Lesson #3 Stock Market Cycles and Trading Strategies

volatility can they indicate whether you're at the mid cycle or end cycle or beginning cycle of an s curve so basically if a stock goes up like this and then the curve was like that is it any different from a stock that goes up like this and the curve is very very wide like it takes a little bit longer and could that ever indicate that there's maybe more upside or that this is actually done for. And what I found out through just the past two months is the wider the curve, the bigger the rebound cycle, but the longer the wait time. And then the shorter the curve, usually the higher the chance of the rebound to actually happen and that you're actually in a mid-cycle of a curve. Now, the way to do the calculation is you're not actually using measurements. So you're not going to go in a stock. And, you know, for example, if I was looking over here, since these move a lot, if I use the trend angle and I'm like, OK, from this point to the top right here, at what angle was the stock going at? It's 63. OK, then how much should I pull back? These move as the chart move. So if I kind of just go into here, you guys can see now. the degrees right there. So if I move it, it's kind of now it's a different degree. And the more you zoom in, the more the angle actually changes because you're not really including the prior moves. So this angle thing really, really sucks. And I'm trying to find something that's very similar that tells me that this right here, this is actually a good example. On a macro, whatever happened here, see how this curved? what are the chances that it actually continues based off how well this curve is and it says that if it goes up and the curve takes a while meaning that you know something like this it kind of happened very quickly there's a good chance of a continuation but if it takes a while like it does this usually you go down you go back up you go down you go back up and it takes a very very long time for it to actually punch through and outperform Why? Because the slowing of the pace is killing the implied volatility. And then the expectations take a very long time to come back into it. But that's something I'm trying to master. I mean, will I master it? Is there anything to master? Who knows? It's fuck around and find out type of education. Everything in the market is fuck around and find out. But what I would say is everybody should be trying to learn something. Nobody's too great to ever learn something new. Even if you have a strategy, even if it's working out fine for you, always try to see what's out there in the markets that could make you money. That's interesting. And you never know what you cross. Sometimes, you know, you work on a system or trade and a system is not anything that's copy and pasted. A system is just something that allows you and helps you read things. So there is no buy here, sell there. But usually there's a system that says. You know, I'm looking for stocks that are going up and setting highs. I'm looking for stocks that are going down and setting lows. That's a system, right? A copy and paste strategy is buy when it pulls back to this, short when it pulls back to that. That's copy and pasted. Those don't work very well in the long run. The ones that work really, really well are concepts that you could basically apply on any sort of market. They're not copy and paste systems or copy and paste strategies. Thank you. They're a system of their own because they're just a different way of expression. The way that you're using a system is just to basically think of like the market speaking a language and your system is translating that language to your language. Instead of copying and pasting that language, thinking that you're going to get some different result or something. So with that out of the way, today's lesson is actually going to be pretty quick and easy. We're not going to take up too much of your time, so we'll make sure everybody's out of here by five, hopefully. And it's around levels. And the idea of levels is usually pretty loved by people. Everybody loves drawing levels. But if you draw too much levels, then they become a problem because then they lose the value that they're meant to provide. In which the whole idea of what I just said is price or systems are an expression. They're supposed to explain something to you or tell you what is actually happening. And if you have a level here and a level here and a level here and a level here and you have all these levels. it ruins the purpose of what these levels are actually there for. So you have to minimize the amount of information so that you can actually understand the protocol or the objective or the meaning of whatever it is that you're doing. The more lines that you draw on the more levels, the less efficient you are, even though you would think it is actually more helpful. And the less trade ideas you can come up with on a chart, the more sustainable that trade will actually be so if i go ahead and i say these are all my levels and if the spy comes here you buy and if it comes there you short but if it gaps above it you actually buy and if it gaps down below it you actually short and if it gaps down below here you actually short again but if it goes down below here you have to buy because it's a liquidation and all this stuff it becomes very very inefficient it's really kind of just going to give you yourself a headache. But if you have a line here and a line here and a line here, each one of them stands for something. This stands to represent sellers. This stands to represent buyers. This stands to represent the neutral camp, the people in between. And if you can go ahead and identify which of these is which, you can go ahead and form ideas that are unlimited, but you understand why they're unlimited without having so many damn lines drawn over the place. So instead, what you could say is the same thing I just said, but you're saying it to one angle and you're understanding why. So if a stock goes into the zone, we know that this is a place where sellers are in control. There's a lot of people here who are trying to get rid of the position. Now you go ahead and you start to talk to yourself, why are there sellers there? It doesn't matter that there's sellers there. The question is why? And then because of the why, you go ahead and figure out what the reaction and the result will be. So if there are sellers here because people shorted, it's a different story. If it's what you like, I don't want to take anything. It's hard. I just want to throw that option out there. Okay. These guys are ordering a burrito, I think. I muted him. But if you have an idea or... A concept in your head that says, okay, there are sellers here. The reason there are sellers here is because people are shorting. Okay, well, what's the result of people shorting? You get squeezed out of it. Well, the reason there are sellers here is because people bought the dip and now they want to get out. Okay, well, in this situation, you're going to get a pullback, not a drop, right? Just a pullback, a little pullback. Well, what if the people that are actually there are causing a distribution or there's a wall or whatever it is? that's over there. Well in that situation you get also a different result. Maybe there's a distribution that ends up taking place that's a little bit bigger than usual. So what we're gonna do today is try to identify these levels by simply just picking out points in a chart with any time frame. Now we're gonna go ahead and actually use a one hour time frame for simplicity and then we'll go into maybe different time frames as well. Now, the first thing we're going to actually talk about is the buy. Now, we've talked about expansion points and expansion points are a buy point, but they're a buy point in a macro image. But in the micro, there's also a buy point that can easily be identified on a chart. What does it look like? Well, a buy point simply means that you get a continuous reaction of somebody loading a boat, right? So it's not a... a one-click button, right? People would think that a candle like this is a buy. No, a buy is usually a continuous time frame of just continuously buying things or continuously buying shares or whatever. So if you're looking at a chart, you're looking for something that has consistency to it. It doesn't matter where it is, but there's a continuous movement to it. So an example of this would be, imagine a stock falls, and then it pumps, and then it dumps, and then it pumps again, and then it does nothing, and it pumps. But then after it gets to here, you start to see something like this, and then it dumps again, and then it pumps, and then it dumps, and well, where's the buy? It's right here. Now you might be saying, well, why wasn't this a buy? Well, maybe the pace was too fast. It has to be perfectly sloped. It can't be like this. Sure, this is buying, but it's not continuous buying. It's euphoric buying. People could say, well, why wouldn't a big green candle be a major buy? How come this doesn't matter? Because it means a fat finger took position. It means one dude took that position. It wasn't multiple people. So we can't consider that to be a buy. So instead, what we consider as a buy is a continuous price increase or decrease. Well, in this case, a continuous buy is an increase and a continuous sell is a decrease. It would be a little bit of a different story. So you're looking for that continuous move. You don't want just one candle. Now, of course, the timeframes are going to depend on how you're looking at it. But if I go ahead and actually look at an example, let me tell you this right here. You can see easily from here to here. This was literally just fat fingers, you could assume, right? You could assume these are just fat fingers. It's a big dude trying to load the boat, but he's just a big guy. The one that I really want to pay attention to is this. This is a clean buy because it's continuously going up on a bigger time frame. And when you look at this, this is considered a buy. This is also a buy, but it's not a continuous buy. It's just a single buy. A single buy comes in these massive euphoric, unsloped, you know, just call it a whatever. What's that? Probably the degree we're talking about. It's kind of like this. They should go like that. It's kind of like the building that the secret service let the shooter go up on. They said it was sloped, but everybody can stand there. If you can't stand on there, then it means that it's too much of a buy, and you don't want to consider that. But the continuous buy is the one that slowly goes up. Now, some of you are probably wondering, well, why does this matter? Well, because if you can figure out what's a buy, versus what's a continuous buy, you can actually come up with levels that give you better trade ideas, right? And they also give you higher likelihood of actually, you know, happening. So instead of just like waiting forever for the level to come back to you, and then it never actually gets there and you miss the trade with these continuous buys, you actually have a very, very good chance of getting good levels that you can trade, take trades off of. An example of this is like, well, what are the chances you actually come back to here to buy? Probably very low, right? But if you take a continuous buy, what is the likelihood that you actually get a good entry? Well, here you might actually get a pretty good buy. You get multiple opportunities to take a trade, okay? But that's a buy versus a continuous buy, and the one that we're more focused on are continuous buys. If I take an example of, say, AMD. Alright, and we're looking at a one hour time frame. You can see right here this on this section You can see how there's a big candle. This is just a fat finger by this is also a fat finger by This is whatever. It's kind of whatever. These are all fat finger buys These you can't really do much. You can't really take levels off of them. They're just very very tough to work with but here's maybe a good one. You can see here, it's a little bit more spread out, right? You can see how it's like pop a little bit here. Maybe it's a little bit of problem, but then the rest of it was slowly grinding. That could be considered as a continuous buy. This is just a big sell candle. This is a continuous sell. Some people might say, oh, is it because it's choppy? No, no, this is bad. There's not much that you can do with these candles. There's no levels to actually draw off of them, which is why when a stock is dropping at a very fast pace, you never know where it's actually going to bottom because these are fat fingers, which means that they're orders that just get filled and then it's an empty void of whatever happened there. There's random people. There's a seller here. There's a buyer here. You never know. But the continuous buy is very clear. It's all the way down here. You could always find levels in these areas. You find a level here, you find a level here, you find a level here. There are so many levels to work with. Example of a continuous buy is something like this. You can see how right here, big buy candle and then continuous buying from there. That's good. You can tell that. That's very clear. Here, big buying candle, a little bit of continuous buying. This is beautiful. This is continuous buying. Something like this is good. Something like this, if you were to look at it on a bigger time frame, this would also be good. So what you're doing is you're trying to find something that's sloped, right? That's not in a euphoric angle like this. You're finding something that's going sideways, like how an actual chart should go. and now if i go into a very very tiny time frame this will probably give you a little bit more of a challenge but here's an example this is continuous selling pretty straightforward it's all continuous selling this is continuous selling it's at a slope um this is not continuous this is just a big cell why because look it stopped and it chopped whatever This is continuous selling. This is just a sell. So if I want to go ahead and find a level, where do you think my levels are going to be? It's going to be in these continuous moves right here. There is no level over here, but there is no level from here to here, but there's a level from this point to this point that you could take. There's a level from this point to this point. If you go ahead and look at it on the upside and you guys will get to see this, this right here. If I go ahead and zoom out right here, just big green candle. Sure, maybe this was continuous, but this was a big buy candle off the open. You look over here, it's whatever. This is just a big fat buy. This is also a big fat buy and then dump. This is a big fat buy. Now, if you look at it on a bigger time frame. Sure, this could be a continuous trend on a bigger timeframe, but in the smaller timeframes, there's nothing there. This is a big sell. Right here is also a big buy and then a big sell. Now you could argue that maybe this was a little bit continuous, but there's not. This is somewhat continuous right here. This little selling that it's got going on outside of maybe this, this is still considered continuous. This is just a big buy. This is just a big sell. but this is somewhat continuous now i don't want to keep saying the word over and over and over the whole idea is if you practice a little bit you'll start to figure out that the whole idea is you're looking for something that's sloped and the higher likelihood that something is sloped the more likely you are to actually find a level in it if it's not sloped and it's like this the harder it is to actually come up with a trade idea outside of just by the highs and then maybe get lucky and buy the dip on some random level and you could nail it. But with these slopes, you're always going to find something like that that's actually pretty good. So this is a buy versus a continuous buy and a sell versus a continuous sell. The second part to this is identifying liquidations. Now, a majority of you know liquidations as, you know, a stock going to a zone and then liquidating for stop loss hunting. Now, this is the classic liquidation pattern that we look for. We look for stocks that liquidate zones. However, there's also another form of liquidation, which is not actually a liquidation of hunting stop losses, but a liquidation of liquidity injection, meaning that money is actually getting injected into the system. How are they doing that? Because they're just basically taking an order. off the order book. It's basically, if you guys remember from a movie a while ago, I showed you, where they call it chasing the bid or chasing the ask. You're not actually getting anybody to dump on you. What you're doing is you're forcing yourself through a position to basically find wherever there is as many people who have market orders and force them into a trade. A lot of people are probably looking at a stock that's going down. And then all of a sudden, multiple people with a lot of money put a trade. And they're all market orders. And what it does is it basically destroys the stock and then it rips right back. You can see in this case, there's probably zero level that actually was crucial. If anything, there's probably zero stop losses or anything. But somehow a lot of people were interested and that caused an actual liquidation. So this form of liquidation is. injection or an extraction but it's an extraction and injection at the same time it's more an injection than it is extraction and the way that you can identify it on a chart is wherever you see something click and then instantly take a reversal off of it so if I go ahead in a very small time frame and I look at something let's say like this right here you can see how with AMD it went up with this big candle and then instantly came back down. This is a liquidation. Now you might be saying, well, there's no level that it violated. It didn't break the highs. It doesn't matter. Broke the highs, didn't break the highs, whatever. This is a liquidation. This could also be a liquidation as well. What about these? Well, there's really not much. But it's these big instant moves that go and then take back everything right back. Now the key is that at the very least it takes back exactly to its starting point, meaning it pops and it comes back right to the starting. If it can go a little bit more, then that's okay. But the key is that it has to come back to the mean. or the main point, basically. And you could always find these on any chart. Now, in some cases, people will confuse these with just random candles. For example, this is not a liquidation. The fact that it just dumped in the morning, this could be a regular cell candle or whatever, but it's not a liquidation. People say, well, what about this right here? That's not a liquidation either. This could be a regular cell candle. This could be a regular cell candle. This could be a liquidation not a hundred percent but could be this is definitely a liquidation right it's pretty clear you go ahead and look at some more candles um what about these are these liquidation no but what about this one right here this could be considered a liquidation why because it instantly took back the move could this be a liquidation no that's not a liquidation could this be a liquidation sure But is it? No. Why isn't this one a liquidation even though it's the same as this? It's not big enough relative to the price. One of the key things about liquidation is that there's, there's a, it's kind of like a rubber band effect where sure, you don't actually need to violate a zone, but you should have an outrageous decently move. It should be above a little bit of average. So in this case, this is not actually a liquidation. The only one that really fits the criteria is this one right here. This one could be, but like I said, it's 50-50. It's too small. But this one's definitely a liquidation level. So you can draw your zone from the body to the body, and you'll find something cooking up at that zone. Just like how if you draw your candle from the body to the body here, you'll find something very, very clear tomorrow from this zone. And you start it with the prior candle. So I did with the green candle. I'm not going to do the red one too. same thing right here you drop from the body to the body of the red and then the green candle is the reversal you find another zone let's actually go back and see if we can find something from the prior you look over here are there any liquidations that ended up happening here no nothing that we see nothing that's too clear uh is there anything that happened here yes this right here see this morning one that's a liquidation so something definitely cooked up there If you go ahead and look at, let's say this one right here, that's not a liquidation. This bottom one right here, clearly a liquidation. That's a liquidity injection. This is somebody who chased a bid on the way down. And there's another guy who chased the ask on the way back up. And they took a fill. You go ahead and you put, you know, it's fine. Let's say, is this a liquidation right here? No. This one? No. Why? Because there's a candle in between them. Is this one a liquidation? Sure, but it kind of fell too much. But here you actually have something that's very, very key, right? You actually have multiple ones. You have one here and you have one here in the open and you have one here in the middle of the day. That's three different liquidations that happen in the morning for this chart, which is crazy wild. But you can see they all happen in the same range. So you can kind of include this entire box. to be a major level here in the morning you got a big buy and then you got a big sell that's a liquidation so you take the body of the green candle not the red only the body of the green and as long as the body of the red is not too big but you know bigger than the actual green candle then it works pretty well but when you do this and you zoom out and you guys can take a look right here let's say let me actually remove this one right here just because it had a lot of levels and i want you guys to see you go ahead and you zoom out and you try to find well for this level what happened the next day you see how it went all the way into it and then liquidated pumped back and then dumped into it here you had a big little buy right around this area the first time it went straight through it but if you look tiny you know in the small tiny frame it actually tried to bounce off of it and then it flushed right between it the next day it went right above it came back to it and pushed higher so it failed here but it worked out pretty well here You zoom out, you do the same thing with some of these other charts. It's getting rejected, all this. This is not to tell you that it's going to go ahead and work on everything, but what it's supposed to tell you is that you can actually use these levels to do something with them. And if you can find these liquidations in any chart, depending on you know the time frame, and of course the bigger the time frame the better. right the smaller the time frame that the less strength there is but you could always find these in in bigger time frames as well they just become a little bit more difficult so for example if you guys take a look right here could this be a liquidation no why because yes it pumped in a dumped but the red candle is way too small compared to the green one um if i look on this one you had a big buy you had a big sell sure but you need the candle to be close The closer the bodies are to each other where it's a big red can green candle and a big red candle Sure, it could be like 60 30 40 Whatever, but as long as it's not less than 70 percent of the length of that other body the wick is okay It's cool to have but you need it to be at least 70 percent And then have a wick with it to make it really really worth it. You can see in this case right here That's a beautiful one. So if I go ahead and actually put a level for this chart right here on the hourly and i put a level from here to here you'll actually see that this is a very key zone for the stock on the way up on the way down and on multiple other occasions so that's a good liquidation set up there here horrible liquidation here beautiful this is what you want to see so you take it you put body to body and that's going to be a very key zone for the future that you can use off of. Now, we'll talk about how you can actually put it to actually make trades off of it. But for now, the main idea is, can you find them and can you draw them? Because it's going to get a little bit complicated when you start teaching people strategies, because the idea is if you can find the level, you come up with the strategy. It's not that hard. And maybe you don't use it, use it as a actual strategy. You use it to fill some other gap that you have. and a strategy that you're already working with. Maybe you're trading option flow, but you struggle to find levels to buy, and maybe this is a zone to actually look into. But this is how you can draw it. So this is the liquidity injection level, and you can find that on any time frame, daily, one hour, five minute, the bigger the time frame, the better, the more accuracy. Now, of course, these are going to be huge zones, which is the purpose of them. They're supposed to be big boxes. But you're supposed to use them depending on how you want to trade. If you want to swing trade, you're probably going to use 30 minute to one hour. If you're going to look for something on a monthly or whatever, you're going to look for daily trades to where that range doesn't matter too much. So for example, if I want to swing trade AMD, you know, a dollar move on a weekly contract is a decent amount. So if I say buy between 155 and 160, you're like, dude, you got to be kidding me. 155 and 160. That's too much. But for a dude who's trading a one-year contract, it's not that big of a problem. So adjust the timeframe to the strategy that you're actually trying to trade with to make sure that it best fits the system that you're trying to go for. And you'll usually do pretty well with that. And then back to the first part with find a buy candle and differentiate between the buy candle and the continuous buying. The continuous buying has levels to it. And the continuous buying, the way that you actually find the levels within them, is you don't actually label the level randomly. Instead, what you do is you choose the level that you think you want to trade with. So for example, let's say this is a continuous buy, all right? Just assuming to make things simple. And I want to go ahead and the stock is here. I want to know where could there be a potential bottom, right, for something like this. And I look and I look and I look and I'm like, there doesn't seem to be a potential bottom. But with this, I can actually come up with very good levels. I can come up with very good strategies off of this. So a good example of this is, well, here I can actually draw a channel. There could be a channel that could be drawn here and I'll use that. Now you might say, well, what's good is the channel? Maybe I can't find a level within the channel, but I could always easily just clone this three times. and I'm pretty confident that I'll get some good levels off of it. So you draw like this, and then you clone it again, something like that, and then you clone it again the third time, and you'll keep telling yourself that, hey, as long as we hold these bounces and we're actually bouncing off of it, then I can trade it. And if we keep closing below, then I'm going to keep expecting that we go back to the bottom of the channel. And then you can come up with a level off of it. Another way that you could also do is... When you have continuous buys and levels, you could use a Fibonacci to go ahead and figure out what do you think the stock might bottom off of if it is a continuous buy or if it is a continuous sell. Another way that you could also make good use of these levels is to actually find waves. In majority of cases with these, you're going to find multiple types of sequences. You're either going to find ABCs. You're either going to find 1, 2, 3, 4, 5. You're going to find the double wave cycle. You're probably going to find a market maker cycle where the stock is up and then it's chopping and then it pops up, up, up, and then it liquidates. Now you're in the spring. Now you had the max pain. You got flag one. You got flag two and flag three, right? You're always going to find one of these key patterns that we talk about so much. in these continuous buys. You're not going to buy them. You're not going to find them in these fat candles. They're not as useful. So it's more of to help you figure out what levels can actually be drawn based off of that. And like I said, it's all perspective and it's all timeframes. Depending on the timeframe you're looking at, that's what you're going to find. Because for example, if I'm looking at a five minute, it looks very parabolic. But if I, you know, zoom into the one minute, then it looks very slopey, right? It doesn't look as parabolic anymore. But if I look on the 30 minute, it actually looks even more parabolic. So if I want to find something that's slopey, the best way to do it is start with a bigger time frame and then zoom in. Don't start with a tiny time frame and then zoom out. So start with the daily and then identify where you think there's a continuous buy. In this case, for example, we're getting big buy candles right here. We're getting big sell candles here. Well, maybe they're all big candles here because we're in such a big time frame. Here, they're all big candles because we're in such a big time frame. Here, it's a big sell because we're in such a big time frame. Here, it's massive selling, but it still could be slope, but it's because we're in such a big time frame. But if you zoom into the four hour, you might see a little bit of a different story. You can see. this doesn't actually look so bad anymore. Sure it's still a little bit poppy and then pop but here's a continuous level for sure right around here. So if I was to draw a channel or find a level or find a cycle or find a wave or whatever it would probably be from here to here. I'm actually not going to include this or this because it doesn't look too good there. And then if you zoom in a little bit more you might find that maybe these two candles that you're ignoring are actually okay. So in this situation, they're still very slopey. So I go in 30 minute. They're still a little bit too parabolic. Well, maybe the five minute. And then you can see that in the five minute, they're actually not as parabolic as you thought. You can see this one's actually pretty slopey now. But you can only use it for the time frame that you're going for. So you can't really make a swing trade off of this, but it's more of a scalp or a trade, a day trade or whatever, if you're using this time frame. but if you can find that improve it on a bigger time frame then cool this is also continuous buying you could always find a key level to buy off of in this situation if we ever do come down to it the 158 you could come up with the channel and say okay well this with this type of move or this type of rally or whatever i can't find a level in this but i could also find a level in that meaning that the next day if we actually end up dropping you're more than likely expecting that there's probably going to buy uh right around this zone of 161 now it didn't happen but if it were to come down then you'll be able to take advantage of it but it's much better than saying oh we just got a big candle and i missed it and i don't know what to do it's much better than looking at this candle and then having no clue what to do with it all right you'll actually have more ideas to come up with different strategies uh for that so those are the two uh main ones now The final one, outside of people buying and people liquidating, you want to find stop-loss hunting. Now, this is kind of like liquidation. Stop-loss hunting is referring to failed setups. Now, a failed setup is not the one that you would think of in the majority of cases. People think that if a stock does this and it does that and fails, then that's considered to be a failed setup. That's not true. right it's a failed setup for the guy trying to go long but for all we know the guy who was trying to go long failed to consider that there's a lot of sellers here and that's his fault that's none of the market's fault they should have realized that there was people selling here and you don't long into a wall right so this can't be considered a failed setup so if there was stop loss hunting where would it usually come up it doesn't actually come up when there's fat walls or specific levels In which people usually think, right? That stop loss hunting is very common. You get liquidated, everything is fine. But the one that you're actually going to be focused on specifically is the diagonal or the ones that change over time, where it's more of people get sick of being in a trade and therefore they get kicked out or removed. Not because of a stop. but it's because of lack of patience or because they're forced to move out because something else is better. So if anything, it's kind of a mentality game. You want to find something that's, you know, moved in the morning, came down, moved again, came down and then did nothing. It just kept fucking with people. There are multiple zones in here where there are stops for people. And what you're going to go ahead and figure out is where do you think majority of people got out? Not because they lost money, but because they were sick of the trade. They didn't want to stick with it. And this is going to be hard for people because you guys probably never thought about it this way. But if you think about it, you guys have had trades that are very similar to that. How many of you have traded those trades that you're like, damn it, man, I don't even want to be in this. And then ask yourself, what made you not want to be in it? You weren't down and you weren't green. So you can't say it was loss or profit. Something else has to have happened for you to be able to say, frick, I need to go do something. I'm sick and tired of this trade. Well, the answer to that question is usually in majority of cases, there's something better. Now, this is where it gets a little bit complicated because people are like, well, what could be better? There's always something that's better. in that similar concept. So it's kind of like if you have a little bit of understanding of sectors and all that, you'll probably find this to be very easy. But if you don't, then you'll find it to be pretty hard. So while people find that maybe this is the setup that, let me actually do this. Let's say, let's say right here. Actually, no, let me find this. This is a good one. So look at this. Everybody wakes up in the morning excited about AMD and AMD just went up, down, up, down, up, down. And in the process of that, there's some stock that's actually or two or three that are doing way better than AMD. Right. And those stocks are actually killing it. So if I go ahead and actually compare and I just add NVIDIA and I'm going to go ahead and add AMAT just randomly. right they're both in a similar sector and you notice well which one is actually doing better well amd and nvidia did pretty damn well in the morning and the one that's actually doing a little bit better is this one's actually pumping and it went back up and it went back down but if i was thinking about it in the morning and i was trading and it came around this zone right here that's where majority of these pivoted this one moved and this one topped And this one kind of just sat and topped in the morning. Something happened here to shift people's sentiment. Something definitely happened right here. And this would be the zone that you would try to heavily focus in on and say, OK, this is the stop loss or not the stop loss, but I would probably say the the get out trade. Just get out of it. No loss, no profit. Nobody cares. Get the hell out of it. But this is a key zone that you would pay attention to. Now, some people are going to say, well, this is impossible. How am I going to keep adding the charts of other stocks, you know, every time and being able to compare them? You don't actually need to compare them. In majority of cases, you're actually going to already know this in your head because, well, if you actually trade, you'll see what other stocks are doing or you'll see how the market is moving. So if you see everything is moving except this stock. Where did a majority of things move versus this one? And wherever that zone is, that's where you can expect people will call it a day, right? Right after that moment. So the easiest way to do for every stock outside of maybe penny stocks, just go ahead and add SPY to it. or QQQ in the majority of cases. And then C, where is it that majority of people started to make a move? Well, in this one, you topped, you topped, and then everything started to sell off from there. That's where the trend was. In this case, something happened right at this moment. People got sick and tired in that same zone. And that was also the same with the NVIDIA and the other trades. So this is a very key zone. Now, you're not actually going to trade off of it. There's no buy or sell because of the zone. But what you're going to use it for is your potential stop if you ever do want to take a trade. And in every chart and in every day, there's always a zone in that chart that you can use that would be the stop of people just wanting to get out. Why is it that that becomes a good place for you to go ahead and get out or get back into? Because usually that zone marks where majority of volume gets traded. Because not only are the people who are in wanting to get out, there is also people who probably wanted to get in that actually canceled and said, you know what? Screw it. I'm not interested. So the volume, while it might not appear that it's actually higher, the potential trading volume is basically very, very high. So theoretical volume was supposed to be this, but because this happened. theoretical volumes now is actually very very low so you can actually set some sort of zone in that area and call that maybe a stop so if you were a swing trader and you bought calls maybe near the market close or whatever this could be a very hot spot zone for you to take advantage of the next day or whatever and you can see this actually came back to right around that multiple times hopefully it didn't stop you out because it did touch it a few times but that's that's kind of the idea So you're finding zones where people got out of a trade because they didn't see anything happening and everything else was doing something except that trade. So if I go, for example, like today, well, everything was going well. This was dumping, this was dumping, this was dumping. And then keep in mind, you're only going to find these in either consolidations that are very clear But you're also going to find these in any sort of massive move, right? Now it goes into the other psychological positioning, which is that, well, if you're buying something that keeps going down and the markets are going up, then you would think people would get out and stop buying. So theoretical volume is actually higher. Potential volume is higher. But the reality is, is the volume disappears because nobody wants to be involved in it. So if you ever find a stock that's actually dumping while the indices are pumping, in this case, they were both dumping. So there was no problem. But if I go ahead and find, let's say here's a good example right here. You can see here, for example, the the market pumped and then the market dumped a little bit. But then the market went bazookas. and AMD is just getting murdered. It's doing nothing. Something happened here. You can bet that within this zone, as people saw that the S&P was breaking into new highs and this one was lagging behind and it refused, something probably happened at this zone. And there's also a liquidation that ended up happening as well. So you could use this level to also maybe label a short position or whatever. So maybe if you enter puts at market close, this would also be maybe your potential stop. or maybe a level that you would watch for for break above to see if something actually happens or whatever to give you a little bit of an idea of what to do but you could also find that in there as well in these massive moves the easy ones are always going to be in the chop but you could also find it in these massive up down whatever if it's like this or like this just try to compare it to the spy of course if you have a little bit more broad market understanding you compare it to the industry you'll get more specific clarity. But using Spying QQQ could also work too. And having those levels drawn out on your chart could really, really help step up your game. Now, again, like I said, those are not buy levels. They're not meant to be used to trade off of specifically. They're meant to be used to add to something you're already working on. And that should be it. So yeah, hopefully you guys understood it. I'm going to give you guys nine minutes to go ahead and ask any questions. And then I think we're done for the day. So is anybody confused or anybody have any specific questions? Do water taste so good when you're thirsty? It tastes like heaven. Yo, my voice is getting clapped. How do you trade liquidations? Which liquidation? The liquidation we talked about or the liquidation of stop-loss hunting? The one we talked about? So if you have a liquidation, what you do is you basically use it. as a zone um let me see if i can find one right here this one could be okay maybe not the best but it's all right so if you label the zone right here what you're doing is you're trying to identify in this zone do you have a trade idea of maybe being bearish or bullish but you're struggling to find a place to go short right or you're struggling to find a place to go long this would be the place for you to do that. You would say that as long as we're below here or we're coming around here, I want to short it. And if we're above here, I want to buy above it. So you use that box as a barrier. The liquidation is meant to be used as a barrier in which that barrier may get cracked or may, you know, do something. But, you know, if it gaps or whatever, you want to use it as a barrier or a block or a wall for you to be able to trade off of it. So if you have an idea you could use this to maybe find a level or the zone So for example, let me actually give you guys one right here gld Right. This was a trade you guys took today if you go ahead and actually look at a bigger time frame If you wanted to find an entry, but you were struggling to find one you could have found an entry Based off this candle right here. That would have gave you an idea So if I looked over here, you guys can see this is a big buy candle right here and right here we know that there's going to be a liquidation zone right around this zone right if i go in this candle you're for sure going to get a buy tomorrow in the morning which is why he has it diagonally from here you can see how he's like oh it's going to go down and then you're going to get a big rip because there's a barrier there the only reason we're not going to get a bounce is if we gap below it because then it becomes below the barrier but if not you can actually use that so if you're day trading in the morning and this is falling you could actually trade it and buy it off the dip to maybe play a rebound or make sure to take profit which is why you can see his take profit is right in it as well so you probably want to get out of it now he would have put the take profit a little bit higher but he knows that it's not enough profits to take something and the same idea here you can see this is also a liquidation this is also a barrier if it ever gets to there then you're probably going to find a little bit of a problem okay um hopefully hopefully that explained a little bit of an idea uh tesla today i'm a little confused about liquidation since i have other videos saying to trade against it no so the liquidations that we trade against are the liquidations of stop hunting okay i i've tried to tell you guys the difference as we're going through it this is the liquidation of stop-loss hunting When a stock hits a level, bounces, hits a level, bounces, hits a level, bounces, and then it instantly wicks right below it. And it's contingent against wicking, right? It killed all these levels. That's a liquidation. Now it can go and break out. The one that we're talking about today is the one with no liquidation and no zone. It's just a liquidity injection. Money's coming into the market due to chasing of a bid or ask. so this one is the one that you actually trade the liquidation and buy off of or short off of this is specifically telling you that there's a barrier there it's a little bit of a difference this one you wouldn't trade against it because you would never know it happened until it happened so how would you trade against it the only way you're going to know the level is there is once it happens this one you can trade against it as it's happening in front of your eyes You can trade it on the way you can buy the dip as is dropping. Are you going to trade against it if you're finding the level two days after or three days after? It's just a wall. You can, sure, you can use it for a trade. That's the idea. You want to use it for trades. But you're not trading the actual setup. You're trading the prior technical that already happened. Does that make sense? While this one, you get to trade it as it happens. This one, you can't trade it as it happens because it already happened. Like this one right here, there's a liquidation. It already happened on July 11th. You can't really do anything unless you want to trade it somewhere here or you want to use it as a barrier or a block. unless it gaps below it. And then the other thing with liquidity grabs, the grab is a little bit different, right? The grab is actually referring to a stock that goes up and then it chops for a bit. It forms liquidity and then it drops. Liquidity grabs are not like these. Liquidity grabs are usually... where a stock goes up, up, up, up, up, up, and then comes back down, completely erasing the entire move on a, what? On a violation of a zone. These are both off zones. This is random. This can be applied anywhere with no contingency. This one has to violate a zone. There has to be a top that was touched multiple times that it did this to. Do you understand? There has to be a top that got hit multiple times. And then if it did this, then that's a liquidity grab because it violated all these zones in a stop loss hunt. If it did this and then it pushed up and chop, chop, chop, and then came down, that's liquidity formation. This that we talked about today can be applied anywhere without that rule of having multiple tops or bottoms being violated. You could place it anywhere. Doesn't matter where. There you go. That BA right there is a liquidity grab, right? This is a liquidity grab. Why? Because it violated these two highs. Exactly. You could do that. You could do that in expectations of it. It's also not a zone here either because, I mean, the candle is way bigger than the other. This is because it violated multiple highs in this area. It took out this high and this high. Just like how this one took out this low and this low. This is liquidity grab and this is a liquidity formation because it chopped near the bottom. This one instantly reversed. So formation is when it goes and chops and then comes back. Grab is when it goes and v-shapes. And the contingency is that both of them have to violate a zone. If they do not violate a key zone where something was trading by or a key low or a key high, then they're worthless. So eventually, eventually, when the stock comes to that, the idea is that when it breaks, it'll have a successful break. It doesn't guarantee a break, though. You have to understand that. It doesn't actually mean it has to. No, no, no. It just means that if it gets to there and you trade the breakout, you're highly likely to actually be profitable because think of it like a bonus push. Like you're going up a hill and as you're going up, you somehow get one of those speed boosters that give you a push up higher. That's what these do versus the liquidity right here. This will probably bottom off tomorrow in the morning without a gap. So if it doesn't gap down more than likely, this will bottom and reverse because it's a formation. There's buyers here. Um, what's the difference between a fake out and a stop hunt? I think I answered it. Did you understand it, Chad, or no? It's basically zones. One violates a zone. The other one, you don't actually need a zone. Stop loss hunting has to be, remember, the one that we talked about are a little bit different. Stop loss hunting is there's a zone. that has been touched multiple times, that gets wicked above and then right back. This is the stop loss hunting. It could also be in diagonal channels where you have a channel going down and then it picks up above it and then it goes down. So it broke the diagonal channel. That's stop loss hunting. The one that we talked about is people getting out of a trade, stopping out without a loss. So I guess you can call it stop profit. if that ever makes sense. Because what you're doing is you're getting out without really having a reason to get out. You just hate it because it's not doing anything. And the other market is offering better opportunities. That you can actually use as your stop loss in the future. Can you look at Tesla? I'm identified to break out of liquidity based off this morning. So you could have used this. That was the barrier right there. So that was showing you that you're probably going to hit a wall somewhere around here. Unless it actually just blew right through it. But this is going to be a big wall. Today you did some serious damage, which is good. So you've already damaged it. So the next time in the future, it's actually not going to be as bad. Now you could say that this was a liquidity, but it's not because the candle is small. It has to be big. the candle actually needs to be big off of it so remember the rule is is that you have to have a candle and the next one has to be slightly either bigger or smaller doesn't matter but it can't be too big and it can't be too small and it has to be the same size at least 70 percent body and then maybe 30 percent wick could also work so this doesn't apply because it's just two long wick candles the one that does apply is this one for example this one's okay but it's too big it's a four hour and you're using after hours this one doesn't apply either because just a big red candle um yeah that's pretty much if you look at five minute maybe So as far as the entire day, there really wasn't any liquidation at all outside of this one right here. But it's not big enough. These candles are not big enough to be used as liquidation. So they're just way too tiny. If this was maybe a little bit bigger and the candles went down to like here, that would be a really, really key zone to draw. On the one hour, 7-11. Yep, this one's good. Perfecto. That's a good zone. That's a good barrier. So you could have shorted off of it right here the next day or after two days. That's a really, really good zone. Now, again, it doesn't guarantee that it's going to reject. It doesn't tell you it rejects in the beginning or in the middle or at the top. You don't know. It just depends. That's why you have to have a trade idea to why. So, for example, you have an option flow. An option flows down 40 percent here. Probably going to go a little bit higher and get rejected at 70% or 60 up here, right? So you need something to kind of give you the trade. Don't just trade off of it. Use something and then use this as a zone to kind of take advantage of because it's there. Is the gap over or below the liquidation zone the thing that you were switch or bias? Yeah, the gap rule. We're going to talk about it next week on Tuesday, whenever we do the other boot camp that we're going to do. But we'll talk a lot about gaps next. For now, we're just talking about straight up candlesticks. We're trying to focus on candlesticks and buy and sell of the premiums. Next week, we're going to talk about gaps. And then we're also going to talk about setting expectations. So I'll show you how to actually draw your own path. Kind of just like how we do it with these. so we'll try it and this is gonna be hard but if you understand it you'll realize that it's a beautiful thing like for this we took an iwm trade twice i shorted it here and i shorted again right around this zone for almost three trades and i also got to short it down here as well today from that so we'll talk about how to draw these uh as well whenever we do it next week all right uh that should be it for today um if somebody has uh the recording hopefully they'll post it But the second post should already be down there in the channel. So make sure you guys do go over and watch it. And we should be good for now. Thank you for being here. And as far as stock picks and all that, I'll be here tomorrow. Tomorrow's going to be Friday. So I'll be here in the pre-market. We'll look at some picks for swings and whatnot. But I'll try my best to be here in the pre-market. If not, I'll show up in like 9 or 10 o'clock my time. But I'll be on the computer so I can actually chart and do stuff instead of driving But that should be it. Take it easy and Joe the rest of you night, and we'll see you guys tomorrow. Goodbye

So you're not going to go in a stock. And, you know, for example, if I was looking over here, since these move a lot, if I use the trend angle and I'm like, OK, from this point to the top right here, at what angle was the stock going at? It's 63. OK, then how much should I pull back? These move as the chart move. So if I kind of just go into here, you guys can see now.

the degrees right there. So if I move it, it's kind of now it's a different degree. And the more you zoom in, the more the angle actually changes because you're not really including the prior moves. So this angle thing really, really sucks. And I'm trying to find something that's very similar that tells me that this right here, this is actually a good example.

On a macro, whatever happened here, see how this curved? what are the chances that it actually continues based off how well this curve is and it says that if it goes up and the curve takes a while meaning that you know something like this it kind of happened very quickly there's a good chance of a continuation but if it takes a while like it does this usually you go down you go back up you go down you go back up and it takes a very very long time for it to actually punch through and outperform Why? Because the slowing of the pace is killing the implied volatility.

And then the expectations take a very long time to come back into it. But that's something I'm trying to master. I mean, will I master it?

Is there anything to master? Who knows? It's fuck around and find out type of education. Everything in the market is fuck around and find out.

But what I would say is everybody should be trying to learn something. Nobody's too great to ever learn something new. Even if you have a strategy, even if it's working out fine for you, always try to see what's out there in the markets that could make you money. That's interesting. And you never know what you cross.

Sometimes, you know, you work on a system or trade and a system is not anything that's copy and pasted. A system is just something that allows you and helps you read things. So there is no buy here, sell there.

But usually there's a system that says. You know, I'm looking for stocks that are going up and setting highs. I'm looking for stocks that are going down and setting lows. That's a system, right? A copy and paste strategy is buy when it pulls back to this, short when it pulls back to that.

That's copy and pasted. Those don't work very well in the long run. The ones that work really, really well are concepts that you could basically apply on any sort of market. They're not copy and paste systems or copy and paste strategies.

Thank you. They're a system of their own because they're just a different way of expression. The way that you're using a system is just to basically think of like the market speaking a language and your system is translating that language to your language.

Instead of copying and pasting that language, thinking that you're going to get some different result or something. So with that out of the way, today's lesson is actually going to be pretty quick and easy. We're not going to take up too much of your time, so we'll make sure everybody's out of here by five, hopefully.

And it's around levels. And the idea of levels is usually pretty loved by people. Everybody loves drawing levels. But if you draw too much levels, then they become a problem because then they lose the value that they're meant to provide. In which the whole idea of what I just said is price or systems are an expression.

They're supposed to explain something to you or tell you what is actually happening. And if you have a level here and a level here and a level here and a level here and you have all these levels. it ruins the purpose of what these levels are actually there for. So you have to minimize the amount of information so that you can actually understand the protocol or the objective or the meaning of whatever it is that you're doing.

The more lines that you draw on the more levels, the less efficient you are, even though you would think it is actually more helpful. And the less trade ideas you can come up with on a chart, the more sustainable that trade will actually be so if i go ahead and i say these are all my levels and if the spy comes here you buy and if it comes there you short but if it gaps above it you actually buy and if it gaps down below it you actually short and if it gaps down below here you actually short again but if it goes down below here you have to buy because it's a liquidation and all this stuff it becomes very very inefficient it's really kind of just going to give you yourself a headache. But if you have a line here and a line here and a line here, each one of them stands for something. This stands to represent sellers.

This stands to represent buyers. This stands to represent the neutral camp, the people in between. And if you can go ahead and identify which of these is which, you can go ahead and form ideas that are unlimited, but you understand why they're unlimited without having so many damn lines drawn over the place. So instead, what you could say is the same thing I just said, but you're saying it to one angle and you're understanding why.

So if a stock goes into the zone, we know that this is a place where sellers are in control. There's a lot of people here who are trying to get rid of the position. Now you go ahead and you start to talk to yourself, why are there sellers there? It doesn't matter that there's sellers there.

The question is why? And then because of the why, you go ahead and figure out what the reaction and the result will be. So if there are sellers here because people shorted, it's a different story. If it's what you like, I don't want to take anything.

It's hard. I just want to throw that option out there. Okay. These guys are ordering a burrito, I think.

I muted him. But if you have an idea or... A concept in your head that says, okay, there are sellers here.

The reason there are sellers here is because people are shorting. Okay, well, what's the result of people shorting? You get squeezed out of it. Well, the reason there are sellers here is because people bought the dip and now they want to get out. Okay, well, in this situation, you're going to get a pullback, not a drop, right?

Just a pullback, a little pullback. Well, what if the people that are actually there are causing a distribution or there's a wall or whatever it is? that's over there.

Well in that situation you get also a different result. Maybe there's a distribution that ends up taking place that's a little bit bigger than usual. So what we're gonna do today is try to identify these levels by simply just picking out points in a chart with any time frame.

Now we're gonna go ahead and actually use a one hour time frame for simplicity and then we'll go into maybe different time frames as well. Now, the first thing we're going to actually talk about is the buy. Now, we've talked about expansion points and expansion points are a buy point, but they're a buy point in a macro image. But in the micro, there's also a buy point that can easily be identified on a chart. What does it look like?

Well, a buy point simply means that you get a continuous reaction of somebody loading a boat, right? So it's not a... a one-click button, right?

People would think that a candle like this is a buy. No, a buy is usually a continuous time frame of just continuously buying things or continuously buying shares or whatever. So if you're looking at a chart, you're looking for something that has consistency to it. It doesn't matter where it is, but there's a continuous movement to it.

So an example of this would be, imagine a stock falls, and then it pumps, and then it dumps, and then it pumps again, and then it does nothing, and it pumps. But then after it gets to here, you start to see something like this, and then it dumps again, and then it pumps, and then it dumps, and well, where's the buy? It's right here. Now you might be saying, well, why wasn't this a buy?

Well, maybe the pace was too fast. It has to be perfectly sloped. It can't be like this. Sure, this is buying, but it's not continuous buying. It's euphoric buying.

People could say, well, why wouldn't a big green candle be a major buy? How come this doesn't matter? Because it means a fat finger took position. It means one dude took that position. It wasn't multiple people.

So we can't consider that to be a buy. So instead, what we consider as a buy is a continuous price increase or decrease. Well, in this case, a continuous buy is an increase and a continuous sell is a decrease. It would be a little bit of a different story. So you're looking for that continuous move.

You don't want just one candle. Now, of course, the timeframes are going to depend on how you're looking at it. But if I go ahead and actually look at an example, let me tell you this right here. You can see easily from here to here. This was literally just fat fingers, you could assume, right?

You could assume these are just fat fingers. It's a big dude trying to load the boat, but he's just a big guy. The one that I really want to pay attention to is this.

This is a clean buy because it's continuously going up on a bigger time frame. And when you look at this, this is considered a buy. This is also a buy, but it's not a continuous buy. It's just a single buy. A single buy comes in these massive euphoric, unsloped, you know, just call it a whatever.

What's that? Probably the degree we're talking about. It's kind of like this.

They should go like that. It's kind of like the building that the secret service let the shooter go up on. They said it was sloped, but everybody can stand there. If you can't stand on there, then it means that it's too much of a buy, and you don't want to consider that. But the continuous buy is the one that slowly goes up.

Now, some of you are probably wondering, well, why does this matter? Well, because if you can figure out what's a buy, versus what's a continuous buy, you can actually come up with levels that give you better trade ideas, right? And they also give you higher likelihood of actually, you know, happening. So instead of just like waiting forever for the level to come back to you, and then it never actually gets there and you miss the trade with these continuous buys, you actually have a very, very good chance of getting good levels that you can trade, take trades off of.

An example of this is like, well, what are the chances you actually come back to here to buy? Probably very low, right? But if you take a continuous buy, what is the likelihood that you actually get a good entry? Well, here you might actually get a pretty good buy.

You get multiple opportunities to take a trade, okay? But that's a buy versus a continuous buy, and the one that we're more focused on are continuous buys. If I take an example of, say, AMD.

Alright, and we're looking at a one hour time frame. You can see right here this on this section You can see how there's a big candle. This is just a fat finger by this is also a fat finger by This is whatever.

It's kind of whatever. These are all fat finger buys These you can't really do much. You can't really take levels off of them.

They're just very very tough to work with but here's maybe a good one. You can see here, it's a little bit more spread out, right? You can see how it's like pop a little bit here. Maybe it's a little bit of problem, but then the rest of it was slowly grinding.

That could be considered as a continuous buy. This is just a big sell candle. This is a continuous sell.

Some people might say, oh, is it because it's choppy? No, no, this is bad. There's not much that you can do with these candles. There's no levels to actually draw off of them, which is why when a stock is dropping at a very fast pace, you never know where it's actually going to bottom because these are fat fingers, which means that they're orders that just get filled and then it's an empty void of whatever happened there. There's random people.

There's a seller here. There's a buyer here. You never know. But the continuous buy is very clear.

It's all the way down here. You could always find levels in these areas. You find a level here, you find a level here, you find a level here.

There are so many levels to work with. Example of a continuous buy is something like this. You can see how right here, big buy candle and then continuous buying from there.

That's good. You can tell that. That's very clear.

Here, big buying candle, a little bit of continuous buying. This is beautiful. This is continuous buying.

Something like this is good. Something like this, if you were to look at it on a bigger time frame, this would also be good. So what you're doing is you're trying to find something that's sloped, right?

That's not in a euphoric angle like this. You're finding something that's going sideways, like how an actual chart should go. and now if i go into a very very tiny time frame this will probably give you a little bit more of a challenge but here's an example this is continuous selling pretty straightforward it's all continuous selling this is continuous selling it's at a slope um this is not continuous this is just a big cell why because look it stopped and it chopped whatever This is continuous selling.

This is just a sell. So if I want to go ahead and find a level, where do you think my levels are going to be? It's going to be in these continuous moves right here.

There is no level over here, but there is no level from here to here, but there's a level from this point to this point that you could take. There's a level from this point to this point. If you go ahead and look at it on the upside and you guys will get to see this, this right here.

If I go ahead and zoom out right here, just big green candle. Sure, maybe this was continuous, but this was a big buy candle off the open. You look over here, it's whatever.

This is just a big fat buy. This is also a big fat buy and then dump. This is a big fat buy.

Now, if you look at it on a bigger time frame. Sure, this could be a continuous trend on a bigger timeframe, but in the smaller timeframes, there's nothing there. This is a big sell. Right here is also a big buy and then a big sell. Now you could argue that maybe this was a little bit continuous, but there's not.

This is somewhat continuous right here. This little selling that it's got going on outside of maybe this, this is still considered continuous. This is just a big buy.

This is just a big sell. but this is somewhat continuous now i don't want to keep saying the word over and over and over the whole idea is if you practice a little bit you'll start to figure out that the whole idea is you're looking for something that's sloped and the higher likelihood that something is sloped the more likely you are to actually find a level in it if it's not sloped and it's like this the harder it is to actually come up with a trade idea outside of just by the highs and then maybe get lucky and buy the dip on some random level and you could nail it. But with these slopes, you're always going to find something like that that's actually pretty good.

So this is a buy versus a continuous buy and a sell versus a continuous sell. The second part to this is identifying liquidations. Now, a majority of you know liquidations as, you know, a stock going to a zone and then liquidating for stop loss hunting.

Now, this is the classic liquidation pattern that we look for. We look for stocks that liquidate zones. However, there's also another form of liquidation, which is not actually a liquidation of hunting stop losses, but a liquidation of liquidity injection, meaning that money is actually getting injected into the system. How are they doing that? Because they're just basically taking an order.

off the order book. It's basically, if you guys remember from a movie a while ago, I showed you, where they call it chasing the bid or chasing the ask. You're not actually getting anybody to dump on you.

What you're doing is you're forcing yourself through a position to basically find wherever there is as many people who have market orders and force them into a trade. A lot of people are probably looking at a stock that's going down. And then all of a sudden, multiple people with a lot of money put a trade.

And they're all market orders. And what it does is it basically destroys the stock and then it rips right back. You can see in this case, there's probably zero level that actually was crucial. If anything, there's probably zero stop losses or anything.

But somehow a lot of people were interested and that caused an actual liquidation. So this form of liquidation is. injection or an extraction but it's an extraction and injection at the same time it's more an injection than it is extraction and the way that you can identify it on a chart is wherever you see something click and then instantly take a reversal off of it so if I go ahead in a very small time frame and I look at something let's say like this right here you can see how with AMD it went up with this big candle and then instantly came back down. This is a liquidation.

Now you might be saying, well, there's no level that it violated. It didn't break the highs. It doesn't matter. Broke the highs, didn't break the highs, whatever.

This is a liquidation. This could also be a liquidation as well. What about these? Well, there's really not much. But it's these big instant moves that go and then take back everything right back.

Now the key is that at the very least it takes back exactly to its starting point, meaning it pops and it comes back right to the starting. If it can go a little bit more, then that's okay. But the key is that it has to come back to the mean.

or the main point, basically. And you could always find these on any chart. Now, in some cases, people will confuse these with just random candles.

For example, this is not a liquidation. The fact that it just dumped in the morning, this could be a regular cell candle or whatever, but it's not a liquidation. People say, well, what about this right here?

That's not a liquidation either. This could be a regular cell candle. This could be a regular cell candle. This could be a liquidation not a hundred percent but could be this is definitely a liquidation right it's pretty clear you go ahead and look at some more candles um what about these are these liquidation no but what about this one right here this could be considered a liquidation why because it instantly took back the move could this be a liquidation no that's not a liquidation could this be a liquidation sure But is it? No.

Why isn't this one a liquidation even though it's the same as this? It's not big enough relative to the price. One of the key things about liquidation is that there's, there's a, it's kind of like a rubber band effect where sure, you don't actually need to violate a zone, but you should have an outrageous decently move. It should be above a little bit of average.

So in this case, this is not actually a liquidation. The only one that really fits the criteria is this one right here. This one could be, but like I said, it's 50-50. It's too small. But this one's definitely a liquidation level.

So you can draw your zone from the body to the body, and you'll find something cooking up at that zone. Just like how if you draw your candle from the body to the body here, you'll find something very, very clear tomorrow from this zone. And you start it with the prior candle.

So I did with the green candle. I'm not going to do the red one too. same thing right here you drop from the body to the body of the red and then the green candle is the reversal you find another zone let's actually go back and see if we can find something from the prior you look over here are there any liquidations that ended up happening here no nothing that we see nothing that's too clear uh is there anything that happened here yes this right here see this morning one that's a liquidation so something definitely cooked up there If you go ahead and look at, let's say this one right here, that's not a liquidation. This bottom one right here, clearly a liquidation.

That's a liquidity injection. This is somebody who chased a bid on the way down. And there's another guy who chased the ask on the way back up. And they took a fill. You go ahead and you put, you know, it's fine.

Let's say, is this a liquidation right here? No. This one? No. Why?

Because there's a candle in between them. Is this one a liquidation? Sure, but it kind of fell too much. But here you actually have something that's very, very key, right?

You actually have multiple ones. You have one here and you have one here in the open and you have one here in the middle of the day. That's three different liquidations that happen in the morning for this chart, which is crazy wild. But you can see they all happen in the same range.

So you can kind of include this entire box. to be a major level here in the morning you got a big buy and then you got a big sell that's a liquidation so you take the body of the green candle not the red only the body of the green and as long as the body of the red is not too big but you know bigger than the actual green candle then it works pretty well but when you do this and you zoom out and you guys can take a look right here let's say let me actually remove this one right here just because it had a lot of levels and i want you guys to see you go ahead and you zoom out and you try to find well for this level what happened the next day you see how it went all the way into it and then liquidated pumped back and then dumped into it here you had a big little buy right around this area the first time it went straight through it but if you look tiny you know in the small tiny frame it actually tried to bounce off of it and then it flushed right between it the next day it went right above it came back to it and pushed higher so it failed here but it worked out pretty well here You zoom out, you do the same thing with some of these other charts. It's getting rejected, all this. This is not to tell you that it's going to go ahead and work on everything, but what it's supposed to tell you is that you can actually use these levels to do something with them.

And if you can find these liquidations in any chart, depending on you know the time frame, and of course the bigger the time frame the better. right the smaller the time frame that the less strength there is but you could always find these in in bigger time frames as well they just become a little bit more difficult so for example if you guys take a look right here could this be a liquidation no why because yes it pumped in a dumped but the red candle is way too small compared to the green one um if i look on this one you had a big buy you had a big sell sure but you need the candle to be close The closer the bodies are to each other where it's a big red can green candle and a big red candle Sure, it could be like 60 30 40 Whatever, but as long as it's not less than 70 percent of the length of that other body the wick is okay It's cool to have but you need it to be at least 70 percent And then have a wick with it to make it really really worth it. You can see in this case right here That's a beautiful one. So if I go ahead and actually put a level for this chart right here on the hourly and i put a level from here to here you'll actually see that this is a very key zone for the stock on the way up on the way down and on multiple other occasions so that's a good liquidation set up there here horrible liquidation here beautiful this is what you want to see so you take it you put body to body and that's going to be a very key zone for the future that you can use off of.

Now, we'll talk about how you can actually put it to actually make trades off of it. But for now, the main idea is, can you find them and can you draw them? Because it's going to get a little bit complicated when you start teaching people strategies, because the idea is if you can find the level, you come up with the strategy.

It's not that hard. And maybe you don't use it, use it as a actual strategy. You use it to fill some other gap that you have. and a strategy that you're already working with.

Maybe you're trading option flow, but you struggle to find levels to buy, and maybe this is a zone to actually look into. But this is how you can draw it. So this is the liquidity injection level, and you can find that on any time frame, daily, one hour, five minute, the bigger the time frame, the better, the more accuracy. Now, of course, these are going to be huge zones, which is the purpose of them. They're supposed to be big boxes.

But you're supposed to use them depending on how you want to trade. If you want to swing trade, you're probably going to use 30 minute to one hour. If you're going to look for something on a monthly or whatever, you're going to look for daily trades to where that range doesn't matter too much.

So for example, if I want to swing trade AMD, you know, a dollar move on a weekly contract is a decent amount. So if I say buy between 155 and 160, you're like, dude, you got to be kidding me. 155 and 160. That's too much. But for a dude who's trading a one-year contract, it's not that big of a problem.

So adjust the timeframe to the strategy that you're actually trying to trade with to make sure that it best fits the system that you're trying to go for. And you'll usually do pretty well with that. And then back to the first part with find a buy candle and differentiate between the buy candle and the continuous buying.

The continuous buying has levels to it. And the continuous buying, the way that you actually find the levels within them, is you don't actually label the level randomly. Instead, what you do is you choose the level that you think you want to trade with.

So for example, let's say this is a continuous buy, all right? Just assuming to make things simple. And I want to go ahead and the stock is here.

I want to know where could there be a potential bottom, right, for something like this. And I look and I look and I look and I'm like, there doesn't seem to be a potential bottom. But with this, I can actually come up with very good levels. I can come up with very good strategies off of this. So a good example of this is, well, here I can actually draw a channel.

There could be a channel that could be drawn here and I'll use that. Now you might say, well, what's good is the channel? Maybe I can't find a level within the channel, but I could always easily just clone this three times.

and I'm pretty confident that I'll get some good levels off of it. So you draw like this, and then you clone it again, something like that, and then you clone it again the third time, and you'll keep telling yourself that, hey, as long as we hold these bounces and we're actually bouncing off of it, then I can trade it. And if we keep closing below, then I'm going to keep expecting that we go back to the bottom of the channel.

And then you can come up with a level off of it. Another way that you could also do is... When you have continuous buys and levels, you could use a Fibonacci to go ahead and figure out what do you think the stock might bottom off of if it is a continuous buy or if it is a continuous sell.

Another way that you could also make good use of these levels is to actually find waves. In majority of cases with these, you're going to find multiple types of sequences. You're either going to find ABCs.

You're either going to find 1, 2, 3, 4, 5. You're going to find the double wave cycle. You're probably going to find a market maker cycle where the stock is up and then it's chopping and then it pops up, up, up, and then it liquidates. Now you're in the spring.

Now you had the max pain. You got flag one. You got flag two and flag three, right?

You're always going to find one of these key patterns that we talk about so much. in these continuous buys. You're not going to buy them. You're not going to find them in these fat candles. They're not as useful.

So it's more of to help you figure out what levels can actually be drawn based off of that. And like I said, it's all perspective and it's all timeframes. Depending on the timeframe you're looking at, that's what you're going to find.

Because for example, if I'm looking at a five minute, it looks very parabolic. But if I, you know, zoom into the one minute, then it looks very slopey, right? It doesn't look as parabolic anymore.

But if I look on the 30 minute, it actually looks even more parabolic. So if I want to find something that's slopey, the best way to do it is start with a bigger time frame and then zoom in. Don't start with a tiny time frame and then zoom out. So start with the daily and then identify where you think there's a continuous buy.

In this case, for example, we're getting big buy candles right here. We're getting big sell candles here. Well, maybe they're all big candles here because we're in such a big time frame.

Here, they're all big candles because we're in such a big time frame. Here, it's a big sell because we're in such a big time frame. Here, it's massive selling, but it still could be slope, but it's because we're in such a big time frame.

But if you zoom into the four hour, you might see a little bit of a different story. You can see. this doesn't actually look so bad anymore.

Sure it's still a little bit poppy and then pop but here's a continuous level for sure right around here. So if I was to draw a channel or find a level or find a cycle or find a wave or whatever it would probably be from here to here. I'm actually not going to include this or this because it doesn't look too good there. And then if you zoom in a little bit more you might find that maybe these two candles that you're ignoring are actually okay.

So in this situation, they're still very slopey. So I go in 30 minute. They're still a little bit too parabolic. Well, maybe the five minute. And then you can see that in the five minute, they're actually not as parabolic as you thought.

You can see this one's actually pretty slopey now. But you can only use it for the time frame that you're going for. So you can't really make a swing trade off of this, but it's more of a scalp or a trade, a day trade or whatever, if you're using this time frame. but if you can find that improve it on a bigger time frame then cool this is also continuous buying you could always find a key level to buy off of in this situation if we ever do come down to it the 158 you could come up with the channel and say okay well this with this type of move or this type of rally or whatever i can't find a level in this but i could also find a level in that meaning that the next day if we actually end up dropping you're more than likely expecting that there's probably going to buy uh right around this zone of 161 now it didn't happen but if it were to come down then you'll be able to take advantage of it but it's much better than saying oh we just got a big candle and i missed it and i don't know what to do it's much better than looking at this candle and then having no clue what to do with it all right you'll actually have more ideas to come up with different strategies uh for that so those are the two uh main ones now The final one, outside of people buying and people liquidating, you want to find stop-loss hunting.

Now, this is kind of like liquidation. Stop-loss hunting is referring to failed setups. Now, a failed setup is not the one that you would think of in the majority of cases. People think that if a stock does this and it does that and fails, then that's considered to be a failed setup.

That's not true. right it's a failed setup for the guy trying to go long but for all we know the guy who was trying to go long failed to consider that there's a lot of sellers here and that's his fault that's none of the market's fault they should have realized that there was people selling here and you don't long into a wall right so this can't be considered a failed setup so if there was stop loss hunting where would it usually come up it doesn't actually come up when there's fat walls or specific levels In which people usually think, right? That stop loss hunting is very common.

You get liquidated, everything is fine. But the one that you're actually going to be focused on specifically is the diagonal or the ones that change over time, where it's more of people get sick of being in a trade and therefore they get kicked out or removed. Not because of a stop. but it's because of lack of patience or because they're forced to move out because something else is better.

So if anything, it's kind of a mentality game. You want to find something that's, you know, moved in the morning, came down, moved again, came down and then did nothing. It just kept fucking with people. There are multiple zones in here where there are stops for people. And what you're going to go ahead and figure out is where do you think majority of people got out?

Not because they lost money, but because they were sick of the trade. They didn't want to stick with it. And this is going to be hard for people because you guys probably never thought about it this way.

But if you think about it, you guys have had trades that are very similar to that. How many of you have traded those trades that you're like, damn it, man, I don't even want to be in this. And then ask yourself, what made you not want to be in it? You weren't down and you weren't green. So you can't say it was loss or profit.

Something else has to have happened for you to be able to say, frick, I need to go do something. I'm sick and tired of this trade. Well, the answer to that question is usually in majority of cases, there's something better.

Now, this is where it gets a little bit complicated because people are like, well, what could be better? There's always something that's better. in that similar concept. So it's kind of like if you have a little bit of understanding of sectors and all that, you'll probably find this to be very easy.

But if you don't, then you'll find it to be pretty hard. So while people find that maybe this is the setup that, let me actually do this. Let's say, let's say right here.

Actually, no, let me find this. This is a good one. So look at this.

Everybody wakes up in the morning excited about AMD and AMD just went up, down, up, down, up, down. And in the process of that, there's some stock that's actually or two or three that are doing way better than AMD. Right. And those stocks are actually killing it.

So if I go ahead and actually compare and I just add NVIDIA and I'm going to go ahead and add AMAT just randomly. right they're both in a similar sector and you notice well which one is actually doing better well amd and nvidia did pretty damn well in the morning and the one that's actually doing a little bit better is this one's actually pumping and it went back up and it went back down but if i was thinking about it in the morning and i was trading and it came around this zone right here that's where majority of these pivoted this one moved and this one topped And this one kind of just sat and topped in the morning. Something happened here to shift people's sentiment. Something definitely happened right here. And this would be the zone that you would try to heavily focus in on and say, OK, this is the stop loss or not the stop loss, but I would probably say the the get out trade.

Just get out of it. No loss, no profit. Nobody cares.

Get the hell out of it. But this is a key zone that you would pay attention to. Now, some people are going to say, well, this is impossible.

How am I going to keep adding the charts of other stocks, you know, every time and being able to compare them? You don't actually need to compare them. In majority of cases, you're actually going to already know this in your head because, well, if you actually trade, you'll see what other stocks are doing or you'll see how the market is moving.

So if you see everything is moving except this stock. Where did a majority of things move versus this one? And wherever that zone is, that's where you can expect people will call it a day, right?

Right after that moment. So the easiest way to do for every stock outside of maybe penny stocks, just go ahead and add SPY to it. or QQQ in the majority of cases. And then C, where is it that majority of people started to make a move?

Well, in this one, you topped, you topped, and then everything started to sell off from there. That's where the trend was. In this case, something happened right at this moment. People got sick and tired in that same zone.

And that was also the same with the NVIDIA and the other trades. So this is a very key zone. Now, you're not actually going to trade off of it. There's no buy or sell because of the zone.

But what you're going to use it for is your potential stop if you ever do want to take a trade. And in every chart and in every day, there's always a zone in that chart that you can use that would be the stop of people just wanting to get out. Why is it that that becomes a good place for you to go ahead and get out or get back into?

Because usually that zone marks where majority of volume gets traded. Because not only are the people who are in wanting to get out, there is also people who probably wanted to get in that actually canceled and said, you know what? Screw it.

I'm not interested. So the volume, while it might not appear that it's actually higher, the potential trading volume is basically very, very high. So theoretical volume was supposed to be this, but because this happened. theoretical volumes now is actually very very low so you can actually set some sort of zone in that area and call that maybe a stop so if you were a swing trader and you bought calls maybe near the market close or whatever this could be a very hot spot zone for you to take advantage of the next day or whatever and you can see this actually came back to right around that multiple times hopefully it didn't stop you out because it did touch it a few times but that's that's kind of the idea So you're finding zones where people got out of a trade because they didn't see anything happening and everything else was doing something except that trade.

So if I go, for example, like today, well, everything was going well. This was dumping, this was dumping, this was dumping. And then keep in mind, you're only going to find these in either consolidations that are very clear But you're also going to find these in any sort of massive move, right?

Now it goes into the other psychological positioning, which is that, well, if you're buying something that keeps going down and the markets are going up, then you would think people would get out and stop buying. So theoretical volume is actually higher. Potential volume is higher. But the reality is, is the volume disappears because nobody wants to be involved in it.

So if you ever find a stock that's actually dumping while the indices are pumping, in this case, they were both dumping. So there was no problem. But if I go ahead and find, let's say here's a good example right here.

You can see here, for example, the the market pumped and then the market dumped a little bit. But then the market went bazookas. and AMD is just getting murdered. It's doing nothing. Something happened here.

You can bet that within this zone, as people saw that the S&P was breaking into new highs and this one was lagging behind and it refused, something probably happened at this zone. And there's also a liquidation that ended up happening as well. So you could use this level to also maybe label a short position or whatever.

So maybe if you enter puts at market close, this would also be maybe your potential stop. or maybe a level that you would watch for for break above to see if something actually happens or whatever to give you a little bit of an idea of what to do but you could also find that in there as well in these massive moves the easy ones are always going to be in the chop but you could also find it in these massive up down whatever if it's like this or like this just try to compare it to the spy of course if you have a little bit more broad market understanding you compare it to the industry you'll get more specific clarity. But using Spying QQQ could also work too. And having those levels drawn out on your chart could really, really help step up your game.

Now, again, like I said, those are not buy levels. They're not meant to be used to trade off of specifically. They're meant to be used to add to something you're already working on.

And that should be it. So yeah, hopefully you guys understood it. I'm going to give you guys nine minutes to go ahead and ask any questions. And then I think we're done for the day.

So is anybody confused or anybody have any specific questions? Do water taste so good when you're thirsty? It tastes like heaven. Yo, my voice is getting clapped.

How do you trade liquidations? Which liquidation? The liquidation we talked about or the liquidation of stop-loss hunting?

The one we talked about? So if you have a liquidation, what you do is you basically use it. as a zone um let me see if i can find one right here this one could be okay maybe not the best but it's all right so if you label the zone right here what you're doing is you're trying to identify in this zone do you have a trade idea of maybe being bearish or bullish but you're struggling to find a place to go short right or you're struggling to find a place to go long this would be the place for you to do that.

You would say that as long as we're below here or we're coming around here, I want to short it. And if we're above here, I want to buy above it. So you use that box as a barrier. The liquidation is meant to be used as a barrier in which that barrier may get cracked or may, you know, do something.

But, you know, if it gaps or whatever, you want to use it as a barrier or a block or a wall for you to be able to trade off of it. So if you have an idea you could use this to maybe find a level or the zone So for example, let me actually give you guys one right here gld Right. This was a trade you guys took today if you go ahead and actually look at a bigger time frame If you wanted to find an entry, but you were struggling to find one you could have found an entry Based off this candle right here.

That would have gave you an idea So if I looked over here, you guys can see this is a big buy candle right here and right here we know that there's going to be a liquidation zone right around this zone right if i go in this candle you're for sure going to get a buy tomorrow in the morning which is why he has it diagonally from here you can see how he's like oh it's going to go down and then you're going to get a big rip because there's a barrier there the only reason we're not going to get a bounce is if we gap below it because then it becomes below the barrier but if not you can actually use that so if you're day trading in the morning and this is falling you could actually trade it and buy it off the dip to maybe play a rebound or make sure to take profit which is why you can see his take profit is right in it as well so you probably want to get out of it now he would have put the take profit a little bit higher but he knows that it's not enough profits to take something and the same idea here you can see this is also a liquidation this is also a barrier if it ever gets to there then you're probably going to find a little bit of a problem okay um hopefully hopefully that explained a little bit of an idea uh tesla today i'm a little confused about liquidation since i have other videos saying to trade against it no so the liquidations that we trade against are the liquidations of stop hunting okay i i've tried to tell you guys the difference as we're going through it this is the liquidation of stop-loss hunting When a stock hits a level, bounces, hits a level, bounces, hits a level, bounces, and then it instantly wicks right below it. And it's contingent against wicking, right? It killed all these levels. That's a liquidation.

Now it can go and break out. The one that we're talking about today is the one with no liquidation and no zone. It's just a liquidity injection. Money's coming into the market due to chasing of a bid or ask.

so this one is the one that you actually trade the liquidation and buy off of or short off of this is specifically telling you that there's a barrier there it's a little bit of a difference this one you wouldn't trade against it because you would never know it happened until it happened so how would you trade against it the only way you're going to know the level is there is once it happens this one you can trade against it as it's happening in front of your eyes You can trade it on the way you can buy the dip as is dropping. Are you going to trade against it if you're finding the level two days after or three days after? It's just a wall. You can, sure, you can use it for a trade. That's the idea.

You want to use it for trades. But you're not trading the actual setup. You're trading the prior technical that already happened.

Does that make sense? While this one, you get to trade it as it happens. This one, you can't trade it as it happens because it already happened. Like this one right here, there's a liquidation. It already happened on July 11th.

You can't really do anything unless you want to trade it somewhere here or you want to use it as a barrier or a block. unless it gaps below it. And then the other thing with liquidity grabs, the grab is a little bit different, right? The grab is actually referring to a stock that goes up and then it chops for a bit. It forms liquidity and then it drops.

Liquidity grabs are not like these. Liquidity grabs are usually... where a stock goes up, up, up, up, up, up, and then comes back down, completely erasing the entire move on a, what? On a violation of a zone. These are both off zones.

This is random. This can be applied anywhere with no contingency. This one has to violate a zone. There has to be a top that was touched multiple times that it did this to.

Do you understand? There has to be a top that got hit multiple times. And then if it did this, then that's a liquidity grab because it violated all these zones in a stop loss hunt.

If it did this and then it pushed up and chop, chop, chop, and then came down, that's liquidity formation. This that we talked about today can be applied anywhere without that rule of having multiple tops or bottoms being violated. You could place it anywhere.

Doesn't matter where. There you go. That BA right there is a liquidity grab, right?

This is a liquidity grab. Why? Because it violated these two highs.

Exactly. You could do that. You could do that in expectations of it.

It's also not a zone here either because, I mean, the candle is way bigger than the other. This is because it violated multiple highs in this area. It took out this high and this high.

Just like how this one took out this low and this low. This is liquidity grab and this is a liquidity formation because it chopped near the bottom. This one instantly reversed. So formation is when it goes and chops and then comes back. Grab is when it goes and v-shapes.

And the contingency is that both of them have to violate a zone. If they do not violate a key zone where something was trading by or a key low or a key high, then they're worthless. So eventually, eventually, when the stock comes to that, the idea is that when it breaks, it'll have a successful break. It doesn't guarantee a break, though.

You have to understand that. It doesn't actually mean it has to. No, no, no.

It just means that if it gets to there and you trade the breakout, you're highly likely to actually be profitable because think of it like a bonus push. Like you're going up a hill and as you're going up, you somehow get one of those speed boosters that give you a push up higher. That's what these do versus the liquidity right here.

This will probably bottom off tomorrow in the morning without a gap. So if it doesn't gap down more than likely, this will bottom and reverse because it's a formation. There's buyers here. Um, what's the difference between a fake out and a stop hunt?

I think I answered it. Did you understand it, Chad, or no? It's basically zones. One violates a zone. The other one, you don't actually need a zone.

Stop loss hunting has to be, remember, the one that we talked about are a little bit different. Stop loss hunting is there's a zone. that has been touched multiple times, that gets wicked above and then right back. This is the stop loss hunting.

It could also be in diagonal channels where you have a channel going down and then it picks up above it and then it goes down. So it broke the diagonal channel. That's stop loss hunting.

The one that we talked about is people getting out of a trade, stopping out without a loss. So I guess you can call it stop profit. if that ever makes sense. Because what you're doing is you're getting out without really having a reason to get out. You just hate it because it's not doing anything.

And the other market is offering better opportunities. That you can actually use as your stop loss in the future. Can you look at Tesla? I'm identified to break out of liquidity based off this morning.

So you could have used this. That was the barrier right there. So that was showing you that you're probably going to hit a wall somewhere around here. Unless it actually just blew right through it.

But this is going to be a big wall. Today you did some serious damage, which is good. So you've already damaged it.

So the next time in the future, it's actually not going to be as bad. Now you could say that this was a liquidity, but it's not because the candle is small. It has to be big.

the candle actually needs to be big off of it so remember the rule is is that you have to have a candle and the next one has to be slightly either bigger or smaller doesn't matter but it can't be too big and it can't be too small and it has to be the same size at least 70 percent body and then maybe 30 percent wick could also work so this doesn't apply because it's just two long wick candles the one that does apply is this one for example this one's okay but it's too big it's a four hour and you're using after hours this one doesn't apply either because just a big red candle um yeah that's pretty much if you look at five minute maybe So as far as the entire day, there really wasn't any liquidation at all outside of this one right here. But it's not big enough. These candles are not big enough to be used as liquidation. So they're just way too tiny. If this was maybe a little bit bigger and the candles went down to like here, that would be a really, really key zone to draw.

On the one hour, 7-11. Yep, this one's good. Perfecto. That's a good zone. That's a good barrier.

So you could have shorted off of it right here the next day or after two days. That's a really, really good zone. Now, again, it doesn't guarantee that it's going to reject.

It doesn't tell you it rejects in the beginning or in the middle or at the top. You don't know. It just depends. That's why you have to have a trade idea to why. So, for example, you have an option flow.

An option flows down 40 percent here. Probably going to go a little bit higher and get rejected at 70% or 60 up here, right? So you need something to kind of give you the trade. Don't just trade off of it. Use something and then use this as a zone to kind of take advantage of because it's there.

Is the gap over or below the liquidation zone the thing that you were switch or bias? Yeah, the gap rule. We're going to talk about it next week on Tuesday, whenever we do the other boot camp that we're going to do. But we'll talk a lot about gaps next. For now, we're just talking about straight up candlesticks.

We're trying to focus on candlesticks and buy and sell of the premiums. Next week, we're going to talk about gaps. And then we're also going to talk about setting expectations.

So I'll show you how to actually draw your own path. Kind of just like how we do it with these. so we'll try it and this is gonna be hard but if you understand it you'll realize that it's a beautiful thing like for this we took an iwm trade twice i shorted it here and i shorted again right around this zone for almost three trades and i also got to short it down here as well today from that so we'll talk about how to draw these uh as well whenever we do it next week all right uh that should be it for today um if somebody has uh the recording hopefully they'll post it But the second post should already be down there in the channel. So make sure you guys do go over and watch it. And we should be good for now.

Thank you for being here. And as far as stock picks and all that, I'll be here tomorrow. Tomorrow's going to be Friday.

So I'll be here in the pre-market. We'll look at some picks for swings and whatnot. But I'll try my best to be here in the pre-market. If not, I'll show up in like 9 or 10 o'clock my time.

But I'll be on the computer so I can actually chart and do stuff instead of driving But that should be it. Take it easy and Joe the rest of you night, and we'll see you guys tomorrow. Goodbye

Transcript for:Lesson #3 Stock Market Cycles and Trading Strategies

Transcript for:
Lesson #3 Stock Market Cycles and Trading Strategies