Every figure and definition this video puts on screen, chased to a source.
The charts are worked examples built to teach the mechanism, and they are labelled
Illustrative on screen wherever they appear. The round numbers in them (100 and 105, the
1.2500 level, 20 points and 80 points, 200 points) are the arithmetic of those examples and
are not readings taken from any market. Nothing in this video claims a win rate, a
backtest or a result.
The video opens by saying that most traders lose money even when the basic idea of trend following is sound. The public evidence for retail traders losing money comes from the regulators, who require every provider to publish its own figure.
ESMA, announcing its product intervention measures on 27 March 2018:
NCAs’ analyses on CFD trading across different EU jurisdictions shows that 74 to 89% of retail accounts typically lose money on their investments, with average losses per client ranging from EUR 1,600 to EUR 29,000.
Source: ESMA, 27 March 2018
The FCA, 1 December 2022:
Approximately 80% of customers lose money when investing in CFDs and, because of the risks, the FCA has undertaken an extensive programme of work to ensure consumers are as protected as possible.
Source: FCA press release, 1 December 2022
The standardised risk warning that carries a provider’s own percentage, and the requirement to recalculate it every three months over the preceding twelve months, comes from the same intervention and is retained in the FCA Handbook at COBS 22.5.
Source: FCA Handbook COBS 22.5
What these figures do and do not cover. They are loss rates for retail CFD accounts across every strategy those account holders used. They are not a measurement of trend followers, and no regulator publishes a loss rate broken down by entry timing. So they support the general statement that most retail accounts lose money. They are not evidence that late entries are the cause, which is an argument this video makes from mechanism rather than from data.
The structural definition the video uses throughout is the standard one, and it goes back to Charles Dow’s work in the late nineteenth century.
An uptrend is made up of ascending peaks and troughs. Higher highs and higher lows.
A downtrend is made up of descending peaks and troughs. Lower highs and lower lows.
Source: Fidelity, Basic concepts of trend
The same source is where the video’s claim that trends move in waves rather than straight lines comes from. Dow described prices moving in waves, and a rising primary trend as one producing larger rallies and smaller retracements, which is the expansion and pullback pattern the middle of this video is built on.
The video’s worked example breaks resistance at 100, rallies to 105, and then treats 100 as a candidate support area on the way back. That role reversal is a stated principle of technical analysis rather than an observation invented here.
As the price advances above resistance, it signals changes in supply and demand. The breakout above resistance proves that the forces of demand have overwhelmed the forces of supply; if the price returns to this level, demand will likely increase, and support will be found.
Source: StockCharts ChartSchool, Support and Resistance
Note the wording in the source, which the video keeps: support will likely be found. It is a probable area, not a guarantee, which is exactly why the video pairs it with a stop below the structure.
The three periods named in the video are the conventional short, medium and long term settings.
An exponential moving average weights recent closes more heavily. The multiplier is
2 / (periods + 1), it is seeded with a simple moving average, and each subsequent value is
(close minus previous EMA) x multiplier + previous EMA.
Source: StockCharts ChartSchool, Moving Averages
The video’s point that a moving average is a reference rather than a line price must bounce from is supported directly by the same source:
A moving average doesn’t predict price direction. Instead, it defines the current direction. However, a moving average tends to lag because it’s based on past prices.
Moving averages are trend following, or lagging, indicators that will always be a step behind.
The charts in this video compute their averages from the formula above rather than reading them off a charting package, so what is drawn is what is described.
The video lists the 50% retracement among the precise levels traders wait for. It is worth knowing that this one is not actually a Fibonacci number.
The 50% retracement is not based on a Fibonacci number. Instead, this number stems from Dow Theory’s assertion that the Averages often retrace half their prior move.
The retracement levels usually drawn are 23.6%, 38.2%, 50% and 61.8%, and only three of those four are derived from the sequence.
Source: StockCharts ChartSchool, Fibonacci Retracements
This reinforces the video’s argument rather than undermining it: the level most traders treat as the textbook retracement is itself a rule of thumb about roughly half the prior move, which is why the video treats the pullback as an area rather than a price.
Two numbers on screen are results rather than inputs, and both are plain arithmetic on the example’s own figures.