How to Trade Stock Market Cycles & Stages

hey guys Jared Wesley here of live traders and I'm back for another educational lecture this week's topic happens to be market cycles and market stages okay understanding what a stage one is versus a stage two stage three stage four we talk a lot about fear and greed and the need to be right and apathy and a tug of war in a stage three so this week's lecture guys about thirty or forty minutes it's understanding the stages as well as matching the stages okay you don't want to be shorting a stock that's in the stage two uptrend on the daily and you're shorting it on the 15-minute chart many of you are making these simple novice mistakes and I'm here to tell you stop doing that so I explained that in the lecture and I also talked a little bit about ego trading okay ego trading is when you let your ego trade for you in spite of what the chart is actually telling you okay so guys you don't need to be right you don't need to be the first person in the trade you don't need to prove everybody else wrong trade proper okay and I'll talk about that in the lecture so we're going to talk a little bit of like I said about the market cycle and the stages we're talk a little bit about ego trading I use a lot of examples of trades where you match the daily in the weekly chart with the lower timeframe as well and one of the things I want to leave with in part with you guys today is this I always talk about how challenging this business is and it is and the reason that is is because of ego most of the time people just they just have to be right so use this mantra write it down I didn't come up with it but I think it's a great quote guys great traders control risk bad traders chase gains great traders control risk bad traders chase Jake gains do not be a bad trader guys make sure you have an entry a stop loss and a target for every trade you take before you take it before you take it have a trading plan don't blindly follow other people that's called gambling okay so I hope you guys enjoy this lecture we're going to get to it in just a second as always if you would like a 30 day trial into the live traders chatroom you can get that for $1 $1 for 30 days if you email info I n fo at live traders dot-com info at live traders dot-com for a $1 30 day trial alright so market stages market cycles let's get into it I'm Jarrod Wesley let's get started [Music] okay guys today's topic is market cycles and matching timeframes understanding the four stages I'm also going to talk a little bit about ego and how it is very very detrimental or deadly or expensive or whatever you want to call it to your trading okay so I've been getting some questions comments emails from folks about you know just looking more into the candlesticks we've talked a lot about money management lately and I think the last two or three weeks we've done a better job of getting more into just the candlesticks and I want to say this because I think I say this every time I do candlestick lectures I get it guys candlesticks are sexy I get it it's the Victoria's Secret model of the trading industry but that is not ultimately what really makes you money what makes you money is risk control proper trade management having a trading plan proper money management those are the things that ultimately make you money in the long run and I said it today and I'll say it again good traders control risk bed traders chase gains it's that simple good traders control risk bad traders chase gains but that's not today's topic so I want to talk about the four different stages in the market and what you're supposed to be doing during each stage as well as good trading is matching the timeframes from those market cycles and market stages so to speak all right so let's uh let's just dig right into that and without further ado so this is a basic market cycle okay profiting from bull and bear what is that profiting and Bo and bear markets Sam Weinstein right secrets for I have the book in front of me anyway the basic market cycle guys we have a stage 1 stage 2 stage 3 and stage 4 those are the four stages ok and every stage goes in order one two three four one two three four and they start over and over and over again so I'm not going to go as crazy detailed as I would if I were in professional trading strategies but the key here guys is understanding the emotion in each stage that's the key so when you think about stage one guys its apathy its accumulation so what does that mean appt basically means nobody cares okay it's you're indifferent you're apathetic to something you're you're largely indifferent to it and we're going to see some examples of these but basically and so what okay nobody's really noticed yet nobody cares yet that's the general criteria of a stage one typically more narrow range typically the volume is lower etc and so forth so it coincides with not really caring right so you would imagine if nobody cares about something there's not going to be a lot of volume in it there's not going to be a lot of range in that stage Stage two is the stage where the average person typically makes money right that's greed or demand and this is where in fact I'm blown away when I do some of these lectures not only for you guys but also on YouTube how many people don't know what shorting is it's shocking to me especially after the movie The Big Short came out so many people don't know that you can make money when the market goes lower but what does that tell me it tells me that yes greed stage two is really the only stage that the average person makes money in right outside of us traders who can make money in all four of these stages and we'll talk about that in a minute the average person on the street in America around the world only knows how to make money when the market does one thing and that one thing is go up your job is to learn how to make money in each one of these stages now I'm not saying that you have to trade in every one of these stages we'll talk about that later too what I am saying is you should know how to make money in every one of these stages unlike the average person who only knows how to make money in a stage two then we come to a stage three which is anxiety it's a tug of war back and forth distribution basically what happens in a Stage three is buyers and sellers disagree okay one faction says stock goes higher the other faction says no stock goes lower and they they basically fight it out it's a tug of war back and forth and this stage is typically wider range than a stage one it's wild it's whippy the volume is usually above average so it's the antithesis of a stage 1 stage 1 nobody cared stage 3 everybody cares but the opinions differ now see in a stage 2 everybody thought oh stocks going higher and everybody agreed on that stage 3 is where the disagreement begins and a stage 4 obviously is when the Bears take control sellers take control and stocks tank and you'll note not always but most of the time stocks drop faster than they go up now that's the basics here okay stage 2 uptrend you buy the pullback and you buy the breakouts right so you see a pullback here you buy it and then you buy the breakout stage for you short every break down you short every bounce on the rally here you short this short this short this etc okay so that's the basics now the question then becomes is what is the thought process behind this so that's what I want to take a couple minutes and explain to be honest with you I could probably spend 30 minutes an hour two hours just talking about the market cycle okay but I give this analogy frequently when I talk about market cycles but this is I use a fashion analogy ok so just bear with me for those of you that have never heard this um when you think about fashion trends ok the designer goes out and they make something they create something that nobody knows about it's new to them ok and then they slowly release that product now when it's new to them that would be our stage 1 nobody knows about this new product yet okay it hasn't quote hit market yet alright but what do fashion designers typically do to get their product out there well they get it in the hands of the most influential people and the most influential people are typically celebrities okay so when you think about that if you're Ralph Lauren or if you're Gucci Prada whatever whoever doesn't matter and you want the most bang the most impact that you can get you want famous people wearing your clothing using your product why because they have a huge amount of followers right you want if you're young you want Justin Bieber wearing your jeans you want I don't know Kylie Jenner one of the Kardashians is doing white because they have tremendous following so those are the people that get in early why because they're the first people to know about the product they're the first people to hear about the product well in the finance world those people are what large banks and institutions Goldman Sachs maybe a hedge fund of some kinds people that have quote the inside track those are the ones typically that get in at the bottom you're right as a stock breaks from a stage one into a stage two and by the way in a week or two maybe three I'm gonna do a lecture on transitions okay I'm not gonna talk about transitions today but anyway all of all the famous people get in down here on the clothing analogy all the big boy big banks and institutions get down here in the finance analogy so as the stock moves higher as the fashion trend continues what happens it's not just famous people anymore now it's people with money right so not every Joe Schmo can afford to buy the latest $300 pair of jeans not every Joe Schmo on the street hears about a stock after goldman sachs talks about it okay so then it's kind of like the people that are connected but aren't quite famous the people that are connected but aren't quite goldman sachs smaller banks smaller institutions people with leverage and pull in the industry they get in here then all the average people start taking in up here right the people that are kind of in tune with the market the people that are in tune with fashion okay by the time we get up here guys by the time we get here who's getting it all the people that are last to know right this is when products are now in all mainstream over here products are at the gap I don't know they're at what are popular stores these days I don't know guys okay anyway so that's when everybody the average person's getting in and then the last bit of stragglers get in up here why this is when clothes get to Walmart t.j.maxx Kohl's when things are cheaper fashion industry this is when you know the flow libraries are no longer terribly interested in the product because what is happening here this is where banks are getting out I'll repeat this is where banks are getting out but what's the Main Street America doing getting in okay so let me repeat this again banks are now upgrading the stock at this point why because they want that last pop in the stock they want to drag you all in all you people that care about upgrades and downgrades they're sucking you in trust me there's an agenda okay and all this is where all your clothes are at t.j.maxx Kohl's Walmart Macy's whatever okay and then what happens the stock starts to pull back but before it pulls back here's the question also guys why do so many people get in so late okay why do so many people get in so late I'll tell you why because of this over here okay what happens to the average person who's in the stock market they typically lag the market the average person underperforms the market also had to do was buy an index fund but they lagged market why because of emotions so what typically happens is they remember the last time that the stock market tanked they remember the last time they were in a trade that didn't work they remember that so what do they need to get into a trade they need confirmation so they don't want to get in down at the bottom when you're supposed to get in because that's not confirmed enough because they're thinking well maybe it's just peekaboo and it's going to come back they don't get in in the middle why because they remember what happened last time like oh I'm not gonna be suckered into this thing there's no way I'm gonna get sucked into this trade because it's gonna pull back and screw me like it did last time so finally by the time it gets up here two things happen tons of Confirmation and FOMO fear of missing out so by this point they're like - maybe this moves for real this time maybe this isn't some fake move maybe this is for real I'd better get in this thing that's where the FOMO comes in and then they get in and they're the last few people to get in because now the institutions are smiling Don sweet take that upgrade I'm selling into you on that upgrade so all the celebrities are getting out that that's that fashions old news at this point they don't want that they don't want skinny jeans that shit's old school okay they're onto the next new thing so they're selling them to you and you're all buying them at Walmart goldman sachs is selling you all their shares after the upgrade and then you get the tug of war these people that just got in aren't going to get out oh gosh no that's going hire these people over here saying you know what hmm this thing doesn't look so good I'm gonna get out so all the smart people get out up in here up in here and then you get that tug of war stage 3 where there's a bunch of people who just got in and their ego won't let them get out they won't they can't see what's happening here so they hold on and then the institutions come in and finally seal them to their fate the stock drops pops drops pops and the regular Joe's don't even get out here and then what happens fire sale happens fire sale I use the restaurant analogy okay you got a hundred people eating at a restaurant some are eating it near the front door some are eating in the middle of the restaurant some are eating in the back of the restaurant but people are eating in this restaurant and somebody else fire everybody runs for the door what happens only the people closest to the door are lucky enough to get out on the scathed right those are the people over here this is basically after Goldman's screwed everybody and all the big banks got you on the upgrade now they're downgrading this dock okay and pulls back the first people near the door get out and then it gets ugly and it gets ugly quick and all these people are sitting in the back of the restaurant all these people that got in late up here the the FOMO people the extra confirmation people why because the average person lacks confidence they really do they lack confidence they need so much confirmation that by the time they get it the stock is extended so they're getting out down here because they're the last ones to get in they're going to be the last ones to get out and right right about here is right when the big bags do that last sell alert Oh get out of this why they want one more push down to screw you guys off because they shorted it up here so this is the basic mindset of how the market cycle works and then it starts all over again and the average person is always late to the party because they need extra confirmation and they have FOMO you don't want to be the average person every trend has a matching action mo modus operandi every trend has a matching action ok you don't want to be buying up here you don't want to be shorting down here so this is why folks in the chat room when I hammer you guys when a stock is up five bars in a row and I go what are you thinking that's novice thinking I don't care if it goes up eight bars in a row you're never gonna get in after a fifth bar up we talked about that a couple weeks ago three bars up think sell four bars up really think sell five bars up really really think sell don't be a novice don't have FOMO let the market cycle let the stages be your guide okay so here's a basic example over here narrow price action okay not a lot of volume nobody really cares and stock gaps up and rips this is the beginning of the stage to uptrend this is when all the institutions get in ok so you get in on this first day and all the big banks are going yeah we know we know we're the ones who actually gap this thing up so they're actually in it like 6 bucks right because they have all the inside information moves up the pros are getting in still up here and then the novices do this 1 2 3 4 5 oh yeah 5 bars up after a massive boom I think I'll jump in right here FOMO confirmation bla bla bla bla bla stupidity is what it should be called because that's what it is so they get in all the way up here and then what happens immediately the stock pulls back why because these people down here want their profits right they got you all to buy that they all they got you to push it up an extra 5 bucks and they're like sweet I'm gonna sell into you now and that's what happened and you just got into everything well I'm not gonna get out just yet I just got in I I'll sit through the pullback it's gonna bounce again and then the other thing happens you know though you know a lot of traders joke and they're like man I just should do the opposite of what I actually do and I'll make money every time I get into a stock it immediately pulls back it's because you're getting in after six bars up Oh every time I short a stock it immediately bounces why cuz you're getting in after four bars down stop being stupid use your brain okay so the stocks up six seven bars it immediately pulls back one last-gasp but this is that tug-of-war we talked about it fails one last get it fails and then once it breaks $20 it is over stick a fork in it and it comes drop bounces drops not quite a hundred percent but about eighty percent this is a real stock and a real market cycle these things really do happen the emotions that go here are real fear greed and the need to be right are what works and runs the market fear greed and the need to be right so it's people that are scared people that are greedy and then ego is everything else and that's the need to be right okay and that's what it looks like all right don't be still foolish don't be stupid if it's up this much don't get in you have no business getting into that stuff okay now now I want to talk about matching stages okay your job guys is to take the macro and match it with the micro so that's simple stop making trading so difficult on yourself you take the macro uptrend and you match it with the micro up trend so let's let me don't get me wrong or don't give me a moment I'm gonna show you guys some real-world examples of this but what I want you guys to see here is take the big picture here put a big circle around this now I want you to imagine hypothetical imagine that what we're seeing is a five-minute chart but the big picture is a daily uptrend all right I want you to imagine we're in a daily uptrend don't don't worry I'll show you a picture but right here we're looking at what a five-minute chart your job is to match the 5-minute with the daily but what do we do we always use the top down approach which means we start with the daily chart you start with the daily chart if the daily looks like crap we don't care about the 5-minute of the two minute of the one-minute because the dailies crap so start with a good daily and then work backwards okay so in this case we're gonna imagine hypothetically the daily looks good so the daily is in an uptrend so let's start here at the micro three okay you don't buy up here we've talked about this you're up four or five bars or not buying right here micro three you're not buying here when you get the micro for micro one and then early micro two we're looking for what stage to stage match okay so we're already in a macro uptrend now what do I need a match on the micro timeframe so you're gonna buy down here when the one turns into an early - that's your buy moves higher or we have a micro stage 2 micro stage 3 micro stage 4 what do we have micro stage 2 stage 2 stage match should we short right here what do you guys think should we short right here yes or no right here on this little micro stage 3 should we short the stock right here what do you guys think the answer is unequivocally absolutely completely and totally no no.0 you guys got it all right why because we're in a macro stage - uptrend this isn't climactic yet this isn't parabolic if the big timeframe is higher and the lower timeframe is also higher why would you short a non extended stock you would never do it people try to pull the cheese from the trap which we'll talk about later that's ego trading okay we don't ego trade we trade for money okay so stock pulls back sits at some support right there to the left we'll talk about stage to match the timeframes higher time frame uptrend lower timeframe uptrend that's your buy signal okay so guys here's what it looks like macro stage 2 micro 3 just wait macro to micro 4 wait macro to micro one Lock and Load you got your gun cocked it's ready bullet is in chamber you are pointing at the target macro to micro to fire that rifle wait wait lock and load fire the rifle guys be patient sometimes they don't give you this this fire signal you're locked and loaded and it just keeps going lower be patient okay wait wait lock and load fire that's how good trading happens matching the higher time frame with the lower time visit let's take a look okay so here is a daily chart so how should we trade this now remember this is a daily chart okay so the stock that's in a downtrend bounces retest bounces pulls back consolidates breakout pullback now that's what it looks like I've added nothing to this on the next slide I've added some lines and arrows etc and so forth okay so this is what it looks like without anything on it this is what it looks like or I should say the way it's supposed to look like okay so over here we have a little bit of a breakout it's breaking above resistance this line should technically be red but nonetheless alright and it breaks out what you're looking for on this day right here where this little arrow is this blue arrow you are looking for a lower timeframe entry of any kind any kind it could be a breakout on a 2 minute it could be a 5 minute buy setup it could be a 1 minute 3 bar play it doesn't matter the daily is breaking above the 1375 range and it has room to this pivot that pivots roughly $15 you have about $1 to play with on this trade why the higher time frame daily chart is breaking out drill down to a 1 minute 2 minute 5 minute of 15 and find an entry that is your job ok over here we have a daily buy setup and it triggers so with the daily buy set up triggering you have two choices you can literally buy the daily buy set if you can get in at 14 with a stop at like 1350 right that's the daily by setup trigger $14 right here with a stop at like 1350 you could buy that and ride it up to 16 that's four to one on your money there's nothing wrong with this totally acceptable or you could buy the daily on the buy set up and you could trade it on a two minute five minute one minute chart as well with a three-bar play a buy set up a breakout whatever you want does that make sense you're matching the time frames the Daly has a buy setup now drill down to the 5-minute and see what you can find you'll get a better entry that way too now let's move away from this for a quick second down here is this a good buy area now most of you are gonna say no for the simple reason that have failed but if you cover the future the question is would you have bought this it's a good question if you could cover the future put a piece of paper over this would you have bought that and the answer for many of you would be yes but you shouldn't be buying this it's too aggressive you're still below the moving average you've just barely broken the trendline and another big reason is this wide range red bar okay so for me this is too sloppy to buy over here I want more confirmation extra confirmation we're gonna talk about this in a few more minutes don't let your ego trade for you this is where ego traders get in why I want to be the first one in I want to prove to the world that I was right I'm gonna be the first one in and that guys if we're right this thing's going back to 21 bucks so good you got in a buck or two before me so what it's still all about risk to reward 50 cent stop-loss back to 21 gives you I don't know ten to one on your money more than that okay so you don't need to be the first person and you don't need to be overly aggressive always look for extra confirmation this is a great buy setup now what I short this stock on the way down here no I wouldn't even on a micro timeframe I wouldn't this pullback is fully acceptable it pulls back to price support back to a rising moving average but I'm not going to short this stop on any timeframe right here let it go why would you want to short this stock it's strong it's proving it strong and it's pulling back to support okay let's do it again now this was actually an email that was sent to me recently you can see this trade is from I believe it was yesterday actually okay this wasn't the question the person was asking but we're on the 5-minute time frame of immu okay and what we have here is what a little cell set up right higher low higher low to green bars stock is what down trending lower high lower high lower high lower low lower low right down trending and somebody said hey what do you think about immu at 1875 stop-loss would be like 1882 so about a seven cent stop-loss okay you look at that you your first thought is that's not the worst thing I've ever seen right I mean this stock is relatively weak right here lower highs lower lows higher low here two green bars little doji bar red bar right you're gonna try to get in right there you think okay it's got room in 1860 and then it'll probably go lower maybe I get one to one down to 1860 and then it's gonna go low right that's what people are thinking but this is what happens when you don't match timeframes wait for it guys why in the world would you ever consider shorting this stock okay it just broke out over 18 dollars it's clearly in a strong daily uptrend here it broke this prior pivot yeah it's a little sloppy here and then on top of shorting it at 1875 what is to the left remember Beyonce said look to the left to the left to the left what is this line here and lines like I don't know 1865 1870 support and even if you get below that there's more support at 1840 okay I mean it's garbage right here it's not a stock I'd love on the long side it's not a stock I'd love on the short side but what happens to vacuum traders is they get caught up in this little micro five minutes l set up without looking to the left or looking at a higher time frame it's a daily uptrend why would you just just curiosity why would you want to go against a daily stage-two uptrend there's only one reason FOMO or just stupidity right I mean maybe you're a new trader and you just don't know that's a possibility the other one is FOMO you just fear of missing out but look what you're shorting into you're shorting into support right here you're shorting in a more support right here at the bottom of that the bottom of that the bottom of that I mean why would you want to short this top you can't find anything better in the world to short than this and if you can't then just don't take the trade right always ask yourself is this the best I can find is this the absolute best I can find if the answer is yes double check the stock and then ask yourself is it really good enough to trade okay is it good enough to trade sure there's gonna be some people that say well I just want a micro-scalper you could it's still aggressive and then the question becomes why why do you want to be so aggressive you could might you might get away with it you might be out of microscope this for five or ten cents but why what are you hoping to gain an extra hundred bucks in your life for that kind of risk is it worth it microscope something really good something that's not sitting whoops something that's not sitting right on support right a nickel from support why would you want to do that it doesn't make any logical sense okay so this is why people do stupid things guys it's right here egos for many traders it's ego that rules the day I was the first person in it I pulled the cheese from the trap everyone said it wouldn't work tell me it's never happened to you you know damn well it's happened you come into a chat room and some of us I wouldn't take that or maybe I say I wouldn't take that I I know it's true how do I know it's true because everyday people ask me about trades all day long and some of them I like a lot of them I don't like and I said I would take that and then what inevitably happens when it works 30 minutes later an hour later who do I hear from the person who took the trade hitting target right now they don't say haha Jared they round about slap you right it's like one of those backhanded compliments I said hey I don't like that trade I don't think it looks good an hour later hitting target on XYZ right now great good for you and I my comment always is don't spend that money the market wants it back why you won the wrong way winning the wrong way is not winning it's getting lucky I mean your feet winning the wrong way is not actually winning it's called getting lucky okay don't spend that money cuz the market wants it back alright be smart don't let your ego trade for you guys just just read this line and this is everything take the easy money and leave the rest for the arrogant egomaniacs who need to be right and want to challenge all the time that's it it's that simple re-read it again let's reread it one more time take the easy money and leave the rest for the arrogant egomaniacs who need to be right and they want to challenge all the time and they want to turn six hundred and twelve dollars into a million why would you want that take the easy path take the stuff where the stages match it's a high quality trade with relative strengths or relative weakness to the market and it's one of those like wow I can't pass up on this it's so good you don't need to be the first person in you don't need to pull the cheese from the trap and you don't need to prove everybody wrong that's not what training is about it's about making money and the easy money hence easy money is a lot easier to make than the hard one hard money easy money it's just money why would you want to make it harder on yourself the bank doesn't give you any more or less whether you made it the hard way or the easy way it's the same amount of money make it the easy way okay so for me I prefer smooth easy winners over choppy sloppy all-day slugfests I'm not interested some of those trades will work they're just not worth it to me so again take the easy money match the stages don't let your ego trade for you it's just not worth it having said all that some of you're gonna do it anyway so let's take a look okay this is this is kind of ego treating right can you make money here yeah of course you can make money here is it easy no it's not easy what do we have a sideways sloppy stock sure you can buy the bottom and sell the top and buy the bottom so sure you can but remember you don't know the future I'm showing you the future so you're going oh that's a no-brainer yes because you know what the future looks like try to buy these sloppy pullbacks guys see what happens now some of them are better than others like 1 2 3 4 5 6 7 red bars down to a double bottom support that stock should bounce but is it gonna be easy no and you can see that it moved up pulled back 80% and then went higher I'm not interested in this just give me the easy stage to uptrend the easy stage 4 downtrend or the transition area by setup which I'm not talking about today give me that stuff you can make money inside this jar you absolutely can you're gonna work damn hard for it though I don't want to work that hard I'm just I guess I'm lazy when it comes out I just don't want to have to work that hard when I know for sure there's a stage 2 uptrend out there somewhere or a stage 4 downtrend out there somewhere ok and I just had to throw this in because I'm getting tired of answering this question guys I use dollar gainers and dollar losers okay and I scan with a 60 minute and a daily this is all I look at in the morning you're looking at the gainer side in the lose side I use a 60-minute chart I use a daily chart and I just go down the list click click click click click and I look at what daily and what 60 looks good that is it top down approach top down I don't look at the 5 minute first I don't look at the 2 minute first I look at the daily in the 60 minute first if it doesn't look good enough on the daily or 60 it will never get looked at on the 5 minute or 15 or 2 minute stop trading in a vacuum match your stages ok stop trading in vacuums dollar gainers 60 minute chart daily chart dollar losers 60 minute chart daily chart that's it okay so now isn't this is so much easier what the trend be your guide the trend is your friend those silly corny mantras right by the break out after it breaks above resistance right this is that stage one over here okay just by the easy money breakout add to it when it breaks out again and then ride the wave all the way up over here I probably be out by that point right it's such a nice move up and pulls back I probably would have been out but you get an opportunity to get back in and move higher it pulls back beautiful by setup and right it rides the moving average the entire way wait till it breaks resistance I don't need to be in down here at $22 I don't need to be the first person in that's ego trading why because you have resistance to the left as soon as it bounces there's resistance here just wait for it to break above everything which is the redline by the breakout here add to the breakout there by the pullback here keep it easy life is easy here in the uptrend life is easy in the downtrend you know where life isn't easy right here this is hard man it's money the hard way but hey some of you guys you just gotta have it you just gotta have it that way don't you just gotta have it that way you got to come in with no experience risk $1,000 a trade blow up your accountant and just call it quote experience no it's just stupidity all right keep your day job cuz you're gonna be there a long time alright so let's take a look match the stages guys match the stages so we start with the daily what do we have stop yapping down take a look note where it's gapping okay so it's gapping see the top and tail it's gapping down the the green line was support that's what $18.25 give or take something like that so this stock was generally pretty choppy not a good stage to uptrend not a good stage through four downtrend just chopped okay but it gaps it down under this pivot and under this pivot so now I know it's it's going lower there's nothing to stop it from going lower so what's my job now just find a lower time frame entry a wide range bar narrow range bar drop it faded the whole day went lower the entire day it's a little bit of a wide stop a little bit concerned about the range potentially but this is actually a decent range trading stock so you get in like 1760 give or take stop losses like I don't know 1790 so got like a 30 30 cent stop-loss and it goes about a dollar a dollar ten three two one on your line why because the daily you match the timeframes match the stages okay do it again what do we have here let's look to the right never start with the five what do we have Oh a weekly three bar play look at that wide range bar narrow range bar breaking out over $70 on a weekly three bar play let's drill down to the daily I'll look at daily breakout so the weekly looks tremendous the daily looks really good what's my job drill down stay and match the stages Stage two uptrend on the weekly stage two uptrend on the daily let's find an entry to minute 1 minute 5 minute 50 doesn't matter let's just find an entry Oh wide range bar now arrange bar a little 3/4 bar play rip right that's it you're in here like 69 80 may be stops like 6960 20 cent stop-loss what it looks like anyway okay maybe it's 30 I don't know it doesn't matter it goes up over a dollar and it pulled back a little I would have been certainly out before that but it went a dollar 50 or more two dollars almost but this initial pops all you needed you only had a 20 or 30 cent stop-loss anything went a dollar twenty dollar thirty four to one on your money five to one six to one on your money watch weekly looks great daily looks great could you swing trade or core trade this sure you could you could take this as a core trade at $70 right put your stop under here use the wider stop and court rate that you can also intraday trade it you see how much easier life is when you just stick with the higher time frame stage and trade within that stage right let's try it again okay totally different type of setup right totally different type of pattern okay now what we've a stock that's really choppy here let's be honest right it's really choppy moves up pulls back moves up and then it opens the day here like 110 okay and comes all the way down here what's down here support right buyer stepped up here by your stepped up here anything ripped so when this happens Oh interesting this is like a stage within a stage because realistically this is more like a stage one right 102 102 102 103 right it's showing a lot of support here this is realistic more like a stage one of a stock that was trying to push higher but then started to mess around a little bit and you come all the way down and support on a massively extended move look at this waterfall super wide range bar super wide range bar super wide range bar super wide look at the volume guys look at the volume here then nobody cares volume look at the volume here right nobody cares range narrow range nobody cares volume boom look at this self everybody cares this stock was barely doing 10 20,000 shares right / 2 minute bar now it's doing 550,000 shares every two minutes when I repeat this for a second it was doing 10 to 20,000 shares every two minutes now it's doing half a million shares every two minutes you don't think there's any interest in this stock you don't think the big boys are looking at this as an opportunity to get cheaper prices on this stock of course they are jump in right jump in find an entry here on this climactic setup and write it back up this is matching time frames it's not it's more advanced than just biased age - on a daily and then drill down to a two-minute stage - it's more advanced than that but you can see how the stock was extended into support and this is an area previously bounced and this is an area it should bounce again 103 right there at the bottom 103 right there at the bottom this is how you match time frames okay it's how you match time frames so keep it simple on yourself there is a modus operandi there is an action for every one of these stages my recommendation to you guys is this stages ones and stages threes just don't trade them if you're new or specific if you have experienced these can be wonderful areas to make money if you know what you're doing but if you want the easy money to slap you in the face easy money to stick to stage two up trends in stage four down trends again guys I don't want to hear your excuses you're new and you're not profitable sticks the stages twos and fours and I don't want to hear anything about this but but but but no there's no buts it's just your ego you're not ready yet keep your toolbox simple one or two patterns stage 2s and stage fours when you gain experience which means consistently profitable over six 12 18 months then we can start talking about how to take advantage of stage ones and stage threes which are transitionary areas and I'll talk about that in the next lecture that I do we'll talk about transitions okay they can be massively lucrative massively profitable but they're also much more challenging once you understand them though Wow truly impressive right really profitable right now stages twos and stages fours keep the money simple keep it simple buy the dips and breakout short the rallies and breakdowns okay and again don't let your ego trade for you that's just dumb all right that's just dumb so not quite as long as some of my other lectures but I think I got to the point match the stages guys and life will be good demand quality demand it okay a lot of you guys doing foolish things are your it's FOMO it's fear of missing out because I didn't take a single trade today I couldn't find one I liked it doesn't happen often but I just couldn't find one I liked so what what's the harm if I don't take a trade today I don't make any money so what but you know what I also don't do I don't lose any money either think about it see trading is unique any other business right normal business you get paid good day bad day you get paid anyway that's a salary position sales job good day you get paid bad day you don't get paid trading good day you get paid bad day you lose money most jobs don't have that other component the losing money component okay be smart remember and I'll leave you with this great traders control risk bad traders chase gains great traders control risk bad traders to chase gains alright hope you guys enjoyed the lecture I'll see you guys again next time to get more great educational content subscribe to the live traders youtube channel this way you'll get email alerts every time I upload a new video

Channel: Live Traders

Views: 37,159

Rating: 4.9542704 out of 5

Keywords: stock market, trading, stocks, traders, trader, daytrading, daytraders, day trader, day trading, day traders, daytrader, online trading, technical trading, learn to trade, how to trade, live trading, trading education, trading seminar, live daytrading, money, finance, business, power, freedom, wall street, lifestyle

Id: g9exe7zkpOs

Length: 45min 27sec (2727 seconds)

Published: Tue Dec 03 2019