Everything in Trading Clicked When I Finally Understood This

I'm sure you've seen kale say cheat sheet patterns like this before but have you truly learned to understand candlesticks Candlestick patterns rarely show up this clean every single time once I learned how to properly use candlesticks and Candlestick patterns my training drastically improved and I became consistently profitable if you want to be able to effectively use candlesticks you need to realize it's not about spotting the Candlestick patterns on your chart it's about understanding what the price of the market is actually telling you for a great example look at this big bullish Candlestick right here what this one Candlestick is telling us is that the price opened up here sold off really really hard and then reverse and closed pretty much at the same price and so what that Candlestick tells us is that the price tried to keep going lower and it got rejected now this is on a 15 minute chart and so every Candlestick you can see gives you information and so what you can do though is when looking at this Candlestick you can know it's showing you that there's a great reversal in the market because if if you actually dive into a smaller time frame chart if we look at a one minute chart now we're just looking at a 15-minute chart if we look at that same 15 minute section you can see that the price opened up here sold off really hard and then reversed back higher and then close at the same price and so that is a massive thing that you can do when you're looking at candlesticks is when you see any Candlestick you can read into the price and say okay that's what it's actually meaning that's what it's actually doing on a smaller time frame and then just these couple candlesticks next to it you can see they are kind of the same thing is the market kind of sold off reversed both of these candlesticks and then the market had a massive push higher and then if you just look at that over here the market kind of put it around tried to sell off a little bit and then had a massive push higher and so that is a big big key when you're trading is reading into those candlesticks because what they can do is they can allow you to combine things and actually find really good trade entry spots to get in the market and so a super easy way to use this is you can see the market kind of sold off here reversed and then it's essentially with this Candlestick it's showing you that the market attempted to break this low or retest this support area that it's making now and then it reverse very quickly and so with that information you can potentially get in on a buy right here after the Market's gonna go higher and that's how you can use candlesticks to effectively take trades now you don't want to just be using Candlestick patterns by themselves to make a trading strategy you want to be using other factors as well to stack the odds in your favor we'll go over a couple of things that you can use in a minute but I want to walk you through how you can now use this idea of reading the candlesticks to really understand what these patterns are shelling you because again these aren't going to show up perfectly like these examples every single time but what you can use is your ability to read into the candlesticks to understand what they're telling you and what the market might potentially do and so a really a clear simple example is a bearish engulfing Candlestick but so what a bearish engulfing pattern is it's telling you that this big red Candlestick is engulfing the Candlestick before and so all that tells you is if we kind of take all these candlesticks together is the markets going higher it's slowly trading higher it starts to kind of lose some momentum with this Candlestick and it actually goes up a little bit more but just based on this open here and then it reverses all the way down here it's essentially engulfing the whole previous Candlestick and so what that is trying to tell you is it's a massive switch in momentum the market kind of slowly goes higher kind of slows down loses its upward momentum and then there's a big switch of momentum to the downside and so these are really my favorite type of signals to get in on a reversal trade because you want to be looking for that when you're looking for a trade in the market you want to be using candlesticks as your final confirmation as okay we're at let's say a resistance Zone up here or resistance level and I want to see the market reverse off here but you don't want to just blindly be reversing when the market gets to a level you want to wait for it to lose that upward momentum start to kind of go sideways and then show you an initial momentum to the downside and then you can jump in on a short right here and bet that the Market's going to go down and so you can apply this to all of these Candlestick patterns pretty much all of them are showing you a loss of momentum and a switch in momentum as well if we just look at an example of this three black crow Candlestick pattern I don't really know the names of all these but I know how to read into the candlesticks and that's all that matters right all these are showing you is Big good bullish momentum it kind of starts to lose momentum and continue lower and so that shows you that okay we're starting to lose momentum it's likely that we break lower and so these three candlesticks are kind of showing you that it's showing you that it's lost momentum and it's likely to give back up that this move that it had and so after the pattern if it plays out how it's supposed to you then get some massive red candlesticks in the market then reverses lower and so you can couple using the candlesticks with other things to effectively make trades and so here's an example of a trade I jumped in and you can see this Candlestick right here is a really good engulfing Candlestick the market was kind of just slowly chugging higher here it doesn't really have any crazy momentum you can see there's multiple candlesticks here that are kind of just stacking on top of each other the Market's kind of losing momentum and then all of a sudden this Candlestick right here the Market opens here tries to keep going higher and then makes a really big reversal closing at the lows giving you a really big red body and so I like to use that as a good cover mate to jump in on the trade and so I jumped in after I saw that close and like I said before I don't blindly just look to take engulfing candlesticks like this when I see them you want to have a catalyst right because you know there's another one right here looks pretty good and that was not a good spot to get in what you want to do is you want to be taking these at a resistance level you want to have a overall reason you're expecting that the market to reverse at that level initially and then you can use this as a confirmation to get it another thing that I like to use is I like to make sure that there is the uptrend in the market into that resistance Zone that is actually broken because that's just another confirmation that okay well the trend into this support zone is broken and it's starting to lose Steam and then we get that kind of initial momentum down and then you can jump in on a trade and assume that the market is going to potentially reverse and make an actual downtrend now that's a really big key with trades in the market is making sure that if you're looking for reversal trades is you want to see kind of this area of consolidation where the market is starting to lose momentum Market can have really fast kind of v-shaped reverse muscles either on the highs or on the lows but those are really hard to capture and really not worth it when it comes to actually trading so here's another very similar type of trade and I want to show you another tool that you should use when looking for using Candlestick patterns and looking for trades and what I like to call that is either a retest or a pullback and so when you're looking for a reversal off of a resistance Zone like we have here you know we've already made sure that the market there's a really tight uptrend here the Market's broken that and so we want to potentially look for the market to break lower now a big important thing though is sometimes a big key that I have found though to increase your win rate is letting the market make this type of pullback right here so instead of seeing the mirror come up it makes a really strong reversal candle right here this is actually a really good pattern and so this might get you in trouble sometimes if you use patterns without this and so what this pattern is right here this is a really good pattern if you take kind of all these candlesticks right here is you have a really big bullish Candlestick and then it just has a bunch of smaller candlesticks where it's essentially just chopping around and then it has a massive big bearish Candlestick now this would essentially just be basically a Morning Star I believe what they're generally called but it's just a big bullish candle essentially a doji saying that price is not moving around and then a massive reversal bar and so that's what this is showing you as that's showing you initially you can use that Candlestick powder to say okay there's a big switch of momentum here this looks like a really good spot to potentially look for the mark to reverse after that you want to see okay it's going to make this little pullback and there's almost a little pattern here as well as you have a good bullish candle right here and then there's a couple little dojis here and then again my favorite pattern shows up you have a big engulfing pattern so that's a really good signal to get in assuming that the market is going to reverse because also what you have here is this is kind of a little sidetracked but you have two big pushes up the Market's made two really clean reverse or are moves to the upside and the market likes to do that it likes to move in pairs I find a lot of times it has a one push like this there's a little pullback here has another push and then it'll if that lines up with your kind of resistance zone or support Zone on the bottom side that's when you have a good chance that it's going to lose its momentum it's kind of made its moves and it has a good chance to reverse and so I've found when it comes to trading is using all of this together in terms of using Candlestick patterns trend lines Trend breaks support resistance how did all of those kind of align together at the same time is what makes a really powerful strategy of finding good trades in the market so to quickly go over that I kind of have a step process that I like to follow for getting into every trade and the main one is the first off you need a good support or resistance level in the market and then the next step is well you gotta wait for the market to come back into that level it's really important to wait for the market to come to a level you don't want to be reactionary to the Market you want to be waiting on the market to get to a level and then make a decision based on that and so then next thing is making sure that downtrend is broken right here we have a pretty clear downtrend in the market you can see right here it broke that downtrend and then it came back and kept going lower that's totally okay but at that point the downtrend is broken right if you look at just kind of this price movement in here it's starting to consolidate and then you know from here it was in a downtrend and now it's starting to consolidate and so what can we expect if we're looking for the mark to bounce off of the support level well if it starts going up it's probably going to start a potential uptrend and so next thing is looking for either that Candlestick pattern and a pullback and retest and so the market makes a new low here and it has a pretty nice little reversal Candlestick pattern into this area taking kind of these candlesticks right here it was a pretty big bullish Candlestick and then some kind of choppy candlesticks right again it's showing you that reversal and it has a really big bullish Candlestick and so it's showing you that the market reversed there it kind of make that pullback and then here here this Candlestick is a really big reversal Candlestick well first off it did that kind of pullback here and so this is confirming that that pullback is happening and so this Candlestick opens here reverses tried to go lower and reverses back up and so it shows you that the market attempted to keep going lower and attempted to keep that downtrend going and it got rejected because buyers came in they liked this area and they want to see that the market reversal that's where I elect to get in on a trade I buy and I bet that the markets could go higher and that's how I like to get in on trades having that kind of four-step process really made me consistently profitable I struggled at trading for years and years because I was all over the place I didn't really have a good play and a strategy and this has really changed things around for me now what I'm turning here is the es Futures and so they're not stocks or options it allows you to have really big leverage and a small account same time so it's really good for starting out and growing your account over time and so just to show you how this trade played out after the market kind of breaks in my favor a little bit and it has this move I like to move the stop to break even because you know if the market comes back and knocks me out or comes back to this area I want to get out you know it's likely that maybe we'll just chop around but the risk reward is not there anymore and then we have a little pullback here and I move my stop up to that I use a more fluid management style I like to be able to read the market see what it's going to do let it play out because you know maybe I'll get a good return if the market just kind of whips up here right I want to let my Runners win and cut my losses when the market goes against me and so move my stop up here and you can see there's a little uptrend now and so I'm gonna manage with that little uptrend and so once the mark kind of breaks that up Trend you know I'm looking to get out because I've captured a really nice swing here I've got two to three times where I risk on a trade and that's what you're looking to do when it comes to trading is you're looking to just get consistent wins over time and so in this video I definitely went over a really quick overview of my actual strategy here if you want a more in-depth strategy and explanation I have a free class that I link in description of this video and if you want to just learn more about Futures and have some more trade examples check out this video right here it goes way more in depth into what Futures are and how to use them to consistently trade in the market foreign

Channel: Riley Coleman

Views: 74,731

Keywords: live day trading futures, day trading strategies, futures trading, futures trading for beginners, futures trading strategies, trading strategies, trade ideas live, day trading live, stock market for beginners, price action trading, Price action trading strategy, price action trading system, price action trading live, price action trading for beginners, price action trading small account, trading price action, Trade ideas live, live day trading, scalping, scalping strategy

Id: tZIZKA1Ns1c

Length: 13min 27sec (807 seconds)

Published: Sun Jun 11 2023