How To Start Trading Stocks As A Complete Beginner - Ep.4

Summary

In this YouTube series episode, the host promises a transformative trading lesson focusing on momentum, a crucial aspect of successful trading. He introduces four key strategies: understanding candlestick wicks for real-time sentiment analysis, utilizing a private indicator's key metrics table for volatility and momentum insights, leveraging volume trends to confirm momentum direction, and combining these techniques for a robust trading approach. The host's engaging style and practical tips aim to enhance viewers' trading skills and profitability.

Takeaways

• 🎥 The speaker introduces Episode 4 of a highly regarded YouTube series focused on trading strategies.
• 🕒 They acknowledge the time between episodes, justifying it with the saying 'good things take time'.
• 📈 The episode promises to transform viewers' trading by teaching about the crucial role of momentum in successful trades.
• 🔍 The speaker will share four hacks to identify and trade around momentum, enhancing the techniques from previous episodes.
• 📊 The importance of momentum is emphasized, stating that all good trades have momentum and it makes predicting market movements easier.
• 🕊️ The first hack involves using candlestick charts to understand the sentiment of buyers and sellers in real-time.
• 📝 The significance of the 'wick' in a candlestick is explained, with longer wicks indicating stronger sentiment and potential market direction.
• 📈 The second trick is utilizing a key metrics table from a private indicator to assess real-time metrics like volatility and momentum.
• 📉 The table helps in identifying high volatility for easier trade predictions and the current momentum's bullish or bearish nature.
• 📊 The third trick highlights the importance of volume in trading, with increasing bullish volume indicating strong upward momentum.
• 📈 The speaker suggests not to trade solely based on one indicator but to use a checklist approach, combining multiple factors for better predictions.
• 🔗 For those interested in the mentioned private indicator, the speaker provides a link to tradinglab.ai for more information.

Q & A

What is the main focus of Episode 4 in the series?

The main focus of Episode 4 is on understanding and utilizing momentum in trading.

Why is momentum important in trading according to the video?

Momentum is important because it makes predicting price movements easier. When a chart shows a lot of movement, it's easier to predict its direction compared to when the chart is moving sideways or consolidating.

What is the first trick mentioned to identify momentum?

The first trick is analyzing candlesticks. Candlesticks can indicate the sentiment of buyers and sellers in real-time through their wicks.

How should one interpret a candlestick with a long lower wick?

A candlestick with a long lower wick indicates that sellers pushed the price down, but buyers fought back and drove the price up, suggesting a bullish sentiment.

What does the video suggest about using candlesticks alone for trading decisions?

The video suggests not to enter trades purely based on candlestick patterns. Candlesticks should be part of a checklist of indicators used to make trading decisions.

What is the second trick for identifying momentum mentioned in the video?

The second trick involves using the key metrics table from a private indicator, focusing on metrics like volatility and momentum to make trading decisions.

How does the momentum metric in the key metrics table help traders?

The momentum metric indicates whether the current trend is bullish or bearish, helping traders decide whether to enter or exit trades based on the momentum direction.

What is the third trick for identifying momentum discussed in the video?

The third trick involves analyzing volume. Increasing bullish volume suggests strong upward momentum, while decreasing volume indicates consolidation and a lack of momentum.

What additional feature does the trend table from the private indicator provide?

The trend table includes a volume metric that identifies if the volume is currently bullish, bearish, or if there is no trend, simplifying the analysis for traders.

What combination of techniques does the video suggest for successful trading?

The video suggests combining market structure techniques from previous episodes with candlestick characteristics, the trend table, and volume analysis to improve trading profitability.

Outlines

00:00

🚀 Launching Episode 4: Momentum Mastery

The speaker proudly introduces the fourth episode of a highly anticipated YouTube series focused on trading. Acknowledging the time taken between uploads, they emphasize the importance of quality over speed. The episode promises to be transformative for viewers' trading strategies by delving into the concept of momentum, which is considered crucial for successful trades. The speaker outlines four key 'hacks' or techniques they use in their daily trading to identify and capitalize on momentum, hinting that these will significantly enhance trading outcomes when combined with previous lessons. The introduction concludes with a teaser for the first trick, which is related to candlestick analysis.

05:08

📈 Understanding Momentum and Market Movement

This paragraph delves into the necessity of momentum in trading, explaining how it simplifies the prediction of market movements, especially when compared to sideways or consolidating charts. The speaker introduces a set of 'tricks' to identify momentum in real-time trading, starting with the first trick involving candlestick analysis. They describe how different candlestick wick patterns can reveal the sentiment of buyers and sellers, offering insights into potential market direction. The importance of not solely relying on a single candlestick but using it as part of a broader trading checklist is highlighted. The paragraph ends with a transition to the second trick, which is suggested to significantly improve trading strategies.

📊 Leveraging Key Metrics for Enhanced Trading

The speaker discusses the use of a private indicator's key metrics table to enhance trading strategies. This table provides real-time data on market volatility and momentum, which are deemed essential for successful trading. They explain the significance of high volatility for easier market prediction and the importance of the momentum metric for confirming the direction of trades. The speaker also introduces the strength metric from the trend table, which indicates the intensity of the current momentum. They advocate for the use of this table as a powerful tool in trading, offering a link for interested viewers to access the indicator.

🔍 The Power of Volume in Trading Strategies

The final paragraph of the script focuses on the importance of volume in trading. The speaker explains that volume is indicative of market movement and is essential for identifying momentum. They provide a simple method for using volume to gauge market momentum, emphasizing the need for increasing bullish volume in long trades. The paragraph also mentions a volume metric in the private indicator's trend table, which can automatically identify the nature of the volume and its implications for trading decisions. The speaker concludes by reiterating the importance of combining various trading techniques for increased profitability and promises to release the next episode of the series in the near future.

Keywords

💡Momentum

Momentum in trading refers to the speed at which the price of an asset is moving. It is a key concept in the video, as it is used to determine the strength and direction of a trend. The speaker emphasizes that all good trades have momentum, and they will teach viewers how to identify and trade around it. For instance, the script mentions that 'All good trades have momentum. I'm going to teach you how to find momentum, how to trade around it...'

💡Market Structure

Market structure in the context of trading pertains to the organization and patterns seen in price movements over time. In the script, it is mentioned as a significant topic covered in a previous episode, implying its importance in understanding market behavior. 'We went over actual market structure and if you don't know that, well you're kind of fkd' illustrates the importance of this concept in the series.

💡Candlesticks

Candlesticks are graphical representations used in a price chart to show the high, low, opening, and closing prices of a security for a specific period. The video script uses the term to describe a method for reading market sentiment in real-time, with the 'wick' of the candlestick being particularly important. 'But candlesticks tell the story of a chart...Whenever you look at a candle you can see what the buyers or sellers are currently thinking. Literally in real-time.'

💡Volatility

Volatility is a measure of the amount by which the price of a security can change over a period of time. It is a critical concept in the script as it helps traders predict price movements. The speaker mentions that 'Volatility is the rate at which the price increase or decreases... In a perfect world when we are entering trades, we want the volatility metric set to high.'

💡Trend Table

The trend table mentioned in the script is a tool that provides metrics such as momentum and volatility to help in trading decisions. It is described as extremely helpful and a key part of the speaker's trading strategy. 'This trend table is EXTREMELY helpful. I can not recommend it enough, it completely changes the way you look at the market.'

💡Volume

Volume in trading refers to the number of shares or contracts traded in a security or market during a given period. It is highlighted in the script as an important factor in determining the strength of a trend. 'Volume is very very important in trading... If you don't have volume, you don't have a good trade.'

💡Resistance

Resistance in trading is a price level that an asset has difficulty surpassing, as it is a zone where selling interest is expected to be strong enough to prevent the price from rising further. The script uses this term to illustrate a point at which a trend might reverse. 'But once it gets up to this point the price, hits a pretty strong resistance and the momentum on the trend table turns to bearish...'

💡Bullish

Bullish is a term used to describe sentiment or conditions in the market that suggest a rise in price is likely. The script uses this term in the context of momentum and volume, indicating a positive outlook for price movement. 'If you are entering long trades you want this, to be green and say bullish.'

💡Bearish

Bearish is the opposite of bullish and indicates a market sentiment that expects a decline in prices. In the script, it is used to describe a negative momentum or a situation where selling pressure is expected to drive prices down. 'If you are entering short trades, you want this to be red and, say bearish.'

💡Wick

In the context of candlestick charts, the wick is the small line extending from the body of the candle, representing the high and low of the period if they are outside the body. The script explains that the wick can provide insights into the balance of power between buyers and sellers. 'The wick itself can tell us a lot... If we see a candle that looks like this. This is saying that sellers got the price, all the way down to here, but the buyers fought them off, and got the price back up to here.'

Highlights

Introduction of the greatest series on YouTube with the release of Episode 4.

Acknowledgment of the time taken between episode uploads and the saying 'good things take time'.

Emphasis on the importance of market structure from Episode 3 and its impact on trading success.

Promise that Episode 4 will transform viewers' trading through the teaching of momentum.

Momentum's role in trading and its significance in determining good trades.

Introduction of four hacks to pinpoint momentum in everyday trading.

Explanation of how combining new and previous tricks will yield serious trading results.

The necessity of momentum for easier prediction in trading charts.

The difficulty of identifying real-time momentum and the introduction of tricks to overcome this.

The first trick involving the use of candlestick charts to understand market sentiment.

Candlestick wick analysis to predict future chart movements based on buyer and seller actions.

The significance of wick size in indicating the strength of market sentiment.

Advice against trading solely based on a single candlestick, promoting a checklist approach.

Introduction of the second trick using a key metrics table for real-time trading advantages.

Importance of volatility and momentum metrics in the key metrics table for effective trading.

Use of the trend table to identify when to enter or exit trades based on momentum changes.

The third trick focusing on volume analysis for determining chart momentum.

Volume's role in confirming the strength of bullish or bearish momentum.

The private indicator's volume metric to simplify volume analysis for trading decisions.

Final emphasis on the combination of market structure, candlestick analysis, trend table, and volume for profitable trading.

Humor about the release timeline of Episode 5, promising it will be sooner than 9 months.

Transcripts

I am proud to announce the greatest series to ever be on youtube.

Episode 4. You guys love this series.

So here we are, making episode 4. I know I know Im taking huge amounts of time

to upload these episodes. But don t they say good things take time or something like that.

Yeah lets go with that. Now if you guys watched episode 3, that was

a big one. We went over actual market structure and if you don t know that, well you re kind

of fkd But I do have to say, this one may just take

the cake. This episode is going to completely TRANSFORM

your trading. In this episode we are going to go over momentum.

Which arguably could be more important than market structure.

Momentum has a huge role in trading. If you don t have momentum, you don t have a good

trade. All good trades have momentum.

I m going to teach you how to find momentum, how to trade around it, and I m going to go

over 4 hacks that I use in my every day trading to pin point this momentum. And if you pair

this with the tricks I told you in previous episodes, you re going to start seeing some

serious results. I m done talking, lets get on with the value.

Well im not done talking because I have to talk to teach you the tricks but I m done

with the intro You get what im trying to say. Alright so why do we need momentum in the

first place? One of the biggest reasons why traders look

for momentum is because momentum literally makes your life so much easier.

For one, when a chart is moving up and down a lot, it s a lot easier to predict.

When a chart is moving sideways or is consolidating it s a lot harder to predict what is going

to happen next. So as a trader you want to see a lot of movement

on the charts. Now this may be a lot easier said than done.

Especially if you re trading in real time and not just looking at a chart from the past.

It s a lot harder to see when this momentum is actually happening espiecally if you re

trying to do it in real time. That is, until you know these tricks.

So I m going to give you all 4 tricks and they are going to be in order of importance.

The last one is kind of advanced, but my god has it done wonders for me.

I was actually thinking of not putting it in this video because we are kind of the begging

stages of this series and it may be just a tad bit advanced for where we are at but you

guys are big bois, you can handle it. Lets start simple and start with the first

trick tho. The first trick is absolutely FIRE. It s the exact MATCH we are looking for.

It s absolutely WICKed. It s candlesticks. Those were candlestick

puns. But not wax candles, the candles on your chart.

A lot of people overlook this. But candlesticks tell the story of a chart.

I like to think of the chart as a book and each candlestick is a little page of what

that book is trying to tell. What I mean by that is this:

Whenever you look at a candle you can see what the buyers or sellers are currently thinking.

Litterally in real-time. Which is basically a cheat code when trading.

Now as im sure most of you know. There are candlestick patterns. Sure, they can be useful,

but what im about to teach you will make it so you wont have to memorize any of those

patters. You just need to look for these certain cues

When looking at these candles we are looking for a few characteristics. The first one is

the wick. The wick itself can tell us a lot.

So if we have a candle that looks like this. This is saying that sellers got the price

all the way down to here, but the buyers fought them off, and got the price back up to here.

Which is a pretty bullish sign as you can almost think of it as the buyers won the war.

If the candle looks like this. This means the buyers got the price all the way up to

here, but the sellers came in and fought them off, and got the price back down. Which is

a pretty bearish sign. Just this simple wick idea can give a pretty

good indication where the chart is going to head next. And what the buyers and sellers

are currently thinking. The bigger the wick, the stronger the sentiment.

So for example. If we see a candle like this with a long lower

wick, we can assume that chart will head upwards after this. As its showing the buyers fought

off the sellers and are now in control. Which it does head upwards after this.

If we see a large candle like this with a big upwards wick. We can assume the chart

is about to fall as its showing the sellers are winning the battle. Which is exactly what

it ends up doing This can be used on any time frame but just

know they will be stronger and more consistent on higher timeframes.

Now I also think this is worth mentioning. You should not enter purely based on a candlestick.

For example, seeing a large lower wick and entering a long right after it forms. No.

Don t do that. How I like to think of trading is almost like

a checklist. The more checks you have, the more likely the trade will go in your favor.

So this candlestick can be used as a good indication of what the chart is likely to

do next, but you shouldn t enter purely based off of it. You should use it paired with everything

that im about to teach you and use it as an extra check on that checklist.

Now it s time to go to the 2nd trick and this when we start getting into the really cool

stuff. This one single trick will help your trades

IMENSILY. But

first Alright this next trick I use for every single

trade I take. Once I implemented this trick it instantly

made my strategy work better. It involves using this.

Now this is the key metrics table from my private indicator and it gives a ton of useful

metrics of whats currently happening in real time.

I created this table because I know just how important metrics like momentum and volatility

are and I wanted a fast way to present those values so I could use it to my advantage when

trading live. So what we are looking for are a couple metrics.

The first metric is volatility. Like I said in the begging of the video, the

more the price moves, the easier it is to predict. The less it moves, the harder it

is to predict. Volatility is the rate at which the price

increase or decreases. In a perfect world when we are entering trades,

we want the volatility metric set to high. As this tells us the price is moving a lot

which is exactly what we want. The next metric we want to look at is the

momentum metric. Now this metric is one of the most important

as that s what this whole video is about. If you are entering long trades you want this

to be green and say bullish . If you are entering short trades, you want this to be red and

say bearish . You can also use this to tell when a trend

is starting to change. For example, say if we were in a long trade

here and the chart is going up and the momentum is set to bullish, were in the clear and know

we can stay in the trade. But once it gets up to this point the price

hits a pretty strong resistance and the momentum on the trend table turns to bearish, this

could be a good sign to exit the current trade as the momentum is starting to change. So

we exit Which good thing we did, because the chart heads downwards and after this.

Hopefully you can start to see when all of these tips are put together how powerful they

can be. You can also use this strength metric to see

the strength of the current momentum. The higher the number the stronger the move is.

The lower the number, the weaker the move is.

Overall this trend table is EXTREMELY helpful. I can not recommend it enough, it completely

changes the way you look at the market. If you re interested in checking out the indicator

you can go to tradinglab.ai or ill leave a link in the description.

Okay, so we know the first 2 tricks I use for momentum. The 3rd trick is the cherry

on top. The 3rd trick involves using volume.

Volume is very very important in trading. Like Ive said time and time again, we want

a lot of movement on the charts and the only way you can have a lot of movement is by having

a lot of volume. But when looking at volume it can be kind

of confusing on whats happening because it looks like just a lot of random rectangles

on your chart. Well, heres a simple but effective way to

use volume in order to see the momentum of the chart.

When you re in a long trade, you want the bullish volume to be increasing.

As that will make the chart head upwards. So what you want to see is something like

this. Where the bars are getting larger and larger and are all green.

This shows there is bullish momentum and its getting strong and stronger.

You don t want to see something like this, as this means the chart is probably consolidating

and not moving a lot and there is no momentum. As a little extra hint, the trend table from

my private indicator also has a volume metric. It will basically identify all of this for

you and tell you if the volume is currently bullish, bearish, or if there is no trend

at all. This is very simple a little trick but volume

is very very VERY important when deciding to enter a trade or not.

If you don t have volume, you don t have a good trade.

So if you pair the market structure technique from episode 3, with the candle stick characteristics,

the trend table, and the volume trick. You will definitely start seeing your trades become

more profitable. Again if you re interested in the trend table

you can go to tradinglab.ai to get access to the private indicator.

I promise ill release episode 5 .eventually probably in like 9 months. Just kidding ill

release it soon. Maybe.