Reading Candlestick Charts Was HARD Until I Learned These 3 SIMPLE Steps
Summary
TLDR本视频教程旨在帮助交易者简化对蜡烛图的解读。演讲者分享了自己早期交易时的挑战,并介绍了三个简化步骤:减少使用指标、专注于明显的交易机会、构建有效的交易策略。他强调,成功的交易依赖于识别清晰的买卖信号、避免过度复杂化,并根据历史表现选择正确的交易工具。此外,他还讨论了如何处理交易中的恐惧和如何通过设置止损来管理风险。
Takeaways
- 📊 蜡烛图是金融市场的通用语言,学会正确阅读可以发现图表中的买卖信号。
- 🤔 初学者常因过度复杂化和关注错误的图表类型而难以理解蜡烛图。
- 📉 交易者应减少指标使用,避免因过多指标导致交易前难以检查和信号冲突。
- 💰 作者通过交易小份额来克服对损失的恐惧,减少情绪化交易。
- 🚫 没有所谓的完美指标或“圣杯”,每个交易者都会时不时地亏损。
- 📈 使用指数移动平均线(EMA)9、20和200,因为它们能快速反映价格变动。
- 📊 利用成交量加权平均价格(VWAP)作为均衡点,判断市场情绪。
- 📘 成交量条应根据蜡烛的开盘和收盘价进行颜色编码,以反映市场情绪。
- 📉 MACD(移动平均收敛发散指标)有助于识别市场动能和潜在的买卖点。
- 🎯 专注于交易明显具有高相对成交量的股票,这通常与新闻催化剂有关。
- 📌 构建交易策略时要关注有效的模式,避免过度复杂的图表和指标。
Q & A
什么是蜡烛图,它在金融市场中的重要性是什么?
-蜡烛图是一种展示股票、期货、外汇等金融市场数据的图表,它能够直观地反映市场在一定时间内的开盘价、收盘价、最高价和最低价。它的重要性在于,通过蜡烛图的形态和组合,投资者可以识别市场情绪和潜在的买卖信号,从而做出更明智的交易决策。
为什么许多交易者在开始时难以理解蜡烛图?
-蜡烛图对于初学者来说可能像一门外语,因为它包含了许多特定的形态和信号,需要时间和实践来熟悉。此外,初学者可能会因为过度复杂化或关注错误的图表类型而难以把握其精髓。
如何简化蜡烛图的分析过程?
-简化分析过程的关键在于减少使用的指标数量,专注于几个关键的指标,如移动平均线、成交量加权平均价格(VWAP)和成交量条,以及MACD指标。这样可以避免信息过载,更清晰地识别市场信号。
为什么交易者应该避免在图表上使用过多的指标?
-使用过多的指标会导致分析过程变得复杂且难以管理,可能会产生相互矛盾的信号,使交易者难以迅速做出决策。此外,过多的指标可能会掩盖真正的市场信号,导致交易者错过交易机会或做出错误的交易决策。
什么是移动平均线,它在交易中的作用是什么?
-移动平均线是一种通过计算一定时间段内的平均价格来展示价格趋势的技术分析工具。它在交易中的作用是帮助交易者识别市场趋势的强度和持续性,以及可能的支撑和阻力水平。
成交量加权平均价格(VWAP)是什么,它如何帮助交易者?
-成交量加权平均价格(VWAP)是一种考虑成交量因素的平均价格指标,它显示了在特定时间段内的平均交易价格。VWAP帮助交易者了解市场在特定价格水平上的成交量分布,从而判断市场的供需平衡和可能的价格动向。
为什么交易者在交易时应该关注相对成交量?
-相对成交量是当前成交量与其平均成交量的比值,它反映了市场的活跃程度和交易者的兴趣。高相对成交量通常意味着有新闻或其他催化剂驱动市场,这可能导致价格的大幅波动,为交易者提供交易机会。
如何定义“明显的交易机会”,并如何识别它们?
-“明显的交易机会”是指那些具有高相对成交量、价格大幅波动和新闻催化剂的股票或其他金融工具。识别这些机会可以通过使用市场扫描器来监控整个市场,寻找符合这些条件的金融工具。
为什么交易者不应该只交易他们熟悉的股票?
-只交易熟悉的股票可能会限制交易者发现更好的交易机会。熟悉的股票可能并不是市场上最活跃或最有潜力的交易对象。交易者应该根据市场条件和交易策略来选择交易对象,而不是仅仅基于个人熟悉程度。
如何建立一个有效的交易策略,并如何使用蜡烛图来支持这个策略?
-建立有效的交易策略需要定义清晰的交易参数,如相对成交量、价格变动、催化剂等,并根据这些参数来选择交易对象。使用蜡烛图来支持策略,可以通过识别蜡烛图上的特定形态和信号来确定买卖时机,同时结合其他技术指标来验证这些信号的可靠性。
为什么交易者在交易中应该避免过度交易熟悉的股票?
-过度交易熟悉的股票可能会导致交易者忽视市场上其他更有潜力的交易机会。此外,熟悉的股票可能并不总是表现出足够的波动性,从而限制了交易者的盈利潜力。
如何使用蜡烛图来确定交易的入场和退出点?
-使用蜡烛图确定入场点可以通过识别第一个创出新高的蜡烛来实现,这通常表明市场趋势的延续。而退出点可以通过识别第一个创出新低的蜡烛来确定,这可能表明市场趋势的反转。同时,交易者还应结合其他技术指标和市场条件来做出决策。
为什么交易者在交易中应该避免过度简化他们的图表?
-过度简化图表可能会导致交易者忽视重要的市场信息和信号,从而影响他们的交易决策。一个平衡的图表应该包含关键的技术指标和数据,帮助交易者全面地分析市场情况。
如何通过蜡烛图识别市场的买卖信号?
-通过蜡烛图识别市场的买卖信号,交易者可以寻找特定的蜡烛形态,如吞没形态、锤子线、流星线等。同时,交易者还应关注成交量的变化,以及价格相对于移动平均线和VWAP的位置。
为什么交易者在交易中应该避免追求所谓的“圣杯”指标?
-所谓的“圣杯”指标是指能够完美预测市场买卖时机的指标,但这样的指标并不存在。市场是复杂的,没有任何指标能够始终准确无误。成功的交易依赖于交易者对多种指标的综合分析,以及对市场条件的适应能力。
如何使用MACD指标来辅助交易决策?
-MACD指标是一种振荡指标,通过计算两个不同周期的移动平均线之间的差异来展示市场动力。当MACD线位于信号线之上时,可能表明市场处于上升趋势,而当MACD线位于信号线之下时,则可能表明市场处于下降趋势。交易者可以利用这一点来确定交易的时机。
为什么交易者在交易中应该避免因为恐惧而过早卖出?
-因为恐惧而过早卖出可能会导致交易者错失更大的盈利机会。成功的交易需要交易者有良好的风险管理策略和耐心,以持有有利可图的交易直到出现明确的退出信号。
如何通过调整交易策略来克服过早卖出的问题?
-交易者可以通过设置预设的卖出规则或使用交易软件的热键功能来调整交易策略,例如,设置在盈利达到一定水平时自动卖出一半的头寸,然后在价格继续上涨时逐步卖出剩余的头寸。
为什么交易者在交易中应该避免持有亏损的头寸?
-持有亏损的头寸可能会导致交易者的损失进一步扩大,特别是在市场趋势明显反转的情况下。成功的交易需要交易者有明确的退出策略,一旦市场条件不再符合预期,就应该及时止损。
如何使用蜡烛图来管理交易中的风险?
-交易者可以通过设置止损点来管理交易中的风险,例如,在蜡烛图上设置在最近的支撑位或阻力位下方作为止损点。此外,交易者还可以通过分散投资和适时调整头寸大小来控制风险。
Outlines
📊 蜡烛图入门指南
本段介绍了蜡烛图作为金融市场的通用语言,以及如何通过简化图表来识别买卖信号。作者分享了自己作为新手时的困惑,并强调了减少指标数量的重要性,以避免在交易前检查过多指标导致的信息冲突。作者还分享了自己在交易初期的个人经历,包括面对经济衰退和个人财务困境时如何通过交易谋生,并鼓励观众通过简化图表和克服对损失的恐惧来提高交易技能。
📈 简化交易指标
这一段讲述了作者如何通过减少图表上的指标数量来提高交易效率。作者推荐使用三种指数移动平均线(EMA9、EMA20和EMA200)和成交量加权平均价格(VWAP)作为主要指标,并解释了这些指标如何帮助交易者识别市场趋势和交易机会。同时,作者还介绍了如何通过观察成交量条的颜色变化来理解市场情绪。
📉 交易量分析
本段深入探讨了成交量条的重要性,说明了如何通过观察成交量的变化来预测价格走势。作者指出,仅通过成交量条可以进行交易,但没有成交量条的蜡烛图则难以理解市场动态。作者通过实例展示了成交量条如何揭示买卖双方的力量对比,并强调了在交易中识别模式和进行准确预测的重要性。
🚀 抓住明显交易机会
作者在这一段中分享了如何识别和专注于市场上最明显的交易机会。他强调了避免交易那些自己熟悉但波动性不足的股票,而是应该寻找那些具有高相对成交量和明显价格波动的股票。作者还提到了使用扫描器来发现市场上的热点股票,并分享了自己如何通过这种方法实现盈利。
📉 相对成交量的重要性
这段内容强调了相对成交量(Rel RV)在交易策略中的重要性。作者通过自己的交易数据展示了高相对成交量与盈利之间的正相关关系,并解释了高相对成交量通常是由新闻催化剂驱动的。作者还分享了自己如何通过分析交易数据来发现盈利模式,并鼓励观众寻找具有高相对成交量的股票进行交易。
📈 构建有效的交易策略
作者在这一段中介绍了如何基于有效的市场指标构建交易策略。他分享了自己如何通过分析交易数据来确定交易策略的关键参数,例如寻找价格在2到20美元之间、相对成交量至少是平均水平五倍的股票。作者还强调了催化剂在推动交易中的作用,并解释了如何使用扫描器在市场中实时寻找符合这些参数的交易机会。
🏄♂️ 抓住交易波动
本段内容讲述了作者如何在交易中识别和利用波动。作者分享了自己如何通过观察价格波动和成交量来判断买入时机,并解释了在价格上涨后的首次回调中寻找买入机会的重要性。作者还讨论了如何使用技术指标,如MACD和移动平均线,来验证交易决策,并强调了在波动市场中寻找清晰交易模式的重要性。
🌊 交易时机与波动
作者在这一段中比喻了交易中的波动,强调了在价格上涨后的首次回调中寻找买入机会的重要性。他解释了如何识别波动的模式,并在波动的“回撤”时寻找买入点。作者还讨论了如何使用技术指标来确认这些买入点,并分享了自己如何通过这种方法在交易中取得成功。
📉 交易中的人性因素
本段内容探讨了交易中的人性因素,特别是对损失的恐惧如何影响交易决策。作者分享了自己如何通过改变交易习惯和使用热键来克服过早卖出的冲动。他还讨论了如何通过调整止损点和逐步卖出来提高交易的盈利潜力,并强调了在交易中保持纪律和遵循策略的重要性。
📈 成功交易的策略
作者在这最后一段中总结了成功交易的关键要素,包括使用较少的指标、专注于最佳交易设置,并围绕自己的交易数据构建策略。他强调了在交易中保持耐心、不过早卖出,并在出现明确的退出信号时才退出交易。作者还提供了自己使用的交易策略的PDF下载链接,并鼓励观众实践这一策略。
Mindmap
Keywords
💡蜡烛图
💡交易指标
💡移动平均线
💡成交量
💡恐惧损失
💡相对成交量
💡新闻催化剂
💡MACD指标
💡交易策略
💡退出指标
💡利润损失比
Highlights
本集专注于如何正确阅读K线图,解决初学者面对K线图如同面对外语的困惑。
K线图是金融市场的通用语言,适用于不同交易市场。
许多交易者因过度复杂化和关注错误的图表类型而误解K线图。
简化指标是关键,过多的指标会导致交易前难以检查并可能产生冲突信号。
作者分享了个人交易经历,如何从复杂的图表中简化并克服对损失的恐惧。
使用较小的交易规模可以减少因错误而导致的情感损失。
不存在完美的交易指标,即所谓的“圣杯”,交易者应接受偶尔的亏损。
作者展示了即使只有68.6%的正确率,通过良好的盈亏比仍然可以实现盈利。
推荐使用简单移动平均线(9日、20日、200日指数移动平均线)作为交易指标。
成交量加权平均价格(VWAP)是另一个重要的交易指标。
正确使用成交量条,根据蜡烛图的开盘和收盘价进行颜色编码。
MACD(移动平均收敛发散指标)是一个有用的振荡指标,帮助减少假突破。
专注于交易明显具有高相对成交量的股票,这通常与新闻催化剂有关。
作者通过分析自己的交易数据,发现高相对成交量与盈利交易有很强的相关性。
建议交易者不要只交易熟悉的股票,而应交易当天明显波动或值得关注的股票。
交易策略应建立在简单指标、明显模式和个人交易成功的基础上。
作者提供了一个PDF策略下载链接,供交易者学习和实践。
强调了交易者应如何正确设置止损和获利,以及如何避免过早卖出。
通过改变交易习惯和使用热键来避免因恐惧损失而过早退出交易。
使用退出指标,如首次出现新低的蜡烛图,作为卖出信号。
强调了保持交易策略简单性的重要性,避免过度复杂化。
Transcripts
if you've been having a hard time
reading Candlestick charts this episode
is for you I remember a time when I was
getting started when I looked at a
Candlestick chart and I said to myself I
don't see anything it's like I'm looking
at a foreign language and it's true that
this is a language this is the universal
language of the financial markets and it
doesn't matter if you're trading Forex
cryptocurrency futures or you're trading
stock when you learn to read Candlestick
charts the right way you will see the
subtle buy and sell signal that are on
every chart the reason most Traders mess
this up is because they're over
complicating it and they're looking at
the wrong type of charts I'm going to
clear all of that up for you in today's
episode so we're going to go ahead and
jump into the slide deck how to read
Candlestick charts and I'm going to walk
you through the three simple steps that
I took that made finally reading
Candlestick charts click now I struggled
with this and the reason that I
struggled was because when I was getting
started as a Trader I had a small
account as many of you may have today
and I felt like I couldn't afford loss I
could not afford to make mistakes my
back was kind of up against the wall
just to give you context when I was
learning a trade I was in my 20s I had a
college degree but it was the Great
Recession the economy sucked and I
couldn't get a regular job and I
basically had no savings I was running
out of money and so I was in a position
where I needed to make this thing work
my goal was to make $200 a day you know
roughly a th000 a week 50,000 a year
that for me at that time was was like a
dream and I wasn't achieving it so when
I was setting up my Candlestick charts I
was doing everything possible to reduce
my likelihood of what I thought would be
loss and I ended up creating these
incredibly complex charts I'm a little
embarrassed to even show this to you
this is an actual Candlestick chart that
I was using at one point you can barely
even see candlesticks they're up here on
this top panel there are more than 20
different indicators on this chart right
now so step one I'm going to tell you
guys fewer indicators is better and I'm
going to show you which ones you should
be using but the reason fewer is better
is because when you have that many
indicators it's it's literally
impossible to check all of them before
you take a trade and you can end up
getting conflicting signals because
you've got so many indicators you're
trying to rely on so what I really
needed to do to be honest
was address that fear of loss that was
so deep inside me I was so scared of
losing and one of the ways I was able to
kind of break free from that was by
beginning to trade with really small
share size so when I would take losses
they weren't as emotional because I made
a mistake that a lot of beginner Traders
make that when I first got started I was
trading with big size and I incurred a
few huge Lo well it felt at the time to
be huge losses they wouldn't be relative
to where I'm at now but but at the time
they were really big and it was so
disheartening I was so frustrated I just
felt like you know the world was ending
if if I couldn't figure this thing out
and so I was trading with this kind of
like it was like crazy but it was like
almost like Russian Roulette like every
time I took a trade I was like oh God is
this going to be the one and I had so
much fear in me that I couldn't focus I
couldn't see straight so I was adding
all these indicators because I was
searching for the Holy Grail now some of
you may have been on the hunt and not
even realized it the Holy Grail so to
speak is the perfect indicator that will
always tell you when to buy exactly when
to sell and you will never lose money
man that would be awesome it would be
awesome and I hate to break the bad news
that it doesn't exist there is no such
thing out there as a Holy Grail
indicator that's never wrong and there's
no such thing is a Trader that doesn't
from time to time lose money and just to
inspire you you know just a little bit
um and this isn't to brag it's uh just
just to kind of put it out there though
and show you this is $12.6 million of
real money third party audited broker
statements you can see it on my website
if you want this is real money that I've
made and I did it while being right only
68.6% of the time in other words I'm
wrong 30% of the time and I'm still
making money and that's because of
course I've figured out how to have a
good profit loss ratio my accuracy is
pretty decent and I'm choosing the right
instruments to trade every single day
but let's get back to these Candlestick
charts so hopefully that's a little
inspiring for you although I'll remind
you that my results are not typical this
is pretty exceptional uh hopefully it
inspires you because for me one of the
things that kept me going was knowing
that there were other Traders out there
that were making money you know if if
everyone was losing 100% of people were
losing it was like no but just the fact
that there were a few people out there
that were doing well that gave me hope
so you're telling me there's a chance
okay so fewer indicators is better
there's no doubt about that what I would
say is these are the indicators that I'm
going to encourage you to use okay so
number one we're going to keep it simple
we're going to use um moving averages
and I'm going to use exponential moving
averages and these are the ones I'm
going to use the 9 the 20 and the 200
those are three exponential moving
averages now the way I set it up my 200
is in magenta my nine is in a kind of a
gray color and my 20 is in blue so now
let's jump onto the chart real quick and
I'll actually show you these indicators
okay so this isn't this is just a very
clean example of a chart and if I full
screen this I mean I don't really
probably have to compare it to what you
just saw because this is obviously much
much easier to read I mean it's almost
like the difference between a a very
messy disorganized room or you know
office or whatever and something that is
like clean and clear right so this is
what you want you want a nice clean
simple chart so we've got the nine
exponential moving average here this is
our fastest exponential moving average a
moving average takes the average price
over the X number of periods and so this
is a nine moving average so it's giving
you the average price over the last nine
candles and going to move the fastest
with price action this is the average
price over the last 20 candles it's
going to move a little slower than the
nine and this is the average price over
the last 200 candles the 200 period
moving average is is very well respected
a lot of people use the 10 and the 20
and the 50 and the 100 I use the nine I
actually like it just a little bit more
than the 10 it's just like a little bit
faster I like the 20 and I don't find
the 50 or the 100 uh necessary they're
just extra unnecessary indicators on my
chart and if I'm not using them it makes
my chart messy and I don't need it so
we've got three moving averages the nine
the 20 and the 200 now the other
indicator that you're going to want is
your volume weight at average price so
indicator number two is vwap volume
weighted average price and this is going
to be uh it's a standard indicator and I
do it in an orange dotted line just like
that now your volume weighted average
price here just make that cleaner your
volume weighted average price price is
like a moving average except that it
also factors in um the volume that
occurred there it is so this is actually
in solid but you could have it either
either in a solid line or a dotted line
whichever one you prefer so this is
factoring in the amount of volume that
occurs at price and the volume weight
moving average um volume weight average
price is the equilibrium point for the
day so it is the exact average price PR
for the period of the day so if the
price is above average it's bullish if
it's below average it's bearish so as a
very simple way of thinking about it if
something is below um the volume weight
average price the Bears are in control
if it's above the Bulls are in control
and generally as a long biased Trader
I'm going to focus on trading when the
price is above vwap so down here we
dipped below it just for a moment and
then the Bulls uh regained control and
it got back above it all right so we've
got our 9 EMA our 20 EMA our 200 EMA our
volume weight at average price then of
course we need a volume bars so number
number three volume bars and volume bars
have to be colored based on the close
and open of um the candles so you cannot
have volume bars for instance that are
all the same color this would be a
mistake these are our volume bars right
here and what we're actually going to do
here um I'm going to go full screen this
just the volume bars and I'm going to
demonstrate for you how important this
is if these were all the same color what
we would miss is uh it would be hard to
understand sentiment so I'll just make
them all the same color here just for a
second uh and just kind of show you what
this looks like oops okay oops this way
all right so if these are all the same
color all we know is that we've got a
lot of
volume but I can't tell from this where
the price is going can you I would
imagine you can't it's impossible now
let's add um for growing volume we're
going to change this back to green here
and even if you didn't make this one red
you of course know the inverse is going
to be red so now this is painting a
picture what this is telling us is on
these candles right here we certainly
had high volume kind of out of nowhere
high buying volume came in what this is
communicating is the imbalance that's
occurring between buyers and sell
so during this period of time right now
who's
dominating just based on the volume
profile the volume profile is telling us
that the buyers are dominating so we can
almost certainly assume that the price
was moving up we probably moved up here
we pulled back for a second we moved up
more we pulled back again we moved up a
little bit we dipped down maybe a little
higher dip couple red candles so dipping
down a little bit more maybe coming back
up for a second and then going into a
little bit of a period of pulling back
we start to pop up for for a second and
then we kind of pull back again all
right so now let's pull up the chart and
see how that lines up okay so you could
actually almost trade exclusively on
volume bars without Candlestick charts
at all they're that they're that
significant and likewise to trade
without volume bars you would be almost
trading with one eye closed because
while the candles are moving up it's
very important to understand the volume
profile because this gives you context
so let's just say for instance that the
price is moving up so we're going to do
some green candles here let's just say
that the price is moving up U but the
volume is declining those are the volume
bars and then when you have a red candle
here let's just imagine that the the
selling volume is like this what story
does that tell the imbalance is clearly
to the sell side while there were buyers
they were diminishing and then when the
sellers came in they Di
what about the inverse volume increasing
as it's moving up and when it pulls back
light volume now this is the information
that we need in order to make an
accurate prediction at what's going to
happen next the traders who can predict
the future the best will be the ones who
make the most money and what we're doing
as Traders is we're getting really good
at pattern recognition now what I
struggled with as a beginner was that
for one I couldn't see the patterns I
couldn't see the the trees through the
forest because I had so many indicators
on my charts I couldn't see the patterns
trying to visualize patterns the SLE
patterns of an indicator
is the problem is the indicator is a
derivative of the actual price so I
don't know a really good analogy for it
off the top of my head but to me it
makes a lot more sense to pay attention
to the price it's almost like trying to
do everything like looking in a mirror
looking in a reflection it it like just
look at the actual Source because that's
where you're going to get the cleanest
information so the source is here the
candles the indicators provide context
and that's helpful but you can't only
have indicators when you only have
indicators you can't make accurate
predictions because the best patterns
are going to occur on the Candlestick
chart itself and then what you're going
to do is you're going to use these
indicators your moving averages your
volume weight average price your volume
and then this one right here which I'll
talk about in a second you're going to
use these to help you essentially
validate that this is doing what you
think it's going to do okay so in this
uh case right here the prediction
changed significantly based on the two
volume profiles so we'll do a second
version right here um where we have
decreasing volume as we go higher and
then we have these candles here with
high selling volume so now if we start
to make a move back back up I would
predict that the buying volume would be
very low and that we would end up at
best double topping at the high of day
with this being resistance for a move
back lower and at the worst it wouldn't
even make a new high it would just keep
going lower and lower and I certainly
would not be buying dips or pullbacks in
this area here thinking it's going to
move higher there's no way I would do
that on this chart on the other hand if
we're pulling back right here and that's
our 9 moving average and then our 20 is
down here and our V app is down here a
little lower I would look at this and I
would say I should be a buyer near the
support of the N9 moving average right
here the volume profile tells me there's
an imbalance to the buy side if I buy
right here near support I can set my
stop at the low of this candle right
down here and I can add as the price
moves higher and this is a chart where I
would expect to see strong resolution to
the upside now this is an example this
is a real chart and this is a real stock
that I traded and I'll show you the p&l
that I had on the stock um a little bit
later in this class so we have our first
move up here on high volume nice volume
we have a momentary pullback and then it
pushes even higher we have here a little
bit of a more proper pullback and again
look at the volume profile nice high
volume buying as it was moving higher
and then a light volume candle right
here that's red it dips down for a
second and this is the spot to be a
buyer right down here while you
certainly could buy as the pattern comes
back up to the top you could also be
accumulating right here on this pullback
because the volume profile is supporting
the belief that this is going to move
higher the buyers are in control and
when buyers are in control the dips get
bought up and the price moves higher it
pulls back again buyers are still in
control and the price moves even higher
now the four indicator that you're going
to see uh is on my charts is the
macd so the macd macd stands for moving
average convergence Divergence indicator
and this is an oscillating indicator so
it goes like this and it has a signal
line that goes like this and what I do
with this
indicator is uh I I focus on trading
when the macd is above the signal line
so you've got your signal line here
which is orange and then you've got your
your macd which is the um which
basically what this is doing is it's
taking the moving averages and it's
telling you when they're uh converging
or diverging so here the moving averages
are diverging they're moving apart right
do you see how those moving averages are
moving apart they move apart when the
price is moving quickly the price moves
quickly the moving averages pull away
from each other when the price starts to
contract and come back together the
moving averages converge and during the
bare Market of 2022 and then the rally
in 2023 I found that by only trading
when the macd is open that greatly
reduced the number of false breakouts I
had so this is an indicator that is
helpful to look at as you know sort of
in a way Red Light Green Light if the
macd is positive above the signal line
I'm interested if it's negative I'm not
interested and so on this chart right
here when that crossed over you know
right at this point that was the place
where I would say nope I'm not
interested anymore now you know you
could create kind of a
complex overlay like this and you know
you could it make it very easy to not
miss it but unfortunately when you start
doing this it's very easy just look at
how much Messier this chart looks it's
not easy to see and what you don't want
to lose sight of are these clean simple
patterns right here because this really
is going to be where you're going to
find the most
success so Step One is simplifying your
indicators you can see on my chart how
simple it looks it's just not worth over
complicating it so you really want to
keep it simple this is what my charts
look like and this is what it looks like
whether it's a 1 minute a 5 minute a 10c
a daily chart they're the same I just
keep it really simple okay so now let's
pull the slide deck back up here for a
second all right so step one is fewer
indicators is better step two is
focusing on what is obvious this was a
huge mistake that I made when I was
getting started when I was getting
started I wasn't focusing on what was
obvious my problem was that I started
focusing on stocks that I knew and now
it doesn't matter whether you're trading
futures or Forex or you're trading
cryptocurrency you you want to trade
what is obvious so let me just pull the
charts back up here and show you an
example of what I mean so on this
particular day I would say without
question this was the obvious stock to
trade it ended up going up 100% it had
news it was on my scanner right here I
saw it when it was up like
69% these are scanners that are
searching the market for stocks that are
moving but you can use scanners like
this for um commodities for Forex Pairs
and for cryptocurrencies as well now the
problem that I got into is that I
started trading things that I knew so
I'd pull up a chart on IBM and I'm like
I know IBM computers and I'd start
looking at this chart and I this is what
this is when I said I don't see a gosh
darn thing I'm looking at this chart and
it's just I got nothing I pull up a
chart on us steel x this is a company
that I was familiar with I see nothing I
pull up American Electric Power this is
another stock that I had for a while
that I focused on on a lot oops a pulled
up American Electric Power I got nothing
this thing makes you know I I I just
don't see anything here there's not
clear patterns and this was the biggest
mistake that I was making I was trading
things that I was familiar with I was
not trading things that were actually
volatile or worthy of my attention on
that particular day by the way if you
want to download a PDF of my strategy it
breaks down my crit for finding the best
stocks to trade and where I'm getting in
and what exit indicators I'm using to
tell me when to get out you can download
the PDF it is linked to the top comment
I pinned it and it's also linked in the
top of the description so make sure you
download it print it out and start
practicing trading this strategy in a
simulator of course this is the strategy
I've been trading for more than a decade
it works in today's market so I would
encourage you to study it as much as
possible and see if you can find Success
With It because it's incorporating
everything we're talking about in
today's episode so here was my reasoning
I had heard some people say you should
get really good at trading like one or
two stocks get really good at trading
like apple for example or the S&P 500
and some people do this with with
Bitcoin or with gold just get really
good at trading you know One Financial
instrument once you start to kind of
learn its patterns you'll start to get
comfortable and you'll get better at it
that was not true for me that was never
true I wasn't able to actually get
dialed in and and to be honest I think
it's kind of a myth because now with
more than a decade of experien trading
full-time I don't know any traders who
actually make a living trading like that
I've known a few people who were very
wealthy who bought positions in some of
these stocks like Tesla or apple and
would kind of trade around them
sometimes they would buy more shares on
one day the price would go up they'd
sell them but if the price went down
they would just keep holding them
because they believed in what they were
buying and that's not really day trading
and to be honest for Traders like myself
who are getting started with small
accounts you can't afford to do that so
I it just didn't make sense so this was
the big problem for me is I was not
trading what was obvious so what is a
better way to define and help you
understand what is
obvious what I look for is high relative
volume
so let's define what that means some of
you may be familiar with this phrase uh
others are not so we're looking for uh
the abbreviation is just Rel RV for
relative volume and what I have found in
my metrics is that I make the most money
when the relative volume is five times
higher than its average and I can
actually back this up with um with this
$12.6 million in in profit so we're
going to look here uh let's see what it
is um it's under is it under let's see
under
instrument okay so we're going to pull
this up um what we're looking for here
oh no maybe it's stay oh let's just
check no it is here um so performance by
instrument relative volume right here so
this shows over $10 million of my profit
came from stocks that had at least five
500% higher which is five times higher
five times higher relative volume
relative to the 50-day average and then
the rest for the most part was on uh
stocks that were between 150 and 200 but
in fact look at this these are losses
when I'm trading stocks that have lower
relative volume that's very interesting
now what what is this what is this
essentially telling us the reason that
I'm making money on stocks I have High
relative volume is because High relative
volume is a byproduct typically of a
news Catalyst when you have breaking
news and you can have breaking news and
a day where Bitcoin is really hot or a
day when Apple is really hot it'll
usually happen like four times a year
when they're putting out their quarterly
earnings at least in the case of stocks
but there can be Global events that
create a catalyst for futures for future
commodities for gold things like that
for Bitcoin and currency pairs so
whatever it is you need the Catalyst the
catalyst is what's going to create that
high volume so now let's look at this
chart in a little bit of a different way
we're going to move this out of the way
um I'm going to look at the daily chart
here on American Electric Power and if
we look at the daily chart and we just
look at the volume you could see a few
days here that have higher volume here a
little bit here a little bit here a
little bit here so these would be the
days that have that it has higher
relative volume even in spite of that
the relative volume ratio these these
Peaks are maybe twice the average
they're not that high this one's a
little higher but but they're really not
that high let's look at
Tesla so we're going to look at the
volume Peaks on Tesla there aren't many
Peaks it has sustained high volume but
the relative volume is not particularly
High except back here this day was very
high volume okay so that day right there
that's a day that I would say okay maybe
we could consider trading it on that
type of day when you have you know
significantly higher volume let's look
at the S&P 500 for those of you that try
to trade the S&P every single day when
does the S&P have high relative volume
basically never let's get real this is
the S&P 500 this doesn't have a usually
single days with crazy high volume you
had um in March of 2020 when the market
dropped 30% that was that was the
highest pretty much relative volume
Spike that I had seen and and so on that
particular day yes and in this sort of
stretch these two weeks this was an
opportunity if you really wanted to
trade the S&P 500 although what I'll say
is that there were individual stocks
that were even more volatile that are
within the S&P 500 that were driving
this move that would have been better
candidates for trading so on any given
day you're looking at these large cap
stocks American Electric Power us Steel
on mobile whatever these are not
volatile enough occasionally you'll have
higher relative volume but even when you
do more or less the price action there's
nothing here to look at so it made sense
when I said I'm not seeing anything here
because I was focusing on the wrong
stocks to trade now for me getting
focused on the right stocks to trade the
ones that had the five times higher
relative volume this only came after a
really big loss that I took that blew up
my account well it put my account so I
had to deposit more money to keep
trading the the account wasn't negative
which could be if you have a really big
mistake but in any case I had to add
more money to my account and so During
the period where I couldn't trade until
I had to add more until I added more
money I went through all of my metrics
and that's when I began to notice this
pattern what I was trying to figure out
was you know okay I've been doing this
for 18 months where are my winners where
are my losers what am I doing right if
anything I mean I was feeling pretty
defeated so I wasn't sure I was really
doing anything right but I looked
through my metrics and this is what I
noticed my profits predominantly cons
consistently most consistently were when
we had high relative volume it was also
when the in the uh instrument was up
more than 10% okay so the opening Gap uh
being more than 2% but the instrument
being up 10% so then all of a sudden
it's like well wait a second this for me
was a really big deal because when is
the S&P 500 ever up 10% when is Apple
ever up 10% never never I mean not in
one day it doesn't happen so then all of
a sudden it was like wait a second so
then what where am I making money and
again this is these are real metrics
from Real Money trades and my hope for
you is that by looking at this you're
able to sort of understand the anatomy
of the strategy that I'm trading every
single day and it's a strategy is
working in the market today so my
performance is predominantly on lower
priced stocks while you'll see that I do
have some that are higher price Gamestop
right you know I traded that when it was
higher price and a few others um
predominantly my profit is under $20
between 2 and 20 that's really my window
where I've got the most profit so I was
like okay well so we know we're looking
for a relative volume of at least um
five times higher we know that we're
looking for so this is number one number
two we know that the price needs to be
up
10% number three all right we're looking
for um a catalyst because the catalyst
is what's creating the interest that's
what that's what drives the move that's
where the relative volume starts to move
up it doesn't move up if you don't have
some type of catalyst right and then
let's see we'll get out another marker
number four we're looking for price
between 2 and 20 right so now we're
starting to get a little dialed in this
is how you start to build a
strategy right this is how you build a
strategy you've got some parameters and
now I can start searching the market
every single day for stocks or
Commodities you know or currency pairs
it wouldn't matter that meet these
parameters for being worth considering
okay so let's see so let's back this out
here for a second all right so um let's
see we're going to jump back over to
here so I'm using my scanners to find
this all in real time so these are these
scanners are actually searching the
market they're scanning the entire
market and then what I do once I see
something that's on my scanner like I
did right here in the case of WIA is I
say well what's the Catalyst what is
driving this move I see that we've got
news on it jumps on announcing fourth H
HDTV PTV license with major TV brand
okay so that's the Catalyst now I don't
have to be an expert on this stock I
don't have to be an expert at this
industry all I need to know is that
there's a news Catalyst the price is up
10% we've got high relative volume the
price fits within my wheelhouse of 2 to
20 and from there it's game time all
right so I pull up the chart and boom
nearly
$10,000 right here trade trading this
move up so I know that this for some of
you guys who are newer you know you're
like I don't even have $99,000 in my
account I don't even have 900 in my
account so I'm not going to have $9,000
winners anytime soon fair enough but to
inspire you and to show you someone
who's been doing this for a while is
able to extract this kind of profit from
this kind of move I hope will help you
get focused on trying to find these
setups in your own trading and get
really good at reading these charts so
what we really want to be doing is
making sure number one we're keeping our
indicators very simple number two we're
trading what's obvious and number three
you want to build a strategy around
what's working so you want to throw this
out right here this is way too
complicated this is obviously not where
you're going to find success and you
want to lean in on trading these types
of patterns where you're seeing good
resolution so this again it's just a
screen grab uh from a day where you know
up 3500 uh on the day total but look at
the patterns here now this is a little
higher priced which made it a little
riskier for me but look at this move
from 36 pull back up to 40 pull back up
to 50 that's really clean you know you
see a chart like that and you're like
wow I mean yeah that makes sense I want
to be buying this pullback but again
we're only buying that pullback when the
volume profile checks out when the macd
is open right we still have to check our
indicators we got to make sure all of
our indicators are checking out before
we're taking that trade but if
everything checks out then that's where
we're going to step up to the platee
we're going to say all right I'm going
to jump in here I like this setup so
this was um this is another example here
you've got one two 3 four candles moving
up we've got high volume green candles
green bars this is preferred sort of a
light volume pullback right here we dip
back down the first candle makes the new
high and for me that's the moment where
I'm a buyer so the way I think of these
um charts and I think of this because
it's what's happening is I think of
these waves so if you think of a wave
coming in you first get this move up and
there are some people who are going to
buy down here and just jump in but to be
honest the Candlestick chart's not
supporting that entry you know people
who are buying here are kind of chasing
the move and you'll have people that
chase the move and that's fine people
can do as they'd like but that's not
really a good setup I like to wait for
that first wave to pull back a little
bit and this is the moment of truth
because this is where the volume profile
is going to either tell us high volume
selling this is when the macd is going
to cross over we're going to break below
our moving averages or we're going to
hold and if we hold then at that moment
I can now visualize the rest of the
pattern I know what's coming next so now
what I'm looking for is the moment that
the wave sort of shifts so if you think
of the tide coming in the wave going out
and then you're looking for that next
wave to come back in so the way I do
this is I'm looking at my indicators I'm
looking at my chart and I usually in
this area here while we're still selling
off actively I'm starting to think okay
macd is open the volume profile is
acceptable I want to start looking for
an entry and what I begin to look for is
the first candle to make a new high so
we'll actually draw it on this side so
when we're talking about first candle to
make a new high uh this is something
that is so important for timing these
waves so we've got the price moving up
and then we've got the dip back down
right here and the second we have a
candle right here that breaks the high
of the previous candle that's where I'm
getting in
so something that we talk about a lot is
candles is making new highs see each of
these candles are breaking the high of
the previous candle that's the high of
the previous candle right here that's
the high it broke it that's the high it
broke it that's the high it broke it
that's the high so the high of this
candle breaks it right and then when
we're pulling back candles are usually
making new lows see how these candles
are making a new low a new low a new low
now if it keeps making new lows I'm not
going to buy I'm not just going to get
in down here I'm going to wait for the
first candle to make a new high right
there now these patterns the way uh
these types of stocks trade is they're
they can be very clean early in the move
new High new High new High new low new
low new low new High new High new High
new high and the reason they're like
that is because there's a catalyst
that's driving the volume if there
wasn't a catalyst driving the volume you
wouldn't have it but when you have a
catalyst you have new that's pushing it
higher pushing it higher pushing it
higher pushing it higher and honestly
let's just ask ourselves what's the
first candle that actually made a new
low it's not until all the way right
here that was the first candle that made
a new low these pulled back but they
didn't actually make a new low and then
this right here none of these made a new
low the low of that candle that red
candle this one was not as low so we had
one candle that made a new low right
there and then and we didn't have
another one until right here two candles
made new lows in that whole stretch so
if you bought at this first candle that
made a new low I mean you wouldn't want
to buy but but basically you bought
because you said okay this is the wave
this is the first wave it dipped down
and then as soon as that next candle
makes the new high that's where you're
in so basically right after that candle
made a low that's going to be your
lowest risk entry and the reason that's
the lowest risk entry is because where
do you set your stop loss where do you
bail out if this doesn't work
the low you bail out at the low right
there so now this is where you start to
get dialed in because you're thinking
I'm getting in right here my stop is
right here let's just say that's 10
cents a share now if I can make 20 cents
a share on this position I'm going to
have a 2:1 profit to loss ratio right a
2 to1 profit to loss ratio means if
you're right even just 33% of the time
you're break even that let your break
even 33% if you write half the time 50%
you're profitable now if you had a 1:1
ratio 10-cent winners 10-cent losers 50%
would be your break even you need to be
a little higher to be profitable okay
now as you saw from my metrics my
accuracy is about 68% and that's
produced 12.6 million in gross profit
okay so you see how this comes together
it's the combination of profit loss
ratio and your accuracy that creates
profitability so what you're looking at
here is is let the first wave happen let
it move up and then look for that first
dip back down that first pullback candle
makes a new low and then right after
that the first candle that makes a new
high that's where you're a buyer again
as long as your indicators are
supporting it these are the only
indicators I'm using right now and I
only recently added macd so for a long
time I didn't even use that but in a
bare Market in a choppier market I found
it helpful so I've kept things really
simple for a long time and I've done
well as a result you don't need to over
complicate it so you let it squeeze up
you let it pull back and then you're
getting in on that first tip now one of
the challenges a lot of beginner Traders
have is they'll get in right here and
then they're going to sell right here
they're like I'm out I'm selling and
then they watch this thing you know
squeeze all the way up you know to way
up here something like that it just
keeps moving higher and they're like
well holy smokes I so right here for a
tiny profit meanwhile this thing went
like way higher you could have had like
a 5: one profit to loss ratio but you
sold early with a one:1 ratio you do
that too much what you're going to do is
you're going to set the bar higher than
necessary for you to be a break even
Trader so here's what I would
suggest you're going to have that
instinct to sell I had it myself why did
I have it I had a small account as soon
as I had a winner I was like boom I got
to get out of this trade I don't want to
overstay my welcome I don't want to lose
it fear of loss right so once again that
fear of loss creeps back in and it's
telling me to bail as soon as I've got a
little profit sell because the sooner I
sell the sooner I've locked it up and
made the win are real and it's not going
to turn into a loser so here's what I
started doing I set up hot keys on my
computer so I have these um and I'll
show you just show you here just for a
second so you could see here so these
are the keys that I
use and the way I have it set up is um
shift one is to buy and contrl Z is to
sell my full position and this is
selling at the bid contrl X sells half
of my position at the bid contrl C sells
a quarter of my position and so what I
did was I actually took away the sell
the sell full position I changed the
script on it to only sell half my
position because my instinct was to bail
out when I was up just a teeny amount I
said the only thing I I need to just
start you know rewriting that and so
when I have the urge to sell the whole
thing I'm going to change the script on
that button so I'm only selling half of
my position and that was a real game
Cher for me cuz it kept me in my
position longer at least half of it but
at the same time it sort of did give me
that little bit of gratification that I
needed of like locking up a small winner
and after I've sold half I adjust my
stop to break even on the rest of the
position so now I have guarantee that
this is going to be a winner now
eventually I got better at not selling
half until I saw an exit indicator so
what do exit indicators look like when
we're looking at a stock chart and we're
looking at these candlesticks the exit
indicator is the first candle that makes
a new low so if you've been holding this
whole way up and you and you didn't sell
any of it then as soon as you have a
candle making new low that is an exit
indicator because at that point you
don't know how much this is going to
pull back now as it turns out selling
down here wouldn't have been great and
you would have actually gotten right
back in a moment later but as a beginner
Trader you have to have a set of rules
that you follow and so you hold until
that first candle makes a new low now
what some Traders will do is they'll
scale out selling half or a quarter
scaling out a little bit into profit and
there's nothing wrong with doing that
especially when you have big green
candles like this cuz you have these
kind of big green candles it if you
don't sell until the first candle goes
red well now this is kind of a a large
amount that you ended up giving back as
it came back down so that's when you do
want to start taking profit into a move
so when I first get into a trade what do
I want to
see number one I want to see that when I
first get in if I'm getting in down here
right if this is my entry right there
what are the things that I want to see
so let's list them out with a marker
that's working well so number one I want
to see the price move up
right price should move up obviously if
I timed my entry correctly and I got
into the first candle make a new high
the wave is already moving up so I
should be getting in here and the wave
should just continue higher so that's
not a big ask for the price to move up
should it move up I you know I would say
at least 10 cents within one minute of
entering the trade just to quantify it a
little bit more so like it should move
up pretty quickly number two I want to
see um
buyers on the time and sales which would
be in other words green on the
tape so when we're looking at the level
two we want to see we've got the bid on
the left we've got the ask on the right
so you've got something that's like 550
by 560 let's say and then you have your
time and sales window usually right next
to it and this is where what we want to
see is a bunch of buy orders going
through 560 5
65570 green on the tape we want to see a
lot of buyers okay these are the two
things I absolutely want to see I'd also
like to see
large green
candles okay large green candles so now
let's inverse that we'll invert it so if
I want to see all of those things in
order to feel good about a trade in
order for me to see an exit indicator a
reason to sell a reason to sell would be
I get in and the price is not moving so
if I got in right here and the price
doesn't go up 10 cents in a minute I'm
going to get out if there are not any
buyers or green on the tape I'm going to
get out if there are not any large green
candles I'm going to get out and what
might happen just for instance is I'll
have an instance where I got in and then
the next candle goes red and I get right
out now this would not be typical if we
had a good volume profile and if all of
our indicators checked out but the fact
is my accuracy is 68% of the time so 32%
of time I'm going to be wrong I'm going
to have the right idea but you know I'll
be wrong and I just have to cut my loss
quickly but if I get in and the price
moves higher moves higher moves higher
and then up around here let's say right
around this area the price sort of stops
moving we stop seeing buyers on the
level two we start seeing red on the
tape
or we start to see the formation of a
red candle those are exit indicators so
we start to get a small red candle up
there right that's NE indicator the
price is now moving down we now have
sellers on the tape and we're having a a
red candle it's the opposite of a green
candle so sometimes what can be helpful
is when I think about everything I want
to see for this trade to work I then
invert those and those are my exit um
exit indicators so my exit indicators
here are essentially when I'm not seeing
all of the things I need to see for the
price to be moving up that has been
really helpful for me now if you had the
discipline to not sell until you saw an
actual exit indicator you would do
really well because most Traders
including me a lot of the time sell too
soon and when you chronically sell too
soon unfortunately you're capping your
upside profit potential and the fact is
what a lot of Traders do when they get
into a trade that doesn't work they get
into a trade it's a losing position well
they don't sell too soon they just keep
holding so let's just say you had um a
chart like this you had a nice move up
you had a little pullback here and then
you have one of these candles where the
price goes up um and then it comes back
down so when you have one of these you
got in first candle makes a new high it
squeezes up and then it drops back down
you didn't sell and then the next candle
goes red and it breaks the low now
there's a lot of traders who just keep
holding and now you're looking at this
and it's like you're stair stepping
lower you made a new high but it
rejected for whatever reason it rejected
and the fact is all your technical
indicators could check out but there's
some guy you know some guy in his stupid
office in New York City who has a big
sell order up here for 100,000 shares
and this guy just ruined the chart it
could be one one order one Insider
whatever it is he's got that giant cell
over there he's blocking the way so okay
whatever it happens chalk it up as a
loss or get out Break Even or even for a
small winner if you're in at a good
enough price but do not just continue
holding but a lot of Traders do this
they'll keep holding and they won't just
sell half they'll hold full size all the
way down they're going down to the ship
and this is a problem because what this
does to your profit to loss ratio is
your average losers are big because
you're holding full position down 50
cents a dollar a share or more but
whenever you have a 50 Cent winner well
you sold half when you're up 10 cents so
now even if you sell the other the rest
of it up0 50 cents your average winner
is still only you know 20 cents or
whatever you sold halfway too soon
that's the problem so again if you're
selling half too soon change those
hotkeys change those orders so you're
scaling out more slowly into the move
and try to teach yourself if you can not
to sell until you have a valid exit
indicator again success when it comes to
reading Candlestick charts can be
simplified if you just focus on using
fewer indicators focusing on the best
setups and building a strategy around
where your metrics are showing you have
success if you want to download a PDF of
the strategy that I'm trading every
single day it's pinned to the top of the
comments and it's linked in the
description you can download it you can
print it out you can use it in your own
trading and practice it see if it works
for you because this is a strategy I've
been trading now for more than a decade
fulltime so if this episode was
interesting and helpful I hope you hit
that thumbs up I hope you subscribe to
the channel and I'll see you for another
upload just like this real soon
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