The UNFAIR Fibonacci Trading Strategy (THE ENDGAME)

Wysetrade
15 Aug 202153:55

Summary

TLDRThis 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

  • πŸ˜€ The video introduces a top trading strategy that combines Fibonacci with price action, applicable to various assets like stocks, options, cryptocurrencies, and currencies.
  • πŸ“ˆ The Fibonacci tool and levels are important for identifying trade entry opportunities and act as key support and resistance levels in a trend.
  • πŸ” 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.
  • πŸ“‰ 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.
  • πŸ’‘ Fibonacci levels represent areas of value during a moving trend, offering better entry points for trades.
  • πŸš€ The video emphasizes the importance of combining Fibonacci levels with key support and resistance levels or areas of confluence to increase trade quality.
  • πŸ“Š 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.
  • πŸ”Ž 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

πŸ“ˆ 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

πŸ€” 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

πŸ“Š 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

πŸ”‘ 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 canι’„η€Ί 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

πŸš€ 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

πŸ“š 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

πŸ” 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

πŸ›‘ 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

πŸš€ 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.

πŸ“‰ 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.

Mindmap

Keywords

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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.

πŸ’‘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

play00:02

[Music]

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hey guys welcome back to another episode

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in this video we will be showing you the

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number one trading strategy that

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combines fibonacci with price action

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this will be the most important trading

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video you will ever watch as we'll be

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covering concepts you won't find

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anywhere else online whether you trade

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stocks options cryptos or currencies

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this price action video is essential for

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all traders of all asset classes we're

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also going to go through the massive

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bitcoin and crypto trade our members and

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us gained on using this exact strategy

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so that you can do it yourself

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now if you want us to release more

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videos more often please click the like

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button subscribe and turn on the

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notifications bell so that you know

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exactly when we release new content

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now here's a quick breakdown of what we

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will be covering in this video

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[Music]

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so let's get right into it

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[Music]

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a topic we get asked to cover almost

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daily is how to use fibonacci in trading

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as you already know we always read the

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comments to decide what topics to cover

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next so right now go to the comments

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section and tell us exactly what topic

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you want us to cover next

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when we say fibonacci we are referring

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to the fibonacci tool and fibonacci

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levels so why is the fibonacci tool and

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fibonacci levels important to use and

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understand

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the fibonacci tool provides you with

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trade entry opportunities at areas of

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value during a moving trend as fibonacci

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levels can act as a form of key support

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and resistance and as you should know by

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now support and resistance levels are

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areas where price has a high chance of

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reacting to or reversing from all which

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again create high quality trade entry

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opportunities for you

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let's now access the fibonacci tool

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to access the fibonacci retracement tool

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click this button here on the left

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scroll down

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and click fib retracement right here

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now to use it click on the chart

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drag the tool upwards

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and then click again

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to lock it in

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then to the right your fibonacci

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retracement levels will appear

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now these levels are important because

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they are the most widely used fib levels

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by traders and represent areas of value

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within a moving trend

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so let's go through how to apply the

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fibonacci tool right on the charts

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let's say you're analyzing this current

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moving up trend

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you have your run pull back run pull

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back run

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as you already know an uptrend makes

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higher highs and higher lows

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so if you are analyzing this run here

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and want to apply the fib tool to find

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areas of value to enter trays long at

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here's how it works

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you grab your fib tool click where the

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swing low is at the bottom of the wick

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drag the tool to the top of the moving

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trend and where the swing high is you

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will then see the fib level percentages

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appear to the right

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if price were to pull back to the 50

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level this would represent a pullback of

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50 percent from the recent swing high

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here and if price were to pull back to

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the 61.8 level this would represent a

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pullback of 61.8 percent from the recent

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swing high here

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so let's show this in the opposite

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direction and in a downtrend

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you have your run pull back run pull

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back run

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as you already know a downtrend makes

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lower highs and lower lows

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so if you are analyzing this run here

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and want to apply the fib tool to find

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areas of value to enter trades short at

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here's how it works you grab your fib

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tool click where the swing high is at

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the top of the wick drag the tool to the

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bottom of the moving trend and where the

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swing low is you will then see the fib

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level percentages appear here to the

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right

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if price were to pull back to the 50

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level this would represent a pullback of

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50

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from the recent swing low here

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and if price were to pull back to the

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61.8 percent level this would represent

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a pullback of 61.8 percent from the

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recent swing low here

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now how do average traders traditionally

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use fibonacci to enter trades

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so in an uptrend when price pulls back

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to these fib levels traders will enter

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trades long when price hits these fib

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retracement levels because fibonacci

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levels act as a form of support in an

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uptrend and again support levels are

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areas where price can potentially bounce

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and reverse from

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going the other way in a downtrend when

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price pulls back to these fib levels

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traders will enter trades short when

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price hits these fibonacci retracement

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levels because fibonacci levels act as a

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form of resistance in a downtrend and

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again resistance levels are areas where

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price can potentially bounce and reverse

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from

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now let's get into the psychology of

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fibonacci and why fibonacci levels work

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so the first reason fibonacci levels

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work is because of herd mentality or

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what can be deemed a self-fulfilling

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prophecy a lot of traders subscribe to

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these fib levels in order to identify

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trade opportunities to be more specific

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the school of fibonacci traders who look

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to take action at fib levels adds

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additional confluence to areas you are

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already watching for trade opportunities

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and we'll dive deeper into this in the

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next section

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and the second reason fibonacci levels

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work is because fibonacci levels

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actually represent areas of value during

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a moving trend or more specifically

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you're getting in at a better price

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relative to where price has already been

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[Music]

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[Music]

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so how do we use fibonacci as part of

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our trading

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first let's go through the exact fib

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levels we use and the quality of the

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different fibonacci levels

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first the 50

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or 0.5 fib level

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this is a great quality fib level as it

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represents a deep pullback during a

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moving trend

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as a quick note even though we say level

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you should treat it as an area like all

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things second the area between 50 fib

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and 61.8 fib

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this is again a great quality fib area

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as it represents a deep pullback during

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a moving trend

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and third the 61.8 percent or 0.618 fib

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level

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this is the best and highest quality fib

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level because it represents a very deep

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pullback and best area of value during a

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moving trend

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[Music]

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now there is a problem that lies with

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using fibonacci levels the traditional

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way

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when price pulls back to a fib level a

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trader subscribes to using they will

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enter a trade instantly once price hits

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the fibonacci level as they expect price

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to reverse

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now the problem with using fib this way

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is that you're assuming that price will

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reverse solely because it is at a fib

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level and not take into account the

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multitude of other moving parts within a

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noisy and imperfect market

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fibonacci levels do indeed work as

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support and resistance levels but

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fibonacci levels on their own isn't

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enough

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so this then leads us back to the main

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question we get asked which is

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how do we use fibonacci as part of our

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trading process where it actually helps

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here is the exact formula we use

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we combine fibonacci levels with key

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levels of support and resistance or

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areas of confluence two increase trade

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quality now this is a stacked statement

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so let's break it down starting with

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combining fibonacci levels with

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key levels of support and resistance to

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increase trade quality

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first let's quickly recap what key

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levels of support and resistance is key

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levels of support and resistance are

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levels where price has reacted to

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bounced from or reversed from in the

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past

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this matters because if price reacted to

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these levels in the past there is a

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chance that price will react to them

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again in the future meaning possible

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trade opportunities arise at these

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levels

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now back to the first way we use

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fibonacci which is combining fibonacci

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levels with key levels of support and

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resistance to increase trade quality

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so let's do this right on the charts but

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from our perspective at every step

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you had your key level of resistance

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here so you would have had it drawn in

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and extended out in case price reacted

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to it again in the future

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after price broke out this key

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resistance level then becomes new

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support which means if price approaches

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this level there are possible trade

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opportunities long

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so how do we increase the trade quality

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of this trade opportunity this is where

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the fib tool comes into play

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with the fib tool click at the swing low

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here

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drag it up to the recent swing high

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and look at that the trade opportunity

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you identified is also right at the 61.8

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percent fib retracement level which is a

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very high quality fib level as it

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represents a very deep pullback within

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the moving trend and a great area of

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value to get in at

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so the combination of a key support

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level with a key fib level increases the

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quality of the trade opportunity instead

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of taking a trade with only a support

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level

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now as price approached this level of

play11:58

support you had no idea whether there

play12:00

would be a reaction to the level or not

play12:03

you needed to wait for price action

play12:05

through candlestick formations at the

play12:07

area to show that prices indeed reacting

play12:10

to the level this time around

play12:12

so when price reached the level you had

play12:15

exactly that which was a candle with a

play12:17

long wick sticking out which shows a

play12:19

reaction to the level and confirms the

play12:22

trade opportunity long

play12:24

so let's build on this and move on to

play12:26

the next way we use fibonacci which is

play12:30

combining fibonacci levels with areas of

play12:33

confluence to increase trade quality

play12:41

so first areas of confluence are areas

play12:44

where multiple schools of traders are

play12:46

stacked and looking to take action which

play12:49

presents trade opportunities

play12:52

these trade opportunities at these areas

play12:54

of confluence where many schools of

play12:56

traders are stacked have a higher

play12:58

probability of going in your favor due

play13:01

to many traders taking action at the

play13:03

same time which creates momentum for the

play13:06

trade

play13:08

this here is where the short trade

play13:09

opportunity occurred as it is an area of

play13:12

confluence and access point so let's

play13:14

break it down

play13:15

first you would have identified this as

play13:17

a clear moving downtrend as price is

play13:19

making lower highs and lower lows so you

play13:21

want to trade with the moving downtrend

play13:25

you add your key level of resistance

play13:26

here because of this reversal point

play13:30

you have your trend line here and

play13:32

because it crosses with the resistance

play13:33

level it makes it an area of confluence

play13:37

you then have your moving average here

play13:40

notice how it intersects perfectly at

play13:42

the access point and area of confluence

play13:46

so to increase the quality of the trade

play13:48

we grab the fib tool click at the swing

play13:50

high here drag it down to the recent

play13:52

swing low

play13:54

and look at that the trade opportunity

play13:55

you identified at the area of confluence

play13:58

is also at the 50

play14:00

fib retracement level

play14:03

so when price reached the level you had

play14:05

multiple longwood candles sticking out

play14:08

and failing to break through which shows

play14:10

a reaction to the area of confluence and

play14:12

confirms the trade opportunity short so

play14:16

why is this a high quality short trade

play14:19

at this area of confluence

play14:21

you had support and resistance traders

play14:23

looking to enter short you had trend

play14:25

line traders looking to enter short

play14:27

moving average traders looking to enter

play14:29

short trend traders looking to enter

play14:32

short candlestick and price action

play14:34

traders looking to enter short

play14:36

confluence traders looking to enter

play14:38

short and then also you had fibonacci

play14:41

traders looking to enter short

play14:43

all these schools of traders stacked at

play14:45

the area of confluence looking to take

play14:47

action and in this case take action and

play14:50

enter short trades increases the chances

play14:52

of the trade going in your favor which

play14:54

means it is a high quality short trade

play14:56

entry

play15:03

before we get into the strategies

play15:06

section there is one topic and

play15:08

foundational trading ideology you must

play15:11

learn first it is the concept of trade

play15:15

quality without fully understanding

play15:17

trade quality your trading journey ends

play15:20

here and you will always be at a huge

play15:22

disadvantage

play15:23

this is the most important training

play15:25

lesson you will ever learn

play15:38

[Music]

play15:50

[Music]

play16:12

so before we continue

play16:14

at our office

play16:18

stored on our servers

play16:22

we have a series of advanced high

play16:24

quality trading videos already completed

play16:28

ready to be uploaded to youtube

play16:31

now the only way we'll release them is

play16:33

if enough of you do the following

play16:37

first

play16:38

hit the thumbs up button on this video

play16:41

second hit the subscribe button

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third hit the notifications bell

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fourth leave a comment below with

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exactly what video topics you want us to

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cover

play16:54

and five the most important one

play16:56

go follow our instagram page which is

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wise trade

play17:01

the link is also in the description

play17:03

below this video

play17:05

[Music]

play17:26

all right let's get back into it

play17:35

so what is trade quality exactly

play17:40

any attributes and factors that

play17:42

influence the chances of success of a

play17:45

trade opportunity you have identified

play17:48

meaning you shouldn't look at trading as

play17:50

taking right or wrong trades but you

play17:52

should look at trading as taking low

play17:54

quality trades versus high quality

play17:56

trades

play17:57

so how do we increase the quality of a

play17:59

trade

play18:02

simple the more you learn and understand

play18:05

about price action the more high quality

play18:07

traits you can identify

play18:10

the more high quality traits means the

play18:12

higher the probability it will go in

play18:14

your favor but more importantly go in

play18:16

your favor with true momentum and

play18:19

distance so that you can actually make a

play18:21

good return on the trade

play18:26

so here it is the most important part

play18:29

we're now going to go through a list of

play18:32

high quality traits the more you have

play18:34

from this list within a trading

play18:36

opportunity you have identified the

play18:38

higher the trade quality every example

play18:41

in this video will be coming back to

play18:43

reference this list

play18:46

first

play18:47

trend trading

play18:49

are you trading with the moving trend

play18:51

in an uptrend you would want to look for

play18:54

long trade entries to move with the flow

play18:56

of the upwards market pressure

play18:59

in a downtrend you want to look for

play19:01

short trade entries to move with the

play19:03

flow of the moving downwards market

play19:06

pressure

play19:08

next break breakout momentum

play19:11

are you trading with heavy breakout

play19:13

momentum

play19:14

so what you do is you identify a key

play19:16

level of support or resistance where

play19:19

price tried multiple times to break

play19:21

through and failed

play19:24

then price finally broke through the

play19:26

level showing the heavy bullish momentum

play19:28

and heavy buying presence that entered

play19:31

the market so from a price action

play19:33

perspective for price to be able to

play19:35

break such a key level that held

play19:37

multiple times there needed to be heavy

play19:40

momentum that entered the market so what

play19:42

you want to do is trade with the heavy

play19:44

bullish momentum and buying presents so

play19:47

that you can ride the wave

play19:50

next a fresh trend versus trend

play19:52

exhaustion

play19:54

are you getting into a trade at the

play19:56

start of a reversal and a fresh trend

play19:59

where price has legs and room to move

play20:01

fresh trends and fresh reversals are

play20:04

powerful because you can capture a

play20:05

larger portion of the move as you are

play20:08

getting in early and at the start

play20:10

in contrast when you enter trades after

play20:12

the trend has already moved

play20:14

significantly the trend might suffer

play20:16

from trend exhaustion and if enough

play20:18

people start taking profit it can

play20:20

trigger a larger reversal

play20:24

next using the higher time frames

play20:27

things you find on the higher time

play20:29

frames hold more weight when we say

play20:31

higher time frames we are referring to

play20:34

the monthly and weekly time frame

play20:35

specifically so what exactly is things

play20:38

you find

play20:40

it can be key levels price movement

play20:42

price patterns or any form of price

play20:44

action that is visible on the higher

play20:47

time frames that influences your

play20:49

directional bias

play20:50

price action takes longer to form on the

play20:53

higher time frames but as a result it

play20:55

gives you a more accurate depiction of

play20:57

where price is headed and of what the

play20:59

market is actually

play21:00

doing next

play21:02

multi-time frame usage and time frame

play21:05

confluence

play21:07

do you have time frame confluence

play21:09

meaning using multiple time frames that

play21:11

give you the same directional bias we'll

play21:13

cover this in an upcoming video

play21:16

next divergence

play21:19

remember in our previous video

play21:21

divergences can be very effective

play21:24

engaging possible reversals of price and

play21:27

reversals of the trend so here is a

play21:30

chart we showed you in our last video

play21:32

showing the different qualities and

play21:33

types of divergences we look for again

play21:36

reference our last video on rsi where we

play21:38

cover divergences in depth

play21:42

next

play21:43

fibonacci retracement levels

play21:46

are you at a fib level and if so which

play21:48

fib level

play21:49

are you combining fibonacci levels with

play21:52

key levels of support and resistance

play21:54

with areas of confluence

play21:57

next

play21:58

trend lines

play22:00

do you have a trend line that also lines

play22:02

up with where your trade entry is

play22:07

do you have a trendline break that

play22:08

signals a trend change

play22:11

next

play22:12

moving averages

play22:14

does the moving average line up

play22:15

perfectly with your trade opportunity in

play22:17

area of confluence

play22:19

which moving average is it certain

play22:21

moving averages work better for specific

play22:23

time

play22:24

frames next

play22:27

areas of confluence

play22:29

are you at an area of confluence

play22:32

and if so how many traits are stacked at

play22:34

the area of confluence the more that are

play22:36

stacked together at the access point

play22:38

means the higher the quality of the area

play22:40

of confluence

play22:42

next

play22:42

candlestick patterns

play22:45

do you have a candlestick pattern

play22:47

forming and if so what kind

play22:50

do you have multiple candlestick

play22:51

patterns stacked together

play22:53

is the candlestick pattern forming at a

play22:55

key level

play22:56

is there price action inside of the

play22:58

candlestick on the lower time frame

play23:02

next

play23:03

chart patterns

play23:05

do you have chart patterns forming do

play23:07

you have patterns that show a trend

play23:09

continuation do you have patterns that

play23:11

show a trend reversal now chart patterns

play23:14

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

play23:16

cover in a future video

play23:18

now a final branch trait that is very

play23:21

important

play23:22

support and resistance quality traits

play23:26

so not all levels of support and

play23:28

resistance are the same meaning you need

play23:31

to also gauge the quality of an sr level

play23:35

the higher the quality of the support or

play23:37

resistance level the higher the

play23:39

probability that price will actually

play23:41

react to the level of support or

play23:43

resistance this is very key

play23:47

now here are the key traits to look for

play23:49

when gauging the quality of an sr level

play23:53

first found on the higher time frames

play23:57

sr levels found on the higher time

play23:59

frames specifically the monthly and

play24:01

weekly are the most key levels

play24:04

found on means actually visible on the

play24:07

higher time frames

play24:09

second extreme swing highs or lows

play24:13

meaning the highest and lowest points

play24:15

prices reached in recent time

play24:19

third

play24:20

multiple reactions bounces or reversals

play24:23

from the level

play24:26

and fourth recently formed

play24:28

meaning it was created very close to the

play24:31

left of where price currently is

play24:35

so to recap the more traits from this

play24:37

list stacked together on a trade

play24:39

opportunity you are looking at makes it

play24:41

a very high quality trade

play24:44

there are still a lot of other trade

play24:46

quality traits and concepts we haven't

play24:49

discussed yet which we will introduce in

play24:51

future videos

play24:53

so now that you understand the premise

play24:55

of trait quality and fibonacci let's

play24:57

combine this all together and move into

play25:00

the strategies section

play25:09

[Music]

play25:18

[Music]

play25:25

[Music]

play25:32

now there are multiple parts to the

play25:34

strategy but the core of it is a trend

play25:37

trading strategy

play25:40

so we're going to start simple with

play25:42

combining fibonacci with key levels of

play25:45

support and resistance using only one

play25:47

time frame

play25:53

now every example we go through we will

play25:55

do it through the process of identifying

play25:58

and listing high quality traits

play26:01

this here is where the trade qualities

play26:03

list and counter will appear

play26:06

this here is where the trade opportunity

play26:08

presented itself so let's go to the high

play26:11

quality trades that this trade

play26:12

opportunity had

play26:14

this is the one hour time frame

play26:17

now the first high quality trade you had

play26:19

was a key level so you had it drawn in

play26:21

and extend it out

play26:23

now what quality traits does this key

play26:25

level have

play26:26

multiple reactions through these three

play26:28

reversals and recently formed because

play26:31

the level was created close by directly

play26:34

to the left

play26:42

the second high quality trait you had

play26:44

was heavy bullish momentum so this key

play26:47

resistance level previously held three

play26:49

times before price finally broke through

play26:52

it showing the heavy bullish momentum

play26:55

and buying presents which is required

play26:57

for price to be able to break through

play26:59

such a key level

play27:01

this then means you want to trade with

play27:03

this heavy bullish momentum and heavy

play27:06

buying presence

play27:13

and this is where the trade opportunity

play27:15

long presented itself

play27:18

with the fib tool click at the swing low

play27:20

here

play27:21

drag it up to the recent swing high

play27:23

and notice how the key level is also

play27:27

right at the 61.8 percent fib

play27:29

retracement level which is a very high

play27:32

quality fib level

play27:40

these candles with the wicks sticking

play27:42

out right at the level shows a reaction

play27:44

to the level which then confirms the

play27:47

trade opportunity long

play27:54

all these traits listed make this a high

play27:57

quality long trade opportunity

play27:59

so this was just starting simple let's

play28:01

now take it up a notch and move into

play28:04

combining fibonacci with areas of

play28:07

confluence

play28:14

in this example we're going to go even

play28:16

deeper and explain what should have been

play28:18

going through your mind at every step of

play28:20

the trade

play28:23

this here is where the trade opportunity

play28:25

long presented itself so let's break it

play28:27

down

play28:28

you first identified that this was a

play28:30

clear uptrend through the higher highs

play28:32

and higher lows so you want to trade

play28:34

with the moving uptrend

play28:39

this is a high quality trade

play28:42

next you should have identified your key

play28:44

level of resistance turned to support

play28:47

this is a very high quality level

play28:49

because price reacted to it multiple

play28:51

times and was recently formed

play28:57

another high quality trait

play29:01

you then would have identified that you

play29:03

had heavy bullish momentum because price

play29:06

broke through this very key level of

play29:08

resistance that previously held multiple

play29:10

times

play29:11

and again for price to break such a key

play29:13

level you needed heavy bullish momentum

play29:15

and buying presence

play29:18

and knowing this you want to trade with

play29:20

this bullish momentum

play29:24

another high quality trait

play29:29

as price started pulling back you would

play29:30

have identified your possible trade

play29:33

opportunity long at the key level of

play29:35

support

play29:37

next you had your moving average that

play29:39

crossed perfectly with the key level and

play29:42

trade opportunity

play29:47

another high quality trait

play29:50

next you would have identified that a

play29:53

trend line crossed perfectly with your

play29:55

key level and moving average

play30:00

another high quality trade

play30:04

then you would have checked to see if

play30:06

you were at a fib level as well

play30:09

click at the swing low drag it up to the

play30:11

recent swing high

play30:14

and perfect the 50 fib retracement level

play30:17

also lines up right at the area

play30:22

another high quality trade

play30:26

now the fact that the key level trend

play30:28

line moving average and 50

play30:31

fib level all intersected perfectly

play30:34

makes this an area of confluence

play30:37

or an area where multiple schools of

play30:39

traders cross and are looking to take

play30:41

action

play30:42

another high quality trade

play30:48

now look at all the high quality traits

play30:50

that are stacked in this trade

play30:52

opportunity

play30:53

these are very high quality trades which

play30:55

means they have a very high chance of

play30:57

success

play31:00

so this part is very important even

play31:03

after all the high quality traits we

play31:05

have identified as price pulled back and

play31:07

approached this area you had no idea

play31:10

whether there would be a reaction to the

play31:12

area or not you needed to wait for price

play31:14

action through candlesticks forming at

play31:16

the area of confluence to show that

play31:18

price and the market is indeed reacting

play31:22

to the area of confluence this time

play31:24

around

play31:25

and that is exactly what you got

play31:27

you had these candles with the wicks

play31:29

sticking out right at the area of

play31:31

confluence which shows a reaction to the

play31:34

area

play31:41

now even after you had candlesticks form

play31:43

and react to the area of confluence you

play31:45

don't instantly enter a trade long you

play31:48

need the final two steps which is

play31:51

one the trend change confirmation

play31:53

pattern and two our key entry and exit

play31:56

strategy and entry tool

play31:59

we'll cover this as we progress through

play32:00

the video

play32:03

so let's show this again

play32:07

so this is the weibo stock

play32:09

many of our members took this exact

play32:12

trade because of how picture-perfect it

play32:14

was

play32:15

this year is where the trade opportunity

play32:16

long occurred so let's break it down

play32:19

first we identified that this was a

play32:21

clear moving uptrend as price was making

play32:23

higher highs and higher lows so you want

play32:26

to trade with the moving trend this was

play32:28

your first high quality trade

play32:31

you then had your key level of

play32:33

resistance turned to support another

play32:36

high quality trade

play32:39

you then had your trend line that

play32:40

crossed perfectly with the key level

play32:43

another high quality trade

play32:46

you then had your moving average that

play32:48

also crossed with the key level and the

play32:50

trend line

play32:51

another high quality trade

play32:55

with the fib tool you click at the

play32:56

recent swing low here drag it to the

play32:58

recent swing high

play33:01

and notice how the 61.8 percent fib

play33:04

level also lines up with your trade

play33:06

opportunity another high quality trade

play33:11

now the trend line key level moving

play33:14

average and fib level all lining up

play33:16

perfectly gives you an area of

play33:18

confluence

play33:21

as price pulled back to the level you

play33:23

had a ton of candles that tried over and

play33:26

over and over again to push lower but

play33:28

failed this all shows a clear reaction

play33:30

to the area of confluence

play33:34

you then need the final two steps again

play33:38

so let's do this one more time

play33:42

this is the air canada stock trade our

play33:44

members took the entry occurred right

play33:46

here so let's break it down

play33:49

first you identified the uptrend so you

play33:52

want to trade with the trend

play33:56

next you identify the key level here

play34:00

the moving average then lined up with

play34:03

your key level and is where the trade

play34:05

opportunity presented itself

play34:09

the trend line also perfectly crosses

play34:12

with your key level and moving average

play34:17

with the fib tool click at the swing low

play34:19

here drag it to the recent swing high

play34:22

the 61.8 percent fib area lines up

play34:25

perfectly

play34:28

this thing gave you an area of

play34:30

confluence making this a high quality

play34:32

long trade opportunity

play34:36

as price pulled back to the area you add

play34:38

a perfect along with candle right at the

play34:40

area of confluence which shows a

play34:42

reaction to the level

play34:45

now this leads us perfectly into our

play34:47

next topic so after you had the

play34:50

candlestick react to your area of

play34:51

confluence you don't enter a trade long

play34:54

instantly and blindly you need the trend

play34:56

change confirmation pattern so let's get

play34:58

right into it

play35:10

now before we continue if you're

play35:12

enjoying this video and want us to

play35:13

release more videos more often please

play35:15

hit the thumbs up button

play35:17

and in the comments below tell us what

play35:19

videos you want us to cover next and any

play35:21

questions you have

play35:23

also go give our instagram page a follow

play35:30

is where the trade opportunity long

play35:32

occurred

play35:33

you first identified a clear uptrend so

play35:36

you want to trade with the trend

play35:40

next you had your key level of

play35:41

resistance turned to support

play35:46

next you had heavy bullish momentum

play35:48

because price broke the key level that

play35:50

previously held multiple times

play35:55

then the moving average crossed with

play35:57

your key level and where the trade

play35:58

opportunity long presented itself

play36:03

with the fib tool

play36:04

swing low to swing high

play36:07

and you have the 50 to 61.8 percent fib

play36:11

zone that lines up with your trade

play36:13

opportunity area

play36:16

this then gave you an area of confluence

play36:20

when price pulled back to this area you

play36:22

had a long wick candle right at the

play36:24

level which shows a reaction to the area

play36:26

of confluence

play36:29

at this point you still don't jump into

play36:32

a long trade instantly this then leads

play36:34

us to the next step required which is

play36:36

the trend change confirmation pattern

play36:39

now why exactly do you need a trend

play36:41

change confirmation pattern what we are

play36:43

going to explain right now is very

play36:45

important to understand

play36:47

your big picture trend is indeed an

play36:49

uptrend and bullish

play36:51

but your immediate trend is a downtrend

play36:54

and bearish

play36:55

meaning there is a conflict in your

play36:58

directional bias

play36:59

or to be more specific

play37:01

the larger trend is telling you to trade

play37:03

long while the short-term trend is

play37:06

telling you to trade short the two

play37:08

trends are telling you to trade in two

play37:10

different directions

play37:11

so what can happen is price can stall at

play37:14

your area of confluence

play37:16

react to it and then break through and

play37:18

continue down and trigger a larger trend

play37:21

change this happens when not enough

play37:23

buyers step in at the area of confluence

play37:27

don't forget that this here is a current

play37:29

moving downtrend which can continue on

play37:32

in its directional path

play37:34

so how do we get around this problem

play37:37

you need this short-term downtrend to

play37:40

turn from bearish to bullish so that

play37:42

this short-term trend matches the

play37:45

direction of the big picture trend

play37:48

now to do this you need to look for a

play37:50

trend change pattern inside of this

play37:53

downtrend that shows a change from a

play37:55

downtrend to an uptrend or from bearish

play37:57

to bullish or to be more specific to

play38:00

signal that the short-term downtrend is

play38:02

over and that the larger uptrend can

play38:04

continue or to be even more specific to

play38:06

confirm that enough buyers actually

play38:08

stepped in at the area of confluence now

play38:11

there are many trend change confirmation

play38:13

patterns we use but to keep it simple

play38:15

for now what you do is you place a trend

play38:18

line onto the immediate trend like this

play38:21

and if you have a trendline break

play38:24

this signals a trend change from a

play38:26

downtrend to an uptrend a change from

play38:28

bearish to bullish and shows that the

play38:30

short term downtrend is over and that

play38:31

the larger uptrend can continue

play38:34

if price doesn't break the trend line

play38:36

and continues down there's no trade

play38:38

because not enough buyers stepped in at

play38:40

the area and it's clear the sellers are

play38:43

in control

play38:44

so after you had that trend change

play38:47

confirmation breakout all things are a

play38:49

go this is when you need the final step

play38:51

of the formula which is to go to the

play38:53

lower intraday time frames and use our

play38:56

key entry and exit strategy and entry

play38:59

tool

play39:01

so this leads us to our next topic what

play39:03

if you cannot place a trendline onto the

play39:06

immediate trend

play39:08

this is why you need to know how to use

play39:10

multi time frames knowing how to use

play39:12

multi-time frames is what separates the

play39:14

amateurs from the pros

play39:22

so before we continue

play39:25

every day we get asked the same two

play39:27

questions

play39:28

how do we design and edit our youtube

play39:30

videos

play39:32

how did we grow our youtube channel so

play39:34

fast

play39:35

if you want to learn how to do this all

play39:37

yourself step by step head on over to

play39:39

our website at wisetrade.com

play39:42

the link is also in the description

play39:44

below

play39:48

so let's start from the top again except

play39:51

now we'll be combining the usage of

play39:53

multi-time frames this is the eight hour

play39:55

time frame and this is where the trade

play39:57

opportunity long occurred

play40:00

first you identified the key level here

play40:05

next you had heavy bullish momentum

play40:08

because price broke the key level that

play40:10

previously held multiple times

play40:14

then the moving average crossed which is

play40:16

where the trade opportunity long

play40:17

presented itself

play40:20

with the fib tool swing low to swing

play40:22

high

play40:25

and the fib zone lines up

play40:29

this then gave you your area of

play40:31

confluence

play40:34

when price pulled back to the area you

play40:36

had a long wick candle with the wick

play40:38

sticking out showing a reaction to the

play40:40

area of confluence

play40:44

so in the last section what we would do

play40:46

is we would put a trend line onto the

play40:49

immediate trend and wait for a break to

play40:51

occur before looking for a trade entry

play40:53

long now the issue with doing this on

play40:55

the current trend is that price movement

play40:58

is too tight meaning you cannot clearly

play41:00

see the swings of price and cannot see

play41:02

the swing highs and swing lows so if you

play41:04

attempted to place a trendline up close

play41:07

and tight to the trend like this you

play41:09

will often be faked out by false

play41:11

breakouts this is a very important point

play41:14

price movement won't always be suitable

play41:16

for you to place a trendline hence why

play41:18

you need to know all the trend change

play41:20

patterns which we will cover in a future

play41:22

video but now for this particular case

play41:24

how do we get around this problem of not

play41:27

being able to place a trendline and

play41:28

here's what you need to do we need to

play41:31

use a lower time frame where we can look

play41:33

inside of this downtrend and be able to

play41:35

see the swings and price movement of

play41:38

this trend and then be able to look for

play41:40

price action that shows a trend change

play41:43

from a downtrend to an uptrend to

play41:45

confirm that the downtrend is over and

play41:46

that the larger uptrend can continue so

play41:48

let's pull up the lower time frame

play41:50

specifically the four hour time frame

play41:52

and put it beside this one

play41:55

so the chart on the left is the eight

play41:57

hour time frame we just looked at

play41:59

meaning every candlestick represents

play42:01

eight hours of time the chart on the

play42:03

right is the same asset but is the one

play42:05

hour time frame meaning every

play42:07

candlestick represents one hour of time

play42:10

here's the key level on the eight hour

play42:12

time frame and here is the same key

play42:13

level on the one hour

play42:15

here's the eight hour pullback downtrend

play42:18

where we tried to place the trend line

play42:19

but couldn't and here is the same

play42:21

pullback downtrend on the one hour time

play42:23

frame here is the area of confluence we

play42:26

previously identified and where the long

play42:28

trade opportunity occurred and here is

play42:30

the same area on the one hour time frame

play42:34

now on the eight hour time frame we

play42:35

previously looked at notice how you

play42:37

couldn't see the swings of price whereas

play42:39

on the one hour time frame you can

play42:41

clearly see the swing highs and swing

play42:43

lows and movements of price

play42:46

again we are looking on the one hour

play42:48

time frame in this downtrend for price

play42:50

action that signals a trend change from

play42:52

a downtrend to an uptrend and here it is

play42:55

on the one hour time frame we can easily

play42:58

place a trendline connecting these swing

play43:00

highs because again on this time frame

play43:02

we can actually see the swing highs and

play43:04

swing lows

play43:05

and once you had the trend line break

play43:07

this was your trend change confirmation

play43:09

the one hour time frame turned from

play43:12

bearish to bullish and matches the eight

play43:14

hour time frame big picture bullish

play43:16

directional bias

play43:24

so one more point as to why a trend

play43:27

change confirmation pattern and using

play43:29

multi-time frames is important

play43:31

you could have easily had a long wick

play43:32

candle form and stall at the area of

play43:36

confluence on the eight hour time frame

play43:38

here but then on the lower time frame

play43:40

price could have done this instead

play43:42

run

play43:43

pull back run

play43:45

pull back and instead of breaking out

play43:47

and through the trend line started

play43:49

another run and continued on triggering

play43:52

a larger trend change so after you have

play43:55

your trend change confirmation breakout

play43:57

this is when you need the final step of

play43:59

the formula which is to go to the lower

play44:01

intraday time frames and use our key

play44:03

entry and exit strategy and entry tool

play44:07

so now the part you've all been waiting

play44:09

for the massive bitcoin and crypto trade

play44:12

our members and us took using this exact

play44:16

strategy

play44:21

[Music]

play44:42

so

play44:48

[Music]

play45:04

this trade used everything we have shown

play45:06

you in this video and also some more

play45:09

advanced concepts

play45:11

so let's break this down step by step

play45:15

this is the bitcoin monthly time frame

play45:17

meaning every candlestick represents one

play45:19

month of time as we previously discussed

play45:21

things you find on the higher time

play45:23

frames such as the monthly and weekly

play45:25

hold more weight

play45:29

this is a very very key point because

play45:32

the monthly is slower moving and things

play45:35

take longer to form as a result it gives

play45:38

you a very accurate depiction of where

play45:40

the market is headed and of what the

play45:42

market is actually doing

play45:44

now you don't trade on the monthly

play45:46

timeframe you only use it as guidance

play45:48

for trade entries you take on the lower

play45:50

time frames

play45:51

[Music]

play45:54

so there were three high quality traits

play45:57

that gave us our clear bullish

play45:59

directional bias even before we brought

play46:02

in other time frames

play46:04

first your key monthly resistance level

play46:07

turn to support

play46:14

price then broke through this very key

play46:16

monthly resistance level that held two

play46:18

times

play46:25

next price was in a clear downtrend

play46:27

before price made a higher high which

play46:30

shows a clear trend change pattern and a

play46:32

clear moving

play46:40

uptrend even before we go down in time

play46:43

frames everything we just covered tells

play46:46

you one simple thing look for long

play46:48

trades

play46:49

now this is a very important point this

play46:52

is what price action is in a nutshell we

play46:54

were reacting to what we saw the market

play46:57

doing not guessing where the market

play46:59

would go next

play47:00

this wasn't even on our radar until we

play47:03

saw the breakout momentum and heavy

play47:05

bullish presence that entered the market

play47:07

which is then when it entered our watch

play47:10

list

play47:11

as retail traders you don't have the

play47:13

power to move the market you are just

play47:15

reacting to what you see and entering

play47:18

trades in the direction of where the

play47:20

herd and crowd is headed that's it

play47:23

so let's pull up the weekly time frame

play47:25

so that we can see this in more detail

play47:28

so the chart on the left is the bitcoin

play47:30

monthly time frame we just looked at and

play47:32

the chart on the right is the bitcoin

play47:34

weekly time frame meaning each

play47:36

candlestick represents one week of time

play47:38

this was the monthly key level and this

play47:40

is the same key level but on the weekly

play47:42

timeframe here was where the breakout

play47:44

occurred on the monthly

play47:46

here is the same breakout area on the

play47:48

weekly so let's go through the high

play47:50

quality traits on the weekly time frame

play47:52

full screen

play47:55

this is where the trade opportunity long

play47:57

occurred which was at the key monthly

play48:00

level and now also the key weekly level

play48:03

again things you find on the higher time

play48:05

frames hold more weight

play48:07

so first you add your very key weekly

play48:10

level

play48:13

next this level that held three times

play48:16

previously finally broke through which

play48:18

shows how much bullish momentum and

play48:20

buying presence had entered the market

play48:25

next we are also in a clear moving

play48:27

uptrend through the higher highs and

play48:29

higher lows

play48:32

we then had the moving average that

play48:34

crossed perfectly with the key level and

play48:37

is where the trade opportunity long

play48:38

presented itself

play48:42

next with the fib tool click at the

play48:43

swing low drag it to the swing high

play48:46

and notice how the 61.8

play48:49

fib area also lines up with our trade

play48:52

opportunity

play48:55

this then gave you your area of

play48:56

confluence

play48:59

remember that this is a level that is

play49:01

visible

play49:02

on the monthly and weekly meaning there

play49:04

is a very high chance that price will

play49:06

react to the level when price finally

play49:09

hit the area of confluence you had

play49:10

candles with the wicks sticking out

play49:12

right at the level which shows a

play49:14

reaction to the area of confluence

play49:18

so as we previously discussed we would

play49:20

usually try to place a trend line onto

play49:22

the immediate trend and wait for a break

play49:25

to confirm the trend change now the

play49:27

issue with trying to put a trendline on

play49:29

this current trend is that price

play49:30

movement is too tight and we cannot

play49:32

clearly see the swing highs and lows so

play49:34

if we were to put a trend line up close

play49:36

and tight like this it'll result in fake

play49:38

and false breakouts so again to get

play49:40

around this problem

play49:42

we need to use a lower time frame to

play49:45

look inside of this pullback where we

play49:47

can actually see the swing highs and

play49:49

lows of price and then be able to look

play49:51

for price action that shows a trend

play49:53

change from a downtrend to an uptrend so

play49:56

let's pull up the daily time frame and

play49:57

put it beside this one

play50:00

the chart on the left is the bitcoin

play50:01

weekly time frame we just looked at

play50:04

and the chart on the right is the

play50:05

bitcoin daily time frame here is the

play50:08

very key monthly and weekly level and

play50:10

here is the same key level on the daily

play50:13

here is the pullback area on the weekly

play50:16

here's the same pullback area on the

play50:17

daily

play50:18

here is the weekly time frame area of

play50:20

confluence here's the same area of

play50:22

confluence on the daily

play50:25

now on the weekly time frame notice that

play50:27

you couldn't see the swings of price

play50:29

whereas on the daily time frame you can

play50:31

clearly see the swing highs and lows and

play50:33

movements of price

play50:35

so again we are looking for price action

play50:37

that signals a trend change from a

play50:39

downtrend to an uptrend and we got this

play50:41

trend change pattern in two forms

play50:44

the first is the trendline break

play50:46

on the daily time frame we can easily

play50:48

place a trend line onto the immediate

play50:50

trend like this and then once you had

play50:52

that trend line break this was your

play50:54

first trend change confirmation

play50:56

now secondly you also had a higher high

play50:59

which is another trend change pattern

play51:02

run

play51:03

pull back run

play51:04

pull back run

play51:06

but notice how this run here failed to

play51:08

make a lower low but instead made a same

play51:10

low or a double bottom which shows a

play51:13

loss of momentum and this all occurred

play51:16

at the weekly and monthly level

play51:18

clear lower highs before price finally

play51:21

broke through the trend line they made a

play51:22

higher high which is again another trend

play51:25

change pattern

play51:32

so after you had your trend change

play51:34

confirmation breakout all things are a

play51:36

go this is again when you need the final

play51:39

step of the formula which is to go to

play51:41

the lower intraday time frames and use

play51:43

our key entry and exit strategy and

play51:46

entry tool

play51:47

this was a very high quality a plus

play51:50

trade almost picture perfect

play51:52

now there were many different ways our

play51:54

members entered on this trade some

play51:56

directly through bitcoin as we showed

play51:58

and some through positively correlated

play52:00

assets

play52:02

so now what exactly is the entry and

play52:05

exit strategy and entry tool

play52:07

meaning exactly where to enter trades

play52:10

exactly where to exit

play52:11

exactly where to put your stop loss

play52:14

exactly where to put your profit target

play52:16

how to manage an open winning position

play52:18

to maximize profits and minimize risk

play52:20

and all the other high quality traits to

play52:23

look for within a trade opportunity

play52:26

and a ton of other content that won't be

play52:28

available on our channel as it is too

play52:30

dense if you want to learn this all head

play52:32

on over to our website at wisetrade.com

play52:38

so in the comments right now tell us

play52:40

exactly what topics you want us to cover

play52:43

next and any questions you have again if

play52:46

you want us to continue to release more

play52:48

videos on youtube here's how you can

play52:50

show your support

play52:52

hit the like button

play52:54

subscribe

play52:56

turn on the notifications bell and more

play52:59

importantly go follow our instagram page

play53:01

as we'll be posting more content over

play53:02

there

play53:05

now

play53:05

we also have a great selection of

play53:07

trading art that shows you the exact

play53:10

chart patterns and candlestick patterns

play53:12

we use

play53:13

if you want access to these pieces also

play53:15

head on over to our website so thanks

play53:18

for watching and i'll see you in the

play53:19

next episode

play53:25

[Music]

play53:54

you

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Fibonacci TradingPrice ActionTrading StrategyCryptocurrencyStock MarketSupport ResistanceTechnical AnalysisMarket TrendsTrade QualityConfluence Zones