1 00:00:00,610 --> 00:00:07,610 In this section, I'm going to tell you how you can identify high probability bullish candlestick setups. 2 00:00:08,340 --> 00:00:10,800 Our aim is to make high probability trades. 3 00:00:10,810 --> 00:00:12,750 What do you mean by high probability trades? 4 00:00:12,760 --> 00:00:18,310 See, in market at any point of time you make any trade, say, for example, you make a buyer trade 5 00:00:18,310 --> 00:00:25,540 without doing any analysis, there will be approximately 50 percent chances of being profitable, isn't 6 00:00:25,540 --> 00:00:25,690 it? 7 00:00:26,170 --> 00:00:31,570 You make a random trade, buy in trade, you'll find out that in some cases you are winning and in 50 8 00:00:31,570 --> 00:00:32,800 percent cases you are losing. 9 00:00:33,490 --> 00:00:39,120 So our aim of doing candlestick analysis is to increase that probability of winning. 10 00:00:40,060 --> 00:00:46,900 So we are trying to increase our purity maybe 70 percent or 80 percent so that we can earn consistent 11 00:00:46,900 --> 00:00:47,700 money in the market. 12 00:00:47,980 --> 00:00:51,470 So that is the whole aim of doing this exercise. 13 00:00:51,800 --> 00:00:58,960 So our aim is to identify higher probability set ups that that are going to give us more winners and 14 00:00:58,960 --> 00:00:59,520 losers. 15 00:01:00,070 --> 00:01:05,170 How you can find them have given some hints in previous sections as well. 16 00:01:05,500 --> 00:01:13,810 But here we are going to see all those filters that you can apply while identifying high probability 17 00:01:13,810 --> 00:01:14,470 setups. 18 00:01:14,510 --> 00:01:15,620 Let's see them one by one. 19 00:01:16,030 --> 00:01:21,940 So here you can use four filters to get high probability to your previous filters that I have told you 20 00:01:21,940 --> 00:01:24,620 that is market should be falling. 21 00:01:24,940 --> 00:01:26,250 Second risk reward. 22 00:01:26,260 --> 00:01:29,590 And third, as I told you, the next can and should open green. 23 00:01:30,040 --> 00:01:35,740 But apart from that, there are few more filters that you can use to increase your probability. 24 00:01:36,310 --> 00:01:44,440 Even if you don't use these filters, you you can still have high approval rates if you follow what 25 00:01:44,440 --> 00:01:45,670 I just told you. 26 00:01:45,680 --> 00:01:51,470 But yes, if you use this, it will increase you property maybe 10 to 15 percent more. 27 00:01:52,000 --> 00:01:53,290 So what are those filters? 28 00:01:53,890 --> 00:01:55,170 First, filter volume. 29 00:01:55,780 --> 00:01:59,650 Second, this trend line that is a risk to warrant for this support and resistance. 30 00:02:00,010 --> 00:02:01,360 You see this one by one. 31 00:02:02,520 --> 00:02:03,770 Let's see the first filter. 32 00:02:04,930 --> 00:02:08,590 What is first filter, which is the risk reward ratio? 33 00:02:09,130 --> 00:02:12,670 As I told you, that you should have at least one to one risk reward. 34 00:02:12,760 --> 00:02:15,220 If it is above this, then it's welcome. 35 00:02:15,220 --> 00:02:19,720 But if risk is one and the world is less than one, then you should not go for this. 36 00:02:20,140 --> 00:02:22,780 So you have to apply this filter before making any trade. 37 00:02:22,790 --> 00:02:27,220 So you are to find out what the what is the risk and reward on that particular trade. 38 00:02:27,220 --> 00:02:29,770 If it is at least one is to one, then you should go for it. 39 00:02:30,280 --> 00:02:34,210 So we have to calculate the risk, as I told you, that you have to calculate it on the basis of it 40 00:02:34,210 --> 00:02:37,170 to calculate reward on the basis of resistance. 41 00:02:37,180 --> 00:02:40,060 It should be minimum one as to one. 42 00:02:41,350 --> 00:02:44,530 The second filter that you can use is. 43 00:02:46,110 --> 00:02:46,590 Volume. 44 00:02:47,890 --> 00:02:54,490 Now, what is what do you mean by volume, volume indicates how many shares are traded on that particular 45 00:02:54,490 --> 00:02:54,740 day. 46 00:02:54,760 --> 00:03:01,290 Simply speaking, some more number of shares are traded, the more convincing that pattern will be presented. 47 00:03:01,300 --> 00:03:06,420 So say, for example, you have a hammer pattern that is getting formed with high volume. 48 00:03:06,820 --> 00:03:08,870 Isn't it more convincing? 49 00:03:09,010 --> 00:03:15,370 So here, I would like to show here the price as well as volume so you can see volume on the bottom 50 00:03:15,790 --> 00:03:16,800 and this is the price. 51 00:03:18,110 --> 00:03:25,730 So this particular bar indicates volume on this particular day, so you can see, for example, this 52 00:03:25,730 --> 00:03:33,140 was a big scandal and you can see the volume, you can see a huge volume followed by long scandal, 53 00:03:33,380 --> 00:03:33,930 isn't it? 54 00:03:34,190 --> 00:03:36,380 So if this happened, this is more convincing. 55 00:03:36,800 --> 00:03:40,820 So what I mean to say bit volume is this one. 56 00:03:43,200 --> 00:03:46,350 We have got our hammer in this case one. 57 00:03:46,620 --> 00:03:47,240 This is Luke. 58 00:03:48,420 --> 00:03:53,250 We can use this filter, we can find out what is the volume in this particular case, so you can see 59 00:03:53,250 --> 00:03:59,190 the volume is higher than you can see previous three or four candidates, you can see this volume is 60 00:03:59,190 --> 00:04:02,040 this one, the volume of this Cantley, this. 61 00:04:02,550 --> 00:04:06,380 And in this case, this is what the volume is. 62 00:04:06,690 --> 00:04:12,090 But if you consider this one, you can see this volume is higher than the previous three. 63 00:04:12,300 --> 00:04:14,100 So what what metric should we use? 64 00:04:14,460 --> 00:04:16,740 We should idealist's speaking. 65 00:04:17,040 --> 00:04:26,530 We should trade those patterns where volume is at least 50 percent more than average volume of last 66 00:04:26,530 --> 00:04:27,260 three trades. 67 00:04:28,230 --> 00:04:29,480 So what do you mean by this? 68 00:04:29,490 --> 00:04:35,770 Say, for example, on this particular day, your volume is, say, for example, one zero. 69 00:04:36,090 --> 00:04:40,530 OK, so this is your a year and calculate last three days. 70 00:04:40,560 --> 00:04:49,980 Say, for example, on previous day the volume was a Tilak on previous to that it was a positive Tilak 71 00:04:50,310 --> 00:04:52,350 and previous to that it was for Telek. 72 00:04:52,530 --> 00:04:56,850 We are to find out the average of these three 40 plus 50 plus 80. 73 00:04:58,470 --> 00:05:04,800 So it is 170 divided by three, but it is almost to 60 something. 74 00:05:06,350 --> 00:05:18,380 So that is what you get the volume for in this case, this volume is much more higher than 60 like so 75 00:05:18,380 --> 00:05:19,010 I didn't speak. 76 00:05:19,010 --> 00:05:20,290 It should be 50 percent more. 77 00:05:20,300 --> 00:05:22,790 So what is the 50 percent of 60? 78 00:05:23,930 --> 00:05:25,120 You are 50 percent. 79 00:05:25,130 --> 00:05:25,870 That is 30. 80 00:05:26,030 --> 00:05:27,820 It should be 96. 81 00:05:28,670 --> 00:05:33,080 OK, so 90 like in this case, it is once a year. 82 00:05:33,080 --> 00:05:36,250 So we can go for this many times. 83 00:05:36,260 --> 00:05:38,780 You don't need to do this calculation. 84 00:05:38,780 --> 00:05:43,760 You will mostly find find out by the graphical representation. 85 00:05:43,760 --> 00:05:47,960 Say, for example, this one you can see such high volume. 86 00:05:49,020 --> 00:05:53,910 And you know that this volume is much higher than the previous three days volume, so you don't need 87 00:05:53,910 --> 00:05:55,060 to even do the calculation. 88 00:05:55,080 --> 00:05:57,270 You can just do it manually here. 89 00:05:57,270 --> 00:06:03,150 Also, you can see such high volume and you can quickly make out that as compared to last three days 90 00:06:03,150 --> 00:06:06,760 volume, the volume is don't just go on the numbers. 91 00:06:07,020 --> 00:06:14,430 Even if I have told 50 percent if what if it is forty nine point five percent, go for it. 92 00:06:14,430 --> 00:06:15,120 No problem. 93 00:06:15,660 --> 00:06:22,180 But it should be what it should be more than the previous volume that that is the logic behind this. 94 00:06:22,800 --> 00:06:28,180 What I'm trying to tell you is that the volume should be good on that particular candle. 95 00:06:28,200 --> 00:06:31,800 So if the scandal is supported by volume, then it's a good bye. 96 00:06:32,100 --> 00:06:34,350 So this is the second filter that you can use. 97 00:06:34,590 --> 00:06:35,700 That is volume. 98 00:06:36,120 --> 00:06:40,920 Third filter that you can use is filter with support and resistance. 99 00:06:41,250 --> 00:06:42,150 Look at this line. 100 00:06:43,060 --> 00:06:49,870 This line is acting as support as well as resistance when the parade is coming to this level, it is 101 00:06:49,870 --> 00:06:51,370 returning again. 102 00:06:51,380 --> 00:06:52,780 It has come to this level. 103 00:06:52,780 --> 00:06:58,840 It is returning here also more broadly to discount to this level and return here also in return for 104 00:06:58,840 --> 00:07:05,140 this level is acting as a resistance which will get broken. 105 00:07:05,140 --> 00:07:06,430 In this case, it got broken. 106 00:07:06,430 --> 00:07:08,860 It became support for this was support. 107 00:07:09,400 --> 00:07:10,870 This was support. 108 00:07:11,440 --> 00:07:13,920 And when support is broken, it again became resistance. 109 00:07:13,920 --> 00:07:18,530 So support and resistance game is getting played in this particular storm. 110 00:07:18,970 --> 00:07:27,250 So in our case, when this hammer is formed, this hammer got formed near the support that this got 111 00:07:27,250 --> 00:07:28,940 formed near this support. 112 00:07:28,960 --> 00:07:36,220 So it is another indication that the market can go up because this is the level which is acting as the 113 00:07:36,220 --> 00:07:42,170 support, which is preventing prices to front from going down from this level. 114 00:07:42,670 --> 00:07:49,130 So this is another indication that can help you to further their careers. 115 00:07:49,150 --> 00:07:52,930 So these are the few price points at which prices have reversed. 116 00:07:53,350 --> 00:08:01,180 And this is the price point, which is not only a hammer, but not only hammer also came with good volume, 117 00:08:01,870 --> 00:08:06,170 also came in falling market, and it is a near support. 118 00:08:06,490 --> 00:08:07,930 So that is what we are doing. 119 00:08:07,930 --> 00:08:10,980 We are trying to increase the probability of winning. 120 00:08:11,050 --> 00:08:15,390 So this is how we have to free trade using support and resistance. 121 00:08:15,670 --> 00:08:18,490 So this is how you can use support and resistance. 122 00:08:18,520 --> 00:08:23,770 We use resistance when we talk about bearish patterns, when we talk about bullish patterns, we are 123 00:08:24,370 --> 00:08:25,480 concerned about this. 124 00:08:25,480 --> 00:08:27,850 Support and praise are coming to this level. 125 00:08:27,850 --> 00:08:31,400 It is taking support and going up, coming to this level support and going up. 126 00:08:31,900 --> 00:08:37,280 So this is how you can use support and resistance to filter out the trade. 127 00:08:37,450 --> 00:08:40,060 So this is one way of putting it. 128 00:08:40,330 --> 00:08:43,930 And last filter that you have is trend line. 129 00:08:44,110 --> 00:08:50,250 The trend line is nothing but a line which indicates the trend or the direction of the trade. 130 00:08:50,930 --> 00:08:58,990 So that is a line when at which when market comes, it reverses and it follows the trend you can see. 131 00:09:00,540 --> 00:09:02,880 This is the point where the market reversed. 132 00:09:03,480 --> 00:09:05,610 This was an uptrend market reversed. 133 00:09:05,910 --> 00:09:09,810 And again, market came to this trend line and reversed. 134 00:09:10,530 --> 00:09:14,380 So in our case, this hammer is getting formed. 135 00:09:14,790 --> 00:09:20,730 You did not only near support, but also near the train line. 136 00:09:21,820 --> 00:09:30,370 So it is, you can say, a golden point where you have so many things getting converged at one point 137 00:09:30,370 --> 00:09:33,510 of time, so this will give us a high approval rate. 138 00:09:33,520 --> 00:09:38,950 And you can see in this case that it gave a very sharp rally and it worked. 139 00:09:39,640 --> 00:09:47,500 So this is how you can filter out the trades using this reward volume, support, resistance and train 140 00:09:47,500 --> 00:09:49,750 lines to sum up everything. 141 00:09:49,750 --> 00:09:53,380 In this case, you have first thing that is hammer. 142 00:09:54,400 --> 00:10:03,700 Second, it has come in falling market for the next scandal is bullish one, fourth it is come volume. 143 00:10:04,450 --> 00:10:06,520 Fifth risk reward is favorable. 144 00:10:08,020 --> 00:10:11,860 6TH, it is near the airport and seven. 145 00:10:12,970 --> 00:10:20,160 There are that it is near trend line, so you have seven things that are indicating you to buy them, 146 00:10:20,170 --> 00:10:22,030 there is no point in waiting. 147 00:10:22,430 --> 00:10:28,120 You should quickly buy such stocks and you should you can take benefit of this. 148 00:10:29,050 --> 00:10:33,430 But there is a slight piece of advice that I would like to give you. 149 00:10:33,610 --> 00:10:39,550 Even though these are the filters that you can use, it is not necessary that all the filters should 150 00:10:39,970 --> 00:10:43,040 must be present to make the trade. 151 00:10:43,450 --> 00:10:51,970 It's okay if this trend line indicator filter is not supporting, it's OK if it is not near resistance. 152 00:10:52,270 --> 00:10:55,330 So do not try to make the trade perfect one. 153 00:10:55,600 --> 00:11:02,800 If you try to do that, you you may not get many of the trades and that that that may not work in the 154 00:11:02,800 --> 00:11:03,370 long run. 155 00:11:04,090 --> 00:11:07,810 Even if to filters are not there, then it's okay. 156 00:11:08,950 --> 00:11:13,870 It is important to put the trades if even if a few filters are working. 157 00:11:13,870 --> 00:11:17,410 But yes, don't put trade unless and until recently. 158 00:11:17,530 --> 00:11:24,870 It is not a feeling unless and until the market is not opening bullish to the scandal. 159 00:11:24,880 --> 00:11:26,770 So that that is what you have to understand. 160 00:11:26,950 --> 00:11:33,880 So volume trendlines and supports this to be are additional filters that can be used. 161 00:11:34,150 --> 00:11:37,690 If they are there then that's very good. 162 00:11:37,840 --> 00:11:41,810 But if they are not there, that does not mean that the trade will not work. 163 00:11:41,950 --> 00:11:42,700 It will work. 164 00:11:43,700 --> 00:11:48,000 But if the three are there, then it will have high probability. 165 00:11:48,020 --> 00:11:49,240 That is what I want to tell you.