The Only Technical Analysis Video You Will Ever Need... (Full Course: Beginner To Advanced)

ruticker 04.03.2025 23:48:00

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**Your ability to use technical analysis in order to make good trading decisions and inevitably make money in any market is imperative.** It's something you cannot do without, and if you do not understand some parts of technical analysis or if you don't know how to use them correctly, then that is likely a huge reason that you are currently either losing money as a trader or struggling to create profits over time. For that reason, what I want to do in today's video is show you everything you need to know about technical analysis. We're going to be going all the way from what a candlestick chart is to indicators, support and resistance, trend, all the way to entry patterns and how to take stops and targets. We're dissecting everything today in this video. I will be pouring all the knowledge about technical analysis that I have gained over the past decade of my own trading career into one video. Since I'm doing that for absolutely free, it would be awesome if you could just smash that like button for me to help out with the YouTube algorithm. If you are new, go ahead and click that subscribe button because we come out with content like this each and every week. You're already subscribed? Welcome back! You know what's coming. I'll see you after the intro and disclaimer. So, I'm gonna say this really slowly so that anybody who is brand new will easily understand: **Technical analysis is the study of historic price movements in order to make accurate decisions of what the market may do next.** Technical analysis is how we make those accurate decisions of what price may do next. Every part of technical analysis is based around price. Think about a candlestick chart; that's just a visual representation of price itself. Trends are nothing more than higher highs and higher lows or lower lows and lower highs in price structure. Support and resistance, even indicators, are based around price; they are just a formula added to historic price data in order to plot that indicator on your chart. So, because of the fact that the foundation of all technical analysis is price, the very first thing we're going to study today is a candlestick chart. I'm going to put a timestamp beside me of the seven or eight things we're going to be going over in today's video; that way you can skip ahead if you already know parts of technical analysis. With that said, let's go ahead and dive into candlestick charts. What you see on the screen in front of you is known as a candlestick chart. Right now, we are on a daily chart of the S&P 500. I'm gonna go to a price chart of Bitcoin. Now we are on the daily chart of Bitcoin, and now let's go to a candlestick chart of the Euro dollar. Now, what do you notice about all three of these? They all have candlestick charts. So, the foundation of technical analysis, no matter what market you're trading in—whether that be forex, stocks, or crypto—the foundation of technical analysis in every market are these candlestick charts. But before we can understand this full candlestick chart, first you need to understand what a single candlestick represents. So, let's do that now. Here are a couple of single candles, and what these candles represent is price movement throughout a certain period of time, depending on the time frame that you're on. I'm sure you've all heard of time frames, right? The daily chart, the one-hour chart, the five-minute chart. Depending on what time frame you're on, that's the amount of price movement these candles represent. So, let's consider that we are on a five-minute chart. That means that each of these candlesticks would represent five minutes of price movement. Now, before I get ahead of myself, candles have two parts. Candlesticks have a body, which you can see here colored in green, and a wick, which are the lines above and below the body of the candle. A green candle represents a five-minute period—since we're on a five-minute chart—where price went up or closed above where it opened. We're going over that in just a second. A red candle has a body as well, but the body of this candle is red because it represents a five-minute period where price closed below or went lower during that five minutes. To make this really simple, let me go ahead and explain the open, high, low, and close. The open of a candle is where it opened during that five-minute period. So, let's say that the beginning of our candle is at 12 o'clock. What this candle would represent is the open of a candle at 12 o'clock. The low would be the lowest point price got to during a five-minute period. The high would be the highest point price got to during a five-minute period, and our close would happen at 12:05, and that would be the ending price during a five-minute period. So, that is a green candle. A red candle represents when price went down during that period of time. So, for a red candle, we would have an open at the top of the body. This is the only difference between the two candles: the open is at the top of the body of a red candle because during a red candle, it represents a period where price closed below where it opened or went lower during, let's say, a five-minute chart. So, the open is there, the highest point is the same—it's the top of the line or wick of the candle—that's the highest point price got to within five minutes. The low is the lowest wick on that candle; that's the lowest point price got to in five minutes. And the close is the closing price after five minutes of data on a five-minute chart. Again, if we started this at 12 o'clock, then the closing price would be at 12:05, and this candle shows you all of the price action between 12 and 12:05 if you're on a five-minute chart. If we're on any other time frame, everything is exactly the same except for the amount of time that passes. If you're on a one-hour chart, then this would be the open at 12 o'clock, and the close of this candle would be at 1 o'clock. Everything else stays the same: the low is the lowest point that candle got to during that hour, the highest is the highest point that candle got to during that hour. So, at this point, you should know exactly what each and every candle represents, and we put a large amount of these candles together in order to interpret what price is likely to do next by identifying trends and areas of value, identifying entry patterns, which is all stuff that we're going to go over right now. So, let's dive down to a chart, take a look at a couple of live examples of single candles, and talk a little more about trend, areas of value, and the way we can use candlestick charts to predict what the market may do next with a high degree of accuracy. Just as a quick look at candles on an actual chart, we are currently on the one-day chart of the Euro/New Zealand. So, what do each of these candlesticks represent? They represent 24 hours of price movement or one day of price movement. A green candle represents a day where price went higher or a day where the price closed above where it opened. A red candle represents a day when price went lower or a day where price closed below where it opened. This most recent green candle—what does it represent? It represents price opening right here at the beginning of the day. The lowest price that price got to is the bottom of this wick. The highest price that price made during that 24-hour period is the top of the wick right here, and the close of that day is the top of the body of that candle. The opposite is true for a red candle. So, now that we have that, let's move on to how we can use a large amount of these candles in order to identify a trending market and make accurate trading decisions. So, if you had to take a guess of what trend the Euro/New Zealand was in—which is the chart that is in front of you—what would you say? Uptrend, downtrend, or consolidation? Hopefully, you were able to say an uptrend. Simply put, an uptrend is nothing more than when a candlestick chart is consistently making new highs and then higher lows, followed by new higher highs, new higher lows, new higher highs, new higher lows, and so forth. This higher high and higher low situation is what is referred to as a trending market, and this particular situation would be an uptrend. Now, the reason we utilize a trending market is because it gives us more accuracy on our trades. You've probably heard "follow the trend" before, and most beginners will gravitate towards trend trading for good reason. Again, it adds accuracy to your trades, it can make for better reward-to-risk setups, and all in all, it's much easier to ride a trend that's already there than to pick the very top or the very bottom of a market trying to trade reversals. So, it's a good thing to trade with the trend. With this market being in an uptrend, what direction would you like to trade this market? To the upside, right? You'd want to be buying while the market is in an uptrend. But here's the problem with trend identification that I see all the time, and that is just not really understanding or having a set-in-stone, objective defined way to identify trend. A lot of traders can easily identify this, right? That's an easy trend to see. But what if price is acting like price normally does, and it looks more like this? We have our high, low, a new high, but then price does this and this, and then finally goes up and then goes up again. At this point, doesn't it get a little bit harder to identify trends? So, with that being the case, I want to give you an objective way to identify trend. Right now, what we have in a trending market are impulsive moves—that is, the big moves that break into new highs. Right here is our impulsive move; I'll label those with an "I." These are the impulsive moves. After an impulsive move, the market takes a breather; we call that our pullbacks. These are our pullbacks in price. This would be a pullback followed by our next impulsive move that breaks a high. Right here, impulsive move, and again, pullback right here. So, the objective way that we're going to be identifying trend is the lowest low of the pullback cannot be broken for us to stay in an uptrend. So, once we have this move that breaks and closes above our previous high, we call that our impulsive move. Once we have that impulsive move breaking into new higher highs—which is what we're looking for in an uptrend—this market is still considered in an uptrend until we break and close below the lowest low of the previous pullback. So, when we get a break above this high right here, when this market breaks above this high with the new impulsive move making a new higher high, then this market is still considered to be in an uptrend until or unless the market breaks and closes below what? The lowest low of the pullback, which would be where I just put this line. This is the lowest low of that pullback. So, as long as the market stays above that low, then we're still considered to be in an uptrend, and we still want to look for buying opportunities. At this point right here, we have had what? Another impulsive move. This move is our impulsive move because it broke above the previous higher high. At this point, what level cannot be broken for us to continue this uptrend? We cannot see the low of our pullback broken. Where's the low? That's the lowest point price got to in this pullback. As long as the market stays above that level and continues making higher lows and higher highs, then we're still in an uptrend. What we do not want to see is the market come down and break below that previous low of the previous pullback. I know that might sound complicated; we'll do it on a real chart to help clear things up. Also, if it sounded complicated, just go back and rewatch this portion of the video. This is how I objectively identify whether the market is trending up or down. We're going to look at a downtrend as well, but the reason we have to have this information is because we want to be trading alongside the trend of any given market. If this market's in an uptrend like this, do I need to be trying to sell and go short and go against the trend? No, because the likely scenario is that we're going to continue into this trend. We're going to continue breaking into new highs. And just to show you that, let's click play and see what happens. At this point right now, looking at the chart, what do you expect to happen? What do we have? We have our low just as we were just drawing it out to a high, a higher low, a higher high. Here's our higher low right here, our higher high, our higher low, our higher high, and our higher low. We have now done what? Created an impulsive move. What do we expect after the impulsive move? We expect a pullback. But what cannot happen? This pullback after our impulsive move cannot break and close below the low of our previous pullback. This is the low of our previous pullback. So, if this market does this, then we're expecting what? A possible reversal. We're expecting this market to possibly head lower. But as long as we stay above this previous pullback, we're still considering this market in an uptrend, still looking for buying opportunities. Let's see what this market does. Boom! Just like that, we break into new structure highs, continuing this uptrend here on the Euro/New Zealand. So, that's how I identify uptrends. Now, let's switch the script, flip the coin, if you will, and take a look at downtrends and how to identify those in order to make more accurate trading decisions. So, if for an uptrend we are looking for higher lows and higher highs, what do you think we're looking for with a downtrend? It's the complete opposite, right? We're looking for a starting point here, then we're looking for lows followed by a lower high, followed by a lower low, followed by a lower high, followed by a lower low, followed by a lower high, so on and so forth. And with this being the case, just like with the other example, I'll give you an example on the whiteboard here. If we're heading lower, it's really easy to identify this as a downtrend. This chart is extremely easy. What about when price does what price normally does, and we get something like this, and then the market goes like this and gets higher and consolidates, and then finally breaks below this low? Well, now since we just went over this, you know that this is still a downtrend unless what happens? Just like an uptrend, we have our impulsive moves here followed by pullbacks. What we do not want to see is the market break and close above the high of the previous pullback in a downtrend. If that happens, then we're considering that a possible reversal. But as long as that doesn't happen, then we are still in a downtrend, and what kind of trading opportunities are we looking for? If this market's heading down, we're looking for selling opportunities as long as the market continues to head in the downward direction. So, that is my objective way of identifying trend. At this point, you have a lot of knowledge you've gained throughout this video. You now understand candlestick charts, you understand how to identify a trending market, whether that be up or down. So, if you've already gained value, why not go ahead and smash that like button for me? What we're going to do now is talk about how to find high-probability areas of value using structure support and resistance. See you there! **Support and resistance** are simply areas in the market that price is likely to react from. Support is an area in the market that price is likely to have a bounce up from or be supported by, whereas resistance is an area in the market where the price of an asset, currency pair, crypto, or stock is likely to fall or drop down from. These areas are based on historic price and based on other areas of support and resistance we can see in historic data, and those are based on the decisions of all other market participants. We're not going to dive into the psychology of support and resistance in this beginner video, but these areas of support and resistance are useful for three main reasons: you can use them to spot possible reversals, you can use them as entry points on trend continuation trades, and you can use them to help you determine your stops and targets. So, what we're going to do right now is go over a couple of those. As I said earlier, most beginners are going to gravitate towards trend continuation trading. So, what I'm going to do is show you how to use these areas of support and resistance to make better trading decisions while in a trending market, and I'm going to go over how to use them to help you set your stops and targets. So, let's go ahead and dive into some charts and talk about support and resistance and how they can help us make better trading decisions. Using support and resistance as entry points in a trending market is very simple. If we build on what we already know from the previous lesson about trend, if we were to draw out a trending market, it would look something like this: low to a high, pullback, break above, a little bit of consolidation—not crossing that previous pullback low, though. So, what are we still in? An uptrend, right? Continuing, then pulling back, continuing up, pulling back, and continuing higher in an uptrend. The likely scenario, if we're going to continue in this uptrend, and one of the best ways to look for possible support and resistance trades is to look at the previous level of resistance that was broken to become support. This is how we use support and resistance for entry points in a trend continuation model. In a trending market, it's by using that previous level of resistance as possible support. Let's do a bearish example. In a bearish trend, the trend would look something like this, right? As we go further and further, what we're looking for in a bearish trend is for the market to get back up to that previous level of structure support that now we expect to become resistance. So, this is called a break and retest strategy, and what we're looking for with this strategy, again, is the market to break below a previous level of support, like we have right here, come back to that level, and provide a trading opportunity. We're going to talk about how we enter trades later on in the video, but what you need to know right now is using structure support and resistance for entry levels in a trend continuation model and in a trending market goes like that. And what we're going to do now is take a look at this on live chart data. Here we are on that same Euro/New Zealand chart. What did we just discuss? Well, we want to see the trend start. So, we have our low to high, higher low, followed by our higher high. At this point, the reason this is our higher high is because this is where the market made a new high compared to its previous high and closed above the previous level of resistance. With that being the case, the previous level of resistance is likely to become support for a trend continuation market. For a trend continuation trade, if we continue looking here, we have a push-up, a pullback, a push-up to a new high. This pullback—where does this pullback come to? If I was to draw this box out right here at our previous level of structure resistance and make it a little easier to see for you, what do you notice at this point? With this trend continuation in mind, the market made a new high with our impulsive move, comes down to our pullback. Where does our pullback come to? Our pullback comes right into the previous high that was broken. This is resistance turned into support, and this is how we use support and resistance to find entry points in trend continuation. Let's take a look at a bearish example of this now. Here we are on that same Euro/Aussie chart we looked at for the trending model we were discussing earlier in the video. In this case, we have our high down to our low, up to our high. Once we break below this low right here, what are we looking for in a bearish trend? After we break that low, we would be looking for a pullback. Let me delete these lines to make it easier to see into that low, just as we have right here, and a continuation of the trend afterwards. As you can see, this market pulls back right into the previous area of support; it does become resistance, and this market continues pushing down. This happens over and over again and looks to be happening right now on live chart data here on the Euro/Aussie. Let's draw that out so you have a complete comprehension of how to use support and resistance to find entry points in trending markets. We have our high to our low, our lower high. What happens? We break below what? Our previous low. If we put a box around that previous low, what has price now done? Price has now come back into that previous support level that now is what? It's a break and retest strategy. So, if it was support, it's now going to be resistance. So, at this point, once we get to that level, we can start looking for entry reasons. Again, we're going to talk about ways to enter the market in these types of situations a little bit later on in the video, but for now, it's just important for you to understand and comprehend that we're looking for breaks and retests of support and resistance levels in trending markets, whether we're trending up or down. That shouldn't have been too hard to comprehend, but if you had any trouble, rewind the video and watch that section again. Now, let's talk about how to use these levels for possible targets. Let's go back to a bullish example. So, for a bullish example of this, let's say that you got an entry in this area on a lower timeframe. Let's say you dropped down and you saw like a double bottom or something in this area. If that's the case, then the way we could use support and resistance for possible targets is this level of support—this box that we drew—we definitely want our stop loss below that level. So, with that being the case, we would make sure that our stop is below that level, keeping us safe in terms of what we can expect out of targets. The way we use this to prepare to take those targets is if we're expecting trend continuation... than the red candle. This indicates a strong shift in momentum from sellers to buyers, suggesting a potential reversal or continuation of the trend. For a bearish engulfing pattern, the opposite is true: the previous candle must be green, and the next candle must be red with a larger body. This signifies a shift in momentum from buyers to sellers, indicating a potential reversal or continuation of the downtrend. The third candlestick pattern I want to discuss is the **pin bar**. A pin bar is characterized by a long wick and a small body, which indicates rejection of price at a certain level. For a bullish pin bar, the long wick should point downward, showing that sellers tried to push the price lower but buyers stepped in and pushed it back up, closing near the open. Conversely, for a bearish pin bar, the long wick should point upward, indicating that buyers attempted to push the price higher but sellers took control, closing near the open. Now that we've covered these three candlestick patterns, let's take a look at how to apply them on a live chart. **Example 1: The 38.2 Candle** On the chart, we can see a significant down move followed by a retracement. If we pull a Fibonacci retracement from the swing low to the swing high, we can identify the 38.2% level. If we see a candle that closes above this level with a long wick pointing down, we can consider this a valid 38.2 candle, indicating potential bullish pressure. **Example 2: The Engulfing Candle** Next, we look for an engulfing pattern. If we see a red candle followed by a larger green candle that completely engulfs the previous red candle, this is a bullish engulfing pattern. This suggests that buyers have taken control, and we may want to consider entering a long position. **Example 3: The Pin Bar** Finally, we look for a pin bar. If we see a long wick pointing down with a small body at the top of an uptrend, this indicates rejection of higher prices and potential bearish pressure. Conversely, if we see a long wick pointing up with a small body at the bottom of a downtrend, this indicates rejection of lower prices and potential bullish pressure. By using these candlestick patterns in conjunction with the trends and areas of support and resistance we've discussed, we can make more informed trading decisions. Now that we've covered candlestick patterns, let's move on to chart patterns and how they can help us identify potential trading opportunities. See you in the next section! **Body than the previous candle that is a bullish engulfing candle.** For me, we'll take a look at a bearish engulfing on a chart, so I'm not going to have to do that right here. Next up, we have the **close above** and **close below** candle. Again, all these candles are used in the same way; they're all either going to be used to help you identify reversals, market sentiment, or help you enter on trend continuation trades. Here we have a close above and close below candle—pretty self-explanatory. A close below candle would be a candle in which the close of that candle is below the low of the previous candle. As long as that happens, that to me is showing selling pressure, and the opposite would be true in the bullish direction; we would have it close above. Again, we'll take a look at that down on the chart, but right now, let's go take a look at a few live examples of the **38.2 candle** first. So here we have a good example of a **38.2 candle** or **38.2 percent candle**, and what I want to do is explain to you how all of these things are already coming together, and we haven't even hit the end of the video yet. What have we learned about trend? Trend is when the market is making new higher lows and higher highs. What have we learned about indicators? When the market's above the 20-period moving average, we are in a highly volatile uptrend. What have we learned about support and resistance? The previous level of resistance is likely to become support. Right now, with all of that in mind, what did we just learn? A specific candlestick formation called the **38.2 candle**. Look right here: does this candle have a long wick? Let's talk about the psychology behind it really quickly. The candle opened here; sellers pushed it all the way down to the bottom of the wick, but buyers took back over. As soon as that happened, as soon as the sellers said, "We're pushing this market down," buyers said, "Hell nah, we're pushing it back up," and they did. We close up here, closer to the highs. This happened while in an uptrend and at our area of value being this previous resistance level. Now, let's make sure this is a **38.2 percent candle**. We have to use a Fibonacci retracement, pulling it from the low of the candle to the high of the candle. Once we do that, is this candle—the entire body of it—above the **38.2** retracement? It is! Therefore, objectively, we have a reason to enter this market. That's what I was talking about when I said these can be used for entries into a long-term trend. So, in this case, we have a long-term uptrend, we have a market at an area of value, and we get our specific entry reason showing us buying pressure. Now, again, we're combining everything. So let's put on our position tool. What if we say, "Okay, one ATR"? How do we play stops with the volatility of the market that we're trading? Right now, in the Aussie/Canada daily chart, the ATR or average true range is 66. So let's go down to our swing low. Our swing low is right at 47 pips. That plus 66 is 113 pips. So we have a 113 pip stop loss on this specific trade, and let's say we want to use two times that ATR as our target. 66 times 2 is 132, so we move that up to 132, and we now have our trade setup. Let's click play and see what happened. Boom! Hit targets—no problem—for about a 1.2 to 1 reward-to-risk ratio. I wanted to do that entire scenario just to show you how everything is coming together. If you liked that, then make sure to go ahead and smash that like button. You've been watching this bad boy for like 45 minutes now; I know you've gotten at least some value out of it, so go ahead and click that like button for me. Go ahead and comment as well if you're still here because that is amazing! Alright, so that is our **38.2 candlestick pattern**. Let's talk about how we can use it for reversals. Just to show you that it doesn't always work, I have no idea; I've not looked at this data yet. This might work as a reversal, and it may not, but right here, what do we have? We have a **38.2 candle** at the top of an uptrend. If this market happened to be overbought on the RSI, check it out! It is combining other technical factors, looking left for resistance. We're not quite at a level of resistance right now, but this would be an example of the **38.2 candle**. And why would it be an example of that candle? Because if I pull a Fibonacci retracement from the top of this candle down to the low of this candle, is the entire body below the **38.2 retracement**? Yes! This is showing selling pressure. In the same way, we would just set our stop loss one ATR above this candle here and then have a target somewhere near these levels of support. It may not work out, or then again, if we had our targets down at this level of support, then it would have worked out. We would have hit those targets right here. So this is how we can use the **38.2 percent candle** to help us with entries on trend continuation trades and to help us identify possible reversals. Let's take a look at a couple of live examples of the **engulfing candle** as well as the **close above** and **close below candle**. Essentially, they all have the same use; they're all going to be used either to spot reversals or as possible entries in trend continuation trades to ride the trend up even further. Let's go ahead and look at the **engulfing candle** on live charts right now. While we were on the whiteboard, we looked at a bullish example of the engulfing candle. So here we're going to look at a bearish example, and again, I want you to see the things that are coming together on this trade. It is a winning trade—yes, it's cherry-picked—but it has very good merit behind it because of the fact that, let's do this one more time: what kind of trend are we in right now? Well, according to the 20-period moving average, we're definitely in a downtrend. Price is below it. Are we making new lows and new lower highs below the 20-period moving average? Yes, we are. Here's our last low, new lower low; here's our last high, lower high. This could be our next lower high. We are at what? The 20-period moving average. Is that an area of value or possible area of resistance? Yes, it is! All of those coming together, and then the entry pattern we can try to use in trend continuation type trades is what? This **engulfing candle**. As you can see here, an engulfing candle, as I explained earlier, is just a candle in the forex market, at least, whose body is larger than the previous candle, and I need a color change—green to red. Is the red body larger than the green body? It is! Therefore, we have a valid bearish engulfing candle here for possible entry into this trend continuation setup, pushing the market further down. Next up, we're going to take a look at the example of the **close above** candle. Let's take a look at that now. Here is a good example of a **close below candle**. This big red candle—what happens here? We close below the low of the previous candle, and we do so. The where is very important. Like I said, you want to do it in areas of value, right? We don't want to just trade random close above and close below candles; that's not a profitable strategy. We have to combine a number of technical factors in order to create a profitable strategy. So in this case, what we have is the top of an uptrend. This market's been heading higher. What you can't see yet—we know this is a valid close below, right? You understand that, I hope? A close below is nothing more than a candle that closes below the low of the previous candle. The opposite's true for a close above, but I want to show you how everything comes together yet again because this happening in the middle of nowhere, like it did right here, is irrelevant. I'm not trading this just because we have a close below candle. No, I want to trade these in areas of value, such as previous levels of resistance. As you can see, my gray box here is showing that this was a level of previous resistance that pushed the market around a ton. Now that we're back to this level, I have an area of value. This is another good example of how to use the RSI indicator. Here we have an overbought situation, and what do we have? We have higher highs on price, but what's the RSI doing? If you remember from the indicators portion of the lesson, what we were talking about in terms of divergence is higher highs on price and lower highs on the RSI. Is that what we get here? Yes, it is! So with all of these factors coming together, it's a pretty good opportunity to try to use our **close below candle** as an entry on this trade. Doing so would look something like this: we have an entry at the close of that candle. The ATR is 77, so we have 98 plus 77. We're going to go 177 to make this easy math. 177 for our stop loss; we're going to put a target down at the previous level of support, which is right here, and we're going to click play to see what happens here on this specific trade. As you can see, the market pushes down. Now, here's a good reason why we use that ATR for our stop loss. If we used a 10 pip stop above our swing high, do you see how easily we would have been stopped out by this wick? Instead, we used the ATR indicator, combining all of our good technical factors to help us have a positive trade here. So with that said, that's going to do it for the **candlestick patterns** portion. Next up, something I like even more than candlestick patterns, and that is **chart patterns**. So stick around; I'll show you my favorites and how I use them in the market to help you better understand the entirety of technical analysis even more so than you already do. I'll see you in just a second! Unlike candlestick patterns that form with between one to maybe a few candles, a chart pattern is going to form with between 10 to maybe 50 candles. What they are are identifiable patterns that, like candlestick patterns, can give us an indication of possible reversals, can give us an indication of market sentiment, and can help us identify possible entries in the market. **Chart patterns** are by far my favorite way to enter trades, and luckily, even though there are hundreds of chart patterns—and feel free to go study as many of them as you would like to find the ones that fit your trading style best—I personally use one type of chart pattern more often than any others, and for the most part, only utilize this one chart pattern in my own trading, and they are **double bottoms** and **double tops**. I said they're one; I know that's two, but they're essentially the same thing, just flipped upside down. So before we go through the way I utilize double bottoms and double tops in my trading, we need objective rules for this. The same way we had objective rules for candlestick patterns, we have to have objective rules for chart patterns as well. For a **double bottom**, that's what we're looking at right now here on the Euro/Yen. For this pattern, what I'm looking for—and the way it looks on a chart—sorry, I didn't do that before. The way it looks on a chart is a market that comes down, creates a level of support, then bounces up to a level of resistance. But instead of continuing down in this downtrend, we come down, we retest this level of support, and we're supported yet again. So much so that we push up enough to break and close above what is called the neckline. So this is bottom number one of a double bottom, bottom number two of a double bottom. This is referred to as the neckline, and that is the initial pullback from the first bottom that we need to break in order to classify this as an actual double bottom. A way that most traders enter this is either by entering exactly as the market breaks that neckline or, one of my favorite ways to enter—and the way we're going to talk about and discuss entering today—is waiting for the market to break and close above that neckline and then getting a pullback into that neckline. The reason I trade double bottoms like this is because I can get smaller stops, therefore having a larger reward-to-risk ratio on these types of trades. So that is how we spot double bottoms. Let's go over how we spot double tops first, and then I'm going to talk about how I actually use these patterns to consistently make badass trades in my own trading. Let's check out a **double top**, though. A double top is going to be when the market pushes up to a level of resistance, then pushes down in our initial pullback. But instead of continuing this uptrend, we now test that level of resistance once more and find resistance yet again. The market then breaks through the neckline. So on a double top, we have top number one right here, we have top number two right here, and the support level that was created after top number one is known as our neckline. We need that neckline to break to validate that this is actually a double top. The way I said we're going to be trading these today is by waiting on a pullback after that validation, after that break. We want to see a pullback into our level of support, and that's where we're going to be placing possible trades and looking for the continuation down. Now, before we get into how I use it, I know I said we're going to right after this, I want to talk about those objective rules. So the objective rules I have for a double bottom—let's actually start there—is I need to see the first bottom and the pullback. At the point that I see this first bottom and a pullback, what I do is place a box. My box is going to be—let me make this way, way more easy—hold on. Here we go. Okay, so at this point, it doesn't look like a double bottom, right? But I need an objective rule for how I'm going to enter a double bottom. So what I do at this point, whenever I see a bounce like this, is I place a box from the lowest bodies of this first low to the lowest low of this first low. That is what I call my termination point. What I want to see is the market retest this point. A candle can close inside of this area; a wick can go past this area. We could see nothing but the wick of a candle touch this area. All of that I would consider a valid double bottom. What I would not consider a valid double bottom is if we get a candle, but the wick doesn't touch my area, or if we get a pullback and we see a candle that closes all the way below my zone. Those two situations are no longer a valid double bottom for me. So those are my objective rules for a double bottom. We'll click play here and see what the market does. As you can see, we've now entered into my termination zone. We have not closed below it; therefore, we have a valid double bottom. So far, is this valid? Yes! No candles closed below my zone; therefore, I'm still considering this a valid double bottom. The next thing I need to see is a break of this neckline. Once I see that, like we do right there, I'm then waiting for this market to pull back to that neckline to place my possible entry. Once we do that and pull back to the neckline, I want to see buying pressure. For me, buying pressure is nothing more than a green candle. Once I see buying pressure—here's how I'm just explaining to you exactly how I trade these double bottoms, or exactly how a lot of people trade them. I trade them slightly differently, but for the purpose of this video, this is what we're going to talk about. So I would place an entry there. We have a 17 pip ATR right now, so 17 plus 30 is 47. 47 pips, and I want to target my next level of resistance, which is right up here in this area. So at this point, we have our trade setup. We've had buying pressure after a double bottom has been confirmed by the breakout and a pullback to the neckline, plus buying pressure. Okay, cool, we're in the trade. Let's see what happens. Eventually pushing up, down, up, down. This is the reality of trading, guys. You will be tortured emotionally during situations like this, but it's just what happens sometimes while we're trading. And there we go, finally hitting targets. You have to have emotional fortitude. That's something, unfortunately, we're not going to have time to discuss in this video because it is going to be well over an hour long; I already know that. But that is how I would trade the double bottom. The double top would be the exact opposite of that. We'll go over that really quickly; you should have a pretty good idea by now. But here on the double top, the only difference is I am putting a box—let's actually—does it sound like I'm saying pudding? It does to me. Let's put a box right there. So now what I'm waiting for for a double top is the market to push up into an area of resistance and have a pullback. Once I have that pullback, I'm placing a box from the highest bodies of the first top to the highest wick of the first top. This is what I call my termination zone. I want to see a candle that at least touches that zone, but what I cannot see is a candle that closes above this zone. A candle can close inside of the zone; a wick can go past the zone. The only thing I cannot see is either a candle not touching it at all or a candle closing above it. So with that said, click play. You already know what this turns out like. Yes, we have a valid double top, and yes, we broke the neckline. The way I would trade this is by waiting on selling pressure at the neckline as the market pulls back up. Clicking play yet again, selling pressure would be this red candle. Stop loss at that point would only need to go above our swing high, and then we could target whatever we needed to, pushing lower. And that, my friends, is how I use the double top and double bottom strategy. So now you have the rules-based approach I take to spot these patterns. The way I enter them is with buying pressure at the neckline after the break. The other thing you need to know about these patterns is they work best whenever you're aligning yourself with higher time frame trends. So let's say you're trading these patterns on an hourly chart. If you're trading a double bottom on the hourly chart—and what I mean by that is you actually see the double bottom itself on an hourly chart—you want to make sure that the daily chart is in an uptrend. So that way, you are aligned with a daily chart uptrend while trading a double bottom on a one-hour chart. The opposite is true for a downtrend and a double top. If you're trading a double top on, let's say, the one-hour chart, you want to make sure that you are aligned with the daily chart trend. You want to make sure the daily chart is actually in a downtrend while you're trading that double top on a lower time frame. This is going to add an amazing amount of accuracy to your double top and double bottom trades. That'll also add accuracy to any other chart patterns that you decide you want to add to your trading arsenal. So that's going to do it for the **chart patterns** portion of this lesson. Next up, we got **breakout patterns**, so we're going to go ahead and take a look at some breakout patterns and how I like to use them in my own trading to make the best trading decisions possible. I'll see you there! **Breakout patterns** are when the market transitions from a low period of volatility to a much higher period of volatility. We see this often in both uptrends and downtrends. In these scenarios, the market makes a large move to the upside, followed by a small period of consolidation before the next significant move upward. We refer to these as **flag patterns**. Let's discuss how to use flag patterns effectively. We now know what flag patterns are, but how do you use them? I utilize them to capitalize on volatile trends. As we discussed earlier, a volatile trend often stays above the 20-period moving average. For example, on the chart here, we can see price remaining above the 20-period moving average. The way I like to use a flag pattern is as follows: if we are staying above the 20-period moving average and have just experienced an impulsive move to the upside, I want to draw out a flag pattern during the period of consolidation. After this consolidation, we get what is known as a breakout candle, which breaks the top trend line of that consolidation period. This is when most traders decide to enter on a flag pattern trade. Here’s a specific example: we have a situation where the market continues in trend, making an impulsive move that breaks above previous resistance. We then see a period of consolidation that resembles a flag. After this consolidation, we have our breakout candle, and the market continues in that uptrend. This pattern occurs repeatedly in volatile trends, and that’s how we can take advantage of flag patterns. Now, just like everything in trading, we need to have some objective rules. One of the best objective rules I’ve found when trading flag patterns is to only trade these patterns when they occur above or near the 20-period moving average. This moving average acts as a filter for highly volatile trends, and I only want to take flag pattern breakout trades if the trend is highly volatile, as this gives me the best chances of a significant move higher. For stops and targets, if my entry candle is the breakout candle, I would place my stop loss below the previous low by one ATR, as we discussed earlier. So, let’s set this trade up: it would look something like this, with a target at the previous level of resistance. At this point, you know exactly how I trade bullish flags. This video has gotten quite lengthy, so I won’t go into a bearish version; just flip it upside down. In a bearish flag pattern, we would wait for the market to head down with an impulsive move, followed by a small period of consolidation, and then we would sell on the breakout of that consolidation to the downside. Now, let’s take a look at another breakout pattern that I really enjoy using: **ascending and descending wedges**. An ascending wedge is characterized by a level of resistance that the market struggles to surpass, while the support level rises. This indicates that buyers are entering the market sooner at higher prices until eventually, the pattern breaks out to the upside. Conversely, a descending wedge features a level of support that is tested multiple times, with lower highs indicating that sellers are stepping in sooner at lower prices. Eventually, this breakout level gives way to a downward move. These wedge patterns typically take anywhere from 20 to 50, or even 100 candles to set up. The way I like to trade these is similar to the double top and double bottom strategies we discussed earlier. After the breakout, I wait for a pullback back into the zone of resistance. When I get that pullback, I look for buying pressure, which I define as a green candle. Once I pull back to that zone and see a green candle, that’s when I enter the trade. For an ascending wedge, we have a level of resistance that has acted as resistance multiple times, rising support levels, and a breakout of that level. After the pullback, I look for buying pressure to confirm my entry. For stops, I would place my stop loss below the previous swing low, and for targets, I would set them based on the next level of structure support or resistance. Now, I wish I could tell you that this is all you need to go out there, trade, and make money, but unfortunately, that’s not the case. Understanding technical analysis alone isn’t enough. While I’ve shared everything you need to know about technical analysis in this video, I haven’t covered everything necessary to become a consistently profitable trader. Fortunately, we have some space available in our mentorship program. If you’d like to learn the exact combination of technical factors I use, which I call a strategy, and receive mentorship from me personally, along with weekly video trade setups, then there’s a link below for a discounted price on the EAP training program. We’re running a Black Friday sale, and you can get everything I’ve ever created in terms of paid content for $697 or three payments of $297 if you prefer a payment option. You can learn all about the program, what it includes, and how to get access by clicking the link in the description labeled EAP training program. If that’s not for you, that’s totally fine too! You now have everything you need to know about technical analysis. Combine some of these technical factors to create your own strategy, backtest it, create a risk management plan, and work on your trading psychology. Demo trade for a while to build confidence and consistency. If you can create a profitable three months with a rules-based strategy, you’ll be doing better than 95% of traders. So, if you’re interested in the EAP training program, check it out for more advanced training and personal help with your trading. If not, make sure to click that like button and subscribe. I’m exhausted after filming this video for so long, and I’ll see you in the next one. Talk soon!

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