In this video, we are going to be talking about my three favorite Bear Market slash Red Day patterns. Now when I say patterns I'm not talking polka dots, I'm talking about distinct patterns that we could trade off of one. the market is point to downwards. And to be completely clear, I'm not even necessarily saying that I think they were headed towards a Bear Market.

But the reality is that with more days of rapid fluctuation, we're going to need to find patterns concrete patterns that we can trade off of on days where the market actually is pointed downwards and those are happening more and more often. So let's make sure that we have a concrete plan so that we could stay consistent. But anyways, the only thing that I ask of you in return for this video is that you hit that ravishing like button. There is nothing quite so ravishing as that like button.

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It's a great resource. There's no reason to trade alone, so make sure to check out these Zip Trader Circle Facebook group. Ok so first when the overall market is down trending on any given day, we have many different ways to approach it. Just like a hog has many different ways to approach a trough.

There really is no end to opportunities in downward Direction days. But for me, the best setups to trade off of our tickers that are consistently going against the market. We love consistent of trending patterns because that is a huge elevating factor. Stocks that are up trending overall are more likely to continue up trending as compared to stocks that are down training overall.

And as you can see, SVM is a big one now. SVM is in the precious metal sector silver to be exact. but take a look at this uptrend. Ever since breaking into an upward direction over our red directional SMA line, we've seen it run pretty consistently and overall continued gating its upward directional strength.

Now take a moment to compare this to the overall market. The market itself literally could not pick a direction, but good old SVM has been steadily up trending like a pretentious princess. So why does this matter? SVM provides beautiful run ups where you can literally just wait until confirmation and ride the price action up. Now of course, previous history doesn't guarantee future returns, but it's all about finding high probability setups.

And what's the example of this? Well, Jay Nook has been running around wonderfully. We haven't had the same sort of slow, consistent uptrend that we had in SVM, but we've had a consistent push upwards of directional strength over our long term as some, a line with a failed rejection downward, which confirmed strength in its upward direction, we just failed to reject downwards. All of a sudden, the price action left back up. That's a confirmation of directional strength it attempted downward.

We already have a history of attempting downward. It failed, it failed to accept a downward direction, and it reinforced the fact that it is in an upward direction. and that is a huge elevating factor, pushing the odds more on our success if we are long on this position. So why is it that Jay dug with gold as it's underlined acid? Why is it that this is a lot more volatile than the silver Index Was understandable when you realize that gold is more closely intertwined with volatility, since when the market is going down, people rush to put money in gold and vice versa.

So the more volatile the market, the more volatile gold is. But it's not exactly one to one. There's obviously other factors in variation, and just because the markets going down doesn't mean that Gold's going up, but it follows the market along closer than something like that silver index does. Other silver indexes might track it a lot closer.

This one doesn't right? So it depends on what it is that you're training. of course. Never buy an ETF or a stock or any sort of ticker that you don't completely understand how it works. A lot of people go and they're like oh, I'm gonna go buy Jana girl I'm gonna go buy Gush And they have no idea what it is that they're actually buying.

They're just like oh, the price actually looks wonderful, but you need to know what's going on. You can't just buy things without knowing I'd rather have you buy dead dogs on the side of the street. But anyways, folks, we love volatility. You see, it is a wonderful pattern where this upward volatility makes it easier for us to trade off of.

And realize upside, your a zip trader. it's all about upside. When zooming in on the 30 day chart, we could see that literally every time it was oversold, we could have simply bought in at oversold and held out until overbought and made a profit. But I'm not making an argument for holding overnight and that's what this would require, but rather I'm recognizing the fact that while we are trending up, we also have some serious strength.

Since long-term, we've built some great direction and have a pattern of over selling and returning to overbought. as I just mentioned, so if we go ahead and open up the previous two days, we could see okay. we had some directional strength and then Boom broke back into a downtrend. But then what happened to market opened Monday Well, we saw it break into an upward action.

Over the long-term S. Mayline struggled to hold and then regain its price strength and provide a confirmation. So let's say that you were to take a position at this conformation point. This is a point where we have a huge elevating factor, but what is it that we are actually risking here? Well, to figure out your risk versus reward for this position, you need to open up the longer-term time chart for context.

Taking a position here would give you about three dollars of upside to short-term resistance from the prior day, and about 45 cents of downside to current support at directional strengths. But Charlie Why is it that we are declaring current support at directional Strength old simply because we aren't interested in holding this? ETF If it breaks into a downward direction, we want to keep the elevating factors aka our a price strength confirmation and our positive directional strength in our favor. If it breaks directional strikes, the position is no longer relevant and again, we've already seen an attempt to change direction. So if that attempted directional change happens again, at the very least, we'd be able to declare the setup a waste of our time.

We don't like to stay in positions if there's no clear direction. that's a huge time waster. Why would you just want to stay stuck in a position that's going like this? You don't do that. You need to have a clear direction, you need to know where it's going, and you need to have clear, identifiable elevating factors.

unless it makes sense to declare support where it previously held directional strength. Some people do tend to get upset when I declare lines of support based on the position that I'm taking instead of the actual time period. see if all else was considered equal. You could totally argue that support should be declared here.

This is the low of the period and this is where it was recently. But see, when we were trading off an upper direction and this is just how I Do it. I Do a lot of things differently as people know, but when you were trading off an upward direction, anything that is below our directional SMA line invalidates the position. and as an immediate closing of the position, we don't hold past the point where it breaks into a downtrend.

Why is this? Why does this make sense? Well, remember above, the directional red SMA line is an upward direction and below it is a downward direction. If we are trading off an upward direction right as we are doing in this play, if we are trading off an opera direction, why would we hold one? It's no longer in an upward direction. That just does not make sense. And that's why I Don't declare support below the direction.

Lesson mayline on a position like this. So with that being said, we buy in at confirmation and write the price. Chin up, we break past old resistance and old resistance becomes new support. We see a red candlestick test new support.

and then continue back upward. We love this because it confirms that new level of support. But when do you sell out? Well, you sell out at validation. We always buy in at confirmation, and then we sell out at validation.

It's the easiest tricks in the book you see. I'm really just a fancy - trick pony if we are buying in at a period of confirmed price, right? It makes sense to sell out at a period of validated price weakness. and that is, of course, the first candlestick closing below our balloon price rank Besame line. This is where we validate that price strength has weakened to a point where it no longer makes sense to hold the position, especially given that we are overbought on the RSI and way past previous resistance and validation is again the point at which the red candlestick closes below our price, right? That's it.

Main Line: And for those of you who use the actual validation line that I've talked about before in previous videos, it's the same point chronologically, but it's just displayed below. about line: you wait for the candlestick to be below the line, whereas with the regular SMA line, you're just waiting for it to close below it, not open below it. And for those of you who are wondering about my orange validation line, it's not something that I applied to most of my videos. I Just I made one video on one to sell a stock and I used it.

It's sort of like the training wheels of validation points and validation points are waiting you exit, so exiting is very important. So I often preach using a validation line as sort of a training wheels guide to identify and when to leave your position. But once you get used to using the validation line, you can learn to buy in at confirmation and sell out a validation with just the regular blue SMA line. It's just that generally I find with new traders they understand the validation line a lot more because my whole thing with confirmation is you buy it when confirmation the first candlestick above the blue SMA line.

So with validation a lot of people would like to just sell with the first camel sleep that's below the SMA line. but in order for that to work, you can't use the blue SMA line. So I preached using this orange validation line or whatever color you'd like to make it because of the simple fact that it's the same thing just in Reverse but when you get more experience, you end up turning off this validation line. I Don't like to have a bunch of spaghetti on my charts, but that's just something that I recommend.

A lot of new traders do and if you'd like to know more about that, I'll put a link in the description below to my video on the validation line and when to sell stocks Exactly And validation points can change a little bit based on how aggressive your being with a position. But generally speaking, this is what I preach because I find it to be the most consistent in my experience long term. But either way, if you made a plan and bought in, any confirmation and road to validation, you've just secured yourself a profit. And no, you didn't take all the move.

You left some of the top on the table and you also left some of the bottom on the table. But that is the price that you pay for consistency. A lot of people get upset with me because I can't take all of the move I don't know how to take all of the move. If you want to take all the move, go somewhere else.

Okay, so with that being said, another great opportunity when the market is down is trading off volatility. Now, when the market is moving rapidly, neither one direction or the other, our volatility machine T VIX will register. Beautiful opportunity once again. We have a previous history of literally buying in at any oversold point and something out at overbought and making a profit.

But of course, some of these periods were during after-hours or pre market. But the point is that this is a ticker that rapidly goes from oversold to overbought. But again, I don't blindly buy at oversold just because it's over. So if we don't buy dead dogs on the side of the street, we wait for signs of recovery.

and we don't hold these leverage ET ends overnight. Anyways, that's not something that I recommend because we're trading off of volatility. But the sad thing is that a lot of people think that this over selling over buying pattern is only a good thing since you can buy in at oversold and sell it at overbought. But that is really missing the forest For the trees you see, it is actually a good thing because it is also an indication of rapid, irrational movements in price.

To understand this, understand that there is never a rational reason, there is never irrational reason for any ticker, especially volatility as a whole, to move so irrationally from Oversoul to overbought again and again. And as traders, we are here to take advantage of these inefficiencies. We are the Masters of inefficiency when it comes to the stock market. but it is very important to get a clean upward direction.

The VIX is very prone to not being able to take a direction as shown by a struggle back and forth this particular day over our directional SMA line. Do not buy in at conformation unless you see more elevating factors as compared to deprecated ones. A lot of people like to buy in at confirmation points when there's a ton of deprecating factors and I'm just thinking, why would you do that? A confirmation point is not useful unless you have elevating factors pushing the odds of success more in your favour. For example, I Mark it open here.

We had a confirmation, but we we're trading in a downward direction and we're overbought. and that is an unacceptable amount of deprecating factors. Where are the probabilities here? Are they in your favor or not? So remember, we are trading off of positive volatility. so we need this fall.

Attila T Ticker to be in an upward direction over our long-term direction lesson mayline. And the first quality confirmation point where it made sense to take a position was right here. We had broken past previous resistance and we had a strong mission into an upward direction territory. But taking a position here would have resulted in a slight loss.

and the price action was still not yet done struggling. And frankly, that's the cost of doing business in a probability game. Even the best setups won't work a certain amount of time. But then we have this ignition, but not a confirmation as it didn't open over our SMA line and then boom a red candlestick.

Once again, we don't like buying into price weakness, so it makes sense to pass up on this price weakness opportunity. But then look, we had four or five periods later where you could have literally bought in in confirmation and then rode the price action up and over the SMA line and sold out at validation. So on this particular day we had one false confirmation maybe two if you deemed the second one as a sign of an uptrend, but it was poor quality. so if that being said, if we look at it that way, we had two confirmation points that failed and five that didn't fail.

That means that if you had executed on these two first confirmations which again, you probably shouldn't have executed on since that first one literally just struggled to hold its direction. But if you ignored being you bought in anyways, you would have just lost a few cents of share when you got validated out. But then you would have gained that back and profited from the upside on these plays where the confirmation points did work out. But with that being said, I know a lot of people are going to see this and be like Charlie my dog can trade better than you.

That first confirmation point didn't mean squat because you lost profit and if I took confirmation at the second one as well I would have lost money. You're stupid. Totally got first call permission. it didn't work and hey, you're right.

Confirmation points. They don't guarantee profit, but the point of confirmation isn't to give you a blind entry point, but rather to confirm a point where you evaluate whether or not the setup is favorable. the stock market is nothing but a probability game, and the confirmation point is a point where we confirm that the probabilities are more or less in our favor. If you want someone to tell you exactly when to buy a stock I recommend going elsewhere.

Of course before you do that make sure you hit that ravishing like but before you leave it's just proper gesture. But anyways the confirmation is the major in fact are allowing us to buy an to price strength as well as the other probabilities that are pointing the odds in our favor. Okay folks well I hope that you enjoyed this video and you found some value in it. If you have any questions whatsoever, make sure to comment below or reach out to us on the free zip trader circle Facebook Group link is in the description.

We also have a trading tutorials, playlist, a discord chat, and a bunch of other resources on these inner circle Facebook Group that you could access by again joining that wonderful Facebook Group Have a great day folks and I'll see you in the next video.