The UNFAIR Fibonacci Trading Strategy (THE ENDGAME)

Summary

This video outlines a top trading strategy that integrates Fibonacci with price action, applicable across stocks, options, cryptos, and currencies. It covers how to use Fibonacci tools for trade entry opportunities, the psychology behind their effectiveness, and combining them with support/resistance levels and areas of confluence for higher trade quality. The video also emphasizes the importance of trade quality and provides a detailed example of a Bitcoin trade using this strategy.

Takeaways

• 😀 The video introduces a top trading strategy that combines Fibonacci with price action, applicable to various assets like stocks, options, cryptocurrencies, and currencies.
• 📈 The Fibonacci tool and levels are important for identifying trade entry opportunities and act as key support and resistance levels in a trend.
• 🔍 To use the Fibonacci retracement tool, traders can click on the chart, drag the tool upwards, and lock it in to see the Fibonacci levels appear.
• 📉 Fibonacci levels are traditionally used by traders to enter trades in an uptrend when the price pulls back to these levels, acting as support, and in a downtrend when the price pulls back, acting as resistance.
• 🧠 The psychological aspect of Fibonacci levels is based on herd mentality and self-fulfilling prophecy, where many traders look to these levels for trade opportunities.
• 💡 Fibonacci levels represent areas of value during a moving trend, offering better entry points for trades.
• 🚀 The video emphasizes the importance of combining Fibonacci levels with key support and resistance levels or areas of confluence to increase trade quality.
• 📊 Trade quality is defined by the attributes and factors that influence the success of a trade opportunity, and understanding this concept is crucial for effective trading.
• 🌐 The video discusses the use of higher time frames (monthly and weekly) for more accurate market direction and the importance of multi-time frame usage for trade confirmation.
• 🔎 The strategy involves identifying high-quality trade traits such as trend trading, breakout momentum, fresh trends, and using Fibonacci retracement levels in combination with other indicators.
• 🌐 The final step in the strategy is to use lower intraday time frames for the key entry and exit strategy and entry tool, ensuring precise trade execution.

Q & A

What is the main focus of the video?

The main focus of the video is to explain a top trading strategy that combines Fibonacci with price action, applicable across various asset classes like stocks, options, cryptos, and currencies.

Why is the Fibonacci tool important in trading?

The Fibonacci tool is important because it provides trade entry opportunities at areas of value during a moving trend, acting as key support and resistance levels which can lead to high-quality trade entry opportunities.

How do you access the Fibonacci retracement tool on a trading platform?

To access the Fibonacci retracement tool, click the button on the left, scroll down, and select 'Fib retracement'. Use it by clicking on the chart, dragging the tool upwards, clicking again to lock it in, and then observing the Fibonacci levels appear to the right.

What is the significance of the 50 and 61.8 Fibonacci retracement levels?

The 50 and 61.8 Fibonacci retracement levels are significant because they represent deep pullbacks during a moving trend and are considered areas of high value, making them prime locations for potential trade entries.

How do traditional traders use Fibonacci levels to enter trades?

Traditional traders use Fibonacci levels to enter trades by going long when the price pulls back to these levels in an uptrend, as they act as support, and going short when the price pulls back to these levels in a downtrend, as they act as resistance.

What is the psychological reason behind the effectiveness of Fibonacci levels?

Fibonacci levels work due to herd mentality or a self-fulfilling prophecy, where many traders subscribe to these levels to identify trade opportunities, adding additional confluence to areas already being watched for trade opportunities.

What is the problem with using Fibonacci levels in the traditional way?

The problem with using Fibonacci levels traditionally is the assumption that price will reverse solely because it is at a Fibonacci level, without considering other market factors, making it insufficient on its own.

How does the video suggest improving trade quality using Fibonacci?

The video suggests improving trade quality by combining Fibonacci levels with key levels of support and resistance or areas of confluence, which increases the likelihood of a successful trade.

What is the concept of trade quality and why is it important?

Trade quality refers to the attributes and factors that influence the chances of success of a trade opportunity. Understanding trade quality is crucial as it helps traders to identify high-quality trades with a higher probability of success and true momentum.

Can you provide an example of how to apply the Fibonacci tool in an uptrend?

In an uptrend, to apply the Fibonacci tool, you would click where the swing low is, drag the tool to the top of the moving trend (swing high), and observe the Fibonacci level percentages that appear, indicating areas of potential pullback and value.

What are the steps to identify a high-quality trade using the Fibonacci tool combined with other factors?

The steps include identifying the trend direction, locating key support/resistance levels, observing price action at these levels, applying the Fibonacci tool to find areas of value, and combining these with other factors like trend lines, moving averages, and areas of confluence to increase trade quality.

Why is it necessary to wait for price action confirmation at the Fibonacci levels?

Waiting for price action confirmation at Fibonacci levels is necessary because it verifies that the market is indeed reacting to these levels, which can confirm the trade opportunity and increase the probability of a successful trade.

How does combining Fibonacci levels with areas of confluence enhance trade opportunities?

Combining Fibonacci levels with areas of confluence enhances trade opportunities by creating a scenario where multiple trading schools are looking to take action at the same time, increasing the probability of the trade going in your favor due to the collective momentum.

What is the final step in the trading strategy discussed in the video?

The final step in the trading strategy is to go to lower intraday time frames and use a key entry and exit strategy and entry tool to determine the exact points for entering trades, setting stop losses, and placing profit targets.

Why is it important to use multi-time frame analysis in trading?

Multi-time frame analysis is important because it allows traders to see the bigger picture while also identifying immediate trends and potential trade entries. It helps in confirming trend changes and avoiding false breakouts by observing price action across different time frames.

How does the video demonstrate the application of the trading strategy using Bitcoin as an example?

The video demonstrates the application of the trading strategy using Bitcoin by showing how to identify key support/resistance levels on higher time frames, observe trend changes on lower time frames, and use the Fibonacci tool in conjunction with trend lines and moving averages to pinpoint high-quality trade opportunities.

Outlines

00:00

📈 Introduction to Fibonacci and Price Action Trading Strategy

This paragraph introduces a new video episode focused on a top trading strategy that integrates Fibonacci with price action. It emphasizes the importance of this strategy for traders across various asset classes, including stocks, options, cryptocurrencies, and currencies. The video promises to cover unique concepts not found elsewhere and to showcase a significant Bitcoin and crypto trade example. Viewers are encouraged to interact by liking, subscribing, and turning on notifications to stay updated with new content releases.

05:00

🤔 Understanding Fibonacci Tool and Its Significance in Trading

The script explains the importance of the Fibonacci tool and levels in trading, highlighting how they can identify trade entry opportunities and act as key support and resistance levels within a trend. It provides a step-by-step guide on how to use the Fibonacci retracement tool on a chart, demonstrating how to apply it in both uptrend and downtrend scenarios. The explanation includes how Fibonacci levels indicate areas of value and potential reaction points in the market.

10:02

📊 The Psychology Behind Fibonacci Levels and Their Effectiveness

This paragraph delves into the psychological aspects of why Fibonacci levels are effective in trading. It discusses the concept of herd mentality and self-fulfilling prophecy, where many traders' reliance on Fibonacci levels can create additional confluence for trade opportunities. It also touches on the idea that Fibonacci levels represent areas of value within a trend, allowing traders to enter at better price points relative to the market's past movements.

15:04

🔑 Combining Fibonacci with Support and Resistance for Enhanced Trade Quality

The script outlines a method to improve trade quality by combining Fibonacci levels with key levels of support and resistance. It explains that identifying past price reactions to certain levels can预示 future reactions, thus creating potential trade opportunities. The paragraph also discusses the use of the Fibonacci tool in conjunction with these key levels to find high-quality trade entry points, emphasizing the importance of the 61.8 percent Fibonacci retracement level as a particularly valuable area of entry.

20:04

🚀 Advanced Fibonacci Application with Confluence Areas

This section introduces the concept of using Fibonacci levels in conjunction with areas of confluence to further enhance trade quality. Areas of confluence are defined as zones where multiple trading signals align, increasing the probability of a successful trade. The script provides a detailed example of how to identify and capitalize on such confluence areas, including the use of trend lines, moving averages, and candlestick formations to confirm trade opportunities.

25:10

📚 Fundamental Trading Lesson: The Concept of Trade Quality

The paragraph introduces a foundational trading concept: trade quality. It stresses the importance of understanding trade quality to avoid being at a disadvantage in trading. Trade quality refers to the attributes and factors that influence the likelihood of a trade's success. The script encourages traders to focus on identifying high-quality trades rather than simply categorizing trades as right or wrong, and to learn more about price action to improve their ability to recognize high-quality trade opportunities.

30:12

🌟 Key Trade Quality Traits for Successful Trading

This paragraph presents a comprehensive list of high-quality trade traits that traders should look for to increase the probability of a successful trade. It covers various aspects such as trend trading, breakout momentum, fresh trends versus trend exhaustion, higher time frames, multi-time frame usage, divergence, Fibonacci retracement levels, trend lines, moving averages, areas of confluence, candlestick patterns, chart patterns, and the quality of support and resistance levels. Each trait is explained in the context of how it contributes to the overall quality of a trade opportunity.

35:12

🔍 In-Depth Strategy Application: Fibonacci with Support/Resistance and Confluence

The script provides an in-depth look at how to apply the trading strategy by combining Fibonacci with key levels of support and resistance, as well as areas of confluence. It walks through the process of identifying a trade opportunity, listing high-quality traits, and explains the importance of each identified trait. The paragraph uses specific examples to illustrate how these traits come together to create a high-quality trade opportunity, emphasizing the need for price action confirmation through candlestick formations at the area of confluence.

40:14

🛑 The Importance of Trend Change Confirmation Patterns

This paragraph discusses the necessity of trend change confirmation patterns in trading. It explains the conflict that can arise when the big picture trend and the immediate trend are pointing in opposite directions and how this can lead to a stall or a larger trend change. The importance of using trend change patterns to confirm that the short-term downtrend has ended and that the larger uptrend can continue is highlighted. The script also emphasizes the need for multi-time frame analysis to avoid being misled by false breakouts.

45:15

🌐 Multi-Time Frame Analysis and Trade Execution

The script illustrates the importance of using multi-time frame analysis in trading. It provides an example of how to identify a trade opportunity by first recognizing key levels and momentum on higher time frames, such as the monthly and weekly charts, and then confirming trend changes on lower time frames, such as the daily chart. The paragraph explains how to use trend lines, moving averages, and Fibonacci levels in conjunction with price action to identify high-quality trade opportunities and avoid false signals.

50:16

🚀 Bitcoin and Crypto Trade Strategy Application

This paragraph showcases a real-world application of the trading strategy using the example of a massive Bitcoin and crypto trade. It describes how the strategy was applied step by step, incorporating concepts from previous paragraphs, to capitalize on a significant market movement. The script highlights the importance of reacting to market signals and entering trades in the direction of the herd, as well as the use of higher time frames for accurate market depiction.

📉 Daily Time Frame Analysis for Trend Confirmation and Trade Entry

The script focuses on the daily time frame analysis to confirm trend changes and identify trade entries. It explains how to use price action on the daily chart to validate the trend change from the weekly time frame and to find precise entry points for trades. The paragraph emphasizes the significance of trend line breaks and higher high patterns as trend change confirmations and discusses the final steps of the trading strategy, including the use of intraday time frames for entry and exit decisions.

🎯 Entry and Exit Strategy for Optimal Trade Management

This paragraph introduces the concept of a detailed entry and exit strategy for trade management. It mentions the importance of knowing exactly where to enter and exit trades, where to place stop losses and profit targets, and how to manage open positions to maximize profits and minimize risks. The script also hints at additional high-quality trade traits and content available on their website, wisetrade.com, and encourages viewers to engage with their content on YouTube and Instagram for more insights.

Keywords

💡Fibonacci

Fibonacci refers to a set of tools and levels used by traders to identify potential support and resistance areas within a trend. In the video, the Fibonacci tool is highlighted as a means to find trade entry opportunities by providing areas of value during a moving trend. The script mentions specific Fibonacci levels such as 50% and 61.8%, which are considered high-quality areas for potential trend reversals or continuations.

💡Price Action

Price action is a trading methodology that relies on the study of price movements to make trading decisions, without the use of indicators. It is central to the video's theme, as the script discusses how to combine Fibonacci with price action for trading strategies. The video emphasizes the importance of understanding price action to identify high-quality trade opportunities.

💡Support and Resistance

Support and resistance are fundamental concepts in trading that represent price levels at which the market is more likely to find a halt or reversal. In the script, these terms are used to explain how Fibonacci levels can act as key support in uptrends and resistance in downtrends, creating potential trade entry points.

💡Trade Entry Opportunities

Trade entry opportunities refer to specific price levels or conditions that traders identify as favorable for entering a trade. The video script discusses how the Fibonacci tool can help identify such opportunities by providing levels where the price may react or reverse, aligning with the overall trading strategy.

💡Confluence

Confluence in trading is when multiple technical analysis tools or patterns align to suggest a high-probability trade setup. The script explains that combining Fibonacci levels with key support/resistance levels or other forms of confluence can increase the quality of a trade setup, as seen in the examples provided.

💡Trend Trading

Trend trading is a strategy where traders follow the direction of the market trend, either uptrends or downtrends, to make trades. The video emphasizes the importance of trend trading as a high-quality trait, encouraging traders to look for entries that align with the prevailing trend.

💡Breakout Momentum

Breakout momentum occurs when the price breaks through a key level of support or resistance with significant force, indicating a strong trend continuation. The script uses this concept to illustrate how a breakout can signal heavy bullish momentum, suggesting a high-quality trade opportunity.

💡Trade Quality

Trade quality is a measure of the likelihood that a trade will be successful, based on various factors such as trend alignment, price action patterns, and confluence of indicators. The video script provides a list of high-quality traits that contribute to trade quality, which is a central theme in determining the potential success of a trade.

💡Candlestick Patterns

Candlestick patterns are graphical representations of price movements over a set period, used to identify potential changes in market sentiment or trend direction. The script mentions the importance of recognizing candlestick patterns, particularly at key Fibonacci levels, as a confirmation of trade opportunities.

💡Multi-Time Frame Analysis

Multi-time frame analysis involves observing price action across different time frames to gain a more comprehensive understanding of market trends and potential trade setups. The video script discusses the importance of using multiple time frames to confirm trend changes and identify high-quality trade opportunities.

💡Trend Change Confirmation Pattern

A trend change confirmation pattern is a price action signal that confirms a shift from one trend to another. The script explains the need for such patterns to ensure that a short-term trend aligns with the larger trend, providing a clear signal for trade entries, especially when using multi-time frame analysis.

Highlights

Introduction to a trading strategy combining Fibonacci with price action, applicable across various asset classes.

Importance of Fibonacci levels as key support and resistance areas in trading.

Demonstration of how to use the Fibonacci retracement tool on trading charts.

Explanation of how traditional traders use Fibonacci levels to enter trades in uptrends and downtrends.

The psychological aspect of why Fibonacci levels are effective in trading due to herd mentality.

Fibonacci levels as areas of value within a moving trend, offering better entry points.

The problem with relying solely on Fibonacci levels for trade entries without considering other market factors.

Combining Fibonacci levels with key support and resistance levels to enhance trade quality.

Identification of high-quality Fibonacci levels: 50%, the area between 50% and 61.8%, and the 61.8% level.

The concept of trade quality and its significance in trading success.

List of high-quality trade traits that contribute to successful trade opportunities.

The necessity of a trend change confirmation pattern to align short-term and long-term trends.

Utilization of multi-time frames to identify trend changes and suitable trade entries.

A step-by-step breakdown of a high-quality trade opportunity using the discussed strategy.

The importance of higher time frames in providing accurate market direction and trade guidance.

A massive Bitcoin and crypto trade example demonstrating the application of the strategy.

Encouragement for viewers to engage with the content and follow the Instagram page for more insights.

Transcripts

[Music]

hey guys welcome back to another episode

in this video we will be showing you the

number one trading strategy that

combines fibonacci with price action

this will be the most important trading

video you will ever watch as we'll be

covering concepts you won't find

anywhere else online whether you trade

stocks options cryptos or currencies

this price action video is essential for

all traders of all asset classes we're

also going to go through the massive

bitcoin and crypto trade our members and

us gained on using this exact strategy

so that you can do it yourself

now if you want us to release more

videos more often please click the like

button subscribe and turn on the

notifications bell so that you know

exactly when we release new content

now here's a quick breakdown of what we

will be covering in this video

[Music]

so let's get right into it

[Music]

a topic we get asked to cover almost

daily is how to use fibonacci in trading

as you already know we always read the

comments to decide what topics to cover

next so right now go to the comments

section and tell us exactly what topic

you want us to cover next

when we say fibonacci we are referring

to the fibonacci tool and fibonacci

levels so why is the fibonacci tool and

fibonacci levels important to use and

understand

the fibonacci tool provides you with

trade entry opportunities at areas of

value during a moving trend as fibonacci

levels can act as a form of key support

and resistance and as you should know by

now support and resistance levels are

areas where price has a high chance of

reacting to or reversing from all which

again create high quality trade entry

opportunities for you

let's now access the fibonacci tool

to access the fibonacci retracement tool

click this button here on the left

scroll down

and click fib retracement right here

now to use it click on the chart

drag the tool upwards

and then click again

to lock it in

then to the right your fibonacci

retracement levels will appear

now these levels are important because

they are the most widely used fib levels

by traders and represent areas of value

within a moving trend

so let's go through how to apply the

fibonacci tool right on the charts

let's say you're analyzing this current

moving up trend

you have your run pull back run pull

back run

as you already know an uptrend makes

higher highs and higher lows

so if you are analyzing this run here

and want to apply the fib tool to find

areas of value to enter trays long at

here's how it works

you grab your fib tool click where the

swing low is at the bottom of the wick

drag the tool to the top of the moving

trend and where the swing high is you

will then see the fib level percentages

appear to the right

if price were to pull back to the 50

level this would represent a pullback of

50 percent from the recent swing high

here and if price were to pull back to

the 61.8 level this would represent a

pullback of 61.8 percent from the recent

swing high here

so let's show this in the opposite

direction and in a downtrend

you have your run pull back run pull

back run

as you already know a downtrend makes

lower highs and lower lows

so if you are analyzing this run here

and want to apply the fib tool to find

areas of value to enter trades short at

here's how it works you grab your fib

tool click where the swing high is at

the top of the wick drag the tool to the

bottom of the moving trend and where the

swing low is you will then see the fib

level percentages appear here to the

right

if price were to pull back to the 50

level this would represent a pullback of

50

from the recent swing low here

and if price were to pull back to the

61.8 percent level this would represent

a pullback of 61.8 percent from the

recent swing low here

now how do average traders traditionally

use fibonacci to enter trades

so in an uptrend when price pulls back

to these fib levels traders will enter

trades long when price hits these fib

retracement levels because fibonacci

levels act as a form of support in an

uptrend and again support levels are

areas where price can potentially bounce

and reverse from

going the other way in a downtrend when

price pulls back to these fib levels

traders will enter trades short when

price hits these fibonacci retracement

levels because fibonacci levels act as a

form of resistance in a downtrend and

again resistance levels are areas where

price can potentially bounce and reverse

from

now let's get into the psychology of

fibonacci and why fibonacci levels work

so the first reason fibonacci levels

work is because of herd mentality or

what can be deemed a self-fulfilling

prophecy a lot of traders subscribe to

these fib levels in order to identify

trade opportunities to be more specific

the school of fibonacci traders who look

to take action at fib levels adds

additional confluence to areas you are

already watching for trade opportunities

and we'll dive deeper into this in the

next section

and the second reason fibonacci levels

work is because fibonacci levels

actually represent areas of value during

a moving trend or more specifically

you're getting in at a better price

relative to where price has already been

[Music]

[Music]

so how do we use fibonacci as part of

our trading

first let's go through the exact fib

levels we use and the quality of the

different fibonacci levels

first the 50

or 0.5 fib level

this is a great quality fib level as it

represents a deep pullback during a

moving trend

as a quick note even though we say level

you should treat it as an area like all

things second the area between 50 fib

and 61.8 fib

this is again a great quality fib area

as it represents a deep pullback during

a moving trend

and third the 61.8 percent or 0.618 fib

level

this is the best and highest quality fib

level because it represents a very deep

pullback and best area of value during a

moving trend

[Music]

now there is a problem that lies with

using fibonacci levels the traditional

way

when price pulls back to a fib level a

trader subscribes to using they will

enter a trade instantly once price hits

the fibonacci level as they expect price

to reverse

now the problem with using fib this way

is that you're assuming that price will

reverse solely because it is at a fib

level and not take into account the

multitude of other moving parts within a

noisy and imperfect market

fibonacci levels do indeed work as

support and resistance levels but

fibonacci levels on their own isn't

enough

so this then leads us back to the main

question we get asked which is

how do we use fibonacci as part of our

trading process where it actually helps

here is the exact formula we use

we combine fibonacci levels with key

levels of support and resistance or

areas of confluence two increase trade

quality now this is a stacked statement

so let's break it down starting with

combining fibonacci levels with

key levels of support and resistance to

increase trade quality

first let's quickly recap what key

levels of support and resistance is key

levels of support and resistance are

levels where price has reacted to

bounced from or reversed from in the

past

this matters because if price reacted to

these levels in the past there is a

chance that price will react to them

again in the future meaning possible

trade opportunities arise at these

levels

now back to the first way we use

fibonacci which is combining fibonacci

levels with key levels of support and

resistance to increase trade quality

so let's do this right on the charts but

from our perspective at every step

you had your key level of resistance

here so you would have had it drawn in

and extended out in case price reacted

to it again in the future

after price broke out this key

resistance level then becomes new

support which means if price approaches

this level there are possible trade

opportunities long

so how do we increase the trade quality

of this trade opportunity this is where

the fib tool comes into play

with the fib tool click at the swing low

here

drag it up to the recent swing high

and look at that the trade opportunity

you identified is also right at the 61.8

percent fib retracement level which is a

very high quality fib level as it

represents a very deep pullback within

the moving trend and a great area of

value to get in at

so the combination of a key support

level with a key fib level increases the

quality of the trade opportunity instead

of taking a trade with only a support

level

now as price approached this level of

support you had no idea whether there

would be a reaction to the level or not

you needed to wait for price action

through candlestick formations at the

area to show that prices indeed reacting

to the level this time around

so when price reached the level you had

exactly that which was a candle with a

long wick sticking out which shows a

reaction to the level and confirms the

trade opportunity long

so let's build on this and move on to

the next way we use fibonacci which is

combining fibonacci levels with areas of

confluence to increase trade quality

so first areas of confluence are areas

where multiple schools of traders are

stacked and looking to take action which

presents trade opportunities

these trade opportunities at these areas

of confluence where many schools of

traders are stacked have a higher

probability of going in your favor due

to many traders taking action at the

same time which creates momentum for the

trade

this here is where the short trade

opportunity occurred as it is an area of

confluence and access point so let's

break it down

first you would have identified this as

a clear moving downtrend as price is

making lower highs and lower lows so you

want to trade with the moving downtrend

you add your key level of resistance

here because of this reversal point

you have your trend line here and

because it crosses with the resistance

level it makes it an area of confluence

you then have your moving average here

notice how it intersects perfectly at

the access point and area of confluence

so to increase the quality of the trade

we grab the fib tool click at the swing

high here drag it down to the recent

swing low

and look at that the trade opportunity

you identified at the area of confluence

is also at the 50

fib retracement level

so when price reached the level you had

multiple longwood candles sticking out

and failing to break through which shows

a reaction to the area of confluence and

confirms the trade opportunity short so

why is this a high quality short trade

at this area of confluence

you had support and resistance traders

looking to enter short you had trend

line traders looking to enter short

moving average traders looking to enter

short trend traders looking to enter

short candlestick and price action

traders looking to enter short

confluence traders looking to enter

short and then also you had fibonacci

traders looking to enter short

all these schools of traders stacked at

the area of confluence looking to take

action and in this case take action and

enter short trades increases the chances

of the trade going in your favor which

means it is a high quality short trade

entry

before we get into the strategies

section there is one topic and

foundational trading ideology you must

learn first it is the concept of trade

quality without fully understanding

trade quality your trading journey ends

here and you will always be at a huge

disadvantage

this is the most important training

lesson you will ever learn

[Music]

[Music]

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[Music]

all right let's get back into it

so what is trade quality exactly

any attributes and factors that

influence the chances of success of a

trade opportunity you have identified

meaning you shouldn't look at trading as

taking right or wrong trades but you

should look at trading as taking low

quality trades versus high quality

trades

so how do we increase the quality of a

trade

simple the more you learn and understand

about price action the more high quality

traits you can identify

the more high quality traits means the

higher the probability it will go in

your favor but more importantly go in

your favor with true momentum and

distance so that you can actually make a

good return on the trade

so here it is the most important part

we're now going to go through a list of

high quality traits the more you have

from this list within a trading

opportunity you have identified the

higher the trade quality every example

in this video will be coming back to

reference this list

first

trend trading

are you trading with the moving trend

in an uptrend you would want to look for

long trade entries to move with the flow

of the upwards market pressure

in a downtrend you want to look for

short trade entries to move with the

flow of the moving downwards market

pressure

next break breakout momentum

are you trading with heavy breakout

momentum

so what you do is you identify a key

level of support or resistance where

price tried multiple times to break

through and failed

then price finally broke through the

level showing the heavy bullish momentum

and heavy buying presence that entered

the market so from a price action

perspective for price to be able to

break such a key level that held

multiple times there needed to be heavy

momentum that entered the market so what

you want to do is trade with the heavy

bullish momentum and buying presents so

that you can ride the wave

next a fresh trend versus trend

exhaustion

are you getting into a trade at the

start of a reversal and a fresh trend

where price has legs and room to move

fresh trends and fresh reversals are

powerful because you can capture a

larger portion of the move as you are

getting in early and at the start

in contrast when you enter trades after

the trend has already moved

significantly the trend might suffer

from trend exhaustion and if enough

people start taking profit it can

trigger a larger reversal

next using the higher time frames

things you find on the higher time

frames hold more weight when we say

higher time frames we are referring to

the monthly and weekly time frame

specifically so what exactly is things

you find

it can be key levels price movement

price patterns or any form of price

action that is visible on the higher

time frames that influences your

directional bias

price action takes longer to form on the

higher time frames but as a result it

gives you a more accurate depiction of

where price is headed and of what the

market is actually

doing next

multi-time frame usage and time frame

confluence

do you have time frame confluence

meaning using multiple time frames that

give you the same directional bias we'll

cover this in an upcoming video

next divergence

remember in our previous video

divergences can be very effective

engaging possible reversals of price and

reversals of the trend so here is a

chart we showed you in our last video

showing the different qualities and

types of divergences we look for again

reference our last video on rsi where we

cover divergences in depth

next

fibonacci retracement levels

are you at a fib level and if so which

fib level

are you combining fibonacci levels with

key levels of support and resistance

with areas of confluence

next

trend lines

do you have a trend line that also lines

up with where your trade entry is

do you have a trendline break that

signals a trend change

next

moving averages

does the moving average line up

perfectly with your trade opportunity in

area of confluence

which moving average is it certain

moving averages work better for specific

time

frames next

areas of confluence

are you at an area of confluence

and if so how many traits are stacked at

the area of confluence the more that are

stacked together at the access point

means the higher the quality of the area

of confluence

next

candlestick patterns

do you have a candlestick pattern

forming and if so what kind

do you have multiple candlestick

patterns stacked together

is the candlestick pattern forming at a

key level

is there price action inside of the

candlestick on the lower time frame

next

chart patterns

do you have chart patterns forming do

you have patterns that show a trend

continuation do you have patterns that

show a trend reversal now chart patterns

is a very very in-depth topic that we'll

cover in a future video

now a final branch trait that is very

important

support and resistance quality traits

so not all levels of support and

resistance are the same meaning you need

to also gauge the quality of an sr level

the higher the quality of the support or

resistance level the higher the

probability that price will actually

react to the level of support or

resistance this is very key

now here are the key traits to look for

when gauging the quality of an sr level

first found on the higher time frames

sr levels found on the higher time

frames specifically the monthly and

weekly are the most key levels

found on means actually visible on the

higher time frames

second extreme swing highs or lows

meaning the highest and lowest points

prices reached in recent time

third

multiple reactions bounces or reversals

from the level

and fourth recently formed

meaning it was created very close to the

left of where price currently is

so to recap the more traits from this

list stacked together on a trade

opportunity you are looking at makes it

a very high quality trade

there are still a lot of other trade

quality traits and concepts we haven't

discussed yet which we will introduce in

future videos

so now that you understand the premise

of trait quality and fibonacci let's

combine this all together and move into

the strategies section

[Music]

[Music]

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now there are multiple parts to the

strategy but the core of it is a trend

trading strategy

so we're going to start simple with

combining fibonacci with key levels of

support and resistance using only one

time frame

now every example we go through we will

do it through the process of identifying

and listing high quality traits

this here is where the trade qualities

list and counter will appear

this here is where the trade opportunity

presented itself so let's go to the high

quality trades that this trade

opportunity had

this is the one hour time frame

now the first high quality trade you had

was a key level so you had it drawn in

and extend it out

now what quality traits does this key

level have

multiple reactions through these three

reversals and recently formed because

the level was created close by directly

to the left

the second high quality trait you had

was heavy bullish momentum so this key

resistance level previously held three

times before price finally broke through

it showing the heavy bullish momentum

and buying presents which is required

for price to be able to break through

such a key level

this then means you want to trade with

this heavy bullish momentum and heavy

buying presence

and this is where the trade opportunity

long presented itself

with the fib tool click at the swing low

here

drag it up to the recent swing high

and notice how the key level is also

right at the 61.8 percent fib

retracement level which is a very high

quality fib level

these candles with the wicks sticking

out right at the level shows a reaction

to the level which then confirms the

trade opportunity long

all these traits listed make this a high

quality long trade opportunity

so this was just starting simple let's

now take it up a notch and move into

combining fibonacci with areas of

confluence

in this example we're going to go even

deeper and explain what should have been

going through your mind at every step of

the trade

this here is where the trade opportunity

long presented itself so let's break it

down

you first identified that this was a

clear uptrend through the higher highs

and higher lows so you want to trade

with the moving uptrend

this is a high quality trade

next you should have identified your key

level of resistance turned to support

this is a very high quality level

because price reacted to it multiple

times and was recently formed

another high quality trait

you then would have identified that you

had heavy bullish momentum because price

broke through this very key level of

resistance that previously held multiple

times

and again for price to break such a key

level you needed heavy bullish momentum

and buying presence

and knowing this you want to trade with

this bullish momentum

another high quality trait

as price started pulling back you would

have identified your possible trade

opportunity long at the key level of

support

next you had your moving average that

crossed perfectly with the key level and

trade opportunity

another high quality trait

next you would have identified that a

trend line crossed perfectly with your

key level and moving average

another high quality trade

then you would have checked to see if

you were at a fib level as well

click at the swing low drag it up to the

recent swing high

and perfect the 50 fib retracement level

also lines up right at the area

another high quality trade

now the fact that the key level trend

line moving average and 50

fib level all intersected perfectly

makes this an area of confluence

or an area where multiple schools of

traders cross and are looking to take

action

another high quality trade

now look at all the high quality traits

that are stacked in this trade

opportunity

these are very high quality trades which

means they have a very high chance of

success

so this part is very important even

after all the high quality traits we

have identified as price pulled back and

approached this area you had no idea

whether there would be a reaction to the

area or not you needed to wait for price

action through candlesticks forming at

the area of confluence to show that

price and the market is indeed reacting

to the area of confluence this time

around

and that is exactly what you got

you had these candles with the wicks

sticking out right at the area of

confluence which shows a reaction to the

area

now even after you had candlesticks form

and react to the area of confluence you

don't instantly enter a trade long you

need the final two steps which is

one the trend change confirmation

pattern and two our key entry and exit

strategy and entry tool

we'll cover this as we progress through

the video

so let's show this again

so this is the weibo stock

many of our members took this exact

trade because of how picture-perfect it

was

this year is where the trade opportunity

long occurred so let's break it down

first we identified that this was a

clear moving uptrend as price was making

higher highs and higher lows so you want

to trade with the moving trend this was

your first high quality trade

you then had your key level of

resistance turned to support another

high quality trade

you then had your trend line that

crossed perfectly with the key level

another high quality trade

you then had your moving average that

also crossed with the key level and the

trend line

another high quality trade

with the fib tool you click at the

recent swing low here drag it to the

recent swing high

and notice how the 61.8 percent fib

level also lines up with your trade

opportunity another high quality trade

now the trend line key level moving

average and fib level all lining up

perfectly gives you an area of

confluence

as price pulled back to the level you

had a ton of candles that tried over and

over and over again to push lower but

failed this all shows a clear reaction

to the area of confluence

you then need the final two steps again

so let's do this one more time

this is the air canada stock trade our

members took the entry occurred right

here so let's break it down

first you identified the uptrend so you

want to trade with the trend

next you identify the key level here

the moving average then lined up with

your key level and is where the trade

opportunity presented itself

the trend line also perfectly crosses

with your key level and moving average

with the fib tool click at the swing low

here drag it to the recent swing high

the 61.8 percent fib area lines up

perfectly

this thing gave you an area of

confluence making this a high quality

long trade opportunity

as price pulled back to the area you add

a perfect along with candle right at the

area of confluence which shows a

reaction to the level

now this leads us perfectly into our

next topic so after you had the

candlestick react to your area of

confluence you don't enter a trade long

instantly and blindly you need the trend

change confirmation pattern so let's get

right into it

now before we continue if you're

enjoying this video and want us to

release more videos more often please

hit the thumbs up button

and in the comments below tell us what

videos you want us to cover next and any

questions you have

also go give our instagram page a follow

is where the trade opportunity long

occurred

you first identified a clear uptrend so

you want to trade with the trend

next you had your key level of

resistance turned to support

next you had heavy bullish momentum

because price broke the key level that

previously held multiple times

then the moving average crossed with

your key level and where the trade

opportunity long presented itself

with the fib tool

swing low to swing high

and you have the 50 to 61.8 percent fib

zone that lines up with your trade

opportunity area

this then gave you an area of confluence

when price pulled back to this area you

had a long wick candle right at the

level which shows a reaction to the area

of confluence

at this point you still don't jump into

a long trade instantly this then leads

us to the next step required which is

the trend change confirmation pattern

now why exactly do you need a trend

change confirmation pattern what we are

going to explain right now is very

important to understand

your big picture trend is indeed an

uptrend and bullish

but your immediate trend is a downtrend

and bearish

meaning there is a conflict in your

directional bias

or to be more specific

the larger trend is telling you to trade

long while the short-term trend is

telling you to trade short the two

trends are telling you to trade in two

different directions

so what can happen is price can stall at

your area of confluence

react to it and then break through and

continue down and trigger a larger trend

change this happens when not enough

buyers step in at the area of confluence

don't forget that this here is a current

moving downtrend which can continue on

in its directional path

so how do we get around this problem

you need this short-term downtrend to

turn from bearish to bullish so that

this short-term trend matches the

direction of the big picture trend

now to do this you need to look for a

trend change pattern inside of this

downtrend that shows a change from a

downtrend to an uptrend or from bearish

to bullish or to be more specific to

signal that the short-term downtrend is

over and that the larger uptrend can

continue or to be even more specific to

confirm that enough buyers actually

stepped in at the area of confluence now

there are many trend change confirmation

patterns we use but to keep it simple

for now what you do is you place a trend

line onto the immediate trend like this

and if you have a trendline break

this signals a trend change from a

downtrend to an uptrend a change from

bearish to bullish and shows that the

short term downtrend is over and that

the larger uptrend can continue

if price doesn't break the trend line

and continues down there's no trade

because not enough buyers stepped in at

the area and it's clear the sellers are

in control

so after you had that trend change

confirmation breakout all things are a

go this is when you need the final step

of the formula which is to go to the

lower intraday time frames and use our

key entry and exit strategy and entry

tool

so this leads us to our next topic what

if you cannot place a trendline onto the

immediate trend

this is why you need to know how to use

multi time frames knowing how to use

multi-time frames is what separates the

amateurs from the pros

so before we continue

every day we get asked the same two

questions

how do we design and edit our youtube

videos

how did we grow our youtube channel so

fast

if you want to learn how to do this all

yourself step by step head on over to

our website at wisetrade.com

the link is also in the description

below

so let's start from the top again except

now we'll be combining the usage of

multi-time frames this is the eight hour

time frame and this is where the trade

opportunity long occurred

first you identified the key level here

next you had heavy bullish momentum

because price broke the key level that

previously held multiple times

then the moving average crossed which is

where the trade opportunity long

presented itself

with the fib tool swing low to swing

high

and the fib zone lines up

this then gave you your area of

confluence

when price pulled back to the area you

had a long wick candle with the wick

sticking out showing a reaction to the

area of confluence

so in the last section what we would do

is we would put a trend line onto the

immediate trend and wait for a break to

occur before looking for a trade entry

long now the issue with doing this on

the current trend is that price movement

is too tight meaning you cannot clearly

see the swings of price and cannot see

the swing highs and swing lows so if you

attempted to place a trendline up close

and tight to the trend like this you

will often be faked out by false

breakouts this is a very important point

price movement won't always be suitable

for you to place a trendline hence why

you need to know all the trend change

patterns which we will cover in a future

video but now for this particular case

how do we get around this problem of not

being able to place a trendline and

here's what you need to do we need to

use a lower time frame where we can look

inside of this downtrend and be able to

see the swings and price movement of

this trend and then be able to look for

price action that shows a trend change

from a downtrend to an uptrend to

confirm that the downtrend is over and

that the larger uptrend can continue so

let's pull up the lower time frame

specifically the four hour time frame

and put it beside this one

so the chart on the left is the eight

hour time frame we just looked at

meaning every candlestick represents

eight hours of time the chart on the

right is the same asset but is the one

hour time frame meaning every

candlestick represents one hour of time

here's the key level on the eight hour

time frame and here is the same key

level on the one hour

here's the eight hour pullback downtrend

where we tried to place the trend line

but couldn't and here is the same

pullback downtrend on the one hour time

frame here is the area of confluence we

previously identified and where the long

trade opportunity occurred and here is

the same area on the one hour time frame

now on the eight hour time frame we

previously looked at notice how you

couldn't see the swings of price whereas

on the one hour time frame you can

clearly see the swing highs and swing

lows and movements of price

again we are looking on the one hour

time frame in this downtrend for price

action that signals a trend change from

a downtrend to an uptrend and here it is

on the one hour time frame we can easily

place a trendline connecting these swing

highs because again on this time frame

we can actually see the swing highs and

swing lows

and once you had the trend line break

this was your trend change confirmation

the one hour time frame turned from

bearish to bullish and matches the eight

hour time frame big picture bullish

directional bias

so one more point as to why a trend

change confirmation pattern and using

multi-time frames is important

you could have easily had a long wick

candle form and stall at the area of

confluence on the eight hour time frame

here but then on the lower time frame

price could have done this instead

run

pull back run

pull back and instead of breaking out

and through the trend line started

another run and continued on triggering

a larger trend change so after you have

your trend change confirmation breakout

this is when you need the final step of

the formula which is to go to the lower

intraday time frames and use our key

entry and exit strategy and entry tool

so now the part you've all been waiting

for the massive bitcoin and crypto trade

our members and us took using this exact

strategy

[Music]

so

[Music]

this trade used everything we have shown

you in this video and also some more

advanced concepts

so let's break this down step by step

this is the bitcoin monthly time frame

meaning every candlestick represents one

month of time as we previously discussed

things you find on the higher time

frames such as the monthly and weekly

hold more weight

this is a very very key point because

the monthly is slower moving and things

take longer to form as a result it gives

you a very accurate depiction of where

the market is headed and of what the

market is actually doing

now you don't trade on the monthly

timeframe you only use it as guidance

for trade entries you take on the lower

time frames

[Music]

so there were three high quality traits

that gave us our clear bullish

directional bias even before we brought

in other time frames

first your key monthly resistance level

turn to support

price then broke through this very key

monthly resistance level that held two

times

next price was in a clear downtrend

before price made a higher high which

shows a clear trend change pattern and a

clear moving

uptrend even before we go down in time

frames everything we just covered tells

you one simple thing look for long

trades

now this is a very important point this

is what price action is in a nutshell we

were reacting to what we saw the market

doing not guessing where the market

would go next

this wasn't even on our radar until we

saw the breakout momentum and heavy

bullish presence that entered the market

which is then when it entered our watch

list

as retail traders you don't have the

power to move the market you are just

reacting to what you see and entering

trades in the direction of where the

herd and crowd is headed that's it

so let's pull up the weekly time frame

so that we can see this in more detail

so the chart on the left is the bitcoin

monthly time frame we just looked at and

the chart on the right is the bitcoin

weekly time frame meaning each

candlestick represents one week of time

this was the monthly key level and this

is the same key level but on the weekly

timeframe here was where the breakout

occurred on the monthly

here is the same breakout area on the

weekly so let's go through the high

quality traits on the weekly time frame

full screen

this is where the trade opportunity long

occurred which was at the key monthly

level and now also the key weekly level

again things you find on the higher time

frames hold more weight

so first you add your very key weekly

level

next this level that held three times

previously finally broke through which

shows how much bullish momentum and

buying presence had entered the market

next we are also in a clear moving

uptrend through the higher highs and

higher lows

we then had the moving average that

crossed perfectly with the key level and

is where the trade opportunity long

presented itself

next with the fib tool click at the

swing low drag it to the swing high

and notice how the 61.8

fib area also lines up with our trade

opportunity

this then gave you your area of

confluence

remember that this is a level that is

visible

on the monthly and weekly meaning there

is a very high chance that price will

react to the level when price finally

hit the area of confluence you had

candles with the wicks sticking out

right at the level which shows a

reaction to the area of confluence

so as we previously discussed we would

usually try to place a trend line onto

the immediate trend and wait for a break

to confirm the trend change now the

issue with trying to put a trendline on

this current trend is that price

movement is too tight and we cannot

clearly see the swing highs and lows so

if we were to put a trend line up close

and tight like this it'll result in fake

and false breakouts so again to get

around this problem

we need to use a lower time frame to

look inside of this pullback where we

can actually see the swing highs and

lows of price and then be able to look

for price action that shows a trend

change from a downtrend to an uptrend so

let's pull up the daily time frame and

put it beside this one

the chart on the left is the bitcoin

weekly time frame we just looked at

and the chart on the right is the

bitcoin daily time frame here is the

very key monthly and weekly level and

here is the same key level on the daily

here is the pullback area on the weekly

here's the same pullback area on the

daily

here is the weekly time frame area of

confluence here's the same area of

confluence on the daily

now on the weekly time frame notice that

you couldn't see the swings of price

whereas on the daily time frame you can

clearly see the swing highs and lows and

movements of price

so again we are looking for price action

that signals a trend change from a

downtrend to an uptrend and we got this

trend change pattern in two forms

the first is the trendline break

on the daily time frame we can easily

place a trend line onto the immediate

trend like this and then once you had

that trend line break this was your

first trend change confirmation

now secondly you also had a higher high

which is another trend change pattern

run

pull back run

pull back run

but notice how this run here failed to

make a lower low but instead made a same

low or a double bottom which shows a

loss of momentum and this all occurred

at the weekly and monthly level

clear lower highs before price finally

broke through the trend line they made a

higher high which is again another trend

change pattern

so after you had your trend change

confirmation breakout all things are a

go this is again when you need the final

step of the formula which is to go to

the lower intraday time frames and use

our key entry and exit strategy and

entry tool

this was a very high quality a plus

trade almost picture perfect

now there were many different ways our

members entered on this trade some

directly through bitcoin as we showed

and some through positively correlated

assets

so now what exactly is the entry and

exit strategy and entry tool

meaning exactly where to enter trades

exactly where to exit

exactly where to put your stop loss

exactly where to put your profit target

how to manage an open winning position

to maximize profits and minimize risk

and all the other high quality traits to

look for within a trade opportunity

and a ton of other content that won't be

available on our channel as it is too

dense if you want to learn this all head

on over to our website at wisetrade.com

so in the comments right now tell us

exactly what topics you want us to cover

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now

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we use

if you want access to these pieces also

head on over to our website so thanks

for watching and i'll see you in the

next episode

[Music]

you