All language subtitles for ghytr

What's up, everyone? Alright.
So, today, we're going to get

into lesson four which is
technical analysis. Now, this

is kind of the meat of the
class as traders. We are so

focused on the technicals. It
doesn't matter whether you're

trading stocks or
cryptocurrency. Technical

analysis is what we use to find
strong entry points with a

minimal amount of risk and a
maximum amount of profit

potential. So, the topics for
today when it comes to

technical technical analysis,
We're going to define what it

is so you guys understand it.
We're going to show you

candlestick price charts. These
are the same charts that we use

when we're trading stocks and
so many of you are already

familiar with them but we'll
just do a brief review of

candlestick charts. We're
going to talk about performing

technical analysis and then
we're going to get into talking

about common price patterns.
So, these are the candlestick

patterns that we utilize to
find strong entry points.

Alright, so Arch is with me
here again today and I'm

going to let him talk a little
bit about technical analysis.

Yeah. So, let's get right into
it. Technical analysis is a

very popular way of evaluating
price charts. Yeah. And it's a

methodology that helps you
analyze historical data to help

you predict what prices may do
in the future. So, we're

eventually evaluating all of
the trades that have taken in

the past and we may use
something like a candlestick

chart to do that. Uh our goal
is to really use that

information to our advantage by
helping us locate good entries

and exits on our trades.
There's probably hundreds of

hundreds or thousands of
different technical analysis

trading strategies but
ultimately our goal is the same

and that's to find a trading
edge that's going to help us

put the probabilities in our
favor so as you gain experience

as a technical analyst you're
you'll likely be able to spot

these major trading
opportunities that become

visibly evident on the chart
yeah technical analysis is also

really a universal concept that
works practically in any market

so it works in stocks futures
cryptocurrencies and if you

understand technical analysis
from stocks or another any

other kind of trading that's
really great because those

skills can also be applied in
cryptocurrencies but even if

you don't don't worry because
we'll teach you how those

concepts can be applied in this
presentation. Yeah and you know

one of the things is that I
noticed for myself when I was

learning how to trade I kind of
had this hunt for the holy

grail like even when you look
at this slide here you can see

these like oscillating
indicators and they go from you

know green down and up and you
think, jeez, maybe if I find

the perfect combination of
technical indicators, they'll

just, they'll do the hard work.
They'll tell me when to buy and

when to sell and the reality is
it doesn't exist. I search for

it for a long time but what you
can do is you can use them to

help you put the odds in your
favor to help you get that

edge. They're not going to do
all the work for you but they

can help you. Now, those are
technical indicators and we use

a couple of technical
indicators which will talk

about more this class and
primarily we rely on

candlestick chart patterns
rather than the indicators

themselves and that's because a
technical indicator is always

going to lag behind price
action a technical indicator

takes its information from the
price but it requires the price

to go up and down before that
indicator is going to give you

a signal so the price has to
happen first now if we just

look straight at the
candlestick chart we're looking

right at the price and so we
don't have any of we don't have

any lag or any delay if we can
immediately make an

interpretation. So, you know,
that's the goal but technical

analysis includes all these
technical indicators and

reading candlestick charts. So,
this is the breakdown of a

candlestick. Now, every
candlestick that you see

represents a period of time. A
green candlestick right here

has four pieces of information
it's telling us. It's telling

us the open price which is the
bottom of the candle it's

telling us the close which is
the top of the candle right

here so this body right here
this is obviously the the stock

moved up during this period of
time down here is the lower

candle wick or the lower shadow
this is the low of that period

so let's say this candlestick
represents 15 minutes of time

within that 15 minute period at
the beginning the price was

right here at the end the price
was here and sometime during

that 15-minute period, it
dropped down to here, it spiked

up to here but then it closed
right here. So, those are the

four pieces of information. The
open, the close, the high, and

the low. Now, with the red
candle, we see the same thing.

We see the open price and then
the close price. The only

difference is that they're
inverted because the stock went

down. So, that's how we need
the the candles to be colored

to know whether the price was
going up or down. I mean,

visually, you can some see it
but if a stock is kind of

sideways without the color, you
wouldn't know whether the top

was the open or the close. So,
what's really interesting is

that when we take these four
pieces of information, they can

actually communicate a lot to
us. So, imagine for example, if

this candlestick had a high
shadow that went way up here.

Let's say it went way off the
chart. What that would tell us

is that inside that
fifteen-minute window, the

stock squeezed up but it came
back down and the one hand you

could think well that shows
strength but it actually shows

weakness because it came back
down so we call those topping

tail candles because they've
got this long upper wick

inverted is a bottoming tail a
stock squeeze down but then it

got bought back up and that's
actually showing some strength

so just the actual shape of the
candlestick can help us make

some interpretation about the
market sentiment around this

particular stock and I'll I'll
I should should preface that by

saying that these candles
patterns are most significant

when they appear in the context
of a strong move to the upside

or a strong move to the
downside we don't really look

at candlestick patterns during
sideways consolidation because

the fact that the stock is
already sideways tells us you

know the market is a little bit
indifferent alright so now

let's look at a couple of
candlestick charts I'll let

Arch walk you through this yeah
so here we have the Bitcoin

daily chart on the left and we
have the four hour chart on the

right the daily chart really
helps you get an understanding

of the bigger picture of the
the price move. Right. From

current current data we could
see that Bitcoin's been pretty

weak on the daily chart lately.
So that should kind of give you

an hint to be extremely
cautious when taking any kind

of long positions since it's
kind of in a sustained

downtrend at this time. Uh
however you can incorporate

another time frame such as the
the four hour chart to get a

better understanding of what's
happening in the shorter term

picture. So when we look at the
four hour chart year it shows

us that the sellings kind of
ended and we're now steadily

grinding higher. So, that's how
you're going to use the time

frames to your advantage to
kind of get an understanding of

what's really going on. Right
and you can see, I mean, this

is a a four-hour chart. So,
that means each candlestick

represents four hours of time
and you can use any time

period. The most respected time
period for most traders for day

traders would be a one-minute
chart and a five-minute chart.

Now, a lot of traders who do
sort of slightly longer hold

times will use 15-minute charts
and 60-minute chart and swing

traders usually focus primarily
on daily charts or maybe

something like a four-hour
chart just to get zoomed in a

little bit closer but you can
see here is this bottomed out

at the bottom it went from 6,
000 all the way back up to 9,

000 I mean that's a pretty
legitimate bounce and on the

daily chart you you know you
may have said okay here's a

little bottoming tail right so
the stock dropped down but then

it squeeze back up so that
shows strength and maybe would

have seen that as an indicator
to buy maybe around 8000 but of

course if you got in there
you're already getting in 2000

points off the low of the drop
so that's the advantage of

using a shorter time period you
can kind of get that early

indicator that the tide is
starting to shift and here you

can see that peaking volume at
the bottom right here the sell

off the bounce then a first
pull back gets bought up so

possible entry maybe around
seventy-seven fifth it's not a

lot earlier than waiting for a
daily trigger but you know it's

a little bit earlier would have
given you a little bit of a

jump right there so let's look
at another chart here we're

going in zooming in a little
closer this is the one hour

chart and the 15-minute chart
again as a day trader there are

times where I've gone all the
way down and it's not going to

sound crazy to a one second
chart so each candle is

actually one second of time and
obviously we do that it's

there's a million candles in
the day but if you want to get

very very precise entries for
quick trades you can go all the

way down to one second chart
it's not very common typically

you know 15 minute 5 minute 1
minute would be more typical

but yeah yeah especially with
cryptocurrencies you kind of

focus on at least the at least
the five or the fifteen because

when you really get into those
lower time frames with these

these things are very trendy
but they at the same time they

don't break out within a matter
of seconds or minutes.

Sometimes it takes really an
hour or a couple of hours for

that move to get going. So
that's why I like to I prefer

to use the the fifteen and the
1 hour for the shorter time

frame trading because not only
do you get an understanding of

the trend but you can still
nail those those precise

entries using these shorter
time frames. Yeah and something

that we'll talk about in a
moment. If you kind of look at

this, you can sort of visualize
this almost invisible line

right up here. If it can next
this. and this. and then comes

up to here this is what we
would call a trend line and so

if you did that take that
technical analysis where you

drew that line on here then
right in this area you might be

starting to think well jeez
it's hitting this trend line

maybe I should be a little
careful and that would have

gotten you out of that trade
before this drop right so you

know that's something that
we'll talk about a little bit

more that gets into the next
level of technical analysis so

Let me let you Arch walk us
through this slide. Yeah. So,

now that you guys have a better
understanding of what

candlestick charts are, we
could really get into the the

technical analysis tools that
you can use to begin performing

your own technical analysis.
So, there's many ways to

perform technical analysis
using a pretty enormous library

of tools and indicators that
are currently out there but

personally, I like to keep it
very simple and I found these

tools to be incredibly helpful
in performing technical

analysis. So these include
trend lines, support and

resistance levels, volume, and
moving averages. Four big ones.

Learning how to incorporate
learning how to incorporate all

of these tools into your
arsenal can really help you

develop an edge over the
market. And as mentioned

there's plenty of other tools
and indicators you can use. Uh

but using too many can really
become contradictory and it

might give you contradictory
information. So you really

want to limit the amount of
indicators and tools that you

use. Yeah. It's called analysis
says paralysis. So, you have so

many technical indicators and
you, I mean, you could stack

dozens and dozens on a chart to
the point where they they could

all be agreeing but it doesn't
necessarily mean it's a buy or

they could all be disagreeing
and you just gotta sit there

confused and that's what's more
likely to happen. Some will say

yes, some will say no. You sit
there missing opportunities

because you're overthinking it.
So, the four big ones, trend

lines, support resistance
levels, volume, and moving

averages. Those are what we use
when we're trading stocks and

they're the same with trading
cryptocurrencies. So, when it

comes to the trend line, this
is where we actually connect

those two dots with a line and
so from any trading software

any charting software, you'll
be able to go down to your

drawing tools and you'll be
able to click on trend lines

and when you do that, you click
once for the first. and you

click a second time for the
second. So, one of the ways

that I typically use trend
lines is I try to find the

place where the line connects
to as many dots as possible.

So, I'll maybe click the first.
and you can use either the top

of the candle or you can use
the top of the body. There's

not really a hard set rule of
where to draw the line. My

opinion on it is to draw the
line so it touches in the most

places because if you draw a
line, let's say for instance, I

I draw a line that connects
this spot right here with you

know, this spot right here you
know I might have been the only

person that drew that line
because it only touches in two

places whereas when you draw a
line that touches in multiple

places the way this touches
here here and then it retouches

here and and maybe even if we
had drawn it a little bit lower

we would have seen it touch
right here that's when you

start to say this is a line
that's being respected I mean

I'm drawing it and I'm seeing
over the course of hours and

hours that we tapping that line
I'm not the only person that

drew it it's a respected trend
line and that's what we want so

we draw them basically where we
can already sort of start to

visualize them and then we can
adjust them up or down slightly

until they connect to as many
places as possible and so what

we know is that stocks will
often test these types of

resistance points now if the
stock is below it it's going to

be considered resistance
because it's coming up again

it. When it finally breaks,
often times we'll see a break

and then we'll see stocks come
back down and retest the

breakout point. So, they drop
back down and then, if there

are enough buyers, it will curl
back up and it continues on and

and that's when you know that
that previous resistance is now

actually going to become a
level of support. When you

break through that line, it's
now support. So, it really can

be very helpful to draw trend
lines whether it's with

cryptocurrencies or stocks to
help you identify major levels

of possible supporter
resistance where you could see

breakouts or breakdowns. So you
can see here this is a

lightcoin chart. I'll let Arch
walk you through the taps of

this trend line right here and
here. Yeah so this will be the

four hour chart of Litecoin and
we see that we have two major

trend lines currently plotted
on the chart. Uh both of these

trend lines were connected
using the most extended points

that we were able to find which
kind of really helps you

understand the borders of the
price action. Uh when we start

coming out of those that range
it kind of gives you a sign

that the trend is starting to
change. So what what here was

that the first screen box shows
that we tapped right into the

line and we sharp sharply
rejected from there it tested

the line again in the second
green box and again we found

resistance there but we saw
that the price eventually

stopped going down and it made
it back above that trend line

with a bunch of sideways action
taking place but what that

really means is that the
downtrend is likely over for

the short term and we could
likely see a breakout over the

top of the trend line and
that's exactly what Litecoin

did just a few days ago after
this was taken. So, this is a

great example of how you can
incorporate trend lines to

perform this technical analysis
and get understanding of when

prices are really ready to to
move. Yeah and on this slide, I

probably, I would probably have
drawn a second trend line maybe

from the top of this body
because if I had started a

little lower, this would have
come up a smidge bit higher and

it probably would have cut
through here and you would have

seen the trend line would have
been right around here but even

if I had drawn that you can see
right here there's a little bit

of descending resistance
because there's sort of that

level so on this candle here we
broke over that level so here

we are kind of holding maybe
support around here and there

was also maybe a second line
above it that was this sort of

resistance point so there are
times where you'll see stocks

kind of pinned between two
lines and it's just a matter of

time will we break to the
upside or will we break to the

side here's another example you
can see this Bitcoin chart this

is a four hour chart again
trend line starting at the low

point and then connecting right
here right around there and

through here so I think if this
one is connected on these two

points we do that because we're
like okay these are two obvious

levels and as the stock starts
dropping down here that's

usually the time that we would
draw this trend line because

we're thinking when is the
going to find support. Is there

anywhere it might find support
because that's a place I could

potentially be a buyer, right?
So, if you drew this trend line

and you saw, well, there might
be a little support down in

here, that actually would have
been a fantastic entry because

we bounced from 12000 back up
to over sixteen, $17, 000,

right? So, that's a really good
bounce. Right. And that's how

you would have spotted it is by
connecting that those two dots.

So then, again. What's
interesting is it later, sorry,

sorry. Uh what's interesting is
later found support at that

same level but this time, we
didn't see that same kind of

bounce, right? This time
instead, prices kind of

consolidated on. That's true.
As buy buyers used it as a

place for support but sellers
were still kind of in charge

and ultimately, we saw that the
line broke hard and prices

flush. Yup, that's definitely
true and so, in this case,

after we'd had this drop, I
might have drawn another trend

line from the low of this. to
the low of this one which would

have brought the line just a
smidge a bit lower it probably

would have been crossing right
in here but then you would have

seen okay we've got these two
support lines so if they both

break as they finally did here
we could get a really big drop

and we're not going to see any
support now unless we draw some

type of descending support line
coming down here but a lot of

times I I try to be careful
about crossing too many lines

because then again you're
getting a little obscure and

you be connecting dots that are
obvious and that other people

will connect because the only
reason that the stock bounces

here is because other people
connected the same line and

they saw potential for support
so if you're connecting obscure

dots and noone else is doing it
you'll be the only one buying

there the stocks going to keep
dropping so anyways yeah it's

very easy to come up with these
trend lines that you might

think are trend lines but
ultimately the goal is to find

the trend line that everybody
else is watching so that you

all you get the same the
reaction that you're looking

for through the help of other
traders. So usually I say the

validity comes from a trend
line tapping multiple times. So

like this is a long one with
just two taps but then in here

it starts to gain some validity
as it's really showing that

this is a recognized level of
support. So most people would

consider this bearish the way
the stock is consolidating at

the trend line before of course
breaking down. Um yeah to add

on to to which what you
mentioned sometimes it is okay

to use those two points but I
like to only do it in

situations where I'm using the
most extended points because

ultimately I know that not all
trend lines are going to be

respected but I still want to
have them plotted just in case

that they do provide some kind
of support and that can help me

kind of understand what's
really going on. So in this

case we had those two extreme
lows plotted there and we we we

created a trend line from that
but even though we didn't know

whether it was going to come
into it was going to provide

support since it was only two
points it's so helpful to kind

of mark those places off
because you never know that

that maybe a level that other
traders are are using. Yeah.

That's true and one remember
you have to not forget that the

reason technical analysis works
is because thousands,

thousands, millions of people
are all using the same tool,

right? So, I that's why those
four big tools of trend lines

support resistance lines volume
and moving averages work so

well they're the most common
technical indicators that even

when you first load you know an
E trade account or whatever it

is they're automatically on the
chart because they're what

everyone uses so the fact that
a setup is really obvious is

good because more people
recognize it more people will

most likely buy at the logical
buy buy spot and you're

going to see better
resolutions. So, you know, we

really like to go for what's
obvious rather than trying to,

you know, come up with some
very obscure combination of

never before heard of technical
indicators because noone uses

them which means those levels
won't be very respected and

you'll most likely just get
yourself frustrated. Alright,

so support and resistance
levels. Do you want to cover

this one, Ash? Yeah, let's get
into it. So, we have here

support and resistance levels
which are literally just

horizontal lines that we can
plot on a chart based on what

we identified to be major
trading levels. So, some

examples of major trading
levels you might find on a

chart include previous major
breakout and breakout points,

extreme highs and extreme lows
as well as price levels that

have been previously tested and
held on more than two

occasions. So, it's important
to note that support levels can

become resistance and
resistance can actually become

support. Yeah. So, let's look
at a couple examples here of

support and resistance lines.
So, what we look for again are

places where the stock has
ideally tapped multiple times

so right up here at the high
we've got the first this candle

squeezed up here and this is a
topping tail so often times

I'll draw a a support or a
resistance line at the high of

a move or high of day and so if
I draw that on there it creates

this line right here and it's
very common that when a stock

squeezes up if it creates this
this is called the cup

formation it creates this cup
formation that what it's

going to do is it's going to
double top at the resistance

line and it's going to fail so
we anticipate that now that

means we often like to buy at
the bottom of the cup which is

what we would call the bullflag
entry so we're buying down here

and we want to sell at the top
of the cup there are times

where stocks or
cryptocurrencies are really

strong and they squeeze through
that and they keep going but

often they see a little bit of
resistance and this is the

moment where stocks will either
pull back and completely fail

the way this one did or well
there where they'll form a

handle which is that little bit
of kind of pullback underneath

the top of the cup so it's that
little handle right here and

then from that point they
usually continue higher so

drawing the resistance line at
high of day this gives us a

predictive predictable level of
resistance right here similarly

stock drops down the low of the
drop we pop on a support line

now we see here on multiple
occasions the stock kind of

drop below bounce back up drop
below bounce back up so we're

sort of seeing some support in
this area and again one of the

things that can be a little
challenging especially with

cryptocurrencies is that
because there's so much fear

and greed around these these
trades, these currencies, you

can see whips where they break
below support and then they do

come back up through it because
people panic out or people, you

know, greed and they just panic
in. They buy in because they're

afraid of missing out. They've
got FOMO and so we see a little

bit more of the irrational
stuff like in this case, you

know, you sort of see one, two,
three taps in this $10, 000

level, probably a little bit of
psychological support there as

well because it's a big round
no the low of this drop here

you know we could draw that
over this is a good example

also where once this support
level was broken as we came

back up it was also resistance
so now it's forming the other

side where first it was holding
us up and now it's a wall

keeping us from going higher
you can see a little bit of

trend line support and
resistance here or the support

and resistance horizontal lines
on this four hour chart this

drop he You can see we've got a
tap there and a tap there. So

that's a really good example of
those two levels you know

coming up and running into it.
Is there anything else you want

to cover on this slide? Yeah so
we can also cover that the

major breakout points also kind
of tend to provide some

considerable support so on the
Bitcoin daily chart you can see

that we have the major breakout
point listed and we really just

identified as that that is the
the low of the green candle

that really started a huge
upright that's where that big

move really started and before
it kind of just gained

incredible momentum so now that
we're finally back down to that

level you can kind of expect it
to be an area where where some

buyer are going to come in so
if you look on the four-hour

chart we first pivoted into it
bounced a little bit drop

through it but now we're
recovering back up and kind of

consolidating over that level
so that kind of tells me that

buyers are using that as a as a
level of support to place their

trades on Bitcoin that's a good
point yes so this trend line

here is carried over from the
daily so sometimes we'll

actually we do this a lot we'll
draw trend lines on the daily

chart and then when we're
trading intra day using a four

hour hourly 15minute or 5
minute chart we can see okay

this is that level that we
marked out over on the daily

chart we're coming up to it and
so this is where you can

kind of see us coming up to
that level right in here and

that's the same with this trend
line coming up here but you can

also draw these support and
resistance lines intra day on

the four-hour chart as you see
them and again they're as

respected as basically if
they're really well respected

it's because they're really
obvious so the more obvious

they are, the more likely they
are to be respected by other

traders. That's a great point.
Here's a chart on Litecoin. You

want to talk about this a
little bit? Yeah, so we kind of

see similar support levels here
on Litecoin. We have the

extreme lows from the previous
major sell offs, right? Where

we saw that first Litecoin had
broken out incredibly sharply

and then when we had that big
sell off time, we bounced

pretty sharply off of that
level. So, you can kind of plot

that level to be and expected
to be a support level if it's

ever tested in the future and
that's what we saw following

couple couple weeks later where
we once again spiked into that

level and we used it as support
bounced higher but eventually

we curled back down and we
plotted another support level

at the at the new extreme low.
Yup. So, what we're seeing now

is that Litecoin is kind of
using those those levels as

support even though it's not
the most perfect support bounce

there is. Uh it's those are the
best levels that you can really

used to determine support that
there's not really much else

you can identify on that chart
to be a major support level so.

Yeah and this is what technical
trading is all about. It's it's

looking at what are obvious
possible levels of support and

we look at the lows of you
know, extreme drops and things

like that. So, those are
carrying over into this

four-hour chart here. So, you
can see especially in this

area, a little bit of
consolidation bouncing between

these levels and something that
again, is also worth noting is

that we definitely see
resistance at whole dollars

half dollars and just big
kind of lines in the sand that

are psychological so 150200 or
even you know 210220 230 240

it's not uncommon to see kind
of you know a little bit of a

tap against these whole round
numbers and a fade off that

level so when I get in to these
a lot of times I look for them

to break and hold over those
levels and when I look for my

target I like to sell just
underneath those psychological

areas of resistance I wouldn't
want to sell exactly at 250 I

would sell like 24980 you know
because I would expect we might

come up and tap and then we
could get a sharp rejection off

that psychological resistance
so in addition to obvious

support and resistance levels
we also have some of the

psychological ones which
initially not be as obvious but

are definitely a factor. So,
here's actually a similar

analysis on Ethereum. Uh this
one really helps us kind of

understand the importance of
previous major breakout points.

So, if you look on the
four-hour chart, that major

breakout point that we have
identified there. It provided

support not once but twice.
Right. Yeah. On the first

bounce, we jumped literally
from that level and it bounced

for over 30 percent from
literally that breakout point

which means that other traders
had identified it and possibly

placed orders at that price
point ahead of time so when

price came into there their
orders would be filled and it

turned out to be a remarkable
trade for anybody that that

bought the the dip there
because just led to an

incredible balance we also see
that there's a good example of

support turning into resistance
on the four-hour chart we had

the extreme low level plotted
which when Ethereum finally

snap back into it it found
support or resistance where we

have the the green box. Right.
Uh March. So these kind of

levels really kind of help you
understand places where you be

you might be able to buy and
sell for a trade. Yeah. Yeah

these are all really good
examples. Uh and again once you

kind of learn this language of
where to draw these trend

lines. You can apply them to
any type of stock. You can

apply them to Facebook, Amazon,
Netflix, the high-priced

stocks. You can apply them to
the low price stocks. They are

really well respected across
the and and in fact there's so

well respected that there are
some there's algorithmic

support at some of these levels
where there's computer systems

that actually take into account
this is a place where the

computers are going to be a big
buyer and so when we see

support you know the stock is
dropping down or like jeez you

know it's it's not dropping
anymore there's big buy orders

where are they coming from
they're combination of

algorithmic traders they're
also traders with deep pockets

are very experienced that put
out orders days or weeks ago

thinking if we retest this spot
this is where I would be a

buyer even if I'm out to lunch
I want to get picked up right

here for a bounce and you know
you saw it just like to the

penny right here on this drop
dropping out of the against the

support of the prior breakout
Alright. So, volume. Volume is

something that I actively use
on every single trade I take.

Now, when we were giving you
the walk through showing you

Gdax and Coinbase and
everything, you're able to see

the the ladder which is the the
level two is what we call it,

the depth of the market and
then you're able to see the

time in sales and the time in
sales is a transaction list.

It's a list of every single
trade that goes through and

it's just console running
twenty-four seven in the case

of cryptocurrencies. So, volume
is and the volume bars are just

that visual representation of
the amount of transactions that

went through during each
candlestick period. Now, these

are colored red or green not
based on buyers or sellers but

based on the color of the
actual candlestick. So, that's

kind of a little bit deceptive
because there are there could

be times where you have a green
candlestick but a lot of the

volume came from one big seller
who just happen to sell like

50, 000 shares or 50, 000 coins
or whatever it is but for the

most part we sort of just
acknowledge that we color the

candle stick and the volume the
same color so the candlestick

up here and then the volume
would be down here so that's

the reason or that's how we
decide the color of them now

again one of the nice thing
with volume in this sort of

view is that you can visualize
when we have high volume and

when we have low volume and one
of the things that we really

like as active traders is to
see a lot of volume in the

stocks or the cryptocurrencies
that we're trading so a place

that we would be interested is
right here and without even

seeing the chart we know that
the candles were going down

right here and they were
starting to go down with

increasing volume which
probably means the stock was

dropping pretty fast and then
this must have probably there

might have been a little false
bounce right here and then a

more sustained bounce right
here as we start to come back

up and then so what I would
visualize this chart looking

like is the stock dropped down
it bounced up and then it

kind of went sideways for a
while this is probably sideways

it could be slightly down or
slightly up but it's most

likely not anything too extreme
when we see extremes and volume

those come with extremes in
price for the most part and

high volume is what we like. We
like to see lots of trading

taking place because that means
if we want to buy and sell in

large quantities, there are
buyers on the other side that

we can sell to and there's
sellers on the other side that

we can buy from and so there's
going to be it's going to be

very liquid, very easy to get
in and easy to get out. So,

when it comes to technical
analysis, volume is what we

kind of consider to be a
confirmation so we may see what

we think is a nice strong
pattern and or we may see what

we think is a a strong support
level and it's the volume that

will confirm it the volume is
what tells us other traders are

buying at the same place that
I'm buying that means I must be

right that this is a breakout
spot I'm not the only one who

saw it so volume is incredibly
important for confirming that

these patterns that we thought
we saw are in fact legitimate

so here we can see volume on
this chart and as you would

expect some of the big breakout
days are going to have higher

volume some of the big selling
days are also going to have

higher volume what is kind of
interesting with Bitcoin and

with some of the other
cryptocurrencies is that some

of the big moves actually
occurred on fairly light volume

for whatever reason there was
just an balance where there

weren't a lot of traders but
the traders that were there

were all buyers and the prices
just went up very very quickly

which is a little different
from what we typically would

see trading stocks although
it's it does happen from time

to time that you will have
light volume breakouts they're

typically just the result of
you know someone sees the

breakout like right here and so
the only people buying here are

obviously people that saw this
consolidation but it's just so

happens that it wasn't as many
people as we're trading it back

here so ideally we like to see
high volume at the breakout but

ultimately the price is what's
most important so we want to

see the price moving up and
moving up sharply but you can

see here this is that
consolidation definitely kind

of pick up from that though yes
when we did see that huge

volume spike and it nearly took
the prices to all time highs

that can kind of give you early
indicated insight into right an

early and what may potentially
happen in the future. So, if we

saw that much volume come in
and the prices nearly went to

all-time highs. You can only
imagine what prices may do in

the future, right? And. That's
true. Uh that's exactly what

happened here is what we saw
the big volume spike. It took a

few days of consolidation and
we moved out of that bullflag

on. Uh not tremendous volume
but it was enough to really

carry prices pretty far. So,
it's really important to keep

an eye on volume to to get an
understanding of what price may

do in the future. Yeah. Those
are good points and likewise,

when we see drops or we see
periods of consolidation, we

like to see that they're on
lighter volume in a lot of ways

because that indicates more of
more churn rather than panic

selling. So, you know, a little
bit of a drop but it pops back

up and it's on light volume.
That's not as concerning as

when we see a drop on really
heavy volume. Uh you know, like

back here, this is something
that would be a little bit more

concerning but you know this is
even though it's the highest

red volume of the day we have
bigger red candles right here

and up here you know a few
months later this just happened

to at the time be a day where
some traders panicked out a

little bit because it was a
relatively big drop for that

time so let's see here's
another Bitcoin chart you

want to walk us through this
one yeah so it's another great

example of how you can kind of
use volume to your advantage to

kind of get an understanding of
what may happen so we saw that

prices that really started
selling off from the high of

about 5, 000 we dropped all the
way down to 3, 000 which is

pretty pretty steep drop but
what what you saw is that huge

volume came into the buy side
right there so that really

kind of tells you that maybe a
single party or many parties

are really getting involved at
that point and they're they're

taking ownership of Bitcoin at
those prices and they're really

voting that this these prices
may go higher and that's why

they bought so much so over the
next few days we saw just a

little bit of and then you come
out come out of the bullflag

and boom prices just took off
from there and really that that

big volume spike of that day is
just critical and kind of kind

of seeing that happen before it
does because it just gives you

just great insight into the the
price action of the market.

That's a good point. Despite
the selling, more buyers came

in to step up to the plate to
buy it up on that dip and that

is a real sign of strength. Uh
one of the this isn't quite a

bull engulfing candle but a
bullish engulfing candle is

when you have a red candle and
then the following day the

green candle is fully bigger
than it it opens lower it

closes higher and it's just
basically it totally shuts down

that red day and this
definitely did it with the

volume it almost did it with
the price and it certainly did

over the next couple of days We
could see it here again on

Ripple as well when we started
breaking out to all-time highs.

The volume just really kicked
up to another level and seeing

that can just help you predict
that these prices are probably

going higher and that's what
Ripple did with when those huge

buyers stepped in. We got all
of that volume and these were

fresh all-time highs. So, it
could've really helped you kind

of predict a breakout in the
making. Now, it's interesting

with this is that we had peak
volume here over 600 million

coins traded on these high
volume days however remember at

this time it was around 50
cents per coin so here you know

it when it's up at $3 if we
were actually looking at this

not just in dollar and not just
in number of coins but in the

volume of of currency that that
changed hands you'd see that

this was actually increasing
because the price went up and

yeah the volume came down a
little bit in part because

buying 10, 000 coins is much
more expensive on this day at

250 than it was back here at 50
cents, but the transaction

value is going up so that's
that's something that you may

not see at first glance but you
should be aware of especially

when you're looking at
something that went from 30

cents to you know $4 or $5 that
can be a pretty bare sign as

well right when you see that
declining volume kind of shows

you that not as many buyers are
stepping up to the plate yeah

even the prices are higher in
this type of move you really

want to see the volume continue
to increase you prefer to kind

of right right yeah that'll
kind of show you that prices

may continue to go higher in
the future but in this case the

volume just slowly wrap down so
that that should have kind of

given you a hint that maybe
maybe this movement was coming

to an end yeah I think
definitely when we see

decreasing volume it is an
indicator that okay the move is

getting overdone but if you
also were plotting the

transactional volume the the
current the actual amount of

dollars that are changing hands
you would see that it's

probably actually flat or going
up slightly because the price

went up so much so that's a
little on the bullish side so

it does make it a little bit
mixed as to okay you know it's

breaking out on decreasing
volume but the price more

expensive so yeah it's a little
bit of an iffy one I would say

in any case I'd be definitely
hesitant you know buying it

anywhere up on this high level
because obviously just came

from you know twenty thirty
cents

here's the same example again
with the volume just just to

kind of show you guys how
important recognizing that

volume could really be because
here we saw that Ethereum

really kicked up its volume on
that that first breakout. Yup.

To just unseen levels. Uh we
had seen it seen that level of

volume in the past but compared
to the past few weeks, it

hadn't seen any volume like
that. So, when when you finally

got that huge kick up in volume
as well as prices having just

you all time highs. That that
could have provided you an

indication that prices were
ready to to continue much

further which which they did.
Right and this is an example

here where we have our support
or our resistance level which

was all time highs. We came up
and as you can see here, this

is the 15-minute chart. So,
it's a zoom in of this day. We

squeeze up. We break through
all-time highs but then, we

reject them. So, it goes all
the way up to eight, what was

it? 880, drops back down to
800. So, you know, fairly big

false and then it curls back up
but it kind of struggles and

churns around this daily kind
of support resistance level

until finally this becomes
support and that becomes the

low of the next leg up which
starts right here right so this

was previous resistance which
becomes support so you again

using all of your technical
indicators to help you get that

edge so you're making the best
decisions about where to get

in, where to set your stops,
etcetera. So, moving averages

this is another one of the
indicators that I use a lot.

So, what a moving average does
is it tells you the average

price over a fixed period of
time and you can choose what

period of time you look at. So,
the commonly used moving

average lengths would be the 20
moving average, the 100, and

the two hundred. So, a 20
moving average is the average

over the last 20 candles and so
again this can be a little bit

deceptive because the 20 moving
average on a daily chart well

the average price over the last
20 days is different from the

average price over the last 20
minutes if you're using a one

minute candle so the 20 moving
average is not the same on all

charts it's it it's really
relative to whichever time

frame you're looking at so we
use the 20 the 100 the 200 for

me an active day trader I also
use the nine because it's an

even shorter period so it's
telling me the average price of

just the last nine candles so
those are moving averages now

within moving averages we have
two different types we have the

simple moving average which
does exactly what I just said

it's the average price over the
last X number of candles and

then you have the exponential
moving average and what this

does is it weights the more
recent price action heavily

versus the older price action
and so that means when the

simple moving average is going
like this as the stock goes up

the exponential is going like
this it's moving faster and we

like that I like that at least
for day trading stocks because

it reacts faster it's to me
going to be more accurate so

for me I use the nine the 20
and the 200 exponential moving

averages and what do you use
for on your charts with crypto

are you using simple or using
exponential? I'm using simple.

Yeah. And I think I use the
twenty EMA but I the rest I use

simple moving averages. So
again, it really comes down to

personal preference but at the
same time, I'm using the

indicators that I think are the
most widely used among day

traders of stocks. So, day
traders of stocks I think are

using the the nine, the twenty,
and the 200 exponential. The

nine, the twenty, and the two
hundred Simple are also

going to be very similar in
price. It's not that different.

So again, me using the
exponential might give me a

little bit of an edge over
someone else who's using the

simple and it's probably the
same with cryptos. A lot of

traders when they load up their
charts automatically will have

simple moving averages
installed. So, it's what they

come with. It's what they
initially learn and so they

will be inherently more
respected because more traders

are using them. Right, right.
One thing to notice you want to

stick to one or the other
because there is similarities

between the two but they can
still provide contradictory

trading information so you
want to use the one that that

you find works best for you
which in most cases it's the

the exponential but most some
people also like to use the

simple as well so what you see
here these are the moving

averages plotted on this chart
and so you see right here this

is a level of support the stock
is actually finding support at

the average. Right here, the
stock is finding support at the

moving average. This is very
common. So, now we see a couple

of charts and we're starting to
add the layers of indicators.

We've got the candle sticks.
We've got the volume. Now, we

have our moving averages and of
course, we could draw on our

trend lines as well and so you
can see as the stock squeezes

up. It really holds this green
moving average. So, what we

would typically say is that we
like to buy at support. This

moving average is a pretty good
level of support and so entries

at the moving average with
exits as the stock squeezes

away getting back in at the
moving average exiting as it

squeezes away back in at the
moving average exiting as it

squeezes away maybe back in
here exiting again back in down

here maybe you stop out maybe
you don't get in until it

breaks back above because this
is three sharp days of drop but

again you sort of get the idea
of we're seeing the stock or

the the currency in this case
Bitcoin respecting these moving

averages do you want to add
anything on this slide Um yeah

so I I really like to
incorporate moving averages to

kind of get an understanding
for the overall trend. So most

frequently I like to use the
2020 EMA since it's so short

term and it's going to react to
more immediate price term but

the the hundred and the 200 can
really help to find major

support and resistance levels
that previous previously

haven't been tested like in
this case the 50 EMA or the

hundred SMA had only been
tested on one occasion back in

I think it was September or
October but it didn't get

retested since but once we
finally did come back into it,

we saw that the 100 provided a
decent level of support and

then similarly, you can see the
same thing happened with the

two hundred. Uh although they
weren't like sharp bounces

precisely off of those levels.
Yup. Um I'm pretty certain that

the reason we're seeing these
bounces at these areas is

because people are seeing that
we're coming into these major

moving averages. Yes. As well
as other other technical

indicators that we've outlined
earlier like the the major

breakout point the whole the
round numbers. For sure. And

one of the things that we talk
about we talk about this more

in the day trade course. Uh we
also talk about it in a couple

of our terminology video
lessons. There are some traders

put a lot of respect on moving
average crossovers. There's the

golden cross. There's also
something called the alligator

indicator. So what they're
basically emphasizing is these

moments. When moving averages
make really strong crosses like

this that these are very
significant and so in this case

obviously this is a bearish
signal and the crossover when

it first happened was way off.
It's not even on the chart. So,

traders like that would would
sort of have the attitude of

I'm holding this I buy on a
crossover and I'm not going to

sell until a crossover. The
problem with that obviously is

that it's not very precise and
by the time you're selling down

here, you're selling it like
50% off high of all-time highs.

So, you're really not getting
the best exit. I mean, yeah,

you held for for a long time
but we talk about that a little

bit. It's not as helpful for
trading on the daily chart.

It's a little more helpful for
intraday. Um some of the

indicators are also commonly
used on Forex but again, mostly

on intraday charts versus the
daily. So, now we're going to

talk a little bit about common
price patterns. So, these are

some of the things that I love
to talk about because I use

these every single day when I'm
looking for trades. So, the

most common price patterns that
we're going to talk about

patterns of consolidation. It's
fairly self explanatory.

Patterns including bull flags
and patterns including a bear

flag. So, flag patterns are
essentially periods of

consolidation but in a certain
context. So, we'll explain that

context and what that looks
like. That now, we use these

price patterns really to help
us understand low-risk entry

points where we can minimize
our downside risk and maximize

our potential. So, this right
here is a bullflag and this

stock is consolidating sideways
but it's consolidating against

a descending resistance line.
So, that trend line is coming

down and it's going to come to
an apex point which is where

the horizontal line and the
trend line meet and stocks

generally will break out either
the upside or the downside

either at that point or before
that point and in this case, it

did it before that point and it
broke to the upside. Now, we

don't always know when stocks
will break these levels whether

it would break here or here or
here and we showed this example

in one of the earlier classes
but it broke here and my

typical entry is to buy the
first pullback which is right

here. As a day trader, I often
call it the one-minute micro

pullback. Sometimes, it's a
five-minute micro pullback but

it's a short little pullback
after a fresh breakout. A bear

flag is a flag that is
occurring after a drop. So, a

stock that drops and pops up
and then consolidates a little

bit usually before another drop
back down. So, this is a bear

flag here. This is a bear flag
right here. So, here let's look

at a little zoom in of
consolidation. So, this is a

chart where we see this
sideways consolidation. So,

this is churning. You have some
people buying. You have some

people selling. It's it can be
kind of a sort of accumulation

distribution just churn. It's
sideways and sideways can last

for long periods of time and it
can break out to the upside or

the downside so we don't really
like to buy when stocks are

sideways or currencies are
sideways because we don't know

how long they'll continue to be
sideways so instead we like to

just sort of chart out the
consolidation map out the

resistance lines on the top the
support lines on the bottom

figure out where that apex
point is which should be right

here and then make a decision
of okay well we're in

consolidation so if the stock
breaks over this level, I

want to buy. If it breaks below
this level, I'm either going to

short it or if I'm still
holding it for some reason,

maybe I would be selling it.
So, consolidation can turn into

a bullflag or a bear flag but
there are times where the

consolidation is so long that
it really isn't even a flag

pattern at all. It's just going
sideways. It's not very

interesting. It's maybe
drifting down a little or it's

drifting up a but it's nothing
that we would buy. We would

wait for a breakout or a
breakdown to occur and we would

want to of course see the
associated volume that comes

with that that tells us that
other traders are seeing what

we think we're seeing, right?
They're seeing something worth

buying. Right. Yeah, these
consolidations are really

important to understand because
in simplest terms, what a

consolidation really is, it's
it means that the the buyers

and sellers are kind of evenly
matched and there's not much

volatility going on in the
price but when the

consolidation finally begins to
or when the price fund moves

out of that consolidation zone.
It kind of means that the

momentum is starting to build
and potentially uncoil in that

direction and it's really that
that's when the pattern can

turn into a bullflag or a bear
flag which could kind of help

you locate these great trading
opportunities and we'll talk

more about the specifics of the
bullflag and bear flag in the

following slides. Yes. Alright.
So, here we have the bullflag.

This is one of my go-to
patterns for trading small cap

stocks. It works really really
well with caps. It doesn't work

as well with large caps with
your Facebook, Amazon, Netflix,

Google type of stocks but it
works very well with small

caps. It works very well with
cryptocurrencies. So, what is a

bullflag? Well, a bullflag is
when a stock pops up and

creates a spike. That's the
flag pole. Then, the flag is

sideways consolidation after
the spike. So, that's just this

kind of period of digestion
just sort of churn and what we

typically expect from a
bullflag is that this period of

consolidation is where some
people are taking profit from

the first move other people are
beginning to accumulate

positions short sellers are
maybe starting to cover and

then we coil and we breakout so
it's this period of tight

coiling and then the breakout
which occurs as we break over

this trend line right here so
Bowl flag can be as small as

three candles. This right here
is a bull flag. We've got three

candles going up, two candles
going down, and this is the

first candle to make a new
high. It's a small flag but it

is a bullflag and this right
here, this whole thing is also

a bullflag. We've got three
four candles up and then, you

know, a long period of sideways
consolidation but it's still a

bullflag. So, it can occur on
all different time frames from

the one minute to the fifteen,
60, four-hour daily chart and

they can take anywhere from one
candlestick or two candlesticks

to form to fifteen, 20, or 30.
It really is Right. It doesn't

matter. One thing to note that
when you're buying this kind of

bullflag pattern, you really
want to see a spike in volume

where where you're seeing
breakout because that's telling

you that other traders are also
getting involved at that same

point and that's that's a very
bullish sign to see increasing

volume as that breakout is
Happening because yeah as as

mentioned it really just means
that other traders are piling

into that same trade and it's
it's a pretty good chance that

prices are going to continue
higher. So that's the important

thing to remember in general
about the market is that the

market is an island where
millions of traders are coming

together and so the prices and
everything that we're seeing

it's a reflection of market
sentiment and that sentiment is

created by traders who think
this is a place I want to buy

and so they start buying and
the price starts going and more

traders start buying and it
keeps going up. It's just so

interesting how the the the
market really is just a

collection of a it's a
reflection of the emotions that

traders experience. The fear,
the greed, the excitement, the

exuberance. It's all on the
charts and so we look for

opportunities where we think
that the excitement is going to

build and peak and create these
breakouts and so in this case

it was right here and then
again right here on the second

pullback. So, we'll zoom in
here. You can walk us through

this Ethereum chart. Yeah. So,
what's cool is that these

patterns can really take place
on any time frame. You can find

them on the five-minute chart,
the one-hour chart, and in this

case, we saw it on the daily
chart. So, we initially saw

that Ethereum went from a low
of about $8 all the way up to

four hundred. So, that kind of
created the pull of the flag

but over the course of four or
five months or actually took a

while. Uh we consolidated for
quite some time and what's

interesting is that the
consolidation kind of really

began to tighten up as we came
into I see October right there

so once that started happening
that really told you that

buyers are holding up the price
on every little dip and you're

not really seeing much
volatility take place and it

kind of shows you this coiling
pattern that's happening so in

this case we have the the flag
marked off with the two the two

points the two extended points
we noted and then once we

finally started curling out of
that line the breakout really

just gains so much because
what's really happening here is

buyers are seeing that prices
are not going lower. Right. And

that's where everybody starts
to pile up and and that that

just turns into a major
breakout point and can really

lead to some interesting
trades. So, in the next slide,

we could see how that how that
pattern really unfolded over

the the following few months.
Sure, I'll show that one. Um

let me just show you guys one
thing here. In in the context

of this one chart, you can see
how you have it's almost like

fractals because you have
within this is a flag pole

right here for this long flag
that occurred right through

here so this is all one flag
but then just inside the flag

pole we've got this bull flag
right here right that's a flag

and we've got another one right
here that's pretty well defined

that's a flag and we've got
another one right here so all

of these are little
opportunities that eventually

ended up you know forming one
large flagpole that created

this you know large pattern out
here but you can zoom in and

see this on smaller time frames
and whether it's intra day or

it's daily in in short little
weekly periods like this or you

can step back and see them on
this very high level where you

see this long period of
consolidation and in that case

you know buying down here is
buying the dips of the moving

average and then selling
through the breakout especially

as we get over this descending
resistance line. Alright, so

you want to walk us through
this Ethereum Daily Chart. So,

this is well basically and I'll
let you walk us through it but

this is the continuation. So,
this was the chart we were just

looking at where we saw right
here was the breakout point and

now we're looking at it a few
months later and this was what

that breakout produced, right?
Right. So, you really see the

result of what that breakout
did for prices. You know, it it

kind of once the uncoiling
finally happened. The buyers

really just let loose on the
price and we went from three

eighty all the way to about
fifteen hundred. So, it really

shows you the power of those
kind of patterns and what it

can help you how it can help
you to predict these huge

potential future moves
especially in cryptocurrencies

where we see so much momentum
once the momentum really gets

going things prices just seem
to let loose yeah yeah I mean

this is where we saw that
really big move and again this

kind of interesting because
it's actually on lighter volume

than we saw you know on this
candle back here but this might

be sort of that early indicator
of the stock the the currency

dropped and lots of buyers
stepped up to the plate they

bought it up and then here we
get the breakout a few months

later so it's kind of
interesting to see that similar

indicator alright so here we
have a Bitcoin chart we've got

our moving averages on here and
you can see nice flag right

here this consolidation this is
a resistance line we draw this

was the breakout the volume
that comes in down here we

spike up we have another small
pullback right here another

breakout another pullback here
and another breakout small

pullbacks here and small
pullbacks here. So, you can you

can make a living trading just
this pattern because it is one

of the strongest patterns and
it's a universal pattern. You

know it for socks, you know it
for cryptos because it occurs

in the same exact way. Is there
anything else you want to add

on this? I see that nice bounce
on the 200 right down here.

Yeah, that was great as well.
Really incorporating all of

these these different technical
tools and indicators can really

just help you develop such a
great edge over the market you

know just just the bullflag
pattern itself is a great way

to go about trading these
cryptocurrencies since what

they really just help you
understand is they help you

predict these major breakout
points because once you get out

of that consolidation everybody
starts jumping on the train and

that's when prices start going
so you really want to learn to

be able to identify these
breakout points using using

these flag patterns and you
want to sell into the breakouts

and that's really going to help
you potentially create

substantial trading profits.
Yeah. The interesting thing to

note is that these patterns
sometimes can be very short

term like in this case the
Bitcoin flag it it worked for

quite some time but eventually
we saw that prices finally back

down. So you really have to be
disciplined about making sure

that if you're taking this kind
of trade that you're also

taking profits and if you fail
to have maybe taking profits up

there you really want to make
sure that just don't let the

trade go red at least. It's
absolutely and that's

definitely true. This is a
technical analysis is short

term trading. It's not
investing. It's not buying for

the next three or four years.
These are very short-term

opportunities and we use larger
position sizes to profit on the

short-term opportunities and we
certainly larger than we feel

comfortable investing for six
months or a year. So, that

compensates for it and and
ultimately, most of us make

more on these short-term
opportunities because of the

additional leverage of share
size that we use or coin size

to the where we probably make
more on these than we would if

we were doing long-term
investments on the same

instruments. Right, right. When
you're incorporating your risk

management, you can really take
take advantage of large share

size because at the end of the
day, when you have such a tight

stop, you're not going to lose
too much versus what you stand

to gain. Exactly. So, here we
see the same pattern unfold on

the one-hour Litecoin chart. We
saw that we had a giant balance

from a few days ago, prices
began to consolidate but once

they finally broke out of that
consolidation, prices started

traveling higher and that just
provided a great trading

opportunity for anybody that
bought that flag breakout but

once again we we see that this
flag pattern even though it

originally worked it did come
back so you you really have to

have that trading mindset when
trading these kind of patterns

because they may work in the
short term but that doesn't

mean that it's going to work
that the prices are going to

continue moving in your favor
so. Right. You have to take

advantage of taking your
profits when you can. And one

of the things that we'll talk
about more in the class on

trade execution. We'll talk
about stops and things like

that but generally speaking we
you always want to know as per

risk management, your max loss
on a trade and we typically

would set the proper stop as
the low of the flag or the low

of the most recent pullback
which if you're a buyer up

here, your stop would probably
be down here as a tight stop.

Down here would be a looser
stop and again, you determine,

do I really want a tight stop
or one that's got more space

based on what the profit
potential is. So, tight stops

when the profit potential is a
little limited and maybe a

wider stop when the potential
if it works is that you have a

a real home run type of trade
so here's another one where we

have this consolidation this is
really interesting too because

this is occurring right
underneath a trend line level

of resistance we tap it we fall
we come back and retest it we

fall we test it again and we
fall and this is also one of

the things that we call a flat
top breakout this one's not

quite a flat top but it's not
uncommon to multiple tests of

almost the same price and the
more times that gets tested,

eventually, we're going to
break through it. Now, it

doesn't mean we'll stay above
it. Here's the break and then

it drops back below because a
lot of people are anticipating

the break and so when it does
happen, they take profit or

they take profit at the
earliest sign of weakness

because they're like, okay, I
got as much as I could get and

now you have an imbalance where
people are taking profit,

they're selling especially in
this case, people who maybe in

from way down here they're
taking profit and now you get

this period of of sell off.
Yeah I really wanted to include

this example to kind of help
you guys understand that these

flag patterns can really form
even pretty far off of the lows

like in this case we had
bounced pretty hard and we we

were pretty far from the lows
and even then we still saw the

flag breakout occur but of
course it ultimately began it

was sold off but even then you
could have still taken

advantage of this as a trade
because if we had placed our

stop at that previous low right
before the breakout this trade

actually still turn into a two
1profit loss ratio trade. Yeah.

So but it it really helps you
to understand that even though

it's a good looking flag
pattern. It's not just going to

keep going. So you really have
to be disciplined about taking

your profits when you're in
this kind of situation.

Absolutely. So now we'll talk a
little bit about bare flags.

Bear flags are the opposite of
both flags. They're the exact

opposite. So with the bare flag
instead of the stock popping up

the stock sells off. That
creates the flag pull going

down and then after the drop,
we have sideways consolidation.

Typically, it's consolidation
before the next leg down. So,

it's kind of stair stepping
down. Now, obviously, we have

this problem right now with
cryptocurrencies where it's not

practical or possible in most
cases to short them. So, you

really can't there's some ways
you can but for the most part,

you can't trade against the
value of the of these

underlying assets. So, these
aren't necessarily going to be

short setups that you would
trade to the short side they're

more just a pattern to be aware
of especially if you're holding

it to the long side that this
is a bearish pattern it's you

don't usually want to be
holding it and something that

you may be able to apply in the
future if it becomes more easy

to you know borrow and and and
short cryptocurrencies I don't

know if there's any indication
that that'll happen but just

something to be mindful there
so this here is a stock or the

currency Bitcoin dropped down
and then it bounced up this

right here is sort of that that
telltale sign of a bear flag

it's an ascending support line
but after it's in the context

of this recent drop so it's
kind of moving up and then this

is the apex point where we drop
back down right so not the

prettiest pattern for traders
who want to see this going up

is there anything you to add on
this one. Right, right. Yeah,

just add on to what you were
saying. It's just really great

to be aware of this pattern
since you really can't short

the cryptocurrency but in case
you're long, you want to be

aware that this this type of
pattern really means that

prices could go lower. So, it
may help you exit a position

before taking further losses.
Right. Yeah. That at this point

would be sort of the the best
value and here's another big

drop. This is ends up actually
being a pretty nice bounce back

up but it of is just a long
period of sideways

consolidation below the
original breakdown point so

this is the breakdown point
here the drop consolidation and

then a further drop here and
again doesn't mean these are

going to zero it's just a short
term correction and pullback

before you know possibly
turning around as you see here

and making its way back up
right right so say if you're

long term invested or something
in Bitecoin and you saw that

what you could really do to
take advantage of it is maybe

you would have sold out your
position there and then have

the opportunity to buy it back
for for much lower prices.

Right. Yeah. So, alright. So,
what we've done is we walked

you through the four important
technical indicators that you

really need to understand to
start to become proficient at

technical analysis. We talked
about trend lines, ascending,

and descending. We talked about
support lines, the horizontal

lines, support and resistance,
we talked about our moving

averages exponential and simple
and we talked about volume and

then of course we talked about
the actual candlestick patterns

of bullflags bare flags and the
consolidation patterns so these

are going to equip you to start
becoming a more confident

trader but remember you have to
practice all of this stuff I

remember for me as a beginner
trader and not even just as a

beginner I've been trading
probably for over a year when I

had a day I remember sitting
down and looking at a chart and

feeling like, I don't see
anything. I'm looking at an

entire chart. I don't see a
single pattern. I don't see

anything to buy or sell. It
takes a while to sort of adjust

your eye to visualize these
patterns. It's like looking at

a magic eye poster. You don't
see anything and then, it's all

right there and so, we're
trying to help you get to the

point where you know, you can
start to kind of visualize

through everything the patterns
And being in the chat room,

we're going to show you these,
we're going to point them out

every time we see them, and
it's going to become second

nature, but know that it takes
some time, just like anything

else, mastering the skill of
technical analysis is something

that takes time, and so you
gotta study up. Right, right,

and I would say that
cryptocurrencies, especially,

for some reason, they're
extremely technical traders.

Yeah. And that's likely because
there's not much fundamentals

driving the price. It's
ultimately just the technicals

that are driving the price back
and forth. So, if you're really

interested in trading
cryptocurrencies, you should

make sure that you're really
focusing on your technical

analysis skills because that's
that's what's really going to

help you develop your your
trading edge. If you can

recognize these these patterns
for what they are and take the

trade before the pattern takes
place, you could, you could be

involved in some great trades.
Yeah. But at the end of the

day, you still have to
incorporate all of your trading

roles such as risk management
and you you want to make sure

that you never even though a
pattern may look like the best

pattern you've ever seen and
you still have to understand

that there's the possibility
that the pattern doesn't work

because at the end of the day,
it's it's just a pattern. So,

as as important technical
analysis is, you you still have

to take it with a grain of salt
at times because these are just

traders emotions that are
reflecting on the chart. Yup.

Yup. That's absolutely true.
Alright, everyone. So, I hope

you guys have enjoyed this
class and we'll put together

some for you. You guys can do
the homework and then we'll get

into chapter five. Alright,
we'll see you guys soon. See

you guys.