The online trading space is often misleading, presenting trading as simple when in reality, profitability requires a sophisticated approach that combines both technical and fundamental analysis, rather than relying solely on basic technical tools.
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There is a total lack of seriousness in
the online trading space. You see, if
you go online and search [music]
trading, you are going to get bombarded
with thousands of videos telling you
that trading is simple, that trading is
easy, and that all you need is a simple
candlestick [music] strategy. When in
reality, this couldn't be further from
the truth. This video is not here to
sell you a dream. It's here to show you
that trading profitably is very real.
But most [music] approach it completely
the wrong way. So many traders struggle
not because they're bad traders, but
because they are missing key tools.
[music] And chances are you're much
closer to profitability than you
realize. So let's get into it. One of
the first things you have to understand
is that the odds are against you. Okay?
They are against you big time. You're
not trading against other random traders
on the internet. You are trading against
institutions. Okay? And what do
institutions have a lot of? They have a
lot of money, right? They pour millions
into modeling different strategies,
millions into trading algorithms, and
they hire armies of the smartest people
they can find. Keep in mind, these guys
are trading the same thing you're
trading. So if you're only using
candlestick analysis, you are going to
get eaten alive, right? I wish there was
a kind of a nicer way to put this, but
the truth is as candlestick analysis is
very important. It's very very limiting.
And by itself, if you are using this to
trade, you are most certainly going to
get eaten alive. So for you to even
stand a chance, you need to incorporate
the fundamental analysis, right? The
fundamentals, the reason why price is
actually moving. Now here, it's not
about using one or the other, right?
It's not about only using fundamental
analysis and no can and no technical
analysis, right? Or it's not about only
using technical analysis and no
fundamental analysis here. It's about
using them together because they
complement each other so so well, right?
I like to think of it as the technicals
tell you when. So they give you that
entry in the trade and the fundamentals
tell you why, right? That reason why
you're actually taking the trade, right?
The reason behind behind the trade. Now,
a lot of traders are much closer to
profitability than they realize, right?
because they've already have such a
strong technical analysis base that all
they need is the fundamental bias to
give them that clarity. Right? Like I
said in the beginning uh in the intro of
this video, if you go online and you
search trading, you're going to get
bombarded with thousands of videos and a
lot of these videos are actually
breaking down technical analysis, right?
So a lot of people already have this
solid base, but they lack this
fundamental understanding, right? So all
you need is to learn the fundamentals to
give you that clarity, right? To give
you that understanding. Now obviously
first we have to start with what
actually are the fundamentals right so
the fundamentals are basically anything
that affects the price of what you're
trading so whether you're trading forex
foreign exchange FX whatever you want to
call it um whether you're trading gold
futures whatever right anything that
affects the price of what you're trading
now remember fundamentals does not
directly equal news right obviously
these can be used together but doesn't
mean they mean the exact same thing so
think about it as the news is more so
the release so the announcement and then
the fundamentals is more so Why the
reason the reason why the announcement
actually matters right so you have the
announcement and then the reason why the
announcement actually matters right so
they do they are very similar but they
do have those key key differences which
is really important to to kind of
differentiate between them now when we
come to types of information obviously
we have our economic data right our CPI
GDP unemployment claims and again many
many more obviously I can't put every
piece here otherwise it won't fit on the
screen right below that we have central
banks this is extremely important to pay
attention to right monetary policy rate
changes press conferences quantitive
tightening quantitative easing then we
have geopolitical events right elections
trade conflicts sanctions then we have
market sentiment is the market risk on
is the market risk off do we have market
fear do we have market optimism and then
again many many other things which I
haven't put on here right but the key
thing here is to use this information
and again the other ones and again ones
that I haven't listed obviously but add
this information with your technical
analysis right to give you the
understanding of what is going on right
now I know there is a lot in here right
it takes time to understand this stuff
but once you start to understand this,
you're going to understand trading with
this whole new clarity, right? You're
going to understand why price is
actually moving and it's just going to
completely revolution, like just
completely change your trading. Right
now, instead of me just going on and
talking about this, I'm actually going
to show you a trade that I took um using
this this analysis, using technical
analysis and fundamental analysis.
Right? So, this is the trade right here
on AUD/USD and it was primarily taken
off a CPI release, right? So, you can
see I entered right here and this big
candle is obviously the CPI uh release.
Okay, so first off we have to start with
what actually is CPI. Okay, so CPI
stands for consumer price index and then
in short CPI is the change in price of
goods and services. So for example,
these goods and services could be
housing, food, transportation, clothing
and many more. Um but let's say in this
situation we have a higher CPI, higher
CPI than is expected, right? An elevated
CPI, these goods and services are going
to be more expensive, right? In a
situation where we have a lower CPI,
these goods and services are going to be
less expensive. Right? Now again this is
a very simple explanation. And I'm not
trying to confuse anyone here. There is
a little bit more to it. But again,
yeah, trying to keep this simple and
easy easy to understand. Okay. Now, CPI
is so important because it is one of the
key indicators of inflation. Okay. Very
very important. Um because yeah, it's
basically the most important indicator
in in terms of inflation. So, central
banks are going to be paying very very
close attention uh to to this CPI
figure. Okay. Now, in this situation, we
had AUD CPI forecasted in at a 3.6 and
then we had it released at a 3.8. Okay.
Okay, so obviously the print has in this
case released higher than expected. Now
I just want to put a quick little
disclaimer in here. There is quite a big
um context around this trade. So it's
very important when you're trading like
this to understand the context. I'm not
going to go into it too much because
again it would make this kind of I want
to keep this simple. It would make it
quite uh complicated for for anyone that
doesn't really know what I'm talking
about. So just keep in mind that if you
know if you've noticed that I haven't
I've missed anything in particular
that's because I'm trying to make this
kind of easy to understand, right? Um
but yeah, I will be going in depth
further in other videos, right? So just
to put that out there. Now once we get
our release, we need to think about what
is this going to mean to the central
bank. Okay. So in this case, obviously
we have the AUD CPI. So we're going to
be um referring to the Reserve Bank of
Australia, right? Otherwise known as the
RBA. If in if in a situation I'm trading
US CPI, obviously I'll be looking at the
Federal Federal Reserve. Oops. And then
for example, if I'm trading in the UK
CPI, I'll be looking at the Bank of
England and so on so forth. Right? But
here, Australian dollar CPI, uh we're
going to look at the Reserve Bank of
Australia. So in this situation, we have
a high CPI and signaling that
potentially we have higher inflation. So
what's this going to do? It's going to
cause the central bank to shift to more
of a hawkish stance. Okay? So hawish is
just basically a stance where the
central bank is what you call more
restrictive. Okay? So their focus is
primarily on uh on inflation as opposed
to helping the labor market. Right? The
opposite of hawkish is you have
doubbish. So in a doubbish situation,
you have the central bank focusing more
on the labor market and not as much on
inflation. But obviously here we have
this higher CPI signaling this potential
higher inflation. So we're going to
shift to more of a hawkish stance. Right
now because of this print it doesn't
mean we're automatically completely
hawish like 100% hawkish. It just means
we're going to tilt this kind of almost
like a needle if we have from this side
to be hawkish to be doubbish. We're
going to tilt to more of the um side of
hawish. Right? So yeah restrictive.
We're in a hish stance because of this
higher CPI. Right now what is going to
be the market impact? What do we expect
to actually happen? So because of this
hawkish stance, the currency is
typically going to gain strength, right?
This is because obviously in a hish
stance, um they they are kind of trying
to tackle inflation. So they're going to
have interest rates higher. They
potentially hike rates. They'll
potentially hold them for longer. Um and
when we have higher rates, uh you're
going to get a bigger return on your
money, right? So people are going to
want to hold their money in that
currency. And then again, because more
people are going to want to hold on the
currency, you have more capital flow and
then the currency is going to gain
strength, right? So just before we jump
into the charts, I'm actually going to
break it down and show you everything
how I entered. But I want to quickly
make sure we understand that the CPI
first we get the CPI released. So we've
come out higher than expected. Then we
have to come to what does this actually
mean to the central bank. Right? In this
situation we have had that means we're
going to be in a more of a hawkish
stance. And then because of this hish
stance, how is the currency going to
react? Right? And this situation we
expect the currency in this case the
Australian dollar to gain strength off
this print. Okay. So now let's jump into
the charts so I can actually break
everything down and show you exactly
what I'm looking at. Okay, so we're on
the charts. This is the trade right here
and let's get straight into it. So first
things first, before I'm entering the
trade, before I'm looking at any news,
any fundamentals, I want to come up to a
higher time frame, which will usually be
the 1 hour. And I want to mark off clear
levels that are most likely going to get
respected. Okay, so obviously you can
see my levels here. Again, I'm not
trying to come down to the 1 minute,
mark off every possible reaction because
more often than not, those levels are
going to get blown straight past. Okay,
so clear obvious levels that are most
likely going to get respected. If you
want to pause here, you can see the
levels that I have. Okay, so I'm going
to work myself all the way down to the
5m minute, which is majority of the time
where I'm the time frame that I'm
actually entering most of my trades in.
Okay, so actually let me go into replay
just get rid of this before this trade
plays out. Okay, perfect. So obviously
this is what I'm looking at before uh
before the trade before that CPI print
releases before I'm actually entering
the trade. So what I want to look for is
a range or a key uh piece of structure.
Okay, obviously ideally I want to see a
range and you can see right here we have
a very very clear range. So this is this
is great, right? Obviously not every
situation um we're going to have a
perfect range like this. We're going to
have you know obviously varying
different price movements but the key
thing that I want to see here is a key
structure. Okay, so specific structure
that I can see be broken in the
direction that I am planning. Okay, so
I've got my levels marked off. I found
in this case my range, my clear points
of structure. Now I'm going to shift to
the CPI release and think what do I
want? um what am I expecting for this
print? And how am I going to react based
off the outcome? Okay, so for simplicity
sake, let's just say we have three
different outcomes. Okay, we have a
higher than expected, we have a lower
than expected, and then we have come out
as expected. Okay, now just really
quickly, as expected, I'm usually not
trading because it doesn't give the
markets a clear direction. Usually when
that happens, I will stay out. But in
this situation, I need to think what
would offer me the the best trade,
right? What what do you think is the
best what do I think, sorry, is the best
tradable opportunity for for for a
print. Okay, so I'm not going to get
into it too much cuz this kind of gets
into the context, but basically for me,
um, yeah, I won't get into that, but for
me, I wanted to see a higher a higher
than expected CPI release because that
was most likely going to give the the
best uh possible move. Okay, so
obviously I'm thinking before the print
release is if I see a high CPI release,
I want to see immediate Australian
dollar strength. I want to see a break
out of this range and that will be
enough for me to enter the trade. Okay,
so I can skip here. Is this how I do it? Yes.
Yes.
Is it working? Okay, so I can skip
across to see this is the release that
we have right here. So this is CPI
releasing and as like we've already
discussed before um we came out higher
than expected. Okay, I think it was a
forecasted in 3.6 came out at a 3.8. We
can see that we get that immediate
Australian dollar strength and we have
um the clear break above this above this
structure above this zone above this
range right whatever you want to call
it. So for me I have my technical reason
when which is this break of structure to
the upside and then I have my
fundamental reason why which is the
reason yeah backing the whole trade
which is this CPI release um and then
obviously the higher than expected
because what we've discussed before with
the hawkish stance and all this kind of
strength right so that's enough for me
to enter the trade you can see that I'm
entering the trade my entry is right
here now keep in mind I am using a um a
news terminal so I get the data really
really uh uh really really quickly right
I get it basically the second it's
released I would strongly recommend and
to use a news news terminal. If you're
using, for example, like an economic
calendar, um you you can get quite a
delay and sometimes you won't even be
able to catch catch these trades, right?
So for me, I get the data the second
it's released. I'm looking here. I see
my news terminal. I see the print come
out higher than expected. Like I've
already prepared. I want to see that
breakup structure. Soon as I get that
breakup structure, I can see that
strength coming in, I'm entering that
trade. Okay. So I enter the trade. My
stop loss is below this small structure
point right here. And then I have my
takerit right targeting this high up
here. Okay, so how do I get out of this?
Here we go. So, as you can see,
obviously the trade ran quite nicely um
and hit my my takerit. Okay, now this
red line is represents my my stop loss.
I do like to trail my stop loss. There
is no reason for me to be in a trade um
where I'm in profit and then for that
trade to be a loser, right? So, when I'm
in a certain amount of profit, I like to
base it off this uh indicator called
pivot points. You can search that up.
Um, and basically I like to find my
trailing stop loss points or below
pieces key pieces of structure while I'm
in profit. Right? So obviously I had it
down here and then I think when I
actually remember when price uh pushed
up here I moved my stop loss. I think it
was a pivot point that was hit right
now. Obviously looking back at this I
probably should have held this trade. I
was actually able to get into a few
scaling positions here. But obviously I
don't know the future right? I need to
stick to my plan to what I I've prepared
for for this trade. Okay. But um yeah,
you can see the reason CPI, we got those
technical breaks. I was able to enter
stop loss below, target the high, and
you can see we hit uh we hit my take
profit. Okay, so I hope this was um
educational. I hope this is easy to
understand. Um obviously, there's a lot
more to it. I haven't I've missed quite
a few things. So if you know, if you
think I've missed something, don't
worry. I'm trying to make this easy
understand, but I'll be able to go
through more in future videos. And yeah,
again, hope you found this educational.
If you have any questions, feel free to
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