Hey hey: what's up my friends, so welcome back to today's training video, where i'll share with you right four steps to finding the best trading setups and to do that right i want to introduce to you the taste formula. This is formula okay. So what does taste stand for simple right number one. It stands for stands for trading with the trend and why trade with the trend - and it's simple really, because when you trade with the trend, it increases right, your potential profit.

Let me just illustrate to you what i mean so let's say this: is it it's an uptrend? Let me ask you: do you want to be buying or selling you can see? You know on both sides of the uh coin, right if you were to be buying right. This is your potential profit potential yeah. This is your profit potential right from you know from here this portion here and if you were to sell your potential. Profit is probably just over here to here so clearly right by staying on the right side of the trend, you have greater profit potential and the gist of it is very simple.

If you identify that the market is in an uptrend, then look for buying opportunities. If the market is in a downtrend, then look for selling opportunities, that's pretty much it okay! So a couple of examples: if you look at this chart aussie and this market is in a uptrend. So what you want to do is to look for buying opportunities, and if you look at this one over here, pound aussie, this market is in a downtrend and you want to look for selling opportunities right. I didn't say: sell immediately, i didn't say buy in the moment the market is in an uptrend.

We will talk about that later, but for now i want you to be clear right on what you should be doing to buy or sell okay. So that's the first one trade with the trend, number two identify your area of value and in essence, right. This simply means right. Where might potential buying pressure step in right, especially if let's say if you are in an uptrend, you don't want to buy just because the market is in enough frame right.

You want to wait for the price to come to an area of value, because the market could be in an uptrend and it could be overextended ready to make a pullback. And if you buy any other hundreds right, you will likely get stopped out on a pullback or reversal. So this is why we want to identify the area of value. We want to also ask ourselves right: where might potential buying pressure come in and if it's an uptrend it might come to you know, area of support might be a moving, average, might be a trend line, etc.

So these are some of the few common concepts right to identify your area of value. So let me just share with you a few examples. So if you look at this stock over here, doku right, where is the area of value so from what i'm seeing over here doku? This is docusign a very popular tool right to get your signing of documents online. So what you can do is you identify your area of value? What i'm seeing is over here right this area of support in this uptrend right.

Yes, this market is in an uptrend and identify this area of value here, because the market has tested once twice three times and possibly right on the fourth time over here in an uptrend. So this area of support right is an area of value another one. How about this all right? Euro dollar? So if you look at this right historically, you can see that this market right area of value, don't necessarily just have to be support resistance. It also can be in the form of a moving average, in this case right notice.

That how we, you know, tested the moving average a few times over here, historically, okay, a few times here. I think here almost once here then here and here a massive spike through then another time - and you know that's my point right - your area of value can be defined right using different concepts. So the popular ones that i like to use is support resistance. Moving average trend lines, okay, so this is how you identify your area of value and that's the second thing.

Moving on the third thing right, you want to look for stack area. So what do i mean by this all right? So we are now. We are now applying a concept on top of another concept, so earlier we discussed about area of value finding out. You know where my potential buying pressure step in, so we also want to find out right that, whether that area of value does it coincide with a higher time frame area of value.

Why is that? Because that increase right, the probability of your trading success right. It's very simple right. Just imagine this if you are going after a girl right, you're interested in her. How do you know if she's interested in you? Well, if you text her you, whatever you message her and you know she doesn't reply, you or you should give you one.

Two word answers. You know that's pretty much a goner right, you, you just cut your loss and move on, but on the other hand, if the female right that you are texting that you're, you know messaging, you know you realize that she replies back. You know almost instantaneously very quickly. Right and you give her two lines, she gives you back five lines all right.

When you're asked out on the dane right, you say she's willing to come to your place and pick you up and send you to the restaurant or whatsoever, and you know when she told her hair. You know i have no hair to tool, but you know she told her hair when she talks to you. You know it's good signs right that she's, probably interested in you, and it's the same as trading when you have multiple factors. Some people call it confluence coming together that kind of increase the odds of the trade working out understand where i'm coming from okay.

So what we are looking for in this stack area of value is that we want to make sure that the area of value that we have identified earlier on our trading time frame that area also coincides with a higher time frame area of value. So let me explain so one example is this. So if you look at this over here, okay, i'm just going to do a quick split of the charts. Okay, so over here this is the daily time frame.

Then here is the forward timeframe. Okay, so let me just orientate you a little bit so if you look over here, this is the daily time frame, and this is the four hour okay, so you can see that over here on the daily timeframe, we have this uh area of value where the Price respects to 20ma tested once twice and at the time over here, so you can see that the 20ma serves as an area of value on this daily time frame and when you go down to the four hour time frame, you look at this chart over here. You'll notice that this market has come into this area of value as well, this uh area of support - so you can see that over here. This is an area of value on a forward time frame, and this area of value coincides with this higher timeframe area of value, which is the 20ma over here.

Okay, so this right is what i mean by stack area of value right, so area of value. On the trading timeframe, let's say your trading timeframe is a four wall. Time frame coincides with a higher time frame area of value and is in this case the daily is the daily time frame right. This one here is the daily time frame right.

20. M8. So your area of value doesn't mean that a support must, you know, be a support on a higher timeframe. That's not true because, as i've mentioned earlier, there are different ways to define area of value could be, support, could be trend, line could be moving average and stuff like that.

Okay, so this is one example. Let me share with you another example right to see the area of value in action so over here. This is the daily time frame. Okay, so let me just make the charts bigger, so this is nasdaq you see over here again uh.

Let me just uh pull out the two charts again: okay, so this deck. This is the daily timeframe of nasdaq. Okay, pull out the 20ma and over here, let's make it the four-hour timeframe. Okay, so over here same thing notice.

Here we have this area of value. On the nasdaq timeframe, price respecting the 20ma at this point over here, this is the higher timeframe area of value, and when you go down to your trading timeframe, which is the four-hour timeframe, this is an area of value as well. This price over here has retested this area of support over here right and this area of support right coincides with this higher timeframe area of value, this 20ma on the daily timeframe. Can you see where i'm coming from right? So this is the four-hour time frame, and this is the daily time frame.

This area of value on the four hour time frame coincides with the area of value that you see over here on the daily timeframe, which is a area value uh using the 20ma okay. So this is what i mean by stack areas right. This is what we are looking for stack area right. This puts the odds right in your favor next one and by the way, if you're, enjoying this video hit the thumbs up button, and if you don't right then just subscribe to the channel sounds good right.

So number four entry trigger. So once we have identified our you know our trending market, the area of value, the stack area or value. The next thing we want is the entry trigger. What is the signal right to tell us that you know hey it's time to enter the trade, and one way to do it is that you know you want to look for price rejection.

So what is price rejection? It could be it's a very simple concept. You basically want to see price come into your area of value and then leaving it quickly. This tells you that there is price rejection if the price comes into support and quickly right, bounce or reverse away from support. This tells you right.

There are people you know buying at this area of support. That's why the price got rejected. So if you are familiar with candlestick patterns right, this could be things like. You know the hammer, the bullish engulfing pattern and for bearish you want to be the shooting star.

Bearish engulfing pattern, etc. So, but the key thing is basically: you want to see the price come into your area of value and then leaving quickly right, the faster it leaves right, the better. So let's have a. I don't think we need examples.

For this i mean this one is pretty much uh straightforward. So let's have a look at a few charting examples right to illustrate that today's uh today's concept right the taste concept right trend. Let me just recap: right the taste concept, trend, area of value, stack area of value and entry trigger, so the one thing to mention is that the stack area value basically, is that you want your area of value on the entry time frame on your trading time Frame to coincide with a higher time frame area of value. Okay.

So let's have a look at a few examples, so i think you've seen uh some earlier we mentioned earlier - is the uh aussie, canadian one. You saw that earlier, okay, so this is the the daily time frame. This is a four hour time frame. You've seen that on this daily time frame, or rather, let's talk about the trading time frame, first, the four-hour timeframe over here.

Okay, we have this area of value, which is an area of support, and this could be an entry trigger price, come into support and bounds off. You know pretty quickly and if you realize right, this support is no ordinary support, because it is at this area of value on the higher time frame, the daily timeframe at the 20ma as well. So this is the taste concept in action right. We are trading with the trend this one here we are trading with the trend.

We are trading at this area of value. Okay, this area of value has stacked on this higher time frame area of value as well, and then we have this entry trigger right. This is a big bullish, uh candle closing back above support next one nasdaq, okay, so this example, we have also seen it earlier, but just you know, walk you through it. So nasdaq again, this is a daily time frame.

Okay, let me just walk you through. This is, let's say the four hour time frame is your trading time frame. This is the area of value right and over here we have the price coming into this area of value and then getting rejected uh pretty quickly, but as you've seen right. This area of value is no ordinary area of value, because this area of value coincides with this area of value on the daily timeframe as well.

The 20ma right, that's the number of times previously, so you can see that this level is a significant level because it has stacked right on top of the higher timeframe area of value. All right. Let's look at another example: the euro gives a swiss franc uh. This one here, i believe, is the daily time frame.

Okay and so i'm gon na be the weekly. So let's have a look at the uh the daily time frame. First. So if you look at the euro against the swiss rank, okay, let's see okay, so this one over here, we can see that this market has come into this area of it.

Let me just use a tool to draw it this area of value right where previous previous uh resistance right could become support over here. Markets in a downtrend came into this area of value, where previous resistance could become support. So is there a stack area of value and the answer is yes or if you go up to the weekly timeframe, you would see right that this market right coincides with this uh downward trend line as well about here. Okay, so you just pull this out and make this, like you know like a channel, or rather an area on the chart.

You realize that this area of value right on this one is the daily time frame. You see earlier the daily timeframe, this area of value right coincides all right with this downward trend line right over here, which you've drawn on the weekly timeframe, which you can be seen right so again right. You have the confluence of this resistance here and this uh downward trend line here. Okay and then our price rejection right will be in the form of this candle right price came into this level and then rejected strongly closing right near the lows of the day.

Right. So this is again right, the taste formula in action and just one more example before we, we kind of you know sum up. Today's uh training a pretty short one right, but hopefully you get the idea of what i'm trying to to share over here. So let's say on the you know, it could be the four or eight hour time frame right.

Let me just zoom this one here, okay, so you can see that on the four hour time frame, was it eight uh? Okay? I can't really find an example on this chart, so we'll we'll just you know, uh move back to the slides, okay uh. So let me share with you a few bonus tips before we sum up today's training. Okay, number one right: the stack area, combos right as i've said right, you can use different area of value and stack them together, for example, support and moving average. So this is the examples that you have seen earlier.

Uh. The trading time frame is at an area of support and on a higher timeframe, we set a moving average. Alternatively, it could be a support. Entry trading timeframe at support and higher timeframe will come into a higher timeframe trend line or it could be support.

On top of support, meaning, let's say the trading - it came into a trading time frame area of support and that area of support right happens to be a higher time frame area of support as well. That could work as well. Okay, so these are certain combos that personally i i like to trade off right. You know whether it's support and moving every support and trend line etc, and the next tip that i have for you is that you know you want to buy the strongest and short the weakest.

So what i mean by this is that, let's say, for example, the stock markets right uh, based on my research and my own back testing right. I find that stocks right all right and also right, based on academic research, right stocks that have moved the most in price. Let's say over the last 50 weeks right: these are the stocks that tend to outperform the market; okay, so so so how can you use this in your trading? So very simple: let's say you have two similar trading setup or two potential trading setup, one. Let's say it looks like this: okay, maybe comes back re-tests uh.

This area of support is the first setup, and then you have another setup that might look like this. Okay comes up here, breaks out and do a deeper re-test of previous previous resistance. That could become support, so in this case, which setup do you want to trade? Do you want to buy this one over here, where previous resistance could become support, or do you want to buy this one here with a price retest support, so one way to go about? It is just to measure right these two stocks, for example, whether you see your trading stocks or fx measure their rate of change measure how much they have increased in price over the last 50 weeks. Let's say this particular stock has increased 50 over the last 50 weeks, and this stock has only increased, let's say 20 over the last 50 weeks.

Then clearly, you want to be looking to buy this particular stock because it has moved more in price right over the last 50 weeks that you have. You know, look at okay, so this is what i mean by buy the strongest shot, the weakest. You always want to be buying the strongest markets, because these are the ones all right. These are the markets right.

They tend to move more in your favor if the market goes in your favor. Likewise, right, if you shot the weakest, these are the markets that tend to drop the most right. If the market does, you know, collapse, okay, so so these are a couple of tips to share with you right can be applied to our currencies can be applied to stocks. But one thing to share is that for stocks i usually don't shop because in the long run the stock market is in an uptrend right, but for currencies, it's fine, okay.

So a quick recap number one. The taste formula is trend trading. The direction of the trend identifying the area of value identify the stack area of value, meaning your your trading time frame. The area of value coincides with a higher time frame area of value as well, and then we mentioned the different combos that you can use and then the entry trigger.

What we are looking for is price rejection, basically price, coming quickly into an area and then getting rejected by it sounds good right. So with that said right if you've enjoyed today's training, and you want to learn more about such a trading tips and tricks. So what you can do is go down to my website over here trading with renault.com, and i recommend right getting this uh. This guide over here, the ultimate guide to price section trading.

We will talk more about. I know how you can use support, resistors market structure and stuff like that right to help you better time, your entries exits and all the fun stuff. Okay, so uh! This guide is completely free, just click this orange button and i'll send it to your email for free. So with that said, i wish you good luck and good trading.

I will talk to you soon. You.