Transcript for:
Oliver Kell's Breakout Strategy

Wick play ball flag ball pennant wedge pot wedge drop base and break EMA crossback exhaustion extension reversal extension Outside reversals Inside bars EPS flag breakouts descending channels descending wedges you might be like what on Earth have I just clicked on well this is a video explaining Oliver Kells breakout strategy that he used to achieve a 941 return in 2020. I'm going to be teaching you both the technical aspect so identify control mitigate and optimize but also looking at the fundamentals I've Incorporated Market Smith charts into this presentation they are today's video sponsor there is a discounted Market Smith trial in the comments section below if you are interested I am going to show you this chart at the end of the presentation and hopefully everything is just gonna click so when you're trying to learn any strategy I think it is prudent to break it down into four component parts number one how does that person identify their setups number two how does that person initially control their risk when trading those setups number three how does that person mitigate the risk when trading those setups and number four how does that person optimize the profit from those setups that is what we're going to be doing with Oliver Kell's breakout strategy now I warn you at the start of this video it is ridiculously complex at the beginning to really wrap your head around the concepts because I have to teach you the market framework that Oliver is applying which I started off a little bit earlier in the video so his own cycle of prices he calls it we've got to start there you've got to understand the terminology and then there are lots of different entry setups there are then different ways to control risks there's different ways to then mitigate risk there's different ways to optimize the profits including adding on to positions so you are probably gonna have to watch this video twice I'm being honest with you at the start you're probably gonna have to watch it twice because I don't want to labor points and spend loads and loads of time on a single point I think it's better if I go through the whole thing and then you watch it twice and then hopefully on the second viewing it will just start clicking like that so let's start here with a strategy overview I consider myself to be be an intermediate termed Trend follower and swing Trader I'm always looking for the strongest growth stocks with big earnings and sales and a game-changing story for my longer term period trait I want to find breakouts from Big basing patterns for my swing trades I try to buy pullbacks or play shorter term continuation chart patterns in the end I'm a slave to price and use volume for Clues once positions are utilize moving averages to write the trends a rule-based strategy with the ability to act on your gut feel right or wrong while managing the wrist is the ultimate combination for big returns here are my tools for analysis very similar to data set price volume moving averages multiple time frames and chart patterns all of his win rate around about 30 35 so here's right roughly on one out of three trades so the risk management side of things is going to be really important as we start diving into that a little bit later on now I won't read all of these quotes out to you you can read them in your own time but William O'Neill obviously founder of Investors Business Daily and Market Smith had a significant impact on Oliver strategy as you're gonna learn as we progress so here we go this chart here you're going to be like what what does this mean and you may actually turn off because it's going to look really confusing at first but what I've tried to do is break every single part down into its relevant components and teach you it step by step and then as we start progressing start adding and building on it so you just follow it follow it through as I said hopefully it makes sense be math to watch it a couple of times for it to really sink in because I don't want to spend loads of time here Lose You In The Weeds at the beginning of the video I'd rather take you through the whole thing and see where we get to at the end so this is the cycle of price action this is how Oliver contextualizes the market so this here is the framework and then the setups that he's looking for how he's then controlling the risk how he's managing the positions looking to optimize profits all stems from this which is his framework for how he is viewing the market and individual stocks as well don't worry we're gonna make sense as we go so we have EMA cross backs we have Basin breaks we have exhaustion extension we have wedge drops EMA crossbacks to downside bass and breaks and downside reversal extension we've got the wedge pop EMA crossback bass and brakes exhaustion extension so on and so forth the 10 EMA and the 21 EMA are very important to Oliver's strategy which we'll get on to a little bit later so let me just give you an overview and this is going to make no sense to you at the start I was thinking about how am I going to film this video do I go in really in depth at the beginning and I just went no you just need to go through the video and things will just start clicking reps and sets reps and sets but here you can start to see how Oliver is then his contextual framework is applying to the market and then is going to be applying to individual stocks you get wedge drops EMA crossbacks we're going to do all the definitions in a couple of slides time we've got definitions for each part here bass and breaks reversal extension wedge pop EMA crossback EMA support bass and breaks to the upside exhaustion extensions it's all going to make it's all going to start making sense so let's now start breaking it down so cycle a price action the market goes up when there are more buyers and sellers and goes down when there are more sellers than buyers it's really that simple it is just supply and demand when a stock tops turns into a downtrend and then eventually bottoms out it follows these steps exhaustion extension wedge drop EMA crossback bass and break reversal extension done right so we're going to make sense we've got a lot of examples to go through when a stock bottoms turns into an uptrend and then eventually tops out it followed these steps reversal extension wedge pop EMA crossback bass and Brake exhaustion extension a little quote down here which is a good one if you miss the optimal buy point I still think it is worth trying to be in the top liquid stocks versus a secondary stock in those instances paying attention to the price cycle or patterns like Flags pennants or pullbacks to the moving averages may present opportunities you can already see a couple of quotes about growth stocks leading stock so you can start to see the influence William O'Neill had on Oliver's strategy here we go these are the main chart patterns that Oliver is looking to trade so we're just in the identified part here so when you are seeing the EMA crossback which will make no sense to you at the minute the Basin breaks which will make no sense to you at the minute Oliver is looking for these kind of patents also to a lesser extent on the wedge pop they're more descending channels and descending wedges don't worry we'll get there so in essence he is looking for Flags triangles pennants vcps cup and handles wedges so vcp kind of low mid pivots flat bases and then there's a couple of other ones in terms of bull flags and ball pennants so a ball flag now I will just say this at the start of the video Oliver is very very active very aggressive with getting into positions as well so he'll he'll trade some bull flags and some ball pendants from bases that are three days long five days long so you're gonna see examples examples of that so it's not kind of the classic say an O'Neill and a high type flag he would want minimum base duration of three weeks Oliver in the context of his his price cycle he is looking for bull tenants ball Flags into key moving averages which can often be the 10 EMA so the difference between a bull flag and a ball pennant for which you are going to see a lot in this presentation is a bull flag is basically making a series of lower highs and lower lows whereas a ball pennant is making a series of lower Highs but higher lows that there is basically the difference but you're gonna see these ones you are also going to see a couple of other ones a double bass a double bottom base which also Trader Vic who came up with the 2B reversal which is basically kind of a Wyckoff spring in a way as well um you can oftentimes see this as well so Oliver is aware of Springs and things like that in these bases as well I've actually got an example to show and then obviously the traditional O'Neill cup and handle a little bit of kind of a description there for you as well but you probably haven't really come across a 2B reversal or a double bottom pattern so I thought I would just put a little slide in here so double bottom pattern it basically looks like a like a w okay like this I don't know if that was that the right way for you guys probably so see how the market comes down it makes a low see how it actually holds around the key moving averages we'll get into all this later bounces come down undercut and then here is the 2B reversal check out The Mantel open on the low recovery then it tightens up look at this inside bar coming in look at the volume coming through and then the breakout but you probably haven't seen really a double bass um type type pattern before so I thought I would just include this one here now that cycle of price action we now need to start breaking down those component parts with definitions so you at least now start to understand the definitions and then we have got various examples to be going for I think we've got Tesla and I also think we have got Zoom as well and then plenty of other ones and what I've tried to do is make this interactive included quiz quizzes for you as we progress so reversal extension this is the bottoming part of the cycle so here you can see imagine that price is doing this and then our price is the white line here so look for a defined support level on a higher time frame when price approaches the higher time frame level it must be extended from the 10 EMA on the lower time frame chart air between price and the moving averages when the stock starts to put in a reversal bar go long heavy volume capitulation on the reversal bar is a key ingredient in this setup initial stops go below the low of the reversal bar area first profit Target is the 20 EMA on the trading time frame stops move to cost 1 partials are taking with discretion used to exit the remaining shares and you might be like what this is initially to get your head around it a very complex strategy but it all makes sense come the end but you've got to understand all the component parts so Oliver will rarely Trade A reversal extension on a higher time frame being the weekly or the daily chart but he will utilize this if a higher time frame so say the daily chart in a leaving stock is pulling back to say the 21 EMA or the 20 EMA as all of the uses on his charts he could then go down to a five minute chart as the quote over here says to then look for the reversal extension to try and get positioned off a key moving average now I'm just going to take you through that ready here we go so here we have Nvidia this is from this year 2023 so you can see that em I use for me on my chart I use the 21 EMA so throughout my charts you're going to see Blackline 10U May Blue Line 21 email purple line 50 s May greatline 100 SMA and the red line just poking its head up there is the 200 SMA so where do you see that Nvidia has generally speaking been finding support 21 21 over here 21 undercut the 21 then recovered 21 in it and then it pulls back down to the 21 in here so what you can then do if you see a leading stock pulling back to a key moving average in this instance here it's a 21 EMA you could think about it as the 50 SMA as well but what we could then do is look for reversal extensions on the lower time frames I'm already going really in depth this video is going to be extremely in-depth okay it is just a really in-depth video here we go so remember this level here of 272.40 on the daily chart okay that was the 21 EMA where we can see Nvidia has been for finding supportive action so here is the five minute chart looking at this now you are looking for basically capitulation type bottom on the reversal on the reversal extensions down so we're on the five minute chart here and we're looking for evidence that large operators are stepping up so what do we see we see multiple what I call demand helps so demand tail is coming down and look at the high relative volume so the stock on the higher time frame is finding sport of action around the 21 EMA which is an area we know leading stocks tend to be supported so this here is the reversal extension this will all make a little bit more sense as we do some more reps and sets here is on so you can see that on is trending up here first pull back to the 21 EMA and here is the five minute chart here so see how it's a reversal extension price is extended to the downside versus the 10 EMA and also the 21 EMA perfect ShakeOut domanto and then starts bouncing off so see this 30.60 level where is this on the daily chart it's pretty much right there on the 21 EMA so Oliver will use the reversal extension on leading stocks as they are pulling back down to potentially key moving averages such as the 21 EMA potentially the 50 SMF it's in a bigger base but it is more so focused on the quicker moving averages tanning mate and also the 21 EMA for Oliver's charts but using the multiple time frames that is going to be all we're going to be talking about on multiple time frames for a little while now but I did just want to show you this as it's something probably a little bit New To You Oliver will also use outside reversal bars that you're going to learn much later in the presentation around key moving averages so kind of gap down reversal wise don't worry we are going to get there so after the reversal extension you then get the wedge pop so this is the first time the market trades back up across the moving averages being the 10 email and the 21 EMA after a reversal extension where price has been on a short-term basis extended to the downside versus the 10 EMA and also the 28 EMA price rates in a tight range as it works lower often for Longs the stock is showing relative strength to the underlying index so even though the stock is below its key moving averages it is showing relative strength relative shrimp is going to be a huge huge part of this presentation and a significant part of Oliver's strategy so we're going to spend a lot of time on that the 1021 EMA should be tightening showing a lack of overall momentum despite being dragged in the direction of the underlying Market when price recaptures the Titan 21 EMA go wrong with a stop below the near-term price consolidation ride the EMAs as a trailing stop once the trade triggered for me this is the money pattern this is what I really like to play on the daily chart I love Breakaway gaps as part of the wedge pop so we're actually gapped up above the 1021 EMA I think it's a key key ingredient I didn't mean to Elbow my desk then so we're going to do loads of examples I'm just giving you an overview of things we got an example after example after example so the EMA crossback one Earth is an EMA crossback so what part would this be down here this would be the wedge pot and then we're looking at the EMA crossback so this is the first retest of the moving averages following following a wedge pot so price has been extended to the downside that's the reversal extension the wedge pop is back through the 10 and the 20 EMA and then the EMA crossback is the first pullback in to the key moving averages so prices already recaptured the 1021 EMA on the chart being the wedge box to be a candidate it then pulls back into the 1021 EMAs For the First Time For the First Time buy the stock again so as it's pulling in by the stock against the 1021 EMAs don't worry we've got loads of examples I know this is completely over your head right now but by the end it should all start clicking really really hopeful that that is the case stops the place below the moving averages race race stops in the trailing format with the 1021 and the Amaze you might be like what what do you mean race stops don't worry we'll get there by the um by the end so next one afterwards in the price cycle is the base and break so we've had reversal extension wedge pop EMA crossback now the basement price will build a basing pattern finding support at the 1021 em8 this is often a slightly longer consolidation rather than a short one today three pullback so that is much more so it could be the handle in your cup and handle type pattern it could be a flag it could be a vcp of sort a flat base or a Darvis box wedge something like that okay buy against the moving averages with confirmation ads on the base breaker so this is something that you're going to see a lot he's Oliver likes to buy in pieces so we'll get into this as the presentation goes he's actually buying against the moving averages so remember those reversal extensions I was just telling that all of it is an extremely active Trader from what from what I can make out so he's buying parts of his position into the key moving averages and then adding to his position on various breakouts so it could be a breakout for a high breakout for a trend line so on and so forth stops a place at a loss of the moving averages ride the moving averages higher while selling into pops away from the 10 email with final stops at loss of the 10 EMA we're going to go all in to selling and optimizing profit good quote here you don't want to be buying stocks that show air to the 10 day so I are extended from the 10 10 EMA so you see here on this on this schematic up here there would be air between price and the 10 here whereas here it is much much closer so again it's kind of judging it relative basis we'll go into deliberate practice how you can really train your skill set skill set here this is a nice quote here it's not about knowing where the Stock's going to go it's about finding lower spots where you can execute and manage risks that's what technical analysis is all about so after you get the Basin break you then get the exhaustion extension now I some you'll see on some of the charts sometimes it says exhaustive extension that's because I'm dyslexic and I wrote the wrong word and it can be asked thank you and change it but you know what I mean it's an exhaustion extension this is the blow off Euphoria and a sign the market may be topping the Fairview get into an uptrend and the more extensions you get away from the 10ime the more likely a stock is to rebate the stack second extension from the 10ime don't worry I've got loads of examples is generally a good place to take profits if you get a third extension you are often getting late in the intermediate term Trend also pay attention to first and second extensions away from the weekly 10 SMA which is the daily 50s me so simple moving averages then on the downside after you get the exhaustion extension you then get the wedge drop by prices coming back down through the moving averages being the Tenny mate and the 21 you make this could be triggering your stop losses as well and we'll get into that later on in the optimizing profits the next is the EMA crossback this is where you've had your wedge drop down and then price rallies back up into those key moving averages it could be one it could be two it could be three of them as well potentially instead of the 50s there but much more common for the type of momentum growth stocks Oliver's trading is going to be the 10me and all the 21 EMA so you get the wedge drop that loses them and then it rallies back into them forms a structural lower high and then finds resistance and then rolls back over Basin break is basically basing so it's a little bit longer in terms of a consolidation is basing into the key moving averages so you could see some form of kind of like just Darvis box kind of rectangle to use a visual example okay something where price is consolidating and then the moving averages are catching up but it can't reclaim them and then it breaks to the downside like this and then makes a series of lower lows so time frames what time frames does Oliver use well he says the highest time frame supersedes the lower time frame what does that mean he gives more weight to the monthly chart than he would the weekly chart and he gives more weight to the weekly chart than he would the daily chart he gives more weight to the daily chart versus the one hour chart hopefully that makes sense the weekly is the anchor the daily is for trade management intraday he uses the one hour and the 15 minute time frame he says he rarely uses the five minute chart but sometimes he does but for the initial risk management he's using the one out and the 50 minute he does say if there is not a setup on the higher time frame so that is the weekly chart or the daily chart there is no point looking at the intraday chart because you'll get so many false signals and you'll just start over Trading so let's now start putting it all together a little bit we've got Tesla to be going through like this and then we have zoom to be going through like this and by the time we've gone through Tesla and zoom hopefully a couple of these things are starting to make a little bit of sense in terms of what on Earth is an EMA crossback what is a wedge drop what is a wedge pop what is an exhaustion an extension look like what does a base and Brake look like we're going to get to it we'll explain it all as we go so let's start from the high so let's start point a this is an exhaustion extension um parabolic rally extended from the 10 email look how this thing here has just run up to remember black liners Tenny mate and on my chart the blue line is the 21 email they are the two to really focus on the black line and the blue line okay so this here is parabolic it's clearly extended from the 10 EMA then at point B we have the wedge drop so price drops through the Tenny main you can see the change of character on this bar here it's a widespread red candle so the volume that popped up as well on this bar it's a clear change of character it's a wedge drop then you have the EMA cross back so see how price goes down and then it rallies back into the black and the blue line the 10U man the 21 EMA it actually gaps up above it and then loses it closes weak below them that's an EMA crossback so like the wedge pot is the first move back above the moving averages and then the EMA crossback is the first test into them the wedge drop followed by the EMA crossback is losing the moving averages then rallying into the moving averages and losing them that's the EMA Crosser back then as we go down to D this is the reversal extension so price is now extended to the downside relative to the 10 EMA and it also finds a port of action on the 200 estimate it's showing a lot of relative strength we may actually look at this one a little bit later on so I can show you the relative strength point then at Point e price has traded back up to the 21 EMA pulls down here and then here is the wedge pop and I know I've pointed to the entry point we're going to be going deep into the actual entry points how do you actually get into the position again I'm just starting up here giving you an overview then going down this is extremely extremely concept when I started putting this PowerPoint presentation together to try and teach it I was like oh my word this is going to really take some explaining to try and get this across in the space of an hour or two hour um YouTube video so as I said you may have to watch it a couple of times but this is the wedge pot okay so it reclaims this bar here see how it reclaims the black line and the blue line being the 10 and 21 EMA then at Point F this is the EMA crossback where it pulls back in to the 10 the 21 EMA for the first time and actually find supportive action then as we go over to G we then get the base and break and what what can slim trial patterns you see cut handle so the bass and break will often be in terms of a cup and handle the Basin break will often be that kind of classic handle phase of a cup and a handle now the cycle continues so here you can see G this was where that handle was building so you get the breakout here the Basin break and then at Point H we get another Basin break so see how price pulls into the key moving averages and remember I was talking about some of the reversal extensions off of the key moving averages so where is Tesla finding support 2020 you may 21 EMA 21 EMA 21 you may kind of undercut the 21 EMA then it goes against these leading socks can often find support around their 20 EMA or their 21 EMA they are pretty much both the same things um so I know Oliver uses the 20 EMA I use the 21 so if I say 21 EMA instead of 20 EMA that's just because I'm very used to using the 21 EMA but I mean the same thing pretty much okay HC another bass and break so price consolidates above the 10 and 21 EMAs opportunity to initiate or add to the position while adjusting stops are underneath the key moving averages being the 10U mate and the 20 year mate will come on to actually trading stops a little bit later then at point I you get your first extension so this is a blow off exhaustion so extension from the 10 EMA with a gap reversal on high volume so price actually gaps up Supply shoot taking it up and then it comes back down this is the first extension so we want to be aware of the first extension and then a second extension it is then rare to see a third extension we're going to come on to extensions a little bit later on then you can see at J1 and J2 this is where we have the wedge drops so price wedge drops through the 10 EMA here and then we wedge drop through the 10 and 21 EMA in this vicinity but then at Point K we get the wedge pop so the wedge pop is back up through the key moving averages and you get a nice downwards trend line coming through here it's a bit of a downwards Channel downwards wedge more so than a downward Channel coming through in this region here and then at Point L we get the second extension so Oliver is very aware of when we're coming out of large bases then how many extensions you're likely to get potentially two it is very rare to see a third extension and this kind of goes into um uh William O'Neill's base count four stage bases fifth stage bases are very very failure prone and this kind of links into the extensions that you'll see next slide here so this is where we're looking at here at Point l so it's going to take longer for the stock to rebase out so at Point M there's another Basin break which turns around and fails you are going to have failed trades at Point N there is then a wedge drop so see how it closes down through the 10 and the 21 EMA then at this point here oh this is where it wedge pops so see how it's underneath the 10 21 and 50 and then here it actually which pops up and this was the inclusion of Tesla into the S P 500 so it was a catalyst which makes it a stronger breakout and it takes out this pivot here so it takes out the pivot starts trending up to P now p is a blow off extension so you could think about this as a first extension potentially as well so it's extended from the 10 email pulls back into Q so Q is your EMA crossback so EMA crossback first pullback to the key moving average potentially a place to add there if you're using say the 10 and then you're on the lower time frame so you're thinking about a higher time frame first pullback to the 10 email the 21 EMA and then you could be looking as I showed you with Nvidia and on earlier on the reversal extension on the lower time frame such as say the five minute chart or the 15 minute chart but again Oliver is extremely active then you get ah so R is a basin break which kind of goes for a day turns around and fails then you get this ball flag that comes through so there's a potential entry there then at s you get another kind of blow-off extension so this one here is extremely extended look at the run that Tesla has had T is then a failed Basin break but you're getting fairly long in the move here and then you is a convincing loss of the 10 and 21 EMA so kind of bearish synchronistic but look at the increasing price volatility coming through so increasing price volatility as you will see throughout this presentation increasing price volatility is more so associated with a lot of Supply coming to the market and distribution where decreasing price volatility is a signal of the other so it's actually that there is absorption of supply and less Supply coming to the market this is what it looks like when you piece it all together so here is your traditional cup and handle so from a to G this being the cup then this being the handle where it tightens and then you get your first extension into eye pull back second extension into l a big bass then builds and then you get kind of your first tension into P pull back and then your second extension in to asset so be aware of kind of the extension points as well but as we do more reps and sets is we're going to start coming together now the price cycle is also a clickable if you are trading the weekly time frame so this here is Peloton and I know these kind of arrows where I've drawn things and stuff at the minute it's a little bit wishy-washy it's a little bit vague it's a little bit fluffy I appreciate that but I have to start off higher give you an overview and then start going into the weeds you need to understand the concept before you start applying the the tactics so you need to understand the strategy and then the tactics to implement the strategy hopefully that there makes sense so you can see major IPO so it's a flat base which is a canceling pattern flat base see how it tightens in here so what was I saying on the last shot decreasing volatility is a sign of absorption of supply and less Supply coming to the market so these tight can do six whether it's on the monthly chart the weekly chart the daily chart the one hour chart the five minute chart the one minute chart they are very constructive to see for a breakout because they tell you either there's absorption Supply if it's kind of higher relative volume well there's very little Supply if there's very little relative volume coming through they're really good to see at B you get your Basin break at C you get your stage two flat base so here's a flat base at D you get your exhaustion extension so this is kind of potentially the first one here albeit it is fairly extended at e you get your EMA uh pullback support so I use the 21 EMA so you can see that's roughly finding sport around that F you get a stage three base so see how it's getting all a little bit kind of wide and loose G you get your second exhaustion extension from the 10 week so you see this black line here remember be aware of exhaustion extension so we're looking at on the daily chart with Tesla first extension pullback then the second extension happens on the weekly but more so from the black line which is the 10 week simple moving average which on the daily chart is the 50 SMA so see how you get your first extension pull back and then your second extension it is very rare to get a third extension height so something to be aware of and then to put that in kind of the context as well so this then links into the Wyckoff price cycle Stan Weinstein State analysis phase one phase two phase three distributional top phase four decline uh H is a failed breakout and it's very volatile in here as well I is then your stage four bass and then you can see at J it's just taking out these lows and that is then going into the stage four Mark that let's run through Zoom as we did with um as we did with Tesla and again hopefully these things will just start clicking as we uh as we go throughout so a this is the wedge pot through the 10 and 21 EMA so see how Zoom it's actually basing here you get this tightness in terms of price volatility and then you get this pop through the 1021 em8 what is that it's a wedge pop and then the stop below the breakout day so Oliver will trade these wedge pops through and don't worry we've got lots and lots of examples I got some quizzes in a couple of slides time as well so this is the wedge pop that actually loses this trend line here at B which is then a wedge drop at C it's another wedge pot back through the 10 and 21 EMAs then over here at D price find support around the key moving averages so the 10 EMA the black line here is catching up and then at Point e here you get the breakout and this is a wick play you're going to learn all about Wick place I think I got like five examples if not more examples a little bit later on to be showing you at Point e we get a basin break so a pointy here we get a basin break point f is the first extension so you can see visually how it's kind of extended from the 10 EMA here it's okay we get an extension there then at G you actually get a gap up exhaustion extension so you see I've written exhausted that that's my dyslexia kicking in there but you see how it actually gaps up and then starts getting very very volatile here and then H is another exhaustion extension so you're kind of getting like one two three okay it's indicating there's some distribution stocks getting a bit volatile some Supply coming to the market needs to probably pull back tighten up which is then what we see at point I see how it pulls into the 10 and 21 em8 so the black line in this blue line here starts to tighten there's your breakout going through then at J you get another exhaustion extension and then at K you get the wedge drop and you also lose this downward strand line but then you see how the stock finds support of action around the 50 SMA so that's where you can look for the reversal extensions on the lower time frame let's keep going so at Point number L this is our wedge pot so it pulls down Zoom pulls down Fine support around the 50s mate and then the wedge pop is back up through what two moving averages the 10 email and the 21 EMA now at Point M this is the EMA crossback so the EMA crossback is the first test of the moving average so that could be the 10i mate and all the 20 EMA after the wedge box so first test at those moving averages after the wedge pop at N is a basin break which goes for about two days turns around and then fails so oh up O is a gap up exhaustion extension pulls back down the stock rebases then at P you get your base and a break as you see how the stock builds a decent base there's your Basin break and then at Q this is your EMA crossback which also turns into a little bit of a ball flag slash ball pen type pattern in here so see how it pulls back down in here now again olive oil trade these aggressive shorter bases in the context of an uptrend from three five day bases assuming the 10 EMA there's no air from the 10 EMA so you are going to see plenty of these ones here at point R you can see that EMA support Rises so EMA supports a race stop to the 10 event so you see how the 10 EMA is just basically supporting the stock but you then start to form this trend line here and then at s you get your three signals actually you get a bearish engulfing Candlestick which is also a trendline break and is also a tanium a brake cell signal so again kind of three confluences there so it's losing the moving averages it's breaking the trend line and it's a terrible looking Candlestick it's embarrassing golfing type candle set let's go on to the next one so I'm now going to start asking you some questions so this is kind of towards the end of the overview section then we're going to start getting really deep in it so hopefully you're getting a little bit familiar with Oliver's terminology this is a whole kind of Market framework to be thinking about it so that there was a little bit was an overview of it but now I need to start asking you questions to make sure that you are following along and you get it so here's the chart of Nvidia can you identify where the wedge pop is I'll give you three seconds three two one there it is hopefully you got it so remember the wedge pop is when it gets back through see how it tightens in here puts in a structural highlight and then it reclaims the 10 EMA and the 21 EMA so it's the first reclaimer the 1021 EMF that's really really good to see there is technically one here but see how it's still pretty volatile you want to see some tightness in price ideally higher lows coming through before that as as well and even better if you get kind of a tight inside bar on low relative volume before a wedge pop so now you've got a couple to try and find on this one okay this teledoc so can you identify a wedge pop an EMA crossback a bull pennant a ball pennant breakout and exhaustion extension and then the wedge drop so I'm asking you I think five things there ready three two one see if you can get so here is the wedge pop see how it pops back up reclaims the 10 and 21 EMA look out the tightness coming through in here as well see how the stock is building higher lows you then get the pull the bull pennant breakout so the stock is building lower lower highs in here but it's then also building higher low so remember the difference between a ball pennant is the fact that it's building lower Highs but higher lows and a ball flag is building lower lows and and and lower highs as well so the difference is is the higher lows coming through the ball pen so see here's the ball pennant then this is the exhaustion extension up here was also the EMA crossback so first test after the wedge pop so there's the wedge pop first pull back into the key moving averages and then here is obviously the wedge drop clear change of character and it takes out not one but two key moving averages being the ten and also the 20. let's do a another one so this is on the NASDAQ so can you identify the wedge pop and a bonus if you can also get the chart pattern so there's a chart pattern there as um as well so I'll give you three two one here you go here is the wedge pot so see the tightness that comes through see the higher low that forms look at the tightness and then the first reclaim of the 10 and 21 EMA and see how it opens on the low close on the high and it's a little Gap up as well and it was an inverted Head and Shoulders type pattern here's the left shoulder here's the head here's the right shoulder over here now a couple for you to try and identify can you identify the wedge pot to exhaustion extensions and the wedge drop ready three two one there you go here's the wedge pot so you can see pulls back down here starts putting in this higher low so do you see the commonality here the repeatable nature of invariably before the wedge Pop there's a higher low so price puts in a higher low then makes the wedge pop so see here this here is a structural high low relative to this low here and then here is the exhaustion extension here's another exhaustion as I said my dyslexia was having a field day that I was writing exhaustive extension that's just my stagger and then you see here this is the wedge drop coming through in here you clearly lose the 21 em8 that is not a good looking candlestick so this is then quite interesting here we have on the right hand side we have AMD and then I've tried to line up here the NASDAQ Composite as well now this is feeding into the relative strength Point as well so where is the wedge pop slash low pivot breakout for AMD well I've kind of pointed to it haven't I it's Wednesday the 13th of October do you see do you see how AMD here made a higher low and the index made a higher low coming through here as well and then the very next day the index will have its wedge pop but AMD has its wedge pop the day before and see how it's reclaimed the 10 21 and the 50 SMA so on this day here on the 13th okay we're actually on well we could look at the 13th but if you look at the 12th okay the market being the NASDAQ so the NASDAQ 100 is below the 10 email the 21 you made in the 50 estimate whereas take a look at AMD it's just basically been in this mini pivot this mini Darvis box and it's sitting there on the 10 and 21 EMA and the 50s May is just above so then you get the wedge pop for AMD but it was showing relative shrimp it's also a wick play which I will teach you a little bit later a little bit later on so here we go can you identify the key moment and again you can print screen this you can print it out you can try and Mark it and pause the video and go for it so there's a lot of different key moments on this chart so again I wanted to try and be engaging for you if I involve you I think you are going to learn much better so can you identify for the cycle of price action the key moments on this chart three two one there you go so to begin with we have the exhaustion and extension then we have the wedge drop we pull back down here we build this descending Channel we have the wedge with the wedge pot we then have an EMA crossback we then go up we kind of fail then here we pull back down there's a wedge drop here descending Channel with another wedge pop then we pull back down this would be the EMA cross back in here you then have a basin break in here another Basin break see how the market is then finding sport on the 21 emac 21 EMA in here another Basin break and then a wedge drop coming through and hit so this terminal terminology of wedge drops wedge pops crossbacks exhaustion extensions bass and breaks reversal extensions is Oliver's way of trying to decipher the kind of puzzle of the market if you like now standing on the market environment because obviously this is a momentum based breakout strategy so it is going to perform better in certain Market environments what are those Market environments let's get into it so generally when trading growth stocks then NASDAQ composite or the triple Q ETF is the index reflective of those underlying stocks when it's below the 20 EMA it's better to be cautious rage cash will be far more selective in taking new opportunities so these red zones are pretty much when the market is below it's 20 20 EMA again as I say I use the 21 EMA on my on my charts they are pretty much of a much less guys and then the green zones are to indicate when the price is basically above the 21 EMA so IE the market is trending up on shorting I find it more difficult to play the short side because of that I do not often show or a much less aggressive in shorting stocks on margin as mentioned above if the QQQ EMA if below so if price on the QQQ em to if price is below it's if if I said that really really badly didn't I I'm even going to keep it I'm not going to edit it out so if the trouble queues is trending below it's 20 EMA we got there didn't we we are in a lesson Ideal Market margin is to be used when progress is being made and the stars are aligned so say margin what Oliver is basically saying when the market is trending up and you're making a lot of progress and breakouts are working on Big Winners the next big winners are found during Corrections they are found by screening for stocks that hold up better than the market so this is the relative strength point we're going to come on to a little bit later on one of the main reasons not the short stocks is because it may distract you from uncovering the next big limit so here you can see Oliver is primarily and I would say yeah just primarily focused on trading the long side and does not do much shorting because he thinks it's much harder and he also thinks it may psychologically distract him from trying to find the biggest winners it's very difficult to be shorting stocks and looking for big winners at the same time psychologically maybe some of you are psychological Geniuses and you can do it absolutely crack on so can you spot the setups for TTD so I've got a couple of quizzes now we're going to start testing your knowledge and then once we've done this bit we're really going to start getting into the Weeds on various other parts of the process so can you locate the wedge pot EMA crossback and the base and break bonus what can slim chart pattern do you see three two one here we go there you go so here we have the wedge pop reclaims the 10 EMA here it's a very bullish bar ideally it would have got above the 21 EMA as well but certainly in here this is then your wedge pop in here but here the wedge pot then you have your EMA crossback which is the first retest of pretty much the 1021 EMAs after the wedge pot and then the kind of traditional Basin break comes here within the context of the handle until you have your EMA support you have your ShakeOut before the bass and break the ShakeOut gap down reversal bars are really really really good to see quote by Oliver I think if you use my price Oracle you can often get in before the handle so talking about the cup and handle the bottom of the cup is usually a wedge pot as you can see here and the handle is usually in the form of a bass and brakes again this always contextualizing the market so now we've got net cloudflare loaded up can you can you locate the wedge pot the EMA crossback EMA crossback and the short bull Flags there's three things to try and get on this one ready three two one there we go so here's the wedge pop see how it reclaims at 10 21 EMA reclaims all the key moving averages here is the EMA crossback so see how it finds then support on the 10 email for the first time after the wedge bot and here is the bull flag so I was not joking earlier on when I said Oliver will trade three-day ball Flags there is one there but there's no air really from the Tenny met see how it's not kind of uh what's a good example it's not it's not like up here see how here there's kind of air from the tanime I.E distance from the 10i May well this is pretty close to attenuator they've got to be pretty close for Oliver to trade these short-term patterns to the 10 EMA so these are Oliver's three favorite setups that I'm now going to start going into so Oliver's favorite setups to trade is the post earnings per share flag so that is basically when there has been a gap up on the earnings and then it builds a flag got some examples the descending Channel and wedge so he treats those as the same they are usually wedge pops which is if we said at the at the beginning of the presentation is quote that there is the money pattern for him and then also you've probably heard of the wick play so this is the post EPS flag base let's take a look at it so we've got Asana loaded up here so note the context this is building An Almighty base in my mind it's still a little bit kind of wide and loose up here but you get this earnings move up and then it starts to build this flag so this orange Zone in here this is what we are focused on here you can see the earnings bar coming through it so I'll read the quotes out to you and then we're going to start getting more into the entry tactics now okay so we're now thinking about the context of of the market via the by the cycle of price action so we're thinking about wedge pops we're thinking about EMA crossbacks we're thinking about Basin breaks we're then thinking about continuation type balance both flags and ball pennants and now we're starting to get into the weeds in terms of Entry tactics and then we're going to get into initial stops as well so this is something a setup I preferred more than the earnings Gap and get so Oliver would rather trade this than just buying it on on the earnings so he does do the Bible Bible Gap up which is kind of a William O'Neill um William O'Neill disciples point in there in their book Dr K and Jill Morales if you want to go and read about that because all of a sudden he prefers the post earnings per share flag base I haven't spoken about the Bible Gap up I'm going to talk about this setup instead but he does play the earnings Gap UPS as well but I thought because he said he prefers this I would talk about this setup more so than just a Bible Gap up on the um on the earnings this setup may be my favorite pattern to trade that's why I'm including it right it's not uncommon for me to buy day one being the earnings Gap up get stopped out and then re-engage on this pattern I love this pattern so when we're looking at Asana here this quote links to this you could start buying this into the moving averages so see here you get the earnings Gap up and then it pulls back down near the 10 EMA that's where you could be looking for your reversal extension that I showed you on Nvidia and on at the beginning of this video add some more through this breakout so you see how you get this little downwards trend line coming through here and it starts taking out these Heights actually then an inside bar and starts taking it out so Oliver's then saying add some there and then some more through the pivot high so basically as it takes out the high of the earnings that's nice because you buy in two to three spots and raising your stop loss so each time he's then buying if he's starting here then he's adding here and he's adding here as he's adding he's raising his stop loss up they have lost some of you there in as we go into the control and mitigate section we're going to be going through these examples of the entry and then raising the stop loss up okay so then you're increasing your position size but you're not increasing your risk we'll talk about that very thoroughly a little bit later on this here is a descending Channel outside of the post-eps flag I think this might be my favorite pattern this is a multi-week pattern of lower of lower highs and lower lows on the daily chart what's key is towards the end of the pattern you'll start to see the price action tighten and at some point you'll see some sort of structural high alert so hit see here with Nvidia price actually gaps down and reverses on this bar and it puts in this structural highlight and then the wedge pop comes through so the higher low it's a change of character this descending Channel nearly always lines up with a wedge pop oftentimes there'll be six touch points so one two three four five six so oftentimes you will see six touch points with a descending Channel basically three on the top three on the bottom as well and then the wedge pot and as we know Oliver like wedge pops and he also says unfill gaps are a sign of shrap so you actually get an unfilled Gap here an unfilled Gap here as well and then you actually get a little kind of unfilled Gap in here I do but certainly more pronounces this first one and the second one I'm Phil gapped or assignation especially if it's a stock like an Nvidia or an AMD so on and so forth it's a sign that institutions are stepping stepping in and buying it and then you can see various bull flag bull flag bull flag and then the exhaustion extension up here so Oliver will buy these much shorter bull Flags here you can see this is what four five day ball flag this is a four five day ball flag this is a three-day ball flag so he will buy those bull Flags in the kind of TMO true market leader type stock in the context of an uptrend which is extremely aggressive not waiting for the longer term basis he's very active in his trading he's sitting there in front of the screen if you cannot sit there in front of the screen I think you'll find it hard to implement many of his strategies next one is the descending wedge very similar to the descending channel so it's similar to the descending Channel but the pattern converges more the the pattern has lower highs and lower lows but the lower lows become less pronounced to the downside so you see how it's making lower lows but it's not making as aggressive kind of lower lows as in Nvidia was it's price is basically finding it harder to go to the downside and then at the bottom these lows here you're looking for evidence ideally that large operators are stepping up and trying to buy and the two thing large operators will cry above everything else is perceived value and liquidity okay they're the ones that create the lower highs or yeah the lower highs within within the bay so be on the lookout for these ShakeOut demand Tails where prices going down in the session them being bought up you could also get a gap down reversal bar so you see on Nvidia here the pry closes here what's that around about 140 and then it gaps down on the open to around about 105 135 the open is the low of the day and then it pushes up that there is an immediate sign of demand it must be on the open it's reversing and turning around it's a really good so check out the martells gap down reversal bars really really really good to see and then here we'll start talking about pyramiding a little bit so this would be the entry point here as it breaks the descending trend line like this you can see one touch two touch three touch full touch coming through in here so this would be the entry but then it also creates this pivot in here nice checkout demattail the day before and starts taking it out so here you can pyramid and move the initial stop to cost Break Even twice the position with the same principal rest we're going to talk about that in the control and mitigate um mitigate part of this presentation next one here is AMD so this is outside reversals so remember when I said at the start there's lots of different various entry techniques guess what there's lots of different various entry techniques so this one here is an outside reversal this is a great way to buy pullbacks into key moving averages want to see price trade down and then back through the prior day's low suggested to not do this if price is extended from the key moving averages so this is when prices say broken out of the base is in the context of an uptrend and pulls down to a key moving average so you see here on the left hand chart we're going to be zooming into it over here so what does price do well price moves up here and then it starts pulling back as you start trying to form this like ball flag pattern but then you see the pry closes here so this bar here which is the entry bar it gaps down so the prior closes here at around about 120 then it gaps down and this open here maybe but say 119 or so so it gaps down moves down and then as it starts turning back up during the session the entry is as it takes out the prior day's low with a stop underneath the low of the entry Candlestick in this instance here the stop would go at 118 13 probably a penny below that so one eighteen twelve which is Circa one and a half percent risk and the entry is as it takes out the prior day's low so it gaps down but it's got to be around the 10 EMA and all the 20 EMA so there can't be air you'd like to see it kind of pulling down and then reverse it some people also call this an oops reversal type of Entry as as well but that's a way to try and get on the stock that is in a powerful uptrend and potentially you didn't get into it in the base or you'd like to add to your position next one here reversal candlesticks so I just want to emphasize the point that large operators be aware of the game so you will see Shake out Tomatoes but you'll also see I call them gap down reversal bars and actually they're a really constructive sign especially if they're around key moving averages so you see this bar here the pry closer is going to be up here at just over kind of 84.85 and then it gaps down opens around about 80 onto the 21 EMA and then reverses and then again it gaps down and reverses here it gaps down and reverses that is kind of classic games that you will see large operators play large operators also are most active in the first hour and last hour of the session in particular the first hour of the session so pay attention what we're doing is these three bars here I've pointed to we've pointed to the blue the blue arrows are pointing to the first candlesticks okay so if you look here we're looking at this third and final one here the pry closes up here then what does price do it gaps down on the open but by the end of that bar it's reversed higher and look at the volume coming through does that look like large operators are Distributing or trying to accumulate interesting so be aware of the gap down reversal bars to shake out demand tails that you can see in bases before pivots form they're really good to see this is then eBay just to give you another visual example so be aware in bases of shake out to Montel see how this holds the 21 EMA remember what we said earlier about reverse extensions potentially going down to a lower time frame here you get a gap down reversal bar and strong recovery and then here you get a check out demand tail then it moves and then you get your tight pivot here then this would actually then be a wedge pot back through this is eBay back in 1998 and 1999 so be aware of the ShakeOut Tomatoes The Gap down reversal bars in developing bases and around key moving averages inside bars so Oliver gives a significant amount of weight to inside bars and you're going to learn about the wick play as well so when a bar trades inside the range of the previous Days bar it's a sign that volatility is Contracting Martin beanie had a significant influence on Oliver's Oliver's process as well as much as um William O'Neill to an extent as well inside bars can have even greater meaning if they take place on extremely light volume this is not this is a sign that only is volatility Contracting but trade I.E being supply has completely dried up in anticipation of a future move multiple inside bars can amplify this pattern so to an extent you just talk about a stop being too about being too tight for too long but a couple of inside bars in a row in the context of a developing base can be a very very good thing indeed so see here with novovax this is then a descending wedge type pattern here as well and you see how the lower lows are becoming less and less pronounced in this thought and see how it then find support around its 21 EMA tightens up in here good reaction to the earnings and then see how you get this tight inside bar here look how the volume dries out there's not much Supply and then it's a case as you're going to see in the optimizing profits he talks about using the Tenny mate and also the 21 EMA to ride the intermediate tantran as you said he's an intermediate term Trend following so inside bars number two I'm just going to show you a collection of inside bars with some quotes volume Drive proceeds move so see how you get the vcp action volatility contract see how I get this really tight inside bar the volume dries up and then the stock explodes out of the base another one here with Celsius here you actually get back to back inside bars so see how the price pulls back in so this is kind of a basin break this would hit would be a wedge pop coming down in here this would be a bit of an extension but also an EMA crossback and then it starts tightening back to back inside bars look how the volume dries up look at the relative 52 cars free tool on trading view search my name and you will find it and as Oliver says it love love love inside bars because it's a way to really manage your wrist so we'll come on to the wrist element as well I.E you're trying to take minimal risk and maximize the upside and then look how well the stock trended along its 10ime and it's 21 EMA hit 101 for it close below it's 21 day em may not bad right especially if your initial stop is underneath the low of that inside bar another one apps so see how the stock moves up here and you get a really good reaction to the earnings this would then be kind of an EMA cross back there's a little kind of wedge pop coming through in here but here is the quote-unquote Basin break so it's a bit more of kind of your conventional type chart pattern it's a bit of a flag type bottom forming over here I suppose you could say but see how it starts finding sport wet on its 21 day EMA and then it moves up and then you get another Basin break look how tight the stock gets in here it's another inside bar on the volume driver inside bar is really really really important cannot stress that enough here AMD this is it looks to be pretty much back to back inside bars in the context of a bass and Brake and what bar is this remember I was teaching it to you on apls there were three of them on that chart what bar is this gap down reversal bar price gaps down then reverses then it tightens up understand the games the large operators are playing shake out demand helps gap down reversal but it's really really really key this one hit another one see how it goes basically pretty much going inside inside nearly is a very tight range bar so tight tight price action invariably proceeds moves as all of a sudden look how the volume is drying up here so tightness and price going sideways with the volume is drying up is telling you what about supply and demand there isn't much Supply around if you're then buying a breakout guess what you don't want much to fly around before you buy the breakout why because then you can get some very explosive moves beforehand Overstock see how it basically goes tight tight tight pretty much inside bar inside bar look how the volume is drying up then the breakout and then look at the trend along the 10U mate and the 21 e makes as all of a set is an intermediate term Trend following so trying to ride the intermediate term Trend combining the 10U may and or 21 EMA but then looking for extensions as well is very key to his process we'll come on to that a little bit later on so quick place you've probably heard of this what on Earth is a whip play the trigger is through the high of the wick or the high of the inside bar I love this pattern I think it's awesome you only get a couple of you only get a couple of it you only get it a couple of times a year is often in the form of a little flag the best way it plays are When there's less volatility and tightening so if you look at Tesla here what is a whip player so you see Tesla this is a daily chart so see how you get this Wick here so a wick plate is an inside bar but it's even more of an inside bar if that basically makes sense so see how you get this Wick I call it a supply shoot but we can call it a wicket so the range of that is from 340 156 to the high there at 364.98 and then you see how you get this bar that trades within the range of the wick so from 3 41 56 to 364.98 see how it's trading within this range so it's an inside bar but it's an extremely tight inside bar then the entry is through the high of the wick bar the inside bar and or the high of the wick as um as well Oliver's preference from what I can understand is actually buying through the high of of the actual Wick bar so the inside bar itself so in this instance would be as it takes out the high here volatility Contracting volume drying up a good signs to see why because it's telling you Larry much to supply coming to the market which is good Nvidia here's another one so see the range of the whip coming through here so that is from 244 74 up to 250 90. see this and then price is trading so it's an inside bar but it's a really really tight inside bar even better on this Wick bar here it actually closes on the high of the bar that's kind of the subtlety then the entry is through the height and then the stop loss is underneath the low so you can create really asymmetric reset here's another one with zoom so price is moving up here it builds what chart pattern watch out button would you call this it is a bull pennant type pattern because it's actually making higher lows in the bass like this and then you see how you get this Wick so the wick is from 89.86 roughly to 91.93 and then you get this inside bar trading within the range of the wick that there is a wick play so the entry is through the high of the inside bar with the stop loss just underneath the load so really favorable responsible tricked when a stock closes off the highs of the day so this is talking about the wick place this is upst another one highs of the day on the previous session there is a wick play in The Daily bar if the stock gaps higher the next day it will often it will open potentially in the wick of that previous bar if the stock stays positive and the holds within the wick it is a sign of strength so here okay you can see here's the wick here's the inside bar so the entry is 206.47 I think that is through the high and then stop loss just underneath for that oftentimes when you drill down the actual Wick play bar so you take it from the daily chart to the one hour chart quite often times you can see really tight nice price action and on the one hour chart you can often see it consolidating this is my own anecdotal experience is 10 EMA 21 EMA and the purple line being the 50 SMA you can see price clustering around that really really nicely and nice and tight like this and look how the volume is drying up there just kind of a a little subtlety to be um bringing in then we've got one more whip play so this here is fastly so you get a positive reaction to the earnings where does it find support on the 10U mate where does it find sport 10ime 21 email or check out demander and then you see how you get this Wick play coming through in here look how the volume dries up this one is even better because you've got that larger causality there of this high tide flag pattern with a really positive reaction to the earnings and then you can see the breakout and then see how it Trends here and then this bar here would actually be your wedge drop in terms of Oliver's terminology so now we go into the concept of relative strength and we're going into kind of the market Smith charts as well remember they're the video sponsor if you're interested in a discounted trial there is a link in the comment section below so relative strength is extremely important and it was extremely important for William O'Neill who had a massive impact probably the biggest impact on Oliver's trading in terms of what are the types of stocks that he is looking to direct so some of the tax is going to be a little bit heavy but let me read them out to you because it's really important so quote from Oliver first then O'Neill a fundamental a fundamental truth in my trading is that I believe buying the strongest stocks on a relative basis will lead to the greatest future returns I want to allocate the money to new leaders that are outperforming the market as quickly as possible as William O'Neill said the number one market leader is not the largest company or the one with the most recognized brand name it's the one with the best quarterly and annual earnings growth return on Equity profit margins sales growth and price action so this is zoom here okay Zoom obviously was a very big winner in 2020 if you think about why it is fairly uh obvious we're all at home and we needed a way to communicate with each other suddenly there was a massive increase in demand for zoom's products and so people were buying their services their earnings went up what do you think happened to the share price but what's quite interesting is when zoom's earnings topped out they actually or the share price actually topped at the peak of the earning cycle when the earnings coming out on a year-over-year basis were quadruple digits interesting will come on to that but zoom's yearly earnings per share so EPS increases over 5 000 over two years so for here 2019 they reported for the year six cents but in 2021 they reported three dollars 34 cents that's a five thousand percent increase look at the move Zoom had it goes from basically sixty dollars to six hundred dollars really interesting and then you see here that the earnings that were coming out at the top here were 999 that's quadruple digits back to back and that's when the stock topped out so yes it's very important to look for the stocks that have huge earnings huge sales growth but this this is where the contextual framework comes in and thinking about extensions so the various extensions first extension second extension the third extension how many bases have you seen in the context of the upcycle understanding phase one into phase two uptrend phase three distributional tops and then price getting a little bit more wide and loose bit more volatile high volume indicates more so distribution so that kind of framework at the beginning kind of very similar to the Wyckoff price cycle or stand Weinstein stage analysis is really good for thinking about things like growth stocks now what I want to do is just show you some examples of relative shaft so in 2002 2003 well in 2003 my understanding is William O'Neill basically owned One stock and it was eBay and if you think about eBay from a canceling um perspective and you think about the technical strength and the relative strength you can kind of see why as well right so you see eBay here I'm only going to go in depth or um for for eBay I may do a couple of others but you see how eBay actually makes its low here in late in late 2000 okay it actually bottomed in 2000 whereas what does the market do the market continues making a series of lower lows what does eBay do eBay puts in a series of higher lows so eBay is making higher low structure on the weekly chart while the NASDAQ Composite is putting in lower loads which is stronger technically it's eBay isn't it it's putting in higher loads you can see this in the RS line again it's free to use search my name on trading view the indicators you will find it it's really really helpful you can just pin it to the bottom of your charts like this you've got blue dots for 52-week highs and red dots for 52 weeks so leaders will often bottom first but then they will also sorry leaders will often top first but they'll also bottom first as well then it starts tightening up here so just as the market starts coming off of its lows that's when eBay starts ripping that is the proverbial basketball being held underneath water by the market okay the stock being the basketball the market being the kind of water crushing it down like this so when that weight when that pressure is lifted or does the stock do pops up starts trending so focus on the relative strap the really strong ones here's Tesla we spoke about this holding the 200 so well this is the 200 but it's the 40 week on this charts these are weekly charts and then you get this cup and handles this would then be kind of the base and break coming through in here but look at the relative strength of of Tesla versus the market the market is trending below all these key moving averages Tesla was able to hold its 40 week which is its 200 SMA then we take a look at phm this is back in 1980s so see how the market is actually putting in a lower low after the stock breaks out and the stock goes up 800 look at the 52e cards relative relative relative Amgen had some fantastic moves look at it in the 1990s Amgen is just trending up here making higher highs and higher lows while the index is making lower lows this is an extreme example of relative strength another one for Amgen see how it's building its pivot here above all the key moving averages whereas the index is below three out of four of the key moving averages this is the relative strength Point here again this is nxgn stock you've probably never heard of but look what he was doing higher high high low higher high high low high high lows tightening up in here what's the index doing lower lows lower highs lower lows lower highs lower lows lower highs this is the relative sharp Point focus on the relative shamp The Tick the can slim criteria the importance of volume so we're looking at this this um falsely try again with the wick play and then the breakout thereafter if you see enormous relative volume volume relative to the typical amount of trading in the stock it's a sign of institutional buyer I call it heavy volume signature bull snorts as a smaller investor we want to find the stocks institutions of building positions in with the goal of riding their coattails for large gains therefore when we see huge volume it's assigned to pay attention and search for a low risk entry so oftentimes you can see the huge volume a bull snow as Oliver calls it around the earnings as well he also has another very good saying that Gap up means the street is caught off guard I'll repeat that Gap up means the street is caught off guard so oftentimes around earnings suddenly the company could have a blowout earnings report and the street is caught off guard the analysts were expecting this and suddenly this came in and it's a massively exceeded their expectations so now suddenly institutions are getting in there trying to build positions because something has fundamentally changed with this company and usually if a company has one significantly it usually means subsequent significant beats as um as well so you've seen these kind of post earnings bases build are really really good set and there's the whip play coming through in there so the big theme as well so Oliver will think about themes they'll try and understand what is the theme in the market or various themes in the market so many long-term holders are buying a vision of the future think about Tesla here as well in the vision if the vision of the future is powerful enough you'll have more people interested in buying the stocks having a powerful story can Inspire conviction to hold the stock through pullbacks and uptrend I think Oliver there is referring to both himself but also to others as um others as well so if you think about some of the themes of late you have EV and green NG Tesla um the the at-home gym being Peloton work from home zooms e-commerce Etsy pen Shopify Cloud Edge fastly net um gig workers Fiverr and upwork coming through as well so try and identify what are potentially the three to five themes going on in the market and three to five groups as well at any one time in the market my experiences is usually somewhere between three to five groups and or themes that are leading so okay what are the leading groups what are the leading themes and then what are the leading stocks within those thinking about it more so from a canceling perspective so I.E liquidity but they're massive earnings massive sales massive estimates coming through have you seen really positive reactions to earnings like this as a stock basing is it showing relative sham so on and so forth right so sales growth many studies show that sales growth is actually the greatest predictor of future stock appreciation Revenue growth is a key metric for finding big leaders so this was on and actually it had earnings come out which were again that's why you really want to focus on the um on the earnings so the prior earnings report fantastic reaction but the most recent one at the time of filming this is May 2023 it reported around about around about a week or so ago it reported huge earnings huge sales and the stock got absolutely absolutely walloped so there is no guarantee that oh if you find a company of big earnings and big sales it's just going to keep going and going going to the Moon absolutely absolutely not but here you can see on at the time of taking a print screen huge sale is coming through huge earnings coming through look at the estimates coming through guidance up as well so looking for the sales growth and what Oliver's saying here is actually putting a greater weight on high sales growth relative to high earnings growth coming through to my kind of interpretation of that but earnings growth is extremely important I'm not discounting that at all so this one hit there's a reason why companies get to the size of Microsoft Amazon Apple and Google there's Warren Buffett quote and I think it's something like in the short term the stock market is a voting machine in the long term it's a weighing machine and what does Buffett mean by weighing machine he means it's earnings in in the end the company will be judged by its owning sure you can get some kind of voting that suddenly and this is kind of Oliver's point about themes and stuff like this people can get kind of get a little bit carried away with themselves and things like this but at the end of the day if the earnings are not there the company is not going to grow into a trillion dollar market Gap okay the Microsoft's the Amazons the apples the Googles of the um of the world Tesla at one point as um as well as over a trillion dollar market cap but here you go if you look at Microsoft and you look at the last eight years in terms of the earnings per share see how it's just going up institutions absolutely love this two dollars three dollars four dollars five dollars seven dollars nine dollars eleven dollars estimates are sales are growing and again Microsoft is now absolutely massive but sales are still wearing steadily for a company the size of this as well earnings generally are growing as well that is how a stock gets to the size of a Microsoft and Amazon and Apple or Google they need the earnings they're in the consistency and the earnings they're over many many years many years many decades to get to that size so this is then an interesting one so this is Monster Beverage so this is just the chart to kind of illustrate and try and bring through a couple of things together of the power of both technicals but then also bringing in the fundamentals as well so if you can find a stock that is setting up technically so monster beverage here this is actually on the monthly chart Oliver does does put a significant amount of weight on the monthly chart I haven't included too many here this is the only monthly chart you're going to see in this in this presentation for brevity say but see how it starts building the high lows you get the ShakeOut Tomatoes then you get the extreme tightness remember what he said about price where volatility dries up potentially invariably proceeds moves so here you get the volatility drop on the monthly chart and then the exposure but take a look at the earnings grow year over year the sales growth year of year and the margins accelerate as well so you have a company growing its earnings itself significantly and also significantly improving their net profit margins and you have a really good technical setup here and look at all the 52e cards so if you can line up the technicals plus the fundamentals in terms of earnings sales and improving margins in a very strong theme as well you know I'm a very strong situation on your hand trade what you know so Peter Lynch also had a big impact on Oliver's strategy so I'm a huge believer in the pin in the Peter Lynch buy what you know approach if you can find a strong stock with big earnings and sales relative strength a strong new theme and you understand it that is the ultimate combination of a top idea so here you can see this is dualinga so it's currently ranked in the number one number one group the company's gone from losing money to expect it to being profitable in 2023 little bug bear here is 2024. um the earnings estimates are actually down over in terms of versus 2023 but the guidance is up but look at the consistent sales coming through here so this is a Millions going from 58 million to 81 million to 96 million to 115 million high quality funds in there high RS rating relatively new in terms of its IPO and past the lockout period as well building a big phase one base and now this kind of phase two continuation type base potentially um building there as well Oliver's looking more so for high beta and liquid stocks and that many of you will be familiar with average daily range percentages as well so you can look for a high ADR stock you can also look at the beta of a stock as well so if you think about beta of this if this here says one it basically means if the S P 500 moves 10 in either direction the stock will move 10 in either direction if the beta was two if the stock went down 10 or up 10 the the stock would be the move would be double that so if the market goes down 10 is reasonable to expect the stock will go down 20 rather than 10 and if the market went up 10 it'd be reasonable to expect the stock went up 20 so it's basically two times so ideally Oliver is looking for high beta so stocks that are going to move and they're also liquid as well so I prefer to drink very liquid stocks as they have more defined price movements getting in and out of a stock with very little slippage is important usually I prefer stocks that trade 1 million shares per day or more but it's more about how the stocks move as price action should feel uniform I get a feel that a stock is acting correctly and if it isn't then I don't trade it you want higher beta stock so that when you do catch on to a strong Trend it has the potential to move quickly in a short period of time so if we take a look here this is ACLS is the ticker it's a semiconductor stock good sales good earnings good estimates for going so decent beta as well RS rating very strong finding support has kind of undercut and reclaimed its 10 week being this red line here some high quality funds are in there as um as well mid cap name kind of 4.1 billion billion dollars and not the most liquid of socks but certainly takes a lot of the can slim criteria was a good stock to show and into Roe return react 30 O'Neill put a significant emphasis on that earnings per share growth 41 over the last three to five years and not too many shares outstanding as well 30 33 million so it does mean the float can turn over a little bit quicker avoid penny stocks you can make a ton of money in penny stocks if you are right you can also lose a lot if you are wrong my number one goal is to protect my principal capital I do not trade stocks under ten dollars and the stocks I usually trade are well over 50 per share many institutions have rules that do not allow them to buy stocks below a certain share price or market cap and I want institutional sponsorships I thought this one here was of zom was um a fairly good one see this is kind of the life of a penny stock isn't it you can see absolute huge moves here and then just nothing nothing so kind of just extremely volatile very liquid very erratic so the price movements are not uniform like you would see in say the zooms the pelotons the shopifies the Teslas the amds the nvidias of the world um that um varsities of the world as well that all of it is more so looking to direct to avoid penny stocks I think it made that bit they're pretty clear so now we're moving into a different section which is also going to bring in the identify part but we're going into the control and mitigate um slides as well so this this one here is going to be a little bit tax heavy this slide but then we're going to go and start getting into some examples so you really start understanding how is Oliver thinking about controlling risk and mitigating risk so I'm a Trader and my goal I don't know why I did that in capitals is to control the risk reward equation stop losses allow you to control the risk reward equation there are so all of the things about stop losses that there are three different types of stop losses you have your initial stop loss which determine initial principal risk and position size you have your Rising stop loss which used to protect open profits and then you have your final stop loss which is exiting the position potentially after the stock has been trending stop losses move up but never doubt stop losses move up but never well remember that if your reason for buying is no longer there you shouldn't be in a position anymore I've got a slide on a breakout so a stock that's breaking out of the base on earnings and then pulls back pulls in to emphasize that point work out your initial max pain stop usually below the pivot and or key moving averages then the stop should be moved to the breakout day low when it is a good breakout bar and or action through the pivot then we want to try and get our stop to break even as quickly as we can without choking that position off you do need to give your stocks a bit of room you don't want to move your stops to break even too quickly or you might lose your position in general I'm comfortable using tighter stops I would generally say my stops are between one to three percent there are times when I'm taking a five percent stop but I'm likely taking a smaller position one to three percent initial stop loss is fairly accurate for about ninety percent of my trade most of my winners work right from the starts remember Oliver in essence is a momentum breakout Trader then trying to write the intermediate term Trend so he's trying to enter when he thinks the momentum is coming in so what he's saying is most of my employers they're just going immediately when I when he is entering through the pivot it's not uncommon for me to take a couple of paper stocks so stopped out then get it right when he's trying to get positioned in a stock so let's start talking about a couple of variations so as soon as we can within reason we want to get our stop to break even to protect our principle so imagine here we get this kind of BCP uh flag type Banner building here so the pivot's gonna be at 50 so it goes up pulls back down to 40 bounces puts in a higher low here bounces back up to fifty dollars pulls back down puts in this low at 48 so all of his entry can be in here at fifty dollars with a Max paying stop at 48 so two dollars underneath the lower this final contraction and imagine if that tied in would say the Tenny mate as well but as it starts breaking up potentially you can get a really nice breakout day then Oliver would move his stop to the lower the breakout day that may also coincide um with the Breakeven level it depends let me show you a couple of examples so here when a stock puts in a strong breakout especially if there is heavy volume the stop should be put at the low of the day if the low of that day is Right violated it's a sign that sellers have overpowered heavy volume that cause the initial breaker so imagine on this one here again see how it starts tightening up you get kind of one contraction two contraction and this little low pivot look how the volume dries up and then it starts moving through here which is also a wedge pop you got it so as this starts breaking out what Oliver's then saying is Well if I had my initial stop say down here there's now no point I can actually just move it to the breakout load of the day because it shouldn't fail it's such a powerful breakout if it fails and turns around something is inherently wrong with this stock so what Olive is saying is his initial stop maybe say here or in this instance here this is nice because you get this inside bar and it's a it's a flag type pattern here see it just surfs just rides to 10 email look how the volume dries up on this bar here as well with this inside bar then it goes so if his initial stop would say underneath the low of the inside bar or maybe it was just underneath the lower the prior two days when it starts going he's then moving his stop to break even sorry the lower the breakout lower the breakout day and then when it starts kind of following through assuming it's prudent that's when he's then moving up to a roundabout break even so he's initially controlling the wrist but then his wrist mitigation is actually moving his stop up as well the first place is usually low of the breakout day then it would be the break-even point hopefully that's making sense and then there's a good one here high volume breakout so if his initial stop would say here underneath the Tenny May well when this starts going he if he was buying through this pivot here and then he moves his stop here to the lower the breakout days stops not quite at break even maybe it's kind of a I don't know dollar away or something like that sent to kind of two percent away but then as it starts moving up that's when he could go lower the breakout date and then pushing up there got some examples hopefully it'll make sense a little bit later so control thinking about wrist versus one so we've determined the setup does the potential upside justify the risk if I have to take a 10 stop to make 20 that's not a trade I have any interest in but if I can think I can risk three percent to make 30 40 50 and maybe even 100 that's a great opportunity at a minimum I think you should be targeting potential reward to risk of three to five to one so what he's saying there is if we look at this example here what he's saying is risking one unit but how many units can we potentially make from a trade like this well in this instance here say before it closes below whatever moving average this is one two three four five six seven eight times the initial risk so he's looking for where he can take minimal risk but have lots and lots of upside and then the optimizing profits part that we're going to come into a little bit later helped him stay in the trend to optimize the profits as the name implies so small losses big ones small losses big Winners as we did on the first on the first way for me I'll have a couple of Trades per year which make my year that can be 20 30 are to be frank many of my other trades are kind of mush Break Even This is the 80 20 principle so what he's saying there is a couple of Trades per year actually make the vast majority of his profits for the year so this is also the patience element of waiting for the bigger one to come around and then managing it correctly as well okay so he what he's saying here is he'll have a couple of Trades per year where they basically make his trip makers year where he has huge multiples of his initial risk and he can potentially pyramid into them we're going to talk about pyramiditing pyramiding a little bit later so take small losses and though sometimes it takes multiple attempts to get on board of stock that's the paper cut point that we did a couple of slides ago next slide so this is thinking about control and mitigate so entering and exiting this one is a little bit text heavy but it really explains how Oliver goes about pyramiding so a key to risk management is buying in pieces and selling in pieces overall the goal is to tighten your stops as your position size increases you use initial profits to increase your size while maintaining or even reducing the principle actually print the public Capital At Risk by raising stops this is a miniveini point about using profits to finance future risk so I'll talk about this example in a minute because the text is here to describe it I'm really good at adding to positions in the sense of I'm not afraid to add I don't have the highest hit rate but when I get a stock right I usually get it right I usually get it pretty right so I.E a big big winner so thinking about big big multiples coming in I would say I can make the majority of my money on a whole year on like three to five trades when I get this right this is my realege remember kind of the 80 20 principle but kind of maybe kind of 9010 principle here that it's it's a couple of Trades a year kind of a handful that really make Oliver's year for example let's say you bought 100 shares at 50 so here we're doing this example so you buy a hundred shares at fifty dollars with a stop with a two dollar stop and 200 arrest so here is the stop loss two dollar stop loss of 48. the stock advances to 55 so that pair advances to 55 pulls back to 53 and presents a new buy area at 55 so this is kind of imagine that this was say like a flag or a little continuation type type pattern here you add an additional 100 shares at 55 okay in here and adjust the stop to 53 on the entire position so moving the stop loss where we bought the first batch of shares up here they're actually locking in some profit I will just read the whole thing then I'll go for it so you add an additional 100 shares at 55 and adjust the stop to 53 on the entire position your total risk is actually a hundred dollar profit in that you are using the three dollar profit from the initial entry assuming you get stopped out at 53 to pay for the additional 100 shares of rest despite having double the position size and double the potential profit if the trade works you have less principal risk when these type of scenarios play out in your favor you have the opportunity to have a large position that can really move the account if the trade works so here's the maps on this example that we're doing here it's your original 100 shares bought at fifty dollars and then the stop loss at 53 means you're locking in 300 of profit you're buying an additional 100 shares at fifty five dollars here with a stop loss at 53 so they would have two dollars of risk associated per share which is 200 risk so you're 300 locked in profit minus your 200 new risk equals a hundred dollar profit whilst doubling your position size this is a really key point to understand how Oliver is pyramiding in but he's pyramiding in higher adjusting his stop loss up so he's increasing his position size and getting concentrated on what he thinks are kind of the tml type stocks and we're gonna go on to portfolio Construction in a little bit but this is the pyramiding point and he talks about having top ideas where he's trying to get the bulk of his account in a couple of stocks especially when on margin so we'll do a couple of those um in terms of thinking about position sizing and how he manages his accounts a little bit later on how many how much of his Capital he's he's allocating to different kind of ideas in his account so adding and mitigating Rissa we're going to do this one here so see how it's breaking out it's fairly wide and looser space okay but it Powers up here and then it starts building this flag type pattern here and consolidating underneath this downwards Trend like that you get three touch points on here so it's a bit of a kind of descending Channel very volatile descending wedge type pattern but see how it Powers up here and then it goes back to back inside bars so the entry could be through the high of this inside bar here with the initial stop loss placed here then it powers out and it creates another little pivot here here's a it's nearly an inside bar it's nearly kind of back to back inside bars but it tightens look how the volume dries up so the ad could then be here but then you're pushing up your stop-loss in the entire position underneath these loads so you're then locking in a profit on your on your previous shares or your initial shares to then Finance the risk on your next shares you're actually kind of backstopping a profit in here so remember this example here where it kind of breaks out pulls back and then you see a higher pivot so you can move your stop loss up but then increase your position size see this how it breaks out pulls back and then goes that there is how that is basically playing out in a visual example like that hopefully it makes sense here's thinking about one so as the stock is moving High during its Trend the stop is adjusted higher at key points these key points can be reconfirmation so basically where it's making the trend is making higher highs and higher lows ignite bars which we'll talk about an important key moving averages and or stop losses so what I've just tried to do here is show you an example of Tesla how Oliver is thinking about moving his stop loss up so we're talking a little bit about the optimizing profits here as well but I'll give you kind of guidelines on that and quotes as we get to that section so imagine that the initial entry is hit okay the entry is here at this breakout and let's say the initial stop loss is placed there okay I and then we're going to talk about the R's and then the f as well for the Stop losses so the entry is here and I is going to be our initial stop down here underneath this pivot and let's say it's underneath the tanium as well be in the black light okay as the stock starts powering out here well we may want to move our stop to say the lower the breakout day so after the first couple of days we could move it to say the lower the breakout there so we're mitigating Risk by pushing our stop loss up and reducing the risk we got on the drain then it starts getting our hits and then we probably moved it to around about breaking so imagine there's like another an r and an R to an R 2.5 in here right and then there's an ad point it kind of pulls down for a couple of days really tight bar so imagine if there's an ad Point here and it starts powering out this is also breakout reconfirmation so it's powering out I call this bullish synchronistic widespread candle six opens on the low pushes up look at the volume coming through as well really really really good really good to see it's also a bit of an ignite bar as well now ignite bars are basically widespread candlesticks on high relative volume I call them but Oliver calls and ignite bars they're basically the same things it's where there's a lot of demand moving into the stock and very positive price action and it's really standing out like a sore thumb it's indicating there is a lot of demand for this stock NOW the loads of those kind of ignite bars should not be lost so here as it starts powering her and making a high high this is where the stop loss could be moved from R2 to R3 and you've also added to the position then it starts powering up then you get another ignite bar so you wouldn't want to see the lows of that bar taken out great move the stop loss to the lower the bar then it builds this little flag type pattern which is also what it's also a wick play isn't it see the wick play coming through in here so then there's an ad through here so you could then push your stop-loss up even higher underneath say the lows in here and then you get another ignite bus and you can move it from R4 to R5 but to be fair you probably moved it up in here maybe underneath these lows and then as it starts rolling back over you get a pullback to the Tenny maze then you could adjust your stop loss here on this day here there was a bit of news as well for those of you that know Tesla Elon Musk actually did a poll about should he sell I think he was looking to sell around about five billion dollars of his um of his Tesla stock to pay a to pay a rather big tax bill um and then here is where Elon started selling so there was a little bit of news around here um as well but price obviously extended here but we'll talk about exhaustion extensions and optimizing the um profits I'm going to jump a little bit ahead just to make the point here for me I think in terms of optimizing profits and you guys can go and study this and we're gonna do a deliberate practice session at the end of this video for me instead of trying to guess where the top of the stock is I've just found it's better to go lower the bar Lower the bar Lower the bar for me I think it's a much more consistent and rules-based strategy Oliver doesn't talk about that but for me from studying tens of thousands of these I think lower the bar Lower the bar Lower the bar is much more effective than randomly kind of thinking you know I think it's extended here I'm going to sell well you may think it's extended here and then you missed out on another kind of hundred dollars worth of upside but if you just went if you start thinking it gets extended lower the bar Lower the bar Lower the bar Lower the bar Lower the bar Lower the bar Lower the bar Lower the bar Lower the bar you're taking out up here somewhere so for me I just think the most consistent and rules-based approach and we'll talk about this in the optimizing profits phase and those different examples is lower the day lower the day lower the day lower the bar Lower the bar Lower the bar that's just for me it'll kind of side point there so here we go this one is a little bit tax heavy isn't it so has to be though because we're talking about position sizing and also portfolio construction so the way my account is put together is not always the exact same but over time I generally hold 8 to 12 names and you should have a very good idea of what those 8 to 12 names are now Oliver splits those into thinking about different kind of ideas he has and then waiting them differently as well so top idea I usually have two to three top ideas where I know the story Phil the theme is excellent and the name is near the beginning of its Trend I want these ideas to be breaking out of larger basing patterns and to show the volume from the get-go for a sustained move so basically breaking out of a really large phase one base showing relative strength taking all the canceling criteria then he has a conviction core idea a conviction core idea is a high conviction name that fits all the criteria of my top ideas but doesn't quite fit into the absolute best breed column it might fit into positions four through seven in my account volatile conviction core idea this is a conviction core idea but the stock may have higher volatility could potentially be less liquid as well so I want to position size down to account for that if it still fits in the position it it still fits in the position the four through seven bucket but has a smaller account waiting I judge the volatility based on how the stock trades and my interpretation of its movement some people use things like average true range ATR as a measure measure of volatility I'm not that scientific cornet this is the name I want to have my top seven to eight Holdings and plan to hold it for a sustained move but for some reason it is second tier relative to my top Holdings swing positions stocks and uptrends not coming out of a large basing pattern I may take positions on shorter patterns such as the bull Flags pullbacks the moving averages bull pennants so some of those much shorter patterns we've been looking at in the context of an uptrend to like three four day pullbacks maybe five day pullback into key moving averages so it could be outside reversals could be as old as saying there the flag type patterns as well um could could be a whip play as well given the short pattern I expect a shorter term trade and plan to book the profits on these trades more quickly overall portfolio trade overall portfolio approach I trade with margin and I like to get my top um to I like to top weight my top three to seven ideas and diversify the back of my portfolio as I start to put on margin additionally I view my top Holdings as higher conviction plays that I'm going to be more interested in holding through pullbacks the back half of my portfolio are my cash flow names where I want to be more aggressive in Booking profits on extensions from the 10 email to keep the account moving so here you can see I won't read it all out to you you've probably been reading this okay but this is giving you an idea of a margin approach and a non-margin approach and how much Oliver is looking to put in so this is not risk okay this is not his kind of risk as we touched on earlier he's risking somewhere between a percent and three percent of his of his uh total account on sorry not on the side effects he is risking between a percent and three percent in terms of a stop loss okay say what I'm saying here in terms of the top idea he's not risking 25 of his account on his top idea stock okay he's got a stop loss somewhere in the region of one percent to three percent still most likely on that top idea stock okay so this is not how much risk he's not risking 35 percent of his account and that's all I did he will still be going in with a tight initial stop but somewhere between one percent and three percent so keeping it really really tight hopefully that made sense I explained that look point there a little bit badly but hopefully I kind of uh pieced it together a little bit there so control this is um this is an interesting takeaway so is your reason for buying still valid so if Oliver's buying a breakout and the Stock's not breaking out well his reason is invalid it's not valid so this is one that I could find here it's a relatively recent one osur is the ticket so you can see it's building it's kind of a flat base type pattern maybe it says vcp but I'd say it's a kind of the office box isn't it just kind of riding the 10 and 21 EMA and then it's an earnings-based breakout and that was a big beat you can see the surprise coming through on the earnings you can see the surprise on the revenue as well so imagine if you were buying this breakout coming through in here well as and imagine if your initial stop would say underneath to lower this bar so think about what were you talking about with the controlling risk and risk mitigation so if you're going to buy say here through this trend line then let's just say that's 7.10 and you're going to place a stop at 6.80 so around about 30 cents well as it starts breaking out and you can see the supply price is going up on that day where you could move your stop from 680 to the low of the breakout bar so just over kind of 7.705 something like that because your expectation is this should just now go it's starting to go it's on the earnings this is the Catalyst it should just power out par so why do I need to keep my stop loss down here I don't we can mitigate risk we can move it up and then when this bar comes obviously you'd then be stopped out here but this is a point of the kind of initial Max Payne stock but then raising your stops so break out lower the day makes sense because it's now going on the um earnings so if you buy a stock for a specific reason and that reason is no longer true then your reason for being in the trade is now invalid basically if you if you put a stock for a if you buy a stock for a specific reason that should say you should sell if that reason is violated so if you're buying an earnings-based breakout and then it's not breaking out on earnings it's invalid what's Oliver telling you to do exit so reconfirming price strength now I've drawn this schematic perfectly it rarely plays out like this okay so this is basically you guys can read this I will just summarize it here this is basically a play on the Darvis box so what Oliver's saying is you have your kind of initial base entry here in the stocks respecting the key moving averages so you have your first stop your second stop your third stop your full stop and then you stopped out here okay what Oliver's basically saying is as you make higher highs and higher lows when the higher highs then taken out by a new higher high raise your stopper so see how price comes here makes a higher high higher low and then here at this rate stop point is making a higher high so this is where you can then raise your stop loss from here to here so then you're putting it underneath the higher low which could also coincide with being underneath one or more key moving averages whatever moving average we're imagining this is so it's a 10 email or the 20 email something like this so then price goes again makes a higher high high low as it takes out this high high makes a new higher high we could raise our stop loss again it rarely works out as perfectly as I've shown you on the schematic I actually think using moving averages as trailing stops which you're going to find Oliver speaks about in the optimizing profits is easier you could also think about trend lines as well and I've got a slide on trend lines a little bit a little bit later but we are in the optimizing profits phase now so 1021 EMA trailing stop sell when a stock closes below the 10 and all 21 EMA which specific EMA is open to interpretation based on whatever moving average the stock is sharing respect for during its move higher as a trend extends price May accelerate and it may be worth moving to a shorter moving average if it's a bigger cap stock like a Tesla or in a video or an AMD it may be more prudent to use the 20 EMA or the 10 email and or do what I do I use par so I will sell part it depends if it's extended but I will look to sell I will look to free roll my trade early on and then I will try and ride the Tenny man the 20 and the 21 EMA for me and I will sell part on a close but low the 10 email and partner close below the 20 21 EMA but it depends if price gets extended and remember I was saying about lower the day lower the day lower the day if I start thinking price gets extended from the Tenny mate I will go lower the day lower the day lower the day lower the date start checking off maybe on all maybe on par depends how extended it is personally I said here if I think stock the stock gets extended from the 10 email I will start checking off load the day load the day load they're up here the stock is absolutely extended and it's gone parabolic and huge climactic volume coming through so at least I'd be going lower the bar okay lower the bar extended stocks can't come more extended but even here imagine if you actually bought this day off the 10 email here or 10 you may hear and you think oh correctly this is extended here well if you just go lower the day you're just choking it off as Darby said who has a very big impact on all of his strategy let your stop loss decide okay so Tenny May 20 EMA really really important as reference guide as the quote says down here you could also have Rising trend line of bricks and the rising trend line will invariably match up with the 20 EMA or 21 emit usually they're pretty close but it needs three touch points okay touch point one touch point two touch point three so it breaks the trend line here loses it and in this instance loses the 20 EMA as well you can read the square in your own time and then that there would be the exit going up on another one Gap up exhaustion extensions so when a stock gets extended into its Trend gets extended from the 10-day EMA and has a large gap up this can often be a time to sell or at least partially sell a portion of your position selling and exhaustion is selling into strength again look how effective lower the day lower the day for your stops would have been during the extension so you see here with Tesla imagine if this bar here okay this Gap up doji you thought oh this is really extended for me I know this is a presentation about Oliver but I want to put kind of my own spin on it my own experience lower the Barlow with a bar Lower the bar I just think as a rules based thing it's just much more effective for me I prefer being rules based like that so lower the day lower the day lower the day really effective um weight but you have got to understand the stock and understand when it is potentially um Extended and climacted and extended from the 10 EMA so this here would then be the extension the exhaust the exhaustion extension okay hopefully that there is making um sense but trying to stay in for the intermediate term Trend and trying to uh trying to ride it the ignition bar low we touched on this a little bit earlier an ignition bar is some sort of wide range bar or heavy volume continuation but they should be noted in those daily lows the ignition bar should not be violated therefore when we see an ignition bar low we want to adjust our stops to lower that bar so you see here Tesla starts paring out ignition bar ignite Bar lower the bar here especially if it's on earnings that that there is a bigger bigger Catalyst as well I think that has much more weight to it and then there is that wet Wick play that we were talking about earlier on so be on the lookout for those ignition bars in the context of a trend white bread candlesticks really positive price action they should stand out like I saw thumb on the chart and look at the high relative volume confirming it as as well sell some hold some so this is kind of like a mental approach those of you have read um minovina's book will know his kind of concept of selling half it's kind of a win-win so this is a similar take on that I think so some whole time so risk reward selling guidelines so one quarter to one half of your position within the first three to five days after a breakout at three to five times your initial risk as the trend progresses reduce if you see red flags and or signs of distribution so that could be wedge drops it could be bearish synchronistic bars it could be kind of Gap up bars that are then fading everything we've been covering sell the final piece into an extreme extension or get stopped out on weakness if price loses a rising trend line and or 10 21 EMAs remember or I was saying use whichever moving average works best for the stock what the stock has respected sell margin into strength and Equity into weakness sell some Hotel so here is just a visual example of that stock trading is all about selling out a multiple of your risk over and over again let's say you risk two dollars on your trade and have a ten dollar gain and the stock is a little bit extended it's reasonable to sell some hold some because you have gained five acts your initial risk this concept may help you hold a core position for a larger move it also allows you to have far more losers than winners as as games are a multiple of losses so let's imagine here you get a kind of a vcp type action going on Titans up here you get an inside bar coming through so your entry is here three to five days later sells up okay so some hit add a multiple of your risk and then you see you get this pullback in here there's actually then this bull flag type pattern um forming here this is then like an EMA crossback isn't it first test into the key moving averages then this here would actually be a basin break so potentially you're adding in here you're potentially adding through here on this um a little time inside bar where the volume dries up as well but the point of this chart is when it then closes below then save the 10 email so part of your position and when it closer below the 20 EMA which is a 21 EMA on my chart selling on the part of your position so that's how I kind of trade much more so is selling part early on to free order trade I'll cover that in other videos and then trying to ride the intermediate term Trends being the Tenney main the 21 email and selling part on a closed blood sent part on the close below the 21 but if I think it gets extended from the 10 potentially choking it off all of the position part of the position depends how extended and kind of um climactic the move it now we're going to go into the mindset a um a little bit so talking about early on envisioning trading for a prop fan I went to sit on their desk multiple times and created a vision of my head of massive massive success so I think this is really interesting before all of them came very successful he was creating a vision of him being successful in his head now many of you will be familiar with kind of the Law of Attraction um and and things like this Joe dispenser's work is very very interesting in terms of your personality creates your personal reality I really love that saying your personality creates your personal reality so here you can see Oliver was actually talking about he created a vision of of himself becoming massively successful in stock trading you'd say that played out flexibility went wrong and patience when right are also key factors about performance these skills are created through hard work and time the learning and growing never stops and the knees of some hit some old sayings with a lot of meaning for all of it you've probably read them already so I will not take you through Reading those but you'll be very familiar with many of them deliberate practice so I'm going to show you this slide and then we're going to go into that chart remember around about an hour and 15 minutes ago at the start of this presentation I showed you that chart of ubsd and I said where are the entry points where the where is the wick play where is the bull flag where are the wedge drops where is the base and brick remember that chart I'll show you after this like so deliberate practice how on Earth did Oliver get so good at trading right how do you do it well here you go there's an art to this for sure I've looked at a lot of charts and I've lost a lot of money while learning how to spot these setups there's a creativity factor to how you look at charts I don't care what anybody says the more you practice the more the more you practice the more you put into it and the more charts you look at you're going to get better at being able to identify different patterns so much of trading is basically pattern recognitions and or pattern recognition skills and having a very good understanding of risk management and trying to right tracks go through all the biggest winners of last year and go through the names that work this year and trade them ice in terms of bye bye boss will come on to it I set up my chart where I can see the bar before the entry and mentally trade the stocks that have already had their moves it's not perfect because I kind of know what's already happened but I try to be honest with myself for how I'd execute my rules and take it bar by bar and I mentally trade them after a fact it's a great way to practice those who have followed the channel for a while no I'm a huge proponent of deliberate practice bar by bar deliberate practice spoke about at the end of the qualamagi video I ranted for about 15 minutes on deliberate practice so interesting the Oliver trades or practices in a very similar way as well lots and lots of stocks in his database but also babai bar on the biggest one it's how would he trade them what are the rules and put in place how did you get into them how do you control the risk how do you mitigate the risk how do you ride the trends doing it all very very deliberately on his learning phase so this is back in 2010 2011 I was reading studying and watching the market for 16 to 18 hours per day this is not an exaggeration I had one issue that I'd get so anxious about losing all of my earnings that I would often get ticked out of stocks only to to watch and then turn up and do exactly what I intended them to do for all of my studying I still struggled to embrace the idea of controlled rest a vital part of my training so what he was saying is he would get positioned in the stock and soon as the stock kind of pulled down a little bit he would get really anxious and he'd go I'm going to give back all my profit I'm going to get out of the stock and he would just panic and again this comes from studying that the stocks are going to make the big moves they are going to pull back they're going to pull back into the key moving averages if they're going to go on a big move then I'm probably going to find support around those key moving averages yes as I showed you in the presentation there might be the gap down reversal bars shake out demand house so on and so forth but you have to study and understand the game that you are playing and what are the rules of the game so remember this job I showed you this at the beginning of the presentation I said can you identify where is the wick play where is the two ad spot where is the bull flag where are the wedge drops and where is the Basin break do you think you now know hopefully this is honestly to try and piece this all together um and try and explain it coherently and take you from start to finish in the space of under two hours I was like how on Earth am I going to do this but if you can now look at this chart and you can identify those points on the chart I think it has been a good use of your time to understand Oliver Kell's breakout strategy ready here you go three two one there are the points there is your work play in there there is your ad see the prior day is an inside bar here is your additional ad see how the prior day is an inside bar and you get this little kind of flat base in here here is a ball flag as it pulls back into the key moving averages and a strong close on the prior day nice here is your wedge drop here is on a base and break with a little low pivot cup and handle with a little low pivot a little low treatment avenin will call that see how you get the volume dryer there's your Basin break you could also think of this as a bit of an extension and there is your wedge drop there so hopefully you were able to identify all of those points on the chart you have learned a lot in the space of about two hours if you made it all the way to the end of this video please do subscribe to the channel if you're new please do press the like button if you have any questions just ask me in the comment section down below and I will happily respond to you thank you very much for watching and I will see you in a future video