Trading Success Ep 4

Chris: Good morning, everyone. Welcome back. Good morning, Cam. How are you?

Cam: Good thanks, Chris. refreshed. Went for early morning ride this morning. just magnificent mountains. Got some fresh air.

Chris: Better than all that rain we had in the last few days.

Cam: Yeah, it was. It was good. It was good to see it break because I was thinking that rain on Sunday was if that was going to persist for another week, I’m like, Oh God, we’re going to have a quagmire. So I managed to get a bit of mowing down on Saturday afternoon, which was awesome. So my timing has been impeccable. Lately, I’ve been working around the weather well, so going good, excellent.

It was such a busy week in the markets last week, I really needed a break. Because when you’re in front of the computer a lot you really need to get out and ground yourself because of the just the EMFs you pick up from the computers can really affect your immune system, your nervous system. So it’s important just to walk around just connecting with the earth Sun, so it was good to do that.

Chris: Fantastic. Well, for people if you’re just joining us for the first time, this is Trading Success with Cam Buchanan. Cam is the founder of International Day Trading Academy, and has been a successful trader and educator now for over 20 years.

So yeah, Cam, we’ll jump into what happened last week, we did talk a lot about round numbers in the NASDAQ, the S&P and even in gold. I’ll let you run through how it all turned out.

Cam: Yes. And, guys, just remember, this is general advice only. Right? We’re licensed to provide general advice. And whenever we talk about performance, past performance is no evidence of future performance. All right. So remember, everything is based on past performance, what could happen in the future is subject to, you know, uncontrollable events that may happen, right.

So really important to understand that because sometimes as a trader, you can get a little bit, your longer term perspectives can be in conflict, you might think that longer term, the market is going to go down, right, there’s a correction to the market, but then there’s, there’s moves on the day trading timeframes on the smaller timeframes, we’re getting long moves.

Alright, so buying signals. So I think at the moment, with everything going on, I think it’s really important to separate if you’ve got a longer term strategy, or a longer term portfolio, you know, being able to separate that concept from your short term trading. Okay. And as day traders, we’ve got to be very much short term. And just watch your biases don’t get in the way of your day trading opportunities. Also a lot of the information we’re giving is a based on the week ahead like important support and resistance levels that may come up in the market that may give us insight information into what’s likely going to happen, one of the key levels to look for, for trading opportunities to trade off. And that’s what we exactly got this last week.

Last week was a great trading week. There was there was particularly some of those numbers that Chris, you mentioned, by 18500 on the NASDAQ 2300, on the S&P 500, that were the key levels, we were looking for the market to, to hold either above that level, or get under that level. Alright. Having a short term view, you can use those key levels as areas to look for trades from and you want to look for, like I was looking for resistance at 18500. And looking for shorts at 18500. And I was looking for also on the S&P 500 looking for the market to maintain under that 5300 level. And that seemed to play out really well that week, do you get it right all the time? No. All right. But I think this is the most, I think an important part of your trading process is to review based on what you thought was going to happen, reviewing at the end of the week, and going well, this is what I thought would happen and this played out. And that gives you great confidence in your ability to read the story. And you don’t need to get it right 100% of the time.

But because the great thing about having a certain level that you’re looking for in the markets is you’re using that level as a pivot. So that 18500 was a pivot which means the market was either going to pivot above and hold above that price, and if it was, then we were looking for buy trades or Longs. If it couldn’t hold under 18500 we were looking for shorts of that level.

Okay, so just to know that that’s kind of what we were looking for, and, you know, luckily, was one of those weeks where we could take advantage of that. There was some great opportunity. So let’s have a look at the NASDAQ, shall we, Chris?

Chris: Yeah.

Cam: So to explain where we are, what happened last week, and what could potentially happen this week. So we’ll look at the NASDAQ, because that’s one of the most important indexes that our traders look at. And I’m going to share my screen. All right, so let’s start on our daily chart. To give you a some context of where we are on the daily chart. Let’s have a look and make sure this has got all the data. This is the one I’m after.

So that was that was Monday, Easter Monday on the NASDAQ, the last trading day was Thursday, the 28th. You can see you had this little inside bar happening here. So the market tested the high of that bar, then it went down and tested the low. But it really just stayed in the range. It was a very balanced day. Easter Monday, obviously, people are getting back into the markets probably a little bit slower, lighter volumes, you know, not much going on. Also that was only two days after that horrific Baltimore bridge collapse, which happened on the 26th. So around 26 and 27. You know, we didn’t see initial negativity out of that.

But I think we’re going to see over the next couple of months, particularly in America, I think we’re going to see a little bit of negativity coming out of that, that because that’s going to be a massive issue, particularly with supply chain dramas, because I read somewhere that, you know, so many cars come into that Baltimore port from Europe and China, Japan. So that that is a major drama, they need to get that port cleaned up, so that they can start getting, you know, stock back into the inventory back into the port so that can be distributed. So that’s going to have a definite effect on, I think the US markets. And you can see, we had on the Tuesday, we had this breakout of this market was imbalance here. You know, the week leading into Easter was a very low volume week, very low volatility. Then we finally got some volatility on the Tuesday and the market broke down.

Interesting to note, that 18500 number that we spoke about, Chris, last week, was a key point where the market opened and closed on that level on the Monday. And then on the Tuesday we opened up, we sort of spiked up above it for a little bit, but we basically traded underneath that level. And the whole week, the market could not get back up and close over that 18500 level. So on Thursday, the market tried to break out above it got caught in some of these levels I had up here, which were what I was calling strong rejection areas that were to meet institutional areas where bigger sellers were coming into the market. And these areas were acting as major resistance. And the market could not get back above those levels up around 18550 around that. And then the market sold off.

We had a very strong sell off on Thursday morning, I think that was to do with the FOMC. With the Federal Reserve one of the speakers or one of the members of the board came out and said that they are definitely not in a rush to increase or decrease interest rates right now. So that was fairly negative on the market. So we had this big breakout candle here. So, this to me on the daily timeframes, we’re starting to look a little bit corrective or bearish on the daily timeframes. This is why it’s so important not to get so overall caught up with the larger perspective or having a bias that the market’s bearish. Because what happened on Friday is that we had quite a strong rally on Friday.

So we had Nonfarm Employment news, Nonfarm Payrolls, which is a really important red flag news announcement that can really affect the markets. And this market was looking like it wanted to go low and keep going lower. During the Asia session, we sort of broke down lower, and we tested the low of Thursday. And we tested the low a couple of times on on Friday, but we couldn’t break below that level, and then the market just rallied. So this is why it’s really important to have a short term perspective, and really focus on what’s happening on those smaller timeframes as day traders, and not get too caught up with the overall habit to larger bias on what the market should do on a larger level, or on a larger timeframe and look really dialed in as a day trader on your smaller timeframes, you find the 15 or 30. Watching those charts is very, very important. Okay.

So, if you were hell bent on going short on Friday, then, you know, basically what we had was a short covering rally on Friday. So a lot of these shorts that came out on on Thursday, basically got covered on Friday. So that’s kind of what played out there.

Chris: From a quick visual on that, Cam, if you look left, you can see that that was a support level back in the middle of March as well. So as you say, if you look at the bigger timeframes to get key levels of support and resistance and then down into the smaller timeframes to play off, you know, the charts you’re looking at.

Cam: Absolutely, you can see this market is still on the daily timeframes, it’s was we’re basically back into this balance, right, and the markets in this balance zone, pretty much all of March. And, you know, this is obviously going to be very key, if we break under this level 18,000 is probably the the next key level, on the larger timeframe, you want to see the market go down and test 18,000 And hold under it, that’s where the bigger timeframe shorts are going to play out. So you can see that this is the market now trading, you know, where the markets are open. Because these markets do a trade 23 hours a day. So we’re in the Asian Asian market right now, Asian open, and you can see the markets going down short at the moment. So it’ll be interesting to see if we can test this out 18000 level, or test these prior lows and break those levels. If we can break it, then and hold under and there’s going to be some some bigger selling coming into the market.

So that’s, that’s kind of what’s happening on the on the daily timeframes. One thing that’s interesting to note is, and I’m not a very big on technical analysis. But if we’re looking trying to find a trendline, we’re kind of, under the trendline a little bit, that’s something important to watch on NASDAQ, that we are under this trendline. And that can typically be a bearish sign. It’s a fairly rough trendline, but as you can see, trend lines are very difficult to draw, because they’re a technical thing. So, you know, sometimes being too technical really doesn’t help you in the markets.

Chris: I think everyone has a different opinion of a trend line, they draw them differently as well.

Cam: That’s exactly right. Markets tend to go from -particularly on these larger timeframes, they tend to go from trend to range to trend right where, we’re going to continue to trend up or are we going to start a new trend down? That’s kind of where we’re at at the moment on these larger timeframes. So that’s the key levels down there is where you mentioned exactly that those all those support levels down there around 18,000.

If we look at the weekly timeframes, so you can see on the weekly timeframes, how we’re in this range. We still not in a correction yet. We’re still in this range. We did close under the prior week, so this is last week here. So you can see last week, the volatility increased a little bit more than the prior week. I think the volatility is quite on the large timeframes, the volatility is quite low. But on the on the smaller timeframes, the volatility has been quite high, like the market has been moving a lot of ticks in a session.

If you look at the smaller timeframes, you know, some of these moves we’ve seen in the US close on Thursday, we had a huge drop in a huge amount of volatility. But really within the larger timeframes, that there is not a lot of volatility in the market at the moment. I did note, however, the VIX, which is what they call the volatility index, the volatility index, did pick up a little bit last week.

Another interesting point as well was the commitment of trade, which is basically a measure of open interest of basically the Chicago Mercantile or the CMA has to report of big, big trading firms have to report to the CMA about their position sizing, whether they’re net long or net short, and one of our members yesterday at our Gold Coast trading hub mentioned the commitment of trade for the commercial traders. So the commercial traders are the ones you want to be following on the larger timeframes. And they’ve gone net short on on the US indexes. So they’re generally the ones that are right, the non-commercials, and the speculators, the smaller term traders, they’re still holding their net long. So they’re generally on the wrong side of the market.

But once again, that’s a larger timeframe scenario, which is not that important for us as day traders. But it’s interesting to have in the back of your mind that this is what is happening now that the traders have gotten the bigger institutions, that will the commercial traders, which generally are on the right side of the market have gone short, which is interesting point of view. So interesting to note on this weekly timeframe is just grabbed my ruler. That was obviously we closed under the prior low of last week. And it’s and we’re basically still in the middle of this range, at the moment, monthly timeframe. You can see with the monthly timeframe, you can see, April is we still haven’t tested the march low. And that March low is that level that you know, we were talking about before on the daily chart, around 18,000. That 18,000 level is a really key level here to watch. So if we break 18,000 Typically, when these monthly levels break up, what I’ve seen from my experience, is that we tend to get quite a strong move down once we break these monthly levels that you can see, the monthly charts have been, you know, we’ve had 5 months bullish all that we had three months kind of grinding down. That was coming into Christmas. And then pretty much on a Christmas that was coming to November, November. December, January. No, that’s February, March. So we’ve pretty much been rallying pretty much since November December, up to the all time highs so that that monthly low is a key level to look for on the NASDAQ, which is around 18,000.

Chris: So you’re looking as you said, at that larger timeframe, you’ve got support at 1800, resistance at 18500. I guess your parameters are now where the market sitting. We’re trading in between here, and that’s your bigger picture.

Cam: Yeah, and you know, between 18000 an 18500, that’s 500 points, which equates to about 2000 ticks. So there’s a lot of movement between those levels. So you know, our trading philosophy is all about finding the best support and resistance. You don’t need to trade a lot as a trader, if you can get the best levels of support and resistance, and trade off those support resistance levels, you can get some very strong moves off those levels. So you don’t need to over trade as a trader, as it can cause a lot of emotional issues over trading. You know, being in front of a computer too much is not great health wise as well. So it’s having that balance.

The reason why we have these podcasts is to help you map out where there’s going to be good opportunities to look for on these larger timeframes. And then you can use your skills using the smaller timeframes and the way you trade a smaller chart and what you use to help you find those support and resistance on those smaller timeframes, then you can really hone in and target your particular trades. So that’s that’s that on the NASDAQ.

S&P is doing fairly similar things. The S&P 500, you can see the trendline looks a little bit tidier here than the NASDAQ. Once again, we’ve kind of closed almost near the trendline. We couldn’t get back into that trendline on Friday, but you can see NASDAQ and the S&P 500 are doing very similar things. So we had Thursday bar here was very strong sell off. We’re basically, one, two, three bars down on the daily chart. That can be can be a fairly bearish sign on the larger timeframes.

So that’s on the that’s the daily chart, the monthly chart looks very, very similar. We’re still breaking highs, we’ve made all time highs in April. But we still got a fair amount of room. So you’re looking at around about that 5125 is the monthly low on on the March low, so that’d be a key level. This market looks like it’s still rallying. So if we do have a short, sharp sudden sell off in the markets, you’d be wanting to look for this area down here that 5001.50 to 5100 is a really key level of support.

You can see we’ve got this imbalance zone here, from around 5000 add up to around 5001.50 that still hasn’t been filled, as well. So that can be a bit of a target. So we finally fill this imbalance zone last week, which was still exposed. Maybe this week, there’s not a lot of Red Flag News in the markets. But I think maybe some more updates around the Baltimore bridge collapse. And as we know, there’s still lots of tensions, geopolitical tensions that could really drive prices as well. That’s what we’ve seen in the gold market and the the silver market. We saw a big rally last week in gold and silver, which we’ll quickly go in and show you that.

Now the gold chart, so we look from the gold daily perspective. So this is the current day. So you can see the markets quite bullish already. In our last podcast we did on Monday we said the key levels to look out for gold were going to be that 2300 could easily be tested, we’d broken 2200 And we were looking for the market hold above 2200. And you can see last week the market has not tested the low on Thursday. But Friday pretty much closed within the range. Today we’re continuing higher prices.

So gold has really been lively, that’s the way gold operates, gold goes through these periods of just real slowdowns, and then when it breaks out, it really goes. So we basically had 9 days in a row up on the market. So there was some really good opportunity that we highlighted last week about the gold market. Silver’s been a bit of a dormant market, it’s still quite a long way away from its all time highs as well. We’ve almost hit all time highs. I think all time highs are back up in 20, around 27. I’m not too sure if that is the all time high, but we’ve gone back up, and we’ve tested that all time high today. So that most recent high anyway. Silver pretty much followed gold last week and broke out.

That was what we were mentioning, if the market could get back above 25, then looking to trade up to 26, and it just smashed through 26. Then we smashed through 27. Now it looks like we’re trading around that 27 mark at the moment. I think that’s just a pure result of what’s happening geopolitically. China is buying a lot of gold as well that the Federal Reserve China, the Fed backs over there are buying up a lot as well. So that’s kind of a breakdown a review of what happened last week, and what could happen this week.

Just to finish off, there was a comment on YouTube about, you know, you guys are all great at Harry hindsight sort of stuff. You know, but you know, how do you actually make this work? How do you actually, you know, how do you trade it to be a benefit? Well, no, I said last week, was it was a very good week in the markets. And because of the way I framed the market up? No, you know, we did have a very good week. So you know, I just want to show you, if you look at these results here, this is just from one week’s of trading. That’s in US dollars, right? That’s just trading the net the NASDAQ market alone. Now, I’m not showing you what I did on on silver and the gold market. But just on the NASDAQ alone and remember, past performance is no indication of future performance. And this is all general advice. But this is basically the net result from trading the NASDAQ last week, and no trading particularly off those off that 2018 5000 level. That was a really key level that I was looking for, that I was using, you know that sort of downward trend in the market to fuel a lot of my trades. So that’s, that’s 3396 US dollars in a week’s worth of trading. And you can see here, I didn’t win every trade, that’s an 81% win rate. There was 36, winning trades, eight losing trades.

So I just wanted to show show some of the skeptics out there that, you know, not only do we review the markets, but we also you know, we try and trade these markets as well. We try to get great performance in terms of financial gain out of this analysis we’re doing. I totally get people out there skeptical about it right, it’s all well and good to trade all this stuff in hindsight. But basically what we’re doing in this podcast is giving you a week ahead outlook, we’re looking at key support and resistance levels, that you want to look for trade opportunities. How you trade is up to you, you’ve got to take full responsibility for how you trade, but if you can map out the trades and find those key support and resistance levels in what we call Confluence levels, powerful levels, if you know how to do that, and you can mark that up and carry that over onto your smaller timeframes, then, when the market gets to those timeframes, then you can start to get really zero in and look for your trade signal and your smaller timeframe charts.

So what we’re trying to do here is to give you a good understanding of what could potentially be happening in the week ahead, what to look for, and you know how to navigate the market in a safe way. Try to take advantage of the smaller timeframes, you know, with a with an idea of what the larger charts are telling us as well. Okay.

So that’s about it, Chris, I know it was a long one today, but there was a lot of good information that I need to share. There’s a lot going on in the world. You can see just looking at the silver chart, if you just look at the volume, how much more volume came into the silver market last week compared to what we’ve seen, like, this indicator down here shows you the daily volume. So big compared to what we’ve seen, there’s gold as well, gold as well, we started to see some big volumes, it’s a gold really stepped up here, you know, when we came to this, the market was coming out of this kind of range, you know, a bit of a consolidation. We came out of that and look at the volume came in when we broke those that trendline look at the market, it’s just gone crazy for about nine days in a row. Then we’ve broken out again to the upside.

This market hit its 2300 mark and now that’s kind of the next sort of resistance area. Now, will the market continue to hold above 2300? If not, then, you know, look for maybe short opportunities on the 2300. That’s where your small charts come into play. You go into your smaller charts and really zoning around those key round numbers. And you know, at the moment we’re holding above that level, but you know, what happens in the week, we’ll see what happens. There may be some selling short term selling, but I think with all this geopolitical stuff going on, you know, there’s there’s this is the markets are telling you what’s coming up, right? The smart money is going into, basically safe havens. What does that tell you? Well, there could be something more going on, that we don’t know about. You have to be on the phone with the you know, the big world leaders to know exactly what what’s going on. But the charts can tell you a lot about what’s building.

Follow the capital flows, right? Yeah. Martin Armstrong, if you’ve studied some of his work, got it. Totally recommend Martin Armstrong. He’s very switched on. He talks about following the capital flows, and is a longer term investor. That’s what you want to be looking for. Getting in getting your focus on that. But anyway, that’s it for this week, guys. Chris has anything else we need to cover off on?

Chris: I think that’s it, we’ve covered a lot. As you say it’s easy to look at the charts and trade off hindsight. But as you mentioned, we’re not telling you what to buy or when to sell it. So these are the key levels to look at giving you 20 years of experiences as this is where we think you should be looking. And then you apply your own trading strategy, you know, within that if you agree. So great information cam and and thanks again for a very informative week.

Cam: Excellent, thanks, Chris

Chris: No worries

Cam: Stay safe guys, and we’ll catch you next week. Excellent.

Chris: Thanks, Cam.

Cam: Thanks, Chris. Bye, guys.

To listen to more of “Successful Trading with Cam Buchanan” you can find the series on Spotify, and you can also find all of the episodes of Successful Trading with Cam Buchanan on YouTube.