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Stochastic RSI Trading Strategy - YouTube
Channel: The Moving Average
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she is absolutely slaying it on a daily
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basis making
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10 to 20 000 a day trading us 30.
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so the stochastic rsi a lot of you guys
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want to learn about it i get it in my
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discord chat
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all the time in this video i'm going to
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show you how to use the stochastic rsi
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which settings you should be using and
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on which
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time frame so that you can have a clear
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understanding of a better entry
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and when the price is actually going to
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reverse
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or continue
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[Music]
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welcome back to the channel everybody my
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name is artie and this is the moving
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average a show where we discuss
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everything day trading to keep you
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profitable on a consistent basis
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so there is a relative strength index
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the standard
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rsi then there is the stochastic
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rsi and it basically is this formula
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which i'm going to show you in the video
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but let me explain it this way when the
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standard rsi
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is doing its flow it's only got peaks
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you don't know when that price is
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actually going to start coming down
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whereas with the stochastic rsi it is
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two
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overlying percentage averages and so
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when those lines
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cross a lot of people use that as their
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indication to get in
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on their position so let's jump into the
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charts i'm going to show you how to set
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it up and i'm going to talk about the
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basics of the stochastic rsi formula so
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investopedia is one of the greatest
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websites if you want to learn about an
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indicator or how it works or how to
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adjust the settings to get the best
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results but essentially for the
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stochastic
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rsi it's taking the rsi minus the
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minimum
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rsi that it was in that time frame
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divided by the maximum rsi
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minus the minimum rsi so you can see how
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it's taking multiple
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averages working it in to make one
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specific indicator there is
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also another part of the stochastic rsi
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which you'll see when we go into the
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settings
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but there's a k period percentage and a
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d period percentage
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the k period is the number of periods
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used in the stochastic calculation
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whereas the d
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percentage is the number of periods used
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when calculating the moving average
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just so that you have a basic
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understanding that this takes into
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account a lot of averages
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and percentages okay so now we are
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looking at euro usd the most
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commonly traded forex currency pair on
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earth
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i want you to pull up two things on your
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chart two things alone
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both free indicators that you can use in
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confluence with each other to find a
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great entry on a trade the first thing
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you're going to have
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is a 200 moving average you can use
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smooth
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you can use exponential it depends on
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which currency pair i prefer smoothed
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the next
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indicator that you're gonna pull up is
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the stochastic
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rsi it is a built-in indicator put a
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star next to it keep it on your
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favorites list
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now once you add that you're going to
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get this big purple line with these
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two overlapping red and blue lines
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now i want to discuss these settings
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really quickly and i want to tell you
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how you can adjust them depending on
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which time frame you are trading so
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clicking on the settings you can see the
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k percentage is three
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d percentage is three rsi length is 14
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which is the standard number for the
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traditional relative strength index
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and the stochastic length is 14. these
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settings
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are completely fine if you are trading
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15
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minutes and above so the 15 the 30 the
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one hour the four hour or the daily
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if however you are trading below the 15
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minute time frame
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you want to change the stochastic length
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to
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eight as you can see it made it a lot
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more noisy but that's because we're
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still on the 15 minute chart if we take
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it down to the five minute
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it smooths it out just a little bit but
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for the purposes of this video we are
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going to keep
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the default settings and keep you
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trading on a higher time frame which
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means less false signals
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keeping you more consistent so this is
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not my strategy
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if you are part of our discord group
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you've seen in the testimonials
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there's this chick christie she is
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absolutely slaying it on a daily basis
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making 10
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to 20 000 a day trading us 30.
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go look at the testimonial section in
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the discord group but essentially people
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were asking her about the stochastic rsi
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settings i promised to make a video on
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it that's why i'm discussing this with
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you guys
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basically what we're doing here is we're
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looking for
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continuations of a downtrend or an
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uptrend
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depending on if it's above or below
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the 200 moving average so essentially
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we're looking at places
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like this finding resistance on that 200
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continuing down
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finding resistance on the 200 again and
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continuing down but we're using the
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stochastic
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rsi to find our entry points all right
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zooming this in a little bit closer you
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can see that we're getting
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a lot of resistance off that 200 and it
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starts coming down so
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people would see this normally and start
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getting in
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right about here just simply looking at
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the price action
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but if you had the stochastic rsi up you
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would actually
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see a crossover in the rsi so making a
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vertical line right here
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let's zoom it in and look at what the
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price action is doing
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versus what the stochastic rsi is doing
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you can see we had this last ditch
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effort momentum swing
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up and then a completely flat top
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starting the continuation down
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this in itself is a very weak signal
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it's not even an engulfing candle
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but if we look at the stochastic rsi we
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see
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that at this point we had a stochastic
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crossover
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we wait to make sure that that's a solid
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signal
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this right here is three candles in to
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the downside of the move
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so you can clearly see that this price
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is in the overbought territory of the
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stochastic rsi
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with the potential to continue to the
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downside and that's exactly what you
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got going on here and with the
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stochastic rsi
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maintaining this oversold market for
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quite some time
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this is just a heavy momentum grab you
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could have gotten out on this first
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stochastic cross
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but i mean theoretically you could have
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just maintained a trailing stop loss on
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this
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and gotten a nice decent move out of it
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again using the stochastic rsi
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alone would be very very difficult in my
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opinion you need to overlay this with
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multiple indicators
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now again i told you that this is not my
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strategy but one of the supplemental
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tools that this person uses to get
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better entries
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is actually an indicator called the lmi
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it is a paid indicator
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and just like the stochastic cross
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you're looking for a cross right here on
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the lmi
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i'm not going to go into this lmi
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indicator on this video
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but essentially they all work in
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confluence with each other
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if you want to learn more about this
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head on over to our discord group
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there's links to videos that christy
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made that are phenomenal
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and literally she slays the markets on a
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daily basis so if you want to learn her
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strategy
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top to bottom front to back get in the
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discord group
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and follow the links in there i just
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wanted to make a quick rundown video so
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that you guys had some clarification
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because there was a lot of questions
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in the testimonial section about this
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strategy if you guys are still watching
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this video that means that you like the
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video so if you wouldn't mind
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hit the big thumbs up button down there
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below my face and if this 15 minute or
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higher time frame is way too high for
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you and you want to scalp on the one
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minute chart
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check out this one minute scalping video
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that i made that is just
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absolutely legit and if you guys got
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some value out of this video and you
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like the way that i teach consider
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subscribing to the channel by clicking
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this button
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right here thanks so much for watching
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and we will see you in the next video
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speak english dude
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