As a trader and investor, this is a very simple and straightforward strategy that anyone can learn. And it is highly effective if you know how to evaluate companies. In addition, you will also need to understand the current market sentiment. But using the stop loss strategy and having some variation in the portfolio and then also using the chart to plan entries in addition to fundamental analysis can be a very profitable long-term strategy. It is not a get rich overnight strategy. Honestly, people who don’t understand charts will always say things like this. in addition, if you want to learn a little bit more, you can learn how to hedge your portfolio in the event of a black swan. But investors who make like 7-8% a year probably will never understand unless they want to investigate and dare to have their current knowledge challenged. Not everyone can attain wealth.
From my experience,after consolidation there is normally a fakeout in the opposite direction in which it will eventually reverse in the true direction.....this phase liquidates the stop losses 100/150 pips,then builds momentum in the opposte direction usually atleast 3 fold from fakeout 3 x 100/150 pips,then i exit when the direction shows first signs of losing momentum ie volume dipping or smaller fading candles or long wicks etc....i find my strategy more probable with better profit % win rate,than your example which is a beginers basic low probability entry with very low profit %....
One should not hide the fact that with tight stops the number of losing trades increases. This is not an argument against tight stops, but it does require a certain mental acceptance. With this approach, there may be periods when about one in three trades ends in a profit - and occasionally a rather small one. Then equity stagnates and the trader with wider stop-loss margins has the better results than the trader with tighter stops. This can be mentally exhausting, even if it is more profitable in the long run.
listen and heed more to the footage. He is stating that if u have lets say 15K and you buy stock, you then get shares that are 5K. after, your SL is 1/5. meaning u lose 1K. then you have 14K. im sure he is solidified on the kelly criterion. meh
Usually during this time of the year, we get to see certain stocks go up in the market, but that’s very unlikely this season cos of the recession and overall economic crisis, issue is I've been holding a lot of stocks hoping to sell for profit this month but I'm not sure if to keep holding or sell, I’ve been running at a loss since Q2 and 2023 is really not looking favorable for investors
We’ll be seeing the market plummet further, so I advise you do critical analysis on these companies you’re holding and their data projections in the next fews years. Even better, you could have an investment adviser guide you restructure your overall portfolio and offset the bad apples you’re holding, that strategy’s been working for me so far, saves me a whole lot of stress and continuous anxiety and also it’s very time efficient
@@caroamira I’ve honestly been considering going the route of an advisor, this current market is no jokes for the average retail investor, but do these advisors really make any notable changes to a portfolio or am I better off on my own.?
@@EvanQuiel4 Unless you intend to buy and hold stocks for a decade, cos I don’t see a reason not to, I’ve been investing closely with an investment adviser for the past 2years and so far I’ve pulled over $850K in net gains and I’m not worried at all about where we’re heading this year because I know I’m in good hands
Incredible information Buying and selling is easy. Tough is to hold quality stocks. There are few gems in the world who held their stocks(after deep research) for years and sometimes decades. They are the most successful investor's
I am a newbie looking for the best company to get involved with. I've done a couple of researches and every finger points towards Google & EQB. I have approximately $500k stagnant in my portfolio that needs growth. What is my best bet?
Google & EQB are good bets. I heard people are looking into these Chinese stocks as well NIO and BIDU. However, it wouldn't be very safe for you to make crucial financial decisions on your own.
I tried being a Lone Wolf but ended up losing quarter of a Million $ because I lacked the knowledge of both the entry and exit point on the securities i focused on. In my opinion, it is better to save than to invest without a handler so you don't get to lose everything. I employed the services of a Professional and due to my large capital, i made back the quarter and more before long.>
@@younglee-segredo831 I just verified her and it turns out she has worked with top notch companies like VOYA FINANCIAL PARTNERS, LLC, I thought this was just some overrated BS lol.
I think it is not possible to say - as is done here too - that smart investors are able to maximize returns (and neither are institutional ones), managing to buy and sell with the ideal timing. This is demonstrated by the statistics which in fact show that these groups of investors fail to beat the market. Therefore, to say that smart investors "buy here and sell here" is just an idealization that does not correspond to reality.
Buy and hold for individual stocks is fine, and clearly works well given that Warren Buffett and others have made huge profits from it. They key here is valuation. Hype drove the price to ridiculous levels which could easily be seen simply by looking at the PE ratio, which at even today's lower prices is still hovering about 30. Any wise B&H investor would have sold at the ridiculously high price levels (or at least not bought it). In short, if you're buying in for the long term, you need to think in terms of fundamental analysis and valuation rather than technical analysis and price action.
Excellent. You have revealed the most important classified info for retail traders who come to know of this detail only after taking big hits or getting annihilated. Profits will come only with Discipline, Patience, practice and experience. 👌👌
Exactly. This isn’t a strategy. This is literally “buy low sell high” in a chart of the past. Pointless video and no one who wasn’t already invested in Zoom could’ve seen that coming, unless they had strong intuition regarding the rise of remote work through the pandemic. Again, stupid video.
And since when does “smart money” not employ some kind of risk management? There’s some valuable information here, but it’s kind of twisted to sell “his” method.
The range was 62-76 so lets call half way 69. The position was taken at 88. 10% risk would put a stop at 80....which is above the consolidation range. Am i looking at this incorrectly?
Hey Financial Freedom, first off love your videos there is a lot of useful information for begginer and amateur traders. Just wanted to point out that its a bit unfair to compare risk from no stop-loss strat to a regular one and also profits from a non-leveraged position to a leveraged one. Kind of inflates the result for the naked eye I would say.
Hey there, I have been trading for about 6 months now and just about every trade slaps me in my face. Nearly impossible for me to catch more than a few points . I try to do top down analysis and MTF analysis, but it doesn't work for me . I say to myself, clearly I'm in the 90% that lose money, so I open a demo account, do my analysis, then take the opposite of what I would normally take(I know, it sounds stupid but I was desperate) and get the same result. I'm starting to feel hopeless, any advice for a struggling trader?
@Adam camp Allen You're right, I don't lose money every single trade, but my main problem is trying to let my runners run. Very rarely do I catch big moves . Instead they go a few pips in my direction, then go against me if when I try holding them. Also my entries could use a lot of improvement. A mentor would be amazing, but getting one is easier said than done. If it's not too much to ask, do you know any?
FW, Good information and comparison. However, I'm confused about the 'leveraging' aspect of this example trade. Is this really leveraging? Isn't the trade still costing 'Me' $5,000.00 to enter, as opposed to only $500.00 to enter (with the remaining $4,500.00 being stumped up by a third party (broking house)? Isn't it simply the selling price, i.e. the different points at which 'Public', 'Smart' and 'Me' closed out their positions that has determined the (differences in) $Return$, and not because 'Me' set a Stop Loss at 10%?
Same thing was with TDOC. Idea was good for the pandemic time Some people still believe that the stock is cheap, and are still buying it. I made ton of money going short.
Gr8 vid lance. It makes sense on paper but for me in real time, I often find myself average bad prices when waiting for the turn and then get hammered or shaken out by HFT’s.. personally if I have strong conviction I like to wait for right side of the V with my entries but then add on the frontside when it drops or spikes.. I'm trying to build a portfolio of at least $850k by the time I'm 60, therefore I need suggestions on what investments to make
You might follow a lot of intriguing stocks in many industries. I'll advise you to work with a financial advisor who can assist you decide when is the best to buy and sell the shares or ETFs you want to acquire since you don't have to act on every forecast.
Yes I concur, I've been talking to an advisor for long now, mostly because I lack the knowledge and energy to deal with these ongoing market circumstances. I made more than $350K during this slump, demonstrating that there are more aspects of the market than the average individual is aware of. Having an investing counselor is now the best line of action, especially for those who are close to retiring.
we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides you help?
My advisor is ‘’AMY JEAN ANDERSEN’’ she’s highly qualified and experienced in the finan-cial market. She has extensive knowledge of port-folio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
Smart money are using Stop-loss and also know how to leverage. Nothing new, but a guy way to convince the public that you can sell them something valuable.
I agree with a lot you said, but you cant calculate your 1:36 risk ratio till after you close out the position. So unless you have a price target it's worthless when entering a trade. I also highly doubt after being up 100-200% you wouldn't take profits. Also your real risk to reward needs to account for how many trades you stop out of per successful trade. I understand this is a cherry picked example for learning, but most winning trades dont shot to the moon for 550%.
I calculate risk reward from historical data prior to a new trade. I'm also mechanical so leave trades to run regardless of being up 100% unless the indicators tell me otherwise.
Stan Drunkenmiller has Never had a loss year. Averages +30% per year. One year he made 1 Billion USD. Never uses a 🛑. Confesses that after 40yrs he can’t make the same returns since AI has taken over the markets.
Thank you for the great videos. I don't know how you calculated to 26k, from 1 to 36 leverage. Can someone help explain this? Thank you.😂 Is it like this? 1000x36=36k , 36k-10k=26k.?
Well said! I am also here to learn how to invest after listening to a lady on tv talk about the importance of investing and how she made 7 figure in 3 month, somehow the video taught me nothing and left me even more confused, I'm a newbie and I'm open to ideas on how to invest for retirement
@@ericalorraine7943lookup Priscilla Dearmin-Turner, this is her name online, she's now the real investment prodigy since the crash and have help me recovered my loses
But will the brokerage allow leverage for do many days or weeks or months?? Aren't they going to charge high interest? Did you consider the cost of interest in this?
In a low interest rate environment it is of little concern to me in relation to the returns. I mean, what is 5% per year leverage costs if it can make you 40%.....
Great information but you left out one very important thing. How do you find those few stocks out of many thousands, like Zoom, that are going to be 5X'ers or 10X'ers to mostly limit your investing to? More than likely people will invest in stocks that have already made large gains over many years and hope for 10% and 15% returns for each of many more years. Maybe it would be better to focus the video on using these techniques in the more common investing circumstances average investors face?
Yeah but what do you do when you have Amazon and Google when they range for a year. The 20 week MA and the Mac signal line will move above and below several times because they are in a range. What do you do for those type of stocks?
Hi Will - Remember this is asset bubble theory and is based on the weekly chart - Nothing is perfect all the time. However I trade the same on any stock 20 MA, MACD, Consolidation, risk management etc etc with all this in mind I can be right just 30% of the time and still make money, because when it does take off the winners dwarf the losers..
@@FinancialWisdom if on every trade I want to risk only 1% of my balance and I buy with 1% of my balance, no leverage, no stop loss. All I can lose is still the 1% of my balance that I bought with. Is this a good management of risk?
Which market cycle phase Nvidia went in the recent month going from 142$ to 95 $ ? what is the difference between stock correction and 4 phases of stock cycle? Thanks
Amazing priceless content! Quick question - Is your price action actually being made on the weekly chart? or do you go down to the daily time frame? Also, do you leave the stop loss on the initial point? Aren't you afraid that the price will go up and you might lose great momentum of the up-trend?
Are your services available for USA market too since I trade USA market, I see you are in UK and was not sure if your provide services for the USA market too
Yeah that's the point..in real time you only know the highs and lows in hindsight.....there's also some defective reasoning about the leverage risk...you would only ever lose 100% if the company goes into liquidation, if the leveraged stop loss is hit you lose 25% of capital instantly, do that twice and you've lost half your capital. It can happen in a matter of minutes.. so then you're out, you lost money and then the stock can shoot right back up again and you would have been up if hadn't placed a stoploss, it's called stoploss hunting where the algos drop the price byba one share trade and set off a whole heap of stoploss orders which they buy up and then let the price run. That's why trading short or long-term is not for the faint hearted.. really you're just along for the ride...smart money dumb money...the manipulators and the manipulated.
I backtested this strategy on the SPX chart for example. The results are honestly pretty lame (historically speaking, not just the last 5y). It works best on a type of explosion/bust chart. But if you use it on a chart that constantly crosses the W1 MA20 the outcome is not very good. Besides it´s hard to define what "a consolidation" is, thus making the placement of the SL dificult. It´s very subjective. It probably it works for you, but I´m pretty confident to say most people would be better of simply buying and holding.
Is this a hypothetical example or a trade you really used for your method? Was there really a proper base prior to the breakout on the weekly chart (as defined by what you look for in a base) for ZM? I am not seeing a real base. Furthermore - did ZM meet your fundamental requirements at this buy point?
So basically you are using a weekly TTM squeeze type indicator with MACD entry and exit? I already have such a TTM and MACD trading bot that does rather well.
I like your video and the way you easily present things. And I see that you bought the stock slightly after the breakout. But how do you know that it was a real break out that would continue to go up???... rather than a false break out that would reverse itself downward.
You never know you just have to manage the risk on each trade, being right just 40% of the time can be profitable. Its not knowing what will happen in each trade but after 100 trades.
First of all it's another nice video, thank you for your time. But, something caught my eye and I've found it weird. You projected yourself as even smarter money or maybe 'genius' money by applying RR differences between your approach vs 'smart money' approach. The thing is, smart money you described is full of assumptions which you created yourself. For example who says smart money does not use stop losses? Or how come you are not in the public crowd even you achieve a high success rate? All of these basic categorizations can be useful psychologically while in the market but they don't seem very accurate objectively to a highly chaotic environment, I don't know it just sounded a little out of touch. As long as you make money consistently, you are the smart money. Don't get me wrong but you just bought a consolidation breakout before an epic rally and take your profits cuz of a macd crossover. In this case your main talent lies in your psychological aspects like patience and determination. I hope you make a video about your psychological approach to the market, like how can you restrain from taking profits early or convincing yourself to enter for that specific breakout etc. I know my comment sounds negative overall but my intentions are not. It's a good video motivationally, I enjoyed it and have a nice Sunday.
just accept that you can't buy at the very bottom and sell at the very high. you never know and you can't control it. unless you are the market manipulator. what you can do is make a proper trading plan and stick to it. sticking to your trading plan is the real challenge. you might want to read books like trading in the zone, trading for a living etc.
Hi Eray - I appreciate your feedback, thanks. You are right these are based on assumptions, but for me a typical example from what I have listened to over the years, and of course this is asset bubble theory which is sound, albeit not always predictive. The videos always helps to provoke thought with some nuggets hopefully.
the trouble isn't the trade itself, it's finding them to start with - how do you find these stocks? with a stop at 10% it won't take long to smash your account if you pick the wrong ones
Not really. Smart people are sure beforehand, mostly because of the informations they have and their experience - if someone is "smart" only after the event, he's not really smart but hopefully he can learn from his mistakes.
Something you didn’t cover was the cost of leverage. Any broker house is going to charge you roughly 17% per year to utilize their money. Also the maximum I’ve ever seen allocated for leverage to borrow was 50%.
Anybody knows if he adjusts his risk to take account of using leverage- is it 10% of leverage or 10% of his principal? The first will double his risk by 2
Thank you for your work and your passion as always, a pleasure to consume your content. Do you live off of trading? Do you believe there is a point in trading below daily time frames because of all the noise? I feel like scalping and day trading are way too stressfull/risky/time consuming to make a profit out of it
Could you make a video to show how one can reduce whipsaws while trading using the MACD? In an ealier video, I think you mentioned using moving averages and the Dow Theory. It would be useful to know when things are going to be choppy. Thanks!
Do you use the 20 MA as a basis or reference point to trade ie. buy when prices are above it and sell if below it? It seems like 20 MA is a good proxy for the 6 month moving average of 26 EMA. Thanks.
Question: isn't this ROR assuming you are never stopped out? Using your method of utilizing stop losses at 10% you could just as well use 1% and exponentially increase your 'theoretical' returns. But it wouldn't be practical, would it -- because you'd be stopped out too many times. But in actuality the return is based not on risk over return but on amount invested (leveraged or not) versus the actual difference in buy-sell price. ROR seems to be a paper return, and not the actual amount returned from the trade. Am I seeing this incorrectly?
That risk and ROR part is a bit confusing, but looking at real returns: 1. At the price of $88, by investing $5000 you can buy 56 units - one more and you go above $5k - so you have 56 units bought at $88, worth $4928. 1b. Risk is set to 10%, so if price falls to $80 (I believe that risk of 10% means exactly this) you quit. That would make you sell them for 56x$80=$4480, which is a loss of $448, indeed 10% but of your selling price, not buying price. Which is weird, because 10% from $4928 i is $492,80 to be exact, so allowed risked quote should be higher than what we've got. Any thoughts about it would be highly appreciated. 2. If you sell at the price of $405, you get 56x$405=$22680. This compared to your entry makes 460% return (not 360%, even 405/88 gives you that, which is obvious). I wonder why he made this blunder. 3. If you leverage 2:1, this gives you $10000 to buy units at $88 - which makes you go not for 112, but 113 units actually. So you have 113 units for $88, making them worth $9944. Again no space to squeeze one more. 4. Now you sell those 113 units for $405, which gives you $45765. ROI is at 915%, not 720% - we're comparing that $46k to your initial $5k, right? I wonder, however, where we should put the cost of leverage, because no one is gonna lend us money for free.But if the cost would be higher than additional return, why even use leverage? So it has to take only a small part of the returns. 5. And now the ROR - as a return on risk, you compare your results not to the amount you've put in but to the amount you'd lose if things go against you. And yes, it's pretty much paper thing, but it shows how crucial risk management is.
@@DorianGreer I still think that stoploss at 10% is rather tight, throwing you out of many good trades too early (fakeouts and all that stuff). I don't remember if I saw it on this channel or another one, but someone made backtesting with whichever method that was and with different stoplosses, and 15-20% made best results. But yeah, that's backtesting and there's your life where you don't know what will happen tomorrow. I'm not a trader, but I tried to get into this kind of trading (with various indicators and so on) and what threw me off was that all those MACDs and other stuff were recalculated on the last few candles when new ones were added - which made my decisions invalid most of the time, because MACD crossing which confirmed a good trade wasn't even there a few days later. I took screenshots to be sure I'm not making things up in my mind. Yes, I know that's thanks to volatility, but if an indicator is said to take last 20 candles into account, then I suppose a plotted point won't change in the future - but it changed as if it took a few later candles into consideration.
Its not that expensive when you consider the return benefits, I mean what is perhaps 3% when you create an extra 360%. Its a bit like a mortgage which allows for great leverage, even though you pay for that for 25 years in interest it is still the far superior choice.
Excellent Gareth. Thanks. Have you considered doing a video on how to calculate a stop loss? I note you tend to use 10% which is probably fine for most trades. But maybe not for high or low beta securities.
Very nice! Using weekly VCP to identify potential entry. I like using split screen daily weekly with the signal 50 SMA on the daily in conjunction with the 20 SMA on the weekly. Also like using the ADR as signal for increasing volatility. The explanation for ROR and selling rules is critical. Thanks for the video!
I agree with the concept but not with the leverage, it's obvious you put it just to make it looks your method has a bigger return but in real live trade you would be very careful to use the leverage especially with covid market situation, don't get me wrong, im still a fan all of your videos but not this one. Cheers
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Everybody is smart and reads the chart like a clairvoyant after the fact.
Knew someone would say that....
As a trader and investor, this is a very simple and straightforward strategy that anyone can learn. And it is highly effective if you know how to evaluate companies. In addition, you will also need to understand the current market sentiment. But using the stop loss strategy and having some variation in the portfolio and then also using the chart to plan entries in addition to fundamental analysis can be a very profitable long-term strategy. It is not a get rich overnight strategy. Honestly, people who don’t understand charts will always say things like this. in addition, if you want to learn a little bit more, you can learn how to hedge your portfolio in the event of a black swan. But investors who make like 7-8% a year probably will never understand unless they want to investigate and dare to have their current knowledge challenged. Not everyone can attain wealth.
@@FinancialWisdom I see what you did there.
Look for weekly chart lateral consolidation and price rise above 20ma and use macd cross over. Exit when price drop below sma20
From my experience,after consolidation there is normally a fakeout in the opposite direction in which it will eventually reverse in the true direction.....this phase liquidates the stop losses 100/150 pips,then builds momentum in the opposte direction usually atleast 3 fold from fakeout 3 x 100/150 pips,then i exit when the direction shows first signs of losing momentum ie volume dipping or smaller fading candles or long wicks etc....i find my strategy more probable with better profit % win rate,than your example which is a beginers basic low probability entry with very low profit %....
One should not hide the fact that with tight stops the number of losing trades increases. This is not an argument against tight stops, but it does require a certain mental acceptance. With this approach, there may be periods when about one in three trades ends in a profit - and occasionally a rather small one. Then equity stagnates and the trader with wider stop-loss margins has the better results than the trader with tighter stops. This can be mentally exhausting, even if it is more profitable in the long run.
One should also not hide the fact that stops tend to hurt performance.
@@ouebca Disagree - in this point I am with FinancialWisdom
You are right Michael - I'm actually completing a video on stop losses and performance now😉
Who in their right mind would risk 20% of their account using leverage? 5 losing trades and you're virtually broke.
listen and heed more to the footage. He is stating that if u have lets say 15K and you buy stock, you then get shares that are 5K. after, your SL is 1/5. meaning u lose 1K. then you have 14K. im sure he is solidified on the kelly criterion. meh
Usually during this time of the year, we get to see certain stocks go up in the market, but that’s very unlikely this season cos of the recession and overall economic crisis, issue is I've been holding a lot of stocks hoping to sell for profit this month but I'm not sure if to keep holding or sell, I’ve been running at a loss since Q2 and 2023 is really not looking favorable for investors
The market hasn’t been looking good since COVID, and it will get worse this year, you should sell
We’ll be seeing the market plummet further, so I advise you do critical analysis on these companies you’re holding and their data projections in the next fews years. Even better, you could have an investment adviser guide you restructure your overall portfolio and offset the bad apples you’re holding, that strategy’s been working for me so far, saves me a whole lot of stress and continuous anxiety and also it’s very time efficient
@@caroamira I’ve honestly been considering going the route of an advisor, this current market is no jokes for the average retail investor, but do these advisors really make any notable changes to a portfolio or am I better off on my own.?
@@EvanQuiel4 Unless you intend to buy and hold stocks for a decade, cos I don’t see a reason not to, I’ve been investing closely with an investment adviser for the past 2years and so far I’ve pulled over $850K in net gains and I’m not worried at all about where we’re heading this year because I know I’m in good hands
@@caroamira Very well said, could you recommend this coach that guides you? I’m just a beginner and I’ve been having a terrible year
Incredible information Buying and selling is easy. Tough is to hold quality stocks. There are few gems in the world who held their stocks(after deep research) for years and sometimes decades. They are the most successful investor's
I am a newbie looking for the best company to get involved with. I've done a couple of researches and every finger points towards Google & EQB. I have approximately $500k stagnant in my portfolio that needs growth. What is my best bet?
Google & EQB are good bets. I heard people are looking into these Chinese stocks as well NIO and BIDU. However, it wouldn't be very safe for you to make crucial financial decisions on your own.
I tried being a Lone Wolf but ended up losing quarter of a Million $ because I lacked the knowledge of both the entry and exit point on the securities i focused on. In my opinion, it is better to save than to invest without a handler so you don't get to lose everything. I employed the services of a Professional and due to my large capital, i made back the quarter and more before long.>
@@legilooks
@@younglee-segredo831 I just verified her and it turns out she has worked with top notch companies like VOYA FINANCIAL PARTNERS, LLC, I thought this was just some overrated BS lol.
I think it is not possible to say - as is done here too - that smart investors are able to maximize returns (and neither are institutional ones), managing to buy and sell with the ideal timing. This is demonstrated by the statistics which in fact show that these groups of investors fail to beat the market. Therefore, to say that smart investors "buy here and sell here" is just an idealization that does not correspond to reality.
Buy and hold for individual stocks is fine, and clearly works well given that Warren Buffett and others have made huge profits from it. They key here is valuation. Hype drove the price to ridiculous levels which could easily be seen simply by looking at the PE ratio, which at even today's lower prices is still hovering about 30. Any wise B&H investor would have sold at the ridiculously high price levels (or at least not bought it).
In short, if you're buying in for the long term, you need to think in terms of fundamental analysis and valuation rather than technical analysis and price action.
Excellent. You have revealed the most important classified info for retail traders who come to know of this detail only after taking big hits or getting annihilated. Profits will come only with Discipline, Patience, practice and experience. 👌👌
the animation in your videos is next level...brings so much clarity
Thanks 🙏
All based on assumptions and no data to back up that smart money actually bought "here" and public investor bought "here".... What is the point?
Exactly. This isn’t a strategy. This is literally “buy low sell high” in a chart of the past. Pointless video and no one who wasn’t already invested in Zoom could’ve seen that coming, unless they had strong intuition regarding the rise of remote work through the pandemic. Again, stupid video.
And since when does “smart money” not employ some kind of risk management? There’s some valuable information here, but it’s kind of twisted to sell “his” method.
Thankfully you must be a commentator and not an investor, dear oh dear
You just don't get it. And no, its not a strategy, its a methodology. Buy into fear, sell into greed
The range was 62-76 so lets call half way 69. The position was taken at 88. 10% risk would put a stop at 80....which is above the consolidation range. Am i looking at this incorrectly?
Hey Financial Freedom, first off love your videos there is a lot of useful information for begginer and amateur traders. Just wanted to point out that its a bit unfair to compare risk from no stop-loss strat to a regular one and also profits from a non-leveraged position to a leveraged one. Kind of inflates the result for the naked eye I would say.
True, I'm wondering why "smart" money shouldn't use a stop-loss.
Hey there, I have been trading for about 6 months now and just about every trade slaps me in my face. Nearly impossible for me to catch more than a few points . I try to do top down analysis and MTF analysis, but it doesn't work for me . I say to myself, clearly I'm in the 90% that lose money, so I open a demo account, do my analysis, then take the opposite of what I would normally take(I know, it sounds stupid but I was desperate) and get the same result. I'm starting to feel hopeless, any advice for a struggling trader?
@Adam camp Allen You're right, I don't lose money every single trade, but my main problem is trying to let my runners run. Very rarely do I catch big moves . Instead they go a few pips in my direction, then go against me if when I try holding them. Also my entries could use a lot of improvement. A mentor would be amazing, but getting one is easier said than done. If it's not too much to ask, do you know any?
try to sell when you normally would buy, and oppersite. thats using the peoples psychology in the game to your favour. and beware of the fundamentals
You aren't actually doing the opposite of what you would have done with real money.
That was by far the best video I’ve heard on risk management ever thank you
FW, Good information and comparison. However, I'm confused about the 'leveraging' aspect of this example trade. Is this really leveraging? Isn't the trade still costing 'Me' $5,000.00 to enter, as opposed to only $500.00 to enter (with the remaining $4,500.00 being stumped up by a third party (broking house)? Isn't it simply the selling price, i.e. the different points at which 'Public', 'Smart' and 'Me' closed out their positions that has determined the (differences in) $Return$, and not because 'Me' set a Stop Loss at 10%?
How to leverage
What method do you advise
question @12:20 you said your return is 26k but with leverage if you get 1:36 the 1K you invest should bring 36k instead of 26K, right???
Yes, maybe it is 36k. I could not figure out how 26k were calculated.
Same thing was with TDOC. Idea was good for the pandemic time Some people still believe that the stock is cheap, and are still buying it. I made ton of money going short.
Gr8 vid lance. It makes sense on paper but for me in real time, I often find myself average bad prices when waiting for the turn and then get hammered or shaken out by HFT’s.. personally if I have strong conviction I like to wait for right side of the V with my entries but then add on the frontside when it drops or spikes.. I'm trying to build a portfolio of at least $850k by the time I'm 60, therefore I need suggestions on what investments to make
You might follow a lot of intriguing stocks in many industries. I'll advise you to work with a financial advisor who can assist you decide when is the best to buy and sell the shares or ETFs you want to acquire since you don't have to act on every forecast.
Yes I concur, I've been talking to an advisor for long now, mostly because I lack the knowledge and energy to deal with these ongoing market circumstances. I made more than $350K during this slump, demonstrating that there are more aspects of the market than the average individual is aware of. Having an investing counselor is now the best line of action, especially for those who are close to retiring.
we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides you help?
My advisor is ‘’AMY JEAN ANDERSEN’’ she’s highly qualified and experienced in the finan-cial market. She has extensive knowledge of port-folio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her..
Smart money are using Stop-loss and also know how to leverage. Nothing new, but a guy way to convince the public that you can sell them something valuable.
very good explanation. however I think using short term put options to manage risk is better than stop losses.
Lol yea, nothing like grinding money away as options expire worthless
6:00 specific strategy
9:00 Dumb money vs SMART money
I agree with a lot you said, but you cant calculate your 1:36 risk ratio till after you close out the position. So unless you have a price target it's worthless when entering a trade. I also highly doubt after being up 100-200% you wouldn't take profits. Also your real risk to reward needs to account for how many trades you stop out of per successful trade. I understand this is a cherry picked example for learning, but most winning trades dont shot to the moon for 550%.
I calculate risk reward from historical data prior to a new trade. I'm also mechanical so leave trades to run regardless of being up 100% unless the indicators tell me otherwise.
You make it look so easy in hindsight
So true, but hindsight helps foresight 'sometimes'...
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Stan Drunkenmiller has Never had a loss year. Averages +30% per year. One year he made 1 Billion USD. Never uses a 🛑. Confesses that after 40yrs he can’t make the same returns since AI has taken over the markets.
I want to learn stock position trade do you trade position??? or swing
@@MartinSage source for confession?
Hi is the 20 week moving average the same as 100 day moving average ?
yes, although the chart structure would be different
Thank you for the great videos. I don't know how you calculated to 26k, from 1 to 36 leverage. Can someone help explain this? Thank you.😂
Is it like this?
1000x36=36k , 36k-10k=26k.?
When setting stop loss to manage risk, how to deal with a gap downs the break below the SL level?
They are not frequent and are part of the game
Great video, good inside view on how to trade pretty safe with leverage and the 10% risk factor! Thank you very much.
Glad you liked it!
Well said! I am also here to learn how to invest after listening to a lady on tv talk about the importance of investing and how she made 7 figure in 3 month, somehow the video taught me nothing and left me even more confused, I'm a newbie and I'm open to ideas on how to invest for retirement
@@ericalorraine7943lookup Priscilla Dearmin-Turner, this is her name online, she's now the real investment prodigy since the crash and have help me recovered my loses
Investment now will be wise but the truth is investing on your own will be a high risk. I think it will be best to get a professional👌
@@davidhudson3001Thank you, Going through her profile in her webpage, she smashed all her state certificate and accreditation🙏
But will the brokerage allow leverage for do many days or weeks or months?? Aren't they going to charge high interest? Did you consider the cost of interest in this?
In a low interest rate environment it is of little concern to me in relation to the returns. I mean, what is 5% per year leverage costs if it can make you 40%.....
Tremendous videos!! I needed to find this information years ago and implement it, but glad I have it now.
Glad it was helpful!
Great information but you left out one very important thing. How do you find those few stocks out of many thousands, like Zoom, that are going to be 5X'ers or 10X'ers to mostly limit your investing to? More than likely people will invest in stocks that have already made large gains over many years and hope for 10% and 15% returns for each of many more years. Maybe it would be better to focus the video on using these techniques in the more common investing circumstances average investors face?
Nice learning sir ❤❤❤
Will you please share some wealth creation module (strategy) based on technical analysis?
Regards
In this stratergy are you using a 20 SMA on a weekly time frame and do you take trade on a weekly close over 20 MA, please advise
Yes, I trade weekly charts
Isn't buy and hold a good idea if you can average down, and you're long term investment thesis is correct?
I would argue that your risk versus reward concept is 100% dependent on a theory of what the maximum profit will be. Happy to debate.
Great example! Do you have more examples of stocks with dates (more or less) where you executed the same strategy?
Yeah but what do you do when you have Amazon and Google when they range for a year. The 20 week MA and the Mac signal line will move above and below several times because they are in a range. What do you do for those type of stocks?
Hi Will - Remember this is asset bubble theory and is based on the weekly chart - Nothing is perfect all the time.
However I trade the same on any stock 20 MA, MACD, Consolidation, risk management etc etc with all this in mind I can be right just 30% of the time and still make money, because when it does take off the winners dwarf the losers..
In your specific scenario you can use the Stan Weinstein approach mate. GL.
Using stop loss, price could hit your stop several times before continuing in the up direction
Of course it could, but its how much you lose in comparison to the gain, not so much the frequency
@@FinancialWisdom if on every trade I want to risk only 1% of my balance and I buy with 1% of my balance, no leverage, no stop loss. All I can lose is still the 1% of my balance that I bought with. Is this a good management of risk?
Which market cycle phase Nvidia went in the recent month going from 142$ to 95 $ ? what is the difference between stock correction and 4 phases of stock cycle? Thanks
It's a great video for retail investors. Can you please tell how do you screen these types of breakout stocks?
Have have a bespoke scanner in the members area
Amazing priceless content!
Quick question -
Is your price action actually being made on the weekly chart? or do you go down to the daily time frame?
Also, do you leave the stop loss on the initial point? Aren't you afraid that the price will go up and you might lose great momentum of the up-trend?
Always a weekly chart. I raise the stops with the MACD signals.
Isn‘t ROR of public in zoom 1:0,33?
Some of the best videos on the market around
Thanks!
Why not buy puts as loss prevention?
Is this only to be applied to swing trading or can this be applied day trading? Additionally can this be applied to options?
You can apply time all time frames to improve probability
Did you buy ZM on that date at that price?
Are your services available for USA market too since I trade USA market, I see you are in UK and was not sure if your provide services for the USA market too
Almost all our trades are US based
Super vid and approach! But, in the final chart, doesn’t the use of the leverage change your risk/reward ratio of your approach to 1:26?
Ratio would stay the same, you can lose more but equally win more.
Fabulous video. Just became a paying member of the group and enjoying beginning to dig through your strategies.
How is it different from Stan Weinstein's stage analysis?
Not much
any good assets in this pattern right now? Thanks for sharing
Love your channel. I have a lot to learn and be patient.
Thank you 🙏
Impressive analysis. But, is this video recounting what you actually did, or was the case study developed only after the price movements were history?
Yeah that's the point..in real time you only know the highs and lows in hindsight.....there's also some defective reasoning about the leverage risk...you would only ever lose 100% if the company goes into liquidation, if the leveraged stop loss is hit you lose 25% of capital instantly, do that twice and you've lost half your capital. It can happen in a matter of minutes.. so then you're out, you lost money and then the stock can shoot right back up again and you would have been up if hadn't placed a stoploss, it's called stoploss hunting where the algos drop the price byba one share trade and set off a whole heap of stoploss orders which they buy up and then let the price run. That's why trading short or long-term is not for the faint hearted.. really you're just along for the ride...smart money dumb money...the manipulators and the manipulated.
Thanks for sharing your knowledge. I don’t see any videos related to Day trading on your channel. Any books or videos you can share?
I'm not a promoter of day trading i'm afraid.
I backtested this strategy on the SPX chart for example. The results are honestly pretty lame (historically speaking, not just the last 5y). It works best on a type of explosion/bust chart. But if you use it on a chart that constantly crosses the W1 MA20 the outcome is not very good. Besides it´s hard to define what "a consolidation" is, thus making the placement of the SL dificult. It´s very subjective. It probably it works for you, but I´m pretty confident to say most people would be better of simply buying and holding.
Beware - Its essy to show great trade in hindsight. Risk to reward is just one equation. What would also matter is win rate.
Spot on
Never miss your videos, I follow your concept
Thanks 🙏
Amazing content and great way of presentation. You made leverage approach quite simple. Thank you.
Thank you Dr
Can someone please explain "MACD"? I think I've heard that before, but I'm not sure?
Moving average convergence divergence
@@FinancialWisdom Thank you!👍
is this strategy suitable for long term investor ..because you use 20 day moving average , can we use 200 day mov average ..to avoid fluctuations
because of gaps understating your risk , unless you hedge with options, then you pay for that insurance
Is this a hypothetical example or a trade you really used for your method? Was there really a proper base prior to the breakout on the weekly chart (as defined by what you look for in a base) for ZM? I am not seeing a real base. Furthermore - did ZM meet your fundamental requirements at this buy point?
No i did not take a position based on my bread and butter strategy unfortunately, it serves as a good example nonetheless
So basically you are using a weekly TTM squeeze type indicator with MACD entry and exit? I already have such a TTM and MACD trading bot that does rather well.
My favorite youtube channel ♥️
Great!
I like your video and the way you easily present things. And I see that you bought the stock slightly after the breakout. But how do you know that it was a real break out that would continue to go up???... rather than a false break out that would reverse itself downward.
You never know you just have to manage the risk on each trade, being right just 40% of the time can be profitable. Its not knowing what will happen in each trade but after 100 trades.
That's why there is a stop loss
First of all it's another nice video, thank you for your time.
But, something caught my eye and I've found it weird. You projected yourself as even smarter money or maybe 'genius' money by applying RR differences between your approach vs 'smart money' approach. The thing is, smart money you described is full of assumptions which you created yourself. For example who says smart money does not use stop losses? Or how come you are not in the public crowd even you achieve a high success rate? All of these basic categorizations can be useful psychologically while in the market but they don't seem very accurate objectively to a highly chaotic environment, I don't know it just sounded a little out of touch.
As long as you make money consistently, you are the smart money. Don't get me wrong but you just bought a consolidation breakout before an epic rally and take your profits cuz of a macd crossover. In this case your main talent lies in your psychological aspects like patience and determination. I hope you make a video about your psychological approach to the market, like how can you restrain from taking profits early or convincing yourself to enter for that specific breakout etc.
I know my comment sounds negative overall but my intentions are not. It's a good video motivationally, I enjoyed it and have a nice Sunday.
just accept that you can't buy at the very bottom and sell at the very high. you never know and you can't control it. unless you are the market manipulator. what you can do is make a proper trading plan and stick to it. sticking to your trading plan is the real challenge. you might want to read books like trading in the zone, trading for a living etc.
Hi Eray - I appreciate your feedback, thanks.
You are right these are based on assumptions, but for me a typical example from what I have listened to over the years, and of course this is asset bubble theory which is sound, albeit not always predictive.
The videos always helps to provoke thought with some nuggets hopefully.
I agree
Finally i see a quality comment,not some fucking bots promoting gurus
the trouble isn't the trade itself, it's finding them to start with - how do you find these stocks? with a stop at 10% it won't take long to smash your account if you pick the wrong ones
No, a 10% stop loss against a 10% position size is only a 1% equity loss. If would be insanity if you were risking 10% of equity in each trade 😉
Very clear minded and sensible. Thank you. Subbed.
Thanks for the sub!
Um . . . Isn't the typical MACD parameter 12,26,9?
Yes
Hello... What I don't understand here is that why do you assume the smart money group didn't use stop loss?
I dont its an assumption based on what i hear
Everyone is smart when look back, but don't know before it happened
Not really. Smart people are sure beforehand, mostly because of the informations they have and their experience - if someone is "smart" only after the event, he's not really smart but hopefully he can learn from his mistakes.
Something you didn’t cover was the cost of leverage. Any broker house is going to charge you roughly 17% per year to utilize their money. Also the maximum I’ve ever seen allocated for leverage to borrow was 50%.
Why do you assume that "Smart Money" didn't place their Stop Losses??
Because its an assumption based on the majority. Ask Warren buffet if he places a stop loss into the market
@@FinancialWisdom OK, thanks for your fast answer. Anyway...they are supposed to be..."Smart", right? 😄
It is a great video with illustration. The power of leverage is explained so well.
Thank you so much 😀
ru uk based?
Hi - Yes I'am
Anybody knows if he adjusts his risk to take account of using leverage- is it 10% of leverage or 10% of his principal? The first will double his risk by 2
I missed it, it's 10% against the leverage
A stop loss that makes sense changes everything.
Do you always trade on the weekly chart with this way of trading?
I do yes
Thank you for your work and your passion as always, a pleasure to consume your content. Do you live off of trading? Do you believe there is a point in trading below daily time frames because of all the noise? I feel like scalping and day trading are way too stressfull/risky/time consuming to make a profit out of it
I'm not a fan of anything less than 1 day candles - trading costs also become a major factor below 1 day
Could you make a video to show how one can reduce whipsaws while trading using the MACD? In an ealier video, I think you mentioned using moving averages and the Dow Theory. It would be useful to know when things are going to be choppy. Thanks!
Combine with a 20 week MA😉
Do you use the 20 MA as a basis or reference point to trade ie. buy when prices are above it and sell if below it? It seems like 20 MA is a good proxy for the 6 month moving average of 26 EMA. Thanks.
Greta content! Are you using trailing stop loss?
Reach her on her teIegm
Investwithselina is her username
Using MACD yes
Why not move the stop loss up after prices rise? Like Stan Weinstein says.
Can do, many people including myself has variations to that principle
One or two examples do not make a reliable system. How many times and what type of systems have you back tested this approach with?
nice video as alway,s , i,m in the UK are you based in wale,s ? , i assume you trade only the US market,s ,something i may do next cycle
90% Uk market 10% european
Question: isn't this ROR assuming you are never stopped out? Using your method of utilizing stop losses at 10% you could just as well use 1% and exponentially increase your 'theoretical' returns. But it wouldn't be practical, would it -- because you'd be stopped out too many times. But in actuality the return is based not on risk over return but on amount invested (leveraged or not) versus the actual difference in buy-sell price. ROR seems to be a paper return, and not the actual amount returned from the trade. Am I seeing this incorrectly?
That risk and ROR part is a bit confusing, but looking at real returns:
1. At the price of $88, by investing $5000 you can buy 56 units - one more and you go above $5k - so you have 56 units bought at $88, worth $4928.
1b. Risk is set to 10%, so if price falls to $80 (I believe that risk of 10% means exactly this) you quit. That would make you sell them for 56x$80=$4480, which is a loss of $448, indeed 10% but of your selling price, not buying price. Which is weird, because 10% from $4928 i is $492,80 to be exact, so allowed risked quote should be higher than what we've got. Any thoughts about it would be highly appreciated.
2. If you sell at the price of $405, you get 56x$405=$22680. This compared to your entry makes 460% return (not 360%, even 405/88 gives you that, which is obvious). I wonder why he made this blunder.
3. If you leverage 2:1, this gives you $10000 to buy units at $88 - which makes you go not for 112, but 113 units actually. So you have 113 units for $88, making them worth $9944. Again no space to squeeze one more.
4. Now you sell those 113 units for $405, which gives you $45765. ROI is at 915%, not 720% - we're comparing that $46k to your initial $5k, right?
I wonder, however, where we should put the cost of leverage, because no one is gonna lend us money for free.But if the cost would be higher than additional return, why even use leverage? So it has to take only a small part of the returns.
5. And now the ROR - as a return on risk, you compare your results not to the amount you've put in but to the amount you'd lose if things go against you. And yes, it's pretty much paper thing, but it shows how crucial risk management is.
@@BluesyBor The first sentence in #5 brought it all together. Good job. Thanks.
@@DorianGreer I still think that stoploss at 10% is rather tight, throwing you out of many good trades too early (fakeouts and all that stuff). I don't remember if I saw it on this channel or another one, but someone made backtesting with whichever method that was and with different stoplosses, and 15-20% made best results.
But yeah, that's backtesting and there's your life where you don't know what will happen tomorrow. I'm not a trader, but I tried to get into this kind of trading (with various indicators and so on) and what threw me off was that all those MACDs and other stuff were recalculated on the last few candles when new ones were added - which made my decisions invalid most of the time, because MACD crossing which confirmed a good trade wasn't even there a few days later. I took screenshots to be sure I'm not making things up in my mind.
Yes, I know that's thanks to volatility, but if an indicator is said to take last 20 candles into account, then I suppose a plotted point won't change in the future - but it changed as if it took a few later candles into consideration.
So how do we find the next Zoom? This is the real question. Appreciate your other content though!!
That is the challenge and the thrill
one of my best training vids,,thank you
What moving average
Please.... I use a 20 week generally
Leverage is not free, comes always with a fee and for a 5k trade for 30weeks not a so insignificant one.
Its not that expensive when you consider the return benefits, I mean what is perhaps 3% when you create an extra 360%. Its a bit like a mortgage which allows for great leverage, even though you pay for that for 25 years in interest it is still the far superior choice.
The increase of smart money is 330%. You have to take into account that you already owned 107 dollar. Times 4,3 equals 330%
Excellent Gareth. Thanks. Have you considered doing a video on how to calculate a stop loss? I note you tend to use 10% which is probably fine for most trades. But maybe not for high or low beta securities.
Thanks William, Yes it could be worth it, I'm think of looking at youtube shorts so this might be a good quickish topic
great teaching, thanks a lot
You are welcome!
Very nice! Using weekly VCP to identify potential entry. I like using split screen daily weekly with the signal 50 SMA on the daily in conjunction with the 20 SMA on the weekly. Also like using the ADR as signal for increasing volatility. The explanation for ROR and selling rules is critical. Thanks for the video!
Thanks Dave!
I agree with the concept but not with the leverage, it's obvious you put it just to make it looks your method has a bigger return but in real live trade you would be very careful to use the leverage especially with covid market situation, don't get me wrong, im still a fan all of your videos but not this one. Cheers
Thanks Bobby, much of what I do is thought provoking, and sometimes over exaggerated to emphasise a point.
Have your approach had good result in bearish and sideway market ??
Yes by limiting drawdown and holding on to cash
using 10% stop loss is n't it too much? Bill oneal uses 8%
this works great for crap pump and dump coins!