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How to Trade BULL FLAG Pattern Formation // Learn The Trading Strategy & Secrets That You're Missing - YouTube
Channel: Mete Kaplan
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both flag both black both black
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or flat
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wool
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or how to pronounce this
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[Music]
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flag
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flag
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flag
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what's up guys i hope everything is all
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right and all of you having a great time
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today we'll learn one of my favorite
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trading patterns yes you'll learn how to
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trade both like patterns now i want to
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talk to you about you before i start
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which patterns do you use which ones
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have you had success or failure
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please let me know in the comment
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section below
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because if you are missing something and
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want to learn more i want to make a
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video about it now let's get started
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boot flag pattern is one of the most
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used patterns or formation types in the
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trading world
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from one minute scalpers to one near
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position traders it's my favorite
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trading pattern and at least in the top
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three
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it's extremely simple to identify and
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use with a couple of techniques
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so as the name suggests the bullflag
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pattern has a regular flagship from the
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real world a pole and a flag so
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basically share price makes a huge move
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and forming the pole
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then the stock consolidates for a period
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of time by shaping our flag
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final stock breaks out of the
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consolidation with a strong volume the
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bullflag pattern is a continuation
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pattern is generally found in an
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existing uptrend or the start of a new
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uptrend with a catalyst
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as i teach to all beginners never focus
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on the shapes perfect patterns or
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formations
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always keep your eye on the meaning that
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they deliver
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this is how you read the markets
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now let's talk about what is the meaning
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of the bull flag pattern and what kind
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of message traders should get from this
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formation
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so let's start over we have a regular
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stuck at our hands what we look for is
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an existing uptrend or a catalyst a
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catalyst is a simply a huge driving
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force for the stocks
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for example news think about it i'm a
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company and my company discovers a
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limitless energy source what would
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happen to my company's stock prices
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they would skyrocket
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so catalysts are news earning reports
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product releases and so on i'll talk
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about the most important catalyst to
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watch in other slides
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now a catalyst created a huge interest
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in our stock many traders in the world
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show their interest by buying shares
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or if an existing uptrend has a really
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strong momentum
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sellers cannot stop it
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as a result price keeps rising
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dramatically this is how our pole shape
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forms however
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you should always confirm this bullish
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action with the rising volume which i'll
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show you in the next slide
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after the strong bullish action finally
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we either reach a strong resistance
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point in the price or buyers decided to
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take profits from their positions
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this is how our black shape was formed
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now
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this is very interest rate with the
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expectation of another bullish rally
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with the breakout
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the move is expected to be in the length
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of the pawn
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don't worry i'll show you three
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different ender styles and placing stop
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loss orders soon
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now i would like to teach you how to
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watch volume while trading the bull
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flags
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volume is a secret key of almost all
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patterns and formations because volume
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gives us an indication if the movement
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is fake or real or simply to understand
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if this movement is supported and backed
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up by other traders
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what we really want is a rising volume
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after a catalyst which will indicate
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buyers have a real interest in the stock
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this is a good poll for our stock
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after that we wait for a consolidation
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period a pullback pace
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what we look for here is a stable volume
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if it's decreasing it's even better
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however we definitely do not want a
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rising volume during this consolidation
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now our pole and flag was formed what we
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need is to determine our entry point and
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where to place our stop loss orders
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let's talk about it in the next slide
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now opening a positioned flag patterns
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totally depends on the traders and their
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risk appetite
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however the most common entry in the
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world is the breakout over the flag
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which is expected to start a new bullish
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rally
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this is also my personal interest style
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but as i said
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trading and strategies are not constant
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or fixed
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every trader has their own special
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method and approach from their own
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experiences
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and these are my experiences
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another way to say this this is how i
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become really successful at trading
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because i tried hundreds of methods and
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found out what works for me
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the second common entry is waiting for a
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resistance breakout which is the highest
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price point of our poll
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this type of entry is a minimum reward
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because we are missing the most of the
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movement already
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the final entry type is not common
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however this is a style as well the
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problem with this entry model there is
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no clear entry
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we are just trusting the bull flag
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pattern will work soon but nothing else
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or maybe you have a piece of insider
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information
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the second problem here is that your
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entry point is so close to your stop
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loss order it can be easily stopped
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placing stop loss order is quite easy
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just below the flag
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if you can't find a strong support point
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just place it a little under that
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let's summarize what we have learned so
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far
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one
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look for an existing uptrend or a
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catalyst this is where the buffalo
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pattern comes into existence
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two
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wait for the pole shape to be formed
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what you should focus on is high and
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raising volume
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three
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watch for a small consolidation or a
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pullback with a light volume
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four
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check out if a buffalo pattern shape
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appears or not
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five enter a position depending on your
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enter style i always look for a breakout
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from the flag
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6. place your stop loss order
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immediately this is so important
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actually it's the most important thing
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unless you're a sculptor
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7 write the breakout and take your
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profit
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due to your risky vote ratio it just
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depends on you
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this is how simple it is to write both
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like patterns
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before i move on to live examples i
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would like to talk about catalyst types
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so
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i would like to teach you the most
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important type of catalysts i'll go over
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each of them briefly however i don't go
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into detail because i'll create a one
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whole video dedicated to catalyst soon
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on my youtube channel please subscribe
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if you are interested
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it's really simple and every single
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trader should know about this as i said
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before a catalyst
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is simply a huge driving force for the
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stocks
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which could be positive or negative
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news every catalyst is general news news
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about the world company people employees
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customers that may affect the share
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prices
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earning
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reports as you guess financial report
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releases by companies about their growth
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and revenue these are very dangerous
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catalysts beginner traders should stay
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away from trading them because a good
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report does not mean a bullish rally
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anything may happen
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product launches these are announcements
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or public events like apple events each
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year i like them and trade with them a
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lot
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mergers or acquisitions one company
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joins another company or requires
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another company these are really big
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events and creates very big moves in the
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stock prices
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stock buybacks a company buys back some
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of its shares available
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this generally increases the value of
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the remaining shares
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due to the reduced supply in the market
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deals and contracts
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these are my favorites
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a company sends a deal about anything
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this generally indicates a company is
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growing and improving a very bullish
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indication for the stock value
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low seeds and frauds
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this is also what i watch every day
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because it can drop the share prices by
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50
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in a single day
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not useful for bull flags however really
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great for the bear flags which i will
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teach you in the next videos
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this was a brief introduction to
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catalysts i'll create one whole video
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dedicated to catalyst soon on my youtube
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channel please subscribe if you are
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interested
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here is a clear example of a bull flank
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probably a catalyst push the price
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really high
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you can see the green candles in a row
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one after another
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this should be a piece of big news on
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the stack
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and our pole shape is formed
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the buyers are exhausted at the moment
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and the consolidation period starts
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however
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sellers didn't take the control yet
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now as you can see
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our flag shape is formed
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now we are ready to enter the stack
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looking for a breakout from the flag
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and we open our position with the flag
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breakout and placing our stop loss order
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at the bottom of the flag
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the general take profit point is
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one to two risk reward ratio
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however taking profits depends on you
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and how big the momentum is
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sometimes you don't want to take profits
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early
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so the expected move is around the
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length of the pole
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however
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this is not a rule and in reality
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it does not happen all the time never
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trust it
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take profits when you should fit
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due to your own risk management
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some of the flags are really really
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small
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sometimes even one or two candles while
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the pole could have 10 to 15 candles
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sometimes
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however one specific rule is
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pole cannot be smaller or shorter than
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the flap that is not able for like
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pattern
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now flags don't have to have a perfect
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shape some flags look like rectangles
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some others panels some of them white
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some of them narrow
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shapes are illusions meaning is the only
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reality and the reality is trends
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catalysts high volume light volume and
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so on
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now i'll teach you
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catalyst like important technical
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indications
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which help you to identify both lags
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before they even happen
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you cannot easily find this information
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anymore i try to give all my knowledge
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and trading secrets to you so you can
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make fewer mistakes and much more
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profits in your trading career
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i'm about to show you what i use during
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my day and swim trading sessions with
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bull flag patterns
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however this will be a brief
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introduction to these special
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indications i'm planning to make a whole
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new video which is in much more deep
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detail about it
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now let's see
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52-week high extremely important
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resistance once it's broken the price
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general flies and creates both flags in
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a row
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all-time high
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even more important than the 52-week
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side because
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once all-time high
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ath is broken
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the sky's the limit there's no
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resistance at all
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golden cross
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50 sma crosses
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200 sma above
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there is special indication watched by
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millions of traders out there
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gives us many trading opportunities of
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trading both like patterns
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ema 9 and 20.
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now this one is special it's used by day
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and swing traders a lot during
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consolidation or pullback
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when the price touches
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9 or 20 ema
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it's considered as consolidation is over
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these last three
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are for day traders
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as also a day trader i use these high
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points as a beginning of breakouts
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because once these price levels are
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broken
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price flies and creates minimal flag
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trading opportunities
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don't worry i'll make a new video in
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much more detail about all of these with
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live examples and practices very soon
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now
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let's go back to trading view
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bitcoin has this amazing bull flag
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example for traders
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first of all
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let me draw our bull flag
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as you can see here
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our pole is formed a nice and a strong
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bullish momentum
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and we check if our volume supports
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yes volume is rising
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now price enters a consolidation period
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and our flag comes into existence as you
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can see
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if we check the volume
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it's decreasing and light
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just as we want it
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volume spikes like this one
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do not mean so much anything unless
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there is the following momentum
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these generally happen when underlying
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security reacts to a momentary event or
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a specific moves of market makers
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i remember once the bitcoin price jumped
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20 percent up in one minute and back
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down
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the big fishes aka market makers wanted
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to trigger stop losses in the market
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as i said
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a single volume spikes is not that
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important what you have to look for
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is trending volume one bar after another
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now the expected move of the price is
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around the length of the pole
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let's copy this one
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and our entry is the breakout from the
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flag
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and stop loss is just below the flank
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great let's watch the trade
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okay folks i think we had a really deep
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education about how to trade both lag
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patterns we covered things from catalyst
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volume trans to special indications if
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you miss anything did not understand
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well something please let me know in the
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comment section below if you can
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subscribe to channel and leave a like it
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would be great for me so i can create
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much more content with trading secrets
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strategies methods that you have never
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seen before please take care and see you
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around
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you
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