Hey, hey, what's up my friend? So here's the thing right: when it comes to technical analysis, many Traders they are overwhelmed, frustrated, or even outright confused, right as to how to go about using it correctly the proper way. So what they do is that they focus on the best indicator settings for a particular Market or a time frame. But what's the problem with it? The problem is when market conditions change, which I guarantee you it will, everything falls apart. Do you agree? Smash the Thumbs Up Button if you agree.

So what is the solution? Well, as you know by now, right, you don't want to waste time focusing on the best indicator settings because eventually those settings will fail when market conditions change. Instead, what you want to learn is proven technical analysis strategies right? That holds up well, right, regardless of market conditions, regardless of the different time frames that you're trading. And that's why in today's video, I'll share with you my five proven strategies, right? That will help make technical analysis work for you. The best part is this: you can apply these Concepts and strategies across the Forex markets, the stock markets, or even the crypto markets.

So specifically, here's what you'll discover today: Number one: How to identify high probability reversal areas. Number two: How to catch explosive moves in the market before it occurs. Number three: How to avoid false breakout so you can avoid these unnecessary losses. Number four: How to spot high probability breakout trades where you can risk a dollar to potentially make $3 back or more.

And number five, I'll share with you the one thing that all winning Traders have in common sounds good Then let's get started. Okay now the first thing that I want to share with you is to how to identify high probability reversal areas on the chart. so you know which levels to pay attention to Because if you look at this chart this is the chart of silver. You see that there is multiple area of value, multiple swing High multiple resistance that you can trade from.

For example, you have this one over here. Okay, where previous support support support could become resistance, you have this one this swing High Over here you have this area of resistance over here and this extreme one over here. So if you look at this chart itself you have three or rather four options to trade from, but which is the one that you should be focusing on? Well this this brings me to a concept right of what uh, we Traders tend to call Confluence This is a concept which I learned from Nil Fuller one of the pioneers of our price action trading so he used the term Confluence. So Confluence pretty much means right.

Multiple factors coming together that signal. hey you know this area could possibly reverse from. So for example one Confluence is as you know area of resistance like this one. Over here you have area of support which could become resistance.

What other Confluence can we look at? So another one. that I want to introduce you is called the Quarterly Open. This is a concept which I learned from Trader asset. So there are many traders that have come before me around my time which share Concepts which I learn and I'm grateful for.

So the Quarterly Open is something like this. So if you look at the chart right now you can see that you have this multiple dotted lines over here here here. What exactly is this? So This refers to the quarterly Open. So as you know, right? Uh, every quarter is three months.

Yeah I Suppos to think, is it three or four months? It's three months. So the quarter opens on January April, July and October. So the first trading day of this month, the first trading day. the opening price.

That is the quarterly Open. So as you can see right Dem Market By this, uh, possibly this level over here, this is the first trading day, the opening price for October. Then this one over here is the first trading day opening price of July. So you get what I mean right? So you can see that this level can project ahead of time, right? and it could act as possible support and resistance on your chart.

So where do you find this indicator? You're probably wondering. So just go to indicators. Search for Quarter Open. Okay and look for this one guy here, Caelli, right? So I've been using this indicator for quite a while now so I know it's from this guy.

Okay, and it looks something like what you see on my chart. So I just go to the settings you can see there we have it. I have the I have the show the quarter Open listed over here in a style. If you want to see it's like this: Okay, so just click Okay and you have something that looks like this.

So now you have multiple factors, right? Number one, you have this a this, uh let me just find a tool rectangle tool. Okay, you have this previous support which could become resistance. Next, you have this quarterly open right Dem Market by this line over here. and and why is this quarterly open is because if you look back at this price action of this chart, the quarterly open right This Market seems to be respecting it.

You know quite a bit. So if you look back back in uh July you can see over here this a quarterly open price hit down lower then bounc up higher. Came back down to retest this quarterly open, head up higher, came back down to retest the quarterly open and H up back higher once again, same same for let's say back in April right? this is the quarterly open price hit up higher, pull back, hit up higher, smash through the quarterly open, retest it and hit down once again so you can see that the quarterly open, it's a area. It's a level that this Market tends to respect then plus overlay with this previous support which could become resistance.

This to me, it's a high probability area where I want to look for potential selling opportunities. So now question is, you know when exactly do you sell? Okay, so I'm just going to let me just remove this box over here to make it less cluttered and maybe also remove the quarterly open right since you know that this is an area of Confluence. So what I'm looking for is again, pretty straightforward. There are two ways this could play out right, or at least according to my own trading rules.

Number one, the price could go up higher and then make a sudden reversal, closing back below this area of resistance right, maybe forming something like a bearish engulfing pattern. Then I Look To Go Short Stops a distance above the highs possible. Target just before this recent swing move, thereby capturing this one swing down lower. Don't worry later.

I'll show you where exactly to set your stop loss, Where to set Target So you are clear and objective about it. but for now, just understand this. this concept of this particular setup I'm looking for. Alternatively, if you don't want to trade off the daily time frame, maybe you want to trade off a smaller time frame to get a better risk to reward on the trade, This is where you can go down to a lower time frame like the 4H hour time frame to again look for potential trading opportunities.

So in this case, right, what I'm looking for okay is over here, right? This is the Uh area of value with the Confluence which I mentioned earlier. looking for the price again to hit up higher, come back down lower, make another step higher taking out this highs right and then get rejected once again on this 4our time frame. So this could look something like a shooting star pattern like this. Okay, so when this happens again, right? I will look to go short on the next candle open.

but to be honest, usually I'm a cheap skit I Like to have a sell limit order to get in at a slightly better price. Yeah again, stops the distance above the highs. And in terms of targets this time around, I have two options. Number one, my first Target could be just before this recent swing low and a secondary Target further away at this area of Support over here so you can see in this case I have two potential targets T1 and T2 Okay, and this time around, since you're entering on the 4H hour time frame, your stop loss will be title which allows you a more favorable risk to reward on the trade.

Okay, so earlier we spoke about the quarterly openness and as a Confluence Factor but guess what? that is not the only way to find multiple confluences on the chart. So in this example again, I'm going to teach you another Confluence that you probably would have not heard of. So again, once you look at this chart you can see that Aussie against the dollar Recently right has broke below this uh, area of a support right support that's once, twice, three, four, five, six, then recently break down. So that's one possible area of value to look for selling opportunities.

This is another one. And then we have this other one over here. so you have three, right? All three are fine, but which is the one that sticks out. the one that you should pay attention to.

The one that if possible you want to look for trading opportuni opportunities. Okay, so let me share with you right? So in this case again, you can look for Confluence factor. And for this example I want to teach you something called the Yearly Open. Okay so the yearly Open looks like this so you can see over here here this is the Yearly Open and what is the Yearly Open? Similar concept as the quarterly Open just that the first trading day of the year, the opening price.

that is the yearly Open and as you can see over here on the 2nd of January which is the first trading day of 2023, the yearly Open has been projected all the way right till the end of 2023, December Last training and notice how this Market seems to be respecting this this uh yearly open right tested once twice three times. right now we Curr currently trading near this lows over here so if we can come back here for a fourth time again this area is significant because not only is it at a yearly open it's also at this area of resistance which I hope by now you can see right The price has tested multiple times at this yearly open which now has formed resistance so that is where I want to look for selling opportunity. So among all these levels on the chart that is the most attractive one to me that is the one which I would say has a has a higher probability of reversal right? So let's see what happens next So this is a replay mode. I'm going to walk you through bar by bar right so as you can see this market then starts to know hit down lower collapsing rather tried to break down lower but you know didn't follow through then it just go fast forward a little bit right you can see over here this previous support right which could become resistance.

this Market didn't really respect this level as it just kind of like know bust through higher okay and then started heading now back as at this price point this is where I am starting to be a like what's going on man yeah, starting to pay attention to the level because the price is already near that area of value that I'm interested in. So at that point you can you know set price alert, you know, set whatever uh, bookmark symbol, whatever that you're comfortable with so that when the price comes to that level, you want to see if there's a valid entry trigger to take a short position. Okay so let's see price goes up higher right, closing higher for the day, right? and this long week sticking out. So for me personally what I would like to see is for the price to BU through that level break out of the level right? So where the buyers step in trying to push the price higher, let's go, let's go, let's go and then suddenly have their hopes.

their dreams get crashed down by strong selling pressure where the price closed back below this area of resistance. So at this point right you can see that the price tried to break out higher. It tells me that there are Traders wanting to see the price goes up higher but the selling pressure is so overwhelming right that they you know the the price couldn't close up above resistance in state right? it revers and immediately collapse down lower back below resistance otherwise known as a false breakout. A false break.

Okay, that's what I like to see in this case y you can see the price G try to break. out of resistance but not quite there yet. Boom right on this candle. Right.

Strong, close above resistance. So usually when when this happens I'm I'm very wary I Don't like to just buy after very strong big bullish candle out of resistance because from the looks of it right, the price has moved too fast. too soon, right? Move from just low without any break. just boom right like a car accelerated 0 to 100.

Just zoom just just like that. So usually in the markets when I see this type of price action out, be alert right? Would the reversal be coming right? Or is this going to be a real sustained move? Because if it's a real sustained move I Want to see the pullback? You know, getting weak small series of candles looking like a P flag and then break out higher and then that's where the move can you know sustain up higher. So let's see what happens. So in this case price starts to stall s again on second candle.

Okay, so this could be a potential bull flag in the making and then boom right. The price now collaps back below resistance. So this is what again I call a false break. The price broke out of resistance but shortly within a few candles a few days.

Boom right. Reverse reverse back now to be under resistance once again. so this a false break and again it can go short on the next candle open. or you know, using a sell order if you usually a cheap skit like me.

Okay, so next candle open, you can see over here right? You can place a can go short on this candle here. your stops can be above this highs okay and potential Target could be just before this recent swing low. So I just walk you through, maybe putting some levels on the chart right so you can roughly see uh what I'm looking at. Okay, so that will be your stop loss.

This can be your entry, then we target. We just leave it here as of now. Okay, so I just uh. I just put it to the different colors right? So to signify stop loss, this will be signifying the entry and then the blue will be our Target.

So let's see. Market starts to hit down lower right. Pretty good. Boom right.

strong. Move down lower. Very good. It starts to stall.

Boom right. Collapse down even lower right. It starts to stall with this inside bar. Then the market starts to consolidate.

Maybe there's another move down lower or what? It reverse against us. Whatever the case is our stops, our targets are in place. Let's see. and now boom right.

Notice how quickly the market has reversed against us? So here's the thing right. Many Traders at at this point in time they were Panic Ah, right now the market is against me. I'm losing my open profits. But here's the thing if you think about this: if you were to exit your trade, maybe this candle the closing price of this over here you actually cutting your loss into this area of resistance.

this same area of resistance where you shorted so for me I rather the price hits my stop loss which is at this rate level over here to prove me to invalidate my trading setup rather than exiting the trade prematurely because I see my open profits vaporize in front of my eyes. Yeah so at this point also another thing to not is that this swinging low has been form. so if I to be more conservative I could actually have two target or just one target I would shift my target to possibly just be below this this swing low over here because this is where now potential buying pressure could step in and push the price higher. So if if I'm looking to capture that one swing I would you know possibly consider to shift my target at this just before this swing low.

Yeah so let's see what happens and then shortly afterwards the market then boom right would have you know hit your target over here. So of course you can go with multiple Target you can have you know first Target this level secondary Target over here so this will be T2 this is uh the take profit first level. you can do that as well. Okay, I have one final example over here because I have another way to Define confluence right which again, you might not be aware of.

Okay, so this is the chart of De Decker's outdoor Corporation So you can see that the concepts I'm sharing with you over here can be applied to the Forex markets, the stock, even the crypto markets as we'll walk through uh, some examples in the crypto Market later on. So for this stock right again, uh, what's the thought process behind it right? Where is the high probability area of reversal? So again, since the the stock is in an uptrend, I'm looking for potential buying opportunities. But but where Raina Where you look at all this chart. man.

Raina So many swing low. So many support 1, 2, 3, 4, five Mana where which one? Yeah, good question. Okay, so again, this is where again there are times right where if you are fortunate, you can have multiple areas of Confluence coming all together at this area on the chart. When that happens, if you spot this right, it doesn't happen often.

but it does. Gosh, you know you really really right. Must take such a trade. Okay, so I'm going to walk you through.

So another Confluence factor which I want to share with you as you know like area of support is one know quarterly, open yearly, open, another one is the previous year high or low. Okay, so in this case, since it's in an uptrend, you also want to consider paying attention to the previous year high. So let me just show you this. Okay so you can see over here.

there are two lines on the chart. a red one and this blue one and red one blue one. What does it mean? This tells you that this is the highest price point right of the previous year. So currently I'm shooting this video in 2023.

So previous year the high of 2022 right is Dem Market by this red bubble over here this red dotted line. So if you look back right, the high of 2022 is actually this High over here this point which actually translate into this red bubble Red dott Line You see over here Now what about this blue line? Why is it blue over here? Simple because if you look at the previous year low of 2022 is at this point this point over here which translate into this blue line over here. Yeah so you do it on a year on-ear basis. That's how your levels come up.

So as you can see over here. First thing first is that we have the price had a slight bounce of this previous year. Uh High Okay so that's one. Also, as you know as you can see by now this is also an area of support right as the price has.

uh just to walk you through previous resistance resistance price breaks out of resistance. Came back and retested support once and bounce off. Came back down close right pretty close to support and then had a slight R up higher once again. Okay, now what about our quarterly open? Let's find out.

pull it out Right There you have it. The quarterly Open is the market by this gray dotted line over here as well. So for those of you who are you know, not too good, right? wearing glasses? You might have to zoom this three or four times to see that gray dotted line right? Let me see if I zoom in. Will it help? Uh, well, maybe a little bit.

Yeah, it's okay. And what else? What else did we learn? The yearly Open. Did we learn about the yearly open? Okay, let's find out. pull out the yearly Open.

Wow, there we have it right. So over here this area around the $400 price point. Plus it's a $400 price point. Nice round number.

This area is where you want to focus on you have multiple things coming together. all the stars are aligned, the moon Jupiter Saturn is all coming together in straight line. Okay, this is where you want to look for potential trading opportunity so some of you could be more aggressive. You just place a buy limit order at the area and see whether you know get fill.

You can do that. but for me usually I like to wait for some sort of a confirmation in the form of a bullish reversal Candlestick pattern to time my entry. So let's see what happens next. So market then you know, hit down lower.

We have this uh lower, close for the day, then boom right? This green candle the market is now reversed above support. In fact, this is a false break because you can see over here this low over here. took out this prior low over here and then the next day that candle the market closed up higher right so it came down into support and then took out the lows. Sellers tried to push the price lower, couldn't break it down lower instead.

what happens that the buying pressure Ste in and close back above support. So this is a sign that you know sellers tried to push the price down lower, but there were not enough selling pressure to take the market lower. So what's going to happen? Well likely it could reverse up higher. Plus you have all this multiple uh Confluence factors coming together.

So what I'm going to do is again I'm going to enter on the next candle open. Okay, boom, right. We got a nice entry over here. Okay, so over here I just put this screen as our entry.

Now what about stop loss? So earlier I shared with you I usually like to set my stops a distance below the low I I Just you know earlier, just use this pen and ah over here. So if you want objectively do it right, you can use an indicator called the average true range I'm just going to settings just look for ATR right every true range I Typically have uh 20 over here SMA and click. Okay, you show is this red line over here so you can see that over here. right now the ATR value is about $148 make it $11 Yeah, 48.

It's fine. So what I like to do is to find out what is the extreme uh, low over here, this over this low over here right? So this extreme low the price is Uh 395912 395.1 Sometimes people ask me re know what tool is this you're using It's actually called Camtasia in case you're wondering. Okay, so minus right, 180 What is 18r? Well, it's the value that's showing over here, right? This tells us that over the last 20 trading days, right? this stock right has moved an average of about $148 So on average it removes that much. So I'm just going to Minus8 which is current value of 1148 and it's going to give me right using my trusty calculator right.

Never let me down. Okay, minus 1140 and that gives me a value of 38443 38443. So that is where my stop loss is going to be: 38443. So I'm just going to pull out this uh tool over here.

Just change this to rate and the coordinates will be three 38443. Okay, there we have it. Just going to remove the ATR indicator so you can see better. Now what about Targets? right? So many ways you can have a trailing stop loss or trailer stop loss as the market move up higher, you know, like using a a moving moving average right right, 100 day moving average Etc Or you can look to capture a swing right where if the market heads back up higher towards this swing.

High You look to capture a swing if the market can get back above this, uh swing. High Just change this to to Uh Blue. Okay for targets, right? For those of you who want to capture a swing, I'm just going to remove the all the Confluence factors so you can see better. but if you look at it in terms of a swing right, you probably won't want to do it.

So from risk to reward, you're kind of like risking this much to potentially make this much right. Uh, nothing wrong with it. but you're risking a dollar to possibly make like 60 cents or 70 cents instead if you go with a thrilling stop loss. Since you know that hey, this trend is, you know, pretty nice uptrend and thrill your stop loss and try to write the trend.

that might be another approach that you can consider as well. And because if you are right right, if the trend you know continues up higher and you have a like, uh, trailing stop loss, let's say like in this case, let's go with 100 day moving average since you look historically at this chart right, the price has not break below the 100 day moving average. so that's not a bad trailing stop loss and maybe only exit the price closes below this blue line which is 100 day moving average right? That is another option that you can consider so you can see over here right? and uh, still has not closed below it. Yeah, but I'm not going to play this forward, but hopefully now you understand the concepts I'm sharing with you how to identify high probability reversal areas using Confluence factors Where to enter, where to set your stops, where to set the targets, How to even write this trend up higher, right? All good.

Okay, now the next secret right that I want to share with with you right is how to how to, uh, they teach you how to catch explosive moves in the market before it occurs, right? Because most of the time, right retail. Traders What you'll see is that they let's say at this point in time, right? you look at the chart. Boom! R Look how bullish the market is. Let's buy.

Usually when you see such, you know big huge candles that's already form right printed on your charts. It's usually too late, right? because this is where the market is about to make a pullback or even a reversal, right? So as you can see over here the price revers so. same thing over here. Usually when you see a series of green candles like this over here.

W Rain. No look at this. How bullish the chart is. Usually when you see such bullish series of big green candles in a row Market is primed for a reversal or a pullback.

So now the question is, how can you then capture You know such explosive moves in the market right before such a move occur? Okay, so to teach you this I need to explain to you the concept of volatility. So volatility Here is the thing right? It doesn't move. It's not static, right? The market moves from a period of you know, low volatility to high volatility, right? and then from high volatility back to low volatility. So that's the cycle over here.

So just to walk you through, you just look at this chart over here. I'm just going to zoom up a little bit you look at prior to this big up move over here. What happened? You can see that the market is actually in a low volatility environment over here, right? Notice the range of the uh, or rather, the the price action of this chart, right? The market isn't really moving anywhere. it's just kind of like chopping up and now forming a tight consolidation before it.

Finally then you know volatility then expanded up higher. Okay, so let's see what else. So you just look back right to all the uh, big explosive moves. You have this one over here: volatility getting tight and then boom Market hit down lower.

Okay, let's see. so just walk you through a few examples so you understand where I'm coming from. Another one over here. Volatility of this Market getting Tighter and then boom right? Uh, volatility expanded, then lower and then I'm just going to, you know I This chart, you know quickly to see what sticks out to me.

So again, volatility here getting Tighter and then it expanded up higher. Uh, we have this over here. Volatility right sinking and then it expanded out higher. So at this point this should give you clue right that if you want to capture big moves before it occur, it should be during this period of low volatility environment over here and over here.

this is where you want to look for an entry Trigg to get in, to get on board right, and to see you know if you are right, right, right? Volatility could expand in your favor know, yielding you a favorable risk to reward on the trade or risking a dollar to make $2 $3 or more. Okay, so uh. this chart right now if you look at this: Market we have another potential volatility contraction over here I Think that's what minor V calls it some Traders call it a build up, right? but basically the range of the candle getting nice and tight over here. Okay, great.

So now the question is where exactly do we look for buying opportunity? So for me, what I like to do is again, you can uh I like use multiple time frames, go down a lower time frame like the 8 hour time frame in this case to look for potential buying opportunity. And of course you can use the Confluence Factor tools that you have learned earlier to identify you know where's the higher probability of reversal. Okay, so I go down to 8 hour time frame What? I'm seeing over here right is that there are multiple areas I can trade from trade from here in here and here, right? Let's see if any of the Confluence factors right are coming to play. So I'm just going to pull out one right because I've already done the quote unquote homework beforehand right before I share with you this chart and you can see this is actually the 2023 yearly Open.

How this Market respects the yearly open as well. Okay, uh, this yearly open is this blue line right? Uh, can see it's respecting this area. So of course if I want to look for potential trading opportunity I want to see if the market can retest this 2023 open which coincide with this area of Support over here. So what is the setup that I'm looking for? Okay, so pretty straightforward.

Okay, so now I know that this is an area of support that coincides with this 2023 open. I'm looking for the market to swing down lower right, take out this lows and then quickly reverse and close back up above. support can look something like a hammer like this. When this happens, I'm looking to enter on the next candle open stops of distance below this lows possible Target just before this recent swing high right to exit a portion of my position.

So let's say I buy for example a th000 units of dollar against the Indian rupee. I could sell 500 units over here and have the remaining 500 units holding it to Trail my stop loss right to see if the trend can continue higher because if it could, right, let's go back to the Daily time frame if you could, right? you can see that I just zoom out this Market This daily time frame is in a long-term uptrend. So again I want to tr my stop loss and see you know how much further of the trend that it can ride up higher. So at this point I hope you can see how we are using multiple Concepts and tools right to trade the markets.

Okay now I want to walk you through a another example. So this one is the chart of Ethereum, right? A cryptocurrency right currently right now the second largest uh, market capitalization in the crypto world. So you can see the Ethereum right? Recently we have broke above this area of resistance and the price is kind of like forming this tight consolid ation over here. and I'm aware that you know there another area of resistance at this highs over here, but my top process is that hey, you know volatility is getting smaller.

The market could possibly make another swing up higher maybe to retest this area of resistance. Okay so let's look for potential buying opportunity because if let's say I could get it near this lows of this build up over here sell somewhere here, right? This risk to reward on this trade could possibly not be risking like a dollar to make $2 or $3 or more. So let's see so on. The Daily Time Frame This is the build up, the tight consolidation of the volatility.

uh rather the the build up, the volatility contraction over here. So what I usually do is I go down to a lower time frame like the 4 Hour or 8 hour time frame to look for a false break setup. So let's you say you go down to the 8 hour time frame. or maybe let's say even the 4our time frame.

Okay so what I'm seeing over here is that hey, this is an area of support. So usually when you see the tight consolidation on The Daily time frame the lows of that consolidation. the lows of the build up is usually an area of support on the lower time frame. Confirm.

Don't need to say usually it's definitely is okay. So again the setup: Remains The Same I'm looking for a false break for the price to then you know quickly reverse back up above this area of support, close back above it and look to get long. Okay So let's see what happens next. So this is the game plan.

Okay so in this case you can see that market over here this candle right? We have this nice reversal on this candle over here. Okay, so this candle price came down lower. took out the lows of support that on this green candle. This to me is a decisive close back above support.

So I Look to enter on the next candle open right on this 4H hour time frame here. stops usually a distance below the lows. I'm not going to set my stop loss for you to to see right since you know you already know the mechanics right how to set the calculation and stuff like that using the ATR indicator. Okay and Target right.

target wise my first Target right I'll likely set it I could right set it above this highs right. if I set it above this highs, you can see that risk to reward is not very favorable because I'm like risking a dollar to make like 50 cents right? If I set it somewhere over here, I'll probably probably get a closer to a one to one. So this is where active trade management comes into play. I'll see how the market reacts if it just quickly, you know, blast through this swing high and goes to here I Look to take a portion of a profits, right? Uh, just before this uh, area of resistance on the forward time frame.

But if it comes up here that starts to stall in Reverse right? I will know exit over here, take a portion off, and have the remaining half of my position holding on to see if the market can continue to break out higher, and to write the uptrend up higher. So let's see what happens. Okay, because this is going to very closely simulate the real world of trading. Okay, so in this case, you can see that market then starts stalling over over here.

Okay, so let's see what happens. So the market then moves uh again, a strong weak down low and then closing right bullishly on this 4H hour time frame. Then we have this candle over here right? which uh, stall right? So at this point I could possibly take a portion of my position at this, uh, just before this swing High over here. So of course, right, the uh risk to reward for this first half of the position won't be attractive.

It's probably like risking a do to make like 50 cents or 60 cents. That's okay because if the market right, that's okay right, Reason being that because if the market were to break Above This highs over here. this area of resistance that I've just drawn over here, the risk to reward right could still make sense in the grand scheme of things, right, taking into account both position. Yeah, so I'll likely take half my position off at this, swing high and hold on the remaining half.

Okay, so the remaining half I'll have my trailing stop loss on. So my stop loss right is going to be likely somewhere about here. Okay, and then if the price can break above this, uh, area of resistance here, then I'll use the trading stop loss right to write the wave up higher. For example.

Could be something as simple as like the 100 period moving average you can use Market structure Etc there many ways to do so and I don't believe that that's the best way, so rather just a way right that suits right what you're trying to do over here that better suits your needs. All right. So let's see what happens. So in this case, all right, the market, then you know, starts to consolidate, Then it consolidate still and let's see, still undecided, right? haven't decided to break out higher or reverse back to my entry point.

Okay, and then boom right? Finally, we have this breakout over here. So now it's breakout Resistance Resistance I can overlay with the in this case we have. Let's say the 100 period moving average. Okay, so if the price now were to close below the 100 period moving average, I will then exit the second half of my position right and to take whatever profits that's left.

Okay, so again, using the concepts that I've shared, right? this won't is not guarantee. Know every time you know you'll be able to write a trend right. But there will be times right where it allows you to write the trend and you can know you know, achieve, uh, favorable. Uh, rather favorable risk to reward right on your trade in the grand scheme of things, right? So we can see over here as the price close below the 100 period moving average.

This is where you exit the trade and this is a fourward time frame. You go back to the Daily time frame. You can see that you would have you know, caught that big up. move up higher.

Okay, this this big up, move up higher. The volatility expansion and your entry price is somewhere near the lows of this build up. so can you see how powerful this is? All right, smash your thumbs up button and subscribe to the channel. If you think it is okay.

now look at this chart. over here. This is the chart of Uh Meic, one of the cryptocurrencies that is being AC actively traded out there. So over here at this price point, are you looking to buy or to sell at this price point? I'll give you 5 Seconds Think about this.

1, 2, 3, 4, 5. Okay, so if you look at this right, many Traders will look at this. Oh man. Raina look how bullish this candle, right? The price has, you know, broke above resistance over here.

it's up 17% of for the day, right? This breakout is going to the moon. it's going to the sky. Okay, let's see what happens next. In this case, the market pretty much just reversed down lower right.

Almost. Uh, well. not as fast as it went up. but eventually you know it's a false break up and the market collapsed down lower.

So if this has this has happened to you many, many, many times, right? Don't worry, right? Sorry if that you know trigger a lot of bad memories for you. Because the good news is I'm going to share with you two things, right? Because if these two things are showing up on your chart, it's likely to be a false breakout, right? So this is important. Pay attention right? And I'll share with you what these two things is right now. So going back again, right? this is the breakout point.

So what are the two things that I want to look for? That tells me man, it's likely to be a false breakout. So first thing is to see is the price against the trend. Is this against the trend? Okay, so you look at this breakout, you can see yes, this breakout is actually against this underlying downtrend. So that's true.

Number Two: Is there a strong power move? What is a power move? A power move is pretty much a candle or a series of candles right closing, bullishly, closing strongly higher. Okay, and sometimes people even, uh, call it a short squeeze Right where you know many Traders are short and the market squeeze up higher make a very strong sudden pullback. This what we call a short squeeze as well. All right.

but I call it a power move so it's kind of like more Universal whether it can suddenly Spike up or Spike down. So if the market is against the trend and I see a power move, right, this tells me it's likely to be a false breakout. So you can see over here. Market is in this downtrend over here.

Number Two: We have this power move up higher right and this tells me you know this breakout is isn't likely to be real, right? After all, the trend is still towards. The downside. this could be a short squeeze up higher before the sellers come and step in once again to push the price lower right. So let's see right so you can see in this case over here.

Yep, the market right did collapse down lower. Okay, here's another example, right? So you understand right what I'm saying, right? So again, if you look at this, what's the trend you can see that at this point Market is in the downtrend. So recently again we have the series of candles right? You know, breaking out higher you can see over here the price over here over here, right? Have you know broke above this area of resistance and even this swing high. So again traders who are not aware they think oh man, this is a bullish reversal? Let me go long.

But bear in mind number one, you're against this downtrend. Number two, the this is what we call a power move right? strong series of strong candles. You know, closing up higher and this is as you know, it's not really due to strong buying pressure but more of like Traders You know, getting short squeez right? So many traders who are shot are in profit. They take profit.

It will create buying pressure and that usually you know, uh, creates, uh uh. big bullish candle right as these short Traders take profit. Yeah, so don't get caught right by these large bullish candles because if it's against the direction of the trend, chances are this is just a pullback right? Regardless of how big this bullish candles is, right? So you can see up 7% for the day, this one here up 5% for the day. Why? You think, Well that is a lot right? This means it's the reversal, No right, Because look at it from a grand scheme of things, right? Overall, Market is still in a downtrend right then this could likely be the pullback.

Okay, so since this is a strong up move up higher, what's also another significant thing about the power move is that it means that the market move from point A to point B relatively quickly. Maybe you know two or three candles, you just boom. go up higher. And because it moves up so quickly, right? there's actually no obstacle in the way.

What do I mean by that is? let's say someone would have shot at this swing. High Okay and let's say the market does go down lower and it's starting to look for buying pressure to look for an area of value where buyers could can come in. There isn't any area of value until this swing low over here. So this means the market could just as well reverse down quickly down lower, right in the opposite direction.

So this is why when you see that the market or rather the the current price action is against the trend, there's a strong power move. bear in mind that when the pullback ends, the reversal could be just as quickly right towards the downside, right, resuming this downtrend as what you can see over here. Yeah, so this is the uh, two important lessons, right? Or the lesson that one you to take away from it. So if you want to avoid false breakout, always ask yourself right? the two factors I Just shared.

Is this against the trend and is there a strong power move Because if there is a yes to both questions, chances are it's a false. Breakout Okay, now let's move on and talk about how do you spot high probability breakout Trad So earlier we talk about how to avoid false breakout. Now we want to talk about how do you then spot breakouts that are likely to occur. Okay, so again, two things right that I want you to pay attention to number one.

when you trade breakouts. There are two factors that will increase the odds of you know whether your breakout will work out or not. Number one is in the direction of the trend. so let's let's call it with Trend Okay, so if you're trading in the direction of the trend, that again is a plus for you.

Number Two, you want to look for a build up otherwise known as a volatility contraction pattern or I know a term from Mark minor V Or you can call it a tight consolidation. You know, whatever. So let me share with you what exactly a build up looks like. So build up looks something like this, right? The tight consolidation on the chart.

This is another tight consolidation on the chart. over here and over here with this tight consolidation happening as well. Okay, so this is what we mean by a build up. So at this point now you can see that we have a a few fact.

two of these factors in our favor. Number one, overall trend is towards the upside. Okay, you can see that this Market is in an up Trend Number two we have this build up that I've just highlighted over here. Okay, not exactly the most cleaners, but you can see that the range of the candle getting nice and tight.

So there are a couple of ways to play this potential breakout Trade: Number one, you can have a buy stop order. Okay, so you place a buy stop order Above This highs above this swing High maybe just a few Pips above it, right? And if it's the market trades above it, you will get long. The other approach is that is you can also wait for a break and close Above This Resistance Above This highs If the market breaks and close above it, then you get long. So this very simple ways to uh, trade the breakout.

So breakout, There's only a couple of ways to do it. You know, wait for a close or use a stop order. Okay, but what's important is again the context of the breakout. You know what is the current market structure.

Is this in uptrend or downtrend? Is there a build up form prior to it which are the two things I've just shared with you? So in this case you can see the market did break higher. So if you wait for a close you would seen that you see that you would have you know entered at a higher price. whereas if you you went with a buy stop order you go in at a much more favorable price. So there's no best method whether to wait for a close or buy stop order because sometimes you can go with a buy stop order and then ends up is actually a reversal candle.

So let's see if I can find an example. So let's say uh I don't really have any example over here. but sometimes what could happen is that the market goes up higher and eventually close down lower for the day forming something like a shooting star pattern like this, right? So so that could happen as well for a buy stop order. But for in this case right? Uh, the buy stop order would have been the better method right? Okay so just just to share.

So now once you entered this trade, where do you then set your stop loss again? The principle applies the same right. You can set your stop loss a distance away from price structure. So let's say this is the uh, swing low over here. you can set it a distance 1R below it somewhere possibly around here that would be your stop loss.

and since you're now trading the direction of the trend, you can then have a trailing stop loss right to write the move up higher if the market now continues to move in your favor. And while we at this topic right I also want to share with you that you know you can actually use multiple time frames right to get an entry to go long. let's say if you go down to the lower time frame. Okay, so this one over here didn't give us a set up, but let's say let me just cover this one.

Okay, let's say prior to the breakout, what I will also be looking at is actually for the price to retest this level or possibly this level over here for a potential false break so the market could possibly come down lower, get rejected if that's the case. I would be also looking to buy right around this area even though it's just in front of resistance because again, uh I know I'm trading the direction of the trend and if the market does break out of resistance right, the trend could resume up higher and I will get a favorable risk to reward on the trade, right? So those are the two levels that I would pay attention to. So as I Shar right? This that didn't happen. the market just pretty much break out higher so so you want to trade a plain vanilla breakout again using a stop mod waiting for the market to close above of resistance.

That's fair play as well. Okay, here's another example over here. so I Like to share a ton of examples because I find that this is how you can quickly learn, right? So if you're hardworking enough, can you know Screenshot all these charts right for your own learning purposes. Yeah, so again, right, how do we find high probability Breakout trades Number one.

Okay, you can see this. Market is trading in the direction of the trend right? Overall, Market is towards the upside uptrend. Second thing, we're looking for what we looking for. It's a build up.

Okay, so a build up. Let's call it Bu build up. Okay, so over here we can see a potential build up that's forming right at the highs. Over here this is resistance and we see a series of higher lows higher low, higher low coming into resistance and on top of it, we have this build up that's forming here.

nice and tight. Great. So we can see that this is actually kind of like very different, right? From what we talked about earlier on how to avoid false breakout to avoid false breakout, right? Usually you'll see, you know. Uh, Market is against the trend.

you know, having a power move and this is just kind of like the inverse of it. Okay, so at this price point we have a valid entry trigger as the price has you know, break and close above. Uh, resistance. Okay, so this is the stock right Snps.

So again you can look to get long Your stops right can be a distance below this. lows, right? Let's say somewhere 180r below here. possibly somewhere about here, right? You know to calculate your stop loss earlier already right? So I'm not going to go into it. And then since the overall Market is in an uptrend, you can you know have a trailing stop- loss right? Uh, to Trail your stop loss to Trail your stop loss right? And to see how much further of the trend you can capture.

Okay, now some of you might be thinking so Rain. That doesn't mean that you know to trade breakouts, it always has to be in the direction of the trend right? sometimes. I Actually see, you know, very profitable trading opportunities. Buying breakout after the market has collapsed down lower right.

So I can buy the breakout to capture the start of a new uptrend. Is that possible? Well, the answer is yes, right? But there's one other factor that you must look for, right if you want to trade such a breakout. So to help you better understand it, right? I Want you to know that the market generally move through in four phases. Four stages, right? The first one is what we call.

let's say, a declining stage, right? Market is pretty much in a downtrend. Okay, so once the downtrend is over, it then starts to go into accumulation stage. Okay, and if the price can break out of this resistance of the accumulation stage. we move on into what we call an uptrend and then as you know, the market doesn't go up forever, it then starts.

You know, go into a distribution stage right? If the price breaks below this area of a support, it then goes back down lower to this, uh, declining stage that we Illustrated earlier. Okay, so these are generally the four stages, uh of the market. So if you want to buy a breakout right, it means that you're trying to buy the breakout of this accumulation stage over here. So the tricky thing is, you want to make sure that you're not buying the breakout when it's on the pullback if you get what I mean.

So if you recall earlier right, the trick here is to know to filter out between identifying what is a pullback and then what is an accumulation stage Where if the breakout occurs, it's likely to lead to a reversal. So the way to do it right to kind of like simplify your life is based on my experience is to look for an accumulation stage of at least 80 candles. Right? At Least 80 candles. Okay, because if after 80 candles, right, the market do not break down low, it's probably in an accumulation stage.

And if the price breaks out higher, it could lead to a reversal towards the upside. So how do you know how to calculate 8 candle? So this is the daily time frame. So 80 candles is like 4 months right of a range. so very simple.

There's a tool over here on trading view. You click this ruler over here. you press the first like first start of the range, pull all the way to the extreme right. You can see that the bars over here it says 127 bar.

So 127 trading days has passed. Okay so you just see over here 127 trading days has passed. So that meets our 80 bar requirement. So that's the first thing right? We want to look for at least 80 candles right for this Uh range market.

So once we have that, then the next thing we look for is again our build up. We want to look for a tight consolidation, right? A build up is significant because it signals that the market is storing potential energy right. Getting to make a move right soon, right? So we want to see the build up, the tighter it is the better. And over here we have this build up that's form over here right? this build up.

So how do we then trade the breakout. So once the context is met, once the requirement is met again you can go with a buy stop order or a wait for a break and close above resistance. So let's say we go with a buy stop order This line this green line over here. So if the market does you know trade above it like in this case boom we can see over here it breaks out of this.

uh this this level this green line right? This is where we go along. Right on this. Market Okay so we can see that over if I just zoom out you can see that this is actually overall in a downtrend. But within this downtrend we have this accumulation stage that's being form right.

And within the accumulation stage we have this build up that's form as well. Okay, so that would be a valid entry trigger to go long. And by the way, this is a cherry pick chart so we can see The move is like boom Wow. So juicy, right? Yeah, So guess what you will have.

You know, uh, losers along the way that there's no guarantee, right? But this is how you actually stack the odds in your favor to identify high probability probability breakout trades, right? Uh, especially when you are not trading in the direction of the trend, but against it. So you want to bear in mind to wait for the accumulation stage to have at least 80 candles to form within the range. Now some of you might be wondering, but rain, you know. Does it mean that the breakout can only work when I'm trading in a direction of the trend right? What if you know I'm to capture the start of a new trend reversal right after the market has declined? You know, maybe sometimes the start of a new trend? I'm to get on board as early as possible to trade a breakout.

Is that possible? Well the answer is yes, right? But there is a few other things that you would have to look for. Okay, so let me explain. So yes, you can trade breakouts that is not in the direction of the trend. Okay, but when you trade such breakouts right, you want, you want to make sure that the range of the market is at least 80 candles.

Or we call it the accumulation stage, right? So let me just walk you through quickly. So the market generally move in four stages. The first stage is, uh, let's say what we call a downtrend or a declining stage. Then this over here is the accumulation stage and if the market breaks Above This resistance, we call it the uptrend right? And then as you know, Market doesn't go up forever.

So for example, for those of you who trade Forex I'm going to walk you through an example. Let's say you're going to trade this currency pair Euro against the US dollar. You can choose right currency pair that you're trading. Let's say your account SI size is in uh in US dollar I Think for most of you it's in US dollar.

Let's say your account is $5,000 Okay, and you want to risk 1% of your account, just put in 1% Or if you want to change this into a dollar term, you can put it a soap with money and you want to risk $50 That's possible as well. but I think the percentage one will be I think easier to understand right? 1% 1% of your account. So let's say your stop loss is 25 Pips When trading this currency pair, then now the question is how many units of Eur USD should you trade such that if the trade hits your stop loss hits your 25 pip stop loss. That is only a loss of 1% of your account.

That is only a loss of $50 to your account? Just click, calculate and there you have it right. You'll speed out the numbers which is 20,000 units or about 0.2 lots of Euro USD that you can trade. and that's the position size that you should be entering into your brokerage account. Okay, that's how you calculate position size.

And for those of you who trade stocks, all is not lost because there is also a stock position size calculator. just Google Stock position size calculator. This is a one of the first few that turn up. Let's say your account size for stock trading is $220,000 You want to risk for example, 2% risk on the account.

Let's say your entry price is 20 bucks. Your stop loss is at $15 risk. To reward, let's say just one to one your fees. Let's say this, just ignore the fees.

For now, let's put zero slipage. Just put zero right? If you know what those numbers are, you can put in. If not, just leave it at zero, then just click, calculate And there you have it. It says that you can buy 80 shares right of this particular trade that you are taking.

can buy 80 shares of this particular stock right that you're trading right? So that such that if the stock hits your stop loss, you lose right? Uh, not more than 2% of your trading account. So in this case you'll be about $400 on this trade. Does it make sense As you can see right, This is a very, very important skill set and it's not difficult to master and once you master it right, there's a good chance that you'll never blow up another trading account ever again. Hey, hey, what's up? What's up right? If you made it to the end of this video, give yourself a pet on the back because you have what it takes clearly right to be a good Trader right? Someone who's willing to learn right? So I'm happy to see that you're still with me at this stage.

So let's do a quick recap shall we? Because I know I Covered a lot in this in this video with Concepts that you might not have heard of before. So let's do a quick recap so the knowledge is retained in your head. First thing we talk about how to identify high probability reversal area. So we are using the concept of a Confluence and to look for Confluence on your chart.

Okay, you can look at things like your support resistance just like the staple, then you you know your quarterly open, your yearly open, and even your previous year highs and lows. So if you have multiple Confluence factors coming together at this area on your chart, at this support resistance on your chart, you better be sure that that is an area you want to pay close attention to. Okay, next one, how do you catch explosive moves right before it occur? So a mistake that many Traders make is that they notice the market has already break out higher a series of big green candles in a row and then they buy by the time it's already too late because the market is about to make a reversal. So to catch the big move before it occurs, you have to do this right.

So number one is again, look for a tight consolidation on the higher time frame. could be the daily time frame, then you look for a false break setup on the lower time frame could be the four or 8 hour time frame. So if you do this right, if you can catch the false break on the lower time frame, then there's a good chance that if the market does break out higher right, you are already positioned in the trade right getting ready to reap. right.

The upside of the move Next, How to avoid false breakout. So very simple. Just these two things. If you notice that this uh breakout is against the trend, plus there's a power move, chances are it's going to be a false breakout.

Or rather, chances are right, it's a pullback within the trend. and once the pullback is over right, the trend is likely to resume itself. So so be aware of this right so we can avoid false breakout. And then we talk about how to to identify high probability breakout trades.

So couple of things. Number one: trade in the direction of the trend plus a build up. Number two. Another approach is that sometimes if you are buying the breakout after the market has made a sustained move, let's say lower right, a declining stage.

the market has made a sustain move lower. and if you want to trade the breakout towards the upside, wait for the accumulation stage to form, wait for range to form at least 80 candle, so on. The Daily Time frame will be at least 80 trading days. Okay and then after which you look for a build up to form and once there's a build up and followed by a breakout, then you can safely you know, enter that breakout with uh, a good chance that hey, that breakout could be the start of a new uptrend.

And finally we talk about the one thing that all Winning Traders have in common is risk management and proper position sizing. Now, whatever that I've just shared with you, it's only the tip of the iceberg. There's so much more about technical analysis that I can talk about, but hey, you know my voice is, you know, starting to get a bit rough over here. A bit thirsty already, so got to you know, put an end into this video.

But if you want to learn more then you can actually go down to my website trading with Raa.com look something like this and over here right? We have a few trading guides right that you can get your hands on for free. so uh, I recommend getting the Ultimate Guide to Price Action Trading right because it complement right what you've just learned. We talk deeper about the market structure. the four stages of the market share with you a price action trading strategy as well so we can profit in Bull and bare markets and much much more, right? So again, go down to my website Trading.com Okay and grab a copy of this guide.

In fact, all of this three guides are free. You can, you know, download all of them if you wish to, right? But uh, for the relevancy of today's training, it'll be the ultimate guide to Price Action Trading and this monster guide to Candlestick patterns. These two guides will be very relevant right to what you've just learned earlier. and in fact you will just take your technical analysis knowledge to the next level.

So go and download and grab a copy of this two guide. It is Free! I'll put the link somewhere below this video so you can. in fact my my website is just here trading Reo.com you just you know type in to your phone, to your to your computer and just you know get this guides Yes! So with that it I Wish you good luck and good trading. I Will talk to you soon.