So have a look at this chart over here. I'll walk you through quickly. This red line over here is the 20 period moving average. The blue line is the 50 period moving average and the black is the 200 period moving average.

Now let me ask you which moving average should you use in this example. I'll give you three seconds, one, two, three. Well the answer is this: you should be using none of it, right? Because clearly in this example, the market isn't respecting the moving average and also don't use it. Now what about this chart over here? Which moving average should you be using in this instance, Would it be the rate moving average The blue one or the black one Want to know what's the answer? I'll give you three seconds, one, two, three.

The answer is this: you should be using the blue moving average. Why? I'll explain shortly in today's training, but if you are one of those Traders Always wonder man right now. Sometimes I use moving average. It works, sometimes it doesn't man right now.

how do I use moving average to better time My entry Man Rayna Moving average. You know, sometimes it works, sometimes it doesn't work. Hey I just sit there right? So anyway, if you always you know feel conflicted with moving average, then today's training work will help you with it and to help you master moving average. And that's not all because towards the end of this training, I'll even share with you a moving average trading strategy that you can use to you know profit in Bull and Bear markets.

And it works. You know for the Forex markets, the crypto markets, and even the stock markets, sounds good? Then let's get started. First, what is the moving Average indicator about? Simply put, the moving average is an indicator that calculates the average price over a fixed time period. So if you let's say you have a 10 period moving average on your chart, it simply calculates right the average price over the last 10 candle.

So if you're on it on the daily time frame, it calculates the average price over the last 10 days. If you're using a 50-day moving average, it calculates the average price over the last 50 days. So for example, you can see over here. this red line over here is the moving average We are in this case it's a 20 period moving average.

Okay, and one thing about moving average is that you'll notice it tends to follow the price right a bit with a lag So you can see over here the price has declined lower. And you know moving average naturally is heading down lower as well. Over here, the price is going up higher. Naturally, your moving average right is catching up with the price as well.

So you might be wondering, you know, why does it happen right? How does the moving average work? Let me explain. So the reason this happens is because right again, it calculates the average price right over a given time period. So let's say for example, you have a five day, a five period moving average, and then let's say for example, let's say Apple Stock right? You know what's a you know, the Apple company. Let's say the stock price right over the last five days right is uh, S4 Lows.

Okay, so I'll walk you through. Let's say on day number one, Apple closed at one dollar day, Number two, it closed at two dollar day, Number three closes at three dollar day, number four at four dollar, and day number five, close it. Five Dollar. Simple.

Now, how do you calculate this five period moving average using the data that you have? Well, very simple. You just simply take the values right from day one to day five, and divide by five. So in essence, what you do right if it's in this case, is, let's say it's a simple moving average. You just take one plus two plus three plus four plus five.

add everything together, divide by five, and if my math serve me right, it will give you three dollars, right? So the five day moving average in this case is three Dollars. Okay, so just remember this number. Hold it in your head for like five seconds. Next, let's say day number Six, right? Apple Stock Close at Six Dollars.

Now let me ask you, how do you calculate the five day moving average? How do you calculate the five period moving average? Now you have Six values on your chart? Well, simply. But when you are dealing with moving average, you always take into consideration right the reason. Five days, right? The most recent five days, right? So in this case right, the most recent, uh, closing price over the last five days is from this. this, this, this, and this.

So from here all the way to here is the is the closing price Right Over the last five days, you ignore this one because this will be uh, the recent 68 and you are not dealing with the six period moving average by the five. So what you do is again, same thing. Two plus three plus four plus five plus six divided by five. And what do you have you get The value is four.

Okay, in this case, just one more example, right? So let's say day number seven Apple stock price close at seven dollars. So how do you calculate the five period moving average? Let me give you three seconds. One, two, three. Okay again same thing.

You take the recent closing price over the last five days from here all the way to here. You add all this number together. Three plus four plus five plus six plus seven. Divide by five.

Okay, and if my maths of me right I believe the value is five. So if you just remember the values earlier, this one over here we had the number is three Over here is four. So what happens is that on your chart, right? Imagine this is a chart. Okay, let's say this is the X-axis This is the Y-axis I Hope my X's are correct right? Left school long time ago.

So what happened is that let's say this is zero And then let's say for example, here is a let's say 104 or or ten right? So let's say at number three is here number four. Let's say it's here. and number five, it's here. So what happens that they will connect these dots right as lines on your chart And that's how your moving average.

You know, Uh, you know it's you know, shown up on your chart by calculating the average price over the last five days. Okay, so again, why do you have number three? Because they calculate the average price of the first five days over here. The reason: Five days over here And the reason: Five days over here. That's how you get three, four, and five.

Then you just show up as a dots on your chart and you just connect the dots. It will show up as a moving average. And of course, naturally, if your values right get smaller. let's say five become four, become two.

right? Then you're moving average. Naturally, you know Point down lower as well. Okay, so that's how your moving average works. Okay, now that you've understood right, what a moving average is right? the next question here is this: right when you use a moving average? Well, long story short, Right Moving average works best during a trending market.

And here's why. All right, have a look at this chart. You can see that this Market Market is uh, in the downtrend. And don't worry if you're not familiar with Trend later I have a trading on identifying Trends.

It's going to be a powerful lesson, right? But for now, just follow along with me. You can see that this Market is in a downtrend and the red line. Over here is the 20 period moving average. And if you use this moving average right for this particular Market condition, you can see that you'll be able to spot the right numerous trading opportunities, right? Notice how the market bounce off over here once.

Two times, three times, almost the fourth time, fifth time, almost a sixth time. And these are all potential trading opportunities. To you know, short this market and write the move down lower And this is powerful because you know if you're just a Trader who can just who only relies on you know classical support and resistance. So let's say for example, this over here.

Let's say it's a a resistance. You know this over here is resistance. This is resistance. This is resistance and you're waiting for the price to come back to resistance.

To come back to resistance. You know to come back to resistance. You will be disappointed because the price never came back to resistance. They just continue to head down lower and this will be a missed opportunity.

right? If you know you don't have additional Uh techniques in your toolbox, right to trade the markets. Okay, so this is powerful stuff. Another example this over here. this is the 50 period moving average.

Notice how the market right respects this, uh particular moving average in this trending Market condition, right? That's the ones you know. Two dimes, Uh, three times, you know. Four times, Five times. So I notice how the price you know bounces off the moving average nicely and later on I'll share with you right how to know which is the best moving average right to use.

I wish you use the 20s, you use the 50 or should you use the 200, uh, more on that coming up later. But for now I Also want to talk about when not to use moving average. Look at this chart. This is a perfect example of when not to use moving average when it's a range.

Market Because when the market is arranged, you notice that whatever moving average you have on your chart, the price will just you know, slice through it right like a hot knife through butter, right? The price still comes in, cuts through the moving average at a bounce, head down lower, then hit up higher and cut through the moving average once again and collapse down lower. Cuts through the moving average once again heads up higher, cuts through the moving average. hands down lower cuts through the moving average. heads up higher cuts to remove the moving average so you can see that during a range.

Market Right Moving average is not effective and you pretty much only want to use moving average when the market is trending, so it's key right to it. Surely be able to identify threads. So now, if you're not familiar with Trends you have difficulty identifying Trends right? Then pay attention to this. So a market is said to be in an uptrend when it consists of a series of higher highs and higher lows.

Like for example: Market hits up higher, makes a pullback, hits up higher, makes a pullback higher, makes pullback hits up higher so you can see. over here we have a series of higher highs. Let's call it HH higher high HH And then with this higher low, higher low. Okay, why is this called a higher lowest? Because right, the low over here is higher than this previous low over here.

And why is this called the higher lowest Because this low over here is higher than this previous slope. Same thing. Why is this called a higher high? Because this high is higher than this High over here does it make sense? So let's have a look at an example to see this in action. So if you look at this chart over here, this is what we call an uptrend right.

from left to right, Market is heading up higher and uptrend. If you look at the highs and lows, we have a series of higher high, a higher high, a higher high, higher high, higher high, and higher high. What about the lows? If you look at the lows right, this would be the the the first higher low right because it's higher than this low higher low. This is another higher low, another higher low, a higher low, a higher low, and a higher low.

So you can see that when the market is in and uptrend, it will consistently form a series of higher highs and higher lows. Now some of you might be thinking, but right now you know this is not as easy as it seems because there are times where I see the market is in an uptrend like this, then it goes down lower and it continues up higher. So now Rainer let me ask you. Rainer Is this now in a downtrend Because we now have a lower high and lower low? So that's a good question, right? Because in Market structure in an uptrend, you don't always get a series of higher highs and higher lows because there are times where the market can make a pullback.

and within the pullback, right, the the market gets messy. It forms a lower high and lower low like what you're seeing over here. or sometimes you could even do like like this over your Market goes up higher, then it chops up into a range you thought it's going to be a reversal and then pump it breaks out higher. So how do we know whether an uptrend is intact or not? So this is where I'm going to share with you.

Pay attention right? Something really important is what I call? Is this right? Basically, an uptrend is invalidated only after the price breaks below the swing low that precedes the breakout. What do I mean by this? Okay, so let me give you an example. So if you look at an uptrend, okay, price goes up, comes down, goes up, comes down, goes up, comes down, goes up. So when we talk about the swing low, the swing low that precedes the breakout, we are actually referring basically to a major swing point on the chart.

Now when I talk about major swing point, it can be hard to decide. Like for me I Know this is a major swing point. This is a major swing point. This is a major swing point, but to new Traders they can't tell.

So how do we know that's a major swing point is that you want to look at where did the market broke out previously. So you can see over here previously. this was the breakout point. Right over here is the highs and the market broke up over here.

So this is the the breakout point. Now where is the swing low that precedes the breakout? The word precedes means before. Where is the swing low that happened before the breakout. So you can see that the swing low that happened before the breakout is this swing low over here.

So in other words right, this uptrend will be intact unless the market has brick and then close below this swing low. Until that has happened right, we would say that the uptrend is still valid and we are expecting higher prices to come. Okay, we would say the uptrend is only invalidated if it breaks below the swing low that precedes the breakout. Okay, so let me give you an example.

So if you look at this chart over here, let me ask you. Quiz time. Okay, I'll just make your life a little bit easier. This over here, right is the High Okay, and when the market breaks out of this High Over here, right? You want to ask yourself, where is the swing low that precedes the breakout and then you have this swing low over here.

Okay, now when you look at this chart right, you can see that now on the market is actually break and closed below this swing low right? Yes, Breaking close below it. So my question to you is this is this uptrend still intact Or it has to be invalidated Five seconds, right? Think about this one. Two three Four Five. Okay so the answer is This is that the uptrend is actually still intact because it did not break below the swing low that precedes the breakout.

Okay, this uptrend is still intact so you can see what happened next. Is that this Market It did. Uh, deep down lower and then continue deep down lower and then continue up higher because this is the swing low that you want to pay attention to. If if only if the market breaks and close below it, then we can say that hey, you know this uptrend is no longer intact and the market could possibly go into a range or reverse down lower.

So remember right, uptrend is invalidated only after the price breaks below the swing low that precedes the breakout. Okay, so one more example. look at this chart. over here.

At this point, the market has break below this low. Over here, it's breaking close below it. Let me ask you. is the uptrend still intact or has it been invalidated otherwise known as otherwise Or can we say that the uptrend is destroyed? Yeah, so what's your answer? Five Seconds, One, Two, three, Four Five.

Okay, the answer is this right. So if you first and foremost find out where is the swing low that precedes the breakout, this is the breakout point, right? This is the highest that we are referring to. So at this point the market has break out of this highs. So where's the swing low that happened before the price breaks below this highs? This is the swing low over here.

So at this point you can see that the market did break below this. Uh, swing low. So at this point this is what what I'll say right there. the market.

The trend is no longer intact and it could possibly you know go into a range or even reverse down lower. Okay, now that you are able to identify trends like a pro, Congrats, Give yourself a pattern back. now. How do you actually identify the area of value right? So Area value.

Okay, there's uh, one thing that you must F right? Which is this right? The two test criteria. What do I mean by that? Let me give an example. So over here this is the chart of our Euro against the US dollar. In this case, I've overlay with a 50 period moving average.

as you can see on this blue line over here. So you can see that at this point in time, right? the market doesn't really seem to be respecting the moving average. Right goes up, cuts to it comes, that comes back down lower, goes up, comes back down lower. So what do I mean by the two test criteria? Very simple, right? Let's see what happens.

So in this case, a market goes up and it pretty much bounces off like the 50 period moving average. So this is one test over here. Okay, so we're looking for at least two tests, right? for the market to kind of like confirm and tell us that hey, he's respecting this moving average I Don't know what's the reason? Maybe there's some smart money, some institution you know, paying attention to it. Maybe some lady called dumb right by her boyfriend on the 50th date and she hates the 50 period moving average and she always sought with huge sizes at the 50 period moving average.

Who knows, right? But this is where you want to, you know, pay attention to for at least two tests. So we now already have one test. Okay, and the way I Define two tests, right is that the market must break below the swing low right and re-test it to classify a second test. So this means the market must come down lower, break below this, swing low, and then head up higher and re-test the second time right and only then will I consider this a second test.

So let me just show you what I mean. So in this case, you can see over here the market broke below this lows. Okay, and now I'm waiting to see if it respects the 50 period moving average for a second time. Let's see.

So in this case, you can see the market here down lower and then let's see. Yep, over here we've got a second test. Okay, so of course I'm not gonna. you know short this right now, right? because I still want to see the market getting rejected here, Right to kind of like confirm There's at least two tests All right? So I'm waiting for the price to at least break below this lows right to kind of like confirm hey, you know there's at least two tests on this particular market, so let's see.

So in this case, you can see that market consolidate a little bit right and then eventually break down lower. So now we have the two tests. Uh, technique which I share with you. We tested once it breaks down lower, retested a second time right, hit down lower, had a pullback, and then collapse down lower.

So now I have two tests now, right? I Can then look for potential trading opportunities right on this test over here, so we'll talk about the strategies, entries and exits later on. But for now, let's say don't follow through with this so you can see that the market over here. We did have a third test over here and the market starts to decline down lower. Then let's see what happens next so you can see over here market, then break below.

this lows over here. And then we pretty much retested this here for fifth time. Okay, and then let's see then it breaks down below the low. once again and over here we almost have another test.

We can consider this a test because you know it's pretty close and now we can see in the market. Retested here once again. Now let me ask you. Is this considered a test, right? It's not a trick.

Question: Is this considered a test? So if you recall right earlier, my rule for the market to actually consider a test is that it must break below this swing low. In this case, it didn't just hit down lower. It did not break below this swing low before it re-tests here once again. So over here.

I Don't consider this a test because the price must break below the swing low for it to be considered a test. Okay, this concept might be relatively new to some of you. So I'm going to walk you through another example so you understand how it works. So in this case, right, I'm going to use the 20 period moving average to identify my area of value.

Of course, this is a cherry pick chart, right? because I know what's the end result ahead of time. But I'm just going to walk you through the top process right to identifying the two tests. Uh, concept. So over here you can see over here, right? The market has tested the 20 period moving average once and then it hit down lower as you can see over here.

Okay, and it also had broke below this swing low. Okay, so let's see when the second test will occur. Market continues down uh, over here. lower slightly.

Then it retests here, a second time, right? Why is this considered a valid second test? Because notice the price actually took out below this low. So right here, down lower took out this lows and then retest here a second time over here. Okay, and of course at the second time right, we are not going to short the market just yet because we have no idea whether it's going to hold or not because the market Fall you know it could just continue up higher. So we are waiting for the second test to only be confirmed when the price breaks below this swing low right.

so let's see if that happens. So in this case the market did break below this swing low and now the second test is confirmed. So now we can look for trading opportunities right? Shoot the market right. Re-test today towards the 20 period moving average again.

So again, let's see in this case the market just continued to grind down lower, hit down lower and it's pretty far away from the 20 period moving average. so we are pretty much on the sidelines right and not you know, uh, taking any position and eventually the market. Let's see it came back over here right and give us a third test right Again, Over here is potential a potential trading opportunity because if you look left on the channel, it has respected the 20 period moving average. that's the ones hit down lower.

Come back A second time, hit down lower. So now third time. what do you think? do you think it's going to hit down lower? Well, I'll share with you later on. right at the trading strategy section on how you can actually use the moving average right to help you better time your entries and exist.

We'll talk about the specific entry triggers, the exits and and much more, right? So for now, just pay attention and understand right how to actually identify that two test criteria. So you know right that this particular market right has a good chance of respecting a the moving average. Yep, Okay, now you might be wondering. So Raining: Which is the best moving average? Man, you share with me the 20 period moving average the 50.

You know there's the 100, that's the 200, that's the 300. So which is the best one man. Well, the answer is there's no best moving average out there because it really depends on the type of Trends you're dealing with. So for example, if you notice that the market is in a strong uptrend, right? it's in a strong Trend Then usually right, the 20 period moving average will be more relevant for that market condition.

So over here you can see this is a strong Trend How do you identify a strong Trend Notice the depth of the pullback is usually relatively shallow, so you can see it hits up higher. It pulls back, then continues to hit up higher. A pullback heads up higher. pullback hits up higher, so pay attention to the pullback If you notice that it's relatively shallow.

Usually the 20 period moving average will be a better fit for that kind of a market condition. Now if you notice that the pullback is a little bit deeper, then this is what I call a healthy Trend And this is where the 50 period moving average will be more applicable in this case. So notice the market heads up higher, it makes a deeper pullback, hits up higher, pullback hits up higher, makes a deeper pullback, hits up higher, pull back, heads up higher, and right now making another pullback once again. So if you notice again, Market is has a slightly deeper pullback.

This is where you can use the 50 period moving average and in this market condition is what I call a healthy Trend And finally, when you notice that what man right now the pullback is really strong, it's really huge. Then this is what I call a weak Trend and usually in a week Trend you can use anywhere between 100 to 200 period moving average. This is where you notice that the pullback is usually, uh, pretty deep so it goes up higher. It makes a steep pull back, goes up higher, pulls back goes up higher, makes a steep pullback, goes up higher, makes a stick pull back right.

So in this case you can actually use the 20 or rather 200 period moving average to help you identify the area of value. So at this point, right, we have covered quite a bit about moving average. You know we had to use it, which is the best one to use how to identify your area of value. In the next section coming up, we're going to take all that you've learned right and to use it right to trade the market.

So we are diving into the trading strategy section. We talk about entries, exits, and much more. So let's get started. Okay, this is the chart of FCX Freeport McMoRan So this stock is pretty much in an uptrend as you can see the price making a series of fire highs, higher highs, higher highs, higher highs High highs and higher lows higher lows higher lows.

So clearly it's in an uptrend. So now that we know that this stock is in an uptrend, then we can actually use the moving average indicator to our bus identify the area of value. So let's in this case. so it seems like a healthy Trend I'll overlay with a 50 period moving average.

So let me walk you through and identify the number of tests right so far right. So we came, went up higher one test right then the market really up higher I would say this uh close to the second test goes up higher, comes back down for a third test goes up higher. and back here. We almost got this fourth test over here.

So clearly this Market respects the 50 period moving average and we can use this as an area of value to identify potential by trading opportunities. And if you look a little bit closer, you notice that this Market is also near the area of support right at the 50 period moving average. So this is what we call and a stack area of value because number one, you have the 50 period moving average acting as an area of value here. Then you have this area of support right which is near the 50 period moving average also acting as an area of value.

So you have two areas of value which are kind of like coincide with one another. So this is what I call a stack right? It's because they stack on top of one another stack area of value. So this makes things right, the area of value even more powerful. So what am I looking for now? So what I'm looking for right is pretty much an entry trigger to tell me that hey, the buyers are stepping in and about to push the price higher.

So what I'm looking for is for the price to come towards this area of value and then to quickly get rejected from it. So it comes into this uh, area of support by breaking below the 50ma and then quickly closing back above support. So this, kind of like look like uh, something like a false breakout right? because the price. It tried to break up below this lows break down below this lows but couldn't and then quickly rarely back above this area of support.

So This tells me that hey, you know the market tried to break down lower, but guess what? there's no one selling right? That's why the market couldn't go down lower Instead what happened is that they actually you know rarely and close back up above support. So this is a sign of strength and the market could possibly head up higher. So this is what I'll be looking for. Alternatively, you can also look for you know, a bullish reversal Candlestick pattern like a hammer, so comes into it it forms something like a hammer showing you you know signs of strength.

Again, this could be an engine trigger for you to go long. So let's see what happens next. So in this case the market is approaching our area of value, our stack area of value and then over here we have this Kendall they look somewhat like a hammer now I'm not interested to go along just yet because all right over here this is where the market. That could be where previous right? the price breaks below support where previous support could become resistant.

So it might face some uh selling pressures. it goes up higher and then continues down lower. So I want to see the market? Actually, you know, have a higher close right? a conviction? A convincing close right back above. Support something like this.

Okay, so let's see what happens. So in this case the next candle, we have a nice close back above. Support: So This to me is what I call a false break. Notice the price, how the price comes into this area of support.

It took out the slows, took out, this lows, tried to break down lower, couldn't and quickly got rejected and closed back up above this area of support. So this is what I call a false break and it's an entry trigger that you can use to get along on your trade. So let's say we go along on the next candle open right? Let's say let's say the candle opener over here, right? Let's say our entry price. Let's put it in Green over here, right? So this is our entry price.

Okay, just change this to Green Okay, what about okay, Green is here. What about our stop loss right? So I usually like to set my stop loss a distance below the lows, right? So this means I like to set it I don't want to set it just here because the market for all you know it could come now lower, hit my stops, and then rarely up higher once again. So how many times have you experienced that right? Say me to yourself right? Yeah, don't worry I can't hear you And so what I like to do is to actually set my stop loss or at a distance right below support a distance below the swing low. So my stop loss right usually somewhere about here right? so you can see the distance away from this lows over here.

So to make it more objective, you can use a tool like the average true Range indicator such for AGR just click this default one and I like to usually use the Uh 20 period ATR since that's what 20 trading days in a month I go with SMA Click OK right So find out what's the current ATR value. You can see that the current ATR value is 1.91 What this means is that over the last 20 trading days, right? This Market or this stock moves an average of about 1.91 cents. So what I'm going to do is to actually find out what's the low of this candle, right? Let's say the low of this candle is x minus right? 191. Okay, and that will be my stop loss level.

So what's the low? Let me go find out what's the low, the low of this candle. According to trading view, it's Uh 29.45 So I'll take 29.45 29.45 Okay, minus 1.91 which is shown over here and I get 29.45 Minus 1.91 27 point 5, 4 27.54 Okay, so that will be my stop loss level. Okay so let's go and put my stop loss level. at 27.54 Let's change this to rate stop loss as 27.54 Okay, so why 27.54 Very simple.

What we just did is to identify the low of this candle, the extreme swing low -180r and you know the 180r value is 1.91 So we take this swing low minus one ATR and our stop loss is at 27.54 Okay. So green is entry ready. Stop loss. What about targets? Well, you can set your target right in this instance.

let's keep things simple just before the recent swing high. So just before this hikes. because again, if you look at this, this is where potential selling pressure could come in. because all you know this could be, uh, resistance.

right where selling pressure could come in. So you're going to be conservative to just Capture One swing. You can just look to take profits just before this recent swing high. So just pull out this indicator, put it somewhere over here.

I'll change this to Blue to signal right that this is our Target. All right. So there you have it right. So this is a potential uh trading setup, right? Let's say we got along on this Green line rate is our stop loss and let's see what happens next.

I'll tell you what happened. The market reaches our Target because this is a Cherry Picked chart as you can see over here. Eventually it reaches our Target and this yes it's a winning trade. Now let's move on right? this is the chart of a dollar against the Chinese Yuan and have a look at this trend.

over here. the overall Market is in the downtrend. Now let me ask you, what type of trend do you think this is a strong clay, a healthy Trend or a weak train? Three seconds, one, two, three. Well, the answer is a pretty straightforward.

You can see that the depth of the pullback, they're all relatively shallow. pulls back, heads down, lower, pulls back hits on Lower pullback hits down lower So Based on the look of this chart right, I would say the market is likely to be in a strong Trend and that's where you can use the 20 period moving average to help you identify the area of value. So looking at which I noticed how many times the market has tested 20ma tested once, hit down lower, test it twice, hit download, pulls back. That's the three times Haze down lower, pulls back hits.

Uh, tested four times, hits down lower so you can see that the market right clearly respects the 20 period moving average right in this instance. and one thing to point out is that when you are trading or when you are dealing with a strong trading markets right, you will realize that you know you don't have much time to I mean you have time to make a decision. but at least if you're looking at the daily time frame, you realize that you've got to be fast because notice how the candle just come in towards this 20ma and it quickly got rejected down lower. then it pulls back towards the 20ma and then quickly got rejected down lower.

So if you are not paying attention right you realize that the market seems to you know move right very quickly. You know without you you know grabbing a piece of the move. So the kind of like slow time down right? There's one trick that you can use and it's what I call uh, multiple time frames right? going down to a lower time frame to time your entry and you realize that you have more time right to actually help you better time your entry. So let's do just that.

But before I do it right. this over here. I'm gonna highlight this area because this is an area of value right? The price. Testing the 20ma over here.

So let's draw this and highlight this as an area of resistance over here. Okay so now once that I have that right, I will go down to a lower time frame to the forward time frame and see what the market shows me. Okay so in this time frame I'll just remove the 20ma. Okay, so over here this time frame just to walk you through quickly.

This area of resistance is the same area of resistance you saw on the daily time frame where the 20 period moving average is at. So now the market on this four hour time frame it now seems to be kind of like in a Range like this. Okay so now to trade this little mini range. the setup: the entry trigger I'm looking for is very straightforward I Want to see the price come towards this area of value, this area of resistance and then quickly get rejected and close back below resistance.

This tells me that hey, the market tried to break out higher, but there's no buying pressure to push the price up higher. Instead, what you have is you know selling pressure coming in and that's why the market closed below resistance. So this is what I'm looking for. The price quickly.

you know Spike above resistance and then collapse down lower alternate relatively. You could also get a reversal Candlestick pattern like a shooting star. price comes up higher and then you have a shooting star pattern like this price tries to break out higher right, showing you the upper Shadow only to close near the lows of this time period. So that's another entry trigger that you can use to go short.

So let's see what happens next. So in this case the market hits down a lower closing back at the same price I'll go faster a little bit right market, then start to hit up higher with a bearish close on this candle. Then it eventually starts to break out above resistance and close back below it. So you notice the last two candle on this candle you have this uh, sort of a breakout.

nice strong looking Hammer to break above resistance right. took out the size right and then on this candle you can see that we had a follow through initially. Price took out this highs and this Highs but within the same candle the same four hour candle. The market pretty much got rejected and closed near the lows of this.

uh, four hour candles? What does this tells you tells you that hey, the buyers tried to break out higher couldn't find any more energy to push. High Instead, the sellers came in to control and push the price closing near the lows of this uh candle. So this to me is a valid entry trigger to go shot. So what I'll do is again I'll look to go short on the next candle open.

So let's say the next candle open over here right? This is to Signal my shot and three in green. Okay, I'll just change this to Green to Signal the entry and then right uh for stop loss again I like to set it one ATR Above This high. So I'm not doing to calculation you should really be familiar with it. if not just you know, rewind back a little bit and watch how I did it earlier.

So my stop loss Will pretty much be somewhere about here. Okay, let's change this to rate now. What about Target right? So in this case, since you know that the overall Market is bearish on the daily time frame, right, you can have actually multiple Targets in this case. So my first Target will be pretty much.

let's say over here, right below this, a just above this area of support I'll just change this to Blue for my first Target Okay, my secondary Target can be a little bit more. uh, further away since I know that I'm trading in the direction of the longer term Trend you look at the daily, we are pretty much trading in the direction of the longer term downtrend. So in other words, oops. In other words, since this is a downtrend, there's a good chance the market will break below this low and continue down lower by a little bit.

So I can actually use this piece of information and set a further Target to kind of like maximize my profits. Okay, so let me share with you how I would go about setting my second target. So back to the four hour time frame. Okay, my first Target is over here.

I'll just remove this box right? So to declutter it a little bit. So another technique that you can use to set your second target is what I call a price projection technique. So what you're trying to do in essence is to measure the range over here. from this highs to this lows right from here to here, let's say for example, for Simplicity let's say it's 200.

Pips Okay, so what you want to do right is then from this low so you project down lower lower by another 200. Pips. So literally copy from here this range and project it down lower and that will be your secondary. Target So to make your life easier, you can use a tool like this the trend based FIB Extension You draw this from this high to the low and back up to this high again.

Okay, so you can see over here I draw it from this high to this low over here and then back up to this high again. Okay, and then you can look at the 2.0 The 2.0 is where I need to pay attention to. okay the 2.0 so you can see over here. this is the 2.0 level over here.

All right. So basically what this indicator does at 2.0 what it tells you is that from this highs to this lows right, let's say this is again just to make this simple, let's say it's 200. Pips Okay, what it does is that from this low then you project down lower by another 200. Pips All right.

So this is the level that you want to pay attention to. In this case, it's at 6.44 Okay, so my second target right? I'll just put it slightly above 6.44 right? Let's put it somewhere about here and this one will be my let's say, my second target. So let's see what happens next in this case. Okay, so in this case, you can see that the market I'll just remove this one so you can see how the price action unfold.

Okay, so this is my first Target this is my second target. Okay, so in this case the market pretty much uh, went a little bit against me start to move forward in my direction. Okay then starts to hit down lower at this point and most Traders are thinking hooray right? who's your daddy a newer I knew it is going to happen. Then the market starts to hit down lower, eventually starts rallying back again.

So they start to find the main you know should I take profits Now what if my open profit is no evaporate? What if I know I got nothing out of this trade? No, let me just exit the break even right? Whew. All right, No, right. You really have a plan. Follow your plan, right? Don't give in your emotions, right? You have a plan to stick to it.

After all you know, do you want to stick to your plan? If you you know, deviate against from it, right, deviate against from it, then deviate away from it right? Then your actions is going to be inconsistent. and when your actions are inconsistent, guess what? your results will be inconsistent. So if you don't want that, follow the plan right? So let's go. So in this case, we follow the plan and eventually we reach our first.

Target Oh yeah, right. So yeah, we got our first Target So let's fast forward a little bit. Eventually we reach our second target here as well. So Yep This is a winning trade as well.

And of course this is a cherry picture because it's going to be easier for me to actually illustrate my Concepts right by. you know, picking a cherry pick chart. Okay, let me walk you through this. Uh, next trading strategy right? using moving average So you can see this: Market is dollar against the Chinese Yuan Again, some context.

Previously the market was in a downtrend. okay price making a series of lower lows and lower highs. and then recently it broke out of this accumulation stage. So notice how the market got into a range over here.

Okay, many Traders stop. the range will likely break down lower. but guess what it did it pretty much break out higher. Okay, so as you can see right this right, this breakout could potentially be the start of a new uptrend.

So previously we have this downtrend accumulation stage and this could possibly be the start of a new uptrend. So how can you get a low risk entry right and then to hop on board the start of this new trend? So you can you can imagine right the potential risk to reward over here can be pretty favorable. You know, like risking a dollar to make three, four, Five dollars or more. Okay, and this is how again, right the moving average can help you.

but first right at this point, right? I Won't recommend buying over here because that's just simply no logical place for you to to set your stop loss. Yeah, so if you want to set your stop loss I would say the nearest logical one is to reference this swing low. and if you like me right, set it a distance below this lows 180r below it. Your stop loss is somewhere here.

So from your entry point here to your stop loss over here, you can see that it's a pretty done wide stop loss. And if your stop loss is so wide, this means that the market has to move this much right from here to here, right? It has to move this much in your favor just to allow you to earn one R right on your trade. So what you can do instead is what I call the first pullback? What is it called the first pullback? Because over here is the breakout point and if it does make a pullback, this is kind of like the first pullback right after the breakout, right? So in this case I Like to Overlay with the 20 period moving average. What is the 20 period moving average? For simple right, this is for the For the moving average right to slowly catch up higher and for the price to come and retest the 20 and made to touch the 20ma.

Why is that? Because as it touched the 20 Mei this means the pullback has occurred right? It has a enough time to kind of like, you know, uh, gather energy together, strength and to stitch the next wave up higher. So if you can retest back towards the 20ma and if it does break out higher, there'll be kind of like obviously energy right to continue up higher Because you know when you run right, you know let's say you're sprinting. You can't Sprint You know, 100 meters, 200 meters, 400 meters non-stop You need to press right after you spring. 100 200 meters you rest for like you know, 10 20 seconds or a minute or a minute.

Or if you're like you know, not so uh, fit right and then you sprint again. So same thing for the markets when the market breaks out higher, you know with strength it can't go up forever. It needs to take a break. It needs to wrestle.

that's in the form of a pullback. So we're looking for a pullback towards the 20ma right to show that he is rested enough Before we want to look to you know, get on board the trade and catch the next spring up higher. Yeah! so what I'm looking for is for the market to retest the 20ma So let's see. So in this case you can see over here.

uh 20ma is slowly catching up the price but not yet. So I'll get I'll you know be patient, stay on the sidelines and wait till it retests the twin. TMA So in this case over here it has now retest the 20 period moving average. so so I'll share with you two techniques right there you can uh enter a trade.

The first technique is again we can use multiple time frame technique. You can go down to a lower time frame like the four hour time frame and over here you notice that you have a price rejection. So to to be honest right this is the previous resistance resistance, resistance resistance which became Support over here. I'm not really convinced right of this.

uh this bounce out over here higher. So what I look for is on this time frame if it happens is that I look for a bounce up here and look for another retest down low of this lows and then to get rejected and close back up of this area of support. So This could be something like in the form of a hammer. When this happens right I'll be looking to enter again on next candle open.

My stops will go a distance below the lows again possible Target could be just before the recent swing high as your first. Target Okay so that's option number one. Second option is this right on a daily time frame. Again, Okay, so this is the second option.

Again, the price has retested 20ma so this is a more I would say a more a slightly more passive approach. You can actually look right to trade the breakout of this recent swing high. So again, you can just simply go with a buy stop order. Let's say we place it above this highs.

Let's change this to Green It's our entry. Okay, so the moment let's say the moment the price goes up higher, let's see the moment goes up higher and it touches. This green line will automatically get long. Okay and what's uh different now is that you can actually reference this swing low to set your stop loss.

So previously you're referencing this swing low which is very far away from your entry. So now instead of you know, using this swing low to set a stop loss, you can now reference this one over here. So this gives you a title stop loss which improves your risk to reward on the trade. So let's say a stop loss is somewhere here.

Just change this to rate Okay, great and now what about Target So for this right, I Really like to go with a trailing stop loss. Why is that? Because if you look at this, you zoom out a little bit. As I've shared earlier, you can see that this Market previously was in the downtrend. Then we have this accumulation stage price break out of it, made a pullback and now if it breaks up higher right and if the trend continues up higher, you don't want to have just a one-to-one risk to reward on the trade because you're going to be leaving a lot on the table.

So how you can go about trailing or stop losses. There are numerous techniques you can use moving average for example, you can use a price structure for example. so I'll briefly walk you through both techniques. So for moving averages it's very simple all right.

So in this case what you can do is that you can use a let's say for example the 50 period moving average to trailer stable. So let's say if your entry get triggered okay let's see over here you've got trigger go long right? You can then overlay with the 50 period moving average to Trail your stop loss. So let's say if I overlay for 50 ma right? you only exit the trade right if the price closes below the 50 period moving average. So I'll just fast forward a little bit right? All right you can see over here price continues to hit up higher and a 50 period moving average is continuously no heading up higher as well.

So you only exit the trade right when the market again comes down lower and breaks and close below the 50 period moving average. So imagine it's the 50ma, right? If it breaks in close below it, then you exit the trade. So that's a one method. Another method that you can use is what I call the price structure is that you can actually continue to hold the trade until the market makes a series of lower lows and lower high.

So for example, right now it's continuously making a higher high, higher high and higher low. So it continues to go up higher until it makes a lower low and lower high. Like this, you have a lower low and a lower high at this point. Then you exit the trade right.

So there are two different techniques that you can use to Trail or stop loss. Okay, so in this case, let's say we just go with the 50ma. Uh, this is the result, right? Just fast forward a little bit. actually.

I don't really need to show you the end result because the process is what matters. Not really the result of this particular trade. Okay, just one last uh. example before I let you off, shall we All right? Sounds like you know I'm giving a lesson to kids or okay, you may go for your recess right now.

Yeah. So anyway, this Market again, uh, Euro against the US dollar you can see the market overall is in the downtrend quiz time. Is this a strong, healthy? or weak? Trend Three seconds? One? two, three? Well, uh, in my opinion. Okay, this seems to be more of a healthy Trend Right You look at the depth of the pullback right so it's much a little bit more deeper then it hits down lower.

pull back hits down lower, pullback hits down lower. so usually in Uh I see this type of price action on the chart. this type of a trending Market I usually overlay with the 50 period moving average to see whether the market respects it or not so over leave the 50ma thing. Okay, so this is how it looks like so we can see that the market in this case clearly respecting the 50ma tested once.

Haze down lower, pulls back, test it twice, hits down lower I won't really consider this a test, it's since it didn't break below this lows then hits down lower, test that here at third time hits down lower and back here for a fourth time hits down lower and maybe here the fifth time in hits down lower so that you can see right. The game plan is really starting to formulate in your head. Okay, this is could possibly happen right? Let me pay attention to that area of value and look for a valid entry trigger to go short. So again, if you look at this also notice this is an area of a value where previous previous resistance, all right, previous support, right, previous support support break below.

support could become resistance right. And on top of it you have the Confluence of this 50 period moving average. This is what I call a stack area of value because your 50ma coincides with this area of resistance. Nice.

Okay so let's see what happens next. So in this case again, I'm looking for an entry trigger to go short over here. This could be something like you know, a shooting star pattern. Price comes up higher then quickly get rejected and close back below this area of resistance closing below the 50ma.

So let's see what happens next. So in this case Market goes up higher. install a little bit, starts to know, hit higher again now. Whoa.

Huge candle, right? So again, uh, waiting to see now the price is already at my area available to see if I have a valid entry trigger to go short. Boom right? Okay I have this red candle over here. This is what. uh Traders I Think those of you who are familiar with candlestick patterns what we call a dark cloud cover so you can see that uh, this candle here is bullish.

but the next candle right? We have sellers that begin right and push the price down lower, closing near the lows of a day. Okay, so uh, Traders could use this as an entry trigger to go shot. but to be honest I kind of prefer. uh, something stronger, a stronger bearish reversal Candlestick pattern.

So let's say I I didn't go with this I'll skip this one. let's see what happens. market, then hit down lower and start to regret. Ah man I should shot this Market ah I feel like an idiot right now.

Well don't be right, there's always the opportunities right just around the corner and also the market then starts to break out I've in order to come into this area of value once again and then boom right now. I very much prefer this as an entry trigger, right? Two reasons number one: Okay, the market took out the size okay and then quickly reverse down lower and this reversal right is uh, this pattern is obviously it's much stronger than this one. Notice here you have still this uh, this lower wake signaling slight buying pressure whereas this one over here little to no lower weight so you know can see that the selling pressure I'll say it's stronger in this sense. All right and on top of it, you have this that comes like a false break of this Heist as well.

So sweeter. So what I'll do is again right? Uh, another thing to point out. Okay, okay before I talk about the entry. is that notice right? The market is actually break above the 50 period moving average by quite a little bit and then you know starts to hit down low.

So this is perfectly normal in the real world of trading. In the real world of trading, it really comes to the moving average touch. you know to the take credit and then bounce away. Sometimes you go come close enough and then quickly reverse.

Sometimes you'll come towards the moving average, breaks below it, give you a false breakout signal and then reverse away from it. So again, uh, you have to. you know, be prepared for this scenario. So this scenario is where the price pretty much breaks out of the moving average and then it starts starting to show signs of reversal Once again.

I'll look to enter again on the next candle open so let's see what happens next next candle. Okay, this is where I Look To Go short on next candle. Let's say my entry is green. Okay, stop loss again.

usually 180r above the high somewhere. But here's my stop loss. Okay I'll just change this to read and for Target I can just take profit I'll say first Target right could be just before this recent swing Point recent swing low. let's just blue color Okay Okay so you can see right this is my my first.

Target Just before this recent swing low, this is my entry. This is my stop loss. Let's see what happens next. What do you think this is going to be a winning trade or losing trade? Three seconds, one, two, three.

let's find out so you can see over here. Market starts to go down my favor. Oh yeah, that's what I'm talking about. Start to stall a little bit but overall still you know had a lower close.

Not too bad. yeah that's what I'm talking about baby at this point I think most Traders are really hyped up right here. Probably you know, counting the profits in their mind. All right.

I'm gonna buy a new loaf of bread then almost reaching my target right? Hey wait a minute. what's going on man. Now the market is back to your entry price so you start to sweat it, start to panic. Remember Raina says follow the plan, follow the plan don't you know? Be itchy fingers and no exit and break even because you know.

Guess what? if you have inconsistent set of actions, you got to get inconsistent results. Okay so let's see what happens next. We stick to the plan and in this case market now you know starts to make us. you know, really uncomfortable.

We are. We have seen right, our profits now become losses. Ah sweat. In this case our Market starts to show against signs of reversal.

Maybe you know. Uh Lady Luck is shining on us. Let's see and boom right? we get stopped up of the trade. Well guess what? you did? Well if you get stopped out of this trade, you did well because you followed the plan and the reason why I'm sharing with you this losing trade is because losers will happen right from time to time in trading.

In fact, it could be. You know pretty often as well when you encounter a series of losing trades. So this is just to kind of like bring you back to reality. You know, whatever.

I share with you right? It's not the holy cruel. You're not going to give a 90 or 100 winning rate. You have winners, You have losers. But hopefully in the long run when you trade with an age, right you can become a consistently profitable Trader and hope this moving Average tool that I've shared with you today can help you do just that.

And of course, if you want to level up your trading Union to learn more about our different trading strategies and techniques. right. today we talk about moving average, but there's also another one, right? Yeah, which is what we call Candlestick patterns are very useful to help you time your entry. So go down to my website over here.

Uh, trading with Rainer.com Okay, just scroll down a little bit right. click this orange button right and uh, I'll send this guy to your email address for free. So this is where you learn all the different Candlestick patterns, how to better time your entries exits right and even you know kind of like predict Market turning points. So get a copy of this guy.

it's absolutely free. So with that said right, I Wish you good luck and good trading. I Will talk to you soon.