Market Basics - Chapter 1: Trends - Part 3
Summary
TLDRIn this educational video, the host focuses on teaching viewers the fundamentals of trading and price analysis, emphasizing the importance of recognizing trend reversals. They discuss the use of 20-day and 50-day exponential moving averages (EMAs) for confirming trends and the 200-day simple moving average (SMA) for identifying macro trends. The host also shares personal trading strategies, including taking profits regularly and avoiding long-term holdings in most altcoins, which they believe will eventually lose value. The video promises further insights into trading techniques and market analysis in upcoming episodes.
Takeaways
- đ Importance of Recognizing Trends: The script emphasizes the significance of understanding trends for successful trading, especially in futures markets.
- đ Trend Reversal Identification: The speaker aims to teach viewers how to recognize when a trend might reverse, which is crucial for making informed trading decisions.
- đ Use of EMAs for Trend Analysis: The script mentions the use of the 20-day and 50-day exponential moving averages (EMAs) for trend analysis, especially on weekly and 3-day charts.
- đ Bearish and Bullish Signals: The speaker explains how to identify bearish and bullish signals using price action and moving average crossovers.
- đĄ Confirmation of Trend Reversals: The importance of using multiple indicators, such as EMAs and price breakouts, for confirming trend reversals is highlighted.
- đ Utilizing the 200-Day SMA: The script suggests using the 200-day simple moving average (SMA) for identifying macro trends and confirming the validity of a trend.
- đ« Caution Near Key Supports/Resistances: The speaker advises to be cautious and wait for further confirmations when trading near key support or resistance levels.
- đ€ Regular Profit Taking: The importance of taking profits regularly to maintain a healthy portfolio and avoid potential losses is stressed.
- đ Bearish Confirmation Example: The script provides an example of how a bearish trend was confirmed by a price breakout below the moving average and subsequent price action.
- đ Bullish Momentum Indicators: The speaker discusses how to identify the start of bullish momentum using price consolidation and breakout patterns.
- đ§ Disinterest in Certain Indicators: Despite not being very interested in certain indicators, the speaker acknowledges they can provide additional confirmation for trading decisions.
Q & A
What is the main focus of the video script?
-The main focus of the video script is to teach viewers how to recognize trend reversals in trading and how to deal with prices using various moving averages.
Why is understanding the trend important in trading?
-Understanding the trend is crucial for making informed trading decisions, especially in futures trades, as it helps in identifying whether to go long or short based on whether it's a bullish or bearish trend.
What moving averages does the script mention for recognizing trends and trend reversals?
-The script mentions the 20-day exponential moving average (EMA), the 50-day EMA, and the 200-day simple moving average (SMA) as tools for recognizing trends and trend reversals.
How does the speaker suggest using the EMA 20 and EMA 50 on Bitcoin's weekly chart?
-The speaker suggests using the EMA 20 and EMA 50 to look for deviations and intersections, which can serve as confirmations of a trend reversal, especially when the price breaks out from these moving averages.
What is the significance of a price breakout from the moving average?
-A price breakout from the moving average is significant as it can indicate a change in the trend direction, providing a signal for potential trading opportunities.
What does the speaker mean by 'momentum' in the context of trading?
-In the context of trading, 'momentum' refers to the acceleration of the price in the direction of the new trend that is forming, which can be used to gauge the strength of the trend.
Why does the speaker prefer to wait near key supports and resistances instead of trading?
-The speaker prefers to wait near key supports and resistances because these areas can often lead to trend reversals, and they want to avoid acting impulsively without further confirmations.
What is the speaker's strategy for taking profits in trading?
-The speaker's strategy for taking profits involves taking profits regularly, every week, month, or day, to ensure a healthy portfolio with available funds for further trading opportunities.
What does the speaker suggest about the future of most altcoins?
-The speaker suggests that most altcoins, including those touted as the next big thing in finance, will likely go back to zero when the market makes a significant reversal.
How does the speaker describe their approach to trading after making significant profits?
-After making significant profits, the speaker continues to trade, taking profits as needed and maintaining exposure to the market, ensuring that their portfolio remains at an all-time high regardless of market fluctuations.
What time frames does the speaker primarily use for analyzing trend reversals?
-The speaker primarily uses the weekly and 3-day (3D) charts for analyzing trend reversals, though they mention that the monthly chart can also be useful.
Outlines
đ Understanding Trend Reversals and Trading Strategies
The speaker begins by greeting the audience and continuing a series of videos focused on trading education. They emphasize the importance of recognizing trend reversals, which is crucial for future trades, whether bearish or bullish. The speaker explains the use of the 20-day and 50-day exponential moving averages (EMA) and the 200-day simple moving average (SMA) to confirm trends and reversals, using Bitcoin's weekly chart as an example. They highlight the significance of price action, support levels, and resistance levels in identifying trend reversals. The speaker also mentions the use of other indicators for confirmation but prefers a more straightforward approach. They conclude by advising viewers to wait for further confirmations before acting, especially near key supports and resistances.
đ Profit-Taking Strategies and Long-Term Market Insights
In the second paragraph, the speaker discusses their personal trading strategies, focusing on profit-taking to maintain a healthy portfolio. They share their experience of buying the bottom of altcoins and taking profits regularly, emphasizing the importance of not falling in love with any particular asset. The speaker warns that most altcoins, including those touted as the future of finance, are likely to return to zero in a market reversal. They stress the importance of profit as the main goal, using the metaphor of building a house brick by brick. The speaker also shares their approach to taking profits after significant gains and maintaining exposure to the market while ensuring their portfolio remains at an all-time high. They conclude by summarizing the importance of using price action and EMAs for trading decisions and hint at a continuation of the basic trading course in upcoming videos.
Mindmap
Keywords
đĄTrend
đĄTrend Reversal
đĄExponential Moving Average (EMA)
đĄSimple Moving Average (SMA)
đĄMomentum
đĄBreakout
đĄConsolidation
đĄSupport and Resistance
đĄProfit Taking
đĄAltcoins
đĄPortfolio Management
Highlights
Introduction to a basic trading course focusing on understanding price trends and trading strategies.
Emphasis on the importance of recognizing trend reversals in trading.
Use of the 20-day and 50-day exponential moving averages for trend analysis, especially on weekly and 3-day charts.
The significance of price deviations and intersections in identifying trend reversals.
Confirmation of trend reversals through moving average crossovers and price breakouts.
Simplicity in understanding and applying trading strategies for better grasp.
The role of momentum in trading and its relation to price acceleration.
Introduction to the 200-day simple moving average for macro trend analysis.
The importance of key resistance levels and the approach to trading near these levels.
Personal trading philosophy of taking profits regularly to maintain a healthy portfolio.
Avoiding long-term holding of altcoins due to the high risk of market reversals.
The strategy of selling and buying back for profit and diversifying investments.
Warning against falling in love with altcoin names and the potential for most to return to zero.
The concept of building wealth gradually rather than expecting sudden riches.
The speaker's 20 years of market experience and the lessons learned from it.
The use of the 200-day moving average for daily confirmations and its limitations.
Preference for the 3-day and weekly charts over the daily for trend analysis.
Conclusion of the video with a teaser for the next part of the basic trading course.
Transcripts
hello everyone guys uh here we are again
on the channel so uh I wanted to
continue a bit with a video the
continuation of the little course we're
doing let's start from the basics to
understand a bit how to trade and how we
should deal with prices in past videos
we saw that Trend which is so important
go check it out if you haven't seen it
and I wanted to continue to make you
understand how to learn to recognize a
trend reversal a a quick recap last time
we saw that understanding the trend is
crucial for moving especially in future
trades whether bearish or bullish in a
downtrend I look for trades that on the
highs will lead me to shorts and in an
uptrend trades that will lead me to
gains everything is very simple without
me repeating everything but you can go
back and see what we Ed to also see I
always prefer the prices but sometimes
to also get confirmations to compare I
also use the 20-day exponential moving
average and the 50-day exponential
moving average especially on the weekly
and on the 3-day chart then I also use
the simple moving average 200 especially
on the weekly let's look at some
examples for instance let's check out
the EMA 20 and the EMA 50 so on
bitcoin's weekly chart take this chart
here let's clean it up we can see that
especially regarding the deviations
which we saw in the other video when
there are intersections okay for example
here where it continued to deviate
and staying above this support these are
even more confirmations of a trend
reversal then use them the moving
average 2050 to see if a trend is valid
okay for example we notice here when
there was this crossover where there was
a breakout all right on this level pay
more attention to simplicity and
understanding I'll try to make things as
straightforward as possible so you can
grasp
them what happened here on this key
resistance the ema20 and em50 crossed
over here the price level broke out from
this moving average and then re-entered
the arest below for me was an even
bigger confirmation that the trend was
bearish indeed it then went down 50 to
60% as year the price started to
consolidate on these levels making a
breakout consolidating here there was
the confirmation that the price has
started the bullish
momentum these are mainly used to see
the
momentum momentum is nothing but a price
acceleration in the direction about the
new trend that is forming which we can
also see with some indicators that I am
not very interested in but many use them
I will show them to you because they can
always provide confirmation another one
that you can use especially let's clean
up the chart especially and on the three
days as I told you to see the trend but
you can also do it daily however here it
is much simpler for you to understand
the General market Trend it's the simple
moving average okay let's dive into the
charts a bit with a longer history where
this SMA is very useful for seeing macro
Trends look here how it works support
here the downside was broken that's why
there were all for the bearish remember
which then deviated and went down here
it was a very simple short that however
I personally near key supports I don't
care much about the shots in fact in
fact what I do is wait I've already told
you in several
videos I'm waiting for a reversal or
Price signals because near supports and
key resistances I prefer to keep pretty
calm that's all so don't act and wait
for further confirmations so we went
down heavily here the stock market was
starting to pump so I personally was
holding still so what happened
here the price has broken through we've
gone down the breakout happened okay the
breakout happened of the SMA and the
breakout occurred also of EMA 20 50 and
of the price all bullish
signs and then in another video which
I'll explain If Ever I
did go take another look at it on
Twitter search for cot report I had
taught you something else after that was
my confirmation that buying the bottom
was mostly of altcoins because I bought
the bottom of almost 50 altcoin names
and many ask me why are you taking
profit now guys I take profit every week
every month every day they are my
strategies because I want my portfolio
to always be healthy and with available
usdt after moving around a lot of names
of 200 300 500 or more because I made
one for 40 it's normal for me to gain
depth we can go up much more there are
many other names in the market I do
trading myself I don't care much I make
a 25% sell buy back later move to other
names I have very few uh long-term bags
and then uh when I make significant
moves or even because of the wind I've
been burned many times in the past
Cycles I have never taken profit I
thought the market was pumping I fell in
love with uh useless altcoin names
opening a parenthesis here know that 99%
of the altcoins that are shown here as
the next future of Finance are all
all of them most of
these names including AI I admit they
will go back to zero when the market
makes a reversal it's not time
yet the market is completely bullish and
I think there will still be especially
to go up on ethereum at the moment but
know that profits must be the name of
the game okay
okay building a house happens step by
step Brick by
Brick it's not like oh my God I suddenly
become rich forget about that fairy
tales can happen rarely but what happens
to someone who degenerated in this
manner doing it on a bet those money
will be lost on another trade trust me
it works like this the market operates
this way I've been in the markets for 20
years and learned it the hard way okay
that's why I take profit that's why I do
it it's normal for me to do it after
500% it's absolutely normal I still have
an nam in it I am still exposed but if
the market were to crash now my
portfolio is still at an all-time high I
couldn't care less because I've already
made the profits I needed to after
reaching my goal so I keep
trading and if we go up I will increase
I still repeat I have many names spots
where my stock are positioned in profile
okay let's close that parenthesis so
summarizing the price action that I
taught you in the last video and use the
20 and 50 EMAs First Step Second Step
also look at the 200 day moving average
this you should use and then you can
also use it on daily confirmations okay
it has never crossed down here for now
so the trend was entirely bullish but I
barely watch The Daily I mostly look at
the SMA because it gives me false
signals so I then mostly use the obv and
I use
others two or three indicators that we
might see later in the
video I mainly use it on 3D and weekly
but the weekly is the chart I use more
and more to see these Trend reversals
which can also be seen on the monthly
but you can see it in the stock market
forget about Bitcoin because it makes no
sense so weekly 3D I'm wrapping up this
video here and another one will be
released right away to continue as I
told you our basic course for all of you
it's going to be very intense very long
but it will definitely be a real
spectacle thanks everyone bye
guys
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