The ONLY 2 indicators I use to make $2,134/Day Trading

Summary

In this video, the speaker reveals how they made nearly half a million dollars in 9 months through day trading using just two simple indicators: the 20-period and 200-period moving averages. They demonstrate how to set these indicators up on a trading platform and explain how to use them for trend-following and price action. The speaker emphasizes keeping trading simple and avoiding complex setups, sharing real-world examples of how these moving averages serve as key support and resistance levels in both uptrends and downtrends. This video aims to change how traders view simplicity in successful trading.

Takeaways

• 😀 Keep it simple: The key to success in trading is simplicity. Avoid using too many complicated indicators.
• 😀 Two indicators for success: The only two indicators used are the 20-period and 200-period simple moving averages (SMA).
• 😀 Focus on trends: The 20 MA helps identify short-term trends, and the 200 MA indicates long-term market direction.
• 😀 Trend-following strategy: Always trade in the direction of the trend—either upward with the 20 MA rising or downward with the 20 MA falling.
• 😀 Don't overcomplicate your charts: Overloading your charts with too many indicators leads to confusion and analysis paralysis.
• 😀 Use the 20 MA to enter trends: Look for price retracements or consolidations near the 20 MA to enter trades in the direction of the trend.
• 😀 The 200 MA acts as support or resistance: When price is above it, it serves as support; when below, it serves as resistance.
• 😀 Avoid flat moving averages: A flat 20 MA means there’s no trend, and trading in flat conditions should be avoided.
• 😀 Real-world examples: The video uses real trades and stocks (like KDP, BNS, SPY, and Ethereum) to demonstrate the effectiveness of the 20 MA and 200 MA.
• 😀 Reversal setups with caution: The strategy emphasizes trading with the trend rather than attempting to predict reversals, which are more challenging.
• 😀 Education and mentorship: Beyond the video, the creator offers free courses and one-on-one mentorship for traders looking for more hands-on guidance.

Q & A

What are the two indicators the author uses for day trading?

The author uses two simple moving averages (SMA): the 20-period moving average (20 MA) and the 200-period moving average (200 MA).

Why does the author prefer using simple moving averages (SMA) instead of complex indicators?

The author prefers simple moving averages because they keep the trading strategy simple and effective. He believes that simplicity is often the most brilliant approach, and complex indicators like MACD, RSI, or Fibonacci are unnecessary.

How does the 20-period moving average (20 MA) help identify trends?

The 20 MA helps identify the direction of the trend. If it is rising, it indicates an uptrend, and if it is falling, it indicates a downtrend. The 20 MA is considered a medium-term trend indicator and provides support or resistance for price action.

What should traders look for when using the 20 MA for entry points in an uptrend?

In an uptrend, traders should look for the price to retrace to the rising 20 MA. If the price touches or consolidates near the 20 MA, it could provide a potential buy opportunity as the trend is expected to continue higher.

Why should traders avoid using flat moving averages?

Flat moving averages suggest a lack of momentum and indicate that the market is in a sideways trend. A flat 20 MA, for example, signals that the stock or asset has lost its upward or downward momentum.

How does the 200-period moving average (200 MA) act as support and resistance?

The 200 MA acts as dynamic support or resistance depending on the price's position relative to the moving average. If the price is above the 200 MA, it may act as support, and if the price is below the 200 MA, it may act as resistance.

What is a 'squeeze play' in trading, as described by the author?

A squeeze play occurs when the 20-period moving average is rising while the 200-period moving average is flat. The price oscillates between the two moving averages until it breaks out in one direction. This setup is rare but can lead to strong breakout moves.

What role does volume play in the author's trading strategy?

Volume is not considered an indicator in the author's strategy, but it is mentioned as important for confirming price movements. The author plans to make a separate video on volume, but it is implied that volume can provide additional insight when trading.

How does the author use the distance between price and the 20 MA for trade decisions?

The author uses the distance between price and the 20 MA to gauge whether a stock is overextended (too far from the moving average). If the price is significantly above or below the 20 MA, it may be too extended, and the author may look for a reversal or avoid entering the market.

What are the advantages of trading in the direction of the trend rather than trying to pick reversals?

Trading in the direction of the trend is easier and more reliable than attempting to pick reversals. The author emphasizes that picking tops or bottoms is difficult, and following the trend reduces the risk of making incorrect trades based on unpredictable price reversals.