Let's use Alibaba for example. I pulled up Alibaba on the daily time frame and before first and foremost I want to get an overall view of the stock to capitulate a stock I'm going to delve in into present day.

Getting the Overall View

Going over and setting my entries and exits I want to identify a swing low to a swing high. Remember I'm always going to be long in a position, I'm never going to be shorting the market—I simply just wait for pullbacks.

To identify where I should be entering and where I should be exiting, I first go over setting the proper structure of the stock.

Drawing Trend Lines

So if you guys check over here, I'm going to start identifying the proper structure of Alibaba right? I'm going to identify all the highs—try to connect as many points as possible—and the lows and connect as many points as possible.

So I went over here, drew a trend line—this is the top—and I'm going to try to connect as many spots as possible. Remember everyone's trend line is going to be slightly different. I pretty much want to pretty much just get an overall idea of what's going on in the stock.

Upper and Lower Bands

So it looks like we've been respecting around this level—many touches around this level. We've went above it a couple times as well, but overall respecting this trend line.

Then I want to pretty much identify the lower band. So from here to roughly around here, every time we hit this lower trend line we bounce up from it. We're going to identify areas that we can enter into.

The Golden Zone Reference

A thing that I want you guys to take note is the golden zone—the 0.5 to the 618. Remember this zone is a high—remember this zone is a very strong zone, especially on the daily time frame where oftentimes it bounces up from.

I don't want you guys to just simply enter it, but I want you guys to use this as a sort of guide and find confluences within those zones to find an entry.

After I've pretty much marked out and got a clear idea of the structure of the stock, I then want to identify major areas of demand—major areas of support. For our purposes, I'm always going to be longing a position, so I just want to identify right now areas of demand.

How to Draw Areas of Demand

To identify areas of demand, I pretty much go over to the brush over here—there's a rectangle shape here—and then I want to identify areas of where every time it touches this area you see a lot of buying volume.

So remember, to draw an area of demand:

1. Go to the left of the chart
2. Try to identify a basing candle followed by a very bullish green candle that essentially engulfs the prior candle

Practical Application

So for here, every time we entered around this area, look at that huge green bar that inevitably followed—that is where I'm going to be marking my area of major demand.

To draw an area of major demand, it will always be the top of the body of the prior of the basing candle. So this candle right here—I'm just going to go to the side so you guys can get a better view—but from the top of the basing candle all the way to the lower wick. The lower wick would be here, but to get a better idea of that major demand I'm going to go all the way down here—it's the prior wick which will be an overall zone that I can start loading up into the stock.

Multiple Areas of Demand

Other areas of major demand as you guys can see are within here, but we're not trading around those areas. Other areas of major demand as you guys can see here are roughly around here, you guys can see.

So to identify other areas of major demand, usually this area will be a key area of demand, but I can pretty much confirm by pretty much going to the left of the stock and try to identify if there's a prior green candle followed by great green upward movement.

So as you guys can see here, there's a basing candle followed by a very bullish green candle, so roughly around here all the way to here—this is another area of major demand.

Let's take a look to the left—you guys can see a green another here basing candle followed by a very bullish green bar roughly around here.

So how do we utilize this to pretty much find entries into the stock? If the stock was trading roughly around here and I didn't want to chase a stock, I would using a Fibonacci right—stocks do not trade upward like an elevator. There's going to be areas of where it's going to retrace.

Where to Find Retracement Areas

Where do we find periods of where it can retrace? At the golden zone—the 0.5 to 0.618. You can see a lot of the times this demand zone was pretty much respected prior, also lying within that golden zone—very strong area of major demand.

Confirmation Signals

So once you guys see this candle and you're seeing sort of wicks right here supporting this stock as well as trading along this lower band, this would be an area to long into the stock.

Where do you find your exits? Exits are found using your Fibonacci zones or areas of prior demand.

Understanding Supply and Demand Flips

When an area loses demand, it will essentially revert and flip over to supply, which means an area of selling area. And then inversely, if an area of supply ends up getting broken into, it'll inevitably be an area of major demand as well. But you need to find confirmation before you guys ever enter those areas.

Practical Exit Strategy

So going over here, we are very far away from our moving averages, we're in an area of major demand, we're seeing support around this area, we're seeing a good wick—a doji candle essentially showing indecision, showing support in this area. This would be an ideal area to be longing a stock.

Where do we take our profits? Prior demand that has flipped over into supply or a Fibonacci area seems to align right over here.

So this is one fib—the 0.5 fib roughly around here is where you can be essentially taking profits at. You can see here that was used as prior resistance, but you can see here it's also an area of demand that's flipped over to supply. This is where you would essentially sell your stock at.

Let's look at how much profit that you're able to get from this area—from this area. So pretty significant—7%—and you're going to inevitably find these patterns time and time again.

But you need to identify areas of key demand. A lot of the times it's going to have confluences with the Fibonacci level as well as volume and other confluences that are going to support your thesis.

So that's it for setting entries and exits. Once again:

Step-by-Step Process:

1. Get an overview of the stock

   • Identifying the top band and identifying and connecting as much points as possible
   • Lower band—connect as much points as possible
   • In this scenario we're trading in a falling wedge

2. Identify areas of major demand

   • Remember areas of major demand that's been broken and will flip over into support will be areas where you can potentially sell your stock at as well

3. Utilize Fibonacci retracements

   • To identify areas of entry
   • From area swing low to swing high we'll pretty much mark out our Fibonacci levels and try to find confluences within those areas to find an area to long

4. Find your exits

   • Where do you find your resistances or where do you find your exits? Like I said, it's going to be areas of prior demand or it's going to be using the moving averages as resistance or take-profit levels

• Always go long: Never short the market, simply wait for pullbacks
• Structure first: Identify trend lines and overall stock structure
• Areas of demand: Look for basing candles followed by bullish engulfing candles
• Golden zone: The 0.5 to 0.618 Fibonacci retracement is crucial
• Confluences matter: Don't enter based on one signal alone
• Supply and demand flips: Former demand areas can become supply (resistance)
• Profit potential: Proper entry and exit can yield significant gains (7%+ in this example)

So that is it for day six. I want to know your guys's biggest takeaway from this day. I want you guys to post it inside of the Facebook group and hashtag day6 for me in the group.

In our final lesson, we'll put together everything we've learned about technical analysis to create a comprehensive trading strategy. You'll see how to combine all these elements—trend lines, areas of demand, Fibonacci retracements, and proper entry/exit strategies—into a cohesive approach for consistent profitability.

Remember: The key to successful trading is finding multiple confluences that support your thesis before entering any position. No single indicator should be used in isolation.