Martha Stokes, CMT, Co-founder & CEO of TechniTrader was a guest recently on Benzinga’s All-Access.
TechniTrader is an educational company focused on teaching traders and investors a complete process for trading or investing in the stock market and other financial markets. Founded in 1998, it says it has helped over 500,000 traders and investors achieve their financial goals.
Ms. Stokes shared some of her extensive knowledge, shedding light on important distinctions between certain candlestick types and different buy and sell signals.
TechniTrader is an educational company focused on teaching traders and investors a complete process for trading or investing in the stock market and other financial markets. Founded in 1998, it says it has helped over 500,000 traders and investors achieve their financial goals.
Ms. Stokes shared some of her extensive knowledge, shedding light on important distinctions between certain candlestick types and different buy and sell signals.
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NewsTranscript
00:00 (upbeat music)
00:02 - Good morning, Martha, how are you?
00:06 - I'm great, how are you?
00:07 - I'm doing well.
00:08 There's so much to talk about.
00:10 The market has been hot.
00:11 Folks have been taking advantage of it.
00:13 I'm sure y'all have as well.
00:14 But before we dive into like the candlesticks
00:16 and the nitty gritty of things,
00:18 if you can just kind of quickly give me an overview
00:19 of what is it that your company does.
00:21 - Okay, we've been in business for 25 years
00:23 and we have a stellar better business rating,
00:26 which is unheard of in the financial markets.
00:29 I retired early in my late 30s and I got bored.
00:34 So my business partner and trading partner said,
00:36 "We ran a trading floor for a while and we sold that."
00:38 And he said, "Well, why don't we do a two day workshop?"
00:42 And I said, "Everybody knows what we do.
00:45 I don't know what I can teach them
00:47 that they can't get right off the internet."
00:49 - Right.
00:49 - And he said, "No, no, no.
00:50 What we have is totally unique."
00:51 So he talked me into it, took him a year.
00:53 And I was standing in front of the workshop
00:55 and there was beginners all the way to stockbrokers
00:58 and everything and I turned to him and I said,
01:00 "Well, we're gonna have to refund everybody's money
01:02 because we're not gonna be able to teach them
01:04 something they don't already know."
01:05 - Yeah.
01:06 - And he said, "Martha, just do your stuff
01:07 'cause I'm a very good teacher."
01:09 And so I started talking about eight minutes
01:11 into my conversation.
01:12 I stopped because the whole floor was quiet.
01:15 It was a three ballroom filled to the gunwales.
01:18 And I said, "You don't know that stuff."
01:21 And they said, "Yeah, we don't know any
01:23 of what you're saying."
01:23 So from the buy side perspective,
01:26 I'm trying to give education.
01:28 This is my legacy for what I wanna do
01:32 in the rest of my life is teach
01:34 and help people get better at understanding the buy side.
01:37 You get all the stuff on the internet.
01:39 You have tons of internet stuff, but it's all retail side.
01:43 Retail side is 20% of the market.
01:45 You count for just 20%.
01:48 80% is the professional side.
01:50 If you don't know what they're doing,
01:51 if you don't know where they're going,
01:52 I have been telling students all along,
01:54 we're heading for a moderately tending market.
01:56 All summer long, they're going, "Really?
01:59 It doesn't feel like it."
02:00 I said, "This is a baby bull
02:01 and it's gonna last 10 or 15 years."
02:03 Because I've been through everything
02:05 since I was the age of 12
02:06 when I started learning from my grandfather.
02:08 So we have a very strong market that's moving up.
02:12 We're gonna have some profit taking.
02:13 I wanna talk about candlesticks today
02:15 because candlesticks are everywhere.
02:17 You can learn about candlesticks.
02:18 They were great.
02:19 Steve Neeson, CMT brought them from Japan
02:22 to the US in the early '90s.
02:23 He got his CMT designation from doing so.
02:26 It was great because the bar charts and the line charts
02:28 are just not enough in our modern market.
02:31 However, the candlesticks that you learn in the books
02:35 and online and everything
02:36 are from the original Japanese candlesticks
02:39 that were written in the 1600s
02:41 for the rice commodities exchange.
02:44 And that is also, rice was also a currency at that time.
02:48 So the wealthy landlords used the candlesticks
02:53 to trade the commodities market,
02:55 make money to pay their taxes.
02:57 That's not the market we have today.
02:58 It's very modern, it's very different.
03:00 What I do is I teach specific buy and sell signals,
03:06 not just candlestick reversal continuations.
03:08 There's the push, there's the nesting,
03:10 there's a springboard, there's the hurdle,
03:13 there's a pole vault, there's the resting day
03:16 and all kinds of them that the nudge is a new one
03:19 that the pro traders are using.
03:20 Since they can do their trading on a penny spread,
03:23 their candle patterns are completely different
03:26 than what you learn in the candlestick courses.
03:29 And that's fine, the other ones.
03:30 But what you learn from a technique trader
03:33 are the ones that are actionable on that day.
03:35 You could use MACD or RSI or any of the crossover signals,
03:39 but the problem is you're one to four days late
03:42 getting into the trade.
03:44 And all of us know that in this fast paced market,
03:47 even one day behind price action
03:50 is going to lose you a lot of money.
03:53 If you're happy making a couple of hundred dollars a day,
03:55 that's fine, but a lot of my students go on.
03:58 Brian Pennell was one of my students years ago
04:01 and he was trading a hundred million hedge fund
04:05 and has gone on to write some interesting technology
04:08 and I'm extremely proud of him.
04:09 He's just one of many, many students
04:11 have gone from retail to professional
04:14 or someone like one of my students, Kathy,
04:17 who makes more money position trading
04:20 than her husband does, did working from Boeing
04:23 and he was a top executive.
04:24 So there's a lot of things going on that you can do
04:27 and there's more variables than you have.
04:29 So the candlestick patterns,
04:30 what you want is a buy entry signal.
04:32 You must use candlesticks and not just indicators
04:35 because indicators are a lagging device.
04:40 They have to have price move before it can cross.
04:44 So you're already late in the trade.
04:46 So what you wanna do is get in a little bit earlier
04:48 and make sure that you can make the most money
04:53 with your dollars in the least amount of time.
04:56 You can do lots and lots of trading,
04:59 but you'll never get where you deserve to be.
05:01 And I think a lot of the retail side
05:03 deserve to make more money.
05:04 And certainly business trading as a career
05:08 is becoming more and more popular
05:09 because people would like to work from home.
05:12 They would like to be able to make more money
05:14 if they're a stay at home parent,
05:15 they wanna be able to make extra cash
05:17 without having to abandon their children type of thing.
05:20 So there's many ways.
05:21 So the candlestick buy entry signals that I have,
05:25 I have a small mini course,
05:26 I have a slide that you can pop up if you don't mind.
05:29 - Unfortunately, don't have the slide up,
05:32 but our producer just heard you.
05:33 So as soon as we get that up, I apologize.
05:36 - So the buy entry signals--
05:38 - I've got trading view if you ever wanna pull that up,
05:40 but go ahead, sorry.
05:41 - Now buy entry signals are unique.
05:44 And I use the terms that tell you what's going to happen.
05:49 If you have a springboard pattern,
05:51 obviously if you know if the spring compresses
05:55 what happens after you let go of it,
05:56 it goes like a rocket.
05:58 And that's a very good swing trading entry signal.
06:01 Resting day candles are candles
06:02 where we've had huge big gains
06:04 and then all of a sudden the stocks go sideways
06:06 in tight formations.
06:08 The next thing it's going to do is a very low entry,
06:10 a low risk entry because you can set that stop loss
06:13 under that support level and then it runs up strongly.
06:17 So, and then we also have the nudge,
06:19 which is the professional traders know about the HFTs.
06:22 The HFTs know about retail traders
06:24 because retail brokers are required
06:26 to show their overnight overflow just as the market opens.
06:30 HFTs are triggering on the millisecond.
06:32 So they can shove 60,000 in a few seconds
06:36 and then they're in and they go with it.
06:40 So you can't get into those gaps unless you see the nudge
06:43 and the nudge is a pro trader setup
06:45 that nudges the HFT to gap.
06:48 - Okay, so now whenever you have your,
06:51 you know, we often talk about,
06:53 by the way, if you'd like to share your screen,
06:54 'cause I unfortunately don't know if we have your slides
06:56 and I apologize for that little bit
06:57 of miscommunication on our end.
06:59 But if you have the slides on your end,
07:01 you're more than welcome to share your screen.
07:03 But if not, the question for me is,
07:05 you know, there's so much,
07:06 and to take a little bit of a pivot here,
07:07 there's so much conversation about risk reward,
07:09 about like, hey, if you're, you know,
07:10 say if you're just hypothetically for easy math,
07:12 if you're buying a stock at 100,
07:14 if your profit target is like say 101,
07:17 your stop loss should be like at least 99.
07:19 That way you can get a one-to-one risk.
07:21 - No, no, no, no, no.
07:21 - How do you, so that's exactly what I wanted to ask you.
07:24 How do you kind of conclude that?
07:26 - Professionals are technical analysts.
07:29 I've taught, my primary thing I teach my professionals
07:32 is relational technical analysis
07:34 'cause they're ready for that kind of level
07:36 after their CMT exams
07:37 or if they're just professionals trading.
07:39 And when they trade like that,
07:41 they're taking the support level
07:43 pertinent to the trading style you're using.
07:46 So if it's day trading, it's different than swing trading
07:48 or platform position trading or whatever.
07:50 There's a different support level for each.
07:53 So you have to place it.
07:54 Otherwise, HFTs can see those orders
07:57 and they're gonna whipsaw you out.
07:59 And I'm sure you've experienced that.
08:00 - Oh yeah, for sure.
08:01 - Why has that happened?
08:03 Well, because you didn't place your stop loss
08:05 in the appropriate place.
08:06 You have to place it where the professionals
08:08 will be placing it.
08:09 And the HFTs will not be seeing that right away.
08:13 And so they're not gonna see a mass amount
08:15 of activity there.
08:17 So that's how you get around it.
08:18 My students use stop losses very successfully,
08:20 trailing stop losses very successfully
08:23 'cause I make them see where they're supposed to place it.
08:26 A lot of times you do percentages or penny gains.
08:29 If you're doing penny gains,
08:31 you're going to be trading with scared money.
08:34 If anybody places a stop loss too tight
08:36 and they're whipsawed out,
08:37 you're trading with scared money.
08:38 You shouldn't be trading with scared money.
08:40 You should be trading with absolute confidence
08:42 that you know that my students have ranged
08:45 from 17 and a 90% success rate,
08:47 depending on where they are in their education.
08:50 So this is my little leading candlestick patterns.
08:53 It's an intro to Western candlestick patterns
08:56 and how to use them.
08:57 It's no cost on our website.
09:00 It introduces you to how I trade and how I teach.
09:04 And this is important because you have to find a teacher
09:07 and an educator who's credentialed,
09:09 who's been in the business for at least 20 years
09:12 because you have to have experience.
09:14 And I've been in it since I was 12.
09:17 And you have to be able to understand
09:20 what the teacher is teaching you and apply it appropriately.
09:25 So each educator, as everyone knows,
09:28 you had those fantastic teachers or educators or professors
09:32 that you just remember even to this day.
09:34 And so you wanna find the right teacher for you.
09:37 And so this gives you a chance to see if I'm right for you.
09:41 - Oh, I appreciate the insights on that.
09:43 Someone wanted us to go ahead and post the link.
09:45 So I'm gonna go ahead and quickly copy and paste it.
09:47 There it is in the chat as well.
09:49 But Martha, before we go,
09:51 any other insights you'd like to provide for us?
09:54 - Don't chase stocks.
09:55 We're gonna be in some pretty heavy velocity as we get there
09:58 that we're gonna hit some resistance levels.
10:00 Don't chase stocks.
10:01 Learn to get into the stocks before they move.
10:04 - All right, well, I appreciate the insight.
10:06 That is Martha Stokes,
10:08 who is a CMT and co-founder and CEO of TechnoTrader.
10:11 You've got the link in the chat.
10:12 Make sure you check it out,
10:13 especially when you can get some insights for free.
10:16 And then of course,
10:17 you can always contact her for more education.
10:19 Martha, thank you so much for joining us here today.
10:21 (upbeat music)
10:23 (upbeat music)