welcome to this video on learning day trading basics what we're going to cover in this
video our important issues for everybody day trading whether you are day trading
stocks Forex futures regardless a time interval that you're using you know
people get caught up on that you'll see I'm trading Apple here and a five-minute
chart but what I'm going to show you today is really agnostic with regard to
market or timeframe alright we'll get to those in a later video in fact we'll
have a three part series on this so we will get to that but right now I just
want to share with you three important issues for all day traders so number one
is you want to make sure that you make note of any date time economic news that
is scheduled it's very important so go to a calendar in fact I would look at
this the night before and definitely before you start trading any given day
check out Bloomberg briefing com whichever service you want and look at
the scheduled news releases these are economic news releases etc because those
are very important a lot of the sites will actually rank them as to which they
feel are the most important if you're trading stocks especially you want to
look at earnings reports all those kind of things because I don't care what
candlesticks patterns you're using or indicators or whatever there's an old
saying in the trading world and that is this news Trump's technicals and
brother/sister it is absolutely 100% true
so when news comes out that is surprising or shocking to the market or
heck it doesn't even have to be pre scheduled news
it could just be rumor or gossip that comes across the way or such a surprise
can't really plan for that just be aware that in those situations yep the market
doesn't give a mouses left patootie about your moving averages your
stochastic or RSI or CCI your MA CD or LMNOP or qrst
whatever acronym you've got it doesn't care about all of them or any of them
all it cares about at that point is the new
and even if it's not real news you might find out five minutes later and there
the whole market discovers oh that was just a rumor oh that was just gossip but
it will have a knee-jerk reaction so be aware of that and you'll want to make
sure that you're using risk management because technical analysis does not
always work especially in those situations however be prepared you can't
be prepared for the surprise announcements but you can be prepared
for the calendar with its on the calendar that you need to know be aware
of that and be watching your time you might even want to put a little alert or
something in your cell phone so when that time comes you don't lose track of
it okay so that's number one number two is key market levels very very important
and here are the major ones that I encourage you to take a look at so the
first one here that we'll look at so it's we're trading intraday the previous
day's high is a very important so here we got the previous day's high oops I
actually got the wrong tool that's not the one I wanted I wanted that one so it
goes all the way across there we go okay so this day and you can see that
here is this little vertical green line hopefully you can see that that marks
one day to the next that's basically I put a five-minute chart here was just so
that you could see a whole day on the chart at one time I wanted data see that
and then the next day alright there's next fertile client so the next day what
happens to market has come up come down comes all the way where's it go well it
great up to yesterday is high how about them apples co-inky-dink nope that's
what the market does so everybody in is dribble is aware of that level the
previous day's high as well as the previous day's low have that marked on
your chart as well I'll just make them I'd put liens well I do I put lines on
there so that I'm aware of them I see them and again your trading platform
might be a little different but just put a horizontal line in there like that
come in here I kind of like to draw them off with the real bodies more than the
wicks and so this date didn't come down there but again it may someday and these
are levels that are very very important so previous day high
previous stay low also the previous day closed now let me show you a different
example of that so with regard to the previous day's close there is a couple
of things that can happen it's always important so here's the clothes of this
day and as we start trading this new day over here we want to know where that
line is so again I always put that line on my chart before the day opens so a
couple of things first of all that is going to be a neutral zone the clothes
of the previous day shows where the market ended up and valued that market
whatever you're trading through all the ups all the downs after I was done in
the morning the afternoon and into the evening whatever the market decided and
a final value for that day of that particular market and that's it the
clothes is the most important price point of any given day now the next day
therefore if that's considered okay now are we going to be above that then we're
in very bullish territory if we're below it we're bearish with just relative to
the previous day remember day trading you're in and out within one market open
outcry period of time so it's a very short term and so we're not talking
about long term valuations here we're just talking about with relation to the
previous day are we above where the market ended up valuing itself or are we
below it so that is your line in the sand between a bull in bear market with
respect to yesterday now notice that we have the market come back up to that
level this day because we got down there was a gap down and after the market came
back down it came right back up and tested it so you got your a little gap
close and then we went down so it can be important for that reason as well it can
provide support resistance as well as a line in the sand between a bull in bear
market so really two purposes or purpose i or purposes sis's or it is that good
thing you don't have to know English very well to be a good trader the other
thing that I want to be be clear about this is very important is
not to have unrealistic expectations for any of these support resistance levels
in other words you can't expect that the markets going to come right to the pixel
on your chart on your screen that the previous day is closed no it's gonna you
know it comes back up and look goes above it a little bit right you cannot
be that myopic or that precise with the markets that is still providing
resistance and because the markets are well trade about lots of people all over
the world all different timeframes all different indicators and therefore
there's a little bit of messiness within these zones that we like to call the
support resistance now a third element of support resistance that you should
have on your charts at all time is longer-term major highs and major lows
as opposed to just looking to the previous day because these will carry on
for multiple days if they are not hit in other words people will be watching them
so here this day let me get that whole day on the screen there you go so
alright that's the low of the day it's actually down there technically but
again I like to use the real bodies again that just helps to accommodate for
a little bit of that messiness of the market the next day does it hit that low
no we go a whole day and we do not retest that low so should I take it off
my chart no way mm-hmm nope because the markets going to remember that and again
people are treating longer-term charts we're maybe doing some swing trading or
trading 30 minute charts 60 minute chart so they're gonna see that as a major
support level and they will respond to it they'll buy into it take profits into
it whatever so therefore yeah that's going to be
seen by people because that's seen by people therefore it's going to have
significance and there you go so boom the very the day after that now for this
day it lasted two days came back down bounced backed up and it's in this case
it actually did go back down below that but it provided a support in the market
bounced off of there because why market participants look at that created
uncertainty at that time as to oh hmm I don't know if we're gonna go through
that and so they paused people who are short maybe took some
profits people who are more bullish on the market that's a place they saw would
be a good buying place only one side is going to be right but again it at least
creates a short-term if not long-term bounce in the market and therefore you
should have always always have these out now the question always comes is well
how far back should I go berry with those longer-term support resistance
levels and there's no real black-and-white answer to that just go
back well as far as you can I would say definitely a5 trading days that's not
five weekdays that's five treating days just go back as far as you can okay as
far as you can get you gotta remember that's going to come into play for
people creating longer-term charts they will see those now once these levels are
broken a couple times then you don't need them anymore so you only leave them
up until they have been broken but until they're broken I leave them up there and
then the final point that we can actually show on the same slide is the
volume saucer what I call the volume saucer this is very important and what
that means is that the market volume pattern has a meta pattern like this so
it's kind of a saucer type pattern so early in the day and you can even see
here at the end of that day right it went up and so you have a lot of
training in the morning you've got not as much in the afternoon I'm sorry well
yeah not as much in the midday we'll say around noon time and then volume picks
up again at the end so creates this volume saucer that is a meta pattern so
that becomes important is that the lot of the time when you're reading
technical analysis books they don't take that into effect when they're teaching
you candlesticks or multi bar price patterns or indicator patterns or price
and volume patterns together that stuff's really meant to be read
with daily charts without accommodating the fact that volume comes out of the
market during the lunch time generally not always but generally and so
therefore your indicators are going to be affected by this or candlesticks are
going to be affected by it too your big price patterns will be affected by it
and volume can't look for a price volume coordination as well for that reason
either it's gonna be exaggerated in the morning and late day and it's gonna be
underplayed in the middle of the day so quite frankly the reading volume
patterns on intraday charts it can be done it can be helpful but if you're
using the traditional techniques that you've learned which are typically
taught for date or for daily charts then no it does not coincide perfectly and be
very aware of that so if you start thinking of these price filing patterns
aren't working and you're a day trader that may very well be why so that's it
for now we'll have a a / - and a part 3 but I am giving away one of my favorite
trade strategy is a very specific trade called the rubber band trade be happy to
share that with you just click the green icon up there in the top right hand
corner and we'll get that over to you for free with a little mini course on
exactly how to trade it the entries the exits everything absolutely free my gift
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