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The "MAGIC" Indicator that Shows You Exactly WHEN to BUY and SELL - YouTube
Channel: Vic
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- [Vic] Hey how is it going guys?
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As we all know, the market
doesn't go up in a straight line,
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there are always ups and downs
no matter what you invest.
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But have you wondered if there
is any way that can allow us
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to predict when exactly the
market will go up or go down?
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No matter if you are a short term trader
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or long term investor,
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wouldn't it be great if we
can have a magical indicator
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that can show us exactly
when to sell the tops
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and when to buy the dip?
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Actually there is one such
indicator can do exactly that.
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In fact, this indicator was
used to be exclusively adopted
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by the legendary traders like Steve Cohen
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and Paul Tudor Jones.
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In this video, I will
help you guys understand
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how exactly this indicator works,
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how to use it in your own
trading and investing.
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And also, at the end of the video,
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I will show you guys how
you can add this indicator
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into your charting
platform like TradingView
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for absolutely free.
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So please make sure you
watch this video till the end
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and do not miss out on anything.
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I promise you I will make it quick
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and don't waste your time.
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Alright, let's get started.
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(gentle upbeat music)
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(keyboard clacking)
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Before I show you the
name of this indicator,
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let me first show you how
powerful this indicator is.
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Let's pick a random
stock, for example Square,
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one of the hottest stocks recently.
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When we apply this indicator to the chart,
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we can clearly see
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when exactly the short
term market tops are.
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In technical analysis,
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we call such short term
tops the Swing Highs.
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This indicator shows us where exactly
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the potential Swing Highs are.
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These are the places where
the stock price is overheated
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and we should stay away from this stock.
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Also, other than the Swing Highs,
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this indicator can show us
where the Swing Lows are.
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We often heard people say, "Buy the Dips."
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These Swing Lows are
the best potential dips
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where you can enter your trades,
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or add more shares to
your existing positions.
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Let's take a look at another example.
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Here is the daily chart of Apple.
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Same thing, once we add this indicator,
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we can instantly see where are tops
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that we should stay away from,
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and where are the dips
for us to buy more shares
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at the best price.
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Not only does this indicator
work on individual stocks,
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it works on broad indexes as well.
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In fact, this indicator actually
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successfully predicted the
massive stock market crash
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back in March 2020, exactly
three days before the crash.
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Also, it precisely showed us
where the market bottom was.
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So if you had this indicator back in 2020,
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you would successfully
get out of the market
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three days before the crash,
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and you would know exactly
when to start buying the dip,
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while everyone else was panicking.
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Alright, so what exactly
is this magical indicator?
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This Indicator is called DeMark 9,
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named after its original
creator Tom DeMark.
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Tom DeMark used to work
for Paul Tudor Jones
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as a portfolio manager
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and vice president for Tudor Capital,
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and now he is serving
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as Steve Cohen's personal special advisor
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for his hedge fund Point 72.
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Tom DeMark has created
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quite a lot of different
technical indicators,
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but this indicator called DeMark 9
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is by far the most effective one
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on predicting the short term
market tops and bottoms,
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and also the easiest one
for beginners to understand.
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So what is the secret of
this DeMark 9 indicator?
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And how exactly does it work?
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(keyboard clacking)
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In technical analysis, we often say,
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"Simple things work the best."
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The secret behind DeMark 9
is actually pretty simple.
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In general,
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there are only two major
categories of technical indicators.
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First category is called
the Momentum Indicators,
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which help us to identify trends,
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breakouts and the trend reversals.
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The other category is called
Oscillator indicators,
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which help us to identify overbought
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and oversold conditions in the market.
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And DeMark 9 belongs to the
second category, which means,
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essentially DeMark 9 is a
leading Oscillator Indicator
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that shows investors where the
market is heavily overbought
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or oversold.
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This is how DeMark 9 works.
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It compares the current
candlestick's closing price
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to the closing price of the
candlestick four days ago.
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If the current closing price
is higher than four days ago,
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it will be considered Bullish
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and it will be marked with a green number.
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On the other hand,
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if the current closing price
is lower than four days ago,
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it will be considered Bearish,
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and it will be assigned with a red number.
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The number shows how many days in a row
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that this market has closed above
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or below the price four days ago.
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And the most important
number we are looking for
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is number nine.
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For example, this is the
daily chart of Apple stock.
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If we add the original DeMark 9 indicator,
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you will see something like this.
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We can see that there are two number 9s
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showing up in this chart.
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One is Bearish, and the
other one is Bullish.
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On the Bearish side, this number nine
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indicates there have
been nine days in a row
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that the daily closing price
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was lower than its four days ago.
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And this is a very significant
short term oversold signal.
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Whenever this bearish
number nine shows up,
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it usually means the market
has potentially bottomed
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in the short term.
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So this is usually a very good
time to add more positions
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if the stock is on a clear uptrend.
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On the Bullish side,
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this green color number nine
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indicates there have
been nine days in a row
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that the daily closing price
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was higher than its four days ago.
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And this is an important
short term overbought signal.
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Whenever this Bullish number
nine shows up in a chart,
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that usually indicates this
stock is short term overheated,
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and we should expect a
pullback coming soon.
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Typically you should avoid
buying or adding more positions
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when this overbought number nine shows up,
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especially if the stock
is in a clear downtrend.
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So that is pretty much how
the DeMark 9 Indicator works.
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The mathematical calculation
behind this indicator
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is extremely easy to understand,
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but also is extremely,
extremely useful and effective.
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Before we move on,
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there is one thing I do
wanna highlight here is that,
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whenever you use a DeMark 9 to
make a buy or sell decision,
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you have to analyze
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the current trend of the
market you are trading first.
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If the stock you are watching
is in a clear uptrend,
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then you only use DeMark 9 Indicator
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to look for Buy signals.
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If the stock is in a clear downtrend,
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then you use DeMark 9 to
look for sell signals.
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Never ever bet against the trend,
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especially if you're a beginner.
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If you are completely new
to technical analysis,
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or financial marketing in general,
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and have no idea what I am talking about,
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no worries at all,
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I have uploaded my entire
Trading Course for Beginners
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for free on this channel.
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It covers pretty much
everything you need to know
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about technical analysis.
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Do check it out if you haven't.
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I will put the link in
the comment section below.
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(keyboard clacking)
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Alright, before we go, I
will quickly show you guys
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how to implement this DeMark 9 Indicator
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in your charting platform
for absolutely free.
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First, the most important
thing is the source code.
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These are the codes I am currently using.
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There are a couple of very minor changes
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compared to the original one.
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For example, I don't wanna make
my chart look too cluttered
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with all those DeMark numbers,
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so I remove all the
numbers from one to six,
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and only show numbers seven and eight.
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And for number nine,
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which is the most important
number that we are looking for,
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I changed it to an emoji icon
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so that it's easier to
visualize in the chart,
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especially if you zoom out.
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I can definitely share with you guys
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all these source codes for free.
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All you need to do is
to add me on Twitter,
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send me a DM and I will send
you all these codes on Twitter
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so that you can just copy and paste.
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Here is my Twitter account.
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I will also leave my Twitter link
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in the comment section below.
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Cool, next,
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once you have the source
code of this indicator,
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you need to add them to
your charting platform.
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The charting platform I am
currently using is TradingView,
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which in my opinion,
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is the best charting platform
out there in the market.
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So I will show you guys
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how you can add this DeMark
9 indicator to your chart
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on TradingView with my source code.
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Once you are on your TradingView,
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click the Pine Editor at the bottom.
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In the Pine Editor, you can
copy and paste the source codes
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and then click Save.
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Once you save it, click Add to Chart.
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Then, boom! You are all set.
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You should be able to see
the DeMark 9 Indicator
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on your chart right away.
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All right, just one
last thing before we go,
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no matter how powerful an indicator is,
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nothing is guaranteed
in the financial market.
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So please always remember
this: investing and trading
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is a game of probability, not certainty.
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An indicator's ultimate job
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is to increase our probability of winning,
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but still, it is eventually our job
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to decide how much risk
we are willing to take
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for the potential rewards.
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Always make sure you
understand your downside risk,
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respect the risk, and
protect your downside,
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and your upside profits will
take care of themselves,
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especially if you have
such a powerful indicator
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like DeMark 9.
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All right, that would be
the end of this video.
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If you are new to this
channel, my name is Vic.
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I make videos every week to
share some of my thoughts
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on what's going on in financial markets.
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And I also share some educational contents
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to help your investing
journey, just like this one.
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If you are interested in the
world of finance and business
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and find my videos being valuable to you,
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please consider subscribing.
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Again, thanks so much for watching, guys,
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and I will see you guys soon.
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(lively upbeat music)
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