Boot Camp Day 2: Candlesticks

Summary

In Day 2 of TJR's Boot Camp, the focus is on understanding candlesticks and price movement within them, an essential skill for traders. Although the class starts from scratch, viewers gain insights into nuances often overlooked by beginners. TJR delves into the significance of candlestick patterns, types, and what they reveal about market behavior, emphasizing the 'story' they tell about price action. He warns against relying heavily on complex candlestick patterns, advocating for the simplicity and reliability of individual candlestick analysis. Homework involves identifying candlestick examples in personal charts to solidify learning.

Highlights

• TJR emphasizes starting from scratch in trading education. 📚
• The importance of candlestick charts in understanding price movements. 📈
• How candlesticks are constructed and interpreted in trading. 🔍
• TJR's dislike for complex candlestick patterns, focusing on simplicity. 🎯
• Homework involves practical experience on personal trading charts. 🏠

Key Takeaways

• TJR emphasizes the importance of understanding candlesticks for traders, starting the lesson from basics. 📈
• Candlestick patterns tell the 'story' of price action, offering insights into market behavior even over short time frames. 📚
• A strong focus on the simplicity of single candlestick patterns which are deemed most reliable by TJR. 🔍
• Homework includes finding candlestick examples in charts to deepen understanding. 🏠
• Understanding candlesticks and Wicks can significantly enhance trading intuition and experience. 😎

Overview

In this fun and engaging episode, TJR kicks off Day Two of the Boot Camp with a foundation lesson on candlesticks and price movement. Despite the initial simplicity, this lesson empowers traders with critical skills for reading the market's story through candlesticks. TJR openly shares his frustrations and humor with candlestick education, making the learning experience not just informative, but also entertaining.

TJR dives into the nitty-gritty, explaining the significance of different candlestick patterns, body structures, and wicks. He humorously critiques over-complicated patterns, urging viewers to focus on simple, single candlesticks to understand the dynamics of market behavior. Through his casual approach, he manages to break down complex topics into digestible, relatable insights.

Ending on a practical note, TJR assigns students homework to identify candlestick examples on their own trading charts. This hands-on activity not only reinforces the day's lessons but also encourages independent exploration and application of these fundamental concepts in real trading scenarios. It's a light yet impactful start to what promises to be a comprehensive trading boot camp.

Chapters

• 00:00 - 00:30: Welcome and Overview The chapter titled 'Welcome and Overview' marks the beginning of day two. The speaker reflects on the previous day, describing it humorously as not too difficult for the audience who merely watched them show emotion. The current session intends to delve into charts. Although it is described as a basic, introductory video, the speaker promises to include useful tips and insights throughout the course. This sets the tone for a more engaging and practical learning experience ahead.
• 00:30 - 03:00: Introduction to Candlesticks The chapter introduces candlesticks and their role in understanding price movements within charts, specifically focusing on the S&P 500. It explains that nearly all charts will display candlesticks, highlighting their importance in market analysis.
• 03:00 - 05:00: Understanding Candlestick Components Candlesticks represent price movements using bodies and wicks.
• 05:00 - 07:00: Candlesticks and Timeframes This chapter discusses the importance and benefits of understanding candlesticks and timeframes in trading. Despite initial resistance, it emphasizes trust in acquiring this knowledge for better trading analysis and decision-making.
• 07:00 - 15:00: Analyzing Candlestick Patterns In the chapter titled 'Analyzing Candlestick Patterns', the speaker attempts to explain the concept of candlestick patterns in financial analysis. The chapter begins with a conversational and somewhat informal tone, indicated by the use of words like 'bro' and 'dude.' The speaker expresses a desire to color-code candlestick charts to differentiate between down and up candles visually. However, there is a brief moment of frustration with the visual rendition of the patterns, leading to a humorous acknowledgment of the imperfect drawing. The focus of the chapter is on deciphering the significance of down candles and the speaker's endeavor to find a clear method to visually represent them for better comprehension.
• 15:00 - 23:00: Real-world Candlestick Examples The chapter titled 'Real-world Candlestick Examples' begins with a casual introduction to candlesticks in trading. The narrator expresses a moment of forgetfulness, then proceeds to identify the basic types of candlesticks: down candle and up candle. The discussion promises to provide a quick overview of the components of candlesticks, including the 'opening' and 'closing' prices, the 'body' of the candlestick, and the 'Wicks' left behind. This indicates a chapter focused on explaining the fundamental aspects and interpretations of candlestick charts in trading contexts.
• 23:00 - 26:30: Homework Assignment This chapter focuses on understanding candlestick charts, specifically in relation to different time frames. It describes how various time frames, such as one minute, two minutes, or five minutes, relate to the duration it takes for a candlestick to close. The chapter uses the example of a five-minute chart to illustrate the concept. It is particularly useful for beginners who may be unfamiliar with how these time frames affect candlestick charts.
• 26:30 - 28:30: Conclusion and Closing Thoughts The chapter discusses the concept of candlesticks in trading, emphasizing their usefulness. It highlights how a single candlestick can represent five minutes of price action, providing a clear visual representation of price movement within that timeframe and allowing traders to understand what occurred during those minutes.

Boot Camp Day 2: Candlesticks Transcription

• 00:00 - 00:30 welcome to day two um day one clearly was not too difficult you just had to sit there and watch me cry like a little [ __ ] um but here we are day two we're actually looking at charts um but you probably won't learn much again because this is going to be a video from scratch but you will gain or sorry this is going to be a course from scratch um but you will gain a couple things I'm going to toss in some little tips that
• 00:30 - 01:00 you know you probably didn't pick up when you were a beginner um that can help you along the way so today we are going to be talking about candlesticks and price movement and understanding price movement within candlesticks Okay so right we're on the S P 500 right now and pretty much every single chart you're going to have is going to look like this uh wow okay uh pretty much every single chart is going to have you know candlesticks like this right you can click through
• 01:00 - 01:30 uh whatever ticker symbol you want and you'll see candlesticks okay and these candlesticks describe price okay how do they describe it okay through bodies and Wicks okay these are called candlesticks because they leave Wicks okay and these candlesticks tell a story so with that being said let's move over here and draw our own little candlesticks
• 01:30 - 02:00 okay and I know you're probably thinking oh my God I don't need to learn about candlesticks I know you don't okay I know you don't but this is going to be beneficial Trust okay so these are two candlesticks okay let's say
• 02:00 - 02:30 bro how do I okay whatever anyways okay ready so we have two candlesticks let's let's uh dude I wish I could color this thing um okay ready this one is going to be a down candle so I'll color it in like this actually that looks terrible forgive me we're going to make this oh
• 02:30 - 03:00 here I'm so stupid there there we go that's a down candle this is an up candle cool cool okay so we're going to do a quick quick a quick overview of what these candlesticks represent what the opening the close represents what the body represents and what these little Wicks that they leave behind represent okay so first of all
• 03:00 - 03:30 understanding candlesticks okay we need to understand what time frame we are there are so many little different time frame time frames up here that I'm scrolling through right one minute two minutes three minutes five minutes seven eight whatever okay and if you're very new you're probably saying well what what do those things mean that represents the time that it takes for the Candlestick to close Okay so if we are on the five minute chart which we are on currently
• 03:30 - 04:00 if one of these let's write let's just say this is an actual Candlestick within the chart one of these candles this candle represents five minutes of price action of price movement okay and the reason why these candlesticks are so beneficial is Buzz is because we can read and see exactly what price did within those five minutes with just this one Candlestick
• 04:00 - 04:30 okay oftentimes I can even be able to understand and pretty much just guess what is going on on one minute structure just purely based off of a five minute Candlestick or two five minute candlesticks and once you get good at this you'll understand how to do that as well um but okay we're on the five minute time frame one candle represents five minutes of price action and market movement okay so
• 04:30 - 05:00 when we see a green candle or a bullish candle okay we see that it goes up and it ends right up here okay green means boom price went up right everyone knows a green candle means up in a red candle means down so in this instance price opened right here where the body of the candle starts and it closed at that five minute Mark right here okay
• 05:00 - 05:30 so boom right here is the open and boom right here is the close okay we can put this thing down oh oops shrink the clothes and the open cool cool okay now what do these little Wicks that are left behind mean that
• 05:30 - 06:00 shows where price went during that five minute duration of time okay but it never ended up closing there it just shows where price went right it left a little snail Trail okay it's like um like you take a [ __ ] and you put on your underwear and it's like super white like brand new Calvin Klein underwear and your [ __ ] from from a minute ago left a
• 06:00 - 06:30 little snail Trail it's showing that you did go take a [ __ ] um I I to be honest I don't know how this relates to this but anyways okay it shows where price went so that means right if if there's a wick all the way up here that means within this five minute candle yes it didn't close up here but price moved up to this point okay and then same thing with here okay down here was the lowest price point that price went Within These five
• 06:30 - 07:00 minutes so now we know okay this is the highest point it went to and this is the lowest point it went to okay same exact thing on a bearish candle okay just slightly different okay instead the open is up here okay and the close is down here okay so the close on a bearish candle is
• 07:00 - 07:30 lower obviously and the open on a bearish candle is higher okay remember oops and again right up here is the highest point that price was able to go to okay and down here was the lowest point that price was able to go to perfect candlesticks [ __ ] simplified by tjr now we can get rid of this [ __ ] okay now we are going to talk about Candlestick patterns and and I know what
• 07:30 - 08:00 you're going to say you're probably going to say whoa tjr whoa whoa whoa whoa whoa whoa whoa whoa what the [ __ ] I thought you hate Candlestick patterns I do I hate the ones the Candlestick patterns that are based off of mountain tops [ __ ] W's Head Shoulders that [ __ ] is BS I also hate Candlestick patterns I really hate
• 08:00 - 08:30 every single Candlestick pattern that is more that that contains more than two candles the only Candlestick patterns I like because they can actually show you price action and dictate where price is going to go are the single Candlestick patterns okay so let's look up if this thing will load candle stick patterns cheat sheet
• 08:30 - 09:00 hopefully this pulls up the single candlesticks um okay good it has some of them on this all right let's pull this thing up and let's zoom on in okay so first of all we don't give a [ __ ] about this entire top row okay I also don't give a [ __ ] about anything in here anything in here anything from here and
• 09:00 - 09:30 below I only care about doji's long-legged doji's long-legged dojis and doji's are the same thing okay cross doji's and inverse cross doji's dragonfly doji's hammers okay those are the only things I care about okay just this row forget about all this [ __ ] this is garbage okay no we don't give a [ __ ] all right just focus on this row right here okay and why are we going to be talking about this okay it's because
• 09:30 - 10:00 these candlesticks are showing price action and showing where price rejected and where it didn't okay so if I can honestly just find these on the chart I don't know why I pulled that up um but with a candle this is just like a perfect example with a candle like this one right we see price opens right here it doesn't go low right it pushes all
• 10:00 - 10:30 the way up to this point but then closes down here okay this candle is essentially saying to me okay we have strong bowls but not strong enough to close damn not strong enough to close all the way up here or here or here or here we left a fat ass Wick up here meaning it was not strong enough to close above whatever was residing above here and
• 10:30 - 11:00 more than likely it was taking this liquidity okay so right we knew that price pushed up close still bullish but there was weakness because it couldn't finish out this candle right now let's find another example okay um
• 11:00 - 11:30 right here okay similar situation but with a doji usually doji's which are just small bodies of candles okay so when a candle looks like this doji's are great for reading price action okay it's usually small body long Wicks or just just small body of a Candlestick in general okay looks like this okay something like that
• 11:30 - 12:00 of some sorts okay probably not that long of candles of Wicks but you know what I get you know what I'm getting at anyways doji's are great because they can show us indecision in the market and indecision with a bias in One Direction okay so when we see this bearish doji right we're obviously not taking a trade off of this but we need to be able to read the candlesticks right these are these small things that that intuition can build that that experience builds by being able to see and read these
• 12:00 - 12:30 candlesticks when most people aren't able to do that most people are saying liquidity was swept we broke structure but you guys can't even read these candlesticks you don't even understand what these are saying to you and they're telling you a lot of information okay so this Candlestick in particular right we see Boom Big sell-off down here okay and then we get to this candle okay we get long Wicks to the downside but not a full body close right we don't see a a a big body close to the downside
• 12:30 - 13:00 means we're losing bearish momentum okay and as you can see we did lose it we start consolidating pull up a little bit higher and then nothing [ __ ] happens after that right so we lost bearish momentum with this candle we can see that through the long Wick to the downside and then it failing to close lower in a regular sized candle right this is a doji this is showing indecision within the market okay
• 13:00 - 13:30 again right we we we see the long extension of a wick to the upside all right showing that hey you know we we pushed all the way up here but we failed to close above here right we failed to close above these price points and then what happened we fell okay but this is not something you take a trade off of this is just slowly learning and understanding okay these candlesticks and what they're trying to
• 13:30 - 14:00 tell you okay let's go over to gold gold can give us um some some great momentum some great volume and also shows us some great Candlestick patterns okay let's go to the Daily where are we at huh okay
• 14:00 - 14:30 right here okay this is a great example okay we push up we come down okay yes we formed a bullish doji right this is a doji candle however right we've we failed to push up completely yes we see strong rejection to the downside and yes we do see closures to the upside okay this is why we cannot be taking trades purely off of Candlestick patterns because this this is only one
• 14:30 - 15:00 confluence okay yeah we see boom super strong rejection to the downside with this Wick and then we close bullish still right but we're in a downtrend we are continuously breaking structure to the downside okay so that's an example of where we can't we can't let our bias get [ __ ] get lost in these patterns okay the these are very very minimal in what you
• 15:00 - 15:30 need to trade but it is good to understand and to know and to learn these if you don't know them already they're fairly simple you really just have to know right a [ __ ] strong close which is what literally a regular Candlestick looks like to you so like this candle for example is a just a strong close right it's full it's full it has not many not a high Wick um to the upside if anything a highway
• 15:30 - 16:00 to the upside on this candle would be even more of a reason for it to be a strong close and then also right the the wick to the downside is fairly small again compared to the body right so we had a move to the downside and we were able to close and continue down right and it wasn't just a wick to the downside and then I move back on up showing weakness okay let's just keep going through and spotting these on um on the chart
• 16:00 - 16:30 okay again right this candle this is a great wow great example of something of of something where like we see liquidity get swept in almost like a confirmation candle okay right we see this long long Wick to the downside price at one point remember guys we have to understand that price was opened here so at one point in time during this week
• 16:30 - 17:00 price was literally a big red candle from this point down you PR right everyone probably thought this [ __ ] is going to the floor right because and this is where like your head headspace can [ __ ] get [ __ ] up because people get so caught up in in the candle that's forming and not the candle that has formed okay we can only
• 17:00 - 17:30 make bias and decision on candles that have formed not candles that are forming okay that's why we always wait for a close for a break of structure right we have to wait for that Candlestick to close because right it's not an actual candle until price action is done within you know whatever time frame that we're on okay so this candle for example we get a strong rejection to the downside right price pushed all the way down here but
• 17:30 - 18:00 then nope was able to first of all opens down here comes all the way down here and then rallies all the way back up to this point and closes up here that is a very very strong bullish candle right we see massive Wick to the downside tiny Wick to the upside meaning it literally closed almost as as bullish as it could have right on on most bullish candles
• 18:00 - 18:30 you're going to get some sort of Wick or and on most bearish candles you'll get some sort of Wick um to the top side or to the downside but when it closes so fully like this with a strong rejection to the downside that is telling you a bunch that's telling you a thousand words right that candle is is telling you exactly where price wants to go okay what does price end up doing rallies higher takes out these highs Etc okay so
• 18:30 - 19:00 this is all that I want you to do for today I know today boring as [ __ ] boring as hell you're probably like what the [ __ ] but right we're starting from the beginning we're starting from Clear slate okay trust me we're going to bring you guys up with this and it it'll go it'll get going a lot quicker than you think okay so price or sorry all that I'm asking you to do is get on whatever chart you trade okay
• 19:00 - 19:30 whether it's SPX g-u GJ whatever okay get on whatever pair that you trade okay get on whatever pair that you trade and just spot these and see how Market reacts like literally just being on this chart I can I can see two boom massive Wick rejection to the downside still not a good close but what happens next we do get a full bullish close boom rallies takes out these highs
• 19:30 - 20:00 right okay similar to this right we have a doji long candle or sorry long Wick to the downside bullish clothes right here to the upside right we can use these two in Confluence together right we have this full candle and then this doji with a big wick to the downside showing rejection after several weeks of of Doubt of being down right we
• 20:00 - 20:30 can show exhaustion through the dojis okay and then we get boom closer to the upside price rallies takes out these highs so all that I want you to do again strong look to the downside full close rallies so all that I want you to do is get whatever choose whatever pair you trade okay um and just look for these and see how price reacts off of these certain price
• 20:30 - 21:00 points okay find at least 10 examples okay this is your homework all right find at least 10 examples of these doji candlesticks okay understanding Wicks within the market right there's there's a saying Wix don't lie and I think I literally think there's someone that teaches on uh like YouTube or Instagram named Wix don't lie I'm I may be wrong though it may be fibs don't lie I don't know but Wix do not lie Wix and candlesticks
• 21:00 - 21:30 tell the whole story okay of price action no we do not care about a [ __ ] Mountaintop look how that [ __ ] played out [ __ ] horribly right you got stopped out we don't give a [ __ ] about mountaintops we care about price action okay and that is what we were going to be studying this literally this entire course okay so with that being said
• 21:30 - 22:00 that's your homework okay very very short lesson today but essential okay in on in in in in you know slowly gaining that [ __ ] market experience that I know you guys need and want okay um and honestly these are going to be the lessons that are more important for you guys because this is [ __ ] that you guys probably brushed over and don't think about too often so um homework is fine 10 examples of this
• 22:00 - 22:30 bro homework is fine 10 examples of this on your own pair on your own chart that you trade okay take screenshots of it um [ __ ] label them do whatever you need but not only do I want you to find examples of this on the chart but find how price ended up reacting off of these examples okay and that will give you a better understanding of candlesticks
• 22:30 - 23:00 okay the closes of candlesticks how Wicks work in this market okay Wix tell tell so much of a story within this Market these candlesticks tell tell the entire story of this Market okay so if you cannot understand candlesticks you won't be able to understand the market because we have to read these things these things are telling us a story and we have to be able to read them and dissect them and understand them so with that being said that is day two super short day we're
• 23:00 - 23:30 starting off slow this is like syllabus week right we'll we'll start you off with the easy [ __ ] and then we'll get into the difficult stuff okay so find 10 examples of that and then I'll see you tomorrow all right peace