In this video, I'm taking a look at reversal trading strategies, I do not condone reversal trading
whatsoever in the traditional sense, what I like is trading within the trend.
So in this case, we're in a downtrend.
We get a pullback like shorting that.
It's a reversal of that.
You are not trying to go against the trend.
I can not think of a better way to lose money.
So having said that, Deutsche Bank clearly is in a very negative trend on the daily chart.
So as a day trader, you may want, I don't know, the 15 minute chart, maybe you're looking for that
and you can use the Mac Makdisi.
And the Makdisi is an indicator that has a couple of moving averages and you can see that we have crossed
in the overbought area and that signal is when you're looking to sell.
You can see that that did lead all the way back down to here and beyond.
Yes, there are places where it crosses to the upside, but we ignore that you have plenty of stocks
out there to trade.
You don't need every penny of one particular stock.
That's a sucker's game.
And it's a great way to lose your account.
This being the case, you can see that we've had a couple of crossovers here and got a little bit expensive
on the back.
We broke down eventually.
The stop loss will be based upon support resistance, so if you shorted here, you stop loss would have
been above this next cluster.
You can see that we had a nice little rally here.
We crossed at an extreme in the overbought part of the makdisi above the midline, right at a resistance
level.
You can't ask for a much clearer signal than that.
So other ways that you can look at this might be Bollinger Band.
So Bollinger bands, and in this case, we're in a downtrend on the daily chart.
You're looking for areas where price has broken the top of the Bolander ban, meaning that is more than
two standard deviations away from its moving average, which in this case is twenty you short there.
You put a stop loss on top of the volunteer ban and you continue with the longer term trend.
Same thing here.
You have a stop loss here.
You break below the volunteer ban here.
You take your profit.
That's the thing you're looking for when you go in and out of the Bollinger bands you are not looking
to buy on a break through the bottom in a down trend, you are looking to take your profit.
Every time you get over bond, it's time to sell because, you know, the larger players are still shorting
this market so Bollinger bands can help as well.
And then obviously support resistent.
Which, quite frankly, is the most important thing on the charts, because that's where the buyers
and sellers are.
We're in a massive downtrend here.
Shown resistance there you can see that we didn't make it above there.
We have shown resistance there, which offered support, and then we broke through it and offers resistance.
And this is a simple matter of following the trade.
Once it breaks through these levels and place in your stop loss behind each one of these, eventually
you'll get knocked out.
But this way you can have the market tell you when it's time to leave.
I cannot stress enough that you should not be worrying about these pullbacks if you don't believe me
on the daily chart, you can see that during that time frame we had some nice pullbacks, but we're
still going lower.
And that's all you need to know.
You do not go against the market.