The 1 Video you NEED to INVENT your Own Trading Strategy (beginners Guide to becoming Profitable)

Summary

This video script educates viewers on the realities of Forex trading, debunking common myths and strategies promoted by so-called 'gurus'. It offers a comprehensive guide to trading fundamentals, technical analysis, smart money concepts, and the importance of risk management and psychology. The speaker emphasizes the need for realistic expectations, self-education, and the development of personalized trading strategies, advocating for a disciplined approach to achieve success in the market.

Takeaways

• 🚫 Avoid scams by recognizing unrealistic promises from 'gurus' who claim quick profits with their courses or mentorship.
• 📈 Trading success requires realistic expectations and a willingness to learn and grow consistently, not overnight riches.
• 💡 Embrace the idea that trading is not a get-rich-quick scheme and involves understanding the market and oneself as a trader.
• 🌐 Be aware of the importance of Forex pairs, categorized into majors, minors, and exotics, each with different trading volumes and spreads.
• 📊 Learn the basic Forex terminologies such as 'long', 'short', 'lot', 'pip', 'spread', 'leverage', and different order types for effective trading.
• 🏦 Choose a regulated Forex broker to ensure the safety of your capital and access to the market.
• 🕒 Understand the different trading sessions and their impact on market volume to identify the best times for trading.
• 📝 Utilize trading platforms like MT4/MT5 and analysis tools like TradingView for technical analysis and backtesting strategies.
• 📉 Focus on technical analysis as the most reliable approach for predicting market movements based on historical data.
• 📈 Understand market structures like support and resistance, trend lines, and candlestick patterns to make informed trading decisions.
• 📉 Develop a personal trading strategy that aligns with one's personality and risk tolerance, and test it thoroughly before live trading.

Q & A

What is the main issue the speaker addresses at the beginning of the script?

The speaker addresses the issue of misinformation in the trading community, where big channels deceive viewers by promoting the same strategies with different titles to gain more views and sell courses or mentorship.

What does the speaker promise to provide in the video?

The speaker promises to break down every aspect of Forex Trading that viewers need to know to be on the path to success, but also emphasizes that the video won't make viewers profitable automatically.

Why does the speaker state they are not selling a course or offering mentorship?

The speaker states they are not selling a course or offering mentorship because they don't need the viewers' money to survive, implying they are providing information freely and without bias.

What are the three major categories of Forex pairs mentioned in the script?

The three major categories of Forex pairs mentioned are major pairs, minor pairs, and exotic pairs.

What is the significance of Forex pairs being traded in pairs?

Forex pairs are traded in pairs because each trade involves buying one currency and simultaneously selling another, reflecting the exchange of one currency for another.

What does the speaker mean by 'trading is not a get-rich quick scheme'?

The speaker means that trading requires consistent effort, growth, and learning. It is not a shortcut to wealth and involves facing the realities of the market and developing a strategy that works for the individual trader.

What is the importance of understanding the different trading sessions in the financial market?

Understanding the different trading sessions is important because it helps traders know the exact times when the market is most active, which can affect trading volume and potential for price movement.

What are the two main types of Forex brokers mentioned, and what is the key difference between them?

The two main types of Forex brokers are regulated brokers and non-regulated brokers. The key difference is that regulated brokers are licensed and supervised by financial authorities, providing a safer trading environment for traders.

What is the role of technical analysis in trading according to the script?

According to the script, technical analysis is crucial in trading as it involves using tools to analyze past market data to predict future trends. It is considered the most reliable form of analysis among the three types discussed, which also include fundamental and sentimental analysis.

What is the purpose of the 'point of interest' in smart money concepts?

The 'point of interest' in smart money concepts is a zone on the chart derived from order blocks, indicating where smart money enters the market. It is used to identify potential entry points for trades, aiming to align with the strategies of large financial players.

What are the key components of the Ichimoku Cloud indicator and what does it provide to traders?

The key components of the Ichimoku Cloud indicator are the conversion line, the base line, the leading span A, the leading span B, and the lagging span. It provides a complete picture of the market, offering both trend-following and reversal signals, and helps define support and resistance, identify trend direction, and gauge momentum.

What is the role of risk management in trading and why is it essential?

Risk management is the cornerstone of successful trading. It involves strategies such as setting a proper risk-reward ratio, position sizing, and using stop loss orders to control the amount of money at risk in any single trade. It is essential because even the best trading setups can lead to significant losses without a solid risk management strategy.

How does the speaker emphasize the importance of psychology in trading?

The speaker emphasizes the importance of psychology in trading by stating that traders must see themselves as profitable and build confidence through practice. This confidence drives away fear and helps traders stick to their plans, which is crucial for success in the market.

What is the significance of combining different trading concepts and strategies according to the speaker?

The speaker suggests that combining different trading concepts and strategies can increase the overall win rate in trades. For example, using order blocks as supply and demand zones and adding fair value gaps can provide more confirmations for entering trades, making the strategy more robust.

What advice does the speaker give regarding the development of a personal trading strategy?

The speaker advises to first pick what works best for the individual among the discussed concepts, such as choosing a specific pattern or combining smart money concepts with technical analysis. Then, backtest the strategy, make adjustments, and practice it on a demo account to build confidence before applying it in the market.

Outlines

00:00

😀 Forex Trading Fundamentals and Reality Check

The speaker begins by addressing the misinformation spread by prominent channels in the trading community, focusing on the unrealistic promises of quick riches and the use of deceptive strategies to sell courses and mentorship. The paragraph emphasizes the importance of setting realistic expectations and understanding that trading is not a get-rich-quick scheme. The speaker pledges to provide a realistic and honest approach to Forex trading, covering all essential aspects without the intention of selling any courses or mentorship. The goal is to guide traders on the path to success by teaching them to read the market and develop their strategies, starting with the basics of Forex trading.

05:00

📈 Understanding Forex Market Basics and Terminology

This paragraph delves into the fundamental concepts of Forex trading, explaining the market structure, currency pairs, and the distinction between major, minor, and exotic pairs. It introduces essential trading terminologies such as 'long' and 'short' positions, lot sizes, pips, spreads, leverage, and different types of orders. The speaker also discusses the importance of choosing a regulated Forex broker and mentions trading platforms like MT4 and MT5, as well as the trading view for technical analysis. The paragraph concludes with an overview of the four major trading sessions in the financial market and the significance of understanding market timings for effective trading.

10:05

📊 Technical Analysis and Candlestick Patterns

The speaker focuses on the core aspects of technical analysis, starting with candlestick anatomy and patterns that signal trend reversals, such as the shooting star and hammer patterns. Engulfing patterns are also discussed, indicating potential trend changes from bullish to bearish or vice versa. The importance of understanding these patterns is emphasized for making informed trading decisions. Additionally, the paragraph touches on chart patterns like head and shoulders, and double top/bottom patterns, which are crucial for identifying trend reversals in the market.

15:08

📉 Market Structure and Trading Strategies

This section explores the concept of market structure in trading, highlighting the significance of trend lines, support and resistance levels, and the market's reaction to these levels. The speaker explains the importance of identifying structural points in the market to determine entry and exit strategies effectively. The paragraph also introduces the concept of supply and demand zones, which are critical for anticipating market reversals. The speaker emphasizes the importance of understanding market structure as the foundation of raw price action and the basis for developing a robust trading strategy.

20:11

💼 Smart Money Concepts and Market Analysis

The speaker introduces smart money concepts, comparing them to traditional trading methods. The paragraph discusses order blocks and fair value gaps, which are essential for identifying key entry and exit points in the market. The speaker explains the components of market structure from a smart money perspective, including strong highs and lows, order blocks, fair value gaps, internal and external liquidity. The importance of recognizing changes in market character and breaks in structure is highlighted as a way to anticipate shifts in market trends effectively.

25:14

📊 Popular Trading Indicators and Their Applications

This paragraph provides an overview of popular trading indicators, including moving averages, RSI, MACD, Ichimoku Cloud, Bollinger Bands, and Stochastic Oscillator. The speaker explains the purpose of each indicator, how they can be used to identify trends, momentum, and potential reversal points in the market. The importance of selecting the right indicators that align with one's trading strategy and backtesting them for effectiveness is emphasized. The speaker also shares a personal preference for not using indicators due to their lagging nature but acknowledges their value for other traders.

30:17

🚀 Developing a Trading Strategy and Risk Management

The speaker discusses the importance of developing a personalized trading strategy that aligns with one's personality and risk tolerance. The paragraph outlines the key components of a successful strategy, including aligning with the current trend, establishing entry and exit conditions, and the significance of testing the strategy through demo trading. The speaker also emphasizes the importance of risk management, discussing risk-reward ratios, position sizing, and the use of stop loss orders to protect capital. The paragraph concludes with a focus on the psychological aspects of trading, the need for discipline, and the importance of viewing trading as a business rather than gambling.

Keywords

💡Forex Trading

Forex Trading, also known as foreign exchange trading, is the act of buying and selling currencies in the financial market. It is a central theme of the video, which aims to educate viewers on how to approach trading without falling for common scams or misinformation. The script emphasizes that Forex Trading involves buying one currency while simultaneously selling another, and it is distinct due to the pairs in which currencies are traded.

💡Unrealistic Expectations

The concept of 'unrealistic expectations' in the video refers to the false promises made by some online gurus who claim that traders can become profitable within a short period or by following a specific strategy. The video aims to set realistic expectations for viewers, clarifying that success in trading comes with time, learning, and experience, not overnight.

💡Technical Analysis

Technical Analysis is a method used in Forex Trading to predict the direction of market price movements based on past market data. It is a key concept in the video, where the speaker discusses its importance over other types of analysis such as fundamental or sentimental analysis. The script delves into various technical tools and patterns that traders can use to make informed decisions.

💡Candlestick Patterns

Candlestick Patterns are graphical representations used in technical analysis to identify trends and potential reversals in the market. The video provides an in-depth look at these patterns, such as the shooting star and hammer, which signal potential trend reversals. These patterns are essential for understanding market sentiment and making trading decisions.

💡Support and Resistance

Support and resistance levels are pivotal concepts in trading that represent price points at which it is expected that the security will have a reaction. In the video, support is described as a 'floor' where the price struggles to fall below, while resistance is like a 'ceiling' that the price finds hard to surpass. These levels are crucial for entry and exit strategies in trading.

💡Trend Line

A trend line in the video is explained as a tool used to identify the direction of the market trend. It is drawn by connecting the lows of a downtrend or the highs of an uptrend. The script emphasizes the importance of trend lines for confirming market trends and finding entry points for trades.

💡Risk Management

Risk Management is a critical aspect of trading that involves the process of identifying, evaluating, and controlling risk. The video stresses the importance of having a solid risk management strategy, including setting stop-loss orders and position sizing, to prevent significant losses and ensure the longevity of a trading career.

💡Smart Money Concepts

Smart Money Concepts, as discussed in the video, refer to strategies and insights that are believed to be used by large financial institutions or 'big players' in the market. These concepts include order blocks and fair value gaps, which are used to identify key areas of potential market reversals or continuations.

💡Indicators

Indicators in the context of the video are tools used in technical analysis to help traders make decisions based on historical data. The script mentions several indicators such as Moving Averages, RSI, MACD, and Bollinger Bands, each serving a different purpose like identifying trends, momentum, or potential reversals.

💡Psychology of Trading

The 'Psychology of Trading' is the mental and emotional aspect of trading that influences a trader's behavior and decisions. The video touches on the importance of having a positive mindset and confidence in one's trading strategy. It suggests that a trader's success is not only about technical skills but also about mastering one's emotional responses to the market.

💡Strategy Development

Strategy Development in the video is portrayed as the process of creating a personalized approach to trading that aligns with one's trading style and risk tolerance. It involves selecting patterns or indicators, determining entry and exit points, and backtesting the strategy to ensure its effectiveness before live trading.

Highlights

The video aims to debunk common misinformation spread by big channels in the trading community.

It emphasizes the importance of realistic expectations in trading and warns against the promises of get-rich-quick schemes.

The speaker offers a free, honest guide to Forex trading without selling courses or mentorship.

Forex trading is explained as the buying and selling of currencies based on market analysis and predictions.

The video covers the categorization of Forex pairs into major, minor, and exotic pairs, each with unique characteristics.

Basic Forex trading terminologies such as 'long', 'short', 'lot', 'pip', 'spread', 'leverage' are defined.

The role of a Forex broker as a financial intermediary to the market is clarified.

The significance of understanding different trading sessions and their impact on market volume is discussed.

Technical analysis is presented as the most reliable method for predicting market trends, over fundamental and sentimental analysis.

Candlestick patterns, such as shooting star and hammer, are highlighted as key reversal signals in the market.

Chart patterns like head and shoulders, and double tops/bottoms, are explained as indicators of potential trend reversals.

The concept of trend lines, support and resistance, and market structure as tools for understanding market direction is introduced.

Smart money concepts, including order blocks and fair value gaps, are contrasted with traditional trading methods.

The importance of developing a personalized trading strategy that aligns with one's trading personality and risk tolerance is emphasized.

Risk management principles, including risk-reward ratio, position sizing, and stop loss orders, are outlined as essential for trading success.

The video concludes with a discussion on the psychological aspects of trading and the importance of discipline and confidence.

Transcripts

let's start from the very beginning since I  started exposing most of the big channels that  

has been lying to you by repeatedly teaching  the same strategy with different titles to get  

more views fake withdrawals on a demo account  and show you luxurious Lifestyles so that you  

can buy their course and pay for their mentorship  a lot of Traders has been asking me how they can  

start trading and get the right information about  trading without getting scammed or lied to so in  

this video I'm going to take time to break down  every aspect of Forex Trading you need to know so  

that you can be on the path to success but I will  also like to be very honest with you this video is  

not going to make you profitable automatically  but will get you on track to face the market  

and discover what works for you I always like to  point out that trading does not work the way the  

so-called gurus present it to you one of the  reasons you keep failing at it is because you  

have unrealistic expectations which comes from  what you have been seeing online I hear some  

gurus tell people that they are going to make  them profitable in a month some make videos on  

YouTube about a strategy that has made them so  much amount of money and promise you that you  

will get same results well if that is what you  are looking for then you are at the wrong place  

I don't want to sell a course to anyone and I am  not planning to organise any mentorship I don't  

have paid signal group everything I do here is  free so I guess I don't have to lie to you or  

sugarcoat anything since I don't need your money  to survive everything you will learn from this  

channel are presented realistically as it is in  the market trading is not a get-rich quick scheme  

even when you start to see consistent results you  will still have to grow in all aspects and as you  

grow your account grows as well this video is  the one video that will tell you everything  

about trading and how to start back testing on  your own to become profitable I usually tell  

people that you don't need a mentor or a course  to become profitable everything you need is on  

the charts so all you need is a simple manual or  guide on how to go about everything of your own  

the truth remains no one is coming to save you all  you have at the end of the day is yourself and the  

charts and maybe this my little guide so think  of this video as that manual that is going to  

put you in the right track to start learning for  Forex Trading the right way and I'm confident that  

at the end you will be happy that you came across  this video this video is suitable for all traders  

who are not consistently making money from the  market sometimes the hardest kind of traders to  

teach are the ones who have been trading for years  but are not profitable and they don't like to  

admit that they are not the reason you can't teach  them is because you will have to first beg them to  

unlearn all the things that they think they know  about trading and start from the beginning so if  

you fall into this category you may just have  to pretend as though you don't know many things  

so that you can learn and become better this  video is going to be divided into six major  

parts in the first part we will look at the  basic of Forex Trading in the second part we  

will look at technical analysis in the third  part we will look at smart money Concepts and  

compare it to traditional trading in the fourth  part we will look at indicators for those that  

will be interested in using indicators and  in the fifth part we will focus on how to  

use each of these things to develop your  own trading strategy or plan and in the  

last part risk management and psychology which  are important the essence of this video is so  

that you can choose what you think will work  best for you and run with it you cannot take  

everything I personally do not trade everything  the lesser the better without further Ado let's

begin in this part we will look at the basic  things every Trader must know and be used to  

in the market so first let's start with what  is Forex in a Layman's understanding Forex is  

simply the buying and selling of currencies just  like when you think that a particular commodity  

is going to increase in value in the future so  you buy it when it is cheaper so that you can  

sell it when it is high and make profit in simple  terms we buy low and sell High just like any other  

business but what makes Forex different is that  you are buying one currency and selling the other  

one for instance I woke up one morning to a news  that the British government are planning to raise  

interest rate and I know that a rise in interest  rate always leads to appreciation of the currency  

so I quickly convert my to pounds and when my  pounds appreciates in value I convert it back to  

Dollars the difference between the Buy price and  the sell price is my profit when I bought pounds  

I was automatically selling my dollars because I  have to convert it to pounds the exchange of one  

currency for another is Forex Trading in the Forex  Market currencies are traded in pairs and so you  

can choose which pair you want to trade the first  currency in the pair is the base currency while  

the second currency is the quote currency when  you take any action on any pair the direct effect  

effect of the action is on the base currency  while the opposite effect occurs on the second  

currency for instance when I place a buy order on  GBP USD it therefore means that I am buying pounds  

and selling dollars the direct effect of my action  is on the base currency while the opposite effect  

which is sell is on the quote currency there are  several kinds of Forex pairs in the market Forex  

pairs are grouped into three major category we  have the major pairs the minor Pairs and the  

Exotic pairs the major pairs are the most traded  pairs in the whole world and they have dollars  

as either a base currency or a quote currency the  four major currencies are the euro dollar dollar  

Yen pound dollar and dollar Swiss frank of all the  four pairs the euro dollar is the most traded in  

the whole world and account for over 20% of Forex  transactions this is because the Euro and the  

dollar represent the two largest economies of the  world which are the US economy and the European  

economy the second category is the minor pairs  or cross pairs these group do not have the US  

dollar as a base or quote currency they are made  up of one of the major currency and a currency  

from an emerging economy this is the list of  the minor pairs the third group is the Exotic  

pairs this pairs involves one major currency and  one currency from a smaller economy that is less  

commonly traded and because of their low volume  in the market they usually have a bigger spread  

of the three categories the major pairs are the  most traded and has a very tight spread now let's  

quickly look at some terminologies in the market  and what they mean long means to buy while short  

means to sell so when I say that I am going  long it means that I am buying and when I say  

that I am going short it means that I am selling  lot in a Layman's understanding simply means the  

size of trade you are making a standard lot of 0 Z  represent 100 unit of that currency and a mini lot  

represent 10,000 unit of that currency you will  get familiarise with this when you start using  

your mt4 a pip is smallest change a currency can  make it is a unit of measurement of a currency if  

you want to know how far price is gone in respect  to a particular position you measure it using pip  

a 20 pip movement means prices move 20 points  against you or in your favour spread is simply  

the difference between the Buy price and the sell  price usually known as bid and ask but simply just  

think of it as the transaction cost Leverage is  what enables you to open a big position with your  

Capital so that you can make substantial profits  from the market so when your broker gives you a  

certain percentage leverage the broker is simply  magnifying your Capital by that percentage profit  

is your gain from a trade while loss is your  risk your profit and loss can be predetermined in  

Forex Trading there are different kinds of Forex  orders instant execution means that you want to  

buy or sell at the current price buy limit order  means that you want to buy when the price get to  

a certain point that you think is best to enter  the market sell limit order means that you expect  

price to get to a certain price level for you to  go short buy stop is when you expect price to pass  

through a certain level and then get you in as it  continues up for instance you expect to enter the  

market when price breaks through a resistance and  continue up while sell stop is the opposite you  

expect to enter the market as price continues down  stop loss order is a risk management order to take  

you out of the market when price gets to a certain  level this is used to determine how much you are  

willing to risk per trade take profit order is  used to secure your profits as price gets to your  

desired position a Forex broker is a financial  company that gives you access to the market  

think of it as the middleman between you and the  market so to trade the financial Market you have  

to deposit your Capital with a broker which in  turn will give you access to the market there are  

two types of broker the regulated broker and the  non-regulated broker to trade safely and ensure  

that your capital is safe it is better to trade  with a regulated broker to know if your broker is  

regulated look for the license number at the lower  part of the website and verify with the licensing  

Authority they claim to have gotten their license  from the FCA's website is a good example of such  

regulatory body if it is licensed the broker's  name will come out and that is a good way to know  

those are the basic Forex terminologies you  should know now let's look at the different  

trading sessions I will be using this diagram  that I borrowed from the internet there are four  

major trading sessions in the financial Market we  have the London session the New York session the  

Sydney session and the Tokyo session understanding  these sessions and timings in the market is very  

important because it makes you know the exact time  you should expect much volume in the market using  

the standard eastern Time or EST the London Market  opens at at 3:00 a.m. and closes at 12:00 p.m. the  

New York Market opens at 8:00 a.m. and closes by  4:00 p.m. Sydney session opens at 5:00 p.m. and  

closes at 2: a.m. while the Tokyo session opens  at 7:00 a.m. and closes at 4:00 a.m. the best  

times to take trades are between overlaps of these  sessions there is always low volume in the Sydney  

and Tokyo session so it's best to avoid them when  trading there are several trading softwares that  

Traders can use to trade and analyse the market  but the most common ones are the mt4 and Mt e 5  

which are commonly used by Traders to place trade  you can download it from Play Store if you are  

using Android device or Apple Store if you are  using iOS device alternatively you can download  

directly from your broker to your personal  computer the best place to do your technical  

analysis is trading view this is the most common  among Traders and it is very easy to use and a  

great tool for beginners traders who wants to  back test their strategy what I usually do is  

that I will use the bar replay tool and go back in  time and then assume that I am just trading line  

that way I will know what works and what doesn't  work so trading view in the mt4 or mt5 are what  

you need to start trading the market there are  three kinds of analysis in the financial Market  

the first type is fundamental analysis which  relies on economic events like high impact  

news so Traders just basically analyse the news  to determine what the trend of the market will  

be and to trade in line with it the second type  is technical analysis it's the use of technical  

tool to analyse the past Market data to predict  the future sentimental analysis is based on your  

perception or what you basically feel will  happen in the market of the three types the  

best and most reliable is technical analysis  which is what we're going to focus on in the  

remaining part of this video in this part we are  going to look at all the core parts of technical  

analysis showing you the right way to read price  action and most importantly the meaning of some  

patterns in the market and after that we will  look at smart money Concepts and compare it with  

this traditional technical analysis first let's  look at Candlestick Anatomy there are two major  

types of Candlestick in the market we have the  bullish Candlestick and the bearish Candlestick  

the bullish Candlestick signifies that price is  trending upward which is why it opens downward and  

closes up the bearish Candlestick means that price  is trending downward which is why it opens upward  

and closes down when price closes above at open  point it means that there was a rise in price and  

so it is a bullish Candlestick each Candlestick  represent a time frame when you are on the 1 hour  

chart it means that it take 1 hour for each of  the candlesticks to be fully formed when you are  

on the 15 minutes time frame it means that it  takes 15 minutes for each of the candlesticks  

to be formed so the time frame you are analysing  is a function of the candlesticks being displayed  

the longer time it takes for the Candlestick to  be formed the bigger the time frame a one-month  

Candlestick which has a total of 20 trading days  takes a whole month to be fully formed it will  

interest you to know that each Candlestick  carries it owns unique message and signifies  

something so a good understanding of this  Candlestick patterns can help you decode the  

hidden information of the market makers let's  look at some important Candlestick patterns in  

the market the first Candlestick we have on our  list is the shooting star and Hammer Candlestick  

pattern this is basically like my best entry  Candlestick pattern in the market the shooting  

star signifies a change in trend from an uptrend  to a downtrend market while the hammer occurs  

in a downtrend and indicate a possible change in  trend from a downtrend to an uptrend I love this  

Candlestick because of the wick it leaves behind  when this occurs on a key level it usually shows  

that there is high possibility of reversal and you  should get ready a good example can be seen here  

a hammer Candlestick here which indicate a trend  shift to uptrend and also here we have a shooting  

star here which changed the trend to downtrend  what this Wick usually mean is that a lot of  

Traders are being trapped in the wrong direction  and price will likely move to the opposite side  

another important Candlestick pattern that is  good to know is the engulfing Candlestick pattern  

the bullish engulfing Candlestick appears  in a downtrend market and usually indicate  

a change in Trend or direction of the market  to uptrend while the bearish engulfing occurs  

in an uptrend and signals a change in trend  from uptrend to downtrend note whenever you  

see these candlesticks appear in the market it  does not automatically means that the market  

will reverse it is just one of the confirmations  to add with other confirmations before you can  

say with certainty that price is in the process of  reversal to the opposite side a classical example  

of a bullish engulfing Candlestick can be seen  here this indicated that buyers are in the market  

and so price will go up this is also an example of  bearish engulfing Candlestick price engulfed this  

bullish Candlestick to show that reversal is in  the process there are other kinds of Candlestick  

patterns in the market but this two are the most  reliable reversal pattern in the market we also  

have the tweezer top and down the evening and  morning star and the three Inside Man Candlestick  

you can check our previous video on Candlestick  patterns for full teaching on it now let's  

look at chart patterns these are combinations of  Candlestick patterns that carries a single message  

of trend reversal in the market the first reversal  pattern we will look at is the head and shoulder  

pattern this is a trend reversal pattern that  occurs in an uptrend Market to show that price is  

going to reverse to downtrend it takes the shape  of a sketch human upper body from Price action  

standpoint the left shoulder shows a retracement  from the prevailing Trend then the head and the  

right shoulder indicates that buyers are getting  tired because the could push price above the head  

when price closes below this support level which  is the neckline it shows that structure is broken  

to the downside and price is now ready to go down  this pattern is very reliable especially when it  

occurs on a key level the opposite of the head and  shoulder pattern is the inverse head and shoulder  

pattern this signifies a change in trend from  downtrend to uptrend whenever price closes Above  

This neckline it shows that price is ready to move  up another important chart pattern is the double  

top and double bottom pattern using this diagram  that I borrowed from the internet the double top  

is also a trend reversal pattern that occurs in an  uptrend market and signals a change in trend from  

uptrend to downtrend this two projections shows  that price is having a hard time continuing up  

and the moment price closes below this neckline it  shows that price is ready to move in the direction  

of the new trend the break of the neckline shows  that structure is distorted and price is ready to  

move in a New Direction the double bottom occurs  in a downtrend and signals a change in direction  

to uptrend there are quite a lot of chart patterns  in the market but the most traded and popular ones  

are the head and shoulder pattern and double top  or bottom pattern let's look at trend line trend  

line serves quite a number of functions it is  used as a key level and also used to determine  

the trend of the market to draw a trend line  you start from the low of the first projection  

and drag to the low of the second projections and  drag into the future the third touch is where we  

look for entry into the market the whole essence  of trend line is so that we could keep trading  

in line with the current Trend the more touches  you have on trend line the more weaker it becomes  

so keeping it at just three touch is far better  this is another example this is the first touch  

the second touch here which shows that price is  trending downward and then the third touch here  

which is where you are meant to take your trade  from trend line is very reliable and if apply  

correctly can increase your overall win rate in  a trade now let's look at support and resistance  

support and resistance is still unused by most  traders in the market today support is like a  

floor where price find it very hard to break  through it is that price level where buyers  

deem it cheap to buy again and move the price up  again while resistance on the other hand is like a  

ceiling where price find it hard to break through  this is where most buyers exit out of their buys  

and price drops remember when you buy price goes  up and when you sell price drops down so those  

zones where price reversed from several time in  the market is your support and resistance and to  

draw it you find a place where price is made at  least two touches or more support and resistance  

has a number of functions and one of the major  functions is that it serves as an entry point  

in the market most retail Traders usually base  their entry on this key level as it helps to know  

when price is no longer moving in the intended  Direction now let's look at the simple Market  

structure in a downtrend market the major points  that shows that the trend is downwards are lower  

lows and lower highs this structural points gives  an idea about what is going on in the market and  

helps Traders understand where they are at every  given point on the charts the best point to sell  

using Market structure is the lower high this is  because whenever price breaks through the lower  

high it therefore means that structure is broken  and a new trend is setting in in an uptrend market  

price forms higher highs and higher lows the  higher low point is the main structural points  

and is the best point to enter into the market  understanding Market structure is very important  

in the market as it is the basic Foundation of raw  price action in the market so Market structure is  

very important important in the market and should  be considered as the very first thing in technical  

analysis when we get to the strategy aspect we  will look at how to use it in the market in a  

simple Market structure a change in trend from  one Trend to another is marked by break of the  

current structure like here this is a downtrend  market marked by lower lows and lower Highs at  

point where price was about to change direction it  breaks the lower low here this signifies that the  

trend of the market is changing so in a downtrend  market a break of structure is considered whenever  

price closes above the previous low or high while  in an uptrend Market a break of structure occurs  

whenever price closes below the previous high  or low point so this is an example of break of  

structure in the market and one of the ways to  validates this is that price will always come  

back to retest the point of break like here so  knowing when a valid break of structure occurs  

is important in the market imagine looking for  sells in a market that is already turning bullish  

or looking for Buys in a market that is about to  turn bearish so always keep this structural point  

in mind whenever you are looking at the structure  of the market the last thing we will look at in  

this part is supply and demand supply and demand  are like support and resistance but unlike them  

they are not line but zones where the market is  likely to reverse from in the market supply is a  

Zone drawn from a block of Candlestick like this  which shows that price will likely Go reverse from  

here downward because it was previously rejected  the whole trading game lies on this one thing that  

what had happened before will likely happen again  provided the conditions are the same humans will  

always tend to react to things almost the same  way Demand on the other hand is like support  

a Zone where Traders look to enter in for a buy  and ride all the way up demand moves price upward  

while Supply drives it down we buy in demand and  sell in Supply when we get to the strategy aspect  

of this video we will look at the advanced part  of supply and demand now let's move over to the  

third part which is smart money Concepts remember  we are still trying to get everyone familiarise  

with the major things in trading before we get  into the main part in this part we're going to  

look at some of the major smart money Concepts  and compare them to traditional trading so that  

we can know the difference and which approach is  the best first let's start with order block order  

block just as the name imply is a Zone on the  chart with accumulation of big orders left behind  

by big Financial key players in the market in a  simplified form they are zones on the chart where  

the big boy plan to execute future trades from  and so they leave tons of orders there so that  

price can go back to fill it and we retail Traders  usually spot out this zone so that we can trade in  

line with them the reason I always emphasised on  trading with the big Banks is that they determine  

where the market goes because they have the money  to move the market so to select a reliable order  

block we look for zones or point on the market  where price made a sharp reversal the last  

Candlestick before price makes a U-turn is where  we draw our order blocks from like here price gave  

a bullish candlestick stick before this sudden  drop so this bullish Candlestick is your order  

block the most reliable order blocks are the ones  that usually have a fair value gaps resting below  

it like here fair value gap on the other hand are  price and efficiency it is created when the big  

boys move price to One Direction often creating  gaps between the following candlesticks this space  

between this two Candlestick is our fair value gap  which is also known as imbalance a good fair value  

Gap usually has an order block resting above it  in a downtrend market and below it in an uptrend  

market so order blocks and fair value gaps are  inseparable they work hand in hand the presence  

of one validates the other this is another good  example of order block with fair value Gap resting  

above it identifying an Institutional order blocks  like this is very important in the market as it  

gives you a nice Zone to base your entry on in the  market keep in mind that it is from order blocks  

that we draw our point of Interest now let's look  at Market structure again from the smart money  

perspective there are five major components  of Market structure the Strong high an order  

block a fair value gap an internal liquidity  and external liquidity let's use this sketch  

first this High Point is the Strong high which  is equivalent to lower high in a downtrend market  

market structure begins here the next is the order  block which is where our point of interest will  

be drawn from point of Interest are zones where  smart money enters into the market it is always  

refined from order blocks so as to reduce the risk  like we said a good order block has a fair value  

Gap resting below it like here fair value gaps  validates this structure the next thing is the  

internal liquidity which acts as minor structures  in the market this induces traders to get into the  

market with the hope that the market was ready to  drop the last structure is the external liquidity  

this is the liquidity outside the trading range  it is where smart Money traders exit the market  

so a perfect smart money structure looks just like  this let's look at an example from a live market  

this is where we will have the Strong high which  is equivalent to a lower high point then order  

block which is where we draw our point of interest  from just like here then the next thing is the  

fair value gap which presents with this long  Candlestick in every Market structure there must  

be a fair value Gap in order block then below it  is the inducement which is the internal liquidity  

then we have the external liquidity here which  is where we will exit out of our trades so we  

enter in here on the point of interest and exit  out at the low which is the external liquidity  

so the good thing about this structure is that  is offers a precise entry and exit point in the  

market now the moment price closes above this  strong high that means the trend of the market  

is changing and we should expect a shift  in Trend to the upside and this is called  

change of character in smart money so a change of  character is a change in trend of the market when  

price takes out the previous low which is the  external liquidity we refer to it as break of  

structure so after a pullback and the market  continues in the direction of the Trend the  

moment it takes out the previous low then we can  say that the structure is broken now let's look  

at the a little comparison with the traditional  trading order blocks can be compared to supply and  

demand zones in traditional trading they are high  reversal points in the Market Fair Value gaps or  

imbalance can be referred to as gaps in the market  though not exactly as fair value gaps Strong high  

in smart money is your lower high in a downtrend  market while strong low is the same as higher  

low in an uptrend Market the major difference  between smart money and traditional trading is  

in Market structure the first structure is called  the simple structure while the second type used in  

smart money is called complex structure and in my  opinion I prefer the complex structure to simple  

structure because it is more reliable now let's  move over to the next part of this video which is

indicators there are quite a number of indicators  in the market but we will focus on the major ones  

to get any indicator click on indicator on your  trading view then type in the name name of the  

indicator you want and select it it will be  displayed on your charts most of the pictures  

I will use in this part comes from the internet  the first indicator we will look at is the moving  

averages these are used to smooth out price data  in order to identify the trend Direction there are  

two main types of moving average we have the  simple moving average and exponential moving  

average the simple moving average calculates  the average of a selected range of prices by  

the number of periods in that range and it is  best used for identifying the overall direction  

of a trend while the exponential moving average  places more weight on recent prices to make it  

more responsive to new information and it is  best used for identifying short-term Trends  

in the market to use this effectively you will  need to back test and know which configurations  

is best for your trades the next indicator  is the relative strength index the relative  

strength index or RSI is a momentum oscillator  that measures the speed and strength of price  

movement Traders use it to determine a possible  reversal points in the market Market it has range  

from 0 to 100 when it is above 70 it means that  it is overbought and price is likely going to  

reverse when is this below 30 it means that it  is oversold and price is likely going to reverse  

up and so you should buy the third indicator is  the moving average convergence Divergence which  

is popularly called macd it is another powerful  momentum indicator which shows the relationship  

between two moving average of a Security's price  the McD has three major components the first is  

the macd line which differentiate between the  12-day and 26-day EMA the second components is  

the signal line which is the 9-day EMA of the macd  line and the third is the histogram which is the  

difference between the signal line and the macd  line the major use of macd is in spotting changes  

in the strength Direction momentum and duration  of a trend the next indicator we will look at  

is the ichimoku cloud indicator the ichimoku  cloud is a comprehensive indicator that defines  

support and resistance identifies Trend Direction  gauges momentum and provides trading signals it  

has several components the conversion align the  Baseline the leading span a the leading span B  

and the lagging span the major use of ichimoku  is that it provides a complete picture of the  

market offering both Trend following and reversal  signals the fifth indicator we will look at is the  

Ballinger band The Ballinger bands consist of a  middle band and two outer bands set two standard  

deviations away from the middle band it is used to  determine an overbought or oversold conditions in  

the market the interpretation is simple when the  price is close to the upper band the market is  

overbought when the price is close to the lower  band the market is oversold this indicator is  

best used in combination with other technicals the  last indicator we will look at is the stochastic  

oscillator the stochastic oscillator Compares a  particular closing price of a security to a range  

of its prices over a certain period this indicator  ranges from 0 to 100 and the key levels to note  

are the 80 and the 20 when price is above the 80  mark it means that it is overbought and price will  

likely reverse when price is below the 20 mark it  means that it is oversold and price will likely  

reverse there are so many other indicators in the  market but these are the most popular ones like I  

said previously you cannot use everything the  best thing to do is to select what works best  

for you and run with it I personally do not  use indicators because they are lagging but  

there are other traders that find them really  interesting now let's go to the main part which  

is the strategy aspect of this video the one thing  most people don't understand about trading is that  

it is a reflection of who you are how you respond  to the data presented before you has a whole lot  

to do with your personality as a person that  is why you can copy another successful Trader's  

trades and still not be profitable if you have not  mastered yourself and accept who you are when it  

comes to trading then you will never be profitable  there are people that can be so patient they can  

hold trades for long till it gets to their desired  position there are others that just wants to see  

their profits in minutes you cannot tell a scalper  to hold trades for days he will feel uncomfortable  

and on the other hand a swing Trader will not  be comfortable scalping he will feel like he is  

gambling so everything now balls down to who you  are and who you are determines what your strategy  

will be so the surest way to become profitable in  the market is to find your own path discover what  

works best for you trading is very simple it is  just that we end up complicating the whole thing  

in the process of trying to find our edges in the  market remember you cannot use everything so the  

first thing to do is to pick what you think works  best for you among what we have discussed so far  

let me give you an outline of things to consider  so that you can draft out something for yourself  

one your strategy should put you in the direction  of the current Trend so anything you come up with  

must ensure that you don't trade against the trend  two you will find an entry conditions for it this  

is very important because sometimes you can have a  pattern but you don't have an entry strategy which  

will always cause you to miss out on trades the  third thing is that it must have an exit strategy  

so whenever you see a setup when to enter and when  to exit becomes very important let me paint this  

picture of the market so that you can change the  way you see things look at the market as a flowing  

river that is capable of carrying anything that  falls inside and thousands of people are around  

the shore trying to catch a fish from the river  without getting drowned so everyone will try to  

figure out a strategy that they will use and  with much caution so that they don't fall into  

the river some persons will try to use things  like stones bucket and maybe Spears it doesn't  

matter what you use the most important thing is  that you catch a fish without getting drowned  

but the closer you get to the river the higher  your chances of catching fish and at the same  

time you may get drowned so people will come  up with different strategies which will fall  

under two things entry and exit some persons will  choose to just wait days until the waves bring  

some fishes to the shore before they can make  a catch so people comes up with different ideas  

based on their risk appetites and what they feel  is convenient for them so to develop your strategy  

you can just go on the chart and decide to trade  just one patter let's say you choose the head and  

shoulder pattern for instance so after picking it  the next thing to do is to look for the patterns  

in all the pairs and select the five top pairs  that it appears more often then you go back in  

time to figure out the time frames that are most  reliable to trade this pattern then the next thing  

will be when is the best place to get in is it at  the right shoulder or the neckline after that you  

try to figure out the best place to always exit  the market so when you have done all these you  

write out everything and now testr run them on a  demo account for at least 3 months to see how you  

performed and make some adjustments together  with determining your average risk to reward  

within this period your confidence level must  have been built around this strategy which is  

really important in order to make money in the  market when you see this work out you stick to  

it and in no time you will see how everything  changes the problem with most Traders is that  

they lack patience they just want to make the  whole money in one day and they can't stay for  

a while to test run their strategy before applying  it on the market sometimes you may not just want  

to trade just the pattern you may decide to add  other things to it like the smart money Concepts  

like combining supply and demand with order blocks  and fair value gaps some people may choose to use  

order blocks as supply and demand zones and then  add fair value gaps to increase their overall  

rates in their strategy like I said in my previous  video a good and reliable supply and demand zones  

comes from order blocks so you back test it and  see how it plays out in the market and then work  

on it to make sure that you understand how it  works in the market before putting your money  

behind it you can develop a lot of strategies  from these basic knowledge alone I personally  

trade trend lines with order blocks and fair  value gaps whenever I get a third touch on the  

trend line and it coincides with an order block  here then I prepare to jump in and then when I  

get a shooting star or hammer ections on the Zone  it further confirms that I can go in so I know  

that in every three trades I must get at least  one win which is all I need to be profitable so  

first you have to treat it as a business don't  confuse trading with gambling invest your time  

into it and see how everything plays out now let's  discuss risk management this is the Cornerstone of  

successful trading without a solid risk management  strategy even the best trading setups can lead to  

significant losses the first thing to consider  is risk reward ratio the risk reward ratio is  

a key Concept in Risk Management it compares the  potential profit of a trade to its potential loss  

example if you risk $100 to potentially make  $300 your risk reward ratio is 1 is to three  

always aim for a ratio of at least one is to  two to ensure your profits outweigh your losses  

over time two position sizing proper position  sizing helps control the amount of money at risk  

in any single trade as a rule of thumb never risk  more than 1 to 2% of your trading capital on a  

single trade if your account balance is $10,000  and you risk 1% your maximum loss per trade should  

be $100 at the end of the day it all depends on  your risk appetites three stop loss orders a stop  

loss order is a predetermined point at which you  will exit a trade to prevent further losses it is  

very important to always have stop loss because  it protects your capital and prevents emotional  

decision decision making set your stop loss based  on technical analysis not arbitrary amounts always  

make sure you predetermined your risk based on  what you are seeing on the charts it should be  

placed at a place where you believe that price is  not supposed to get to except there is a change in  

Trend before I end this video I would like to add  that psychology plays a big role in trading you  

have to learn to see yourself as a profitable  Trader you can't get to where you haven't seen  

yourself in and this can only happen when you  have mastered your strategy and see it play out  

several times in the market practices builds up  confidence which is what drives away fear at the  

end you will find out that trading can be fun  if you are disciplined enough to stick to your  

plans this now brings us to the end of this video  thank you for watching see you in our next episode