Full transcript (5181 words)
My name is Oliverz and I'm going to try to do my best to change the way you see the markets and trading forever. And I mean, this is almost embarrassingly simple. We're going to go over a very, very simple strategy using one tactic that I promise you if you follow my five simple rules, you will find it difficult to actually be bad at this anymore. You're going to listen, you will have to work hard at it. It seems like a tall order, but it's not. Despite the fact that I teach this, there still the vast majority of people won't do it. This game called trading is a game of promises. That's all it is. It's a game of rules. It's a game of personal promises that you make to yourself. I will not lose more than $300 on any given trade. That is a line item on my trading plan. I will not trade stocks beyond this price. I will not ever take a position this size. Trading is nothing but a set of rules and rules are nothing but promises that you keep to yourself. But how many people in life keep their promises? How many parents keep their promises to their children or husbands to their wives? Very, very few. And this is one of the main reasons that most people lose money in trading because they cannot be true to their own promises. And if you can't be true to your own self, how can you be true to your personal God or your parents or your children or your husband or your community at large? So, what I'm going to do today is I'm going to set these promises up for you, but I can't make you keep your promises. That's going to be your part. I'm going to teach you now. I produced $4,300 in 8 minutes this morning. And I want to show you how to do exactly the same thing. I'm calling this the most powerful trading tactic, but that's not quite as accurate as I'd like. It's the most magical out of all the tactics that I teach traders. And guys, I've taught more traders in this industry than every single person out there, every single company combined. Institutions used to pay me, hedge funds, pension funds would send me groups of their traders and and pay me $25,000 a person for one week. I did this for 12 years of my professional career. I became the number one chosen instructor of traders. They would send me their worst traders with my job to convert them into consistent, profitable traders. There is no one who knows what it's required to turn a trader around better than me. That sounds self- serving, but it's just true. I teach them tactics like the tactic I'm going to teach you today, and they have to demonstrate that they can take a $50,000 account and just make $3,000 with it. That's it. I don't care if it takes them 6 months to accumulate 3,000 or they make it over 3 months. The time doesn't matter. They have to show me that with the tactics I teach them, they can produce $3,000. Once they do, I turn that account on live with my own capital. My traders never risk a single penny of their own capital. Traders are better when they don't trade their own capital. You are smarter with my capital than you are with your capital. This is one of the secrets of Wall Street. No one trades with their own money. Not even billionaire hedge funds trade with their own money. They attract other people in their hedge fund to trade that money because they're held to a higher standard, a higher degree. They know that they are better traders when the money is not yours. So, no trader trades with their own capital. Once they have that $5,000 account, they must again make $3,000. They get 40%. And the very very best part is that I get 60%. But they never risk a single penny of their own capital. After they make that $3,000, I put $100,000 in their account. They get 40%, I get 60%. After they reach a $6,000 goal, I'll put a quarter of a million dollars in their account. 40% to them, 60% to me. Their goal becomes 10. and then half a million and so forth and so on and the grid continues. It's just why bore you with that? But this is what they go through and this is one of the tactics that I teach them to utilize to get through that grid. Not all of them, but one of them. Before we continue, I created a free guide called the markets alphabet. It teaches you the 13 bars every chart is made of so you can start reading price instead of guessing. Download the PDF below this video and watch the bonus class included. Now what are the tools that we need? We need several things. We need a two-minute chart. My approach to trading is graphical. My approach is technical. It is not fundamental. All right. It is technical. It is graphical. It's visual. We need a two-minute chart. I want to slice the market into two minute two-minut slices. I want to superimpose a 20 period simple moving average on that chart. I want to superimpose a 200 period moving average on that chart. So, we're going to have two moving averages, one shorter than the other, one short, one long. We need the picture of power. I'll teach you what that is. We need the picture of power and we need a small risk tactic. Let's take the two-minute chart. Obviously, the red bars mean that during that two-minute period of time, the stock dropped. Green bars mean during that two-minute period of time, the market rose. We're going to superimpose these two moving averages on that chart, the 20 and the 200. Boom. I hope you can see this clearly, but the blue line is the 20 and the red line above is the 200. Now, that gives us a different view of the stock. This is the picture of power. But it's the picture of power to the downside. Now what exactly is this? The picture of power to the downside is simply the 20 period moving average is sloping down under the 200 period moving average and the stock is under them both. The picture of power is that picture that produces us the biggest amount of money in the market. And we must make sure that we are only acting when we have a picture of power. And take a look. You have the 20 per moving average sloping to the downside. The 20 per moving average is under the 200 and the stock is under them both. Picture of power to the downside. This is the picture of power to the upside. Just the opposite. You have a rising 20 period moving average. You have the stock is above the rising 20 period moving average. The 20 period moving average is above the 200. So you have three fingers the other way. Stock on top, 20 in the middle, 200 at the bottom. Picture of power. Picture of power to the downside. Picture of power to the upside. And these two pictures are where we live. If a stock is not demonstrating the picture of power, which they don't do 65 to 66% of the time, they are not in the picture of power. They live onethird more or less of their lives in the picture of power. Onethird of the day, almost every stock is in the picture of power. Onethird of the week, onethird of the year. And so we just take a collection of stocks and we're always sorting them by what's which ones are demonstrating the picture of power because that's where I live. Now let's go over the rules. The rules are we're going to trade with the 20 period moving average. Rule number one, the one of the most important rules, which means that if the 20 period moving average is sloping up, you can only buy. You can't ever short or bet against the 20. If the 20 period moving average is sloping downward, your play is on the short side. You trade with the 20 period moving average, not against it. 87% of all losing trades break this rule are because of this broken rule. They're trading against the moving average, against the flow, against the river, against the power. The 20 period moving average represents the flow, the river, the trend, the power. You trade with it. Number two, you're you're going to buy above the 200. You won't bet against a position. You won't try to short if the stock is above the 200. You short when you're below the 200. You do not buy a stock under the 200. You buy it above the 200. Rule number two, don't get your position wrong. Is your stock above the 200 or below the 200? Rule number three, you're gonna buy above the 200, short below the 200. Rule number four, all entries, all when you initiate a trade, it must be close to the 20 period moving average. I'm going to show you example after example of this. You your entries must be near the 20, not away from the 20. No entries away from the 20. Near the 20, not away. And the final rule, you must be acting in the picture of power. Let's go to the tactic. This tactic I call the red bar ignored, RBI for short. Red bar ignored. And all it is is a tiny little green bar sandwiched in between two green bars. I mean, a tiny little red bar sandwiched in between two green bars. It's a single little tiny red bar all by itself. It is preceded by a green and it is succeeded by another green that eliminates the high of the little tiny red. And so you look at the little tiny red as if it's a little acorn. Little acorn out of which will explode a mighty oak tree. So what is your action? You are to buy the moment, the instant the green bar after the red bar takes out the high. One penny above the high. You do not wait. You do not hesitate. You do not think. You do not doubt. You do not guess. You just hit the buy button. Now, my traders are trained to take the $50,000 account and boom, $25,000 in. I always want them to initiate their trades with half of every single dollar they have. Not all of it, half of it. That's how we enter our plays. So, $25,000 goes into that play one penny above the high of that little red bar. Their protection is one penny under the low of that red bar. One penny violation. No questions, no doubting, no hesitation. you are out and you move on. If you're doing this right, these will be your statistics. If you are playing this tactic above the 200 period moving average, if you are playing this tactic in the direction of the 20 period moving average, if you are playing this tactic and entering near the 20, not far away from the 20, you will have an 87% success rate. 87%. Let me tell you how huge that is. There are algorithmic systems, right? I've got 14 of them. My best one has a 38% accuracy rate percent accuracy rate and it makes millions of dollars a year with a 38% accuracy rate. Imagine an 87% accuracy rate. This is huge. The magical thing about this tactic is that it is one of the shest events that your play is going to move forward. And the reason for this is because the stock is demonstrating that it has passed the ball or baton from the green team to the red team. Market is nothing more than a battle between the green team and and the red team, the buyers and sellers. And we want to play with the dominant team. And so the green team first has the ball, but then the red team gets the ball. The baton, the ball gets passed to the red team. But look, they almost immediately dropped the ball and the green team took control again. So if you look at the green chance and then the red chance and then the green chance again, it's clear that when the red team, the red team is weaker than the green team. It couldn't hold on to the ball. It couldn't even produce another of its own color. And it couldn't even produce a sizable or significant play. It got the ball real fast and dropped it or gave it up really fast. Boom. That's your sign that red is weak, green is strong. In. So, we want this play in the right position. What's the right position? Above the 200. What's the right location? Near the 20. And that 20 had better be rising. Get all of those things right. You will find an accuracy you've never experienced before in your life. This is what you're after. Look at the green. Green. Green. Then a single. The red finally gets their turn. Yes, I've got the ball. Boom. They drop it right away. That's your sign. Go. I'm betting with the green team. Many of you over complicate this game. It's a child's game. It's red bars and green bars and above the 200 and below, rising 20 and declining 20. I mean, it's really a child's game. And which bars are bigger? Do we have more green bars than red bars? Then green's in control. And are the red bars generally smaller than the green bars? Then green bars are in control. And you always bet with what with who is in control? Sometimes you can get two little ones in a row and we That's okay. The basic setup is one, but two if they're really little side by side. Boom. Same thing. We're buying one penny above the high. Now, here is the opposite side of that. If you are below the 200 and your 20 is declining, it's now a GBI, a green bar ignored. Little tiny green bar. Get ready. Boom. One penny under the low, 25,000 in. Protect yourself one penny above the high. Now, here's why this tactic is magical. And I'm going to show you a lot of examples. Now, but let me just say this first. Here's why this is magical. 87% accuracy rate. That's amazing. Number one. Number two, when you lose, look at what you lose. You fall out of the basement window. So what? Big deal. You just don't want to fall out of the 40th floor window. But the basement window, you get right back up from that. You get right back up from a little stopout above a tiny little bar. And you can get three, four, five of them wrong in a row in one winner will make up for everything because the losses are small. So when you have a tactic that has an extraordinarily high accuracy rate and that is not associated with added risk when it doesn't work, which is usually the case. Usually when you have something that is so profitable, when it doesn't work, you will need counseling. But not this one. When this one doesn't work, it barely bites. This is what makes it so magical. Now, whenever a trader is of mine is having trouble, I put them on RBI and GBI, I revert them to only doing this tactic and nothing else. And almost every time it brings the trader back, brings his consistency back, shrinks those losses, increases the consistency, the confidence comes back. Boom, he's back. And then can start going to the other tactics. Now, I want you to grab the stock, note the 20 period moving average, and grab that 200, the three fingers, identify the picture power. Rising stock, rising stock above a rising 20, rising 20 above the 200. That's the picture power. Now, notice when the stock is near the 20 and then away from the 20. If your best opportunities are near the 20, what do you think you do when you're away from the 20? Sell. We get in near the 20 and away from the 20, we take profits. Repeat, repeat, repeat. This is Microsoft 2-minute chart. Find the little red bars, little tiny lowrisk red bars near the 20 period moving average. Once the stock as the stock, if the stock is hugging the 20, you hold. But as you surge away from the 20, you start shelling your shares out for sale. You see, novice traders, untrained traders have the whole game backwards. their belief systems backwards. For instance, they think up is good and down is bad when in reality it's the reverse. You can't be a successful trader with that general concept that up is good and down is bad. No, up is bad and down is good. So, for instance, when you come back to the 20, isn't the stock going down? That's good. And when you get away from the 20, isn't that the stock going up? And I'm telling you, when it goes up, get out. So if it wasn't bad, why are you getting out? You have to change the whole mentality. Up should make you scared. A good scared, but scared. Out. Down is when the novice is getting out. Oh, my stock is going down. Out and you're getting in. We're always on the other side of the depositors. You know that there are only two general types of market players, right? People who deposit in their account and people who withdraw from the market. A withdraw never deposits. Do you understand this? I may I haven't made a deposit since 1993. No depositing. We only withdraw from the depositors. And you shouldn't even make the initial deposit. you should trade someone else's money and let them deposit for you. No depositing. We only withdraw. And we're always on the other side of the withdrawal. I was a NASDAQ market maker for 9 years. I specialized in basically raping noviceses. And that was the game. And over 90% of the time, I was on the other side. Stock goes up. up to the novice means good buy to the professional it means sell and vice versa. All right guys, take a look at this. Grab that picture power to the downside. Declining 20, declining stock under a declining 20 declining 20 under a 200. Now note that on the left I had this talk earlier today in my presentation where I taught you the states. the left, the three items are close together. In the middle, they're wide apart. Now, your best trades are going to come in the beginning of going from narrow to wide. Your accuracy rate starts to decline in a wide state. The wide state suggests maturity of trend. Your trend to the downside is mature. Don't expect a lot from maturity. You expect a lot from infancy. Infancy is tight. Wide is I'm near the end. I would stop the game at wide and find something that's just coming out of its narrow state. Do you understand this? Does this make sense to you? You sure? Am I speaking a different language? All right. Okay. I just want to make sure. Now notice your stock when it is near the 20 and away from the 20. Now notice that you don't even have to capture the beginning. Some of the best traders just wait for a smooth 20 period moving average. I got it. Now they play the color game. It's a 10-year-old game. Opposite color bar. Boom. Under the low. Opposite color bar. Boom. Under the low. Near the 20. Remember the rules. Short below the 200, trade with the 20 period moving average. Enter near the 20 period moving average. You will have a systematic approach to trade any stock in existence. Any market, this is not only specific to stocks. This is based on human nature. Humans move. The markets don't have a life of their own. Their life is derived from the activity of its participants. And the participants here are human. And humans are driven by fear and greed. And these tactics are based on the interactions between fear and greed. Which means that you can take a a a workable tactic and go on any market that is touched and traded by human beings and have the same results because the same humans are driven by the same emotions. Now, I don't know about anyone from outer space. I have yet to do intergalactic travel. I'm waiting on Ellen Musk for that. But I will tell you that here on this planet, on this green earth, fear and greed drives everything. And so what is the dominant emotion in the picture of power to the downside? Fear. Look at the size of the red bars versus the size of the green bars. It's clear. Solid, long, powerful red. Every time green tries to lift up his head, red just says, "What do you think you're doing?" It's almost as if red has green drowning and then lets it up for air just for a little bit. This is Are you ready again? And it's just these brief green moments. Boom. G brief green moments. Boom. My traders know that on average from a narrow state you get three to five to majority. So from narrow to wide you'll tend to get three to five opportunities. That's crazy. Imagine you've got three power trends going. All right. Boom. Enter this one. This one's to the downside near the 20. Boom. This one's to the 20 to the upside. Boom. When the traders get good, they've got three or four or five power trends operational at the same time. I want you to understand if this activity really shouldn't be call trading. It should be called waiting. Like if you think about it, if your trade lasts, if this short-term trade lasts, you enter here, what's that? 2 4 6 8 10 minutes of your responsibility pressing the button. The waiting, that's where the mastery is. Everyone wants the doing. Everyone out there selling doing. But the real secret is in the waiting. That's where that's where this game is won. Today's trades. What stock is this? Is this Oracle? I mean QCOM. Qualcomm. All right. Two-minute chart of Qualcomm. Look at your picture power. Grab it. This is right into the close today. Look at that rising stock. Rising stock above a rising 20. Rising 20 above the 200. Look at it. Get near the 20, away from the 20. Come back near the 20, away. Find your opportunities. Do you see them? Boom. It's embarrassingly simple. I mean, sometimes I wish I had something a little fancier for you. It's just And the kids, I have a kids program. I have,00 kids between the ages of 10 and 14. and they outrade you because they just keep it simple. To them, it's like a video game. Green bar above the red bar near the rising 20 period moving average. Stop under the low. That's easy. And if they get stopped out, boom. It's like, uh, okay, I just move on to the next one. You know why human adults aren't like that? You'll try to figure out like, shoot, why did that one not work? What's going on? Did I do something wrong? Let me try to get my money back. They're just like a video game when they get blown up. What do they do? Reset. And they're not emotionally touched by a loss. It's like, "Okay, that one didn't work." Do you know that there are certain personality types that have a better job? Better. They have a better chance at this sometimes. Like very very successful people in something else that come to trading, they're going to have a some extra hard hardship. They're not used to being wrong. They're successful. Losers, people who have rarely found success at anything in life. They have the easiest time because they're always they're used to everything not working. And this gives them a psychological edge when it comes to trading. And when you have loss so often, fear disappears. Fear is when you experience loss so infrequently that you just hope it never comes. But when you get it all the time, you fear loses its grip on you. And so psychologically, they have a better chance because they've lost fear. And it's no big deal to lose. Women tend to do a little better on average statistically. All right. I've got some very consistent women traders, and that's because they're more less ego and more rule-based by nature. Oh, Oliver says stop out here under the low. Okay. Boom. And so men are like, "What? What? Shoot. Maybe if if I double down on this, I might be able to get my money back." It's just a completely different different set different set of uh characteristics there. You are under the 200. Your stock starts the day under the 200 with a downward sloping 20. That right there, you know, bet to the downside. Win when red eliminates a green. Now, you can take this one. That's not our tactic today. That's what I taught you this morning. Boom. Right under that green bars low. Whenever the opposite color gets eliminated in the right location, in the right position, it's an automatic go. You want the opposite side to get the ball temporarily. then you're watching. And if your side snatches the control away, that's your near 100% guarantee that you got this right. It's just trying to do this short up there that causes all the problems. Do you understand this? Boom. Look at all of those. Pick one, two, three. Just do it. I'm always telling my traders, when in doubt, do the trade. Money on the sidelines doesn't help anybody. If you're thinking about it, do it. I want them aggressive. I want them doing every single one. And I don't want money in the account. We put half in because if we're initially wrong, I want to be initially wrong on half. But once the other opportunities come, I just put the rest in. Boom. Boom. Another green one. Boom. Another one. Boom. Until I run out of money or until the stock gets away. So, I'm either going to get stopped out or I'm going to get away. One or the other. Rising stock. Rising 20. Rising 20 over the 200. Now, notice how this stock is actually dipping below its 20. That's okay. That's okay. In fact, I'd rather you look at the 20 period moving average more as a zone anyway or a fence that you can lean on. You can lean against the 20. Boing. This is leaning against the 20. Boing. Leaning against the 20. Boing. So, don't get confused by this little tiny drop below. It's really okay because you got the flow. So now there are your opportunities. Little red bars, boom, buy above the high. Little red bars, boom, buy above the high. Guys, let me ask you something. If this is a river going this way, I mean powerful white rapid river like that. And I dive in. Which direction am I going to go? >> This way. All right. So let's say for instance this little trick tricky now. trickier. Now, what if I accidentally fall in by mistake? Which way am I going to go? This way? That's the 20 period moving average. You can be sloppy, trip, fall, make a mistake, not enter exactly where you should have entered, and still because you're playing the river the right way. You and your mistakes and your sloppiness get swept away in the desired direction. It's not just a cliche that you trade with the trend. And the 20 is the trend. I can't stress that enough. Look at your moves. Away from the 20. We come back. Boom. Little red bar. Right into the close. Boom. Another little red bar near the 20. Away out. I spoke this morning about the magic of the number 20. Your goal is to always have more money at the end of 20 trades than you had at the beginning of 20 trades. Now, you may not have more money after four or six. May and maybe you will, but every single time you reach 20 trades, you're richer than you were before you set the 20 trades. So, we judge everything in blocks of 20. I want you to do this 20 times and then collect. 20 trades and collect. Then you start putting 20 similar trades together, 20 long trades, collect. 20 short trades, collect. If you do this, you will never not be profitable after 20 trades. It's impossible. And it baffles me that I can't get enough of you to just do it. I can show you thousand upon thousands of charts every single week of your life. You can watch me trade every day of your life, me trade in your face, and still the majority won't do it. What is that about? I'm no psychiatrist. I can't help someone that won't do what they know they should do. I don't know how to do that. I'm lost and I'm powerless. When it comes to trading and teaching you what to do, I am a superhero. But when it comes to making you do it, I'm powerless. I want you to try to do this 20 times in a row. I want to talk to you about this was a bonus I had for you very quickly. This is called a clear and go. A clear and go is when you get a surge off of the 200 and the 20 that clears a chunk of data to the left of it. So look at this chunk of data hugging the moving averages and then you surge out of that cluster. That's a very very powerful play. We call it the clear and the clear and go. Let me show it to you really fast here. Here is the clear and go. The moving averages are very tight. The stock is hovering really tight with them and then a a single bar or multibar move clears the chunk of data to the left. There's the clear and go. Here is the clear and go. Moving averages really close together. Clear and