatever.

I heard a great thing about Bitcoin or whatever it might be.

You know, it takes emotion out of it.

And you're really looking at these indicators from a real unemotional way.

What is the indicator telling me versus, you know, my likes, dislikes about something and that makes

some very, very good to use in that manner.

Very, you know, way that takes emotion out.

Now, they're not perfect because nothing's perfect.

If there was, I would have one lesson and it would be about what's the perfect indicator to use and

that would be it.

But they have different applications in different ways.

He can use them in some work better than others or in certain situations or certain types of securities.

And we'll go through that as we go through the course.

But just be understanding that nothing, of course, is perfect.

In fact, really beware of anybody who says I've got the perfect system or the perfect set of indicators

or things of that nature.

They don't they may be sure some good stuff and might be helpful, but just beware of anybody trying

to sell you something for money.

That is the perfect answer to that.

It's probably, you know, or it is fraudulent because there hasn't been a perfect indicator out there

yet.

So indicators that they're heart, what they do is they're technical tools that help distinguish between

noise in an actual event.

OK, so what does that say on an actual event is something that's real, something that's happened either

with the company or an organization or a currency or globally, whatever it might be.

Something has happened in a broader sense or specific to that security.

And it's a real live event that's going to make a change.

That's going to happen with trends, whether they're going up or down or sideways.

Something is a real change versus noise.

You know, noise is things that are not dramatic and that does not change the overall trend in my cause.

It's a blip up and down a little bit, but it's not going to actually dramatically change the event

or or change the trend or an event definitely does is dramatic and changes the trend or might strengthen

the tend to have a continue in a strong manner, whichever way it is.

But it's not a temporary thing like noise might cause it's a real thing.

So that's the difference between noise and events and indicators.

Help us to separate that out so we can tell what's true and what's false and what might be, you know,

really the core things that we want to focus on as far as making our buying and selling decisions,

using indicators when events happen.

So let's look an example of these anois and events, for example.

So let's say you have a drug company and there's you know, they say that the new drug that they've

been working on, a launch will be delayed 60 days.

All right.

So they'll cosla to the stock price and things to go down for that particular company is legitimate,

but or might go down temporarily.

But it's more noise, as in, you know, they're going to be fine in sixty days.

They were just delayed 60 days versus something.

That's a significant event where let's say the same thing with this new drug fails a government approval

trial.

That's a bad, bad, bad thing for drug companies.

That means they may have to start all over.

They might just have to pull all the research and development around that drug.

Something wrong is happening.

It's going to cause a significant change.

The trend in this case, it would probably cause a significant downtrend based on that event.

So you got a feel for these events and noise and the indicators, again, help separate out the noise.

So we think about what is actually an indicator, you know, defining it, so to speak, you know,

and indicators a line or a set of lines or some type of mark.

You put on a chart to identify events and clarify and enhance the ancestors perspective.

Our community perception of the price move and what they are looking for, things like is the stock

price trending?

Is it going a certain direction?

How strong is that trend?

What's the degree of strength?

It is a trend.

Her point about to be reached.

All right.

So that's what our indicators are telling us.

Which way is the trend?

How strong is that trend?

And is that trend going to change or gold maybe in a different direction?

If we know those things, then we can make buy or sell decisions based around that indicator or maybe

a set of indicators to help confirm between primary and secondary indicators.

Another way to look at this is what two indicators specifically kind of try and identify, you know,

they're going to try and identify is a trend beginning as a new trend beginning.

How strong or weak is that trend?

Is it kind of.

Going to be a week or so, going to be really strong and we want to get in that trend, whichever way

it's going up or down, is the trend retracing?

You know, is it a temporary pullback?

But it's likely to resume, let's say, for example, is a trend ending and may change or reverse or

go the opposite opposite way, basically.

And also, we can use indicators to indicate a trading range high to low.

What is the range that's going on with a particular security as far as the pricing in there?

And that'll help us decide.

Again, all these things are designed to help us as far as whether we want to invest or not or we want

to buy or when we might want to sell.

And if you look at each of these things and we all these different sections we have coming up are going

to start identifying these things and we'll apply concepts like these different indicators, like for

identifying beginnings of trends, we might use a moving average crossover momentum for strength of

the trend relative strength index we're looking about.

Is it going to retrace but then likely resume the trend?

How can we identify that we can use the RSI or relative strength?

We can use multiple types of indicators for things like, for example, is a trend ending in May reverse

where we got patterns and breakouts of momentum and crossovers and what's the trading range?

You know, that's things we can use to with that like Bolinger bounce or a average to range.

So as you can see, we've got different ways that we can use these different indicators to help us decide

what we want to do.

And ultimately what all this stuff that we're going to learn is indicators are designed to provide us

buy and sell signals or at least a warning that something might be happening to help us, to be better

traders, to be better investors, to make better decision making.

And really, if you look at these different type of indicators are signals and buy and sell signals,

you know, a warning signal or buy or sell signal.

You know, there's really three broad things that they're going to talk about are three broad ways you

can kind of look at these signal types, you know, in those are crossovers meeting a range limit or

things converging or diverging.

So just to give a couple of highlights and that will highlight some of the things you can learn in great

detail coming up.

You know, basically a crossover is when one, you know, line is crossing another.

You know, it's going to show things like a breakout.

So you can kind of see in this quick little example, you can see there's a trading range there with

these two bars on the top and.

Right.

And there these can merely constrain.

But the top right.

You can see where broke through that range, broke through that kind of artificial line we put there

that's showing that it's crossing another line that's showing us breaking out and that a new trend is

forming.

But we're going to learn all about that as we come up as far as that.

But that's the idea of crossing lines.

Also, we have range limits, you know, things like funny names, like oscillators and momentum indicators

where we're going to look at what are the trading ranges and how do things fluctuate, you know, within

an upper and lower band of a training range.

And as they approach them, how are they going to you know, are they going to indicate things like

is something overbought or oversold?

Or how can you combine these different types of range limit type training and looking at things like

movement and moving average indicators, the signal trend breakouts and reversals?

So there's kind of big, broad aspects of that.

And then you have these ideas of convergence and divergence where two things are coming together, prices

are narrowing, they're starting to get closer together within a trading range, and sometimes they're

diverging or getting further apart.

You can see, you know, time in the left, going left to right in this example and price going up and

down as far as height.

And you can see convergence where prices are starting to get closer together.

Divergence where prices start to go further apart is the idea behind that.

So these indicators are these broad concepts.

Indicators are going to put all this together.

We're going to learn a whole bunch of different indicators and different ways that we can analyze investments

and analyze securities so we can make the best decisions by using these indicators, by using these

tools.

And that's where we're going to start learning it and start building that up from the foundation up.