You have to watch this…
I just released a full breakdown of Tesla and where the opportunities are to profit from it.
And it’s seriously like a full on masterclass where I reveal how I think about the trade, dissect it live on the chart, use the Hawkeye tools and tell you the best place to get in.
Click here if you’re ready to take your trading to the next level and use Hawkeye Indicators!
Grab a cup of coffee or tea because we’ll be covering a lot during today’s free training:
We’ll go over multiple of the hottest trades in the market right now, according to the Hawkeye Scanner…
DPZ and Bill Ackman’s 6% stake in Domino’s Pizza…
How the new infrastructure plan will have a big impact on a certain group of companies (revealed in the training)…
And much more!
You think this is helpful content?
Wait till you see what’s behind the scenes when you join Hawkeye Traders!
Coach J.R here coming to you with some solid money-making tips.
We’re going to review some trades the Hawkeye Scanner has picked up… live!
We’ll talk about the levels where you can still trade Tesla profitably.
And we’ll close it by talking about some settings you can use to maximize your trading results when using the Hawkeye software.
Let’s get into it:
If you want more trade ideas like these and to take advantage of the Hawkeye System, click here to join the Hawkeye Community.
Today I’m gonna make your week!
But not THIS week… rather the next one.
Because I’m bringing you 3 charts that you need to look at if you want to get in some
solid trades next week.
Plus, I recorded a training where I teach you how to “stay in the trend” and a couple
other things that I don’t want to reveal yet ;)
And as promised, here are the 3 charts with my thoughts…
I am not surprised at all to see WFC so often on our scanner. After some terrible PR -
due to self-inflicted malpractices in their banking business - I see the stock making a
strong comeback and one of the good inflation hedges available for investors and
traders. So keep an eye on it.
Catherine Wood does give some light about the new market structure many seem to
forget. We have boomers and millennials in the game, while before it was only one
demographic, but now young generations understand the business of trading, and yes,
they may have a short-term view still, they provide new buy impetus to this bull market.
So yes, trading volume increases and so players like SCHW will reach new highs.
The big reopening opportunities are set to explode in 2022. MGM not only on the leisure
front, also on the new business volume it will get from sports betting and never forget
they still have Macau. You cannot miss this stock and ride the bullish trend we all must.
Hope this was super helpful!
If you want more help from the Hawkeye scanner and software, its community, and the
Hawkeye team…
Today we’re going back to the basics of the Hawkeye Methodology. But don’t get that wrong…
Just because we’re talking about basics doesn’t mean this isn’t incredibly powerful.
As with everything, the key to success relies on the fundamentals and proven principles.
If you watch boxing or mixed martial arts you’ve seen this a million times. The fighter that wins the most is the one who has solid fundamentals, not the one who throws weird punches or spinning kicks.
With trading, something similar happens. Once you can understand the structure of how the market moves, then you can “read” and track trends.
And that’s precisely what we’re going to cover today: the six ways the market moves.
(Grab a pen and take notes because this is information that we only share with paying members)
Okay, let’s get into it…
Identifying what the market is doing and how it’s moving is absolutely vital for your success as a trader.
Luckily, there are only 6 ways a market can move:
So, how do we identify where we are in the market?
Using Isolated Lows and Isolated Highs.
Isolated lows occur when there’s a lower low than both the previous bar and the next bar (Point A) and a lower high than both the previous bar and the next bar (Point A).
Phantom isolated lows occur when only the low condition Point A is met. At this point, there’s no need to see where the high is.
Isolated highs occur when there’s a higher high than both the previous bar and the next bar (Point A) and a higher low than both the previous bar and the next bar (Point A).
And phantom isolated highs occur when only the high condition Point A is met. There’s no need to see where the low is for these guys.
So now that you know how to identify what’s happening in the market let’s talk about the different ways the market moves:
Trend runs are established (Point A) when the close is above the dot, the dot is rising and the close is greater than the open and in the top 40% of range.
At Point B the dot is equidistant from the previous point and continues to be equidistant.
A trend pause is exactly the same as a trend run. However, when a close is under the dot and open (Point A) but the dot is still rising, it denotes a pause.
At that point, you’re looking to see resumption of the trend run (close being greater than the dot ). This should occur within three to five time frames.
Congestion entrances happen when the close is under the dot and the dot is flatish to the previous dot. This is the congestion entrance (Point B). You then look for the last isolated/phantom high (Point A).
Once the congestion entrance has been defined, you’re then waiting for the first isolated phantom low to form (Point B). This has to be within 5 bars.
Next, extend a dotted line from the isolated/phantom high (Point A) and the isolated/phantom low (Point B), you then have your congestion high and low.
As the chart continues, you’ll see new lower isolated highs (not phantoms) and isolated lows developing. You then move your congestion parameters to these newly formed pivots (Point C and Point D). It should be noted that you can only contract in congestion.
If after congestion entry, there are no isolated / phantom low formed within 5 bars, you are then in a trend run down and should trade it according to the rules.
Once you’ve got defined congestion, you’re waiting for a close either above the last isolated high (Point C) or below the last isolated low (Point D).
At Point E, the close is greater than at Point C and a congestion exit to the upside has commenced. The bar close must be greater than the open and in the top 40% of the range of the bar (approximately).
In this example at Point E, the dot has also closed above the dotted line at Point C. This is a stronger indication of congestion exit but a close also greater than Point C is sufficient.
Our final market move to cover today is…
At Point B, the bar is wide and the dot is less than the dot 3 bars previously and the close is less than the dot.
And there you have it, all of the possible ways for the market to move, Now that you understand that, we’ll build on that foundation with more complicated concepts next time.
This is just the tip of what we cover inside Hawkeye Traders…!
If you want to get access to all the money-making secrets, tactics and strategies we use inside Hawkeye Traders to consistently generate profits from the market…
As traders it’s normal for our performance to fluctuate.
Sometimes we’re kicking it out of the park.
Other times we’re on the receiving end of an arse kick by the market.
It’s a tough thing to go through…
We start to lose motivation, trade with insecurity and deviate from our trading plan.
It’s the name of the game we play.
But luckily for you, I’ve been in this game for 10 plus years.
So I’ve gotten my fair share of arse kicks from the market. Which means I know precisely what to do when things are going south.
There are 5 things you should be doing when this happens to you.
Let’s get into them:
Your trading plan is designed to be your compass when navigating the markets.
And the destination is profits.
When you’re going through a rough patch stick diligently to your trading plan.
If you stay true and disciplined to your plan, you should at least remain profitable.
When we suffer a big loss, it’s normal to try to make that money back fast.
This typically leads to “revenge trading”.
We start relying on hope instead of our plan, we take risky chances, and we take too long to cut losses.
My advice?
If you feel like a feeling of revenge is taking over your trading…
Reset and get back to it the next day.
Start again slowly.
Do small trades with some profit.
As time passes, you will regain your confidence and work your way back to your normal volume.
If you get hit again, consider taking a day or two off and do something totally unrelated to trading.
Do not look at the markets or second guess yourself.
Trust the process.
Trading is 90% emotional – yes, I always say this… because it’s true!
When we’re in a bad place emotionally with regards to trading, the best thing you could do is talk to a more experienced trader who’s been through the same you’re going through.
They’ll help you organize your thoughts, pinpoint your weak spots, get the fire back, and overall, see the light at the end of the tunnel.
Don’t have someone like that in your life right now?
No problem.
At Hawkeye Traders I personally host weekly Q&A calls where you can ask me ANYTHING you need help with.
Whether you need help with mindset, your trading plan, or picking a niche…
I’ll be there to give you a hand.
Click here if you’d like to join me on these calls and I’ll show you how it all works.
Ray Dalio needs no introduction.
There’s no doubt we can learn a ton from such a legendary investor.
That’s why today I want to share with you 7 powerful lessons from his book ‘Principles’ which you can apply to your trading TODAY.
These are some of the principles Ray used himself to succeed in the stock market, and it’s interesting how I used some of these without even noticing!
Without further ado, let’s get started:
Ray Dalio didn’t particularly love school growing up.
From a young age, Ray decided to work for himself, and he learned that he could get anything that he wanted by working for it.
And when he was 12 years old, he bought his first shares in the stock exchange.
See, Ray didn’t take the traditional, secure route. Instead he chose the uncertain, hard one.
I guess we can both agree it went well for him, right?
Working for yourself can be scary sometimes.
But if you put in the work and become good at your craft there’s no ceiling to what you can achieve.
We talk about developing your own strategy at Hawkeye all the time.
Every trader is different, has different goals, different strengths and weaknesses…
There’s no cookie-cutter approach that can make every single person that uses it successful in the market.
One of the main things we do inside Hawkeye is help our students develop their own strategy.
Click here if that’s something you want help with.
The financial markets are like a jungle.
It’s kill or be killed.
It’s no place to play around or test the waters.
You have to be in 100%… or you’ll soon be out.
That means doing your due diligence, researching, having a solid mindset, learning what’s working now, etc.
There’s a lot of things involved. That’s why you need to apply the next lesson…
When he was beginning in the world of investment, Ray had questions for everyone that he considered a good investor.
This could be anyone. For example, he asked his stockbroker, his barber and anyone else that he thought was good at investment.
By learning the processes of many people, he boosted his chances of being right in trades, and it contributed to his overall success.
Which is why the Hawkeye community is so powerful.
We help each other with research, we share new opportunities, and we learn together!
I personally do a live session every Wednesday where you can ask ANY questions you have.
Plus, you can interact with other members inside our exclusive Hawkeye group to learn what’s working for them or ask about one of your trades!
No matter which type of appetite you have, Ray says that risk grows from not knowing what you are getting involved in.
If you make trades in a sector of industry that you know little to nothing about, that can be risky.
That’s why I always preach niching down to a sector you’re familiar with.
“Invest in things that you know and you will be successful.” – Ray Dalio
In my case that’s energy.
How about you?
If you need help finding your niche, you can look at your previous career, your interests, the news you typically follow…
One of the principles that Ray Dalio depends upon extensively is the process of decision-making and the activity of analyzing results.
Which sounds boring and vague, but I’m going to teach you exactly what Ray means and how I personally do this.
From his days as a boy, he learned that failure was the result of something that he or others around him were doing wrong.
By analyzing the reason for failure, Ray learned how to be effective at a higher rate than his peers.
Struggling with his mistakes, problems and weaknesses made Ray grow into a strong investor.
The lesson here is to not shy away or be embarrassed of mistakes. Simply learn from them and strive never to repeat them.
How do you learn from them?
Here’s what I do.
I go to my trade history and analyze my latest failed trades.
I open the chart and find where I opened a position, what my indicators were telling me, how the trend developed, where I should have closed my position, etc.
And I recommend you do this with every losing trade. This one comes back to the ‘Play to win’ lesson.
Yeah, it sounds cute and all, but the reality is if you don’t put in the work to master the craft you’re not really playing to win.
This is in my opinion the single best thing you can do to become a better trader (besides becoming a Hawkeye Trader).
Overconfidence is much worse than lack of confidence.
When you lack confidence you’re cautious and don’t take big risks.
But overconfidence is what leads to blown accounts!
The most basic lesson in trading 101 is to reduce risk as much as possible.
Yet we forget about this all the time by focusing on the upside.
It’s understandable though — the goal is to close big wins, right?
But that often involves higher risk, and it’s our duty as traders to protect our trading capital.
Which is one of the main things we teach in Hawkeye Mastery Academy!
Click here to learn what that is and how you can get access for free!
Today I want to talk about the “Next” mentality.
This is something not many traders are even aware of.
But as I always say, trading is 90% mental and emotional…
And overcoming mental barriers can have a huge impact on your trading.
The next mentality is pretty easy to understand…
But tough to implement.
This is what it’s all about:
Win or lose, you should always be moving on to your next trade.
Whatever the result of your last trade was…
The sooner you reset and refocus, the higher your chances for your next trade to be a winner.
When I was a beginner trader, things didn’t usually go the way I wanted.
But even when they did and I had a big win, it would often turn against me.
I’d feel super excited and overconfident.
… Which would lead to bad decisions on the next trade, and therefore losing all the money I had previously gained.
So win or lose, you should always have this “next” mentality and focus on the next trade at hand.
But of course, this is easier said than done.
The hardest part is starting a new trade from scratch.
First you have to find a trade that matches your criteria, analyze it to make sure it can be a winner, and then execute the trade…
It’s a whole process.
That’s why a solid trading strategy is the best ally to the Next mentality.
Because if we rely on our emotions after a loss…
We’ll probably want to make that money back as soon as possible.
And as you probably know, that rarely ends well.
Other times we just feel insecure about our abilities and make soft decisions…
Which also very rarely ends well. You shouldn’t ever take a step in the markets unless you’re 100% confident.
Whenever you have a loss, focus on your strategy and the things that have worked well before…
And apply them to your NEXT trade.
Typically when we’re trading well we tend to take gains into the anticipated move, cutting off losses quickly and sticking to a game plan.
So when things go bad, cut your losses quickly, don’t dwell on it and look for the next trade you can apply the above criteria to.
Fundamentals always win, so stick to them!
After all, trading is a marathon, not a race.
If you invest in the proper behaviors and strategies, your chances of reaching your trading goals will be much higher.
I know because it happened to me.
And nowadays I teach the trading fundamentals and mindset needed to succeed in trading inside my Hawkeye Traders mastermind group.
These are the same golden rules that I’ve learned over 10 years in trading — and that allowed me to generate $1,000,000 plus in the last 4 years.
There are many ways to get paid for doing a job.
Money is definitely a very important one.
But there are many others virtually no one talks about.
And it’s my firm belief that they should always play a role when choosing your next career step.
Because it’s the sum of all the different ways to get paid that truly makes a good job.
So what other ways are there to get paid?
First of all there’s time.
Time is the only thing we can’t buy.
If your job sucks all the time out of your day and you aren’t able to do the things you enjoy or dedicate time to your family, I think we can both agree that’s not ideal.
But don’t get me wrong, trading can also be very time consuming.
There’s people that spend the entire day glued to a screen.
If they’re OK with that, cool.
But it’s not the way I personally like to do things.
That’s why we created the Hawkeye set of tools. But that’s a story for another day.
My point is if you’re paying the company you work for with your time, instead of them helping you make time for the things you deem important, things need to change.
One of the coolest things about being a full time trader is that we can safeguard our time and only invest it in things we choose.
Something else that’s important when choosing your job or career is the sense of fulfillment or enjoyment you get out of it.
Reporting to a boss everyday — especially if they aren’t the nicest person in the world – can be pretty unfulfilling.
I certainly wouldn’t enjoy it. Especially after working for myself for 10 plus years.
I also think it’s important to do something that motivates us and challenges us.
If you do sit every single day in a cubicle doing the same thing, day after day…
It’s hard to be truly happy.
And it’s hard to be truly motivated when your earning potential has a clear ceiling!
That’s why if you have an interest in the markets, economics, or any sector that can be traded, there’s no better job (in my opinion).
Just the fact that you can decide how much you get paid based on your effort and skills is a total game changer.
And finally there’s comfort.
Comfort comes in many ways.
There was a time last year where I feared I had Covid…
And it made me appreciate how lucky I am to not have to travel for work, or commute, or work in a public place risking getting infected.
It’s not only about the virus though — I generally don’t like to do those things.
I’d just rather stay in my safe and comfortable house…
Sitting in my office with my dogs, and having my wife close to me.
People who can make their living working remotely and independently are in the strongest possible position to stay healthy, happy and financially secure for the upcoming future.
That’s why in my eyes the pandemic was an amazing opportunity to get into trading (if you haven’t yet).
And if you didn’t make the leap…
The next best time is always NOW.
All you have to do is watch this training where I show you how I was able to succeed in trading as a former mechanic with no formal education in economics or finance.
Commodity supercycles are great for traders…
And a new commodity supercycle appears to be on the horizon.
Bold statement, I know…
But I have plenty of evidence to support my claim.
If you want to learn what a commodity supercycle is, why I believe one is coming AND how you can benefit…
A commodity supercycle is a decade(s) long period in which materials or commodities trade above their long-term price trend.
Commodity supercycles are born out of abnormally strong demand growth that producers struggle to match, sparking a rally in prices.
And needless to say, these are a great environment for us traders to do our thing and profit!
The first indication of a commodity supercycle I noticed was when oil prices surged over the past month…
But then I started to look more closely at other important commodities.
Iron ore — the flag carrier for the boom in resource commodities — has reached record level prices.
Steel seems to be crushing it as well…
Copper prices shot up above $10,000 per metric ton this week for the first time since 2011 and are now close to an all-time high:
Also nickel, cobalt, lumber, lithium, and even coal have rebounded quite dramatically from their pandemic lows.
Plus there’s a boom occurring in agricultural commodities. Wheat, corn, other grains and soy prices are at six-year highs, and cotton and live cattle prices have bounced back strongly from their pandemic lows.
The pandemic severely disrupted production and supply chains for most of these commodities.
So there already is a lack of supply ready to meet pre-pandemic levels of demand…
Which can drive prices up even more.
So is all this evidence enough to say 100% a commodity supercycle is coming?
Nothing is guaranteed…
But what’s for sure is the commodities market is getting red hot as we speak.
As traders, I think this is definitely a market to pay attention to.
I know I will…
And I’ll discuss with my Hawkeye students the best opportunities for big profits and how to take advantage of them… and I’ll even help them with their own trades.
Plus, they’ll be equipped with the most powerful indicators out there.
If you’d also like to be prepared to take full advantage of this potential commodity supercycle…
If you’ve been thinking about retiring early, that’s awesome.
I’m sure you deserve it.
But there are some factors that may get in the way between you and the peace you deserve.
More specifically, there are six reasons why you may not be able to retire as early as you want…
Not Enough Savings
Maybe you still have kids in college…
Perhaps you have elderly parents who need help paying medical bills or nursing home fees. ..
Or maybe you still have a mortgage and credit card debt.
If that’s the case and you’re planning to maintain your existing lifestyle — but your savings are limited — you’ll need to either take care of the above expenses beforehand or make sure you have enough savings to pay them as they come (including an emergency).
Reduced Social Security
The earlier you start collecting your social security benefits, the less benefits you’ll receive.
The earliest you can start collecting your benefits is age 62, and if you decide to do so you’ll only receive about 70% of your benefits.
The more you wait to start collecting, the higher your benefits will be.
Living Longer Than Expected
Thanks to the technological and medical innovations of our era, people are living longer than ever before.
According to the Social Security Administration, about one in three 65-year-olds today will live past age 90, and one in seven will live past age 95.7
And if your family has a history of longevity or you take care of yourself, you might live even longer!
The average monthly benefit for retirees in 2020 was $1,503, or $18,036 a year.
For retirees with no savings and no pension, it may be hard to meet basic living expenses on Social Security income alone. Therefore, you might want to wait till age 70, when you can collect your maximum Social Security benefit.
Increased Mortality
A 2017 paper published in the Journal of Public Economics found a link between early retirement and mortality rates, especially among men.
The research conducted in the study showed that men could see a 20% increase in mortality risk by claiming benefits early and retiring.
Saying Goodbye To Your Bucket List?
Retiring early would mean significantly smaller 401k savings. Which could result in you saying goodbye to some of your dreams or goals.
Maybe you want to buy a house in Florida, or take a cruise…
Are you willing to sacrifice those things?
The Point of No Return
If you change your mind after you take early retirement and want to return to the workforce, it’s not as easy as deciding to go back.
Whether you quit your last job or were laid off, finding new employment when you’re over 50 can be a struggle.
And if you do manage to get a new job, chances are it won’t pay as well as the one you left.
But fear not!
Because you can still retire early if that’s what you truly desire.
Trading can enable you to generate a healthy income while investing little time.
We’ve got many retirees in Hawkeye who have a higher income than when they were working — and they truly enjoy trading!
If that’s something you’re interested in…
One of the most important things you can learn as a trader is to minimize losses.
In fact, this is one of the first things that most traders must learn, in my opinion.
Because it’s not the wins that dictate success — it’s the losses.
Easier said than done, I know…
But today I want to share with you 6 maxims to keep in mind when trading that will help you keep your losses to a minimum.
There’s not a single trader who hasn’t heard the mantra “cut losses quickly” over and over again.
… Yet we’ve all been guilty of ignoring this rule.
Losses can escalate very quickly and wipe out months of gains and diligent trading.
Keep this in mind next time you’re on the losing side of a trade.
What starts as a “small” loss can quickly wipe out months of hard work if you let it get out of control.
Traders are always looking for the next great trade.
This means that as soon as a losing trade is over they forget about it and focus on a new trade.
Your trading history is filled with super valuable lessons.
Take 30 minutes of your day to study your losses so you can avoid them in the future.
Reflect on why you lost that trade and what can be done to prevent this type of loss in the future.
“When you find yourself in a hole, the first thing to do is stop digging.”
It’s very easy to become stubborn when faced with a losing trade.
We’ve all been there.
We figure the trade will turn soon, and the last thing we want to do is sell at the bottom or cover at the top.
Some traders will even double down with no real argument to support that decision.
Remember, a stock can always go higher when you’re short and lower when you’re long.
Don’t be stubborn. Take the loss, study it and move on to the next one.
Stops provide the foundation for a risk management strategy.
And it’s an essential element in any trading plan.
You should know your stop price before you enter any trades, whether it’s a mental stop or a stop loss order.
Focus on your highest probability setups and avoid any subpar setups.
Go back to your trading history and analyze your biggest winners. Find the common denominators on your winners, and look for new trades that share those elements.
This can automatically increase your percentage of winning trades.
Always Trade With a Free and Clear Mind
If you’re tired, anxious or upset, your trading is likely to suffer.
If you’re not in an optimal mental condition to trade, don’t trade!
You should also avoid “vengeance” trading — that is, trying to make back losses, or forcing a trade just to make money.
Hopefully you found these useful, and maybe you’re already implementing some of them in your trading.
But if you feel you need some help with risk management…
Hawkeye can help tremendously.
I’ve always been fascinated with lions.
They’re fearful creatures — assassins, predators…
Yet if you put them in the wrong environment, they will perish.
For example, a lion wouldn’t survive long in the scorching Sahara desert, or in the Amazon where the landscape doesn’t help them in the least.
And guess what?
It’s the same with traders.
>>> Keep reading…
The same way lions or any other animal can’t adapt to every single environment…
Traders, or any other business owner will have a tough time trying to dominate every market.
Imagine three business owners that provide a service.
One is carpenter, the second is an electrician, and the third is both a carpenter and an electrician.
Who do you think will dominate the electrical market?
Most likely the one that focuses on electrical work!
Because he puts all his time and focus into it, which will help him dominate that market faster than the guy who does both carpentry and electrician work.
He goes deep instead of wide.
The same would happen with the carpentry market.
See, there’s a reason for that old saying:
“The riches are in the niches.”
Too many traders try to focus on multiple markets instead of drilling down into one or two that they know or have a great interest in.
Doing this is one of the simplest ways to maximize your wins and minimize your losses.
One of the questions I get asked the most about this topic is:
“How do I pick what niche I’m going to focus in?”
It’s a pretty easy decision making process actually…
For instance, I grew up in a family that owned an automotive repair and retail gasoline business.
I was used to seeing the gas and oil price fluctuate.
And I always knew what was going on in the space.
The key is in going after a niche you know well or have a keen interest in.
So for me, it was the energy sector.
For you it could be the industry where you worked previously, a sector that you are really interested in, or one or two niches where you’ve achieved your greatest trading results.
Give this a try and you’ll see trading become more predictable and enjoyable!
And if you want some tools to help you dominate whatever market you pick…
Check out this on-demand training where I share the tools that helped me become the master of the energy sector!
This may be one of the most valuable pieces of information I’ve ever sent you.
Last week we discussed forensic analysis.
And as promised, today we’ll look at some applications of volume price analysis.
More specifically:
We’ll look at 5 concrete examples of what volume price analysis (aka forensic analysis) allows you to see in charts.
Ok, let’s jump right into it:
So as you can see in this example, Bar A is noticeably wider than the other “normal volume” bars.
This means you should expect greater than average volume.
The relationship of the close on Bar A is an indication of whether it is buying or selling.
In this example the close is in the bottom 1/3 of the range indicating selling pressure, which is also reflected in the red bar.
If you have a wide price bar with low volume, that tells you something completely different.
In this case you should still expect a greater than average volume…
Yet, even though Bar A appears to have more volume than previous bars…
…for the price range of that bar, it should have had substantially more volume.
So this low volume bar is indicating a trend pause.
This is confirmed with the close being at the midpoint of the range.
With Narrow price bar you should expect low volume.
If you have a narrow price bar with low volume, this is telling you there’s no pressure to buy or to sell.
Bar A shows a narrow range and low volume – indicating a pause.
Even though the close is less than the open, it shows that there was no demand for selling.
You should expect for the next price bar to give you a confirmation of whether price is going to break out or break down.
This is the same price bar as the example above, but the volume is much greater for such a narrow price bar.
Even at the top of the trend, Bar A shows that there is above average volume for that range, which indicates buying pressure.
If it was selling, the range would have been far greater as the bid and offer would have expanded.
Even though the close is less than the open, it is showing that this share was not being sold, in fact it is a sign of strength.
There was a failure to sell, which validates the buys.
This is a narrow price bar in a downtrend.
It’s an indication of buying pressure.
Bar A shows there is above average volume for the range indicating buying.
Even though the close was less than the open, it indicates accumulation, for if it was selling the range would have been far greater.
Those are just some of the applications volume price analysis can have.
Inside Hawkeye we teach you how to make the most out of it — and we give you the tools to make it an easy process.
Plus, you can ask me anytime you have a question!
As technical traders, analysis is a major part of what we do.
But there’s a lot of data to go through, and it can get confusing.
Today I want to share with you how to make the analysis process easier…
By focusing on what I call Forensic Analysis.
In the 1930s, stock market wizard Richard Wyckoff used volume to develop a predictive indicator he called Volume Spread Analysis (VSA).
That’s what he used in his trading, and he was very successful with it.
Well, Hawkeye takes VSA and compares it to price, average true range (ATR), standard deviation of price, and other key information to create our own unique spin on Volume Spread Analysis…
Something that we call Volume Price Analysis, or VPA.
The end result is an insanely accurate prediction of market direction and sentiment.
Standard Volume is the total number of shares bought and sold during a specific time or tick interval.
It takes no account of the open and close.
It just accumulates and shows you how much volume was transacted during a certain period of time.
VPA takes that volume bar and looks at the open, the high, the low and the close to determine the distribution.
This distribution is studied and analyzed to determine whether the volume bar is red or green.
In other words, we can tell if there’s buying pressure (green) or selling pressure (red) coming in.
Hawkeye performs over 300 calculations per bar in order to determine whether the volume is buying or selling pressure.
Using Volume Price Analysis is the most sophisticated way of trading there is.
It’s a step beyond technical analysis…
And it’s what we call Forensic Analysis because it helps you do so many things, including:
If that sounds like it would be useful to you…
>>> Click here to incorporate forensic analysis into your trading.
P.S. Next time we’ll cover the actual application of volume spread analysis and how you can use it to win more trades…
So stay tuned!
Between 70% and 80% of traders are failing.
And the fact of the matter is they are using traditional trading strategies and indicators like:
I’m not saying any of these are “bad” or “wrong.”
I’m just saying that if 70- 80% of traders are failing AND they are using the above indicators, there must be a correlation there.
The good news is there’s another way, and it’s… you guessed it — volume.
In today’s newsletter I want to break down for you WHY volume trading is so effective.
But first, let me give you some quick context on volume trading, and then I’ll share with you multiple reasons why volume is so powerful.
In the 1930s, there were three great traders:
And it’s Richard Wycoff’s teachings that we followed here at Hawkeye.
In fact, in developing Hawkeye, Nigel (our founding father) flew to meet the Wycoff family.
From there he was able to get his hands on Wycoff’s original notes, which he used when developing the Hawkeye algorithm way back in 1996.
Now, you may be wondering: what makes volume so special?
Well, check this out…
Here are 6 things volume helps you do that no other indicator does:
Volume really is the key to seeing all these things and helping you as a trader to assess the current value of price in order to know what to do with it.
If you know about trading, you know how powerful all the above points are.
Volume is the only leading indicator that signals price movement before it happens as well as market intent.
All other indicators by comparison are lagging, therefore they fall short of Hawkeye standards.
That’s why trading based on volume is so important.
… And why volume is the cornerstone of Hawkeye.
Funny thing is, that’s just the beginning of what volume can help you achieve when trading!
>>> Click here to unlock the full potential of volume trading.
Some of the biggest obstacles traders face are:
1. Finding the right entries
2. Finding the best exits (stops and profit targets)
3. Understanding why a trade is not working
4. Identifying support
5. Identifying resistance
Hawkeye Zones help traders overcome each of these obstacles in some key ways…
Zones allow you to:
1. Clearly see where to enter
2. See clear exit points (stops and profit targets)
3. Know why the trade is stalled or reversing
4. Know where support is located
5. Know where resistance is located
The nice thing about the Zones is that they are color-coded supply and demand zones that automatically refresh and change as price interacts with them.
So, not only do you get to see things as support or resistance…
But you also get to see where to enter, where to exit, and even where to take profits all along the way.
It’s a way of looking at your charts that allows you to trade with more certainty and confidence.
But how do Hawkeye Zones work?
Zones keep track of key market volume and price action as price moves throughout time.
Basically it’s a data mining algorithm, which gives us an edge on the right side of the market to find support and resistance areas.
Inside the charts, these colors help us remember how many times price has tested and failed to break through at support or resistance.
Zones typically identify regions of significant volume activity.
Historically, these areas are where we see buyers and sellers step into the market.
In the present, we can use these fresh zones to establish support and resistance.
In the future, we can define where price is expected to go as supply and demand shift.
But that’s not all…
Time also plays a big role in Hawkeye Zones.
Any time that the market is open we need to keep track of the creation and destruction of price zone areas.
Zone levels can last for YEARS!
These levels can also switch between support and resistance:
Support & Resistance + Time = Supply & Demand
These are some of the things we are looking for in the zones to find where supply and demand are for a certain ticker:
If you are a serious trader, you know this information is gold!
It’s one of my few “secrets” to success, because when you are able to put these zones to use, the game becomes easier.
>>> Click here to learn more of these game-changing “secrets” to success!
The majority of traders fail.
If you’re trying to make it as a trader, your number-one goal is to defy the odds and avoid an account blow up.
Too many traders are enamored by the potential for profit and fail to protect their downside.
Anytime you are more focused on potential profit over potential risk, you are going down the wrong path.
If that’s you, it’s my duty to put you on the right track.
So today I’ll share with you the strategy I recommend to Hawkeye members to manage the growth of their account.
There are three simple guidelines to follow when using this strategy.
You can tweak them and play around with them as you evolve as a trader, but if you’re starting out, stick to them for now.
Here they are:
Pretty easy, right?
Now let’s take a look at a basic plan to follow in order to manage your capital while growing your account:
Say that you have $18,000 in your account. For some of you that can be a lot, for others just a drop in a bucket…
Nevertheless, you should divide your capital into two boxes.
Half of it into a cash box, which will act as a rainy day fund.
And the other half into your trade box, this is the money you’ll use to open positions.
Equally divide your trade box into the three allowable trades that you can take…
… in this example, $3,000 each, no more.
Then 50% of any profits that you make will go back into your trade box, and the remaining 50% of the profits will go into your cash box.
And then you start the process over again.
That way you’ll always have money to trade and a rainy day fund for emergencies.
It’s a simple yet powerful strategy for managing the growth of your trading account, steadily and safely.
Especially when it’s combined with Hawkeye.
>>> Click here to find how Hawkeye can accelerate the process of growing your account.
This is something I’ve never talked about before…
Because it’s powerful information we typically reserve for Hawkeye members.
But today I’ll share it with you because I know it will help you in your trading.
The opening price principle is paramount to the Hawkeye philosophy.
Here’s how it works… and how it can help you predict how price will move during the day…
Consider a hypothetical auction where you’ve got a piece of fine art that’s going for $100K.
The auctioneer stands up and says, “Do I hear $100,000?”
*Crickets…*
Why?
Because there’s no demand!
The silence means that no one wants that piece at $100K.
The price has to come down before anyone will be interested.
So the auctioneer tries again at $90K…
Then $80K…
Finally, someone raises their hand at $70K and the bidding begins.
Price will probably fluctuate between $70K and $80K and close around $85K in the end.
That initial price set the basis for the session and affected the final outcome.
On the flip side, if the price starts at $100, people instantly raise their hands and generate a huge demand for that piece.
So with only one item and all those people wanting to buy it… the price will start soaring.
But again, the initial price set the basis for the session.
Well guess what?
The same happens in the stock market.
The opening price of a market will generally give a hint of where the market is trying to go.
Look at the example below:
In this case, the opening price was heavy to the downside and red.
What it’s doing is setting the basis…
Similar to the auction example where the price started at $100K, no buyers were interested in this ticker at the opening price, so sellers stepped in.
The price came down until it started to attract buyers…
Buyers started to go in (note the first green candle in the chart), and price started to go back up again.
But note how once the price started to get close to the opening price, it failed to go any higher and dropped once again.
Then it broke support and started to drop again throughout the day.
This example proves that the opening price was showing us that this market wants to go down for the day.
The opening price principle is very meaningful and helps you understand the intent or the sentiment of the current market.
And when this principle is combined with the Hawkeye suite of indicators, it’s a powerful combo that can help you predict how price will move during the day.
I hope you found this valuable and that you start using the Opening Price Principle in your analysis.
But if you’d like to learn more about how this principle works in conjunction with the Hawkeye tools and methodology, click here for an on-demand training session!
We’ve all heard that trading is 20% technical and 80% psychological.
Want to know why?
It’s because our emotions short-circuit our logical brains.
This “emotional sabotage” is the main reason why most traders never make it.
… And it’s also why seasoned traders struggle to reach higher monetary gains.
There are a few emotions that can short-circuit our logical brain, such as:
But why does emotional sabotage happen in the first place?
Why do those emotions come up and overtake our rational brains?
Well, there are a few possible triggers for these emotions:
Those triggers can give rise to negative emotions that can lead to:
And all of these usually share one common result: losses.
Successful traders do things differently…
They:
So how do you increase your odds of being a successful trader?
You need to change some of your thought processes…
Having a minus day does not make you a bad trader
You cannot “will” the market to do what you want
You cannot “predict” where the market is going — because the market will go where it wants, when it wants, how it wants
Something else about being a successful trader that we’ve all learned the hard way is that we do not have to work 12 hours.
In other words: Trade smarter, not harder.
Finally, in case you are struggling with emotions and trading… I want to leave you with some important questions to ask yourself.
These will help you catch yourself when your emotions are interfering with your logical analysis of a trading scenario:
I suggest tracking these questions in a trading journal and trying to spot negative patterns that are harmful to your trading.
You just may uncover a lot of the bad habits and thought processes that are diluting your trading gains.
If you want more information like this, I personally do a weekly call with Hawkeye members where we review the markets and important lessons (like this one) to help you grow as a trader and make more money.
Here at Hawkeye, we’re serious about reaching our trading and financial goals.
I’m sure you are as well…
And I know you’re willing to use every tool at your disposal to do so.
Our philosophy has always been to treat trading as a business, not a “side hustle” or a hobby.
… Which means we need a business plan.
After all, a goal without a plan is just a wish.
A business plan is a powerful tool you can use to bring more predictability, organization, and ease to your trading.
It will help you achieve potentially bigger gains and safeguard your money by sticking to some pre-formed guidelines.
Before we dive in, you need to know that in order for a business plan to be as effective as possible, it needs to be written down.
Here are the 12 steps to follow:
What is the reason you got into trading? What’s the end goal beyond money?
Making money for its own sake is not a strong enough reason to keep you in the game when the going gets tough… for you to push your boundaries and not quit.
You need a mission… a purpose… a reason strong enough to keep you moving forward whatever happens.
In my case, my mission is to be a source of good, for my family and the world.
Write down the vision you have for your future.
If you keep your view on that vision and the things you want to achieve, you’ll stay motivated more easily and push through any hardships.
Here are a few things to think about:
In order for you to hit your goals…
You actually need to have goals. Breakthrough discovery, I know…
You need to know:
Write down your goals, and start moving toward them.
This business plan will help you tremendously in doing that.
There are six market types (bull volatile, bull quiet, sideways volatile, sideways quiet, bear volatile, bear quiet).
Study them, and pick which ones you are going to profit from, and how.
By the way, with Hawkeye we can identify those market types rather easily…
Take note of the current state of the market.
The environment of the markets and the financial sector will have a big impact on your trading, so don’t make the mistake of not taking it into account.
What type of market is it? Where are the best opportunities for profit? What strategies are working?
There are different strategies for each of the six types of markets.
Decide on:
How much of your portfolio will you risk on any given trade?
You can use position sizing to help you determine how many units of a security you can purchase, which helps you control risk and maximize potential returns.
Our unique personalities have a big impact on the way we trade.
So try to work your strategy around your personal habits and preferences. Ask yourself:
All those things can become obstacles to your success if you don’t plan around them.
Daily procedures are a micro version of the business plan.
They are the little stepping stones you’ll follow to your goals.
You should break down your day into the different tasks you need to accomplish.
Thinks like:
You get the idea.
You need an education plan to learn the skills and strategies necessary to achieve your goals.
If you’re not learning, you’re not growing, so your chances of reaching your trading goals will be lower unless you carve out time for education.
When you fail to plan, you plan to fail.
It’s easy to blame something external for a failure.
But if we are not actively thinking about worst case scenarios and preparing for them… whatever happens is solely our responsibility.
So make a list of negative things that could happen and plan how you’re going to respond.
For example:
Trading is the central piece of your business, but there are other aspects of a business you’ll need to take care of.
Taxes and having a solid financial model are the two of the most important ones.
Following these steps and creating a business plan can help make trading an easier and more predictable quest.
It can also help you find more consistency in your results and avoid dangerous situations.
But you need to make sure to write it down and stick to it religiously.
If you have any questions, do not hesitate to reach out.
Would you like to elevate your trading to new heights?
Would you like to avoid making emotional trading decisions?
Would you like to preserve your capital so you can make the most out of it?
If so, then grab a pencil and some paper…
Because today I’m sharing a simple yet profound way you can take a huge step forward in your trading…
By developing a trading plan!
Now a trading plan is a written set of rules that defines how and when you will place trades.
But it’s much more than that.
It is also a business plan, a rule book and a financial planner all rolled into one.
Having a documented trading plan that you adhere to religiously for each and every trade is one of the cornerstones of success.
And in my opinion, a trading plan is one of the biggest single factors that separates successful traders from not-so-successful ones.
A trading plan is:
What does a trading plan include?
Ask yourself the following:
Now that you know the elements that go into your trading plan, I want to share with you 3 keys to a winning trading plan.
Key#1: Having your trading plan in writing.
When your trading plan is written out it acts as a blueprint or a roadmap you can follow to your trading goals.
If it’s not in writing, it’s subject to fear, greed, and emotional decisions.
Why have a written plan?
Consider a mountain climber. Would he begin his assent without:
It’s obvious that a mountain climber who fails to carefully plan his expedition will likely encounter disaster.
The same applies to traders dealing in volatile markets. A carefully prepared plan will keep the trader on course and help him avoid the hidden precipices.
Key #2: Back and forward test your plan.
There are two ways you can test your plan.
Key# 3: Trade your plan!
Even the best trade plan will fail if you do not adhere to it in a live market.
But remember that live trading has issues with fills and slippage.
Trades that were good in testing might not have actually filled in a live market due to low volume or limited transactions at that price.
Always account for slippage in your trades. It makes your results much more realistic.
A final piece of advice… don’t forget to keep detailed records!
If you win a trade, you need to know exactly why and how.
More importantly, you need to know the same when you lose, so you don’t repeat unnecessary mistakes.
Write down details such as targets, the entry and exit of each trade, the time, support and resistance levels, daily opening range, market open and close for the day, and record comments about why you made the trade as well as the lessons learned.
Documenting the process helps you learn what works and what doesn’t.
I hope this provides as much value for you as it has for me. Having a written out trade plan is what has enabled me to achieve the success I have.
Hawkeye users are in a fortunate position of having indicators that come with suggested rules for usage that can also be incorporated into personal trading strategies.
Want to simplify the process of creating an effective trading plan?
>>> Click here to find out the core of a Hawkeye trading plan.
Have you ever wondered what successful traders talk about when they get together?
What sneaky trading secrets we share with each other?
What advice we offer one another when the going gets tough?
Well today, you get to be a fly on the wall and discover the hottest topics highly successful traders discuss when they’re talking shop…
One thing we all agree on is that the mental aspect of trading is much more difficult than the technical aspects.
As traders we need discipline, consistency, and a stomach to handle the discomfort that will be inflicted from time to time when we take a loss… because it will happen.
Trading is a battle against the market and against our own emotions.
Being self-aware and having the ability to keep our emotions in check is of extreme importance.
In fact, it may just be the single most important aspect of trading.
The most important thing a trader can have beyond the mental capacity to do their job is a trade plan.
A trade plan should be the trader’s bible…
You should live and trade by it.
A well-formed plan is the first line of defense against emotional trading.
If you don’t have one yet…
Take a break and work on it. You won’t regret it.
One topic most successful traders agree on is this.
I find that those who are unorganized in other aspects of their life tend to fail at trading.
Trading requires focus and discipline.
If you’re all over the place, you’ll likely have difficulties focusing and being disciplined.
Luckily, this is something you can change.
You just have to make the decision to start living a more organized life, and then start taking action.
It’s all about priorities.
The moment you start thinking that you know everything, you start to lose.
The markets change everyday, new laws are passed everyday, new strategies are born everyday…
It’s our job to stay on top of what’s going on.
There’s a couple more that we could talk about, but these are definitely the most important.
If you master these 4 premises and learn the technical side of trading…
You’ll be well on your way to becoming a successful trader.
If you want to learn the technical side…
Everybody talks about the best moment to enter a trade.
Which made me realize…
…not a lot of people talk about when NOT to enter a trade.
There are 4 core reasons why beginners enter trades that are bound to be losers.
And more importantly, they’re all tied to one single factor.
FOMO trades happen when you are afraid of missing the move.
You may feel like you are faced with an opportunity that will not present itself again, and, of course, you don’t want to miss out.
Usually these opportunities are highly volatile…
Which forces you to make a quick decision — often, a wrong decision.
If you’re asking yourself: do I enter or leave it alone?
Know this:
Entering a trade just because you’re afraid of missing out is not a great idea, so let it go.
If you hear about a certain stock or trading opportunity during a family dinner or while having a chat with a friend…
…that stock is hyped!
You’ll know when there’s hype around a stock the moment someone who doesn’t trade for a living starts spouting emotionally fueled statements such as:
“You can become rich by just buying this one stock!!”
Not only that, most times people are just repeating something they heard from someone else or from the news, which means it’s too late to get in (even if there’s actually solid reasons behind the move).
You’ve heard wonders about this one stock that’s going to be a “revolutionary technology” in 5 years, so if you buy now, you’ll be rich by then.
These are harder to fight.
You’ve seen how companies like Amazon, Apple, and many others have gone from a few dollars to hundreds.
And there will be others that do the same.
But trying to catch the one that does, at the exact right time… is unlikely to say the least.
Plus, have in mind that in order to cash out big you’ll need to invest a lot of money and wait a lot of years, and it may not even happen!
Quite some risk if you ask me…
Possibly the one that we traders have to tango with more often than the others…
And in my opinion, the hardest one to tame.
When you lose money on a trade it always feels awful.
It’s easy to get riled up and try to win your money back as quickly as possible as a way to take revenge on the market.
But this makes you no different from a gambler at a casino.
There will be plenty more opportunities ahead, so take your lesson and look on to the next one.
So… do you know the one thing all these have in common?
They all stem from emotion…
And trading emotionally always leads to disaster!
That’s why effective trading is based on logic.
When you just react to a trade without any plan or process in mind, your trade will be overtaken by emotions.
Now there are 6 distinct components a solid trading game plan requires.
Here they are:
If you are missing any of these components on any or all of your trades, it’s going to be tough to succeed in the long run.
I personally teach how to master each of these components and how to trade based on logic inside Hawkeye Traders.
If that’s something you’re interested in…
The other day I heard a popular expression on TV that got me thinking.
I’m sure you’ve heard it a thousand times…
Here it is:
“We’ll cross that bridge when we get to it.”
It’s funny how it relates to trading.
This is a mistake I actually used to make A LOT during my early trading career.
You see, I had a bit of a problem with timing my exits…
More times than I’d like to admit, I’d hold my winners in the hopes that price would keep going up so I’d make more money.
But I’d hold them so long that they would turn into losers.
So when it comes to trading, “crossing the bridge when you get to it” is not the best strategy.
Rather, you want to try and “cross the bridge BEFORE you get to it.”
What does that mean?
Secure your wins along the way!
It’s ok to hold it a bit longer and see how price develops (if Hawkeye indicators tell you it is likely to keep climbing).
But make sure to sell into strength so you mitigate your risk!
Of course, talking about gains reminds me of another expression that can be related to trading…
Now this is a funny one!
“No pain, no gain.”
I mean, who the hell wants to go through pain to get gains?
Who wants to go through pain at all?
When it comes to trading, pain equals losing money.
And yes, it is very painful!
So pain basically means you’re doing something wrong.
Because if you want monetary gains… losing money is not the way!
It just doesn’t make sense, right?
So this is how I would approach it…
“No pain, more gain!”
Pretty self explanatory, right?
If you’re not making the “gains” you desire, there’s a “pain” in the way.
Maybe it’s this next and last popular expression…
“When they zig, you zag.”
Let me explain why that’s wrong when it comes to learning how to trade.
One mistake I see beginner traders make over and over is going to the market by themselves to try and catch the bottom of a stock that’s tanking – or the ceiling of one that’s spiking.
When you’re at the beginning of the journey, you should take it easy and get accustomed to the market.
If you go “all in” trying to win big from the jump, you’ll burn your account to the ground before you could say “zig-zag.”
You should try to go with the trend and catch the meat of the move.
It’s a lot safer and can yield lucrative results.
Also on this point…
Even though you should have your own personal trading plan, I wouldn’t recommend starting your trading journey by implementing your own “zag.”
Instead, find a mentor that’s already crushing it.
One that you can replicate and trade alongside with.
So when they zig and make money, you also zig (and make money).
This way you’ll win trades while you learn how your mentor picks trades, how he executes them, and how you can do it, too.
Then once you really know what you’re doing and feel confident enough, you can start executing your own trade ideas.
Want to know how I zig?
It finally happened…
After a few intense weeks, the GameStop frenzy seems to be winding down.
To be honest, it feels like this situation has set a new order in the markets.
Things can change quickly nowadays…
But right now, the best thing we can do is learn from what happened and prepare for what’s next.
This is something most traders have probably never given much consideration.
But it’s definitely a factor to consider these days.
Knowing who is trading the same ticker you are matters.
Why?
Because a passionate group of traders can have an impact on price… just like the WallStreetBets boys did on GME.
Which brings us to number 2…
Many traders learned this lesson the hard way with Robinhood.
Choosing the right broker is now more important than ever.
So what kind of broker should you pick?
I’d recommend one that caters to active traders.
These offer more control, access to better short inventory, better platforms, and a host of other benefits that can make or break traders during periods of market volatility.
Speaking of volatility…
I think the real lesson from this situation is:
Anything can happen, so keep your eyes and ears wide open!
There are forces clashing behind the scenes every day that we don’t know about.
New regulations can be passed at any moment changing the way the game is played.
So stay alert and be wary of where you put your money.
Cold reality spoiler:
The market doesn’t care what you think.
A stock is never up or down “too much.”
Remember that the market is not completely “rational” and that price moves don’t always align with fundamental analysis.
Don’t fight the trend — instead, make sure you’re on the right side of it.
This lesson is sponsored by the billion-dollar Wall Street hedge funds.
Cutting losses quickly is one of the most fundamental lessons traders learn early on.
Never risk so much that it can put you out of the game if you lose.
In the same way, you should strive to…
Buying and holding is not a strategy that works on volatile momentum stocks.
That’s something that many Reddit traders didn’t think about (or just didn’t know).
The reality is most of them could have sold their shares and made huge gains while the price was upward of $400.
But they decided to hold in order to keep raising the price.
Clearly, they didn’t consider number 7 on our list…
Parabolic moves are subject to the laws of gravity – what goes up must come down.
Huge moves (especially those with no fundamental basis, a la GameStop) are unsustainable.
Hype inevitably dies down and the market moves on to the next big thing. We see this in every market.
So remember to cash in along the way!
Hopefully, these quick tips can help you survive and thrive in whatever market conditions are coming our way.
Very rarely do we get so many lessons from just one trade.
But GameStop was a true phenomenon that will be talked about and studied for years.
I don’t know when something similar will happen again…
But I do know where you can find more lessons to improve your trading skills.
If you click the link above you’ll go to a free masterclass where I teach you how I became a full-time trader…
Including the exact tools and methodology I use…
And how you can double your account in 36 days trading low-risk setups.
Check out the free training, and have a great weekend!
I’ve been trading for 10-plus years.
At this point, I know what it takes to go from day-one beginner to successful trader.
Now that I have the opportunity to help others on their journey from beginner to pro…
I’ve realized there are 6 main problems that trip most traders up.
They’re the underlying reasons why most traders fail to reach their goals.
The good news, though, is that they are all 100% treatable…
And today, I’m going to break them down so you can avoid them for good.
Here we go:
Traders like to trade.
But in order to find the best opportunities in the market, some research and analysis needs to be done.
It’s also important to know when to stay on the sidelines, and when it’s time to enter.
This is closely tied with the next problem…
This problem is a direct result of the above issue.
You should only enter the best setups out there and avoid taking on low-probability opportunities just because there isn’t anything better in the market.
Be patient and disciplined enough to only trade your ideal setups… when they develop as you expect… and when they follow your entry and exit plan.
It all comes down to not lacking on the next point…
The advantages of a well-tested strategy cannot be overemphasized.
A trader that doesn’t follow a trading plan, strategy, or system is not a trader… but a gambler.
That’s how important it is!
A trading strategy is the roadmap that leads every move you make in the market.
From finding the best opportunities, to executing the trade, to booking the profits.
Yet having a strategy alone is not enough…
The market is never static.
The rules of the game can change at any moment.
There’s always something going on… new laws, new deals, last minute events, etc.
Panic triggers irrationality, and irrationality changes the rules of the game.
Failing or taking too long to adapt to market changes typically results in lost money or money left on the table.
Successful traders are aware of market changes, and they modify their strategies in order to keep winning.
Yet in order to succeed at this, you need to keep your mindset in check as well.
That’s what the next two problems are all about…
When it comes to trading, everybody wants to be right, every time.
I mean, that’s what our success comes down to, right?
But sometimes it’s better to just admit that the trade didn’t go our way…
… take a small loss and learn from it.
No trader wins every single time.
But the ones that win the most are those that learn from their mistakes.
Remember:
There will ALWAYS be another trade.
So take your lesson and move on to the next one.
Just make sure you don’t get caught by the last problem…
When it comes to trading, there are two types of fear to be aware of…
Sometimes past failures can leave us hesitant to make an entry when the conditions are favorable. This is called paralysis by fear (the first type of fear), and it usually results in traders getting on the bus late.
The second type of fear is known as FOMO (fear of missing out). This one typically results in traders getting on a bus they shouldn’t be on in the first place.
Sometimes, the markets are wild and we see “once in a lifetime” opportunities.
Just like with GameStop…
But most times, the upside opportunity on these trades is gone by the time you find out about it. Plus, it’s irresponsible to get into a trade without doing your due diligence.
If you take on a trade because you don’t want to miss out, you’re trading for the wrong reasons…
Anyway…
Success in any field comes down to repeatedly doing what works and avoiding what doesn’t work.
The above six problems act as obstacles to trading success.
Once I learned how to avoid them, my trading became more predictable and profitable…
One of the questions I get asked the most is:
“Which trading strategy will make me more money?”
Of course, there’s more than one way to skin a cat…
And more than one way to be profitable in the markets.
With that said…
There’s one particular strategy that I recommend you learn about today…
So that you can AVOID it at all costs.
It’s called the YOLO strategy…
… And it’s a bulletproof method for burning your account to the ground as fast as humanly possible.
As the name indicates (YOLO = You Only Live Once), it’s a method based on the “all or nothing” philosophy…
And it’s the strategy that the speculators in the WallStreetBets subforum employ.
By the way, did you know their Reddit subforum grew from 1.7 million subscribers to 7.6 in the span of a week? That’s insane!
I guess that’s what happens when you start an all-out war between Wall Street and retail traders, which may just lead to a revolution that will change how the markets and the financial establishment work forever.
Cheers to them for that – love it!
Anyway, what these guys do is they find a stock they like, close their eyes, and dump their ENTIRE trading account into it.
There are great rewards, so if it goes well they make good money.
But there’s also a huge risk, so if it goes bad… they lose EVERYTHING.
You’ve probably heard about their massive short squeeze… the GameStop frenzy?
Some of them did win a lot of money, and fair play to them. They deserve it.
But others will have to pay the piper when the price stabilizes and goes back to normal.
These guys are like a legion of Spartan warriors happy to die in the heat of the battle.
They are not afraid of losing all their money, which automatically disqualifies them from being traders.
In fact, I was watching an interview with the founder of WallStreetBets, and he said point-blank:
“They are treating the market like a casino. These guys are not traders or investors – they’re gamblers.”
I think that’s clear. Traders who know what they are doing don’t need to rely on gambling.
The spike was massive though, and temptation did kick in…
I mean, their stock was up 1,700% at a certain point.
Who doesn’t want to catch a move like that? I’m no surfer, but that’s a wave I’d like to ride!
But I didn’t…
I wasn’t going to risk my hard-earned money on some stock pumped by a random forum.
Any dip could mean the run was over, and I’d be stuck holding the bag.
That’s not how we do things at Hawkeye.
We are all about trading smartly, and with a plan, so that you can make money consistently and reliably.
So that you actually have a shot at securing your future…
Instead of gambling your hard-earned money away on a YOLO trade.
That’s all for now.
I don’t know how this situation will unravel, but I’ll keep you posted.
Now if you want to learn how countless traders are generating predictable streams of income using a proven, step-by-step system, click the link below to watch an on-demand training…
Where I’ll show you how it’s done in 3 simple steps.
Unless you’ve been living under a rock, you’ve likely heard about GameStop’s frenzy.
If you haven’t, don’t worry — I’ll bring you up to speed.
And if you have been following this crazy drama…
I’ll tell you how you could have capitalized on this opportunity…
And how to do it in the future when a similar setup appears.
After hitting an all-time low of $2.80 in April of 2020…
GameStop (ticker symbol GME) opened today at $301…
And it’s currently at $347 at the time of this writing.
So how did this happen?
Some context first:
GME had over 138% of its float shares sold short, making it the most shorted stock in the US market.
Let’s break that down further…
Float shares are the number of shares available for trading of a particular stock.
So, well over 100% of these shares are sold short.
This basically means Wall Street is bearish on the stock.
They expect (and want) GME’s value to fall.
What’s more, Citron Research came out with a report calling for the stock to be shorted, and even saying they took a short position themselves.
Normally, the stock would tank and go their way.
But the conditions were more than favorable for a heavy short squeeze…
Now here’s where sh** hit the fan:
A bunch of youngsters in a Reddit subforum called “wallstreetbets” – which is followed now by 3.4 million people (or as they call themselves, “degenerates”) – were ready to take advantage of the situation.
These guys mostly do what they call “YOLO” trading.
[Definition of YOLO: You Only Live Once…
Meaning they put all the money in their account into one trade or call option and either have huge gains or devastating losses.]
So these “degenerates” took a look at what was going on around GameStop’s stock and decided to become bear slayers.
They coordinated a guerrilla-like strike against short sellers of the GME ticker.
Thousands of these bear slayers started pouring their entire trading capital into the stock.
By buying heavily shorted stocks en masse, the stock’s price skyrocketed.
Short-sellers, in turn, were suffering staggering losses.
Eventually, the hedge funds were squeezed out of their position, forced to take unprecedented MASSIVE losses.
While (for a nice change) many retail traders have managed to bring home some thick stacks of trading profits.
Kinda funny if you ask me…
To think that a group of people in a glorified forum just cost big Wall Street billions in losses.
Not only funny but crazy and unbelievable, a story that the world of trading will never forget…
And it’s a story that carries a big lesson with it:
Where there’s volume, there’s going to be a big move.
That’s the sheer power of Volume.
And the best way to harness the power of volume is taught in this special on-demand training:
>>> Click here to check it out.
This is not the same stock market it was 10 years ago.
Heck, it’s not the same market as 1 year ago.
Things like this will continue to happen.
And if you want to take advantage of them, you need to be ready.
Check out the free training right here and be prepared to strike the next time the iron is blazing hot!
I’m going to level with you…
It wasn’t long into my trading journey before I realized I wasn’t a particularly brilliant trader.
Truth be told, I was more of an “average Joe.”
At times, it felt like big gains were an impossible fantasy.
After a while, though, I realized that most “average” people who achieve unaverage results in any field have one thing in common:
A mastery of the basics.
There’s no need to overcomplicate things.
You CAN achieve your trading goals if you master certain foundational elements…
Even if you’re brand new to trading…
Even if you’re not good at math or spotting patterns…
And even if you don’t have a large account.
Now I believe there are four fundamentals that every trader needs to have in place.
If it wasn’t for these four elements, I wouldn’t be where I am today — over a million in total trade profits over the last four years alone.
So what are those foundational elements you should focus on?
This one is a non-negotiable.
Technical analysis is the compass that will guide you through the markets.
It will help you understand price trends and patterns on charts, identify trading opportunities and make overall sense of the trades you enter.
If technical analysis is the compass that will help you navigate the markets…
Understanding that volume precedes price action, and that price action is reactive to supply and demand are two concepts that will power your ship through the seas and allow you to win trades predictably.
We have a free ebook that explains these two concepts — it’s an easy read and I highly recommend it.
>>> You can get it by right here.
That said, you can have all the knowledge in the world…
But if you don’t have this next element, you’re doomed…
Trading without having a plan is like getting in an Uber with no destination — it just doesn’t work.
A trading plan is unique to you as a trader. No two traders will have the same details in their plan.
A trading plan is more than just a business plan…
It’s composed of who you are as a person, your mission in life, the intricate details of executing actual trades, and much more.
But the most difficult part is this next and last element…
The difference between a profitable trader and a non-profitable trader is DISCIPLINE and CONSISTENCY.
Without these character traits, it’s unlikely anyone makes it in this business.
Because if you can’t stick to your plan…
Then it’s as if you don’t have a trading plan at all.
And remember what happens if you don’t have a trading plan?
YOU’RE DOOMED.
Listen guys, there’s no magic secret to what I do. My system is based on the four elements mentioned above…
Because when I joined Hawkeye and they taught me how to harness the power of volume…
How technical analysis works…
And how to come up with — and stick to — a trading plan…
My life and my finances were completely transformed.
I was able to erase all my debt and give my family the life they deserve.
Heck, I made more than $430K in trading profits last year alone.
If you told me I’d make that kind of money when I was starting out I would’ve laughed in your face…
But if I can do it by simply mastering these four elements, then anyone can.
Now here’s some good news:
Here at Hawkeye, we love helping traders create their own trading plans.
And what’s more?
Our Hawkeye Mastery Academy contains an entire curriculum where we teach you everything you need to know to succeed in the market:
But as I said above, sometimes sticking to your trading plan can be a challenge.
That’s why we created our own private Inner Circle. It’s an exclusive group where Hawkeye traders can interact with other members, ask questions to the group and learn together with their peers.
Here at Hawkeye, nobody trades alone.
So if you’d like me and the Hawkeye team to help you master these four fundamental elements…
Every trader wants to know how to make more money.
As it should be.
But if you can’t manage money properly…
Well, it won’t really matter how much you make from your trading.
Recently, I saw a book about money management.
It’s called “The Richest Man In Babylon.”
It was written back in 1926 by George S. Clason, and it’s (ahem) right on the money.
It’s mostly about a poor man asking a rich man about how he got wealthy.
There are some lessons the rich man talks about that are especially useful to traders…
This is the book’s first and most important rule…
“Ten percent of everything you earn is yours to keep.”
In other words, pay yourself first.
Not the electric bill.
Or the IRS.
Or your ego with a new car.
Or anyone else.
I’m not saying you don’t pay your taxes or bills. But if you want to be financially independent, you need to pay yourself first.
That means the first 10% (more is better of course) is yours to save and invest with, so it can bring you back many more dollars without you having to manually work for it.
Money’s tight right now? Keep reading…
Said simply… don’t spend more than you make.
It may be hard in the beginning.
And you may have to trim some fat from your finances, such as overpriced coffees or dining out regularly, at least for a little while.
In the end, it’s about knowing the difference between a desire and an expense.
But more importantly, resist the urge to spend more as you start earning more…
Because the more money you can put aside, the more powerful this next lesson will be…
This is our bread and butter.
We talk about it day in and day out here at Hawkeye.
So I’ll skip it for today…
On to the next one:
The more you learn, the more you’ll earn…
Knowledge is power…
Education is the passport to the future…
We’ve heard them all before.
But this is what the rich man says in the book:
“If you want to become good at anything…
…seek advice from people who are experts in their particular field, people who have actually experienced what you’re attempting.”
You’ll save time, money, and headaches.
Couldn’t agree more.
And this is especially easy in the times we live in…
… the era of information.
Knowledge is at our fingertips.
And in this case, it’s just one click away…
>>> Click here to learn one of the easiest and safest ways to become a successful trader!
Two different traders with the same budget and strategy trade the same ticker…
Yet one of them will get a positive ROI while the other one loses money.
I see this all the time!
The reason why lies inside your head.
You see, trading psychology is one of the biggest determining factors of whether a trader will succeed or fail.
Here’s the thing: trading is driven by two primary emotions…
FEAR and GREED.
Every successful trader has overcome periods of fear and greed in their career.
… Periods where you let your losers run…
And cut your winners short.
And every failed trader hasn’t been able to escape the grips of these two emotions.
When I started diving into the world of trading, I thought it was strictly a matter of numbers.
I would fry my brain studying every night…
Looking at financial statements…
Analyzing charts…
Studying new strategies…
But when morning came and I sat in front of the computer to implement what I had learned…
I’d still lose more trades than the Jets have lost games in the NFL.
I know, I know… low blow to Jets fans.
But I grew up a Jets fan, so trust me, I feel your pain.
Anyway, the point is that I knew something was wrong.
Every trade I got into felt like jumping from a cliff…
Not knowing what was waiting for me at the bottom.
What was happening is that, even though I was looking at the right numbers…
I wasn’t looking at ALL the right numbers.
There was a missing piece to my trading puzzle:
VOLUME.
Thankful, I found Nigel and Randy, who taught me how to harness the power of volume.
I got rid of the fear and started having some success.
I learned that anything that falls also has the ability to rise.
Unfortunately, I rose too high for my own good on some occasions.
I got greedy on winning trades.
By identifying when volume was pushing the price, I was able to spot the precise moment to go in and if I should go long or short.
But I didn’t know when to get out
I wanted ONE trade to solve ALL my problems.
And let me tell you, greed is more dangerous than fear.
Fear can protect you.
Greed blinds you to potential threats.
But why am I telling you all this?
Because I’ve seen way too many people get burned by trading emotionally.
Trading is not all about numbers.
You need a strong mindset to make it in the trading world.
You may have the greatest plan ever, but if you don’t stick to it then what’s the point?
That’s what I love about the Hawkeye tools.
It’s like having an expert trading advisor sitting next to you…
…telling you if the opportunity is worth it, when to get in, when to get out, when to go bullish, when to go bearish.
This way you can avoid trading with fear and greed.
Hear me out. This isn’t what it looks like.
This isn’t like the gym membership specials, vitamin supplement discounts, and every other New Year’s resolution email you’ve gotten this week.
Think about how we’ve survived COVID-19 so far.
We learned very early on that it’s too overwhelming to think about what might happen in the next several years with this pandemic.
We’ve had to take this entire situation day by day.
Only after breaking it up into smaller chunks of time did quarantine, boredom, fear, and all other things 2020 become more manageable.
Your 2021 resolutions are the same way.
If you have 10 resolutions to achieve over the next 365 days, the odds are not in your favor.
That’s not to discourage you, nor a knock against you.
It applies to all of us.
So often, we fail to achieve all of our resolutions, because we start off with too many.
Don’t get me wrong — they’re all great goals to have.
But there’s only so many hours in a day.
This isn’t a simple to-do list. These are some pretty big lifestyle changes. Especially if you haven’t seen a gym in 5 years, or you’ve been a big spender your entire life, or you have kids that you’re now teaching at home because of the pandemic.
If you get overwhelmed, you get stressed, which causes you to become discouraged and unfocused.
Next thing you know, it’s April and you’re miserable because you haven’t been able to stick to your laundry list of resolutions.
You have to approach these kinds of lifestyle changes the same way you’d eat an elephant: one bite at a time.
Break it up into small increments. Focus on two of your goals for the first six months of 2021.
Once you’ve dropped 20 pounds, you’ll feel and look better. Once you’ve gotten better at eating at home instead of spending $150 on Uber Eats every week, you’ll see your bank account beginning to grow.
You can then use those savings to start building your investment capital.
These quick wins will recharge you at the midway point of the year, making your other goals much more attainable for the last half of the year.
Trading is the same way. I’ve seen so many traders get overwhelmed and stressed out because of the volatility of the market… especially this year.
If you’re hyper focused on every single single penny as your valuations fluctuate daily, you’ll drive yourself crazy. You’ll never put down your phone or leave your trading desk, and that pattern will overwhelm and burn you out with trading quickly.
One of my goals when I started my trading journey was to book maximum profits while spending minimal time chained to my trading desk.
I’m proud to say that I am achieving that goal, and I want to help you do the same.
Here at Hawkeye, my goal is getting my members quick wins with a simple but profitable trading strategy that leaves you more time for the things that really matter.
Things like improving your health, spending more time with your family, or your hobbies, which may include reading a book each week.
So, for 2021, make the choice to do something different for yourself and your family.
You can start today.
Happy holidays, and I wish you the best in 2021!
Roughly 60 million Americans suffer from insomnia each year.
In the search for a solution to their sleeping problem, many insomniacs get stuck in a never-ending cycle…
Jumping from magic pill, to ancient Chinese meditations, to new science based gadgets and back to the newest magic pill.
What many will never realize is that this constant cycle actually makes their insomnia worse.
… Because when one method doesn’t deliver the desired result, they jump to the next one, and so on.
But here’s the thing…
None of these methods actually work.
Don’t get me wrong — a solution to insomnia does exist…
But the people on top of the food chain — the medical institutions, Big Pharma and gadget manufacturers — don’t support it.
Why?
Simple…
Because it doesn’t make them any money.
Well guess what?
The same thing happens in trading.
I know it happened to me…
The constant search for a way to become a profitable trader not only cost me a LOT of time and money…
Even worse, it took a serious mental and emotional toll.
(Not so) Funny thing is, this quest actually led me to many sleepless nights, just like an insomniac.
I would go to bed frustrated and filled with internal conflict…
Wondering why nothing I was doing was working…
Scared to death about the possibility of not being able to provide for my family…
And scared of being a failure.
It became an obsessive quest to find the one strategy or indicator that would turn me into a successful trader.
But in that quest, I ended up with a screen full of different tools and software packages that didn’t work and only led to more confusion.
Little did I know that trading doesn’t have to be that complex…
IF you use the right method.
But similar to insomnia, the big players at the top such as investment banks, major funds and financial institutions don’t want you to know about that method.
They’d rather promote useless indicators and worthless strategies so they can take advantage of novice traders and have more liquidity.
If you’re on this particular quest yourself, I want you to know that I did find a method that works for experienced and beginner traders alike.
It cost me a lot of money, time and sleepless nights…
And because it helped a regular guy like myself succeed in a world where the big players were pushing me down…
I decided I would make it my mission to help other people succeed as well.
And the best part?
By using this method, you can actually leverage the same advantage those “big players” have over most retail traders.
>>> Click here to learn the details… and stop the insomnia trading cycle!
Everything in the world is subject to the 80/20 Principle.
The 80/20 Principle is something I’m really passionate about, and many people use it to achieve success in multiple areas of their life.
Vilfredo Pareto, an Italian economist, discovered this principle in the early 1900s. He realized that 80% of the wealth in England was held by 20% of the population.
But it was recently made much more popular by author Richard Koch.
He realized that the 80/20 principle didn’t just apply to wealth… it applied to everything.
20% of freeways get 80% of the traffic.
20% of customers make 80% of the purchases.
20% of tennis players win 80% of the competitions…
And as you probably know, 99% of the wealth in America is held by 1% of the population.
When Koch stumbled upon this discovery, he began to apply the 80/20 principle to his life and work.
It’s the reason he was able to go from working 60 hours a week as a management consultant making six figures…
…to being worth $400 million while working just one hour per day.
His approach is all about “less is more”…
And this same philosophy can be applied to your trading.
I know that sounds extreme and maybe even hard to believe. But it’s true.
And thankfully, Koch teaches his 80/20 ways in his book “The 80/20 Principle: The Secret To Achieving More With Less.”
That said, you don’t need to go read the book…
Because I’m going to explain his magic formula for achieving more with less right here.
You see, there’s a 3-step system you can use to achieve any goal.
Our goal of course, is winning as many trades as possible.
Step 1: The 80/20 Destination – where you want to be.
Step 2: The 80/20 Route – the easiest way to the destination.
Step 3: The 80/20 Actions – the first key steps.
Follow the steps in this simple order and you’ll achieve any goal, even exceed your goal… while doing less actual “work”, or in our case, less screen time.
Let’s apply this model to trading.
If you want to know the 3 steps I follow that account for 80% of my results (in other words… the 80/20 solution to trading), which you can easily follow as well…
>>> Click here to watch a free training session where I uncover it all for you step-by-step.
I hope you find the 80/20 path to be an eye-opening way of looking at things. It’s amazing how much it can help you achieve your goals in anything in life.
Everybody wants to win fast.
Most people starting out trading have visions of overnight success.
And if that’s you…
I can’t blame you. I totally get it.
Why work your butt off for 10-plus years like I did when you can do it in a few weeks?
Today I’ll tell you about what I truly believe to be the absolute quickest way to WIN…
In trading, in business, in relationships…
And pretty much everything else in life.
I genuinely believe this is the fastest way to success.
But first, let me tell you how I discovered it…
When I was starting out I didn’t know much about trading.
I didn’t have the training and coaching that Hawkeye traders enjoy to get over the learning curve.
Even worse, I was bleeding my bank account dry…
Losing money to the market and to self-proclaimed trading gurus who would make their living selling information products instead of actually trading.
One day, I stumbled upon Hawkeye Traders while searching for indicators on Google (crazy, right?)
They had an intensive in-person seminar coming up in West Palm Beach, Florida.
Now here’s the thing:
I knew I needed to get around people who understood how the market works…
Who had more experience than me…
Who were pulling bigger trades…
And living the lifestyle I desired.
However, my bank account was as dry as the Sahara desert, and I was on the brink of throwing in the towel.
Because not only did I have to invest in the seminar…
But I also had to pay for the flight to Florida, the hotel, the food, the car fair, etc.
I just couldn’t afford to lose more money at that point.
If the seminar didn’t become a turning point (and this is embarrassing to admit now), it was going to be the end of my trading journey.
Thankfully, it was exactly the turning point I needed.
I got to be in the same room with highly experienced people like Nigel and Randy who shared with me what I needed to win.
I learned how they picked trades, what indicators to follow, how the market moves…
And everything finally clicked.
This one decision made me the trader I am today.
I decided to invest in myself… and boy, did I turn out to be a winner!
Now, I’m not saying everyone should put themselves in this situation.
All I’m saying is that learning from people who are crushing it at what YOU want to do is the greatest shortcut there is.
If you don’t have the money to invest at the moment… you can still dedicate some time to learning how the markets work.
This newsletter and our free trainings are a perfect example of resources you can use to start gaining momentum.
They have helped countless traders increase their profits significantly.
If I was starting from the beginning again, I’d start here…
By watching this completely free, in-depth training video that will show you three simple steps to trading full time…
And living life on your own terms.
Just click here to watch it right now!
Last time, we talked about how volume trading with Hawkeye can be leveraged when trading in the Forex markets.
Today we’re going to continue our Back to Basics series as we learn how to read market charts and trends, by reviewing the ONLY six ways that the market can move.
Similar to how learning your ABCs is the first step to reading novels, once you understand the structure of how the market moves, then you can “read” and track trends.
Every other concept used in Hawkeye then builds from there.
Before we get to the six market moves, we’ll identify isolated lows and isolated highs.
Isolated lows occur when there’s a lower low than both the previous bar and the next bar (Point A) and a lower high than both the previous bar and the next bar (Point A).
Phantom isolated lows occur when only the low condition Point A is met. At this point, there’s no need to see where the high is.
Isolated highs occur when there’s a higher high than both the previous bar and the next bar (Point A) and a higher low than both the previous bar and the next bar (Point A).
Phantom isolated highs occur when only the high condition Point A is met. There’s no need to see where the low is for these guys.
Now, let’s get into our market moves.
Trend runs are established (Point A) when the close is above the dot, the dot is rising and the close is greater than the open and in the top 40% of range.
At Point B the dot is equidistant from the previous point and continues to be equidistant.
A trend pause is exactly the same as a trend run. However, when a close is under the dot and open (Point A) but the dot is still rising, it denotes a pause. At that point, you’re looking to see resumption of the trend run (close being greater than the dot ). This should occur within three to five time frames.
Congestion entrances happen when the close is under the dot and the dot is flatish to the previous dot. This is the congestion entrance (Point B). You then look for the last isolated/phantom high (Point A).
Once the congestion entrance has been defined, you’re then waiting for the first isolated phantom low to form (Point B). This has to be within 5 bars.
Next, extend a dotted line from the isolated/phantom high (Point A) and the isolated/phantom low (Point B), you then have your congestion high and low.
As the chart continues, you’ll see new lower isolated highs (not phantoms) and isolated lows developing. You then move your congestion parameters to these newly formed pivots (Point C and Point D). It should be noted that you can only contract in congestion.
If after congestion entry, there are no isolated / phantom low formed within 5 bars, you are then in a trend run down and should trade it according to the rules.
Once you’ve got defined congestion, you’re waiting for a close either above the last isolated high (Point C) or below the last isolated low (Point D).
At Point E, the close is greater than at Point C and a congestion exit to the upside has commenced. The bar close must be greater than the open and in the top 40% of the range of the bar (approximately).
In this example at Point E, the dot has also closed above the dotted line at Point C. This is a stronger indication of congestion exit but a close also greater than Point C is sufficient.
Our final market move to cover today is…
At Point B, the bar is wide and the dot is less than the dot 3 bars previously and the close is less than the dot.
And there you have it, all of the possible ways for the market to move, Now that you understand that, we’ll build on that foundation with more complicated concepts next time.
But if you already have a grasp on the basics and you’re ready to get your hands dirty making real trades and real money…
As we’ve previously discussed, volume is the ultimate indicator.
It increases exponentially our potential for trading success, our confidence, and our analysis of risk on each and every trade.
Without it, trading is a lottery. With it, you potentially have the winning ticket.
Just as with every other indicator, the Volume tool works across all the time frames from intraday time and tick based charts for scalping strategies, to longer term daily and weekly charts for trend traders.
The Hawkeye Volume Indicator also adapts to work in all markets — from Forex to index futures, from stocks and ETFs to options.
Today in our Back to Basics series with Hawkeye, we’re going to talk volume trading with Forex.
While volume trading with Forex presents us with some unique challenges, these mountains quickly become mole hills when you’ve got Hawkeye in your corner.
Unfortunately, Forex volume cannot be measured as precisely as it is for equities, where every share traded equates to one on the volume bar.
So, selling 200 shares means 200 in selling volume. In stocks, the number of shares traded is managed and reported by the central exchanges, such as the New York Stock Exchange.
There are many exchanges around the world that keep track of every share bought and sold, so it is relatively easy to get a precise measure of share volumes being traded on a minute by minute basis. The same is true in the futures markets.
However, in the spot Forex market, there is no central exchange. So we cannot count how many contracts or the size of contracts traded at any given time.
Therefore, to count volume in Forex, it is the number of ticks, or changes in price, which is used, and from which we derive our volume.
One tick measures one price change. As a tick moves up and down volume rises. When volume rises, it signals market activity with participants actively buying and selling currencies. So, from this analysis we can get a relative measure of volume using tick data — but how do we know if it’s buying or selling volume?
Hey, we fixed that for you…
This is where Hawkeye is unique. It uses complicated mathematical algorithms to establish (with an 80%+ accuracy) whether the tick volume is buying or selling volume.
So now, for the first time, Forex traders have the most important of all indicators available to them: VOLUME.
The combination of the volume, volume spread analysis and trend indicators in Hawkeye make it the most accurate software tool available for Forex traders.
We can trade with confidence, knowing that we are trading with the trend and the money flow, rather than against it.
The Hawkeye Volume indicator gives us our own unique radar system to safely navigate the Forex markets.
Is it any wonder that professional Forex traders use Hawkeye?
Click here now to learn more about Hawkeye and become the precise, profitable Forex trader you deserve to be today!
If you’ve been following along, we recently started our discussion of volume trading basics.
Today, we’re going to continue that discussion with volume and trends.
In the Hawkeye software, volume and trend is where the rubber meets the road.
Without the combination of these two variables, a trader doesn’t know the best times to enter the trade or exit for optimal profits.
When you have this information at your fingertips, you can see the precise moments when the market movers and institutional funds are moving into a trade, as well as when they take their money and run.
This makes your job as a trader…
Much Easier
Much More Profitable and…
Much Less Risky
Otherwise, like most other traders without Hawkeye in their toolbelt, you’ll be guessing…
To the detriment of your trade account balance and profit margin.
Volume helps us to determine the health of a trend.
An uptrend is strong and healthy if volume increases as price moves with the trend, and decreases when the market moves into a counter trend.
These are called correction periods or ‘pull backs.’
When prices are rising and volume is decreasing, it tells traders that a trend is unlikely to continue. Prices may still attempt to rise at a slower pace, and once sellers take control (which is shown by an increase in volume on a down bar), prices will fall.
A downtrend is strong and healthy if volume increases as prices move lower and decreases when the price begins to re-trace (pull back) upwards. When a market is falling and volume is decreasing, the downtrend is unlikely to continue. Prices will either continue to decrease, but at a slower pace or stop falling and start to rise.
When volume spikes at certain price levels, professional traders know that this is a clear signal of increased interest being shown by traders at that price level. If there’s significant interest, as revealed by the volume bar, it means the level is an important one. This simple observation of volume allows traders to identify important support and resistance levels which are likely to play a significant role in the future.
Where volume spikes are extreme, larger than any historical spikes, and generally called a volume climax, traders should look for reversal clues from the price itself. Single volume spikes alone can often bring the market to an abrupt halt. These extreme volume spikes often occur during fundamental economic announcements which occur daily.
As we’ve seen with recent events such as the pandemic, the Presidential election and the announcement of multiple COVID-19 vaccines, news cycles can dramatically affect volume, and pricing as well. News can cause a spike in volume for a single day then disappear again.
Reversals, however, happen not over a single day but over a series of days. If higher than average volume stays in the market for several days a huge volume spike, a volume climax, will often signal a point of market reversal.
Volume can help to validate all kinds of breakouts. When the market is consolidating on low volume, an increase in volume can signify that a breakout is due. A breakout occurring on rising volume is a valid breakout, while a breakout with low volume is more likely to be false.
Why? Simply because the lack of volume signals a lack of interest from the market and traders.
Trend lines and other breakouts are validated or voided in exactly the same way. So, as you can see, volume is without question the most important and powerful indicator of all. It’s remarkably accurate at predicting future moves. When you start to incorporate Volume Price Analysis in association with a volume indicator, you then have an amazing trading tool at your disposal.
That tool is Hawkeye…
We’ve said it time and time again:
When it comes to trading, volume is the only true, leading indicator.
For years, professional traders have relied on volume as their trusted source for understanding market accumulation prior to upward momentum…
And distribution prior to downward momentum.
Hawkeye’s Volume Indicator gives you the edge with the ability to see professional buying, selling and periods of no demand.
It’s the heart of my Hawkeye trading method and will help you take your trades to the next level.
Trading using volume is preferential for a number of reasons.
Hawkeye takes market volume and compares it to other factors, such as each bar’s open and close and the range of a specific number of preceding volume levels.
These variables, together with the average true range of the market price, make up one of the world’s only Volume Price Analysis indicators…
The Hawkeye Volume indicator.
The brain behind Hawkeye is a complex algorithm that clocks more than 300 calculations per volume bar…
Instantly communicating to you whether buying or selling volume is currently dominating the market.
Simply put, other trading software will only tell you the volume… leaving you to guess the rest.
Hawkeye actually tells you whether that volume corresponds to buying or selling pressure.
Buying volume = a Green Bar
Selling volume = a Red Bar
Periods of no market bias = a White Bar
The result is one of the most accurate volume prediction indicators on the market today.
Taking account of the opening and closing bar and tracking the preceding volume bars means that Hawkeye can sense the market mood…
And when combined with the other exclusive Hawkeye indicators, it can give you targeted trade entry and exit points.
What does this mean for you as a trader?
Precision trades to optimize your risk capital at the push of a button.
Here’s what a formerly stressed-out traveling salesman had to say after firing his boss and changing his life using the power of Hawkeye and V-Swarm:
Who doesn’t like printing money? *crickets*
That covers Part 1 of our overview of volume.
Stay tuned for Part 2 where we’ll take a look at volume and trends…
But if you can’t stand the thought of going another day without making money on better trades…
You may have noticed that lately, I’ve been talking a lot about the Hawkeye “Rules of the Road.”
That’s because I’ve been getting a lot of questions about the foundations of this powerful software and how it tracks the market to provide savvy investors with consistent, sizable returns.
Even the best, most sophisticated tool in the world is useless if you have no idea how to properly deploy it.
So, we’re going to get back to basics and discuss some of the concepts that are fundamental to using Hawkeye effectively…
Starting with Volume Price Analysis, the foundation of all the Hawkeye Traders tools and indicators.
If you don’t first understand the concepts of price and volume, using Hawkeye effectively will be an uphill battle.
This is for those investors who are new to the market, or those who are experienced, but need a refresher.
Take a look at this:
Credit: The Data Visualization Catalogue
These vertical, colored bars on the chart are called “open/high/low/close” price bars, or OHLC bars.
The tick marks that you see attached to the left and right of the bars illustrate the stock’s price at market opening (left side) and the price at market close (right side).
On a down day, the right side close tick is lower than the left side open tick. On an up day, the right side close tick is higher than the left side open tick, which means that the price closed at a higher valuation than when it opened.
If the closing tick is located on the top part of the green bar, let’s say, in the top 40%, it’s considered a strong bar.
For red bars, the inverse is true. It’s considered a strong bar if the closing tick is in the lower 40% of the part of the bar.
A good way to remember this is “strong bar up” or “strong bar down,” otherwise it’s considered a weak bar.
Again, these are (OHLC) price bars.
They’re different from “candles,” which are a different type of price bar. Let’s take a look at those next.
Credit: Towards Data Science
These are candlestick price bars, or just candles in typical trader parlance.
The candle body represents the range between the open and the close, while the wicks on either end of the candle body represent the highs and lows.
The candles are colored red if the close is below the open. The candles are colored green if the close is above the open.
Although the Hawkeye tools are compatible with both OHLC bars and candlesticks, it’s important to note that the Hawkeye Volume Paintbar should only be used with OHLC bars.
Otherwise, you will inadvertently hide the true open and close of the candle.
Stay tuned for our next discussion, when we’ll explore volume and how it works in conjunction with price to form Volume Price Analysis, the foundation of Hawkeye. Until then…
The 2020 Presidential Election is finally over…mostly. It was a wild, emotional ride, and there were a lot of key takeaways.
Two that stood out to me were how much we’re governed by our emotions as humans…
And how that unpredictable emotional scale translates to market performance in real time.
When investors are uncertain, the market struggles. When investors are optimistic, the market surges.
And when we have an election as emotionally charged as this one has been, those market swings can be all over the place.
Investors and pundits have struggled to anticipate these changes for years, with wildly inconsistent results. The problem is that financial gurus are usually tracking and acting on outdated information.
When this happens, their recommendations are usually a day late and a dollar short — more specifically YOUR dollars.
While no one can predict the emotions of others, we can track it historically and account for it in our future trades. Having access to this valuable information gives you the power to trade with consistent, repeatable profits, while significantly lowering your risk exposure.
How? Through the science and magic of volume trend analysis. Volume trends are the realized expression of human emotion in the market.
Volume is the ONLY leading market indicator which reveals true market intent, BEFORE it happens. All other indicators are lagged, and will tell you what has already happened… which does no favors for your trade account balance.
Only one tool effectively harnesses the power of volume, practically giving you a crystal ball to predict future market shifts…Hawkeye.
Analyzing price and volume to give us market direction and actionable investment intelligence is an extremely difficult process to not only understand, but also execute…
Unless you have the right tools.
Most traders struggle to master this difficult skill, since our emotions are telling us to exit as soon as we have a small profit in any position. With Hawkeye, however, this skill is mastered easily, as we simply follow our simple exit rules, guided by the most powerful indicators available.
Fortunately for you, Hawkeye is a volume company. Our founder and creator of the Hawkeye software, Nigel Hawkes, has studied the equivalent of a Ph.D in Volume Price Analysis, and this was where his own trading journey started.
Hawkeye is your ultimate turnkey solution to predicting market trends early enough to take action. This gives you access to consistently profitable trades…
…all underpinned by the unique Hawkeye algorithms that forecast the market’s intent based on Volume Price Analysis. If the first golden rule of trading success is to keep things simple, then the second golden rule is to trade without an opinion, and to simply trade what we see on our charts.
The Hawkeye calculations are not influenced by human opinion, political ambition, or natural disaster. Hawkeye simply analyzes the price and volume relationship using a combination of standard deviation and price pattern recognition, which is then coupled with the volume price algorithms to deliver the most powerful trading software in the world.
In the coming days and weeks, I’ll be providing a breakdown of the Hawkeye Trading Rules for our top volume indicators. So, keep a close eye on your mailbox, so that you don’t miss this valuable info.
But if the thought of going another day without access to this life changing info is eating you up inside…
Have you ever found yourself behind a slow driver on the highway?
You’re on your way to an important event, like your weekly work staff meeting, that you’re usually late for…
Just when your road rage is about to boil over and you prepare to buzz by them with a few choice words and gestures, you look at the back of the Sunday driver in Tuesday morning rush hour traffic only to see the dreaded bumper sticker…
Caution…Student Driver
With the wind taken out of your sails, your temper cools as you reluctantly realize that you were once a new driver who didn’t know the rules of the road.
Learning the markets is similar.
You step into this completely new world with a different language, different math and no clue where to begin.
Trading isn’t rocket science — unless you’re brand new to it, and then all the charts, graphs and indicators might as well be the blueprints to the International Space Station.
With that in mind, the team here at Hawkeye Traders has put together an outstanding Member’s Training area for you.
Jam packed with literally hundreds of webinars, courses and Mastermind Trainings, our members area will get you up to speed on volume trading in no time at all.
The team and I have put all of our resources and collective trading knowledge in one central location, with the best support, so that you can have access to the same cutting edge trading tools that the pros (at least the successful ones) use to consistently win in the markets.
We take “new to you” concepts like the Hawkeye 3-Step Entry/Exit method and break them down into easy to understand, bite-sized chunks, so that you can get up to cruising speeds to trade like the Wall Street insiders.
Wondering what the heck is a 3-Step Entry/Exit method?
While nothing in the market is failsafe… it’s just about the closest thing we’ve ever found.
It’s a literal step-by-step process to help you identify the highest probability and lowest risk trade entries.
And if you follow the process that we lay out for you in Hawkeye, you could end up like our friend Vauna G.
Vauna was a nurse who started trading in 2018 with no prior trading experience.
In less than 12 months she was able to replace her income and trade full time all with the power of V-swarm.
This invaluable tool can even be used across multiple trading platforms like TradeStation, NinjaTrader and Metatrader 4 (MT4).
A full breakdown of this exclusive, wildly successful volume trading methodology and other priceless trading tools can be found in our Member’s Training Area…
So what are you waiting for? Stop sitting on the sidelines of the market and get in the game by using our winning playbook today!
Click here for a free webclass on how to harness the power of the Hawkeye software and trading methodologies!
In our last trading hardware discussion, we talked about performance specs to optimize your trading desk’s processing power, memory and disk space, to combat trade slippage.
Click here to catch up on that breakdown.
Today, I’ll be sharing my hardware recommendations for the best monitor display and graphics card setup.
Trading from home is the digital equivalent of being in the middle of the trading floor feeding frenzy. Exchanging that much data in real time can crash servers.
Now imagine those traders all trying to smush together into one selfie at the same time…Everyone pushing and shoving to get their face in the frame. It would be a nightmare.
That’s exactly what happens on your monitors when you’re trading from home. Well…almost.
In the selfie scenario, all of the traders get COVID because they weren’t practicing social distancing and then the trading floor has to lock down.
In the monitor scenario, your graphics card seizes up and your computer crashes, because it can’t handle the massive data load of displaying all of your charts and graphs in real time.
Both cases mean that now you can’t trade, which is like throwing cash out of the window.
And that’s only good for the people outside…not you.
So, if you’re not going to take the following advice, I’ll just need your address and the start time of the free cash giveaway and you can stop reading here.
But, if you DON’T like losing cash because of simple hardware issues…
Monitors and Graphics Cards
Most traders can get by with only two monitors. But if you’re trading more than one market, you’ll need more than two monitors. Which means you need to get your hot little hands on a dedicated graphics card.
Just like you need a CPU that can handle the big data surges, you need a graphics card that can keep up with the massive amounts of data coming through the server and loading onto your charts.
At a minimum, your new graphics card should have 4GB to 8GB of on-board memory, in addition to an advanced graphics processor.
This relieves your main CPU of all the graphical requirements needed for the monitors and instead, outsources all that work to the GPU (Graphics Processing Unit).
In other words, your CPU tags in your GPU to do all the heavy lifting for your display, while it focuses on maintaining your trading applications and systems at a steady clip.
Take that, trade slippage!
Some people will simply buy a gaming graphics card, which is typically more than sufficient for our needs as traders. Nvidia graphics cards are my go-to.
When I first started I didn’t have a dedicated graphics card, and my computer would frequently crash during periods of high volatility. An awesome NinjaTrader rep steered me to a dedicated graphics card to fix the problem. Once I got one in place, my computer stopped crashing.
Now, if you’re serious about trading, or you’ve been trading seriously for a while and you know you’re in it for the long haul, I’d ultimately recommend having a computer that is dedicated solely to trading.
The more applications and demands you put on that computer outside of trading, the more processing power, memory and hard disc space you’re taking away from trading functions and allocating elsewhere.
Now that we’ve got the graphics on your trading rig squared away…
Click here to learn more about the Hawkeye system by watching a comprehensive training video!
In the last newsletter, we started talking about the dreaded menace that haunts every trader…slippage.
Click here for a refresher on the concept and great strategies to help you combat slippage today.
Slippage is defined as the difference between the expected price of a trade and the price at which the trade is actually executed.
And slippage is always a possibility with market orders…especially if the stock is volatile.
Now, the novice trader may say, “What’s a few cents here or there?“
But those of us in the know understand that in this game, time is money and if we’re losing both, we’re losing big…
And here…we play to win.
Last time, I gave you some strategies to make your trades more slippage proof.
Today, as promised, we’re going to get down to brass tacks, or more specifically…nuts and bolts.
Things are going to get a little technical, but you’ve got this.
We’re going to talk about your trading hardware and optimizing it against slippage.
If strategy is the brains of your trading operation, your trading rig is the muscle…
All the best strategies in the world are useless if you can’t get your trades through consistently because of technical issues.
If you’ve ever seen the trading floor on the stock exchange, you know things can get crazy rather quickly.
At least they used to… countless traders pushing, shoving, yelling into phones, trying to get their trades in at their desired price.
The same feeding frenzy happens in online trading.
Many times, particularly at the market open, there’s a huge surge of volume and data coming across the server that will crash most out-of-the-box computers that aren’t built to trading specifications.
If you don’t have a computer that’s beefy enough to handle the processing of all the indicators, data flow and graphical display, it’s going to slow you down and can definitely lead to slippage.
My big 3 necessities for a trading computer are as follows:
Slippage can be directly attributed to your CPU and your processing speed.
CPU performance is also directly related to the amount of memory on your computer.
Memory is basically the working area your computer has to do business in.
So, if you don’t have a lot of memory, your computer has to work much harder to keep up with the demand you’re putting on it.
When it starts running out of memory, your computer has to swap things in and out and start putting things on your hard drive, which really slows things down.
This is a big reason why many hard drives have been upgraded to solid state drives.
A solid state drive (SSD) is definitely a requirement these days for traders, along with a CPU with plenty of onboard memory.
Most traders will do well with a 64-bit computer with a minimum 8GB of RAM, and a minimum 250GB SSD.
Keep in mind that the more things you’re doing on your computer outside of trading, the bigger the drive you’ll need to prevent your trading applications from getting bogged down.
A 500GB SSD should be the max anyone would need for trading and most other basic computing functions.
Finally, your CPU must be benchmarked, because it can make or break your trading performance.
The basic benchmark for trading computers is 10,000 or greater.
If you’re trading on a computer with a benchmark under 10,000, you’re underperforming and will likely get bad fill, slippage, and generally poor performance from your trading.
Putting these initial pieces in place will significantly optimize your trading game and allow you to focus on more important things…
Like making money.
Next time, we’ll continue this discussion and talk about monitors and graphics card requirements for trading, but until then…
Have you ever placed a trade…
Only to have the order filled at a price you didn’t want?
Whether price went up or down — in your favor or against it — this can be a frustrating experience.
It’s a phenomenon known as slippage…
And it can really throw a wrench in your trading if you’re not aware of it.
The good news, though, is that there are steps you can take to help prevent slippage from sabotaging your trading.
Now slippage is defined as the difference between the expected price of a trade and the price at which the trade is actually executed.
It’s possible for slippage to occur in your favor.
… But typically, when traders talk about slippage, we’re talking about price moving against us.
So what causes slippage to occur in the first place?
Well, you have to consider the fact that when you execute a trade order from your computer, it doesn’t get filled instantaneously.
There is always some amount of lag time between you placing your order…
And the order getting filled.
That means slippage is always a possibility when you’re using a market order…
Especially if volatility is high.
However, as I mentioned, there are some things we can do to help prevent slippage.
For instance, instead of using a market order, you can use a limit order to ensure you only get filled at the price you want.
Of course, there is a trade-off to using a limit order instead of a market order.
See, a market order will get filled as soon as possible, at the best possible price.
With a limit order, though, your trade will only get executed if the price reaches your specified order price…
Which means there’s a possibility that your trade order never gets filled at all.
Now, the reality is that there’s no real way to prevent slippage from ever occurring, apart from only using limit orders.
But that’s just not feasible for a lot of traders.
So, the reality is that you need to do everything you can to prepare for slippage…
And to minimize its impact on your trading.
The best way to do that is by ensuring that you have the right hardware in place to process the incredible amounts of market data being fed to your computer…
And to handle the massive memory and processing demands of your trade charting and analysis software.
Now, in the next Hawkeye newsletter we’ll dive deeper into the basic computing requirements most traders will need to ensure smooth trading with minimal slippage.
It’s Monday, and I hope you’re well rested and ready to tackle the week ahead!
Last week, we talked about the importance of trading psychology…
More specifically, having the disciplined mindset to focus more on your trading process than on your profits.
“But Randy, the whole point of trading is to be profitable!”
Yes, that’s true…
We trade in the markets as a means of making money.
But here’s the thing…
When you focus too heavily on your profits and losses — particularly when you’re first starting out or in the early stages of your trading journey…
You tend to lose sight of what’s really important:
Developing and STICKING TO a reliable, battle-tested system that can continually produce winning trades over the long term.
See, a lot of traders can do the first part — developing a plan.
Where most traders get tripped up is the “sticking to it” part.
But I’ve got a simple “hack” you can use that will help ensure you stick to your trading plan…
And help you develop discipline as a trader.
Now before I tell you what this easy trick is — and how you can start implementing it today to be more consistent and disciplined in your trading…
I want to show you something that one of our Hawkeye community members posted in the Inner Circle just a few days ago.
Our friend John wrote:
“After many years of trading and listening to a lot of traders, I have found that you have to have your own trading plan and STICK to it.
“Take some time to develop and test your trading plan.
“I used to have a rubber band on my wrist and would snap it before hitting the mouse button to make sure ALL rules were in play before taking the trade.
“Discipline is hard, but it’s the most important part of trading.
“There was a time when I thought 3 out of 5 of my trading rules was good enough… Wrong!!!”
Now, there are a few things I want to point out here.
First, John is echoing something you hear me preach all the time.
You have to have your own trading plan… and you have to STICK TO IT.
But notice that John didn’t say you need any old trading plan.
He didn’t say you need Randy’s trading plan… or Warren Buffett’s, or Bill Ackman’s or any other trader’s plan.
You need YOUR OWN trading plan.
This is key because no two traders are exactly alike.
You have your own way of trading… and if you don’t, it just means you haven’t spent enough time developing your own way, just as John pointed out.
I also like John’s strategy of keeping a rubber band on his wrist and snapping it before pulling the trigger on a trade…
To remind himself to check off ALL the boxes of his trading plan.
Just like he said, 3 out of 5 just isn’t good enough.
Now, the rubber band to remind yourself to check all the boxes on any given trade is a pretty good tactic…
But I want to take it a step further.
This is quite frankly the easiest… yet most powerful trick I know to ensure that you stick to your trading plan for each and every trade.
Ready for it?
Here it is…
Make a checklist.
That’s it.
It’s really that simple.
See, when you have a written checksheet that you go through for each and every single trade you take, it forces you to fully qualify those trades…
And ensures that you stick to your plan.
Now, our friend Anthony posted a handy day trading checklist in the Inner Circle last week that you can reference for this task.
Of course, you may need to make a few alterations depending on your personal trade plan…
But the framework is there for you to see how Anthony qualifies each and every trade he takes to ensure that it aligns with his trade plan.
Now if you’re not a Hawkeye member and you’d like to learn how you can access the Inner Circle and see Anthony’s day trading checklist…
AND learn how Hawkeye’s simple 3-Step Method for spotting and confirming trade setups and entries can make building your own trade plan much, much easier…
In previous issues, we’ve talked about using different timeframes for different strategies.
We’ve also talked in-depth about developing a personalized trade plan…
And testing that plan to dial it in and make sure you can rely on it in real, live market conditions.
Well, today I want to tell you about my personal favorite timeframe, at least from a day trading perspective…
As well as the process of testing I went through to find out which timeframe I preferred.
Now, the 5 minute chart is a popular timeframe that a lot of traders prefer.
The 5 minute timeframe also allows you to leverage the power of harmonics for your higher timeframe charts that you’ll use to confirm trends…
So, for instance, if you’re using the 5 minute as your fastest timeframe, you could use the 10 and 15 minute charts as your higher timeframes, since they are both integer multiples of 5.
Of course, other traders prefer the 1 minute chart as their fastest timeframe.
For me personally, though, the 1 minute chart is a little too fast…
And the 5 is a little slower than I’d like for my trading.
But the 3 minute chart, for me, is right in that sweet spot.
With the 3 minute chart as my fastest timeframe, I’m able to see trends developing quickly enough that I can get in early…
And get back out again without taking on unnecessary risk.
Now, when I was developing my personal trade plan, I tested just about all of the fastest timeframes, starting with the 1 minute and working up to the 5 minute.
As I said, the 1 minute was just too fast for my taste.
Two minutes was OK…
And the 4 minute did not work at all for me.
I’m not sure if it had something to do with the harmonics and the fractal nature of the market…
But the more I played with the 3 minute — and the corresponding 6 and 12 minute charts for higher timeframe confirmation — the more I liked it.
Plus, the 3 minute really corresponds well with the hour chart, as 60 is also an integer multiple of 3.
In fact, my go-to chart setup for most of my day trading looks like this:
This is the Nasdaq E-mini futures (ticker NQ) on the 3 minute (top left)…
The 6 minute (bottom left)…
12 minute (top right)…
And one hour (bottom right).
Now, if you’re new to the world of Hawkeye or to trading in general, you may feel a little overwhelmed looking at these charts.
But I assure you, once you understand what’s going on, reading these indicators — and understanding at a glance what the market you’re watching is doing — is really simple.
We put together a training video to break down the foundational Hawkeye indicators and show you exactly what you’re looking at here…
And how these tools can help you see which way the market’s heading before it gets there.
On Monday, we started talking about market correlation…
And how to identify correlation between markets using the Hawkeye Fatboy indicator.
Today, though, I want to follow up and talk about why understanding market correlation is beneficial for our trading.
Now, there are benefits to trading both correlated and non-correlated markets.
First, the advantage to trading non-correlated markets is portfolio diversity.
For example, if one asset or instrument you’re trading is going up, and a non-correlated instrument you’re trading is going down…
It helps to bring balance to your portfolio and reduce the amount of overall risk you’re exposed to.
Now on Monday, I showed you how I keep my Fatboy set to track the four major indices — the Nasdaq, the S&P, the Dow, and the Russell.
But I also track gold and crude oil, which are two uncorrelated markets in regard to the equities indices.
Again, this helps me maintain some balance in my portfolio.
If I see equities trending down, I may increase my gold or crude oil positionings to hedge those trades to a degree.
Now, the advantage to trading correlated markets is that it enables you to hold multiple positions in markets that are trending in the same direction.
What’s more, trading correlated markets can give you more confidence in your positions, as they can serve as additional confirmation that the trades are trending in your favor.
Of course, the degree of correlation can change within both correlated and uncorrelated markets.
That’s why it’s important to have a reliable system or indicator that can help you see precisely what degree of correlation the markets you’re trading are in at any given time, which is precisely what the Hawkeye Fatboy is designed to do.
Now if you’re not yet trading with the predictive power of Hawkeye and you’d like to learn more about our proprietary suite of indicators, you can watch a comprehensive training class by clicking right here.
Once you have the fundamental tools in place for reading and understanding volume in the markets, you can make the most of market correlation using a tool like the Fatboy.
I hope your week is off to a great start!
Today I want to talk about market correlation… and how we can see correlation between multiple markets to help us in our trading.
Now, when markets are correlated, it means they are moving essentially in step with one another.
The benefit of knowing how correlated or uncorrelated individual markets are is that it can give you a broader perspective on the overall nature of the market at large…
And help you diversify your portfolio to reflect the changing degrees of correlation if needed.
Now, at Hawkeye we have a tool that was developed specifically to measure correlation between several markets or instruments…
It’s a tool called the Hawkeye Fatboy, and it instantly reveals which markets are correlating and which are not, giving you valuable insight into the overall market with one quick glance.
Here’s a look at the Fatboy set to my own personal settings.
Now, what we’re primarily looking at here is the group of wavy bands that are moving along together mainly between the green and red horizontal lines.
(The single red and yellow band across the bottom is a new indicator that’s still in development at the moment.)
Now, the first step in using the Fatboy is to set the indicator to track the particular markets or instruments that you normally trade and want to analyze for correlation.
Personally, I set my Fatboy to track equities futures across 4 major indexes: the S&P (ticker ES), the Nasdaq (NQ), the Dow (YM), and the Russell (RTY).
I also have crude oil (CL) and gold (GC) tracking on the Fatboy to help me see how they’re being impacted by the indices and vice versa.
So, each one of those wavy bands represents one of those instruments that I’m tracking.
The more tightly bound those bands are to one another, the stronger their correlation.
As the bands begin to spread apart from each other, they’re less and less correlated.
So, when two or more bands appear to be sitting on top of one another, that’s a very strong degree of correlation.
Now, looking at these particular markets and their current position on the Fatboy, we see that the Russell (the pink band) is building strength…
… While the other indices are losing strength.
But how exactly does understanding correlation or non-correlation help you in your trading?
Well, typically when you see uncorrelated markets, you can expect choppy, range-bound price action.
On the other hand, when you see a strong correlation between certain markets or instruments, you’ll typically see nice corresponding trends.
Now, here’s what’s great about the Fatboy: It doesn’t only show correlation and non-correlation.
See, those horizontal red and green bars represent areas of overbuying and overselling, so you can see where the instruments that you’re tracking are in relation to being overbought or oversold.
In essence, the Fatboy tells you three things in one easy indicator: whether an instrument is gaining or losing energy…
Whether the instrument is overbought or oversold…
And how correlated that instrument is with other instruments that you’re tracking.
Now, in the next edition, we’ll talk more about the pros and cons of trading correlated and non-correlated instruments.
In the meantime, you can learn more about the basis of the Hawkeye methodology and our flagship indicator by watching a comprehensive training video — just click here to view it now!
