Do You Make This Trading Mistake (Video Review by Jeff)?
hey what's up everybody hey welcome back to the channel i'm trader jeff and in this channel we talk everything trading options forex crypto and right now trading video reviews where we take a video we watch it together we analyze it and then i give you kind of my thoughts and opinions as we're working our way through the video all right so if that sounds good to you you know what to do one hey subscribe to the channel if you haven't done so yet two hit that little bell to be notified whenever i shoot a brand new video three and make a comment let me know your thoughts i would really appreciate it alright let's roll that intro all right everybody hey welcome to this video now in this video we're gonna do a review okay i've got something that ran across my news feed today and it said do you make this candlestick trading mistake hey that's a interesting title and so what i want to do is i want to actually go watch the video now what we're going to do is this is going to be the first time that i'm watching it i have not watched it prior to right now we're going to watch it together so as you know brand new to the channel i want to start doing video reviews and so we're going to watch this together and when i feel something is important i'm going to stop the video and i'm going to talk about it because what i want to do is it's not just enough to watch a video you might not get the whole thing so we're going to analyze this together all right so that sounds good again if you haven't subscribed go ahead and subscribe to the channel let me know your thoughts hit that little bell to be notified when i shoot a brand new video and let's dive into do you make this candlestick trading mistake video together hey what's up my friends so in today's training i want to share with you a candlestick trading mistake that almost all new traders make so let's get to it the mistake is this is that you are trading in no man's land so what do i mean by this so for example let's say this market right now is contained between this highs and this lows it's in the range market goes up to the highs comes back down to the lows and goes back up to the middle of this range and then maybe it forms a bullish engulfing pattern or a bullish hammer whichever the case is and you look at this man rainer look how bullish this is it's time to buy no not quite why is that it's because you are trading in no man's land the price is in the middle of nowhere if you look at this chart you take a step back you would realize the price isn't near the highest of the range or the all right let's talk about that for a minute so we want to make sure we pay attention to this part because he's absolutely right the last thing in the world that you want to do and that i teach my students is trade in no man's land now i don't call it no man's land what i say is you know you've got resistance you got support so you can see up there you've got the resistance you've got the support anything in the middle is noise we make our decisions at resistance and support and this is a sideways channel he's showing us now and so that's a very important concept that you need to understand all right so let's keep going with the lows of the range is in the middle of nowhere and the problem with trading in no man's land is you get an unfavorable risk to reward and let me you know kind of prove it to you here with a chart example so if you look at this chart this is the chart of dollar canadian price is content between these highs here and there's a nearby swing low over here and over here you notice that there's a huge bullish engulfing pattern over here or a huge bullish candle and traders will look at this oh reyna look how bullish this is the price is going to the moon it's going to pluto it's time to buy so where do they buy the price closed over here let's say you entered near the uh open up of the next candle you probably go along around 1.32 oh okay let's say you get get long at this price your stop-loss like a logical stop-loss would have to go at least below this swing low let's say and here 1.305 now what about just really quickly i know a lot of y'all notice but some of you might not he's talking about forex okay forex we're not talking about options right here and again i know a lot of you know this but some people are new to this so the entry these are you know 1.320 they're pips okay and then a stop loss 1.305 so in this particular case he's risking 15 pips which again i know a lot of you know that but pay attention to this because right now he's spot on the market and a lot of people they will enter in this as he calls it no man's land so let's just keep watching targets so if you look at target this is the nearest swing high over here so your target is possibly around 134. so if you look at this from a
risk to reward standpoint you are risking this much from here all the way down to here this is how much you're risking and if you look at it in terms of pips your wrist right let's call it ri is about 270 pips and your reward your potential reward let's call it re is potentially 80 pips right from 8 from 1.32 to 134 there's a potential reward off about yeah and i want to kind of reiterate this concept and again it's the whole name of the game when it comes to trading and i don't care if you're trading 4x i don't care for trading options it's risk to reward so like in this case you know he's sharing with you and i'm just reinforcing these concepts that you're in the middle of this channel no good we make our decisions at support and resistance purely from a reward to risk standpoint if you're gonna if your rewards 80 and your risk is 270 that's terrible so we definitely want to make sure and again i've never watched this video we're analyzing this together but we want to make sure that we're trading at support and resistance and this is a mistake that a lot of people do they trade in the middle right the noise 80 pips so you can see you are risking 270 pips to make 80 pips and if i just take my calculator over here that risk to reward is a potential almost risking a dollar to make 30 cents so from a risk to reward standpoint you can see that it's pretty darn unfavorable especially when you're trading in the middle of nowhere so again if you look through your past charts whenever you see that you're trading in the middle of nowhere just analyze your potential risk to reward where could the market potentially go to relative to where your stop-loss should be your risk to reward most of the time is less than one to one let me give you another example so this one here pound canadian if you look at the weekly time frame over here same thing price could make this bullish candle close over here and if you access assess this chart right where is a logical place to put your stop loss i would say you know this would be the nearest price structure nearest swing low possibly around 167. where could the boss market possibly go i would say maybe into this area of resistance over here so you can see that this is how much you how much is your potential reward let's call it re and this is how much you have to risk to make that reward let's call this ri does it make sense is this something that you want to trade i hope the answer is no so that's the key thing that i'm trying to bring across is that when you are trading in no man's land the risk to reward is usually unfavorable it's kind of like in the ocean when you're in the middle of the ocean you're in uncharted territory the risk is huge compared to if you're near the shoreline or if anything happens you can just swim back to the sand be safe and you know collect some seashells so remember this right don't trade in no man's land i'll explain all right i'll share with you later you know where you should be looking for favorable risk to reward trades where to find them next one you are trading far away from an area of value what do i mean by this so if you look at this the problem with this is that it's usually too late to enter as the market is likely to make a pullback or a reversal so let me illustrate to you what this means let's say the market is in a nice uptrend a series of higher highs and higher lows like this and if you overlay with let's say a 50 period moving average you might find that this type of market condition the price tends to you know bounce off the 50ma here once and twice and right now let's say the price is over here the problem right when you're trading or rather you can see as of right now let's say this one here is the 50ma we can conclude right that the 50 period moving average is an area of value it doesn't have to only be the 50 period moving average it could be an upward trend line it could be an area of support or swing low so whatever the case is right when the price is let's say this point over here let me just stretch it out for a bit at this point here it's pretty done far away from the 50 period moving average from here all the way down here is the 50 period moving average you can see that it's pretty done far away and when you're entering your trades far away from the area of value that is where the market is all right so i just want to reinforce this concept what he's using here in this video is the the 50 moving average i think he said simple moving average as his area value or support i'll try to do my drawing items i don't know if it's going to work but i have a little drawing tool let me see if it allows me to draw on this screen yeah it does so it could be the support area right here these lows just happens to be the 50s so what he's talking about is you definitely don't want to enter a trade way up there because from a reward to risk standpoint it's no good because one of the things that my mentor taught me a long time ago is when you're trading you need to set your stop loss below support below support he said if you set it above support you deserve to get stopped out so the value area or support he's gonna probably say if you get in it right there and set your stop loss somewhere down here then it's too far from a reward to risk standpoint so you definitely want to make sure in an uptrend that you enter at support for sure likely to make a pullback or a reversal and if you buy when it's far away from the area of value you're likely to get stopped out so let me give you an example so look at this chart over here fiverr okay so where is this chart area of value so i would say again in this type of trending market conditions this could serve as an area of value for this particular stock the 50 period moving average right almost tested uh once here twice three times over here so you can see over here the 50 period moving average for this stock chart serves as an area of value and you look at this price over here right now at this point at 320 at this highs do you want to be buying at this heist yes i know it's in an uptrend but do you want to be buying at this heist even though this market is in an uptrend and i hope you say the answer is no because no you don't want to because at this point the market could be could likely right make a pullback or even a complete reversal and where will the pullback end chances are at this area of value so this is kind of like a a swing down lower from here all the way down to here that you have to swallow it's going to be painful especially if you're buying at 320 and the next area of value is around 220 230 so don't trade far away from an area of value because when the pullback comes you'll likely get stopped out let me give you another example this one here is copper okay same story over here so in this case the 50 period moving average also here seems to be acting as an area of value tested once twice three times or if not if you're not using the 50 period moving average it could also be you know things like support resistance where this is previous swing high which could i guess support so you can see that area of value here is around three dollars and 75 cents or 72 cents around there so if you look at this right if you are looking the price now breaking up to this highs do you want to be buying at this heist when it's so far away from an area of value you can look at it like a rubber band being stretched when the rubber band is stretched the more you stretch it what's gonna happen the stronger the snapback is gonna be right rather than when stressed it naturally needs to you know snap back towards this you know normal size so same thing for this type of you know trending market where you can identify the area of value clearly if it's stretched far away from the area of value you want to be careful i don't care what candlestick pattern it shows whether it's a bullish hammer an engulfing pattern or whatever you know uh kachang pattern i don't care you have to be aware of the current price structure of the market whether is it near or far the area of value yeah i'm going to reinforce that concept you know he's talking about you know if it's in an uptrend right market structure higher highs and higher lows just like this you always want to be aware i teach the traders they're in my school we we focus on trading with the trend i mean we can do counter trend trading but if you're a beginning trader then you want to always establish a bias right what is the market structure it's up higher highs and higher lows and so if you're not going to use the 50 like he said you can literally just use the highs and lows and in this particular case the resistance remember old resistance becomes a new support which just happens to coincide here so if you try to jump in and catch this candle up here from a reward to risk standpoint you're you're you're in trouble right and so he's talking about the mistakes and i like this video and i agree with his points 100 percent 100 percent so now what now so earlier i've shared with you two common mistakes that many traders make number one trading in no man's land number two trading far from an area of value so how should we approach candlestick trading if we want to you know use this too efficiently and it's just a one-liner one-liner and by the way if you're enjoying this training so far smash the thumbs up button if you don't then hit the subscribe button let's move on so what now and it's very simple what you want to do is to trade with the trend from an area of value so if you think about this this one sentence has actually overcome the two problems or mistakes right that our traders have made that i've just shared with you so let me explain how this works so again see that's exactly what i just said right i mean again reinforcing the concept trade with the trend if you're brand new or even you know been within the last three years of trading i mean i've been trading for 15 and so focus on trading with the trend the trend from trade with the trend from an area of value so let's say market is trending up higher series of higher highs and higher lows comes back down into this area of value maybe previous resistance could become support you want to be trading from this area of value that's one example or another example could be let's say market is trending up nicely like this comes back and we test this previous swing low over here this could be another area of value or it could even be retesting right a respected moving average like the 50 period moving average that could be another area of value in a trending market so let me share with you a couple of examples before we conclude today's session so first example to share with you is new zealand yen okay so if you look at this chart let me just share with you you can see over here this market is in a nice uptrend forming a series of higher highs and higher lows so let's recap what i just said trading with the trend from an area of value so what's the trend of this market on this time frame new zealand yen eight hour time frame the trend is number one ah number two are we trading near an area of value from the looks of this we are now at this swing low this area of support over here another says yes trading an area of value and number three this is where your candlestick pattern your candlestick knowledge comes into play at this point you have something that looks something like a close to a bullish engulfing pattern or maybe a piercing pattern however you want to define it and really the definition of the candlestick pattern isn't as important right as the context as what i'm sharing with you trading with the trend from an area of value can you see the difference between buying here and trading in no man's land or trading when the price is far away from an area of value big difference one more example right let me let me give you a stock trading example to see that this concept can be can be uh used for the stock markets as well so if you look at this market this price chart trading with the trend number one yes check trend is up number two area of value again this one over here at this previous swing high which could become a support test tested once and over here tested a second time and again what candlestick pattern is this this is where your candlestick knowledge comes into play it looks like a bullish hammer to me so can you again see the difference right between trading with the trend from an area of value compared to trading in no man's land and trading when the price is far away from the area of value so this is what i'm trying to bring across right when you are trading with candlestick patterns so let's do a quick recap number one avoid trading in no man's land because from a risk to reward standpoint it's usually unfavorable and since i'm mentioning this right let's now go back and analyze this from a risk to reward standpoint if you look at this potential let's say a potential trading setup let's say you buy at 45 dollars let's say your stop-loss is at 37.50 okay so you if you do the math right your stop-loss right let's call it s it's about 7.50 that's the size of your stop-loss
what about your target let's say the nearest swing high before it right it's here about 60 dollars so from your entry point 45 dollars to 60 dollars your target is a potential profit of if my math is of me right 15 dollars your stop losses eight dollars in that example but it doesn't really matter what the most important thing is because it is eight dollars but the reward is well he has it up there you know 60 and if you're getting in at 45.50 that's roughly a 14.50 ish so kind again doesn't look like it's bait again going up there 60 45 well not quite a two to one but but you know it's at least like 1.75 so what is illustrating again for a lot of you that are new watching this is it's the concept of entering at support there's three important when it comes to technical analysis there's three big big things one trade with the trend in an uptrend we trade at support so i call it to my students it's trend support and resistance and momentum and in this particular particular case the trend is up it's pulling back the support you got a hammer or a pin bar depending on how you classify it and then you're just waiting for that momentum to shift but the reward the risk is it's good so you're now risking seven dollar and fifty cents to make fifteen dollars or if you look at it from a risk to reward standpoint you're risking a dollar to make two dollars can you see now the difference between trading in no man's land and trading from an area of value can you i hope you do because if not right then uh you might want to rewatch this video again and smash the thumbs up button again so as i was saying right avoid trading no man's land number two avoid trading far from an area of value because this is where the market is likely to make a pullback or reversal and finally number three right to really trade candlestick patterns right or to use your candlestick knowledge remember trade with the trend from an area of value or you might even know you know plasticize cluster this on your wall you know like a coat or something like that to remind you to trade with the trend from an area of value and by the way if you want to learn more all right so we'll stop right there so again number one avoid trading in no man's land okay no man's land is in between support and resistance it's noise okay it's noise avoid the noise right avoid the noise avoid trading far from an area of value okay avoid trade so support resistance again in the middle because in this video he's trying to iterate the concepts of trading mistakes okay do you make this candlestick trading mistake so we don't want y'all to do that and again i'm not affiliated with this guy at all just i got this video on my news feed and i wanted to watch it and so again i wanted to share it with you and i'll go back and i'll you know again my students who are in my course you know watch what i do they watch this and so i'm always trying to dissect things and explain it in a way that people get it i want to reiterate that the value is support trade with the trend from an area of value the trend is your friend right the trend is your friend you've heard that before higher highs and higher lows as it's pulling back it goes up pulls back boom right there from a value so really good video really good video and i just wanted to analyze it together and give my thoughts hey if you've got some videos that you like for me to analyze hey shoot them my way send me an email you know and i'll i'll get around to it and if i pick one i'll give you a shout out on the air that i got the video from you alright hopefully you enjoyed that analysis alright everybody hopefully you enjoyed that really appreciate it yeah i'm gonna start doing that more often i like it so if you like it hey reward me by subscribing to the channel if you haven't done so yet hitting that little bell to be notified whenever i shoot a brand new video making a comment also if you're interested in any of the courses that i offer or my options elite or forex school check down below in the description you'll see the link to all my courses also the indicators that i use and all the bonuses that i offer if you buy not only my course but the indicators through me also i be going live monday wednesday and friday on my channel doing kind of a market recap market review looking at stuff together so make sure that you do that also check out some of my videos on the ttm squeeze or my option trading playlist you'll have a great day and until next time trader jeff moore author of the book trading part-time and we'll see you in the next video lesson you
2021-08-24 11:30
