Everything this video states as fact, and where it comes from.
Two categories are kept apart deliberately, because they carry very different weight:
Definitions. Where the video says what an indicator or a convention is, the source is the person who defined it, or the reference implementation everyone else copies. These are settled and there is no argument to have about them.
Worked examples. Where the video says “imagine price moves from 100 to 110”, that is a
teaching example the script invents to make a mechanism visible. Every chart in the video is
generated for the same reason, and each one carries an Illustrative mark on screen. None
of it is a record of anything that happened in a market, and it is not offered as one.
No performance claim is made anywhere in this video, and none was measured. There is no win rate, no hit rate, no backtest and no equity curve taken from a real system. The two percentages the video does arithmetic on are its own invented examples, and they are listed below as such.
The video shows an RSI pane with an overbought rule at 70 and an oversold rule at 30, and says that a reading above the upper rule is called overbought and below the lower one oversold.
RSI was defined by J. Welles Wilder Jr. in New Concepts in Technical Trading Systems (1978), along with the 14 period default and the 70 and 30 levels the video draws. Wilder’s own framing is the one the video uses: these are readings that describe how fast price has moved, not instructions.
The video draws a Bollinger pair as an envelope around a central line and describes the middle of that band as one of the reference points a mean reversion trader can use.
Bollinger Bands were developed by John Bollinger in the early 1980s. The standard setting, and the one the video draws, is a 20 period simple moving average with the outer bands at plus and minus two standard deviations, so the middle band is that moving average.
Bollinger Bands is a registered trademark of John Bollinger.
The video lists VWAP as one of the reference points price can be measured against and can revert toward, and draws it as a line through the bars rather than as a horizontal level.
VWAP is the average price over a period weighted by volume traded at each price, which is why it is drawn as a line that moves rather than as a fixed level.
The video’s opening argument for trend following is that a market can keep moving in one direction well past the point where someone would have called the top, and it draws a series that runs past a marked “where you would have called it” level.
This is the momentum effect, and it is one of the most replicated results in the literature. Jegadeesh and Titman (1993) documented that buying past winners and selling past losers produced significant positive returns over three to twelve month holding periods, and that this was not explained by systematic risk.
The persistence itself has been shown across markets and across a very long history.
The video draws a run of small losses followed by one much larger winner, and says some professional trend following systems are designed around exactly that shape.
That shape is the positive skewness trend following is documented to have: the return distribution has a long right tail rather than a symmetric spread, which is the same statement as “lots of small losses, occasionally a very large move”.
The specific run drawn on screen, seven small losses and one winner many times their size, is an invented illustration of that shape and not a measured result.
This is the mechanism underneath the whole liquidity sweep section, and underneath the video’s claim that stop losses sit above an obvious high and below an obvious low.
Osler (2003) examined a large sample of currency orders and found that take profit orders cluster at round numbers while stop loss orders cluster just beyond them, and used that clustering to explain why price tends to reverse at levels that are visible on a chart and to move unusually quickly once it has passed through them. Osler’s later work follows the second half of that specifically: stop loss orders triggering in sequence and producing price cascades.
Two limits on this, both of which the video states out loud rather than leaving implied. The evidence is from currency markets, and whether it carries over unchanged to every instrument is not something this video tested. And the video says explicitly that a retail chart cannot show where orders actually are, that what is being done is an inference from levels that are obvious, and it draws that inference as a soft probability cloud rather than as a mark on a specific candle.
The video works through two invented strategies to make this point, and the arithmetic is the argument rather than the evidence, so it is checked here rather than sourced.
Strategy A wins 80 out of 100, each winner makes one unit, each loser costs five. That is
80 × 1 − 20 × 5 = 0, before any cost at all, which is why the video draws its equity line
finishing below where it started once anything is deducted.
Strategy B wins 40 out of 100, each winner makes three units, each loser costs one. That is
40 × 3 − 60 × 1 = +60, from a strategy that loses more trades than it wins.
Both sets of numbers are the script’s own invention, chosen because they make the point cleanly. Neither describes a real system.
Every one of these is a teaching example from the script, drawn on generated price. None is a measurement.
| On screen | What it is |
|---|---|
| 100, 110, 106 | The trend following pullback example: price runs from 100 to 110 and pulls back to 106 |
| 50 MA | The moving average variant of a trend entry |
| 20 MA | The reference average in the mean reversion section |
| 100, 98, 99, 90 | The two ways price can approach a level: falling all the way back to 90, or compressing at 98 then 99 |
| Down 10%, down 10%, down 15% | The earnings example, three legs down while it keeps looking oversold |
| Win rate 80%, winner 1 unit, loser 5 units | Strategy A, invented |
| Win rate 40%, winner 3 units, loser 1 unit | Strategy B, invented |
| 90% win rate | The unevidenced social media claim the video weighs against a tested result |
| Zones drawn, chart covered, touches, rejections | Counters over generated charts, illustrating a mechanism |
The instruments, timeframes and markets shown in the testing grid near the end are labels on an empty grid: the video uses them to say what a person would have to test, and does not report a result for any cell.