They failed to realize that they didn't need any of the stuff that was below the price all they really need The price Some people may not believe me when I say that and that's what I'm hoping that we can accomplish by showing this session so this session will be on reversal patterns and Next week they intend to do continuation or trend trading patterns Let's get started. I'm just going to reset that art with a million Things on it my regular There we go Here's my regular left side is daily chart right side is the 15 minute chart. I'll just put that away for a minute Okay, so Let's start with Different types of trading patterns reversal patterns the first one is a single bottom or single top I Have a touch screen so hopefully you guys can see this in real time and it'll look good We're gonna just make sure we have Pen here is red There's a single bottom look like that is what a single bottom looks like got a bottom here a little bit like that You see that single bottom Happens on single bottom most people think oh, I've got a bottom therefore I can buy here and as you know It's just gonna shoot up to the moon The reality is that is not What will usually happen is This And if I was to draw a single top Do it like this That keeps going Okay So single bottoms fail 64% of the time now throughout this little series that I'm done. I will really relate some statistics Those of you who are trading single bottoms You're looking at the price if you're looking at the price only or even if you're combining it with some with some sort of indicator 64% of the time it's going to do It's going to fail we need to understand that because what you're really saying is two-thirds of the time I'm gonna lose If you went to Las Vegas and you sat up on a table or whatever car table or whatever game you wanted to choose And the person said welcome by the way, you're gonna lose two times out of every three How long would you stay? Maybe you might stay a little bit more than most people would probably not stay at all They would leave say look the odds are not in my favor for me to win I'm not gonna do this and therefore I'm leaving That is exactly what you do when you buy a single bottom on a price chart They're literally saying I'm willing to fail two-thirds of the time That's what I'm gonna do and when I buy a single top and I short it and I buy puts it in a single top Two-thirds of the time 64% I'm going to lose so Does that mean then for all of you is that hopefully after this You guys will never ever ever ever ever ever ever ever I Single bottom will never ever buy a single top If you at least look for some sort of price pattern This includes even those who are doing trend trading or continuation training If you at least look for some sort of pattern doesn't include a single bottom You guys have a much better chance of success That's the case and a single bottom fails. Whoa Works So we'll go and clear this No Lot of people will say okay. I'm waiting for a double bottom That's the next major thing Then I see what ends up happening is this so you get you get the price coming down And it does a bottom and then it comes up and then it comes down and they go. Oh, yeah Look have a single bottom Isn't that awesome?  That's just peaked above them. Yeah I'm you know, I got a single bottom. I rule and the way we go This is going to fail Hey, you're looking for some sort of bottom and you're doing this and you're waiting and you just and you just buy that little Peek-up There's a strong chance You are going to fail on that trade because more than likely what will happen again. I'd say it will more likely do this that little stop a Little drop When up we'll do that Similarly I'll make sure that you guys have it on both both ways If I'm doing a top and I got a top and it comes down and it does another top and then oh If you buy there But where it is There'll be strong chance that it's going to just do this and keep going and you're going to be at a loss But we don't want to do that. So what is the qualifications then for a double top or a double bottom? Well The thing you want to do is you need to make sure you have a top Okay, so there's a top or if I'm doing a bottom have a bottom Then I need a peak up and I need another peak down Okay, first thing I want to do Draw a line across here. Let's draw a line across there First thing you're going to need is for it to go above This level in this case below slow That is when you truly have a in this case a double top on the left And a single bottom or double bottom on the right You need that price. So again, I'll just draw that make it a little clearer. Maybe I should use a different pen Well, you have Green coming up. It comes down. It comes back up comes down and Let's just use blue Goes below It's the first criteria for making sure you have a double top Likewise you have a falling it makes a single bottom it's back down Goes back up Goes above that peak Now have a double bottom There's another thing that's to make sure it qualifies really truly for a double top or double bottom and that is it closes You need it not only to go below in the case of a double top or Go above In the case of a double bottom You need it to actually close and what does that mean that you don't mean necessarily closing in a daily chart because you could be on the 15-minute chart you need that 15-minute bar Close below on a double double top and close above the blue line on a Double bottom Could be a five-minute chart. It could be a one-minute chart It could be an hour chart. It could be a daily chart could be a weekly chart a monthly chart It doesn't really matter if you want to have the pattern confirmed Hey, this is what we're talking about Confirmed Sure, it may look Like a double top it may look like a double bottom, but for it to be confirmed Needs to one Go above the blue line. So break the blue line to those Those above the blue line in the case of the double bottom Those below the blue line in the case of a double top that is when you truly have a confirmed pattern With a little guys that you see that just balance a little bit off and say Oh, that must be a double bottom or a double top. Those are not truly confirmed patterns So that what that really then means is a lot of times we have to wait we have to be patient That's usually the biggest or one of the hardest things for traders to to learn is patience Because they jump in and they're okay. I've got that double top. I'm gonna you know I'm gonna be awesome. I'm gonna short it here and buy puts and they didn't wait They weren't patient And it turns on them and it goes the other way and then they end up losing their entire trade if they're buying options usually And so there's your two two criteria that you need in order to ensure you have a double bottom or double top Some statistics that you might want to be interested in You know That and it goes above on a double bottom use a different pen blue 89% of the time it goes above it keeps going. You know, let me just clear this clear this do it again So that we're clear so We'll bottom 89% of the time keeps going This is why this pattern is very very good because if you wait in our patient to make sure that you actually got a confirmed double bottom 89% of the time they're going to make money some form of money because it's going to keep on going The strong to assist the statistic that you should know be aware of about double tops double tops again This 93% of the time it keeps going. In fact a double top is stronger than a double bottom Now it's not that much of a difference because when you take 89 You take 93 you get an average of 91% of the time 91% of the time a breakout of a double top double bottom in the direction that you want it Will go your way This is why price then becomes very very powerful because if all you're doing is you're waiting you say well If I only use a single bottom, I'm going to lose 64% of the time If I wait for a double bottom or double top, I'm going to win 91% of the time Why the hell would I not do that? Then if I have some fancy indicator and whatever Doesn't really matter at least wait for the price to confirm the patients to wait for that Miss out on maybe on some of the move. You're perhaps you don't get as big of a move as you wanted to At least you have a strong chance winning now there is one caveat There's one caveat and I will draw that for you so that you can see What happens when you get one of these so the price comes down and it does one of these or price Ever pick green This comes up and it does one of these These are likely to fail These are tall double bottoms. Yeah, it's a double bottom You know big T said it's a double bottom 91% of the time or 90 sorry 89% of the time It's going to be successful when it breaks above here the reality is Where the price came from only this small little Mount Here for it to go Hey This little amount there is all you can get out of the trade because it's done this massive Double bottom or double top In the way on on this one here. So came from here Hey And from there it did this double top up here Now move down and did this massive double top now you only have this little bit of space For the price to move Because you've got support down here Hey, this massive double bottom and double top is not a trade you should take Shouldn't take this one because Very minimal profit to be made and more than likely it's going to reverse Come right back up That makes sense So as far as question and answer ago I was thought I would go through a couple of these and then before we get into any questions I did mention that probably do questions at the end Let's just do a couple more and then maybe I will open up to questions and then I'll do the next set Specifically on them so the next version so just so we Let's go to here So here's a different bottom as the reversal patterns are going to touch And I mentioned first of all the single bottom and top fails 64 percent of the time The key here that understand is the more touches you get the stronger the pattern therefore a double top or double bottom has Multiple touches is likely to be a stronger pattern that and it is a stronger pattern than a single bottom Also, if it goes in that if these bottoms are in the same direction It's also going to be a stronger stronger pattern and you will see that as we go through the various Patterns that I'm going to go through there's ten of them there that I mentioned So just looking at again double bottom double top. I have a little picture You guys if when you're watching this video if you want to rewatch it You can be able to pause it on there and take some some notes But the lines are drawn basically in the same spot that I was drawing them You need to break that blue line and when you break that blue line That is when you have confirmation a double bottom and double top Next one on the list You go back Is what we call a one two three double bottom? double top So what is the one two three double bottom or double top? So let's draw that back here Also have a picture by the way, so in case you don't want to draw what I'm drawing You can see the picture and stop stop the recording as well So a one two three bottom is this Comes down it does a bottom It bounces up so far looks like a double bottom potentially could be made then it comes down It doesn't go all the way Does one of these Most of the time when that happens you see this sort of pattern You'll hear people talk about it in the discord look it's got rising bottoms and rising tops Hey That is the one two three pattern and you have the same in reverse or tops And this is red tops comes up comes down go slightly not as much This is the one two three Top pattern Where do you buy? Where do you confirm again similar to a double bottom the confirmation is on the line? We can draw that a different color just to make it clear This is the Here is the one point here is the two point here is the three point In order to have a confirmation of a double bottom or double top you need it to break two point Similarly, I will draw a double bottom down here. This is three. This is two. This is one It's a different color Needs to break the green line and then you have a Double bottom one two three double bottom break out You have confirmation Cuz as we said before We'll just reemphasize it for for everyone You can end up doing this thinking. Oh, I've got one two three, right? That's what we think on a double bottom potentially that this little tick up Oh, I got a one two three forming everything's good and what ends up happening this this is what ends up happening That is why you need You have it above That is how you have confirmed it I hope that you don't have confirmation You could end up having this scenario where it slightly moves up and then tanks on you The same in reverse in reverse comes up comes down. Oh, I've got a one two three top and then up it goes And it screws you up Cuz you didn't wait When we go back to our our little presentation here We can see that Entering on the break of the tube It's a bottom It's up to the tube and makes a higher bottom on a double on a one two three bottom And then it comes up it breaks above and now I know I have a one two three breakout Bottom confirmed similarly on the top It's a top comes down goes up doesn't go as high comes back down breaks num through number two Now you've entered That's where you enter right here Hey, I will point out again It's not just a matter of breaking down or breaking through That's like double bottoms. You want to see I'll draw it here. Let's clear this canvas again I want to see it come up You want to see it break out and you want to see it close Buff And that close could be again. It's based on your time frame if you're using 15 minute charts You want to see the 15 minute bar close above Point two It not just go above but close above that is how you truly know that it's confirmed Now one other thing I want to point out For everyone's benefit is this oh You get a one two three comes above closes above and it does this as I mentioned earlier This here this point This point this point this point and this point all of those Be used for stops Sometimes I get asked where can I trail my stop? So you got in over here? Hey, this is where you got in Waited for the close above you have the one two three your first stop is here stop one Goes above keeps going higher comes back down does this again? Move my stop up to here. This is stop two Move it again to stop three stop four five Hey, that's how you can trail your stops if you've got a chart that's doing these kind of higher highs and higher lows pattern You can continue to trail your stops in these points Of course, that's a lot easier to do with shares because shares you can actually use that point and the price Options you're going to have to sort of understand roughly. Where was the option at that point? Depending on the time value that's gone through you may have to adjust for that If it's been a day trade, obviously, it'll be easier if it's been a trade you've been holding for a couple weeks It'll be harder to trail those stops, but you can In some platforms for instance think or swim you can set up a stop based on the price If it goes below a certain price that you can trade the option instead similarly on a One two three top And it's doing the same pattern you can trail your stops on your puts Okay, so it comes up comes down comes this You can put your stop initially here Your breakout you didn't enter till here. This is where you entered First stop is the first green line then you trail Here then you trail it to here then you trail it to here you trail to here and then when it does bottom And goes through Get stopped out here And you also go along on your calls there at the same time You can manage the trade that way if you like one easy way to And as your trade You're going through it And we'll do the next one before we go into questions for the first three So just just we've already done this one. So now the next one Just go back to my list The first one was a double bottom and top second one was the one two three double bottom and top To triple bottom and top now it might seem like it's Pretty straightforward and for the most part it is But there is a couple of nuances that you want to take note of right. So first of all, what is a triple bottom? Let's just make it simple Bottom is it's a triple bottom There do you buy? Triple bottom what confirms it Same thing as the double bottom Just to go above these peaks Sometimes the peak the second peak is a little less than the first peak and sometimes Looks like this Generally the the concept that you're trying to do is you might have bought here Or you might do there it depends on how you want to trade it, but generally speaking That is where buys would happen either here or here some people like to really wait and make sure Others will we'll get in on the first line There is what a triple bottom looks like Similarly in a triple top. It's the reverse. I will just draw that just for everyone and the video purposes See it triple top looks like this There's a triple top now. There is a couple things that you want To be aware of First of all similarly to what I mentioned on a double bottom same applies for a triple bottom and triple top and that is if you get stock that looks like this You don't want to trade these because again, there's only this little bit of space It's move way too much up and down up and down movement on this Triple top and if you're someone's looking at this might even think it's a triple bottom The movement between the two lines is too too large So you want to generally avoid those because if you're able to trade it for some other method using some other Indicator and maybe you got in here and you could trade it down to there and maybe you got in there You could trade it down there Etc. Etc. But generally speaking if if you get very big m's Hey That you don't want to trade and if we reverse it again for the For the bottoms bottoms are the same thing. You do not want to trade these large Does it look like that? It would be your triple bottom Because the breakout is only going to be this little piece Not worth your time Hey, the other thing that you should know about I'm Triple bottoms and triple tops is a is an interesting little fact. I have to draw it in order for you to see it a Triple bottom looks like this and a triple top looks like this I'm gonna draw a number in between 84% 84% of the time a triple bottom or triple top will pull back and what does that mean? Well, let's draw that It will pull back Do this It'll pull back Do this 84% of the time Triple bottom or triple top will pull back Does that mean it means that generally speaking if you want and most people who trade these will They'll wait for the pullback Sometimes that pullback looks more like Let's do it on the on the tops. It looks more like this And what they'll do is instead of buying here They'll buy here Maybe draw a different color instead of buying here end up buying here because 84% of the time You know, it's gonna pull back up and then tank Hey, so they're gonna try to get a better price and a better confirmation This is the the move to take Hey It's an interesting little fact most people don't realize and a lot of people just buy that bottom and they're trying to buy a ray down here Or sell right down there If you wait for the pullback You will be more successful And I bring that up because again, this is really highlighting a key That I'm gonna I stress it a lot in the chat. I will stress it a lot tonight But you need to have patience Everyone needs to learn to have patience Too many people are trading and getting in too soon And they're not having patience The result end up with very bad fills. They end up getting in way too soon and It is always always always always better Be late and be right to be early and be wrong That I can't stress that enough. I'd rather miss the move entirely Then if I'm a breakout trader, even if you're one of those, you know, you're an active day trader You're trading breakouts. You're not even trading reversal patterns Even if I was one of those I still rather miss the move be right and have patience and You try to preempt the move thinking that it's happened only to get ruined as it goes against me. I Can't stress that enough Please if for those of you are newer at this we understand a lot of the people who've been doing this for a long time are still struggling with patience It's not easy and still even when you have 25 years experience every once in a while you get in too early So I can't stress it enough keep working on your patience. Keep waiting You're better to be wrong or so you're better to wait and be right than to be wrong and be early So that covers our first three patterns double bottoms one to three bottom Which is similar to the double bottom and the triple bottom before I go into channels Let's take a few Questions and I don't know where all the questions are so I'm going to rely on our mod Tommy and rely on moon shot to help me out with questions if there are any I can't not see the twitch. So I don't know if any questions were posed there Do we have any questions guys? Do we know? Okay, I'm getting a few people messaging me personally, but I haven't read them Well, they're kind of all over the place. So I'm trying to find That's fine. That's fine. They're mostly consolidated Um, I are four or five five asked that he read that for one two three patterns The deeper the retracement the lower the probability of the reversal Um, and I guess he just wants to know if that's true or false So You're saying on this that here's the one two three bottom that the farther this goes down Or is number one More likely it will fail that the sound like the question Yeah, more likely that the reversal will fail Yeah, I I don't agree And the reason why I don't agree is because of this pattern the double bottom double top Double bottom double top Effectively is a one two three that went all the way down Hey So, I mean in the end of the day, it's it's a double bottom double top and a one two three bottom And a one two three top are effectively the exact same thing. The only difference is how far down it went This pattern is stronger I'll go back to my list. I've listed these in strength In level of strength for another in other words a double bottom Is the weakest of the first seven eight nine and ten are sort of nuances and we'll get into those The first first seven Are listed in order of strength For example, a triple bottom is stronger than a double bottom One two three double bottom is stronger than our double bottom The head and shoulders bottom is stronger or which is an inverse That is stronger than a triple bottom, which is stronger than a double bottom A cup is stronger Than a channel and is stronger than a triple bottom. They've been listed in order so In a weird way what I are is saying is true Because if the one two three bottom comes down closer to a double bottom, it is a weaker pattern in theory To a double bottom. It does not necessarily mean it's weak But I see where he's going with this question because in theory. Yes, the double bottom is slightly weaker A one two three double bottom That answered the question. I think it does Yeah, yeah I think that's uh, that's a pretty good explanation Okay Next question All right, red to green is asking how do we identify stocks with these patterns? Yeah, this one Not really sure if you have an answer but you could take a step out. Yeah, it's hard. I mean you I don't think or swim has a pattern recognition In Whatever you want to call it within their chart stuff It doesn't work very well. It doesn't really recognize them very well It's hard to find double bottoms and double tops using software or using I know there are some people who are very very smart who have come up with pattern recognition like How goes or whatever you want to call it? Myself I've never been success like I mean I've done some how goes obviously some people see those when I I'm in the discord. They see what I'm doing But I've never been able to successfully do pattern recognition So there's no real nice easy answer. Of course, I'm willing if anyone has suggestions How to find them faster? I all mean suggest them put them in the discord and we'll even pin the message If there's some sort of software out there that finds them better So question for me though, I I mean for me it's The way I do it. I'm old school, uh, you know, I'm 46 years old I just scroll through a bunch of charts and they pop out at me I can quickly see a double bottom versus a triple bottom or whatever I don't have any fancy software and I can't give you anything as a suggestion But I'm willing to take suggestions All right a few more questions Zion is asking is there a way to calculate the length of breakout in a one two three pattern The length. Oh, yeah. Okay. So we're going to get into that a little bit Just go back to the agenda So after I'm done all the patterns, we're going to go into the targets How far can this thing go? Oh, gotcha right, so I'm there in a lot of the cases. They're sort of an interval target and a Higher target I'm not not all of them have the greatest targets Some of them are easier or better than others, but we will get into targets So what I wanted to do is go through all the different patterns first Then after that we'll get into some of the targets of each of the different patterns Yeah Yeah, I'm going to skip over the questions that are asking about price targets because That's the majority of them currently One person Belaric is asking if you could have access to the slides after the presentation This is more of an administrative question Yeah, I mean I can like I don't know if there's a way the best way to post this. It's a word document. It's Be sure we'll post it somehow. We'll figure it out. Yeah, cool Um, here's a good one. Belaric is also asking. Um, these patterns are pertinent in all time charts Um, yes, and I guess they would he was asking like does it yeah, I think he just wants to know like Does it work in all time charts? It does um, but always understand Everyone needs to understand this and I I say it all the time if you're using the one minute the two minute three minute up to the five minute The um relevance of that chart is a lot less And say an hour chart or a four hour chart or a daily chart You really don't want I mean unless you're day trading Really don't want to be looking at these chart patterns at a one minute chart and say, oh, yeah I've got a double bottom and that's gonna you know, that's gonna go to the moon because You're at the end of the day you're looking at a one minute chart And when you go look at that same double bottom on a 15 minute chart, let's say you saw on a one minute chart It doesn't look like anything other than one line The same if you see a double bottom on a 15 minute chart You go to a daily chart There's a good chance that that's not even not even anything other than a line On the daily chart so the longer the time frame the stronger or more relevant the pattern is It doesn't mean it doesn't work. Yes, you can use a one minute chart see a double bottom and scalp for that if you wanted to You're trying to use that as a swing trade for three weeks four weeks from now on a one minute chart That double bottom means absolutely nothing Probably gonna fail doesn't work So the longer the time frame the stronger or more important the relevance Yeah Um, here's another good one. JC is asking should we consider after hours pricing for looking at these patterns? No That's a simple answer. The only time the after hours pricing in my opinion matters is if the stock trades after hours or sorry if not the stock if the Security trades after hours such as the futures. So those matter Uh, the spies and the QQQs trade 24 hours a day. So those matter um The only time a stock After hours pattern really matters is when there's an event If there's earnings and it does a bottom or it does a double bottom with after earnings There's a chance that bottom may bounce and keep going back up a bit at least, you know, maybe even into the next day Um on the trade. So then you might use after hours patterns trade them On the price, but if it's not an earnings event if it's not a major event where it's trading a lot after hours If you're only getting the occasional trade here and there Just because uh grandma jones in the middle of timbuktu traded a hundred shares and created a double bottom Doesn't mean that has any relevance to anything Okay, it's only when there's you know thousands of shares trading because Earnings were good bad or whatever And then asked the after hours trading matters Is that it for the questions for now except for targets? No, hold on. I think tommy was going to ask some questions that i'm not sure where he went Okay There he is Okay So Can you just go on mute for a second because we hear a lot of background noise?  Yeah, and it sounds like you have a fan in the background But yeah, i muted you for now. Sorry It's I could still hear a lot of noise All right. Yeah, there he goes. He's muted now. Oh Yeah, tommy. I'm whoever asked that i'm going to get into targets as to what you can use um That'll be after I just go through all the patterns So I would just ask that anyone who has questions about how far something will go after a pattern And what you can use um, we'll save all those questions to the next section if we've got questions on understanding The various first three patterns and i'll i'll take those Otherwise, we'll move on to Next set of patterns Yeah, I think we can go ahead and move on and for anybody in the audience if you have any questions for big t4x Just go ahead and post them in the questions channel. That way we can consolidate them at the end and then we can do a q&a Yeah, okay good So channels channels is the next one um Is also the second one that can also be a continuation or a trend pattern You'll notice they put the little stars or asterisks after patterns that can also be Trend patterns that we'll discuss next week But channels would be the next one. So um, I'm going to draw a channel so a channel will look Channel will kind of look like a triple bottom Or it could be look like a quadruple bottom effectively what a channel is is Comes down and it does this and that and That and this and you know, whatever Some sort of pattern like that That's created A channel That is the next level um When the key criteria for a channel Is it must be greater than 15 bars? Okay And that applies Again in all time frames If you're using a 15 minute chart if you want to look at a channel or if you think you have a channel It should be at least 15 bars or more If you're looking at a five minute again same thing at least 15 bars of five minute bars If it's daily same thing That's what determines whether that channel is also referred to as a rectangle and a rectangle only because You put a little thing here then now you have a rectangle Okay You can also get these kinds of things At the end and and and they will look some like a flag I'm just going to clear this one So you could get something that looks like This use the up And then it does that right And some people will say well, there you go. I've got a flag It's a weird looking flag, but it's you get the concept the stock moves up Okay, let's use a different color it moves up Okay, and then goes into this channel. You a lot of times will see these on earnings I actually talk about it quite a bit Earnings tend to tend to have this scenario where after a big move after earnings It tends to stay and a channel for four to eight days Okay It's not always the case. It's not a hundred percent rule. I couldn't tell you unfortunately. I don't know the the odds but Four to eight days generally is after an earnings. So if you get an earnings event And the stock prior to that was was like this and moving up and whatever And then earnings come out and it opens like this And you've got this big old gap here All end up happening is for about four to eight days Hopefully We'll form a channel Sometimes it doesn't know exactly where the top and bottom is so you kind of have to wait a little bit of time But it's something you should know that roughly four to eight days. It's going to take After earnings We'll get a channel For it moves Let's use green just to make this easier before it moves up like this Or in some cases Goes down Happens too This would then be the next um Next level Is a strong so in other words again, we're talking about a double bottom the weakest of them all They're now on the fourth one So a channel is stronger than a double bottom a channel is stronger than a triple bottom Um and a channel is stronger than a one two three bottom That's and why because again we go back to my little A little word document here More touches Stronger the pattern what does it mean by touches? I'll go back to here. This is a touch touch touch touch touch right and more touches you have on the bottom Stronger the pattern right and then also The touches are in the same direction Stronger the pattern so ideally what you want to see even in a channel even though it's technically sideways Daily what you'd like to see Is you'd like to let's draw a little channel over here What you'd like to see is that the next one be just a little higher Just a little higher just a little like just it's almost a slight curve. You'd rather see that now you will see occasionally this happen And it almost like starts again the rising pattern The idea here is the more touches down near the bottom And if they're moving in your direction That is ideally what you want this here this channel is Is is one of the strongest patterns and and you see it and we'll get into targets on this and why it becomes so strong Because once you see the targets on them, you'll understand that, you know, how how much money you can potentially make on them Next one is head and shoulders or inverse head and shoulders Um head and shoulders so head and shoulders looks like this That's a head and shoulders top And this is an inverse we talked about earlier and it has Black has a shoulder head shoulder shoulders Head This is stronger than a Channel and stronger than triple and stronger than double So the more you see of these the more stronger they are in fact combining the one two three Thus even It is a stronger pattern Just the I guess the side note to know is that the strongest pattern Is what they call a complex head and shoulders or other people have referred it to as a double head and double shoulders pattern Is actually the strongest pattern of them all I don't have it listed in that way on my little word document But what is that so the complex head and shoulders is this it will look like this It'll come up and do it looks like a double top And it goes higher goes down There's another double top Comes down There's two more shoulders It goes down Okay Here is what they call a complex head and shoulders Head and shoulders most people in They're looking on the market or if they go on internet sites. They don't call it that they call it a double head Excuse my scribble, but double head and shoulders Hey This here Is the number one Strongest pattern you will ever see a chart It's because you combine two three double tops Combined head and shoulders you combine one two three you've combined A droop will channel you got a channel over here. You've combined everything basically that you can possibly have Therefore, this is the strongest pattern that you will see Now, where do you buy a head and shoulders? It's How do you know that you have a confirmed one? That's important to draw I'm going to clear this So you'll get a You will get a pattern that comes up Just going to draw the single one It creates Neck what they call the neckline Here's the shoulder. There's the head It's the shoulder Of the neckline. So here's joe bob. Here's his head Here's a shoulder and here's a shoulder his neck Okay, he has a very long neck, but that's not the point The point is this is the neckline Where do you trade a head and shoulders pattern? You trade it right here. That is the buy Buy of the short or puts or sell short if you're going to short a stock But short it when it breaks below the neckline Similarly We look at the inverse pattern We have a neckline At there That closes above again same thing it goes above and closes above on whatever on whatever time frame you're on That is that is your buy signal That is how you know you have a confirmed head and shoulders and that's when you're supposed to buy Hey, and again the double Black double Yeah, this idea where there's two heads Two shoulders and still the same idea when it breaks above here and closes above that is when you buy That is your number one number one pattern the double Double or complex all right The next one Actually, let's just go back to the little document so we can show them Triple bottoms, there is the channels you have horizontal channels and bearish channels and bullish channels and the reason why These are also continuation patterns. I mentioned earlier Is because they continue Go in the direction of the trend or continue to go sideways Continue to go down continuing to go but eventually They break out When they break out that's the reversal portion And so that's why these are both You can trade a channel where you're buying you're continuing to ride the channel up or down That would be a continuation type trading and we'll talk about that next week Or you can trade the breakout of this channel, which is the reversal of the channel That's what we're talking about this week And the head and shoulders, I don't have an example of a double head double shoulder, but there you go It's again showing Breakout of the blue line is where the entry is Okay Next one there's some caveats to it as well. So the next one we have is a cup Cup or rounded bottom or rounded top. They're also called that most people call them cups And I see so many people trading cups the wrong way I thought I would want to make sure that Everyone understand this so a cup looks like this Of a you have a thing coming down and most people see this Hey What are they doing? Drawing a line here and going okay. I'm in On the breakout, right? That is actually the wrong way to rate a cup And in fact interesting fact 74 of the time In other words three quarters of the time Cup Do this let me draw it with the red Cup one of doing this it will pull back and that's why Okay, that's why I just draw this again Here we have our cup 74 of the time what's going to end up happening It's going to pull back Create a cup and handle And Go I can spell 74 of the time Therefore Do not buy breakouts of a cup and cup pattern Just don't don't buy this Three quarters of the time Don't waste your money go ahead buy a cup It's not the proper spot to buy a cup Want to buy a cup you actually have to buy a cup at Five o'clock and I don't mean five o'clock Some random time frame in somewhere in the world I mean this I draw a clock In this And here is 12 and here is 6 Five o'clock is here So let me let me make it my scribble a little bit better looking Well, I get again. I draw my cup. It's coming down. It's coming down. It's coming down green There's my clock Five o'clock is here I want to buy a cup Here before it is even a cup That is the best spot to buy a cup If you want to trade cups Is where you want to be buying the cup However, there is a caveat Because there's caveats for everything in trading If You get this cup pattern and then Start seeing instead of it going up here Use the eraser Raise that Instead of it going there it ends up doing this If you start seeing that It is more likely to do this So what do you do? So you're you're you have the cup pattern It's coming down. It's now moved back up It's now moved back up. It's around five o'clock on my clock roughly in as far as angle goes I get in Now I get in and all of a sudden it's kind of doing this sideways channel Sort of fading higher but not really I should somewhere around here Should be exiting Because it it is no longer going to be a cup. It's moved into this pattern where it's come down And then has no energy no power at all to move higher And what's going to happen is this it's going to turn over That's going to fail If you're buying cups you're buying at five o'clock somehow The clocks just start squiggling sideways And you want to get out I'm going to exit because you do not want to be caught And then move thinking you bought a cup and it failed As mentioned 74 percent of time it forms the next pattern which is the cup and handle And we'll draw the cup and handle by the way the cup and the cup and handle also have Pop versions Though you rarely see them, but they are there.  Where do you buy a cup and handle? same spot Buy it here at five o'clock you buy this five o'clock These are the points you buy you do not buy here See everyone trying to buy cup and handles breakouts Yes, they will move and break out after the handle No question of that You don't need to wait for it to do this and pull up and say okay. I'm in here You don't have to wait for that. You can buy it way down here and get in nice and early Or you could have bought it way down here and maybe you bought one partial Bought a portion I'm here at the first five o'clock Wait for it to come up and now it comes the second five o'clock and you get a second partial The hell if you want and you're really confident now it's broken out you can get a third partial here third part Okay, but you don't need to wait for this breakup We'll get into the targets of cups so you know where these are going and when these cup and handles are going But that's a key point so many people so many so many so many people are buying here thinking I got a cup and handle breakout. That's where I should buy Oh, you missed so look how much you've missed you've missed a ton Could have got in much earlier. You know, you didn't know it's not your fault for not knowing But now you do at five o'clock don't buy it 12 o'clock buy it one one o'clock buy it at five o'clock on the on the pattern here that I'm showing that's the proper spot And you will do very very well if you do that. Let's see I have So let's let's just go back to our word document. So that's the head and shoulders right This is the cup I got a trend reversal at this point, but that's not where we're buying we're buying down here I'm here at five o'clock is where we're buying. Hopefully you can see my arrow squiggling and moving And the cup and handle Same thing does the cup The resistance line that we talked about but we're not buying the breakout. We are buying down here at five o'clock We're buying down here on the handle at five o'clock We're participating in all of this move and if we bought on the cup we're participating in all of this move Plus whatever happens when there actually breaks above the resistance And we get all of that move too Okay Let's go back to here Sorry There we go. So head and shoulders Rounded bottom or top also known as a cup Rounded bottom and top up and handle by the way again that these do Have top versions that you just don't see them very often because usually a tops end up being head and shoulders Or double tops triple tops, but you will every once in a while you will see a rounded Cup and handle you'll see one of these Doesn't happen very often, but it does happen It's the same thing The only difference is you can't use five o'clock on a bottom We're using one o'clock. So if I'm drawing On the top it's the same area Right, it's one o'clock Same area. It's just in reverse Okay, so that you can participate in the move that eventually goes down here You can get it sooner so Last three are A little bit spins or indifferences. So just to in review these first one to seven are put in order of strength So a cup and handle is the is the strongest Stronger than the rest the only caveat as I mentioned is the double head and double shoulders So if I was to have I've rewritten this or retype this I would add a number eight Right in here between the wedge and call it double head double shoulders or what they call a complex Head of shoulders bottom or top and that is the strongest But otherwise then it becomes the cup and handle followed by the cup Followed by regular head and shoulders, etc, etc So I will take questions on those if there's anyone who has questions on head and shoulders or cups and handles I mean no other than targets I will get into targets after Any question any questions you can see or Yeah, la long shot said Since you're looking at triple bottoms But for any pattern once the candle closes after the entry point Is it better to wait for a retest and potentially miss the move or get it on the very next candle that opens and does a minor dip It's a great question. Um A lot of people will wait I tend to wait you'll notice many times I say, um The person will say well, I see a double bottom and it's even broken out And I just like to wait I just learned over the years and again, you have to understand I've a long time at this My patience level is much higher than Maybe everyone if not everyone most people on the discord So I don't mind waiting Oh, I will tend to wait Is it wrong to say okay closed above Whatever or whatever pattern And now I'm going to buy as soon as the next bar opens. No, it's not wrong. I mean Many people would do that. They've got confirmation. They got the pattern. It went above it closed above You know, what more do you want for it to happen? And they'll take it and there's nothing wrong with that and sometimes when you do take that You get a much better price than let's say me who might say, oh, I would wait for a little bit more of a pullback I tend to what I tend to do is I see that happen and then I'll enter a price. It's a little bit cheaper My option Let's say at the time of the breakout and the close above the options trading at five dollars Let's say a long call just to keep it simple The long calls at five dollars. I might put my order at 480 And what I'm doing there is saying, okay, I'm waiting. I'm going to let it pull back a little bit Broke out. Yes, it confirmed it closed above. Yes confirmed But I'm just going to wait just to just a tiny bit Get that a little bit better price You have to do that. No If you want to just trade the break if you're if you struggle with patience The fact you waited for it to break above the fact you waited for it to close I'll power to you.  Take the order. Take the trade. Why not? There's no really right or wrong answer. Sometimes it's going to pull back a little bit I did mention the statistic about triple bottoms that 84 percent of the time they do pull back Okay, so triple bottom and triple top you'll have that it'll close and then still 84 percent of the time It does that small little dip So if I'm going to draw that just so that everyone is clear what I'm talking about No, miss confusion Um, let me just draw that. So here I have this triple bottom Right and draw my breakout point and it Flows is above And the figure and the fact I gave you is 84 percent of the time We'll pull back That's probably partly why that myself I've learned over the years just to wait for that small pullback And that's what I've done just because of so many years of doing that Um, do you have to know could you have just bought here? Sure 84 percent of the time on a triple Doesn't apply to double on a triple. It's going to do this pullback And so I don't mind waiting Still a little bit. I'd rather be wrong. I'd rather miss the trade and I'd rather Be late on the trade than be wrong So that's what I do But there is really no right or wrong answer per se Only that and on triple it it works More often than it does on let's say a double That answers that question I think Yeah, another question by always learning she said or he asked does volume have importance during these patterns um A lot of people will say yes. I I say no Matters more on the volume is is do you get volume with the breakup? Not necessarily on the pattern. So if I'm drawing I don't know ahead in shoulders. Let's say hey, I have my neckline here It doesn't matter that if I draw volume bars, let's use black down here Or you know again, excuse my scribble Down here, there were these low volume bars. Maybe there was a little bit more here Low volume what matters more is that on this breakout Is the volume increasing not necessarily big You have to there's a key to do I see increasing volume That's what I'm looking for Hey, I'm not necessarily looking for big volume And I don't necessarily care that it's smaller volume down here and in fact Generally speaking As the stock is coming down and I'll draw another one as the stock is coming down and coming down and coming down You should see volume Oh look like this The bottom right should see volume Clining And only when then you start to see it pick up Good the volume then start to pick up That's kind of what you're looking for right you're looking for this rising volume matching rising stock And at the tops I cleared this up The tops is a little bit inverted, but it's the same idea right it's it's coming coming coming I'm doing that right Here down on the bottom I want to see volume kind of slowing down the volume of selling is decreasing as it's rising Then once it starts to turn over I want to see the volume So that it matches It's starting to pick up steam And the volume is also starting to pick up steam But I don't really care over here This bar was small or big or I really don't care. It's irrelevant It's more about the trend of the volume and is the trend of the volume increasing as we're starting to break out That's what I'm more interested in Is that makes sense to everyone? I'm hoping yes Unfortunately, I can't see a bunch of nodding heads. So I'm gonna hope that you all that all made sense to everyone Again, the volume really wants to start to increase as we're We're breaking down or breaking up depending on whatever it is that Ever direction we're going Yeah, he said he understands and he said thanks Okay, good. Excellent Any other questions that you can see? Yeah, taps is asking how do you differentiate double or triple top from a channel in real time? Usually it will take a little while to know um We'll start out Like a double or triple top and you won't know and that's the reason why You really should wait. I mean you just don't know like you might see a stock and and He's he talked about tops. So let's let's use a top. So it comes up It comes down Comes up again Maybe he does this and he go, okay. I think big T was saying that's a one two three top Then it comes down and Does this oh, okay. That's no longer one two three top, but it still hasn't broken above So that's still a top. So maybe now I have a triple top. I think Oh, it comes down. Oh and it comes out and then once you you're sort of at this point It goes with a trained eye or whatever with a little bit of experience start to go. Okay. That's not a double top That's not really a triple top. That's not really a one two three top You just started to form a channel It just takes time and that's again goes back to what I was saying earlier patients patients to wait for the move to develop Everybody wants to get in here Right, they want to get in here. This is where everybody wants to be they want to catch the top Guess what? We'll almost never catch the top you will trade for 25 years and if you hit Absolute top more than five times You are something special Because nobody hits the absolute top Nobody hits the absolute bottom of that very often Okay, but we're all trying to right we're all trying to get to these points That's why we need to learn that patience is important and just let the thing develop and then it develops and go Oh, we're in a channel Um, I think hd HD is a good example Yes, you guys can see my chart, right? hoping Yeah, we can see it Yeah, okay. Good. So here hd came down from the bottom came all the way up to this top I'm down. Okay. I've got a single top great I'm up here now. I've got a one two three top right one two three Down oh Okay, I've had another one two three. It's kind of weird but fine Oh another top And up it came here and now I matched the tops that I actually went slightly above believe or not Which is still in the same range Um, I still call this the same basically this top and this top are equal as is this top And it comes back down to this bottom, but I've quickly looked at this and said Hold on I'm in a channel It's exactly what I'm in it. It may not be the most prettiest most cleanest channel That's a channel Hey, so if I take this screen So I'm here That bigger Now I can use my my pens We use red. Why not? Hey, what do I have? I have a channel Okay, this is the move that came up It's done all these little tops That's a channel If you look at the if you look at a daily chart, which is on the left See that pattern and it's actually turned into a little like So likely it'll do this a little bit and then it's going to go there. That's what's going to end up happening At some point home depot is going to break out of this of this point Because on the daily it's a flag and we'll talk about flags next week flags are not on because a flag is a continuation or a trend pattern not a reversal pattern that's Home depot and that's how you tell if it's in a channel You actually have to wait you have to wait for it to play out because if you're looking at this and I go back to this This thing and I'll use a different color. Let's use blue What was I waiting for? I was waiting for a top I was waiting for a bottom In another top now. What did I need for it to break down? needed it to this below Doesn't it goes like this and then it goes up again. Okay fine Our continuation trend trading system. I needed to break above. It doesn't yet anyways It does it do it comes back down These bottoms comes back up tested again Hey, I know that if I'm doing a reversal pattern. I need it to go below here until it goes below here. It's not a reversal They're waiting Being patient I didn't get caught.  You have time burn Hey But as far as a reversal pattern. No, it's not a reversal pattern. I would never short home depot here ever I won't short it up here either Because I'm in a channel until it and like Sorry, let me rephrase that I would short it if I was scalping or day trading. Maybe I'm Shorting here. Sorry, let's use another She's green. Maybe I'm shorting here buying here shorting here and then whatever or shorting here buying here Whatever if I'm scalping If I'm trend trading or if I'm reversal trading or if I'm swing trading or whatever It's in a channel I'm not going to trade the breakout and I'm not going to trade the reversal Does that answer the question? I think it does Yep, sure does Any other questions you can see and or we'll go on the last three and then we'll do uh, targets Yeah, there's somebody on youtube that asks what is the best way to see volume on thinkorswim Or is it just a basic one that they provide? um You look down here. I mean you can adjust the colors and whatever on volume and thinkorswim But all these little bars down here Those are volume There's going to be some spikes spikes. This is a 15 minute chart So there'll be some spikes on the open and on the close. That's what happens um, if you go to the daily chart you can see that Not today, but yesterday, I guess yesterday For today's monday friday Friday there was a volume spike To the volumes you just use that Um, again, you can change colors. You can you can even have them Up up volume bars be green and down volumes be red I personally don't care for that. I don't need to know Um, for my type of trading but that doesn't mean it's wrong. It's just what other people use That's one way and you can also do the volume the other way, which is what you see here Volume profiles and then this is is based on the price. How much volume at that price? So if we're looking here at 320 the daily chart, this is how much volume has happened at 320 specifically It's another way to do volume But we won't really get into volume profiles and all that kind of stuff in this session because this is really about price patterns Perhaps I will do a a session on volume profiles Somebody else might maybe who likes to who likes them? Cool, and then there's one more question here. Um IR 455 is asking is confirmation Also known as break above below Usually just a single close above the signal line Um, and also is the v-shaped count as a potential double top If so, where do we place the line to signal a reversal? Uh, I don't mean to tell me is on again. Um Then let's break down that question. So Is a single close above Count as a confirmation Yes As gee, can you wait for more to close above or even the pullback as I mentioned? Yes, you can do that too And then the other question sorry, I had the v-shape I didn't I couldn't quite hear that one Um, he asked if a v-shape counts as a potential double top Well without a visual I'm not I'm not a hundred percent sure what he means by that I I I don't really know but This Is not a single bottom or sorry. This is not a double bottom And this Is not a single top This is a v-shape. I'm not sure what you mean by the question specifically That is a single Single bottom not a double bottom Hey, we talked about different Um examples Yeah, I think I think so I think the double bottoms you showed earlier like they're more of a u-shape And I think what he's asking is when you have a v-shape recovery off in the single bottom Does the top of the v? Signify a double top still Because you know on the v there's like first top. Oh, I see so and then another top Okay, so yeah, let's clear clear that up a little bit. So I draw specifically v's and I guess they look like a's Um, it doesn't have to be a v-shape So, you know, I've been all along throughout this session. I've been I've been drawing them like this, right? They look like v's This looks like a reverse a right. It doesn't have to be v-shape Can be u-shaped Well, you can have Bottoms, sorry using the eraser still You can have bottoms that look like this Okay And I think the website was it called the pattern site. I think it's called the pattern site I'm not trying to give them a plug, but they call these uh eve bottoms And then they call this Adam Personally, I think that is irrelevant Um, it doesn't matter that the bottom is rounded Black doesn't matter that the bottom is rounded Or is a point Relevant and it also doesn't matter that the point up here that you're trying to break above Whether it's rounded Or pointy relevant Now and then I think on that site they also show um They show combinations of eve and adam Which again, I think is is is missing the point here like what you're trying to do is you're trying To hit a double if it looks rounded on one and pointy on another and this is rounded Still a double if it looks pointy here and pointy here, but then rounded there Still a double It's irrelevant Nobody's talking Bahamut, but I think that's how you pronounce your name your name. Sorry Do you want to ask something? I think you just turned his mic off Did I I think I answered IR455's question? Let me know. Yeah. Yeah, I think that summed it up well perfect All right, so we go back to our word document So we've covered all of these we're down to to cup and handles we did all those Those are an order of of importance or an order of strength Strength is actually the better way to say it The strongest is seven the weakest is number one Now we get to a few others that are They're just unique Right, so let's get into wedges. So wedges are actually um Both they're both a continuation or a trend pattern and also a reversal pattern So let's just clear this a wedge will look like this the stock comes down Actually, I kind of drew that wrong. Let me just erase this part and a wedge Looks something like that Or maybe if I draw the wedge first and then I could fill in the thing But it looks a wedge will look like this And the stock does this Okay, it is a continuation or trend pattern in the sense that Direction as you can see so far Is down Okay Now if I clear that and draw the reversed one Again draw the wedge lines first Here's the wedge lines Here's the stock So as you can see so far the trend Is up for the continuation or trend pattern so far It's up however Technically or what in reality a wedge is a reversal pattern We'll use this so here we have an ascending ascending wedge Or a rising wedge Or a rising wedge Okay And a rising wedge reversal Will maybe do this It's a reversal pattern. Let me do The other one So again a a falling wedge Look like this Then it moves Higher It's a falling wedge Falling wedge, but it breaks out It moves higher Now Two things that we need to know about wedges that you should keep Handing here first of all wedges Just like head and shoulders and just like cups and cups and handles are large patterns. Okay These are large patterns so Does that mean it means there's over 15 bars at a minimum Yeah, I see way too many people drawing on a five minute chart or even on a 15 or even on an hourly chart And their wedge looks something like this And they draw the thing and they go look I'm in a wedge Right Sorry, it's not the greatest drawing, but there's like four or five bars Even 15 bars and they go I'm going to rising wedge. I'm in a falling wedge. I'm sorry. You're not you're just You're in some other pattern or you're not even in a pattern It's part of a top pattern. It's part of a bottom pattern or whatever it is Or it is potentially, you know some Wedge that's going to happen in the future, but currently you're not a wedge is a large large pattern. It's over 15 bars It also needs to have at least Five reversals What I mean by that is if we look at let me just get rid of this little little wedge It needs to have one two three or five Wedge by by definition must have at least five reversals Or off these lines So hard to draw with my fingers on my screen Um Five reversals in order to have a wedge whether it's rising or falling you need to have a minimum five reversals that's Key point to to understand wedges are also The second strongest pattern Okay, so the first strongest was a double head double shoulders pattern The wedge comes in at the second strongest pattern Even stronger Than cups and the only reason I say that is you'll understand that when we get to targets The cup pattern is strong The target is not hit as much So that's why we call the wedges a a strong pattern now Another key key thing to understand About wedges most people fail to understand I don't know. Let's just clear the whole thing Because a lot of people will say well wedges don't work A lot of people will say that I I think I've even had a strong discussion Call it that on um on the discord about that the reason for that is we'll say Right. Here's my wedge My chart looks like that one touch two touch three touches four touches five touches It breaks out I said wedges don't work Because what ends up happening as it does this? Hey comes down I'm gonna just draw my line a little bit and it comes down to here And they'll say not wedges don't work see proved it And that's the key important factor and there's another statistic that you want to keep track of 37 of the time The wedge will pull back to its breakout line before moving higher 47 percent of the time it's going to do this half the time it break out Will move back Remember we were talking about triple bottoms 84 percent of the time it pulls back On the triple bottom rate it breaks out and pulls back 84 percent of the time The wedge it's 47 percent of the time again repeats sort of what I was saying earlier like Will always be rewarded if you're patient and you wait Now you could say well, but that's only half the time. It means half the time. I missed the move. Yeah But that would be my answer. So what?  I'm going to you're going to get a better price Instead of getting this price up here, you get this price down here But wouldn't you wait you're going to have a better chance of first of one of it confirming that it is and truly a wedge break out Two you're also confirming you're getting a better price And three you're avoiding the scenario that perhaps the person who's saying that wedges doesn't work Is right this time and they didn't work By waiting for that pullback and waiting for it to bounce Sometimes that pullback is it looks like this. Let me just erase some of this Sometimes that pullback looks like this it doesn't quite Catch the bottom Sort of misses it almost a little bit. It doesn't come all the way down Still better off waiting for that pullback here That's when you want to buy the wedges. So now if I'm doing the reverse so that Will follow and don't get any sort of confusion And I've got a rising wedge looks like this stock Multiple touches 47 percent at the time it's going to come up and then do that And so you want to wait for those pullbacks you want to wait for them on the triples You want to wait for them on almost all the patterns and if you don't that's okay if you don't This scenario if you bought the breakout And for a little bit a period of time You're worried because it's moved moved up a bit and you're losing it could have got up here There's going to be a whatever what I'm telling you is if you learn that patience you're better off waiting for that pullback 50 percent of the time Okay, so now when we demonstrate that on the word document just to make sure that you can see it The cup cup handle. There's the wedge Now there's another type of wedge which is an expanding triangle, which really is just a wedge They call this site that I pulled it from call it an expanding triangle The lines are a little bit different in the way that it is but effectively it's just a wedge and it has the same outcome Still, you know, it's rising Really it's bearish it's rising rising rising and then it'll break down and end up moving downward It's a reversal pattern same way on a bullish one Even though it's still falling but expanding Breaks out and moves higher. Those are these are both wedges as far as I'm concerned Even though they call it an expanding triangle Or other people refer to it as a megaphone the megaphone pattern At the end of the day, they're still reversal patterns That's the wedge Next one is retracement So here's where Fibonacci comes in so Fibonacci if just for those who don't know Fibonacci is Fibonacci is an Italian guy who figured out that the entire nature is has this pattern Uh 1.62 or whatever it is from each other seashells everything Everything almost everything in this world has this fat Fibonacci pattern and people apply it in stocks And it looks something like this. So you have a stock that comes down Then it does this And then each of these different points The 38 percent This is the 50 Here's the 62 Excuse my scribble So hard on the Should have got a touch pen would have been easier 62 Hey, sorry that they're not perfectly even in between but basically 50 38 62 So there's another reversal is you have this long down move And 10 stocks when they move up so you you end up with this scenario where you get this one two three, let's say You tend to move usually the one two three is down here. By the way, usually it's like that. Let me clear this I don't want to confuse anyone Let's do this Just so that it there's no Okay, so you buy this one two three bottom Hey, let's see And you're in here Stocks tend to move to these Fibonacci levels Hey Do not want to buy and if you're buying a continuation or whatever or you're buying breakouts you do not want to buy at these points Because they tend to pull back There's another level here that I didn't didn't enter in but this is the 23 And then there's another one up here the 78 What ends up tending to happen is these stocks as they're coming up They hit these Fibonacci levels 38 they tend to pull back They hit 50 and they tend to pull back to 38 And then it hits 62 and it tends to pull back to 50 and it moves up to 70 and it tends Move back to 62 You are trading reversals Are not trading here. Let me use the blue You're a reversal trader. You're not buying here You want to buy here You want to buy here you want to buy here You want to buy here So you can use Fibonacci as a way if you're just using price and you're combining all these other patterns that I've already talked about You can use Fibonacci also Trade off of to buy You can also use it to sell if you wanted to If I was to draw this you could use it to sell here You could sell here when it hit these levels, but we're not really talking about that We're talking about reversals and so reversal patterns are trading using Fibonacci tend to 50% hit 38 and reverse back down and then you can buy the reversals when They bounce You want to wait for that reversal? That's that's the key key point. I'm trying to make here I want to wait for the reversal. You don't want to be buying as it's hitting 38 or as it's hitting 50 So if I go to my little diagram So the stock has moved up Great that actually this is the numbers have shifted over because of the way I had it There you go. The stock has moved up. It's done a top If some one two three top or did a double top somewhere up here now. It's come down It's hit 50 They tend to act as support and resistance and they tend to go on. Does it always go up to here? No It does tend to come here and then move back up to 38 or even 23 Then move downwards, right? So you get this this pattern. We're not buying reversals Here we're buying them on these lines as they bounce back up. Similarly if it comes down It does a double bottom or whatever down here It's like up it hits 38 it'll come down and it's 50 it'll come down and you want to be buying on those bounces up those lines as they hold That's really what retracement says all about on the pullbacks of those And then the last pattern before we get into targets is gaps So what I'm going to do let's go back to this So it's easier for me to show this diagram So gaps, um, there's various types of gaps I will get into some of them next week Because a lot of them have to do with continuation trades This is reversal trades Um, but gaps tend to when your stock opens Uh, it gaps up tend to reverse back down And go back and that gap then ends up as a support or resistance barrier Hey, so you end up having this opportunity to wait again As you missed the move you didn't get it down here. You missed the move it gaps up Wait for it to come back down fill the gap And it often will fill that gap Of course the time it does fill that gap And then You can buy it down here The gap then ends up being your support opportunity to buy the stock and it runs higher Um, this one here Is One here is a The way a gap kind of actually I should show them Let me just clear that I don't want to get into the ones that are Continuations The ones that are reversals Good end up what you end up with a channel Hey Here's your channel And then it gets some new some sort of I don't know upgrade or something That opens here It's breaking out and you wait. Let's say you're using the 15 minute chart you wait for the close of the 15 minute It's broken out At here. This is called a breakaway gap It's broken away quick way I like to personally wait First 30 to 45 minutes on the open you get an open like that I don't know that it's not going to do this Right after that's let's say these are 15 minute bars. Here's the first one Second one. I don't know that within an hour. It's going to close that gap So I personally don't buy a gap breakout a breakaway gap Get away Wait for again. I'm being patient waiting to see if it'll come back and fill But sometimes it doesn't Sometimes it doesn't do that. It just keeps going And it looks like this And that's a reversal breakout A gap breakaway They'll talk about next week continuation gaps and we'll talk about exhaustion gaps and we'll talk also about Another one we can maybe talk about now is island reversals That's when you get this gap way up at the top And there's this space Between here and here. This is also reversal Island reversal So you're going to trade those gaps as well Okay So those are the patterns we'll get into targets, but I'll take questions on wedges Retracements and gaps if anyone has any Um, there's a good question in here Somebody asked and ir 455 is asking if you have stats on fib reversals Um, do I have stats on fib reversals? Most No, I mean the quick answer is no, I don't however most stocks when they do let me draw it They do pull back Will pull back 50% of the time Okay, or if I'm doing it the other way Give this all out If I'm doing a top All stocks will pull back 50% of the time. Do I have an exact? Figure for that. No A lot of stocks will pull back at least 50% of the time what I've noticed is in a lot of Not lately they tend to move even more 62% seems to be even more happening more than it ever has Used to be 50 used to be pretty like almost a good concrete wall And 62% now tends to happen more often. Which would be this I also want to make a note And and mention something and we'll get into this with the targets But in a it's slightly different in a bearish market versus a bullish market A bearish market things tend to not get all the way This is a bullish market. So Um How do I draw that? Let me show you It's easier understood with targets, but No, you will see a lot of times in a bearish market is something like let's say i'm doing a triple top It won't quite get all the way, right? Because it's a bearish market. It just doesn't have the power To get all the way up to this line That's another small hill on center bearish market will have has a tendency to not have enough power to Push all the way to the to form and fully form the pattern There's a bull market will do that and bull market. We might even see A slight peak above and then it comes down right where Kind of like that There's a bear market. You get a lot of these first ones More questions Yeah, it looks like there's a lot of questions that evolved around whether to use the candle wicks or the candle body one of the questions was Does the pullback on wedges get invalidated if it gets a long wick but closes above the wedge break out? No, it doesn't you All patterns should be like i've i've seen it so many times All these people a lot of people are doing this so they're let me maybe best to let's clear this A lot of people will draw their lines And they will use the End of the wick in all cases so you end up having Okay, so let's do it like this Have a falling wedge Falling wedge Something like this okay, so there's your wedge without seeing the price And so what will end up happening is you get these lines these bars And the bar Bear with me part looks like this It's probably not the best drawing because i'm doing this koli on the fly here I'll try to illustrate what i mean When you're drawing your patterns you want to draw where the most touches are and i I mentioned that For kind of with my the beginning This one more touches the stronger the pattern right when you're drawing your patterns I want to draw them where it has the most touches So this one here Red it broke through the line As this is not really the best thing because i didn't draw it very very very well Let's just finish the thing like this I'm gonna finish this off like that. I'm gonna finish this bar like this Just try to fit Just try to make this look a little bit easier a little bit better right Now if i was drawing the line I could have drawn my line This right i could have Let's use a different color just so that don't get confused or again apologize for this What happens are you using a touchscreen? I could have drawn my my my wedge This right Remember I need and a wedge for example. I need five touches right I need one two Let's draw that green line up a little bit higher All right. I know it's not perfect But anyway you get the point A one two three four five and six seven whatever but I need I need minimum of five touches If i'm drawing my line down here Because it broke through As the the person who was asking it actually closed. Let's say Nothing is perfect in trading. I think everybody knows this by now if you don't you're going to find it really fast There's you're never ever going to find a perfect pattern A perfect setup with a perfect indicator with a perfect anything. There's no hundred percent So you're going to have some scenarios or sometimes It just peaks below a line or just peaks above a line But then it closes below or closes above or whatever And you're really trying to say what is What is the whole picture tell me? I'm looking at this from 30 000 feet. What do I see? Not Go look at a microscope and say okay if I look at a microscope And this hammer Right all I see if I'm zoomed in all I see is this Okay, we're talking about this thing here, right? I zoom in That's what I see and this is another reason why I say don't use five minute charts.  That's it. It's over. It's done Oh, because if you look at the whole thing I just did a small little whatever maybe even wasn't small maybe was a large because I don't know some market event The end of that bar It pulled back it closed above and it kept the whole pattern You're going to draw the whole pattern. It kept it kept the whole pattern intact right Still in you're still in the pattern But yeah, I'm using the entire candlestick what I'm not going to rinse over the violation if it's only one or two past it like if you're if if I drew this over here this this pattern and all the lines Black all the lines are breaking through And through breaking through and they all look like that then my pattern is not that my pattern is actually down here right Maybe it's not maybe it's not a wedge anymore because depending on how the pattern is and let's say the lines All these lines are up like up here Hey, well, I don't have a wedge anymore. Maybe I'm in a channel Maybe that's what I have. I have a channel I don't know depends right so if I'm getting a lot of these Line violations then Yes, you're no longer. It's no longer that pattern. But if it's only one It doesn't really matter. Okay Any other questions before we go to targets? Because we're already at two hours Yeah, I don't see any more questions. Okay So let's go quickly through them so double bottom and one two three bottom triple bottom they all Well, not not so much the one two three bottom But a channel a triple bottom and a single a double bottom. So let's let's bring this back Let's bring up the list So the double bottom number one the triple bottom and the channel bottoms all share the same targets and they have two targets So you have a double bottom Do this and this applies also to tops by the way just so everyone's clear I won't be able to draw every bottom and every top It's so we're just going to focus on bottom. So I have a double bottom here. What's the target? Two targets. Okay first target is this I'm going to use red distance Here to here is a Use red that distance it's a first target is this a At target of a on a double bottom Distance between the bottom and the top first target on On a double bottom is the same the height becomes the height height of the double bottom becomes the height of the target a equals a Similarly, if I have a triple bottom one two three Hey That breaks It's a distance To draw this a little bit better comes Hey, that's the first target. Okay, I don't didn't write that very well. It doesn't matter Okay, so there's your first target on on Double bottoms triple bottoms and channels Hey We'll also draw some channels. So let's just clear this If I'm in a falling channel just write okay falling channel If I'm you know what I'm going to do the whole thing all at once. I'm in a sideways channel I turn into a rising channel Do them all at once It's easier the distance Draw right here a distance or Let's do it over here Hey Distance or even over here That becomes the target. So if it breaks out Let me draw my green line if it breaks out of this declining falling channel It's going to move up distance of a And if it breaks out here If I'm in a sideways channel It's going to move up distance Hey, hey Or if I'm in a rising channel it breaks down It's going to break down the distance of a That is your first target channels Also similar for double bottoms and triple bottoms second target Is width So the first target I talked about is height Height of the channel the height of the double bottom the height of the double top the height of the triple bottom Triple top comes your first target Second target is a little bit more subjective Because depending on how you zoom in and zoom out on your chart, it's going to be subjective. However Just to give the general idea Width of the channel Call that be The height Comes the target Hey B There's your second target that does not hit as much as a as He will hit much more obviously because it's closer Then B does Same with a double Say a double bottom Width Which is B This is not really the best best picture. Let me let me draw it a little bit better Okay, because you could have a double Double bottom It looks like this Hey The height is your first target a On the breakout That's here. That's a But your second target Is B B is a little bit bigger not much bigger in this example But that would be up here That would be B Same applies for triple triple bottoms and triple tops So the first target on a double bottom triple bottom and a channel is the height of Distance between the top and bottom of it Second target is the width The width does not always hit as often as the height does Does everyone understand those before I go on to others We have any questions on that the first target is the height Second target is the width see any questions popping up Lodge above asked, how do we determine the time it will take to get to the target? That's a great question. Um there's I can't really answer that with a straight answer it can Sometimes like sometimes what you'll end up happening is this I'm going to clear this Sometimes what will end up happening is it goes in the channel We know our first target is what our first target is the height Hey, and our second target Our first target is a And our second target is B Is the distance Hey Generally speaking a will hit In the time frame it takes normally to go from Bottom to the top of it You might be looking at say let's say I don't know a daily chart and it took Eight days or nine days to go from the from the bottom to the top So there's a good chance that within Eight or nine days that it took to go from here to here or there to there it will also hit a A B however, it's it's hard to say it does not Many times the second target the B will happen very fast. That's why channels are one of the strongest patterns because There's this they call it coiling or consolidation or squeezing is another term that's used If it gets tight and tighter and tighter and tighter and there's this built-up tension And then when it finally explodes it explodes fast Sometimes you get the breakout of B and it happens just as fast as it would Just blows and goes right Let me see, you know what a good good example was oracle I remember a few people were trading oracle Down here in march See if I can get back to when was it march 11th? Get rid of this This january Here we go So in in march when oracle had earnings Right after earnings. I know there was a few people I think guru was in the trade. I even suggested buying oracle and there's a few others suggested it oracle Had earnings it tanked Then it went sideways And there was a lot of people who were in it like waiting is it going to break out break out and I think this lasted 10 days Something like that and I did this sideways channel. I know it doesn't look like a clean one It does this channel here If I was to take this just Do that and about this time frame here All right, let me just put that on the cat on the whiteboard So here's your sideways channel right here Okay And it's tuesday wednesday thursday friday a whole week and monday tuesday wednesday like You can see it took it took almost two weeks This is a sideways channel now. It's not as beautiful as those ones I've been drawing where they hit the tops and bottoms in every case. It's still a sideways channel. It's back here And so what was the target the initial target is a And what is a a is the distance from here to here? All right, and what is that distance we look at it's about 65 to 68. It's three dollars. So here There's a Was your first target? How long did that take? Oh, we look we have wednesday thursday friday. I don't know if there was a friday. I guess it was to I don't know if it was a holiday, but anyway monday So it was either three or four trading sessions. It took Hit the first target The second target is the distance. So we have this distance here Yes, I acknowledge it's a little bit subjective because depending on how how much I zoom in or zoom out Could affect it a little bit, but you have to try to be reasonable and flexible There's your target for b is the width the height So we add that and we have to kind of use our fingers a little bit But that is roughly I'm trying I'm tilting my head if you can Leave me here, but that's roughly somewhere around here Hey That's b How long did b take? Well, we have another week If it was here then it happened within the week And if it was there it was another week. It was about two weeks Okay This here was was two weeks as well. So the distance or the width of the channel Took approximately two weeks for it to hit the the height that it became as its target Was roughly the same a was took roughly Two three four days to kind of hit bottoms and tops and it took three three So, you know the simple answer really is it's around the same amount of time that it takes for it to happen If that that's a rough estimate you can't always expect it That long sometimes it's much shorter It just depends But with this specific oracle example, it takes about three four days to go top to bottom Before it took four three four days for it to hit a target It took two weeks or so for it to do its channel Took two weeks or so to hit its target We're about the same I'd answer that question. I think so All right I'm gonna say yes all right, so targets for head in the shoulders and cups so In shoulders, what is it? Let's do an inverse one The shoulders is like this The neckline is here The target is this the distance from the neckline to the head Comes the target that is your target. However tall that is from neckline to head Comes your target Those targets hit Remember correctly they hit 89 percent of the time. Where's it 88 percent? It's 80 something. I think it's 88 actually 88 percent of the time the head and shoulders will hit its target So it's a good pattern to play because once it breaks up of the neckline It has a strong chance of hitting its target. The next one is a Cup clear that one and we'll actually do cup and handle too So first of all we have the cup We have the handle we buy at five o'clock And here as we mentioned You have a resistance line The target is here And there's two targets as well On the cup and handle The only problem with a cup more than a cup and handle Is the second target the larger target Only hits 37 percent of the time You say well, why would people trade a cup and handle if it's only hitting 37 percent of the time? Well, that's because a cup first of all we're buying down here Not at the breakout Starters and so we've already made a ton of money The second of all cups are the largest pattern So if you take all of them put them all together a cup is the largest pattern it takes months cases For it to play a lot of people will draw a cup on a 15 minute chart that looks more like a Like that And they'll say now there's a cup and handle and it looks more like a shot glass than a cup Cup is not to meant to look like this like I don't want to draw anymore it kind of looks almost like Something it shouldn't drawing on this page But basically my point i'm trying to make is a cup Not look like that a cup needs to be rounded It is massive And it takes time So hitting its target Which is here This distance So big Not only hits 37 percent of the time this target will hit much higher. I don't have odds But I think it's 70 80 percent something like that. So that target, which is the initial we should probably have called that B That initial b target will hit much more The a target only hits 37 percent of time, but that is your target It's a massive move. You think about you bought it down here. You made all of this You held through all of that, but then you made that much more it's a big big move It will only hit 37 percent of the time uh wedges It is this The target Again is the width See there's a common pattern here on these things the width at the widest point Comes the target the breakout Okay same with on a wedge if I draw a wedge, um Rising like this looks like that Actually, no i'm wrong on that one. I apologize. This is not right I apologize the target is actually here It's top top of the wedge In this case the bottom of the wedge The breakdown Is the target It's not the width Apologize for that confusion. I should have said that this is a And this is a it's a different color There's your target It's also now I've had a discussion with a few people I don't know who exactly it was can't remember it doesn't matter Some people don't agree with my targets on wedges The pattern site doesn't have these numbers um However, based on my testing and based on the course that I took way back I knew nothing about trading This is the numbers they came up with so you can take them with a grain of salt You can disagree with the numbers on the targets I've I've already told you that the Uh the breakout of a a wedge will pull back half the time or 47 percent But according to the numbers I received 89 percent of the time a wedge will hit its target, which is again Numbers and I know there are people who don't agree and I know the pattern site Doesn't agree with that I don't necessarily agree with the pattern site I only bring it up because I know this discussion has happened before in the past Hey big T Yes Someone asked Israeli. Hey Somebody asked how do you differentiate between a breakout and a fake out? How do you differentiate between a breakout and a fake well, I mean If you're buying as soon as the breakout happens you wait for it to go above or whatever Let's say you're doing a breakout so you're trying to go higher you're waiting for it to go above you're waiting for it to close above It does both of those things in theory you have a breakout But then it pulls back and I've tried to give some of the numbers on certain patterns that are breaking that will pull back You don't ever ever know with 100 percent certainty that it's going to break out versus a fake out Just don't even if I'm doing a um, let's going to clear this here. Even if I'm doing a channel And It looks like this rate. It comes down and does a channel does a channel does a channel and then I've got my lines here great and It moves above. Okay. It moved above it closed above great You don't know with 100 percent certainty. You just never never ever truly know That is not going to possibly be a fake out You do know Is that a lot of these a lot of these patterns tend to pull back So for some of us with patience with some of us with experience, we don't care if We miss move don't care that Potentially, let me just do this again Moving potentially. Okay. It closed above and potentially it just does this Don't care Because we have learned over the years Some of us not all of us we have learned that's over the years and more often It will do some sort of pull back Not violate The breakout point and then do this right The question was how do you know you just don't know until Happens you can never ever truly know that that breakout won't pot potentially Be a fake out how do you counteract it?  I missed this good move. I could have blah blah whatever But what ends up happening is this it moves moves and then does one of these And you go ah great awesome I was smart. I didn't I didn't get fooled. I got my pullback it held and I bought there But the question is how do you know you just never truly 100 know that it's going to be a fake out versus a breakout You can counteract it with a pullback I imagine you're kind of tired. So do you want to go to like 945 like est? You can go as long if everyone wants to stay up to in the morning. I'll keep going. I'm good Wow, what a king And no, no, I'm not a king, but um Just a humble servant. Um I'll keep going, but I wanted I wanted to cover at least the um all the different Targets uh target on the retracement is the Fibonacci.  Targets are it comes down It does a reversal It's going to hit the 38. It's going to pull back to the 23. It's going to go up to the 50 It's going to pull back to 38 going to go up to the 62 pull back to the 50. What's your targets? Your targets are next Fibonacci If you have this large move and you're able to get a double bottom or say a triple bottom or something down here What's your target at least 50 percent retracement? that's just That's just pretty standard in the market. Um, you know most of the time you're going to get a 50 percent retracement on a large move It doesn't always happen, but that's usually what happens Uh, as far as gaps go, um I will cover the target for for a breakaway gap, which will be next week a target on um Or on a continuation next week a target on a breakaway gap is is really Like I said before it's it depends on what it was. So if this was here, let's it's great that this one's here So let me remove this Hey, and here's my breakaway gap Some earnings or not even earnings. I got a news. Um an upgrade um The target on this gap on a breakaway gap from the channel is the channel's target It's not there's no There's no target on the gap There is a target on um, like I said on a continuation Gap which is way up here Continuation gap Which I will discuss next week is this gap We're not talking about the gap down here Talking about this gap this gap here has a target This gap here does not Again, you don't know that it's a gap until until you have confirmation That it keeps going basically the target on this gap is whatever Channel was or the target is for the double bottom or double top or whatever So that's that said there's no target for for this specific gap um And then the one two three which is the one I skipped one two three is it basically the targets are similar to Elliott waves I didn't want to get too much into Elliott waves one because there's a lot of rules for Elliott waves Do this thing is all about price patterns not Elliott waves But generally speaking Just draw it So you get the one two three And it goes up Right and it goes up goes up Generally speaking the distance of here Comes the next target Of course Elliott waves it's sort of similar that the distance on wave one Wave one can be this entire move Depending on this could be all of wave one Right, but it's the same general concept that So Wave one can be a little bit It sort of measures how big the next wave will be wave three But I don't want to get too much into that. You basically it's the easiest way to understand it On a one two three is whatever the distance here similar to Double bottoms Distance here Comes the target for the next level I probably shouldn't even mention Elliott waves You can do that another time and we'll bring in people who are more experts at Elliott waves than I am I haven't used them in 20 years Someone asked the question. How did you get into trading what made you wanted to start? Um So I wanted to be in a trading since I was five years old or At least as long as I can remember I remember watching the news and seeing all the paper flying on Work and tile exchange and the paper flying on the new york stock exchange and I live in canada so there was also paper flying on the Toronto stock exchange floor And that's just what interested me. I immediately was like that's what I want to do. That's what I've always wanted to do Um, unfortunately, I grew up with no one around me knowing telling me what to do or how to do it and no one No one told me what courses to take nothing. I had to basically learn it all on my own But I pushed um, and I got a job at a brokerage. I worked for a broker And I got my license there after taking a bunch of Securities courses now I don't know the name of the courses in the U. S So that's different in canada But basically I finally figured out I had to take certain securities courses And I took them and I got the job at a broker and I never looked back and I worked for that Large broker. He was a five million dollar producer and I was one of his four assistants And that's where I went from there and there I went on to another trading floor and then another one Yeah, whatever and it all started with just watching on the news and You have to remember when when I was five there was no CNBC Um, that was 1979 and I was you know, the only thing they had was Saturday night fever, right just going whatever so all I could see was whatever was on the news The paper flying so that's what that's basically What got me interested? I said I want to do that whatever that is. I want to do it and as I got older I To realize oh, I can make money doing that. Oh cool. All right Thank you for that For any more questions. I think I've covered all the targets and I've covered all of that um So basically for the agenda Jen is any questions on patterns? And then if not I'll take general questions on trading on anything if you want me to plot some charts Different symbols. I'll do those two So far there's nothing new so if you want to continue with whatever you have planned go ahead I have nothing else planned I've covered I've covered a lot.  Yeah, like ask the questions. I can try to do some examples on charts But if they just want, you know, what do they think of this symbol? I'll do that too Um, someone asked a general question on how you chart Fibonacci retracements I Do it automatically I have code It's dynamic That automatically Parts Fibonacci. Um I know there's some code out there for thinkorswim. Um, I took mine and and massaged a little bit, but like you look at Um, I'm looking at oracle. I guess this is Is this the latest? Yeah, this is the latest. Okay so Here on the 15 minute chart It's drawing a bottom and a top and it's doing it automatically and dynamically I don't have to draw anything the code is doing it for me. So I can I can mean I can show it on anything. So if I I don't know, let's pick a random stock. Um Depot As soon as I do that Yellow line is the top Yellow line is the bottom. That's the zero on the hundred and it's giving me 23 38 50 61 66 right As my fibonacci is already set to go If you look at this this I mean in this specific example for For home Depot, it bounced and went all the way to 61. It didn't stop but 61 was if you notice 61 61 62 when you round up It acted as a resistance and then it just kept on going. It was just strong Okay For me, I don't have to draw them. But if you are drawing them I you want to take Let's take this move here on the daily. It's the same home Depot. You want to take a bottom? You want to take a top? Then you get your tool um Toss it has a percentage tool fibonacci retracement under the arrow Of course think trading view has its own as well Um, but anyway, you take your your thing and then if I select that I can pick the bottom I can draw the top And along behold when I do that He draws the lines right over the gray lines that my automatic dynamic one did And so here we go. We ate a top This is a very long on the daily. There's a very long one two three Sure enough it came down to 38 came back to 23 Down through 28 came almost to 50 Back in back up Where is it going chances are it's going to go all the way back to 23 It's going to break out of this channel and it's going to go up to here I've been saying for a while for those on the options wings that the target for home depot is 322 I wasn't using fibonacci. It was actually using something else. But lo and behold, there's your fibonacci at 322 Okay, so there's likely where home depot will rise on its next move of on a channel That's why it's good to have these but for me I personally I um They're not my number one way of finding targets. I use other things So that's why I've shaded them in darker gray. So they're not so prominent because if you Shade them in yellow or red. It's it and your screen ends up looking like a grid I don't want that Somebody asked what are or I read this wrong How do you decide to trade stocks with huge gaps at gap ups like swbi Okay, let's look at us. I don't even know SW Okay, um, where's the gap? Uh, let me find it Is it down here? Is this what we're talking about? I don't know if there is a gap. I'm not looking at the chart But I'm more I think he's more sort of trying to ask like really big parabolic run Okay, so this is what I was saying earlier. So we'll say that that what he's referring to is this and I'm going to zoom in a little bit this Here we have a stock stock Looks like that, right? so You know what I will even So we don't get confused just the whole chart Intraday here we have a sideways channel Good example actually A sideways channel. I'm going to use tosses Things you can draw a line Here And we see that but you're bouncing between the yellow Sideways channel and it break does a breakaway gap Actually a good example of a breakaway gap, right? And I said earlier that we want to probably try to wait just in case I like to wait about 30 to 45 minutes to see if it's going to pull back And these are 15 minute bars and it turns out it doesn't it doesn't pull back. It's just going to keep going For me, I'm going to get a little bit worse of an I have an entry on this if I was trading it at 21 dollars But I would get in somewhere around here And because it's a breakaway gap And now I'm going to look at my targets. Okay, so what's my target? So if I This back here First target was the height I can almost argue that this here is where the channel is it's right up here It's 20 dollars 82 cents. The bottom is 1954 So that first target is a dollar 30 ish Okay, so where is it going to go from the breakout point? It's going to go at least to 21 30 and it's already done that now the next thing I'm looking at for targets is the width Oh, I could argue Bring this here just here. I could argue was in a sideways channel for a while But at least from here to here Okay, and what's the distance of that from here to here if you're using your fingers and you're looking at the screen We're going to say that distance is approximately. I don't know Five four or five dollars, right? So somewhere up here The distance from here to here is about At least here at least there and probably up here Okay, it hit both targets on the sideways channel. It did a breakaway gap There's no specific target on the breakaway gap There's a target on the channel and the channel we had multiple targets that I gave you It hit one and it hit the next and it just kept on going You couldn't see it kept on going Okay, but then you get another channel here so that we can draw another line if we want Get another channel right here We get another channel Get even draw it here. We don't even have to use the The spike through as we were talking earlier that it can spike through so there's another channel So I have in this distance so the first target is going to be here Look at that that distance to this distance hit here Next target is the width a width is up here It's you can you can see sort of what I what I'm doing, right? I mean, I'm just saying, okay I got a channel. What's my targets? My channel is first to the height. That's the width Stack them on top of it Okay, that's how I would have traded. I would have probably bought three four bars in Missed the first initial move I'm okay with that Because I want to wait for confirmation and I don't mind missing a little bit of it I could have also If you wanted waited for this whole move and then waited for the pullback There wasn't much of a pullback chances are I would have missed it I did that I also could have used this as a resistance these two points and said, okay Once it breaks above there, which it does on the next day I'm gonna buy I'm gonna Live with missing this move because I I believe this thing is going parabolic and I wanted to go higher It broke above these two highs Was in a little mini channel Was a double top a little mini double top it broke above and the way it went I hope that helps now keeping mine over here. You can see it was earnings It broke away on earnings. So I didn't even look at that Knowing that it's breaking away on earnings like that. I might have bought even sooner because it's an earnings play Waiting for the day after it's must have been strong earnings or something It may be I get in sooner. Maybe even on the first bar depending I hope I think it does We have uh questions for others Um, we have two more and then we have some chart requests after Someone and this this first one's up to you for answering. How long did it take you to be profitable consistently? um Yeah, about 10 years about 10 years and The reason for that is without getting too much. Nobody really cares too much of my journey but um, the reason why it took me a little The reason why it took me a little longer is because I was a little bit Um I'm an introvert believe it or not. I'm an introvert and I was just trying at first. I was trying to find the perfect indicator And let me tell everyone out of there who's just starting And anyone else who hasn't who may be been starting and been doing this for a while. There is no perfect indicator All basically don't work Or all will have an accuracy rate less than 40 50 of a time All right, you use indicators for is to give you an idea of where to buy You use price to actually buy If you like mac d great I'm happy for you. You like mac d mac d.  Oh, it's overbought now. Let me go look at price That's what mac d is telling you stochastic same thing rsi same thing all the fancy indicators bowlinger bands whatever anyone doesn't matter Which one you choose They're all telling you oh this here is in a Possible overbought oversold situation now. Let me go look at price Let me if I understand all the price patterns for reversals and continuations I can look at the price and thus trade Go back to my story. Why did it take 10 years? I spent a lot of time trying to find the perfect indicator doesn't exist And the next thing I did is realized I don't have the perfect indicator and oh, I have to work too Because at the time I was still working So what did I end up having to do? I I I tried my my hand in forex And what that ended up happening is I end up staying up till 2 3 4 o'clock in the morning trying to trade forex And I wasted a couple years trading forex when I should have just been trading stocks all along I was trading them on my investment account like I was buying and holding I wasn't trading stocks. I was actually trading forex So that took me on a two or three year sideways journey off to something else um, and that's part of the reason why I never got into um to crypto Because I like my evenings. I like my sleep and I like my weekends So I've never traded crypto. I've traded every single thing else futures forex stocks bonds options, whatever But I never got into crypto because of my experience with forex Because there was a way too many nights. I was up at four in the morning Trying to trade my forex account and then had to get into work by eight o'clock And it just ruined me So that's why it took a little longer for me to realize. Oh Yeah, there is no perfect indicator Profits weren't as easy until that point Somebody asked how do you pick a stock and how long does it take before you decide? Do you read the news? Do I read the news no could care less what the news is I am not a momentum trader. I am not a news trader. I don't care um It's nice to know that a certain stock got upgraded or a certain stock got certain news It helps But I don't trade that way. What do I use? I use math lines math statistic lines um In order to trade I'll show you an example Let me bring up I thought I brought it up It's over here. It's off. I have the multiple screens. It it moved over to the other side Sorry Here we go So I use math lines, um statistic lines linear regression and standard deviation normal normal distribution And can't remember the other name of it But basically you see these lines on here These lines help me to decide where to buy and sell signals are and that's where you see these arrows Then based on those arrows that you're seeing so such as this dark blue one down here Just using the person who asked about swbi Here's where I had a buy signal At the time then these lines were enough spot to create a buy signal I would wait then for a price pattern or a price To confirm the entry And I would buy the confirmation came here on the breakout above here But that's what I use Just because I have arrows doesn't mean I'm trading I want to point that out because a lot of people ask me for charts and I'm okay with that Please just because you see all these arrows and you could say holy crap, man, your system sucks Hey, look at that sell sell sell sell sell sell and up keep it going keep going keeps going sell like your system sucks, buddy I don't know why you're even talking about it. Well, that's because I'm still waiting for price It's just telling me and everyone would agree back down here. Let's just zoom in It was treat this starts dust wbi was trading down here and it was moving one dollar up and down And all of a sudden it's breaking out and it's moved to three dollars and it keeps going and it's moved five six dollars Everyone in there with any sort of smarts would say it's over but it's over but it's over but and that's all this is telling me This is over but it's over but but it means Nothing means nothing until price confirms it. So here it's over but It will top but doesn't confirm the breakdown as we talked about earlier No confirmation can't short it. I guess I have a bunch of arrows telling me it's over but but it's not it actually breaks out the other way Which you end up being over here on the daily chart and it keeps going again over but over but over but over but again over but All triple top whatever into a channel doesn't break it kind of broke down end of I'm patient And lo and behold it backs back up and it keeps going Right That's what I use. I use I use math lines to give me the over bot and over sold You could be for instance interested in mac d or rsi or whatever and it will of course it would be down here on your chart But it's just telling you it's over bot or it's over sold. That's all it's telling you you must use price I've seen Guru do this. He's he uses rsi and mac d. I believe and he can correct me if I'm wrong But then he waits for price and he'll show his price patterns and he'll draw trend lines and he'll do whatever And he's buying the breakouts. He's not buying the mac d going above a certain number That's not what he's trading Some of the other guys who are analysts here don't even have indicators on on their chart They just have price and they'll draw their trend lines. I think What's his name hydra is really big into doing that. Yeah hydra exactly hydra. He does it huge. He does so many trend lines The guy is bang on accurate. I'm just telling you like sometimes his breakouts don't work. Somebody was asking about that earlier All he's using his price. He's he now he's doing continuation and breakouts trend trading not reversals That's all he's doing. He's just drawing lines on his chart and saying if it goes above here closes above Maybe it pulls back. I'll buy here whatever and boom. That's it Whether you're using mac d whether using math lines or whatever my math lines that i'm using standard deviation are not my entry They're just telling me. Oh, it's oversold.  I don't think all of them are but a lot of them are Somebody asked can you run through stops where patterns are invalidated? Run through stops for patterns Uh, so someone said that like they wasn't explained on the following wedges channels double or triple bottoms and head and shoulders So If it's invalidated Where do I put stops you would you would put stops at previous support or resistance? I don't let me May draw So you have head and shoulders Breaks out Does this This is what we're talking about, right? I believe Yeah, I think so somebody's typing. Yes. Okay. So where we put stops So stops could Now it depends on the size of this because head and shoulders can be really really big You don't have to stop here. You're gonna have to stop here or you could even have to stop here Okay, you're waiting for it to go above close above. Okay, great On a trailer stop so depending on the size This size here is 20 cents. Well, maybe you're not you're not using this one Just not but if this size here Is like, you know a good two three dollars and yeah, maybe your your stop is there or maybe it's down here where the Last shoulder was and it goes above Hopefully ran it did this Just erase this a little bit hopefully And it broke out it did one of these instead Because then you could raise your stop here Right Broke above it kept going but it then invalidated but you could have you said oh look I've stepped up my stops And I can put it here Right now depending on the type of option strategy you're using as A time hop described in his butterfly session on saturday And I do encourage you to please watch that if you're interested in option strategies or even if you're not you'll learn a lot Depending on the option strategy may not have a stop loss Stop is simply the price that you paid because you're buying a hedge strategy already Buying a butterfly, which is already much cheaper go butterfly pattern fly Would cost you something let's say around three dollars or as a regular long call On say something like I don't know netflix Costs you seven dollars This stop here or here or here or here Is probably somewhere around three to four dollars I think you get out with three to four dollars meaning you lost three or four dollars The butterfly or similar patterns If it did this and went to zero Lost three dollars So depending on the type of option strategy you're using and if you're using hedged ones which involve selling options and buying options May not have a stop However, if you're trading This regular long calls long puts nothing fancy plain vanilla Stuff Yeah, you would trail the stops as I as I show it here on the on the head and shoulders um On the cup You can do that one In the cup cup and handle In the cup you do this you buy at five o'clock. I talked about if it goes like this, it's probably going to go down You could also set your stop here and then trail the stop because the Let's get rid of this Cup is going to do this right, but it's going to it's not just going to go up.  I'm not drawing them here Drawing them a little bit below. So that's a key distinction hey so Down here. I'm leaving a little bit of space A little bit of space Little bit of space see not Putting my stop right on the line Because what ends up happening is as you know market makers like to hunt for stops The algos algorithmic trading will hunt for stops Do you want to add what when I what I was taught with they called it fluff? Fluff Dulling it out for you in case you don't understand what I'm saying fluff. So if your if your bottom Here let's say is $50 Here is $50 I want to add some fluff Or some extra to it so that you don't get triggered on one of these little jerky moves So I might depending on the stock if it trades Not very Volatile I might make my stop 49 80 I've added that little 20 cents of buffer or fluff buffer to Allow for my stop not to get triggered so easily Same thing with an option and the option makes it a little bit harder because you're using the option price, but you want to Want to add a little extra You know just you know, I know what heaven has asked me to do A whole session on position management money management whatever and we'll do that but basically if you're trading stocks Should have a 10 stop loss Retreating options options should never lose more than 30 to 40 percent The stop loss unless you have a specific hedged Option pattern Okay, but if you're just doing regular long calls and long puts Should it be around your stop loss should be around 30 40 percent here If you're doing stocks, it should be 10 percent and you can use these these These bottoms as a way to to do that. Um, what other pattern did you not give? I'll stop some The rectangles or the channels Before that said that they said that weren't stated we're following wedge channels double or triple bottoms and ahead in shoulders Double or triple bottoms. Okay. So the double bottoms and triple bottoms are simple. You want to sell here I'm uh, whether this is a double or triple This is your stop You put it again. It's similar to be you have it's similar to what I just just drew like you have support The other ones they were they were rising right they were support support support, but you want to put them just below Give it a little bit of buffer a little bit of fluff or whatever you want to call it To allow for the you know for a little bit of a spike through not a lot That's depending on like it, you know, if you're trading for example, if you're trading a stock that's 50 dollars, I think, um Delta or something like that is trading around 50 dollars Then your then your buffer could be like say 20 cents If you're trading tesla 20 cents is nothing Hey, if you're trading tesla, you want to have a buffer. Let's say two three dollars four dollars But you're providing a little bit of buffer. So if you have a double bottom triple bottom is the same thing if you have a channel The channel is like this same thing It was below Certain amount that's your stop What was the other ones they said? Okay It's Riley, right Yeah, my name is Riley Okay, sorry. You're good. You're good. The last one was head and shoulders and shoulders I just did But I'll quickly do those again And in shoulders, I just did it. So you do this or even this or Stop it's here It's your stop point Excuse me Stop is is just below Shoulder on the inverse and just above the shoulder on the on the head at the proper head and shoulders Another one or this is there's no more patterns at the moment, but this is going back to your math lines question Um, do they refer to the same thing as pitchfork? He thinks those work around standard deviation if they're not mistaken That they don't use I don't believe pitchfork uses linear regression My math lines use um linear regression plus standard deviation so Yeah, let's bring I don't know. I'm gonna I'm searching for a stock Okay, so let's see here. Let's use the daily on Netflix. The linear regression line is the blue or sorry not blue This is cyan or aqua aqua blue color Also here That's linear regression standard deviation is the purple red blue. This is one standard deviation. This is two standard deviations This is two and a half That's what i'm using Tier is telling me now that netflix on the daily chart is Uh overbought Doesn't mean it won't run We look at the interday It's near it's just above um Just above linear regression this thing could keep going which is what I showed earlier Are you gonna even hear or you see it on the daily? See a cell signal cell signal cell signal and it's still going higher over here on the interday cell cell cell They're not cell signals. They're overbought signals and it's just keeps on going um a pitchfork As I understand it and I don't remember 100 but I don't believe it uses linear regression in order to formulate it Believe it it doesn't it uses standard deviation for the outer edges of the pitchfork You have to draw the line itself You're drawing in my case. I'm not drawing anything math is drawing the center cyan aqua blue line linear regression is being drawn for me Whereas a pitchfork you're drawing the line and then the outer edges of the pitchfork are standard deviation So it's only using half the equation Something similar is Bollinger bands. So Bollinger bands uses standard deviation to build the bands What it fails to do is it uses moving averages as your center line Moving averages are the slowest indicator on the planet So that's what's wrong with Bollinger bands. It's not that it doesn't work And not that standard deviation is not good. It is it's just Not as good as linear regression because you're using a moving average for your center line We don't have any more questions at the moment, but we do have two stocks listed to chart. Let me see where they're One of them is going to be twitter and the other one's going to be mr Twitter right So let's just do a little bit of a zoom in here All right, so now we have our intraday chart and we have our daily chart So on the daily chart We are still in a breakout Strong pattern what you want to call it I did try to sell off But then held the 20 the green line the dotted green line here is the 21 daily moving average EMA In the purplish bluish grayish color there 50 day daily EMA It broke above those and held and kept going. So in theory There is a resistance here that it's been holding In theory twitter should keep going when I look at the daily chart If I look at Fibonacci just to throw it out there Fibonacci has come up to 61 But it but there's another target up here at 78 percent now when I look at a intraday chart Intraday chart it's it's showing that same strong move It has a number of overbought signals, but it's never confirmed until you have price Did a top And let me just zoom in a little bit here Just to move the arrows a bit it did a top down The higher top thus invalidated a double top Invalidated a one two three top because this is now the new top This becomes your new top it comes down It comes up This is where it gets a little tricky This day here it gapped up then and down The person like me who's waiting I don't view this as a gap or as another top or anything. I view this more as the top because It didn't last very long. It lasted 20 minutes 10 minutes of up and down it goes. So I have a one two three Okay two three top Then I have I do have this point this point. I have this point even though it's not very strong So then when I again, here's the problem if I'm zoomed in I don't see the whole picture I'm thinking oh if I'm zoomed in I got a one two three top held whatever broke down Okay Oh short Hey When we zoom out We see a little bit more of a picture When we start drawing some lines we can draw some trend lines or two, right? Oh, okay. Here's my top Here's my other top Here's this And there's that You could say Say I drew that wrong So let's remove that drawing Off through the lines That looks like this This is what we talked about earlier. Someone was asking if it peaks below, but sorry peaks Pierces through but then ends up closing above. This is a perfect example. So twitter pierced below And at first I drew the line here, but now when I looked at it and I drew back enough I'm able To draw my lines through that piercing but still obeying where it closed that for those 15 minute bars and what I end up having Is I have a And when you zoom in even more I have actually which we will discuss next week I actually have a flag Sorry, let's get rid of this See that so I have an up I have a flag So I won't get into the targets of a flag Because I want to save something for next week However, um Overall the answer to this twitter is bullish. It should keep going after this flag pattern is done Uh, the next two takers are m r i n and baba r i m r i n r i n Maren software Yeah Okay, so Just so you know for everyone's sake, I don't trade penny stocks. I don't trade small stocks Everything I buy is over a hundred bucks It's just why people ask me this all the time. The answer is I don't want to have to worry about the fundamentals However, I will answer your your the question what I see here The intraday that really doesn't show up very well because it's so tight, but the daily shows it you have this long sideways channel You can argue that it It's uh, like a triangle, but really it's a channel You have a bottom here. You have a top there a draw line Just for the sake of it All right, this is a sideways channel long sideways channel first target. What was it? It's the height It would bring it here and do that literally on the first day Next target is the length. Well, that's a little bit different scenario Here we have from march to june where it went sideways So when I stack this distance Wish I had a little measuring ruler, but when I stack it I'm Up here somewhere so my roughly around here is the height So it's hit the second target Right now I have to go intraday in order to discuss the daily charts telling me nothing as far as Whether it's over or done. It's just telling me it's mooning When I go intraday, I go up to here As the fact I've got all these over over bot signals, of course I do because it's so high up I have a top here came down In here it looked like it confirmed one two three top Come quite come down so it did confirm it and then this price here Closed above thus invalidating this top. So now all I have really is a single top It's over bot It's a single top and until you get a top pattern on the price All I can say is this likely keeps on going I know nothing about this company So I can't speak to it That's the reason why I trade a hundred dollar stocks because I can tell you fundamentals about some hundred dollar stock I can tell you nothing about marin software The next ticker is baba Good old chinese stocks That's another thing I don't trade. China's taking a dump. China's taking a dump right now too. Yeah, lovely times Okay, so over over bot double top Two three double top declining double top There I see it two three top blows below here if it goes below 226 50 it's going down It's going to fill the gaps I'm able to do this really really quickly. I just try to Whatever but when I look at Volume profiles and whatever on the daily it's up near resistance There's some resistance here. You can see it resistances came down whatever it's up near resistance. That's why it's probably slowed down It's over but it has a one two three. I would not short it until it goes below 226 Because it could go higher Right now it's still a buy But it's on the radar for a possible short And if it does We start to look at What will happen and what will likely happen is gap fills. So it probably is going to target this gap And if market gets really really negative it might even target this gap down here at the very least Could do a 50 percent retracement which my automatic dynamic thing i