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The One Line Indicator That Flat Out Delivers | The Rumers | YouTubeToText
YouTube Transcript: The One Line Indicator That Flat Out Delivers
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Summary
Core Theme
This content introduces the 9 Exponential Moving Average (9 EMA) as a powerful yet simple trading indicator for new and aspiring traders, detailing how to set it up and apply two core strategies for identifying high-quality trading opportunities and improving entry precision.
You know, after being a professional
trader now for 26 years and testing
hundreds of indicators, strategies, and
countless variations thereof, I believe
I have found what is the best trading
indicator to use for all of the new and
aspiring traders out there who are ready
to level up their game and make more
consistent trades. And that indicator is
the 9 exponential moving average. It's
also known as the 9 EMA because the 9
EMA is both simple and it's powerful. I
mean, it's simple enough that the damn
thing is already pre-programmed into
your brokerage account. All you got to
do to start using it is just click a
button and right there it is on your
screen. No filters needed, no complex
mathematical equations, and no mess.
Just click the damn button. It can give
you the clarity you need to separate
those really highquality trading
opportunities from those duds you should
have avoided in the first place. But the
best part about the 9 EMA, it can give
you those sniper entries to just put you
in the best possible position to be
successful in the first place. However,
as with all trading indicators, if you
don't know how to use them the right
way, they're just going to come back and
haunt you later. So, what I'm going to
do in today's video is show you how to
use this 9 EMA like you are a pro. The
same way I am using it day in day out to
pull monthly profits from the market.
the same way I've showed it to the
members of our live trading community
who are using the 9 EMA on a day-to-day
basis to manufacture great trading
opportunities. And as always, everything
that I say and do in this video and what
I show you, I will back it up with a
series of live trade examples using the
9 EMA in a live market. That way, there
is absolutely no questions on how to
execute this to perfection. So, let's
get started. Now, before we get involved
in all the strategies and the juicy
details, we need to make sure we're all
on the same page and we have this 9 EMA
set up correctly on our charts,
especially if you want to get the most
out of it, which I imagine that you do.
We also need to make sure that we're
using the best time frames to get the
most out of that 9 EMA as well. Now,
like I mentioned there in the
introduction, this is pretty simple to
do because the indicator is already
pre-programmed into your brokerage
account. You just need to click a
button. But what I'd like to do in this
section is I just want to tweak that for
you a little bit to get you right to
that sweet spot you need to be to make
quality trades. So here's what we'll
start with. Take whatever chart you're
trading, don't care what the asset is,
and just for example, you'll see in the
upper left corner, I'm going to be using
the NQ futures for today's example.
However, there are two things that we
must have on this chart to get the most
out of the 9 EMA. Starting with the time
frame. Now, because the 9 EMA is the
fastest yet most reliable indicator,
it's used highly amongst scalpers and
day traders. So, your very best signals
are going to come from your smaller time
frames that are sub 1 hour. Now, it'll
definitely work if you're using a time
frame higher than 1 hour. But if you
really want this thing to excel the best
that it can, it needs to be a 1 hour
time frame or less. And as you can see
in the upper corner here, I'm using my
all-time favorite, the fiveminute. The
second thing that is important to
getting this set up correctly is you
must make sure that you have 24hour
data enabled on your charts. Now, if
you're trading a 24-hour market like
foreign currencies, cryptocurrencies,
and futures, you're good to go. You're
going to have that consecutive data on
that chart. However, if you're a stock
trader, you're going to have to make
sure you have pre and postmarket data
enabled. Otherwise, the indicator is
going to be slightly off, and that is
not what we want. Now, once that has
been accomplished, which is a very
simple thing to do, we're just going to
click that button and get that thing
set. So, if you take a look at the top
of my screen, you'll find something on
your brokerage software. Maybe you're
using Trading View like I am. Just click
the drop-down menu and you'll see I
already have it set moving average X
potential. Not simple, not weighted,
just moving average exponential. And
we'll talk about what the differences
are here in just a second, but you're
going to click that button and it's
going to put a line on your chart. The
next step here is you want to look at
some area or click on your chart
depending on the brokerage you'll use
and you want to make sure that the nine
period has been selected. If it in most
cases it in fact will be, but if it's
not, what you want to do is just click
on the settings menu and make sure that
it says nine. Like for example, Think or
Swim will automatically put the 50 up
there. Now, the rest of this stuff, like
I said in the intro, does not matter.
You don't have to touch any of these
filters. Just click on the indicator and
that line is on your chart. Now, once we
have this 9 EMA set up correctly on our
charts, we can start talking about the
first of two strategies that we'll be
discussing today using this 9 EMA. And
the first one we'll talk about is the
most primitive, simplistic, and
effective trading strategy using this
indicator. And it's something I call the
buy crossell method or it's alter ego,
the sell cross buy method. Now, don't
worry if you don't understand that
lingo. We're going to kind of layman
term that thing here in just a second,
but go ahead and write that down. And
I'll show you exactly what I'm talking
about right here on the screen. So,
let's say, for example, this line I've
drawn represents the 9x exponential
moving average. Here's what we want to
do. If the price of the asset we are
trading is at or above that 9 EMA, all
right, we want to buy that asset and we
want to remain buyers or stay bought in
that asset until the price crosses
through. Then and only then do we sell.
Okay. buy, stay bought, remain bought,
continue buying until you cross, then
you sell. So, just think about that for
a second. We're going to talk more about
it. The next if the price of the asset
is trading below that 9 EMA we want to
sell remain selling or refrain from
buying until the price of that asset
reclaims that 9 EMA and crosses through.
Then and only then do we buy. So that is
sell cross buy. Now don't worry if you
didn't get it. I'll show you exactly
what it looks like in a real-time
environment because it may sound just
too simplistic to work, but bear with me
here. So, let's go back and take a look
at our ENQ chart. So, you'll see our
blue line represents that 9 EMA, and we
can do our very first quiz for today,
which should be a total layup for you
guys at this point. So, based off of the
information you collected in this video,
is the current price of the INQ futures
trading above or is it trading below
that 9 EMA? I mean, this is simple,
right? It's clearly below the 9 EMA,
which means we have what? The sell cross
buy method. That's the strategy we're
going to use. Which means because it's
below that 9 EMA, we are going to be
what? Sellers. and we're going to stay
selling, remain selling, and not even
think about buying until it crosses back
above that 9 EMA. Correct? So, let's
just go ahead here and do a trade. Let's
go ahead and sell that thing based off
of where it is. Now, obviously, this is
a demonstration because in the live
market, you can get a heck of a lot
better entry than this. And I'm going to
show you that in just a second. But,
let's go with the primitive, stupid
simple method of just sell, cross, and
buy. So, I'm going to go ahead and just
move this tape a little bit forward
here, right? Let's do a couple of bars.
And let me just ask you, is the current
price, let me get that out of the way.
Is the current price of where the NASDAQ
is now, is it still below the 9x
potential moving average? The answer is
yes. So, what do we do? Think about it.
What do we do? What do we do? We
continue to hold the trade. Correct?
Because we're not going to cover this.
By the way, for the new people, cover
means buying back. When you're short,
you're profiting. We'll get into that in
a second as well, but we're not going to
touch it, right? We're still in the
trade. Let's move a couple of bars
forward. What do we got? Are we still
below that 9 EMA? The answer is yes. So,
what do we do with this current trade?
Do we take the profits? Do we get out of
this trade? No. We are not going to get
out of this trade until what? Until it
crosses back through that 9 EMA. Very,
very simple. Let's go ahead and move it
forward here and get a couple of
different chart views because when
you're in these, right, they kind of
look different. They kind of fool you.
Let's kind of move it a little bit
forward there. What do we got here? All
right. Is this still still below the
nine? Yep. Certainly. Right. So, what do
we do? We keep it correct. Let's just
keep rolling that tape forward. Still in
it? We still in it? Yep. Okay. We move
it. Still in it. Yep. We still in it?
Yes. Are we still in it? Still in it?
No. No. So, we would cover that position
right there on the cross of that 9 EMA.
Okay. But just take a look at that
chart. Kind of visualize it. And we're
going to move to another one here real
quick. So, here's another day of the
NASDAQ chart. We're remaining on the
5-minut time frame. So, here's your
second part of the quiz. Is the current
price of the NASDAQ futures above or
below that 9 EMA? Easy, right? It's
above. So this would be the what? The
buy cross then sell method, right? So
what we're going to want to do or want
to be here to get on the right side of
the market is we're going to be buyers.
And again, this is just an example. I'll
go ahead and hit the buy button there.
We can obviously get a much better price
than this, which we'll discuss in a
second, but that's the rule. Now, based
off of what we've been discussing up to
this point in the video, we're going to
do what? We're going to buy it, remain
buying it, continue to stay bought in it
until that price crosses back through
that 9 EMA, then and only then are we
going to sell it. So, let's go ahead and
move this forward. This should be real
easy at this point. Are we still above
the 9 EMA? Yes. Right, we are. Let's
move it forward a little bit more. Are
we still above the 9 EMA? Yes. What do
we do with this position? We remain in
the position until that price crosses.
Let's go ahead and move a little bit
forward. Are we still in it? Yes. Are we
still in it? Yes. Are we still in this trade?
trade?
No. No. No. We're not. Okay. So, now
we're out of the trade because of that
crossover. Now, I'm sure for a lot of
you, you're thinking at this moment, and
trust me, I don't blame you for thinking
this way cuz I certainly would too.
You're probably thinking, "There's just
no possible way trading can be that
simple, can it?" Well, the answer is,
yeah, it kind of is. And you can go a
long way in your trading journey, make
some fantastic trades and trading
decisions just off that primitive method
of buying and selling through nine EMA
crosses. However, as with all trading
indicators and strategies, what
separates the average from the
superstars are those little tiny tweaks
they make to the process. Now, you
remember that part where I said, "This
is just an example. You can get a much
better entry." I want to show you how
you can make a small tweak and take what
I just showed you, that basic primitive
method, and turn it into something
special by getting a much better entry.
Let's go back and take a look at that
NASDAQ chart. And what we're going to
talk about is the retest method just to
make sure you're getting the best entry
and more importantly you're on the right
side of the chart. Now, anybody who's
traded for any length of time knows that
if you open up and you have one red
candle or one green candle, it doesn't
necessarily mean that's where it's going
to stay. There's a lot of times it'll
just power a tower or rip right back to
the upside. And that's what you want to
make sure you don't want to rush those
entries. You inverse relationship. It
was higher. The next one could just be a
complete blowout. So what I want you to
do or what I am going to do at this
point is I'm just going to move forward
to that very next candle. And I want to
show you something. Notice that the
secondary candle, the very second candle
in fiveminute candle in the sequence.
Try to reclaim that 9 EMA. Now later
when we get into the second strategy,
I'm going to give you a little kind of
tidbit or forward thinking here.
remember that comment. They want to kind
of come back a lot and revisit that 9
EMA. This is what makes it so powerful.
It's like the ultimate trend guide, the
ultimate balance of power. But notice
here on the second candle, it got
rejected right off of that 9 EMA. That
second rejection would give you probably
15 to 20% better accuracy
in gauging as to whether or not this is
going to continue to go lower, which in
fact it does. So in this case, I want to
show you how valuable this is. My entry
versus the entry for example that was at 23,357.
23,357.
Now, that's about 25 points or so or 30.
However, at 20 points a contract on a
full INQ, that's a big deal. And there's
a good chance for the new trader if you
chase that opening candle, that quick
bounce, right? Because it's happened to
all of us, that quick bounce took us out
of the trade. So, what adds authenticity
to it rather than just aggressively
running through that bar is to wait for
the retest. Now, let me show you how
else this can happen to you because this
is a real live situation that happens to
people when they trade markets, right?
Take a look at this next bar. Let's
focus on the next bar here, the third
one. If you missed the first cross early
in the day, failed to catch the second
one, let's say you're just missing
everything, which sometimes we do, the
third bar did it again. And the third
bar, the more times, the more bars that
accumulate above or below, the more
likelihood that trend is to continue. So
even if you're like, ah, damn, this is
just too low. I can't chase it down
there. As long as it's under the 9 EMA
and you're using that 9 EMA crossover
and it gets rejected off the 9 EMA or
bounces if it's going up, you're still
good to go in the trade. This helps us
with things like anxiety and FOMO and
chasing and just getting on the right
side. I mean, that's that's 90% of the
battle for a trader is to get on the
right side of your trades. Now, I want
to kind of fast forward it here to the
to the cross back over. And notice that
at some point during the day, the price
crosses back over. So, in this case, we
do what? We're now on the other side of
that trade, right? We're take taking the
same instrument, but instead of sell,
cross, then buy, we're now buying,
cross, sell. Correct? So you go through
this, you now are a buyer. Now the
aggressive entry would be right through
that. So let me just go ahead and throw
a buy on there as a as an example. But
again, I want to show you something here
that's important about for the newer
traders. It's the retest. Let me just
move to the next bar and open this up.
Take a look. Even though it's kind of minuting
[Music]
average, right, the exponential moving
average, excuse me. It doesn't matter if
it's all the way in or slightly below
it. But there is your signal. There was
just that little cheater candle that
came in. And in this case, rather than
getting an entry at 23123,
you're almost down towards 23110. So,
you're saving on the entries, which
gives you a little bit more room. And
once that's been confirmed, that means
the market's intentions or the buy
programs that may be programmed into the
market are going to hold this up. So,
again, we'll walk through the the
example. Are we still above the nine
moving average? Take a look at the
aggression. Once you pile through that,
look where it goes. So, again, you can
take that basic primitive strategy and
really take it to another level by just
waiting on that tiny bit of
confirmation. Like I said, it can
probably increase your hit win rate or
whatever you'd like to call it by a 15
to 20% and just give you that extra
confidence you need. Now, having said
that, I want to move on to the second
strategy that I'll be sharing with you
today, which is by far my favorite
strategy, the one I use the most, and
I'm going to call it the separator. Now,
if any of you watch my past VWAP video,
I've actually done a couple of them, and
this is a trading strategy that's a
carbon copy of that VWAP separator
trading strategy. And much like the
VWAP, the 9 EMA and the current price of
the asset at some point in most cases
will reconnect themselves in the future.
Meaning either the price of that asset
will slow down in its speed and allow
that 9 EMA to catch up or the price will
immediately pull back down into the 9
EMA. And that's what we need to know
because that's the biggest power of it.
Now, some of that might sound uh too
much lingo, but I'm going to show you
what I'm talking about right here on the
chart. So, let's go back to our intraday
NASDAQ chart and take a look at how a
separator trade develops in a real-time
market. And you're going to see why this
is my favorite way to make trades. So,
let's take a look at this point right
here, and you'll see at the very low
tail of this wick, the price of the
NASDAQ was 22,800. Now, this chart can't
do it right now, but I want you to do
your best to visualize that this candle
was once fullbodied red just like these
two previously. But at this point,
notice that the distance between that
price and where the 9 EMA is is more than
than
120 points. Now, this is not a video
where we're using any excessive
indicators like range or RSIs to to
enhance that. We're just doing the
basics. But I just want to show you
anytime you get that far away, the
knee-jerk reaction of whatever
instrument you're trading is to try to
reclaim that at some point. So what will
happen in a situation like this? Once
it's become that far, it no longer
becomes a great sell or once it's
separated above that, it no longer
becomes a great buy. You must wait for
that retest to get in. So it keeps you
out of the really bad trades. Now in
this one I would have entered early but
I would have done so and been more of a
buyer here because my thinking in this
case would be overextension because it's
moved too far away from that 9 EMA and I
would at least be playing a reconnection
of. Now I've done a John Wick video
before. This is what I call that candle.
I'll post that video up on the screen
for everybody. But I would be getting in
about 22,810
maybe 8:15
and then I would be looking bare minimum
to reconnect. Stop would be underneath
of the low. So I just want to kind of
play it forward and I want to show you
what happens along the way here. Let's
just kind of move a couple of bars
forward here and you'll see that's
exactly what it does is it reclaims that
9 EMA. Now, from here, you definitely
can make that entry again. So, take a
look. I want to I want to highlight this
to show you where the safer entry is,
just so everybody can see. Take a look
at that bar right there. That was the
official confirmation
of that cross. Remember, now that would
be what you would call the buy, right?
The the buy cross cell, but it's kind of
late in that cycle after three three
candles and a bounce. So, what you would
need is this candle right here. Notice
it just kind of crests that 9 EMA again.
You may have that question about what do
you do if it's just kind of hugging that
9 EMA? And that's okay if price slightly
dips below. As long as the candle stays
very, very close to that 9 EMA, the
current trend is intact. So, you could
reenter it right there off that 9 EMA.
But if you take the separator, notice
that you're 120 points ahead of the
game, right? And now you're just rioting
that 9 EMA up as an exit strategy. So
let's kind of play it forward, right?
Notice that it's still kissing along
there. So again, for the traders that
may have been late to the party, you can
still work your trade by changing it
back to the buy, sell, cross method, but
it pays to get in those off that
separation. That's one of my favorite.
Now, before we jump into these live
trade examples, let's just take a quick
review of what we learned up to this
point. So, while you see these live
trade examples in action and how they
were managed in our live community,
you'll be able to understand why you
would take that trade in the first place
and what to expect out of that trade, at
least the basics, right? So the first
types of trades that we often look at
for the newer trader, the primitive
version is as long as the asset is
underneath of that 9 EMA or above that 9
EMA, you should stay with the trend
because the 9 EMA, excuse me, is the
ultimate trend dictating tool. It lets
you know who's in control. So you're
going to see how it wants to connect
with that. As I said, my favorite trade
is the separator trade because I know at
some point combined with other things
that I use, I know that once we get that
separation, much like I did with the
VWAB video, when you get that
separation, the tendency is to try at
some point during the day to reclaim
that. And those that's excuse me, that's
where the large types of trades take
place. So, let's move over and take a
look at some of these live trade
examples using the 9 EMA. So, the first
trade we're going to talk about is one
taken here recently, RKLB. Now, just to
kind of test your knowledge, it's okay
if you get the answer wrong. That's
fine. We're going to talk about it.
Based off of the chart you're seeing
right now, is you just kind of woke up.
That's the chart you have. What do you
think you should do or what do you think
that I did at the moment? Did I buy
this? Did I sell this? What kind of
trade based off the information we've
discussed in this video would I be
taking here? Now, hopefully you said
sell. And hopefully you see why I would
say that because what do we have here?
We just talked about it. We have the
classic separation between the current
price of the asset and where the 9 EMA
is. Now, when you get that extension,
that's the probabilities that will
rekiss that 9 EMA. But in this case, if
you guessed short, you guessed right. We
sold this. I'll put the stuff right up
here on the top. And of course the
target now becomes because a lot of
traders struggle with targets. The
target becomes revisitation of that 9
EMA. So when we kind of play that back,
what do we end up getting immediately?
You notice that the price comes back
down into that 9 EMA. That's a pretty
good distance. That was only one share
example there. Uh I'm just going to go
ahead and close it out so it doesn't
make a mess. But that is a separator
trade. Now let's take a look at another
version of this using the 9 EMA. Another
recent trade made by by the way today in
Q using that 9 EMA. Now if you take a
look at this chart right now, we have
clear separation. Now in this case
showing you the value of the 9 EMA, I
did not jump in on the first cross. And
once it got through that, I did not want
to chase the price much like that
example. Now, I could have chased the
price, but I didn't want to because I
wanted to wait for that second candle
confirmation. Correct? Now, if I just
kind of move this forward, I want to
show you what this next candle looks
like. And why we wait for those
confirmations in this case is because we
don't know what the next candle will be,
which means this one was a separator
that moved back over the top. And once
it crossed back up over the 9 EMA, it
became a long. Now, the management of
this trade becomes that 9 EMA because
the stoploss in this case would have to
be at the low of day based off of
technicals rather than risking that
much. We can just use that 9 EMA as a
stop-loss and even a profit trailing
guide. So, I wanted to kind of walk you
through that so I don't confuse
everybody. If you kind of just move a
couple of these bars forward, notice
that even though your trades may often
be choppy and bounce you back and forth,
right? Notice that each and every time
you get a clean shot at that 9 EMA, it's
like an algo program. Just steps in
there and buys. Just steps in there and
buys. Just step there and buy. So you
don't always have to be the first in.
You can always wait for that
confirmation. So in this case, you have
it clear without a doubt. you have what
you have a buy cross sell event and
you're going to stay with that trade
until it finally crosses over. So if we
just kind of move it forward here just
real quick to save some time. You're
going to see what does it do? It just
kind of walks away from that
9 EMA. Now take a look at what happened.
This can also help you with targets.
What was this?
it became separated
from that 9 EMA. Correct? So, in a
separation case, I would go ahead and
take the profits from that trade because
in this case, it's most likely to pull
back to this 23,516 or thereabouts
before it rebounces. And I would want to
book that profit and then possibly reby.
Couple candles forward, you tell me what
you see. Take a look at that chart. It's
about as plain as it can be. It walks
right down once it's separated, moves
right into that, kisses that thing, and
then rips right again. So, as scalpers
and quick day traders, we would take
that profit on that separation. If
you're fast enough, you could have
shorted it using that 9 EMA as a
connector or just sat back, rebought the
thing off the bounce. So, I hope you
understand at least a little bit better
than when we started how the 9 EMA
works. I'm sure a lot of you out there
are experimenting with this and maybe
you've never looked at it in in this
light and that's hopefully it helped
you. Now, obviously when we're talking
about trading, I think you know as well
as everyone else and I do. There's so
many variables and other things that you
can add, but if you're a new trader, I
want you to just kind of keep this in
your mind as you move forward. If you
never come back to this channel or watch
anything again, everything is is a
process. You must start small and
internalize each individual step. So
starting with just reading the the 9
EMA, excuse me, just reading that 9 EMA,
the important thing for you to do is
understand how it moves above and how it
moves below. How assets tend to hug
along that and how it develops into
trends. Trust me, after watching this
just solely for a couple days, you're
going to see the markets or whatever
you're trading in a completely different
light. And that's what's the most
important part of this process. From
there, take a look at those separation
moments. See how each market reacts as
it starts to extend. You run into those
short-term overbought, oversold
conditions, which opens up opportunities
for the scalper or day trader. So,
anyway, I think I've said enough. Kind
of got a little bit winded there, but
you know what? I love this stuff. I love
trading. I hope I'm helping you learn
how to trade. This is my life. I want to
make it yours, too. As always, I want to
remind you before I sign off officially
that each and every week, let's say
you're just you're struggling. you're
looking for fantastic ideas, a baseline
to start to elimin eliminate the
confusion. Each and every week, my wife
and I put together a very comprehensive
detailed market report called the gains
guide. We begin by breaking down all the
major markets both technically and
fundamentally. We also take a look at
the very best stocks for that week, the
ones that have the best opportunity to
make trades. It's completely free. We
send it out every weekend that you got
plenty of time to read it and sift
through it and pick out those best
opportunities before the Monday session
starts. Again, it's completely free. All
you got to do is go down there in the
description box, click the link, put in
your email, and you'll have the next
copy. Plus, you can go back and read the
next copies and see how this thing
actually works. Again, it's called the
Gains Guide. It's completely free. As
always, guys, thanks very much for
watching this video. Take care. Trade
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