Full transcript
0:00Have you ever sat down with a strategy,
0:01followed it step-by-step, and still
0:03walked away confused not knowing what
0:04you were doing? Or have you watched a
0:06YouTube video promising that you're
0:07going to have a trading strategy that
0:09you can walk away with and you were more
0:10confused afterwards than when you
0:12[music] started? If you've been jumping
0:13from strategy to strategy trying to find
0:15one that resonates with you, one that
0:16makes sense, one that you can
0:17understand, that you can repeat again
0:19and again, you are in the right place.
0:20Now, there is a reason that none of it
0:22has stuck yet. Most strategies out there
0:23are way more complicated than they need
0:25to be. The more complicated that the
0:26strategy is, the harder it is to learn,
0:29the harder it is to actually repeat and
0:30get started, [music] and longer it's
0:32going to take you to actually find
0:33confidence and implement. The strategy
0:34that I'm going to walk you through today
0:36is built on one simple tool, trend
0:38lines. Trend lines are one of the oldest
0:40and most essential tools in technical
0:41analysis, and they are the foundation
0:43that my entire strategy is built on. My
0:45name is Tori Trades and I've been
0:46trading for [music] over a decade now. I
0:48have turned a $5,000 account into over
0:50half a million dollars in trading. I've
0:52been using the same exact system for all
0:5411 years, [music] and I documented the
0:56entire journey, the highs, the lows, the
0:59wins, the losses, and everything in
1:00between. By the end of this video, you
1:02will have a complete step-by-step system
1:04on how to analyze any chart and execute
1:06a trade from start to finish. [music]
1:07You will not leave this YouTube video
1:09more confused than when you came.
1:11Obviously, I'm just really good at what
1:12I do. So, you just stick around, you're
1:14going to learn something. But first, I
1:15want to set the stage. This entire
1:17strategy is based on one simple concept,
1:19[music] trend lines. So, let's start at
1:21the very beginning. What is a trend
1:22line? A trend line is a line that you
1:24draw on your chart that shows the
1:25direction [music] price is moving in.
1:27Fun fact, trend lines have been used by
1:29traders for over a hundred freaking
1:31years. They are one of the original
1:33tools of technical analysis. I'm talking
1:35the literal Stone Age basics of
1:38technical analysis was the trend [music]
1:40line. And this is dating all the way
1:41back to Charles Dow, which I'm not sure
1:44if it sounds a little familiar to you,
1:45the literal guy himself, the Dow Jones
1:48is named after. But this is why I love
1:50trend lines so much. [music] So, it's
1:51not like some new concept that we're
1:53trying to reinvent. This is the literal
1:55foundation [music] of technical
1:56analysis. So, this trend line based
1:58strategy allows us to read the markets
2:00the same way that the best traders way
2:03back in the day have read it for over a
2:04century. [music] And I don't know if
2:05that gives you a peace of mind knowing
2:07that like we're not reinventing the
2:08wheel. We're just utilizing the absolute
2:11foundational [music] essential tool of
2:13trading. So, now that we know what a
2:14trend line is, we know it's the basics,
2:16the essential, the foundation, there are
2:17two types of trend lines. There's an
2:19upward trend line and there's a downward
2:20trend line. The upward trend line is
2:21what we call bullish. It connects
2:22[music] higher lows. It means that price
2:24is pushing up higher. There is a
2:25downward trend line. This is called a
2:27bearish trend line. This connects lower
2:28highs. It means that price is pushing
2:30lower. The platform that we are going to
2:32use to draw these trend lines on is
2:33TradingView. [music]
2:34This is the most widely used platform
2:37for all traders ever. It is free to get
2:39started. It works in your browser and it
2:41gives you everything that you need to
2:42analyze your charts and mark [music]
2:43them up. It's all we need. Now, let's
2:44talk about the tool. TradingView has a
2:46bucket of trend line tools. Out of all
2:48of the trend line tools that TradingView
2:50has to offer, we're going to use the one
2:51called the ray tool. The ray tool gives
2:53us a point A and a point B and then
2:55extends indefinitely in one direction.
2:58The point A is the pivot point. The
3:00point B locks in the degree or the angle
3:02that we're going to draw it at. And then
3:03the [music] line will extend
3:05indefinitely in the other direction to
3:06help us see what price might potentially
3:08do in the future. And just because I'm
3:10kind of artsy-fartsy and I like to color
3:11code things, I like to make my upward
3:13trend lines green and my downward trend
3:14lines red. So, we know what trend lines
3:16are. We know how important they are when
3:18it comes to technical analysis. And now
3:19I'm going to introduce a new concept to
3:21you guys, which is essentially step one,
3:23phase one, part one. This is something
3:26called top-down analysis. So, before we
3:28hop into the charts and draw any lines,
3:30we need to talk about top-down analysis.
3:32Top-down analysis is the process of
3:35analyzing an asset from a higher time
3:37frame working your way down. So, it'll
3:39be a monthly time frame, a weekly time
3:42frame, [music] a daily time frame, a
3:434-hour time frame, a 1-hour time frame,
3:45and then so on and so forth until you
3:47reach the time frame that you decide to
3:48execute your trades on. Now, why do we
3:50use this top-down analysis? Higher time
3:52frames hold more weight than the lower
3:54time frames because they contain more
3:56data, more information. So, they show us
3:58the major trends, the major key levels,
4:00and how price has been moving over time.
4:02The lower time frames show us what's
4:04happening in the moment, right here,
4:05right now. The strategy works so well
4:07because we use both of these time frames
4:08together. [music] The higher time frame
4:10gives us context for the lower time
4:11frames. So, the bigger picture of what
4:13the markets have done in the past and
4:15the shifts that they've made, we combine
4:17that with what the price is doing in the
4:18lower time frames. Now, I've got a few
4:19analogies that help us understand why
4:22higher time frame analysis or top-down
4:24analysis is so important. So, think
4:25about it like this. We're going to start
4:27with the FBI agent analogy, which I know
4:30there's a lot of women out there that
4:32feel like they are FBI agents. [music]
4:33If you know, you know. You investigate,
4:35you will study the past, every clue,
4:37every pattern, every piece of history,
4:40and then you build a case. [music] So,
4:41by the time that something happens that
4:42the FBI agent, you know, the one behind
4:44your computer screen is waiting for you
4:46to do, they've already anticipated a
4:47move that you might make because they've
4:48studied everything you've done in the
4:49past, [music] your patterns. Another
4:51analogy would be a fighter. So, let's
4:53say that you are getting ready to fight
4:55your opponent. Before a match, you need
4:57to watch hours of old footage of your
4:59opponent. Every move that they make,
5:01their weaknesses, their habits. So,
5:03[music] by the time you step into the
5:04ring, you already have an idea of what
5:05your opponent is likely to do cuz you've
5:07already studied their habits, their
5:08moves. Do they usually use their left
5:09hand? Are they left forward? I mean, I
5:11don't really know anything about
5:12fighting, but I'd imagine [music] that's
5:13the things that you would study. How do
5:14they block? But, you're prepared when
5:15you step into the ring because you've
5:16done your research. And yet again, this
5:18is exactly what we're doing with higher
5:20time frames. [music] We are just
5:21gathering the research. We're doing the
5:23research on the instrument to help us
5:25make a more informed [music] decision on
5:26what it's likely to do in the future.
5:28So, that is the whole point of top-down
5:30analysis. This is why it's so important,
5:32and this is why this is step one when it
5:34[music] comes to this entire strategy.
5:35We need to research our instruments. The
5:37higher time frames give us context, the
5:39lower time frames give us our entries,
5:40[music] our trade management, and our
5:41exits. So, now that we understand why
5:43we're going to implement top-down
5:44analysis, let's learn how to do top-down
5:47analysis. [music] So, now it's time to
5:48get into the charts, open the screens,
5:50and draw some lines. Here we go. Now,
5:52the instrument that we are going to
5:54practice or learn our top-down analysis
5:56on is a very popular instrument. One
5:59that everyone has heard of. I figured
6:00the most generic and most broad the
6:02better, so that we can all understand
6:04and relate. We're going to do our
6:05top-down analysis on Bitcoin. We are
6:07looking at Bitcoin on TradingView. Now,
6:09what you see in front of you is a
6:11completely naked chart. There are no
6:13indicators on it. There's no volume.
6:16There's no [music] session lines. This
6:18is purely price action. This is the
6:21movement of Bitcoin. This is all we
6:24need. Now, when we do our top-down
6:25analysis, it's a quite literal term or a
6:28quite literal phrase, we start at the
6:29top and work our way down. So, that
6:31means we're going to start with the
6:32highest time frame. We're going to go to
6:34the monthly time frame on Bitcoin.
6:37This right here is everything Bitcoin
6:39has ever done. This is our full context.
6:41This is us doing our research on Bitcoin
6:43before we get married, before we
6:45actually place a trade. What we're going
6:46to do is utilize our trend lines. And
6:48remember, TradingView has the trend line
6:51toolbox over here. And then the specific
6:53trend line tool that we're going to use
6:55is the ray tool. So, you can go ahead
6:56and star that.
6:57This will keep the tool right here
6:59easily accessible to the left. So, we
7:01are going to start using our trend
7:02lines. But, the top-down analysis is
7:04what gives them structure. It gives the
7:07entire strategy or the entire system
7:09repeatability and a process. A
7:11step-by-step process that you can
7:13implement [music] across any instrument.
7:15So, after today's video, we'll have done
7:17it together with Bitcoin, but you can do
7:18it your own on crude oil, on gold, on
7:21the Nasdaq, on the Dow, on Tesla. You
7:24can do this same top-down analysis on
7:26any instrument, which is the coolest
7:27part. Now, what we're doing with these
7:29trend lines, this top-down analysis, is
7:31taking all of the context of everything
7:33it's ever done, leading all the way up
7:35to real-time price action to help us
7:37with a decision real-time. The price of
7:40Bitcoin right now is at 78,015.
7:42We to do our top-down analysis and draw
7:44our trend lines tracking all the way up
7:46as close to real-time price action as we
7:48can. Now, what does that look like? That
7:50means we're going to identify trends in
7:53every single one of these time frames
7:54leading all the way up to the one-hour
7:56time frame. When we're drawing our very
7:58first ever trend line, we are going to
8:00look for the lowest point we see on the
8:01screen.
8:02Now, there's going to be a few rules and
8:04guidelines that we have to these trend
8:05lines specifically. One rule will be
8:07specific to the very first trend line we
8:09draw. The very first trend line we draw
8:11needs to start with the lowest point we
8:13see on the screen.
8:15This is going to be the first rule for
8:16our very first upward trend line. Just a
8:19preface. We'll have upward trend lines
8:20and downward. Remember, bullish and
8:21bearish trend lines. So, the rule for
8:23drawing our very first upward trend
8:25line, we're looking for the lowest point
8:26we see on the screen. [music] We also
8:28need to have this line angled in some
8:30degree upwards. This cannot be a
8:33horizontal line. So, I'll show you what
8:35would be incorrect and what would be
8:36correct.
8:39This right here, using the actual lowest
8:41points of Bitcoin, this line would be
8:43incorrect. This is a horizontal line.
8:46When drawing our very first upward trend
8:47line, it has to angle upwards. So, we're
8:49going to use the lowest point we see on
8:51the screen while also angling our trend
8:53line upward. Now, what are some other
8:55rules for our trend line? When
8:56continuing to draw trend lines, we're
8:58going to have these set of guidelines to
8:59abide by. One, [music] every trend line
9:01has to connect to one another. Two, we
9:02try to capture as many touch points as
9:04possible. Three, price cannot have
9:06intersected or poked through the trend
9:08line. As long as we follow these three
9:10rules, you'll be able to correctly move
9:11through your top-down analysis. So,
9:13anytime you're unsure, just go back to
9:14those same rules. Make sure, okay, did
9:15my trend line connect to the last one?
9:17Am I trying to capture as many touch
9:18points as possible? And have I made sure
9:20that price hasn't crossed through or
9:22intersected my trend line? So, on our
9:23very first upward trend line, we were
9:25able to capture one, two, three touch
9:27points. Great. We captured as many touch
9:28points as possible. It's angled upward.
9:31Price hasn't poked through or
9:32intersected.
9:33>> [music]
9:34>> Now, when drawing our next trend line, a
9:35good rule of thumb here to figure out or
9:38to remember how to connect each one of
9:40our trendlines is Remember I said we
9:42have these two points here, a point A
9:45and a point B. We've got a pivot point,
9:48which is our initial starting touch
9:50point, and then we've got our point B,
9:51which locks in the angle or the degree
9:53of where we're drawing our trendline.
9:56I like to call this one point A, this
9:57one point B.
9:59When connecting trendlines, the previous
10:01point B will always be the new point A.
10:05So, drawing a new trendline here, we've
10:06got a new point A. It's going to start
10:09at the previous trendline's point B.
10:11Boom.
10:12Now, we're going to follow these same
10:13exact rules that we just
10:15followed in the last trendline. Try to
10:17capture as many touchpoints as possible.
10:20Make sure that the line connects to one
10:21another, and price cannot have poked
10:23through or intersected. Now, I want to
10:25give you an example of what it looks
10:26like to have had price intersect or poke
10:28through, and what's incorrect.
10:30>> [music]
10:30>> If this line was to go up any steeper
10:32like this,
10:33this line would be incorrect. Price has
10:35broken through the trendline already.
10:37So, you want to think of these
10:38trendlines as truly holding the price
10:40up. So, this would be the correct
10:42placement of our next trendline. So,
10:44we're working towards getting as close
10:45to real-time price action as possible.
10:47So, we're going to continue connecting
10:48and drawing these trendlines until we
10:50can get as close to here as we can. So,
10:51that means we have more trendlines to
10:52draw. So, let's keep going. Next
10:54trendline, same rules. Previous point B
10:56is new point A. Capture as many
10:57touchpoints as possible without price
11:00intersecting. Okay? We have followed all
11:02of our guidelines, and we are ready to
11:03draw yet one more upward trendline.
11:06Previous point B, new point A.
11:09And this is as far as we can go for this
11:11one. This is all of the upward
11:13trendlines that we can draw for the
11:14monthly timeframe on Bitcoin. We do need
11:17[music] a downward trendline. So, we
11:19want to track upward and downward
11:21trends, bullish and bearish trends.
11:22There's going to be some instances where
11:24on higher timeframes, there isn't a
11:27downward trendline to draw, but in this
11:28instance, we can here in Bitcoin. So,
11:30we're going to draw our very first
11:31downward trendline. So, remember we had
11:33some rules for our very first upward
11:34trend line. We're going to implement
11:35those same rules, same same but
11:37different, for the downward trend line.
11:38So, for our very first downward trend
11:40line that we're drawing on the monthly
11:41time frame, we're looking for the
11:42highest point that we see on the screen,
11:44and then we just continue to implement
11:45the same exact guidelines or the same
11:46exact rules as before.
11:48Try to capture as many touch points as
11:49possible without having price
11:51intersected or poked through. And I'm
11:53going to change the color of the
11:54downward trend lines just to
11:56differentiate the two. Now, we've got
11:57red downward and green upward. So, this
12:00is all we can do on the monthly time
12:02frame. We've gotten as close to
12:04real-time price action as we can. This
12:05is now our indication that we can
12:07continue this top-down process. So, we
12:09did everything that we need to do in the
12:11monthly. Now, we're going to do the same
12:12exact process in the weekly time frame.
12:14Weekly time [music] frame here. Quick
12:15tip here. So, when we go from the higher
12:17time frames to the lower time frames,
12:18think of it like we are looking at price
12:20with a magnifying glass or under a
12:22stronger and stronger lens. So, that
12:23means we're getting a little bit more
12:25precise and we're seeing more price
12:27action or more movement. So, when we go
12:29from the higher time frames to the lower
12:30time frames, you'll notice that things
12:31are just a little bit off or a little
12:33bit wonky. All we'll do is just simply
12:34make some adjustments to make sure we're
12:36still following those rules. So, price
12:38poked through just a little bit here.
12:39We'll take this line and adjust it.
12:41Price was a little bit off on this line
12:42here. We're going to take the line,
12:44simply adjust it, get it a little bit
12:45more accurate. There we go. And then
12:47same for the downward trend line. It's a
12:48little bit off, so we're just going to
12:49simply adjust it here and adjust this
12:51one here. There we go. So, this is just
12:53a tip to keep in mind when you're going
12:54to the lower time frames. You'll just
12:56need to make some slight adjustments
12:57every time. Okay, now we're in the
12:58weekly time frame. For the weekly time
13:00frame, there are no additional downward
13:01trend lines we can draw. We've gotten as
13:03close to real-time price action as
13:05possible in this time frame. But, there
13:07is some additional upward trend lines
13:08that we can draw to help get us closer.
13:10So, we're going to follow the same
13:11[music] steps, the same guidelines. When
13:14drawing another trend line, make sure it
13:15connects to one another. Previous point
13:17B is new point A. Capture as many touch
13:19points as possible without price
13:20intersecting. Now, I'm going to make
13:22this green again. There we go. And that
13:24is as far as we can go in the weekly
13:25time frame. So, not as many trend lines
13:27that we needed to draw on the weekly and
13:29that'll happen with different
13:30instruments that you do a top-down
13:31analysis on. But, for this one
13:33specifically, not too much we needed to
13:35do on the weekly. So, now it's our
13:36indication, we can continue to move
13:38down. We did monthly, we did weekly, now
13:40let's work our way down to the daily
13:42timeframe. And you'll see some
13:43adjustments need to be made, price poked
13:45through a little bit over here, we just
13:46need to make some adjustments.
13:49There we go.
13:51Adjust this one here, perfect.
13:54And adjust this [music] one
13:56here. Now, we can see a steeper upward
13:58trend line that we can draw. Previous
13:59point B is new point A.
14:01Try to capture as many touch points as
14:03possible without price intersecting.
14:05There are [music] still no additional
14:07downward trend lines we can draw. So,
14:09this is our indication, we can continue
14:11moving down. Now, let's go to the 4-hour
14:12timeframe. 4-hour timeframe, we need to
14:14make some slight adjustments here,
14:16slight adjustment here, and now we can
14:18finally come in with one more steeper
14:20downward trend line.
14:21>> [music]
14:21>> Capture as many touch points as
14:22possible, we're going to make it red,
14:24make sure price hasn't intersected, and
14:25we're going to reach our final
14:27destination. Now, we're going to move
14:28down to our final timeframe here, the
14:301-hour timeframe. So, we're going to
14:32stop in the 1-hour timeframe for this
14:33video's example. It does not mean that
14:35you have to stop at the 1-hour
14:36timeframe. If you decide to trade a
14:38lower timeframe, you'll just continue
14:40these same steps with the same process
14:41working your way down to the lower. For
14:43example, if you trade a 5-minute
14:44timeframe, you will go from the 1-hour
14:46to the 30-minute to the 15 to the 10
14:48then to the five. That's where you'll
14:49stop. But, for today, we're going to
14:51stop at the 1-hour timeframe. Now, we
14:52have made it to the 1-hour timeframe and
14:54there are no additional lines that need
14:56to be drawn. We have completed our very
14:58first top-down analysis.
15:00Congratulations. Okay, now that you know
15:02how to do your top-down analysis, here's
15:04where we are. We have a chart, we have a
15:05bunch of trend lines, some are bullish,
15:07some are bearish, some are going up,
15:08some are going down, some are green,
15:09some are red. So, right now, they're
15:11just lines. It's just showing us what
15:12price has done in the past and [music]
15:14how it's gotten to where it's at now,
15:16how it's gotten to real-time price
15:17action. But, that brings me to my
15:18absolute favorite [music] part of this
15:20entire strategy. We don't ever have to
15:22guess where price is going next. It is
15:24one of the coolest parts and the most
15:26exciting part of the strategy and it
15:28gets me so excited and I don't know if
15:29you've ever heard of girlfriend brain,
15:30but this is like this strategy is
15:33girlfriend brain. We don't have to
15:34figure out what we're going to eat for
15:35dinner tonight, where we're going, what
15:37we want to wear. This is where it all
15:40comes together. The price [music] is the
15:41one in control. The price will tell us
15:43when to get in. The price will tell us
15:44what direction to take and the price
15:45will tell us when to get out. Our entire
15:47job in this whole system in this whole
15:49strategy is to simply follow the price.
15:52That is the strategy. Now, I'm going to
15:54introduce you to two terms that makes
15:56all of this come together, that makes
15:57all of this work. The two terms you need
15:59to know is action line and safety
16:01[music] line. So, let's start with the
16:02action line. The action line is yet
16:04another very literal term. [music] I
16:06love the literal, easy to understand
16:08terms of the strategy. Action line means
16:10it is time to take action, time to place
16:13a trade. This is when we enter a
16:14position. So, here's the logic and this
16:16part is super important. If [music]
16:17price breaks an upward trend line, that
16:19means the uptrend is being violated.
16:21Buyers aren't in control anymore, so we
16:23are taking a short position. We're
16:25betting the price continues down. If
16:27price breaks a downward trend line, that
16:29means that the downtrend is being
16:30violated. [music] Sellers are not in
16:32control anymore, so we take a long
16:34position. We are betting the price
16:35continues up. The line that price broke
16:37is our action line and the direction
16:39that price broke will tell us which
16:41direction to trade. That right there.
16:42Price breaks a line, we take a trade in
16:44the direction [music] of the break. That
16:46is your entry criteria, that is your
16:47foundation. Quick note, there are ways
16:49to get more picky about your There are
16:51things that you can layer on to help you
16:54get pickier about your setups. There's
16:55different playbooks that you can take,
16:56but in today's video we're going to go
16:58over the foundation of the entry model
16:59here. Now, the second term, the [music]
17:01safety line. The safety line is exactly
17:03what it sounds like. It is the line
17:04that's going to keep us safe in our
17:05trade. The safety line will always be
17:07the opposing trend line to the action
17:09[music] line. It is the line moving in
17:10the opposite direction of the action
17:12line. So, if we took a short position
17:13because price broke an upward trend
17:15line, our safety line is the downward
17:16trend line above price. If we took a
17:18long position because price broke a
17:19downward trendline, our safety line is
17:21the upward trendline below price. Now,
17:23here's how it works. As long as price
17:24[music] keeps moving in our direction
17:26and respects the safety line, we stay in
17:28the trade. The safety line is literally
17:30the line just keeping us safe in our
17:31trade. And it's always keeping us in
17:33profit. As soon as price violates the
17:35safety line, we are no longer safe in
17:37our trade, it is time to close our
17:39position. And that is our exit. So, just
17:40like our entry criteria, this is our
17:42exit criteria. We don't have to guess
17:43when to close our trade. Price will tell
17:45us exactly when to do that. Are there
17:46more layers? Yes. There is criteria,
17:48there are things that we can do to help
17:49us get more precise. There are filters
17:51that can help us look for the best
17:52setups, and there are a ton of different
17:54playbooks that you can use with this.
17:55But, the foundation is this. Action line
17:57gets us in, safety line gets [music] us
17:59out. You know when to enter because
18:00price told you, and you know when to
18:02exit because price told you. If I had to
18:03take everything that I have learned in
18:05the past 11 years of trading and boil it
18:07down into three words, it would be that:
18:10follow the price. [music] Now, let's get
18:11into a few advanced tips here. Let's get
18:13into position sizing, stop losses, and
18:15trade management. We now know when to
18:17enter and what direction to take [music]
18:19the trade in. But, that is only half the
18:20trade. The other half is how much to put
18:22into the trade. And this means how many
18:24shares, how many contracts, [music] how
18:25many lots, how big of a position size
18:28are we getting into this trade? And how
18:30much money are you willing to lose if
18:31this trade doesn't work out? That
18:33decision is on you. Unfortunately, there
18:35is some part of the strategy that does
18:37require your own discretion or your own
18:39decision. And that is [music] position
18:40sizing. But, it comes down to two
18:41things: position sizing and stop loss.
18:44Now, what is a stop loss? Stop loss is
18:46also exactly what it sounds like. It is
18:47a tool that stops your loss. Now, you
18:49will set this before you even get into
18:50your trade. So, this is what you decide.
18:52If you get into this position because of
18:53our action line, price moves against me
18:55and violates [music] my safety line, how
18:57much am I willing to lose? The stop loss
18:59closes the trade for you automatically.
19:01It is how you protect yourself from
19:02losing more than you planned. Now,
19:03[music] for us, we know our entry model,
19:05we know our exit model, and we know that
19:06our exit model is the safety line. So,
19:08the stop loss will always go on the
19:10other side of the safety line. So, if
19:11price hits that level, violates the
19:13safety line, that is where a [music]
19:14stop loss will be initiated. And that's
19:16how we know the trade is no longer
19:17working. That's how we know we're no
19:19longer safe in our position, close our
19:20trade. Now, position sizing. What is
19:22position sizing? Position sizing is how
19:24big your trade is. How many shares of a
19:26stock, how many contracts [music] of a
19:28future, how many lots of a forex pair,
19:30how many is the position sizing. Now,
19:32the bigger position sizing, the more
19:33money that you'll make if it moves in
19:35your favor or if the trade works out,
19:36but also the more money that you'll lose
19:38if it doesn't work out. So, how do you
19:40decide how big to go? You base it on how
19:42much you're willing to lose. That is
19:43essentially it. Now, we do have a rule
19:44of thumb for beginners. Never risk more
19:46than 1 to 2% of your capital on a single
19:48trade. Capital just means the amount of
19:50money that you have deposited in your
19:51account, the amount of money that you
19:53have to trade with. So, if you have
19:54$10,000 in your account and you're
19:57willing to [music] risk 1 to 2%, that
19:59means you're willing to lose 100 to $200
20:01per trade. So, that is the most that
20:03you're willing to risk on any [music]
20:04single trade. If you risk too much per
20:06trade, one bad trade could entirely wipe
20:08you out or take a huge hit to your
20:10account. So, [music] when it comes to
20:11trading, we're working with
20:12probabilities, so we want to keep that
20:14range of 1 to 2% so that you could take
20:16like 10 losses in a row,
20:18back-to-back-to-back, [music]
20:18and you still haven't made a huge dent
20:20on your account. And that allows
20:21probabilities to work in our favor.
20:23Small risk per trade [music] keeps you
20:24in the game, and that's why this is a
20:25great rule of thumb for beginners. It
20:27allows the beginners to stay in long
20:29enough to actually see it through. Now,
20:30quick side note before we keep going,
20:31you may be thinking, "I don't have
20:33$10,000 to trade with, so these numbers
20:35aren't even really clicking to me." But
20:36don't worry, that's not an issue. There
20:37is a solution. We'll get into it later
20:39in the video. But just keep that in the
20:40back of your mind, but for now, let's
20:41keep going. Now, here's one last concept
20:43to add to all of this, trailing your
20:45stop. The safety line isn't just where
20:46you place your initial stop loss. As
20:48price moves in your favor and respects
20:50your safety line, your stop will trail
20:52along that safety line. This allows you
20:54to maximize on profits when you're up
20:56instead of allowing price to come all
20:57the way back down to the original stop
20:59loss. So, you move it, it's dynamic. It
21:01moves along with the safety line. This
21:03is called your trailing stop. [music]
21:04Think of it this way, the safety line is
21:06a dynamic concept. Price will continue
21:08to ebb and flow and move along your
21:10safety line. The stop loss we will keep
21:12adjusting. [music]
21:13Your stop loss follows that same line.
21:15So, the longer that the trade is working
21:16out, the more [music] profits that
21:17you'll lock in along the way. Now, this
21:19part is hands-on. You will be manually
21:20moving your stop along the safety line
21:23as price [music] progresses. As price
21:25shifts and moves along with your safety
21:27line, you will take that stop loss and
21:29continue [music] to move it as price
21:30ebbs and flows along your safety line.
21:32So, that is essentially the stop loss
21:34placement [music] and safety line in
21:36one. Your safety line is your trailing
21:38stop. They are one in the same. And for
21:40some traders who have already been doing
21:42this for a while, the acronym SL, safety
21:44[music] line, same as stop loss, SL.
21:47But, it tells you exactly where your
21:48stop should be and how you should trail
21:49them and how you should move them.
21:50Everything is dictated by what price
21:52does. [music] If the price moves along
21:54and respects your safety line, so does
21:56your stop loss. If price moves along
21:58your safety line, [music] you're staying
21:59in your trade. As soon as price
22:01violates, you're closing your trade. All
22:03of our decision-making is done based on
22:04what the price is doing. Follow the
22:06price. Always come back to that phrase.
22:08Here's what every single trade looks
22:09like for us. One, top-down analysis.
22:11Make sure you mark up your charts.
22:13You've done your research on what price
22:14has done overall leading all the way up
22:16to real-time price action. Two, action
22:17line. Wait for price to break your trend
22:19line and then you get into a trade in
22:20the direction of the break. Three,
22:21pre-planned position sizing and stop
22:24loss [music] placement. This is our
22:25initial risk. How much are we willing to
22:26lose if we get into this position?
22:28Remember, 1 to 2% of your capital for
22:30beginners. Four, trail your safety line.
22:32And then five, price tells you when to
22:34exit. [music] as price violates the
22:35safety line, it's time to close the
22:36trade. That is the entire framework,
22:38step by step. And if you want to see the
22:40strategy be implemented on a live
22:41account, I've done plenty of trade
22:43breakdowns where I go over this exact
22:45strategy using my own personal live
22:46account. Click any of the videos over
22:47here. Later in this video, I'm going to
22:49show you exactly how we utilize these
22:50trend lines to place our trades. And I'm
22:52going to show you this process in real
22:54time, step by step, what the market is
22:56doing right now, today. Here's what to
22:58do next. Go on to TradingView and
22:59activate their paper trading account.
23:01You want to enter a number that is
23:03closer to the realistic amount that
23:04you're actually going to be trading
23:05with. This is how you get the reps in
23:07and this is where you start. You can
23:08enter $10,000, you can enter 20, 25, 50,
23:11100k, 200k, whatever you think would be
23:13more realistic to what you'd actually
23:15like to trade with. Paper trading is
23:16using fake money, but you've got real
23:18market conditions and real price action.
23:20So, you follow the same exact rules or
23:22the same exact system that we just went
23:23over. Same setups, same risk, same stop
23:26losses. This is where you're going to
23:27get the reps in, build the consistency,
23:29master the strategy. Once you've done
23:31that, once you have actually proven
23:32consistency to yourself that this
23:34strategy works, that's when you get to
23:36look into something called a prop firm.
23:38Prop firm is short for proprietary
23:39trading firm. This is a company that
23:41will give you access to trading capital.
23:43So, instead of risking your own $10,000,
23:45remember we talked earlier about if you
23:46don't have $10,000 to invest into a
23:48trading account, this is the
23:49alternative. They will give you access
23:51to trading 10,000, 25,000, 50,000, 100
23:54to even $200,000 worth of trading
23:56capital. Here's how it works. You pay a
23:58small fee to take an evaluation. The
24:00evaluation is a test, so come to the
24:01test prepared. They will give you a
24:03simulated account at the size that
24:04you're trying to get funded for, so
24:06you'll take an evaluation for a 10k
24:08account, you'll take an evaluation for a
24:1050k account, or a 100k account. So, you
24:11have to prove that you can trade
24:13profitably and consistently using their
24:15rules. Things like a daily loss limit,
24:17profit targets, etc. If you pass the
24:19evaluation, you get access to the funded
24:21account. Capital from the firm to trade
24:23with. And when you make money on that
24:24account, you and the prop firm split the
24:26profits. Most firms pay out between 70
24:29and 90% of profits to the trader. The
24:31reason that I love prop firms so much is
24:32that it is the lowest barrier to entry
24:34to get into trading. These evaluations
24:36cost anywhere between 50 to $100. So,
24:39think about this. If you want to trade a
24:40$100,000 in a futures account, you've
24:42got to deposit $100,000 in a futures
24:44account. Most people don't have that.
24:45With a prop firm, the only amount of
24:47money that you're risking is the amount
24:49that you paid for the evaluation, which
24:50is usually around $100. And that's it.
24:52Get funded and start trading. It is
24:54hands down the best path forward for
24:56anyone who's serious about trading that
24:58doesn't have that larger amount of
24:59capital to start with. Now, here's my
25:01recommendation, Alpha Futures. Alpha
25:02Futures has a 50K premium account that
25:05costs around $79 for the evaluation.
25:07That gets you access to $50,000 worth of
25:10futures capital. And if you enter code
25:11Tory at the checkout, you'll get a
25:13discount. And if you're not a futures
25:14trader, there's also Alpha Capital, and
25:16you can use code Tory for a discount
25:18there as well. So, if you want to take
25:19the next step, the link will be in the
25:20description below. Now, there's one more
25:22thing. If you have made it this far, it
25:24is the ongoing maintenance of our trend
25:26lines. What does that look like? If you
25:28do your top-down analysis, you wait for
25:30price to cross one of your lines, you
25:31close your screens, maybe a day goes by,
25:33you come back. How do you readjust your
25:35lines? How do you maintain the lines?
25:37So, I want to go over that example
25:38before we finish today's video. How do
25:40you continue to do this again and again
25:41after today? So, your chart is not a
25:43static picture. The price is not going
25:45to just stay where you left it when you
25:46do your top-down analysis. Price will
25:48continue to ebb and flow and move. So,
25:50as price moves through your old trend
25:51lines, you need to update your lines.
25:53You need to update to new touch points,
25:55new highs and new [music] lows. Markets
25:56are always changing directions, always
25:58creating new trends, so your trend lines
25:59need to adapt with them. Now, this is
26:01what you do regularly. This is not on a
26:03weekly basis or a monthly basis.
26:05Adjusting your lines is on a daily
26:06basis. So, you'll sit down, you'll go to
26:08your designated time frame, and see what
26:10lines need to be adjusted. Your daily
26:12routine is what separates you from
26:14traders who guess versus traders who
26:15have an actual system and an actual
26:17process. Now, let me show you what this
26:18looks like on the charts. Now, let's say
26:20that you go back to Bitcoin. You've done
26:23your top-down analysis already, but the
26:25price has since then crossed through. It
26:27has broken through and violated one of
26:29the trend lines. Now, you weren't able
26:31to get into a position when it crossed,
26:33so you need to modify or adjust your
26:35trend lines to prepare for the next
26:37move. This is what the ongoing
26:39maintenance looks like.
26:40If you open up your charts and price has
26:42already crossed through some of your
26:43trend lines, you're going to go back and
26:45abide by those same rules that we went
26:46over. Make sure price is not
26:48intersected. Make sure lines will always
26:50connect to one another, and try to
26:52capture as many touch points as
26:53possible.
26:54So, if I want to adjust this line
26:56>> [music]
26:56>> to the correct area based on what price
26:58has done now,
27:00I will take this point B and move it
27:02here. Now, price has not intersected and
27:04I've still followed all of my rules.
27:06This is what the ongoing maintenance
27:07looks like. Now, once price breaks one
27:09of these two lines, we understand that
27:11we've got an entry, we've got trade
27:12management, and we've got an exit. But,
27:13as you maintain your lines and as you
27:15continue to watch price day after day,
27:17you will need to adjust these lines. And
27:19this is what the ongoing maintenance
27:20looks like. So, now you have a clear
27:22idea of how to get in, how to manage a
27:24trade, how to get out, and what the
27:26ongoing maintenance looks like for trend
27:28lines. How do we adjust them when price
27:29breaks them and we didn't get in on the
27:31opportunity or we didn't get in on the
27:32trade. That's everything. So, there it
27:34is, the complete trend line system. No
27:36indicators, no noise, no confusion, a
27:39very clear step-by-step system and
27:41strategy. You start from the top,
27:43monthly, weekly, [music] daily, 4-hour,
27:441-hour, or continue down to some lower
27:46time frames. You know exactly when to
27:47enter your trades, how to manage your
27:49trades, and when to exit. And you even
27:51know how to maintain your trend lines
27:52after price has already broken through.
27:53So, that is the whole system. It is
27:55simple, it is repeatable, it works on
27:58any market, [music] any instrument, and
28:00any time frame. This is purely a price
28:02action-based trend line system. [music]
28:04Thanks for watching, everybody. Hope
28:05this is helpful.