--- title: 'How to Find Tops and Bottoms with Precision in Day Trading' source: 'https://youtube.com/watch?v=_wEusYdQG9A' video_id: '_wEusYdQG9A' date: 2026-08-04 duration_sec: 688 --- # How to Find Tops and Bottoms with Precision in Day Trading > Source: [How to Find Tops and Bottoms with Precision in Day Trading](https://youtube.com/watch?v=_wEusYdQG9A) ## Summary This video presents a day trading strategy for identifying tops and bottoms using a combination of a tops and bottoms detector indicator and a custom color rule. The model aims to sell at peaks and buy at bottoms, with specific entry, stop-loss, and target rules, demonstrated on a 2-minute futures index chart. ### Key Points - **Introduction to the Model** [00:01] — The video introduces a day trading model for selling at tops and buying at bottoms, using a specific indicator and color rule. - **Indicator Recommendation** [00:14] — The presenter recommends a 'tops and bottoms detector' indicator for this operation. - **Chart Preparation** [01:11] — The presenter explains the tools and metrics needed, including a 3-period moving average and the tops and bottoms detector. - **Applying the Indicator** [02:47] — Right-click on chart, select 'insert indicator', search 'top and bottom detector', configure to draw labels instead of lines, and set appearance to yellow. - **Creating the Color Rule** [03:46] — Go to strategy editor, create a new color strategy, paste the code from the pinned comment, save as 'TF rule', and insert it as a coloring rule. - **Entry Signals** [05:11] — When the letter T (top) appears, wait for a red candle to close; then place a sell order at the low of that red candle. Stop loss at the top, target projected based on risk. - **Exiting on Opposite Signal** [06:55] — If a bottom signal (F) appears while in a sell trade, exit immediately because the market is likely to reverse upward. - **Buy Setup** [07:46] — When F appears, wait for a green candle; place a buy order at the high of that green candle. Stop loss at the bottom. - **Trade Management** [08:17] — If the trade moves in favor, consider protecting it by moving stop to breakeven or taking partial profits. - **Avoiding Counter-Trend Trades** [10:21] — If a top signal appears while in a buy trade, exit immediately to avoid working against the strategy. ### Conclusion The model provides a systematic approach to trading tops and bottoms with clear entry and exit rules, but emphasizes the importance of risk management and testing. ## Transcript operational model, a study for you to use when trading support and resistance, you to use when trading support and resistance, selling at the top, buying at the bottom, and taking advantage of the best moves that day trading can offer. To do this, I'm going to teach you how to use a really cool indicator, highly recommended for this type of operation. You found that interesting, didn't you? So subscribe to the channel right now, don't waste any notifications, and give us a like to encourage our work so we can reach more people on YouTube. And of course, don't forget to comment. I want to know what you thought of this model. I also invite you to follow us on our social media channels. Take a look here, access it there, follow updates about my operations, our operations, and lots of other information about day trading, mini- index, mini-dollar, forex, and everything else. operations, the website link is in the video description. Go check it out, 'll be happy to answer it. From now on, I'm going to how to prepare the chart and give you all the rules for this help you a lot. We're already here on the chart. First, I'm going to explain to you the tools and metrics we'll need to implement idea behind this model is that you're taking trades at specific points, meaning I'll sell at the top and buy at the bottom, which would be ideal for trading. It's certainly not 100%, but I'll tell you that it's a model that helps a lot and delivers great performance. For this model here, we're going to have a color rule that will show us entry points based on the following settings. Notice that my chart here has regions of tops and bottoms, and we're going to try to take advantage of and enter trades in those regions. To do this, we're going to create a rule that includes this, we're going to create a rule that includes , so that whenever I'm in an overbought or of making a trade. When I'm at a bottom where the market is about to it's an interesting point to buy, and then we can take advantage of it. top region, we have opportunities to sell. For embedded three-period moving average, so that it can identify the closing price above or below it to reinforce our operation. And finally, I'm going to plot an indicator called a tops and bottoms detector on the chart. In other words, he's literally going to mark it on the chart with a little letter there. When it's a top, the letter T. When it's a bottom, the letter F. But there are some attention to in order to really capture this movement. Before we our chart ready. Just a reminder that I'm looking at the futures index chart on 2-minute timeframe, which is where we ran the tests. Before we begin, let's apply the tops and bottoms indicator to our chart. So, to do that, right-click on the chart, select "insert indicator," and in the search bar, type "top and bottom detector." I'll take the last one on the list, look, the top and bottom detector. I insert it directly into the chart, and click OK. We're going to click on this line and ask it to configure it as follows . In the drawing option, instead of drawing lines, he should draw labels. drawing lines, he should draw labels. And in terms of appearance, we're going to use you can put on some yellow, apply it, and click OK. We'll observe that he placed the letter T in the top region and the letter F in the bottom region on the graph. Having done that, now we're going to apply our color rule. a setting that I'll prepare for you. Your job into the Profit strategy editor . Go to the top of the strategy menu, go to strategy editor, click on new strategy, color strategy, and click OK to make it editable. Remove all the text that's already there by default from the editor. Go to the pinned comment on that video; I just posted that rule there. Select the first comment, it's my pinned comment, copy all the my pinned comment, copy all the code from there, and paste it into the editor. Basically, this little rule here, this coding. It's pasted here. Let's save, click on the floppy disk, give a name to our color rule, TF rule, tops and bottoms rule. Save it, close it. We'll right-click on any of the candles and select "Insert Coloring Rule". Click on the plus sign, go to the search bar and enter the name we just saved. TF rule. Select the item, insert it into the chart, add it, and click OK. Note that from now on, in addition to the P and F markings, our chart will include some colored candles. And from there we will look for our operations, our to you now. Okay, so that we can proceed with the operation, we're going to need to observe the following aspect in the chart. When I have the moving chart here, the first thing it has to show me is this top marking with the letter T, and F when it's a bottom, that's what it will mark for me. But he'll only be selected when he meets the criteria we've established, okay? When he marks that letter, I'll need to wait for a signal. The signal will be given by our color rule. So I have a peak there. If I'm at the top, my goal is to sell. So I need to have a red candle in sequence and for it to be broken. From there I have surgery. remind you that this T signal doesn't appear immediately after the candle closes. Here it will close, it will appear at the close of the red candle closes, it will show up there at the top. So, when I have this letter T here, I'm going to check if my candle here is red. If it's not white, I'll wait for another candle. So, we'll go a couple more candles after the letter T. If it activates with a red color, we'll trade. Otherwise, let it pass and wait for a new signal for us. Oh, notice that the signal for us us. Oh, notice that the signal for us will be the letter T. When it's a peak, red candle came up. What do I have to do? I will place a sell order at the low point of this red candle. Okay ? So I mark it here, place a sell order, and as soon as it breaks through, my order is triggered. My stop loss will always be at the top, okay? A safety stop, a stop at a high, and the target will be projected once my risk goes down. It's an operation that usually won't take long because the 2-minute chart is enabled, okay? So here I have a possible entry point; it activates, makes the move, and then hits my target. trade, I entered a trade where there was a high here, the trade was moving, the price didn't move, and then the bottom signal appears here. If a bottom signal appears here, I 'll stop my trade immediately. Why? When it reaches a peak, the tendency is for it to move in a selling direction. When a bottom appears, the tendency is for it to move in a buying direction. So, uh, for safety reasons I'm leaving the operation, okay? So, it marked here, hit my target, nothing more to be done except my target, nothing more to be done except wait for the next signal, which would be a bottom F or a top here, depending on what the chart shows next. Until it appears, I'll just observe. Here, in this case, he gave me the letter F, he already showed me a background here . This fund will be shown shows up immediately, but when you're actually operating it, it won't show up right away. It only shows up after the next candle closes, after all an F has appeared, I'm looking at the next candle. If this candle here were green, It's not green, I'll wait for another candle. He gave me a green candle. Now I have the ticket. Candle high. I have a purchase order. A stop-loss order at the bottom is usually safer, okay? Of course you're going to is the risk of this operation here, for example, 500 points? Is this within your management scope? It's not. It's not. So let it pass, wait, because there are many in the morning, when there is greater volatility. In this case, it triggered my entry, got very close to my target, and then came back here, okay? So, ah, we have the option there, it was close to the target, protect the operation. I have more than one contract, it's partial. I only have one, hold on. As for management, you're the ones who will organize yourselves to take care of this, okay? So, look, let's say I decided to hold off on the operation, he went and hit me there, so, two what do I have to do from here? Waiting for a signal that will show me some interesting information. Look, I have it here, but remember it won't closed, look, the red candle closed, it gave a signal of a top there. Again, is this risk worth it? It depends. You're going to have to look at your management. In our marking the low of the candle here. Entry point: the stop-loss is placed at the very top, at the down here. My operation has been activated, look, it's already moved. If I have a contract, I'll protect myself. If I have more than one, I do a partial one and keep it protected. So you guys will be driving there, okay? Next, he moves over and pays down here. On that day alone, I executed three very well-done trades, utilizing the technique of trading highs and lows in a really clever way. What else do I do here? Just wait. Oh, there was an F here with the green one, but that usually doesn't happen. He will show the F starting from the closing of the second. So I would have a buy operation here at this point. The stop loss is at the bottom. So, is the risk worth it? Again, you have to evaluate what is interesting to you. In this case, the operation was activated , OK, it's there, the movement was made , it got close to the target. If I 'm already aware of the level of risk, I'll , doing a partial job, and thus ensuring safety. There's a trade that's already moved a lot of points here; you can't take a stop-loss order on a trade like that. And then, going back, you see that it's already stalled here, look. It's locked here, it's already protected. If you want to protect yourself even more, and you're already at breakeven , and you see that low of that candle. You'll gain a little more and be even more protected . Another very complicated situation is this one counter-operation and it has reached a high. It reached a peak, it's certain it won't go any higher, it will descend and it will run into you. So if you didn't protect it then, protect it now. Get out of the operation now, because you'll be working against your own operational strategy. Because at this point, what do I already have ? I should already have a trade in place, I should have already exited the trade and should already be in a sell position, because it has already hit the top, signaling to me that there's an entry point here. So, if I leave the operation, look, whoever left already won on the way back here, they already got it down here. I warned you that this operating model was really cool . You saw that the accuracy level is very good, it has helped you in some way so that you can take advantage of this model. Perform all necessary tests, and if it's somehow useful to you, I'll be that you subscribe to the channel, turn on notifications, leave a like if you really enjoyed it, and comment to let me know your opinion. Did me. I'm curious to know your opinion. Furthermore, I am immensely grateful video. Until next time. May God immensely bless your life.