today we’re talking about a very simple
idea that stocks move in waves stay tuned see what it’s all about in this
video talking about one very simple idea that I think a lot of people overlook
the idea that stocks move in waves Cowabunga bro the idea it’s very simple
idea I keep saying how simple it is because it really seems almost too
simple to be true but it is now this is going to apply to you know better stocks
these aren’t gonna be so much the small penny stocks the really crazy three
hundred five hundred percent movers which you know there’s still small waves
but really this is more for long term investing swing trading stuff like that
but you can still see that there are waves even in these really crappy
companies that we trade sometimes so the chart that I pulled up here is Nvidia my
favorite stock I talk about it all the time how I do personally love this song
so looking here at Nvidia this is the daily chart you can see back in May June
of 2017 we really kind of started this new trend this new channel and now the
big thing you have to think about is that channels aren’t always you know
this way they’re not always just support/resistance
channels that go this way and this way up-down and stocks trade inside those
channels and that’s really the overall trend and that’s what kind of looking
for and I’ve recently been talking to a youtuber another trader who’s been
giving me some tips and show me some charts like hey Patrick look at this
chart you know check this out I’ll put a link to his YouTube in the future when
he starts posting up some videos he’s working on some new content his name is
Mac him big shout out to you Mac but I want to talk about this kind of idea cuz
it is so simple it’s it’s almost like I said too simple it’s the idea that
stocks move in waves and you can see here Nvidia daily chart how beautiful
this wave channel pattern really is one thing you think about right off the bat
is when do you want to be buying long and when do you want to be selling short
if you’re looking here in the video where do I want to buy now you see this
way you guys pretty much just wave wave wave all the way up here
following this trend higher but you can see in May the wave started and I got
this channel started pulled back here so that was kind of the first you know
definition of this channel here so you can basically draw a line on the tops of
these candles and then a line connecting the bottom of these two candles kind of
defining that channel so from there it bounced off the bottom found some
support there came back up here to 160 570 area had another small wave bounced
up again made a new high and then pulled back down to the bottom of that channel
so the same ID you can see this is like six months of just following this wave
this trend going higher so obviously now looking back you know hindsight’s always
20/20 but if you look here recently you can see the same kind of idea
now this broke below the trend there in December but came back up reclaimed the
channel and then moved higher to the top of the channel once again and look what
it’s doing now it’s pulling back so there is a good chance that Nvidia could
come down here to the 222 18 area or you know kind of get in this middle of the
channel here now how do you know when to buy obviously you’re not gonna know the
exact hey this is the exact time to buy you know but the thing is this is a good
indicator to look at and be like hey you know we’re at the top of this channel do
I really want to buy long here or 250 is this a good time for me to buy because I
can obviously see that this channel is moving higher we got these waves going
on do I want to buy at the top of the channel or do all gonna wait for a
pullback maybe to the middle of the channel or to the bottom of that channel
and that’s what I’m looking for the big thing really here is when you’re looking
for these setups when you’re looking for these long term holds I’m thinking to
myself I need to wait I need to be patient I need to think
patient I need to keep an eye on it set some alerts if the video gets to a
certain point I might buy there but I don’t just want to go buying a video
when it’s at 2:50 thinking it’s at 250 it’s going to 300 I see how this wave
here it really ramps up fast gets up here to the $200 area we’re gonna that
you know $200 obvious mental resistance that whole $200 area is gonna be a kind
of a key area to break through from the video but it gets up here to the $200
area and then pulls back you can see how the wave really picks up there goes from
170 up there to 200 area and then pulls right back down there so when you’re
looking at these waves a lot of times the waves make these big drastic moves
you’re gonna have the kind of the similar move on the way down where like
on this move you know it was kind of gradual gradual getting up here and then
kind of consolidating and then kind of a gradual down whereas this move was very
rapid and then pulls right back down kind of in that same fashion so you kind
of have that same rate the video has been holding this channel you know right
here it pulled back and then it was kind of bouncing off this channel kind of the
channel now turn into resistance obviously the lines aren’t always gonna
be perfect you’re gonna have some days where it’s gonna pop above it it’s gonna
be a little bit below it but in general this is kind of a good guideline to look
at and be like hey okay we’re at the top of the wave right now do I really want
to jump in long here do I want to jump in here 225 seeing that we’re clearly at
the top of this channel or do I want to wait maybe I’ll wait a couple days and
then boom it drops at 200 I can jump in then it did dip down there to 185 so
you’re never gonna know you know exactly like hey this is the perfect time to buy
but it’s gonna give me a better indicator now you know me going long
here at 225 compared to going long at you know 195 obviously 190 thousand be a
lot better entry for me and then I can have better risk reward there so it’s
very important always be kind of identifying these trends identifying the
channel and finding the wave and making sure that you’re not buying on the top
of the wave before the wave crashes down so I am NOT an expert trader by any
means I’m not super guru that’s making millions of dollars day trade I am
learning more and more every day in the stock market the stock market is one of
the best teachers she will slap you silly the moment you get out of line if
you do something dumb she’s gonna slap you and you’re gonna be like wow that
hurt but the funny thing is you know human instinct is that we keep doing
these things we keep kind of prodding the market we keep playing with fire
over and over and over we keep getting burnt and we mentally we know like hey
if I buy at the top of this wave I’m gonna get burnt but we still do it we
get the FOMO I get the FOMO I keep doing it but I need to train myself to really
wait for the best setups I need to sit here and look at this chart and be like
okay Patrick you know I want to buy in a video I really want to buy it I want to
buy it long but it’s at the top of the wave right now it’s at the top of this
channel do i reel we want to do that I’m gonna wait I’m
gonna be patient and there I’m away from my opportunity and then I see boom it’s
dropping there I’m gonna get in at that point but I’m not gonna just go and jump
in at the top of this wave unless I really have a good indicator that
there’s something going on some crazy news something’s going on but in general
I’m really gonna just wait it’s funny because there’s so many times where I’ll
short of stock here or I’ll go long on a stock and the stock will move against me
I’ll end up getting out of it my idea was to wait for a certain price before
if like I’m like hey I’m gonna short it here at 200 but then it’s cars moving
around like ah screw it all shorted at 190 and all of a sudden it goes at 200
anyway I get stopped out and then it crashes on me so it’s very important
just to wait for those opportunities and I know I break the rules all this I know
I break the rules and I’m trying to get better I’m really really trying to focus
I think the last couple days I’ve been focusing and you know it’s shown I
haven’t made a ton of profit but it same time I haven’t lost any money it’s been
more of just you know sideways for me but I just gotta wait for the right
opportunity because when that right opportunity comes along it’s gonna be a
big payday but until then I gotta be patient I gotta wait for the right setup
and when the right setup comes along that’s what I need to pound
I don’t not sure I’ll even want to talk about it but we’ll talk about it so m80
on Friday made a massive move right there the beginning this is totally just
a big short squeeze they had news came out and stuff happened and this popped
up there right away up there to the seventeen dollar area and I was looking
at it and I was looking out trading it was thinking okay I might trade this
looking pretty good it’s got a lot of you know action here it’s made a massive
move so I’m looking at the 1-minute chart here it pops up here to 1680 and I
was thinking about getting in there 1650 but then I thought to myself wait wait
wait wait hold on Patrick look how extended this is the 90 ma is
all the way down here still so I’m thinking we’re still gonna dip down
we’re gonna probably dip down to the six 2016 dollar area find some support and
then we might break over 17 and that’s exactly kind of what happens I ended up
getting in here at 1620 kind of got stuck there and I got out for a small
win and then the next candle it rips from 1620 up there to 1690 so I was in
the right place the right time I kind of executed right got in at the bottom of
the wave I just didn’t hold it which I should have knowing that that
support that 90 ma the whole dollar was there I should have expected you know
hey there’s a good chance that we’re gonna kind of ride this wave now looking
at the Mattel chart it’s not as clear and on one-minute chart so the wave
isn’t as clear here but you can still see that we’re getting a bit of a wave
so if you turn this chart kind of sideways you would see a bit of a wave
you know you get these green candles and then a pullback
find some support so it’s kind of like the top of the wave here and then boom
the bottom of the wave again now the wave picks up and we roll up to here
again same idea it pulls back the wave finds the top and then pulls back there
and then hits 1690 so very clear that stalks do moving waves and then once you
get that idea in your head and once you really really understand that like I
said I’m still I’m still working on I’m still trying to force myself to always
look for these kind of setups and really understand like hey this sucks really
overextended it’s probably gonna pull back there’s a good chance this thing’s
gonna pull back and this can work both ways
same idea if I’m shorting the last thing I want to do is short on the bottom of
the wave so if I’m shorting here at 16:20 thinking okay this is crashing
it’s crashing it’s gonna break 16 20 and then hit $16 and then go lower if I’m
shorting right there where am i shorting it I’m shorting at the bottom of that
wave there’s a good chance it’s gonna pop up again even if it just pops up a
little bit then I’ll probably end up getting out and then it might go back
down on the next wave so I doesn’t really need to focus on only executing
trades either at the bottom of the wave if I’m going long or shorting at the top
of the wave another chart I want to show you really quick is GoPro here so GoPro
has a very clear kind of downtrend you have these channels that form on the way
up and on the way down so GoPro is trending lower and now let’s say I for
some reason I want to go long on GoPro and I’m looking here on the downtrend
it’s going lower we see some support I’m like okay where do I really want to buy
this dad you know if I do want to go long where
do I want to buy it so we find some support there at 798 and I’m like okay
it’s looking pretty good you know we’re at the bottom of this channel now we
form this channel bouncing off these two and then BOOM got this channel right
here I’m thinking we might get a little bit of bounce there off that support
might get a little bit of a bounce up to the top of this channel over up
there to nine dollar area which it got there at about eight seventy five and
then pulled back from there you got the waves there that are very clear very
evidence we know that you know obviously stocks can’t go straight up they are
gonna go up down up down but the big thing is really just kind of forcing
yourself to a weight to be patient and wait for these trades is set up and give
you an opportunity to jump in that’s one thing that I really want to focus on
this year is just waiting for the trade to set up I think the other day I
shorted a stock and I shorted it like ten cents lower than I really wanted to
I was like I’m gonna short it and then I was like nah screw it I’ll jump in right
here and I ended up shorting it out like 390 i shorted it and I was hoping to get
closer to $4 where you know it got to 390 and then it jumped back up to $4 and
then it crashed I coulda waited five more minutes and I could’ve got that
better entry there and I had a much bigger payday in a much better wind for
myself and it would have been a better trade so really it’s all about just
waiting for the best setups and waiting for that action to come to you we don’t
need to take a hundred trades a day we really just need one or two good setups
a day King so let’s say I’m getting in here at the nine dollar area thinking
okay I’m jumping in here at nine dollars it’s kind of bouncing or getting some
support there you can see this previous support it forms this wave if he gets up
there now if I jump in here at nine dollars where’s the recent support out
where is that recent support it’s there at the 866 area so you know I got about
a 40 cent drop there 40 cent risk and on the reverse side where is this support
up there ten dollar area so same idea let’s say I’m buying here at the five
dollar area at the bottom of this channel I’m thinking okay we’re getting
some support that channels forming then it looks pretty good five dollar area I
could jump in here five dollars for a chance to get back up to the 675 seven
dollar area it’s a lot better entry than trying to buy up here you know right up
here at the top of this channel at seven dollars where’s the support there’s no
defined risk there so when you’re looking at these swing trades or I’m
looking at these long-term holds really wait for these channels these waves to
show you kind of the best entry areas and like I said you’re not always gonna
be perfect it’s not always gonna be right at that channel line but in
general you know the wave will kind of show you where the bottom is where the
top also km I can talk about this one the other day so the other morning KTM
jumped up out of nowhere a really low volume it filled a gap in the chart you
can see here on the chart it had this gap there it filled the gap so this was
a gap reversal kind of setup and you can see how perfectly this worked out
following this wave and just looking at this overall trend so you can see this
overall trend trending higher here connect the top of these two here this
is exactly what I did this is live I did it in the live stream did it that
morning and I made a video showing this all go down live so I want you see you
can use this method even you know in the moment it’s not just hey I can look back
and find trends I can do this in the moment you can apply this exact idea in
the moment when it actually matters so I drew my two lines here I can see where
the channel is the top of the channel the bottom channel so we breakout above
this channel and it was sitting there at 2250 I was like oh man do I want to go
along here now if I was not looking at the bigger picture I was only looking at
the 5-minute chart let’s say I’m only looking at the 5-minute chart look at
this thing now 22:50 area I’m thinking hey the 90 MA is
there it’s looking good and I’m not looking at the daily chart I don’t know
there was a gap in the chart I don’t know this is you know resistance there
I’m just looking at like hey it’s popping a big I’m jumping in this thing
is going to the moon and then all of a sudden look at that smack it got smacked
so hard so I would have ended up getting out for a loss in that trade where I was
thinking about shorting it I didn’t pull the trigger because I wasn’t confident
there was no volume on it was really low volume but you can see look at this move
it followed the trend perfectly it failed to get out there it pulled back
all the way down to the bottom of this channel you can see a couple little dips
below the channel but it got down there so it actually hit $18 and then ripped
back up here in the 1980 area so it found the bottom that channel so you can
kind of look for also these reversals so if it does start selling off big I can
see it hearing back okay I might go long if this can balance off that 1819 you
know support there on the channel if it does find support if the buyers step in
there maybe I’ll jump in there as well we can
get this to pop back up as a $20 which that’s exactly what it did so you can
see boom big move starts to pull back finds the bottom
that channel and then that Support Forums because people are buying there
people are looking at this channel the same way that you’re
looking at this chart there’s a thousand other traders who are also looking at
this chart people are all looking at the same charts their lines might be a
little different they might be using different indicators but they’re all
looking at kind of the same idea that they’re gonna buy the bomb this channel
they’re not gonna buy the top you know everybody who’s buying here the twenty
one they don’t what they’re doing they’re buying and buying and buying
there and then look at that pullback so it’s very important to be able to
identify these trends to be able to look at the chart look at the overall big
picture that’s one of the things that I really need to work on is looking at the
overall big picture seeing where that resistance is seeing the chart seeing
the trend you know am i buying at the top of this wave or my buying at the
bottom of the wave am i shorting at the bottom
am i storing at the top and I need to identify that I need to tell myself okay
before you make this trade figure out where the trend is figure out where the
wave is and then execute and that’ll make me more confident in my tray
that’ll make me feel better and I’ll end up minimizing my risk and also
maximizing my reward this would have been a beautiful tray from 20 to 50 down
there to 18 dollars I’m sure I would have taken profit had like a 20 the $19
area but either way kem the other day I recorded all live you can go watch it
perfectly this really did follow this channel and follow the way if it really
just made the wave so perfect there so I thought this video might help somebody
else out there understand that stocks do move in waves if you’re buying at the
bottom you’re a lot safer than buying at the top of the wave and that’s one of
the things that I’ve had issues with in the past you know chasing the FOMO it
gets you you see a stock that’s going up it’s going up and you’re thinking I can
jump in I can take a quick profit I can make some money and then all of a sudden
it crashes on you and then you’re telling yourself why did I do that I
knew I shouldn’t have done that I knew I knew it so now I need to stop doing that
I need to stop you know taking trades that I I know from the start that it’s a
bad trade but I still do it because I just get the FOMO or I get to greed and
I want to jump in there I’m over trading or whatever is going on I gotta stop
that remove the emotion and stick the trade in the chart stick the trade in
the action and really look for the wave I want to ride the wave baby ride the
wave all the way to pay town there it is hopefully you guys enjoyed this video
something a little bit different than normal
not plugging all cryptocurrencies talking about day trading this also
applies to the cryptocurrency world so if you’re really big in a
cryptocurrencies you can apply the same idea to that as well do me one big favor
right now if your watch this entire video I know you like this video do me
one big favor hit that like button leave a comment and subscribe if you haven’t
already I will talk to you guys later


  1. Good advice. Had the same problem Friday. I feel like every time i practice patience, my entry is to late. "Damned if you do" type situation.

  2. Shift your focus away from penny stocks and see how much the higher priced stocks actually follow the rules, ie they pull back when they are supposed to

  3. I totally agree with this. That being said what do you think about the stock $CLF? It has a nice wave trend and if it goes to $6 the bounce could be great. Any thoughts thx.

  4. i think thats great for the big stocks butttttttt not for the low floaters like under 5 mil shares this is for big stocks like 100 mill shares

  5. make a video explaining how to tell when a stock is reversing or bottoming/topping out, watching level 2 and time and sales

Leave a Reply

Your email address will not be published. Required fields are marked *