Insanely Simple Momentum Strategy — Transcript

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1. 0:00So when I'm in a trade, how do I know
2. 0:01when to sell? I don't want to sell too
3. 0:03soon only to watch it go up without me,
4. 0:05but I don't want to hold too long only
5. 0:07for it to drop back down. So one of the
6. 0:09things that I'm using is the actual
7. 0:11shape of the candlestick to help guide
8. 0:13me of when to sell. So when I see big
9. 0:15long body candles like this, there is no
10. 0:18reason to sell. I am going to keep
11. 0:19holding. But as soon as I see a candle
12. 0:22like this at the top, that is an
13. 0:24indicator of a possible reversal. So
14. 0:26it's communicating that inside this
15. 0:28candle a tug-of-war is beginning.
16. 0:30There's a really high likelihood that a
17. 0:32reversal is coming soon. I love this
18. 0:34simple breakdown of candle bodies and
19. 0:36how to use them. This is a great way not
20. 0:38to overcomplicate trading. You can
21. 0:40literally trade with just watching the
22. 0:42candle bodies themselves, and that's
23. 0:43exactly the indicator that we built with
24. 0:45Quant. It has to do with reading the
25. 0:47candle body sizes. So I use this AI
26. 0:49called Quant by LuxAlgo to build this
27. 0:52indicator, and I said I want to build a
28. 0:53simple indicator based on candle bodies.
29. 0:56And I explained kind of what I was
30. 0:57looking for, and I also provided a
31. 0:59screenshot like here. Large candle body,
32. 1:00and then when the momentum slows down, I
33. 1:02would like an exit signal. As you can
34. 1:04see on gold here, very strong candle
35. 1:06body into a very nice exit at the bottom
36. 1:09there. So once I got it to where I like
37. 1:10I can just copy that code and bring it
38. 1:12into TradingView, and it looks something
39. 1:14like this. So the logic behind it's
40. 1:16actually pretty simple. All I do is have
41. 1:17it plot a bear or a bull signal when the
42. 1:20average body length of the past two
43. 1:23candles is two times greater. We have
44. 1:25good indication that this is a bear
45. 1:27signal that moved, and then when the
46. 1:28momentum slows, you got a nice exit.
47. 1:31Same for the bull here, nice bull
48. 1:32signal, momentum slows, you get an exit
49. 1:35as well. From what I noticed going back
50. 1:37and looking at some of these setups is
51. 1:39that it works very well on higher time
52. 1:41frame. And so the way I would trade this
53. 1:42is I would wait for the 1-hour to close
54. 1:44in a bull or bear, as you can see here
55. 1:45on the left-hand side, and then also
56. 1:47have my 1-minute chart on the right. I
57. 1:49changed the ATR on this one to a one, so
58. 1:50we really focus on the average body
59. 1:52length and volume. And now we're just
60. 1:54going to wait for a bull signal like we
61. 1:56got here. We would take our long, put
62. 1:58stops below the most recent swing, we go
63. 2:01for that two to one, which is what I
64. 2:02like to do, or we wait for an exit
65. 2:04signal. Okay, so we ended up getting an
66. 2:05exit signal right there as you can see,
67. 2:07and that would have end up being a
68. 2:0954-point trade. So, here's a bearish
69. 2:11example. We have a 1-hour bearish signal
70. 2:13that just plotted. Now, we're on the
71. 2:141-minute looking for the next bearish
72. 2:15signal.
73. 2:16Okay, so we got our next bearish signal
74. 2:18on that 1-minute. Here's our short, and
75. 2:20we're going to stop above the high or
76. 2:21the recent swing, go for the two to one,
77. 2:23or we're waiting for the exit signal.
78. 2:25Very nice sell. Wow, right through for
79. 2:27the two to one, but we would have exited
80. 2:29on this exit signal, and that would have
81. 2:30been a 1 to 1.4, which is fantastic as
82. 2:33well. The biggest thing with trading
83. 2:34momentum and using this indicator is
84. 2:36having that higher time frame
85. 2:37understanding of momentum, and then
86. 2:39moving to that lower time frame to take
87. 2:41that trade with the same momentum
88. 2:43signal. Love this idea, and like always,
89. 2:45I'm going to give you the source code
90. 2:46for completely free, so just comment the
91. 2:48word mom, and I'll send you a link.
92. 2:50Then, the first thing you're going to
93. 2:51see here is a chat. At the top, it's
94. 2:52going to say copy code. All you got to
95. 2:54do is click copy code, and then paste it
96. 2:56into your