The Psychology Behind Great Trading Performance_ Winning Trader Psychology

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00:00Fibonacci Retracements.

00:02It is a tool that displays horizontal lines based on the Fibonacci numbers.

00:06These lines can then be used as key support and resistance levels.

00:10To use the Fibonacci Retracement tool, you first start by identifying a swing low and

00:14swing high on a chart, then drag the tool from the swing low to the swing high.

00:20Next, wait for the price to make a pullback to one of these levels, ideally the 0.382

00:25Fibonacci level, because that's the most common level where price tends to reverse

00:29from.

00:30So if price touches that level, that could be a good buy entry.

00:34Keep in mind that price could also reverse from other Fibonacci levels, combine it with

00:38other confirmation signals to get a better entry.

00:42Breakout Patterns.

00:43It is when price makes a sudden and significant movement towards one direction.

00:48This usually forms after the market makes a consolidation period.

00:52For example, here we can see that the price is consolidating, then it suddenly moves sharply

00:57to the downside.

00:58This is called a breakout.

00:59To take advantage of this, traders could use specific patterns as a guide to identify

01:04breakouts before they happen.

01:06Most notable breakout patterns include wedges, triangles, and the rectangle pattern.

01:13Reversal Patterns.

01:14It is when price moves in the opposite direction of the current trend and forms a counter trend.

01:20Specific patterns could be identified in a chart which could help traders predict reversals

01:23before they happen.

01:24Most notable reversal patterns are double top and bottoms, triple top and bottoms, head and

01:31shoulders, cups and handles.

01:34Elliott Wave.

01:35It is a theory that suggests that market tends to move in a series of five waves before reversing

01:41and forming another set of waves in the opposite direction.

01:44By understanding the Elliott Wave sequence, traders could predict where the price is heading

01:48by following the pattern.

01:49In a chart, we can label each point of the waves as 1, 2, 3, 4, 5 and ABC.

01:55Now, there are specific rules to ensure that a movement is considered as a valid Elliott Wave.

02:01First, Wave 2 cannot be longer than Wave 1 and usually pulls back to the 0.618 Fibonacci level.

02:08Second, Wave 3 must be the longest wave amongst Wave 1, 3 and 5.

02:14Third, Wave 4 must remain above the peak of Wave 1 and usually pulls back to the 0.382 Fibonacci level.

02:23So here's an example of the Elliott Wave in action.

02:26In this chart, we can see that the price resembles a possible 1, 2, 3 Elliott Wave.

02:31And so, based on the theory of Wave 4, which is that price tends to pull back to the 0.382

02:37Fibonacci level before continuing upwards, we can use this as a potential buy entry when

02:42price makes a pullback.

02:44Fair Value Gaps.

02:46A fair value gap occurs when a candle forms a significant gap due to an imbalance of buying

02:52or selling.

02:53To find a fair value gap, you first need to find a candle with a large body.

02:57Then, draw a rectangle at the gap.

02:59Place it between the previous candle's wick and the next candle's wick.

03:03This level now acts as a potential magnet, where price may revisit before continuing its

03:08movement.

03:11Candlestick Patterns.

03:12It is a technique that traders use to analyze future price movements by looking at specific

03:17candlestick shapes.

03:18Notable candlestick patterns include engulfing patterns, which signals strong momentum towards

03:23the direction of the engulfing candle.

03:25Hammer and shooting star patterns, which indicates rejection as shown by the long wick on one side.

03:31Doji patterns, which signals neutrality in the market.

03:35Heikanashi.

03:36It is an indicator that fully replaces a traditional candlestick chart to a Heikanashi chart.

03:42When applied, it tends to give less noise than a traditional candlestick.

03:46A green Heikanashi candle signals that the price is on an uptrend, and a red Heikanashi

03:51candle signals that the price is on a downtrend.

03:53The size of the candle's body also indicates how strong a trend is.

03:57The larger the candle, the stronger the trend.

04:00Keep in mind that the Heikanashi only acts as an indicator.

04:03It does not display the real market price.

04:06Moon Phases.

04:07It is a concept that utilizes moon cycles to time the market.

04:11Moon phase traders believe that moon cycles are correlated with human emotions and behavior,

04:16which could have an influence on the market.

04:18Specific moon phases are believed to be favorable towards a certain trend.

04:22A new moon means the market tends to be bullish, and a full moon means the market tends to be

04:27bearish.

04:28Today, it is used mostly as a confirmation tool.

04:31Renko.

04:33It replaces a traditional candlestick chart to a Renko chart.

04:37So unlike a traditional candlestick which forms a new candle based on a certain period

04:41of time, a Renko chart forms its block based on the change of price.

04:46For example, every 1% change in price, a Renko block appears.

04:51This means that each Renko block represents a 1% change in price.

04:55Of course, you can change the parameters of this through the indicator settings.

04:59Traders could utilize Renko charts to filter out noise and identify trends.

05:03A green Renko block signals an uptrend, and a red Renko block signals a downtrend.

05:08And keep in mind that Renko charts only acts as an indicator.

05:11It does not display the real market price.

05:15Harmonic patterns.

05:16These are advanced price patterns that follow a specific shape based on Fibonacci numbers.

05:21Traders can then use these specific shapes to predict future price movements.

05:25For example, a bullish bat pattern is formed when price makes a series of 4 movements that

05:30is shaped like the letter M.

05:32Each point can be labeled as X, A, B, C, and D.

05:35And each of these points has a specific guideline.

05:37For example, point X to point B needs to have a value between 0.382 and 0.5.

05:44Point A to C needs to have a value between 0.382 and 0.886.

05:49And the same thing works for the other points.

05:51Next, these specific guidelines can then be applied onto a real chart.

05:55So, if you see a price forming a series of 4 movements, you can apply the harmonic pattern

06:00tool to check if the price that formed matches a pattern's guideline.

06:05If it does, then you can take a position based on the pattern that formed.

06:10There are multiple harmonic patterns that exist.

06:13Most notable are butterfly, bat, crab, and each have their own unique values.

06:19Support and resistance.

06:21These are key levels that formed horizontally where the price has bounced off in the past

06:25and could possibly bounce again in the future.

06:28If the level is below the price, it's called support, where you can take a buy position

06:32if the price approaches it.

06:34And if the level is above the price, it's called resistance, where you can take a sell

06:38position if the price approaches it.

06:41Dynamic support and resistance.

06:43Similar to support and resistance, dynamic support and resistance also acts as key levels.

06:48But instead of using static horizontal lines, it uses indicators like the moving average

06:52to act as our key level.

06:55Trendlines.

06:56Trendlines are key levels that form diagonally during a trending market.

07:00You can use trendlines to identify the overall direction of the price.

07:04Upwards trendline means bullish.

07:06Downwards trendline means bearish.

07:08And similar to support and resistance, you can also use the trendline to identify possible

07:12entry scenarios.

07:14For example, if price retraces back to a trendline, it can be a good opportunity to take a buy position.

07:21GAN angles.

07:23It is a tool that displays multiple lines that spread continuously on different angles.

07:28These lines can then act as possible key levels and could also help you measure the

07:32strength of a trend.

07:33Price moving within the steep angles of the tool indicates a strong trend, and price moving

07:38within the shallow angles of the tool indicates a weak trend.

07:42To apply the GAN angles, first you go to settings, then make sure to check the lock price-to-bar

07:47ratio.

07:48Next, identify a market range and mark the swing low and the swing highs of that range.

07:54Then draw a straight vertical line at the start of the range.

07:58After that, select the trend angle tool and measure 45 degrees.

08:03Then use the GAN fan tool and place it at the 45 degree angle.

08:10Momentum indicators.

08:11These are the types of indicator that measures the direction and strength of a trend.

08:15It is most effective when used in trending markets.

08:18Some of the most notable momentum indicators are MACD, an upwards crossover indicates a bullish

08:23trend while a downwards crossover indicates a bearish trend.

08:27Moving averages.

08:28Price being above the moving average signals a bullish trend and price being below signals

08:32a bearish trend.

08:34Parabolics are, a dot below the price indicates a bullish trend and a dot above the price indicates

08:39a bearish trend.

08:41Supertrend.

08:42Green signal indicates a bullish trend and a red signal indicates a bearish trend.

08:48Oscillators.

08:49These are the types of indicator that displays the relative strength of a price.

08:53It is most effective when used on choppy or sideways markets.

08:56Most notable oscillators include RSI.

08:59When the line is in the oversold region, it indicates a possible reversal to the upside.

09:04If it's in the overbought region, it indicates a possible reversal to the downside.

09:08Stochastic.

09:10If both lines are at oversold, it signals a possible reversal to the upside.

09:14And if both lines are at overbought, it signals a possible reversal to the downside.

09:19These two lines can also cross over each other to predict future price movements.

09:23Divergences occur when an indicator displays an opposite signal of the real price movement.

09:29When this happens, it is usually a sign that the trend might reverse.

09:33Divergences could occur in many indicators such as the MACD, Stochastic, and the RSI.

09:39For example, here, using the MACD indicator, you can see that the price is forming higher

09:44highs, which is bullish, but the indicator shows the opposite, a lower highs, which is bearish.

09:49In this case, this is a bearish divergence, which signals that the price may form a reversal,

09:55and so you can take a sell position.

10:00Volume indicators.

10:01These are types of indicators that show the strength behind a price movement by tracking

10:05the trading volume.

10:07Notable volume indicators include Price Volume, which displays the volume for each candle.

10:12The longer the bar, the higher the volume.

10:15Volume weighted average price, which shows the ratio of an asset's price to its total volume.

10:20It can be traded like a moving average or as a dynamic support and resistance.

10:25Volume profiles.

10:26It displays a volume bar horizontally, which can be treated as key levels for potential entry

10:30positions.

10:33Supply and demand.

10:34Also referred to as order blocks, these are zones where significant price movements have

10:39occurred.

10:40If price moves significantly upwards from a level, it is considered a demand zone.

10:45And if price moves significantly downwards from a level, it is considered a supply zone.

10:50Just like support and resistance, these zones can be treated as key levels for potential entry

10:54positions.

10:56Market structure.

10:57Market structure is when trader analyzes the behavior, condition, and flow of the market.

11:03An uptrend structure is characterized by price forming higher highs and higher lows.

11:08While downtrend structure is characterized by price forming lower highs and lower lows.

11:14Break of structure.

11:15It is when price breaks the previous price peak during a trend.

11:19For example, if the price forms a higher highs and higher lows, this break of the previous

11:23highs is called break of structure.

11:26Change of character.

11:28It occurs when price breaks the previous structure during a trend, often signaling a reversal

11:33from that current trend.

11:35For example, if the price is forming higher highs and higher lows, then it breaks the previous

11:39lows forming lower lows.

11:41This is called a change of character.

11:43So did I miss any strategy?

11:45Let me know in the comments below.

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11:55You can also check out my other videos as well.

11:57So thank you for watching and I'll see you in the next video.

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