uh we recently covered um Head and Shoulders location Head and Shoulders pattern all right where like that and we've covered the reverse of that right which is the reverse Head and Shoulders right here's the left shoulder the head the right shoulder okay here's your neckline and once you break the neckline okay here is where your stock should be now more or less obeying the 20 ma most of the time all right I hope you see that so if we look we take that here not going to be per perfect like my drawing but here's your neckline let me do that again the neckline does is not always straight by the way you're taking the two points of the shoulder more or less right and look at the 20 look at your 20 it's obeying the 20 remember moving averages are in area so um you know the chart would have you believe that they are narrow moving averages are narrow thin lines but they are not they are areas all of these things we've had individual lessons on left shoulder head right shoulder all right boom there you there you go and I want to explain the criteria first thing your stop must be decently below the 20 period moving average so let's say I want you to ignore nor the Facebook chart here for a second let's say your 20 period moving average is doing that and your stock is has done this right but from here your stock starts from decently below it doesn't have to be super super deep below but it's it doesn't really work if you're close below so there has to be some space between the 20 ma and your stock right x y z so here's what happen your stock moves above the 20 and usually I mean not just barely above it doesn't work barely above it has to move above it it doesn't have to be super far above it but it it's not just a little peekaboo above it all right then it pulls back and as it pulls back your 20 period moving average halts it boom hark who goes there where do you think you're going no no no no no no you can't you can't you can't leave now you can't cross you can't cross this line anymore just go back the other way go back go back the other way you reached the you reached the end that the 20 ma Halls now some people say Oliver what's the difference between just that being a 20 ma play it's different because a 20 ma play is just Facebook here but you didn't start from under the 20 you see in a sense Facebook is the 20 ma halt if you fill in the Gap so you start from well under in this case the 20 you rally above you this is the 200 ma halt right but we're talking about the 20 ma halt now sometimes Traders it's important to understand this I I'm going to take a look at that because I want you one of the exercises today was to find me 20 and may halts right so I want you to do that but let me finish explaining first it's not guaranteed that your Stock's going to halul like you might get the stock that starts from beneath rallies above and then keeps going through oh I've see that a lot I'm just saying that if it holds if you get the color change here if you get the bottoming tailb bar there if you get the bull 180 there if you get the narrow range bar explosion there that's your your buy you must have your buy here you don't guess that it's going to stop you don't anticipate that it's going to stop you don't assume that it's going to stop you wait for it to stop and signal with something you guys understand this you got it all right now let's see the only thing I'm looking at PayPal now the only problem yeah yeah yeah yeah yeah yeah I got it boom boom now you slip through a little bit and this is interesting to do you slip through a little bit but it's not really a break because your signal is there it's really where your signal is do you understand it's not where the low is it's where your signal is is your signal at or above the 20 Main do you follow what I'm saying boom so you started off below you got above boom that's the 20 MAA halt now remember because you're you're below the 20 often times this is how you're going to be below the 200 a lot with this play but it's a great way to know when to start to go the other way all right so you're going to have the 20 above you but there are intelligent moments to play When the 20 the 200's above you I mean and this is one of them if you start from down here the 200s here you got quite a ways to go right so it's okay all right so let's see somebody was mentioning Uber today oh yeah beautiful look at Uber below above boom that's a beautiful one 20 ma halt halt who goes there where's that from by the way guys anybody know where are my Aristocrats at anybody halt who goes there so I love this one but this is a very beautiful 20 ma halt Beau all right um I'll get to them ishmail is going crazy with Y and DX let's do the ym DX he says on the five minute here yeah below all right above uh oh uh oh halt who goes there all right the only thing sometimes you can get just a little bit too high which makes the bounce up may not reach the new high so if this one's too big you you you you're not going to get this one to be big so like you know what you really want is not so high so that the next move is going to be your big one all right if this one has traveled too far then your next one will likely Peter out does that make sense guys like you're either going to have the first one big or the second one big you're not going to have both of them big let me go let me explain very thoroughly what the 20 ma Hal play is first of all we need a 20 period simple moving average of Whatever item we're using now guys everything I teach you is applicable on every time frame a two-minute time frame frame chart a 5 minute chart an hourly chart a daily chart a weekly chart a monthly chart the time frame doesn't matter all right so if you're income trading you're going to trade a micro time frame if you're wealth trading you're going to trade a macro time frame like the daily or the weekly if you're an income Trader you're going to trade the two-minute chart or the F minute chart all right so this is applicable across all time frames just so you know so we need a 20 period moving average of the trading item whatever time frame this is this is the trading item okay now we want an item that has spent a decent period of time under its 20 period moving average so during this period of time your stock or your or your tradable item is under a declining 20 period moving average I'm going to repeat that your item needs to spend a decent period of time under a declining 20 period moving average 20 period moving average is declining stock is spending time a decent amount of time under a 20 period moving average now notice that's criteria one criteria two after spending a decent amount of time under the 20 for the first time we need a move that breaks through the 20 convincingly not a peekaboo break but a convincing break this is a peekabooo break let me show you what a peekaboo break is stock drops that's a peekaboo break I'm not talking about a peekaboo break I'm talking about a break that actually finds itself lifting decently above the 20 so we get we don't have to be super far but it separates itself above the 20 okay that's criteria two so criteria one we need the stock spending time under a declining 20 criteria two we need the first crack through the 20 and we need to get elevated decently above the now criteria three is we need to see the stock retest drop back and halt at the 20 we want to see a halt at the 20 we want to see that 20 period moving average catch it all right we want to see guys look at me we want to see that stock fall back and boom the 20 per moving average catches and says halt who goes there pushes it back to the upside now here at this Mo at this point I want to see guys I want to see something powerful I want to see something strong do you understand I want to see that right there I want to see green I want to see Power I want to see violence I want to see umph do you understand I want to see something unmistakable all right I want to see guys I want to see boom all right I don't want to see all right I want to see boom I want to see something powerful I want to see something violent I want to see something unmistakable you know what I'm saying that point there at that 20 period moving out aage is key but the catch is not enough it's not enough to catch that's not enough I need the catch and the [Music] boom I need something boom right there and I'm GNA dive into the boom boom I'm GNA put my money into the boom okay now cover more of this when we go to some specific examples now here's what's cool all right I'm going to show you what's really cool guys this is the short one all right but I want to focus on the long one what's really cool let me let me tell you what's cool all right what's cool is that I went to the market today not last year not last month not last week today right before this event so I was a little bit late I went to the market today to show you that if you had this technique today when the market opened you could have made a killing already today so I'm not going back in the past cherry picking I'm using today's market do you understand stand and we're going to look at each individual example and by the time we finish you're going to know wow I would have bought here I would have protected myself here you're going to know this all right let's go let's go remember that I told you what we need is the trading item and we need that's a two-minute chart of the trading item and we need a simple 20 period moving average that's that blue line simple 20 period moving average what this moving average does is just average the last close the last 20 closing prices of the last 22-minute bars it Smooths out the data now criteria one we need the stock spending a decent amount of time under a declining 20 period moving average that's CR ceria number one all right I like to draw multiple times this helps you retain the information stock spends a decent period of time under a declining 20 period moving average criteria one criteria two all right we'll talk about this in a minute but criteria two I need the stock from under the 20 to get a above the 20 I need it to be in most cases I'd like to have it you know have some space between the item and the 20 period moving average so not a peekaboo blip above see this is peekaboo point I need non peekaboo okay and we need the next pull back to Halt Boom at or near now let me give you some details about why I say at or near every moving average is not a skinny line as the chart would have you believe the chart is a liar when you're looking at moving averages in reality your moving average is more like a zone or more like a fence that you can lean on never look at it as if it's a skinny tiny line it's a Zone it's like a rubber band now look at me carefully look at me carefully it's like moving averages are like fences that you can lean on the stock can move and bend the moving average and the moving average snaps the stock back it can bend this way and snap the stock back but on the chart the moving average can't bend so you see it as a M break but the mile break is not a break it's leaning on a on like like a boxer leaning on the ropes and comes back so remember that a little tiny break on the chart is more of a lean not a break so check this out guys we get above the 20 we this is not a break that's a lean but look at the power look at the violence look at the M look at that surge we dive into the green off the 20ma halt you put your money into the first Power green I'm going to repeat that Traders you put your money into the first Power green you can wait toward the end of the power green that's a 2-minute power green bar you can wait for a minute 45 seconds a minute 50 seconds just don't let that to minute finish without putting your money inside of that bar your money is inside of the first Power green I'm going to repeat that again your money is inside of the first Power green off of the 20 ma halt we are going to be 20 ma halt experts put your money inside of the first Power green off the 20 MAA the 20 MAA Hal now once your money is in the your protection is under the bar's low simple money in the bar protective stop one penny under the bar don't lose the bar listen Traders this is one of my number one trading precepts don't ever well don't generally lose more than one bar think about this you go inside of a bar you go inside of a bar your protections underneath the bar you got that you go inside the bar protections underneath the bar you buy the bar protections underneath you buy the bar protections underneath you buy the bar protections underneath and check this out if you lose on the vast majority of your trades you lose just one bar guess what your winners are going to do you're going to win five bars but lose one bar you're going to win 10 bars but lose one you're going to win three bars but lose one you're going to win 40 bars but lose one every loss is going to be one bar but your wins will be 40 bars 20 bars 10 bars two bars four bars 19 bars 11 bars six bars seven bars 80 bars but you'll always limit your loss to one bar this is what's going to keep you in this business forever this is going to prevent you from being a chronic loser this is going to keep you out of trouble this is going to prevent you from blowing up your account this this this this concept one bar losses