In this video, we are going to be talking about one of the most important parts of training and that is of course waiting for confirmation. Honestly folks, it really breaks my heart to see so many people who were impatient and don't wait for confirmation. I'm not a big person for tears, but if I was to cry, this would be the thing that made me cry. So many folks instead of waiting for confirmation, decides that they're going to get in whenever it feels like it's the right time.

I'm sorry the stock market simply does not care about your feelings, but why is it that we wait for confirmation Is confirmation? Some sort of divine magical entry point? Well, no, there's no magic behind it. and I'm not a wizard. Confirmation is simply the point at which we have a confirmation of price strength point at which it makes the most sense to take a position. However, confirmation is not a blind entry point.

A lot of people think that you can just buy in randomly on confirmation. But listen, just because you have a confirmation point does not mean that it makes sense to take a position. A confirmation point is meant to confirm an already solid position does not mean it makes sense to take a blind position. But before we go into it, the only thing I ask of you in return for this video that you confirm the ravishing nests of this video by hitting that ravishing like button.

And also, of course, don't forget to subscribe for more short, sweet and simplified videos on how to trade the stock market. Okay, so quick plug If you'd like to network with me and other traders, make sure to go ahead and check out our free zip trader circle Facebook group the link for that is in the description. It's really a great circle to go and meet new traders folks. Trust me, when I say there is no reason to go at trading alone.

Trading can quickly get quite lonely, so make sure that you're in a good trading community. Okay, so first, how does buying in at confirmation actually work? Well, let's say we were looking at JD St At this point intraday, we see that we are at about fair value on the RSI have just broken into an upper direction over our long term Red SMA line and are thus considering taking a position. We love buying stocks that are in an upward direction, long-term and are also a fair or good deal intraday. So it makes sense for us to be scouting out an entry point here.

and since we have already identified reasons we want to take a position, it is now time to wait for the price action to confirm that we were right in our just the ocation and then wonderful Boom! We have a confirmation with the first candlestick opening above our blue price rank that's Mei Lan. So let's say we're taking an entry point here. We wouldn't be buying in because we have a hunch or feel like this is the right time, but rather because we have this concrete concrete folks concrete entry points. So we can take this entry point.

knowing that this is a period where we have a confirmation of a good position. Then we can simply write the price strength up and over the SMA line until we have the first validation point aka our first candlestick closing below our price rights SMA line. But the fact that we waited for confirmation instead of just impatiently jumping in means that we can measure the price strength using the gap between the SMA line and the price action. The wider the gap, the stronger the price strength is.

The smaller the gap, the weaker. It is pretty intuitive stuff, but the reason that this is important is because we have a constant minute-by-minute update on how strong or weak the position is and when it becomes so weak that it breaks its price strength. We can simply sell out at validation. So that's sort of confirmation 101.

Find a position, you evaluate the position, and then you only buy in when you have a confirmation. Simply never make sense to buy in Unless you are confirmed in your thinking. you need a confirmation. Remember, we don't trade based on our gut instinct.

We don't trade based on our emotions, and we don't trade based on educated guesses. Those aren't strategies, that's just stupidity. We need to be confirmed in our thinking. This may sound a little ranty, but while I love filming these videos I get a little bit frustrated when people message me and they they're like Charlie I don't understand what's wrong I Took a position in the penny stock that you talked about.

It felt right and then I didn't make money Charlie What happened? No, you cannot execute on your emotions. You need to be confirmed in your hypothesis. You need to be confirmed. You have to have a confirmation and you have to have a confirmation of a good setup.

If you understand this, I ask you to go ahead and comment below. Stocks don't care about your feelings. Taking a moment to comment this below will reiterate in your mind that the stock market is not your friend, the stock market is not your therapist, and the stock market really does not care about you at all. Thus, you need to wait for a confirmation.

You don't just execute based on how you feel. And commenting below is especially important if you don't usually comment on videos because then you'll really remember if you commented. Of course, it's also a great thing to do just so. I Know that I'm not leading everyone in the wrong direction.

But the point is, simply put, you could be the smartest trader that ever lived. But if you don't wait for a confirmation of your ideas, if you don't have the confidence in your ideas enough to wait for confirmation, then you're really just shooting yourself in the foot. Okay, so besides the fact that confirmation is a huge elevating factor, it is a great way to measure price strength and it allows you to buy into a period where all else being held equal. it's more likely to go up as compared to go down.

What are the other benefits of confirmation? Well, confirmation makes it a lot more likely that you will at least break even on bad positions. Confirmation points are very forgiving. take a look at: Jay Note: for example: now Jay Doug was in a downward direction, both long-term and intraday, so this was by all means a terrible position to be considering. Let's just say that you were a novice trader and you decided to take this anyways, but you at least knew to wait for confirmation.

If you had waited for confirmation bought in here, you would have been validated out at a slight loss. If you had waited for confirmation and bought in here, you would have been validated out at only a slight loss. And if you had waited for confirmation and bought in here, you would have would have been validated out at a slight profit. If you took a position in confirmation here, you would have again been validated out and at about break-even so, you would have broken even.

And here you would have been validated out at a profit. Do you see what I'm saying? Even if you're confirming bad positions, this helps you. Simply put, confirmation can help shelter you from some of the damage from bad positions. Confirmation can help shelter you from stupidity.

This is one of the big reasons that I preached it because I know that a lot of new traders they just take positions and they don't really know anything about the setup. They don't know about support and resistance, they don't exactly know how elevating a certain factor is, so they just take random positions based on a few things. But if you wait for confirmation, that's very forgiving. But confirmation can help shield you from some of the stupidity.

And while we all make stupid trading decisions from time to time, making sure to wait until confirmation is great practice. But there are of course, other benefits of confirmation. For example, getting in the habit of always waiting for confirmation means that you have a specific and consistent entry point. That means that you can use whatever catalyst or technical reasoning that you want, but at the end of the day, you don't buy in and tell a confirmation of your reasoning.

Trading gains are best. Consistency and discipline. Making sure you have a consistent entry point gives you a structured execution. Unless you know that if you aren't earning profit in long run is because of the rest of your hypothesis, Notice how I set the long run because if your hypothesis was right and you waited for a confirmation and the long run you will come out ahead.

This is a probability game, so a certain percentage of the time it still won't work. But having these structure of confirmation means that you will likely break even or even make a slight profit on trades that statistically go against you for no fault of your own and some people will say, but Charlie if waiting for confirmation was so important, why is it that confirming a good setup will still make you lose a certain percentage of the time? To put this in a real-life perspective, let's talk about dating. There's a certain probability that each person is going to like you when you go on a blind date. For example, if you dress nicely and don't pick your nose on the first date, there is a higher percentage chance on average that people will want to go on a second date.

However, just because you didn't pick your nose and you dress nicely doesn't mean that you will get a second date. It's just a good practice. and just because you did pick your nose doesn't mean that you won't get a second date in a probability game. Sometimes bad practices are randomly rewarded.

If you date a hundred people, you dress nicely and you don't pick your nose, you're going to have a higher success rate than you would if you did the opposite. Much like dating is a probability game, so it's trading. That being said, there's a reason that I run a trading channel and not a dating channel. But anyways, Is there a price we pay for confirmation? Is there a price that we pay for the benefit of having a confirmation point? Yes, Absolutely.

there is a price. There's a consistent price that you pay every time you wait for confirmation. For example, on Facebook we had a confirmation point right here and then a validation exit point right here. But in hindsight, the best position would have been before the confirmation.

I Waiting for confirmation. You left some of the move on the table. And that, folks is the reality of waiting for confirmation. It means giving up some of the moves short-term in order to be more consistent with taking moves in the long run.

And just to be transparent I Try to be as transparent as I can. There are for sure folks who think that waiting for confirmation is a poor strategy. They do not like the idea of leaving some of the move on the table. A lot of folks simply feel that the definition of a successful trader is somebody who takes as close to a hundred percent of each move as possible and they're able to do that a hundred percent of the time.

And thus, they feel anybody who doesn't preach taking a hundred percent of the move isn't really a great trader. They're just sort of average. And again, that's fine. Whatever works for you works for you But when it comes to me and my experience I simply don't know how to exactly time when a stock is going to go up.

Thus, I'm fine for going a part of the move in order to be consistent in grabbing a chunk of the move over the long run. You may not be able to grab everything in the short run, but in the long run, you can grab a lot of the move and consistently add to that. I Know that in the short run, there's just no way that I can ever find a perfect entry point. So instead I choose a point that is ideal over the long run.

It's not ideal in the short run, but it is ideal in the long run. Okay, so now that we've identified the beauty of confirmation points I want to give more examples about how confirmation points aren't all considered equal because again, confirmation points confirm something that you're already thinking. they're confirming a prior analysis or prior hypothesis. So let's look at Immu for example now.

I Mm Um, you had a great day. Market closed Friday But let's look at this original open. We opened below our red directional as the male line. We attempted an upward direction and then we had a first confirmation That was both a confirmation of price strength over our blue SMA line, but it was also a confirmation of directional strength.

There was a confirmation point, but it was also a period where it opened in a confirmation territory and then gave back a bit of territory, but held above both confirmation lines. And so it's a point where you have to make a judgment call. When I say judgment call, you're going to have to look at your elevating factors and figure out how much risk you're open to. Based on the elevating factors, the fact that we just broke into an upper direction, and price strength confirmation, it would make sense to take a position here at confirmation.

However, being more on the risk averse I'd myself I wouldn't recommend this. You see the price actions going down. It opened, but if you were buying into a period of confirmation, you would have been buying slightly into the falling price. you would have been buying into a slightly falling price.

This was a red candlestick, so that meant buying here would be buying into essentially price weakness. but this is actually a blessing in disguise. You see, if you were risk-averse enough to avoid this, it actually gives you an opportunity to see how the price action behaves now that it is in an upward direction. We saw get close to the directional ystem a line, but it ultimately rejected it and moved higher at the next candlestick.

So we now not only have a price confirmation and an upward directional confirmation, but we have a previous history of rejecting redirections downward. Thus, we have strengthened our uptrend and can feel more confident buying in the price action acted accordingly. These elevating factors push the price up a lot faster as investors saw that we had broken into an upward direction, and thus it created an influx that was largely unsustainable. But this was the gimme pad and this was an easy pattern to catch.

You didn't even have to wait until validation. When it comes to price action that runs up in price strength over the SMA line this quickly, it's important to bear in mind you could simply watch it reach previous resistance and then hold out until the first show of price weakness. That's because once we've crossed previous resistance, you're elevating factors have now turned into deprecating factors unless any show of price weakness is now a red flag. But when you compare this to the later confirmation, we have a confirmation here, and then a slow but steady appreciation over our SMA line.

You could see that you could see the difference between an overhyped run-up and a more subtle easy run, and this has a lot to do with the elevated factors behind it. At this point, we had more elevating factors, the deprecating ones. Thus, the move had more power and shot up faster. At this point, we were already in an upward direction for a while, and thus it wasn't super excited to see price appreciation and it rose slower, but as a result, it was able to maintain that rise and it was easier to trade off of.

And coincidentally, in the situation, it provided a more profit potential. It actually provided more profit potential over a longer period of time. Anyways, folks, the message with this video is always wait for confirmation. Don't trade based on your emotions and always have a plan when you're trading in the stock market.

Anyways, folks I Hope this video is useful if you have any questions whatsoever. feel free to reach out to us below or join our free zip Praetor circle Facebook Group the link for that is in the description. We also have a trading tutorials, playlist, a discord chat, and a bunch of other resources in the description below. so if you're interested, make sure to check that out.

Anyways, folks, have a great day! Always wait for confirmation and I'll see you in the next video.