How to Avoid Being Among the 97% of Failing Investors: The Answer Lies in 'Trading Volume' and 'Support/Resistance'

Ross Cameron is known as a genius trader on Wall Street in the United States. He is introduced as someone who can clearly explain why most investors lose money. Through his experience and analysis, we can learn the secrets to success in the investment market.

Surprisingly, research shows that 97% of people lose money in the global trading market, and only 3% make money. Among these, the proportion who become wealthy is less than 1%. This statistic starkly illustrates the difficulty of the investment market.

The 97% failure rate statistic actually holds a hidden secret. A large majority of people included in this statistic had only traded once. In contrast, most of the 3% successful investors were professional Wall Street traders. This can be interpreted to mean that most people who trade professionally make money.

Ross Cameron pointed out that the biggest difference between ordinary investors and professional investors is that ordinary, or novice, investors tend to have more noise and comparisons on their charts. He added that the excessive use of miscellaneous auxiliary indicators without understanding their principles is the main reason why ordinary investors lose money, and he himself made the same mistakes in the past.

After enduring several severe failures, Ross Cameron decided to clear all auxiliary indicators from his charts and focus only on the most important and fundamental elements. The method he chose was to trade by concentrating solely on trading volume and support/resistance. This strategy emphasizes understanding the intrinsic movements of the market rather than relying on complex indicators.

Support refers to a zone where the stock price, after declining, finds significant buying interest, making further drops difficult or leading to an upward reversal. Conversely, resistance refers to a zone where the stock price, after rising, encounters significant selling pressure, making further increases difficult or leading to a downward reversal. These two concepts mark important turning points in the market.

Ross Cameron emphasized that accurately understanding the fundamental reason why support and resistance zones are formed is key to turning a profit. He explained that the underlying cause of support and resistance lies in liquidity and the microstructure of the order book. He pointed out that most people are often unaware of this reason, underscoring the importance of understanding the principles.

When market makers' limit orders accumulate significantly at a specific price level, a kind of 'wall' forms around that area. Such a wall is what we call support or resistance. This means that large orders directly influence market price movements, creating important turning points.

Ross Cameron explained that the main entities designing support and resistance are primarily market makers, or the 'forces' in the market. For this reason, he stressed that knowing the fundamental reasons why support and resistance occur is extremely important for investing and is key knowledge for making money. This implies that understanding the movements of these 'forces' is fundamental to market analysis.

When liquidity is absorbed after hitting a buy wall set by market makers, and prices stop falling or momentarily rebound, late-entering investors incur losses. At this point, most short position holders will cut their losses on the rebound, and the price dip that follows is a 'pullback'. When the price returns to the vicinity of the buy wall where the market makers entered, a support zone can be drawn because the buy wall designed by the market makers exists there.

In actual trading, investors often encounter more support or resistance zones than expected, which can lead to confusion. Ross Cameron emphasized that in such situations, accurately identifying the most significant zones among the numerous support and resistance areas on the chart is crucial for investment success. The ability to eliminate unnecessary noise and pinpoint only the key points is important.

A Fair Value Gap (FVG) requires three candles and refers to the empty space formed when the high of the first candle and the low of the third candle do not overlap. A gap formed during an upward move is called a bullish Fair Value Gap, indicating that an imbalance in buying and selling caused a sharp rise. Before continuing the trend, the market forms a pullback near this gap to fill the transactional balance within it, and once balanced, it acts as support, leading to a rebound.

Among Fair Value Gaps, stronger gaps are those where a significant trading imbalance has occurred, possessing a more powerful pull and rebound force. The most suitable auxiliary indicator to distinguish these is the horizontal volume profile. The volume profile is a tool that allows one to instantly see at which price levels market participants have traded the most. The most concentrated price level is called the 'Point of Control (POC)', and prices tend to return to the POC zone, where market participants show significant reactions.

Ross Cameron's 'VP Fair Value Gap' is a powerful tool that combines the Fair Value Gap and Volume Profile. This indicator automatically marks only the strongest Fair Value Gaps among the many on the chart, which contain the Point of Control (POC), the zone where the most trading volume occurred within the gap. A bullish Fair Value Gap acts as a support zone, and when the price returns near the gap and rebounds, a buy entry can be made.

After a bearish Fair Value Gap occurs, if the price returns near the Fair Value and faces resistance, a simple strategy of entering a short position can be used. If the price fails to find support or resistance and breaks out of or through that zone, the Fair Value Gap automatically disappears. This strategy suggests a way to take a short position by leveraging market imbalances.

Based on the theoretical background explained so far, a demonstration of applying this strategy to a real account will now be shown, testing the indicator's performance and explaining the detailed methods for using the indicator in practice. This aims to bridge the gap between theory and practice and help investors utilize it directly.

Over a little more than two hours, Bitcoin made a significant upward movement, breaking through all existing bearish Fair Value Gaps. With no more Fair Value Gaps remaining above and only bullish Fair Value Gaps below, the position was closed with a high profit margin of nearly 200%. This serves as an example demonstrating the validity of the VP Fair Value Gap indicator.

After about 6 hours, Solana was observed to have risen near the bearish Fair Value Gap and then faced strong resistance in that area. Accordingly, the position was fully closed, ending the trade with a profit of about 150%. This was also presented as a successful trading example utilizing the VP Fair Value Gap indicator.

The video provided explanations on the basic concepts of support and resistance and their fundamental principles, then delved into advanced versions like Fair Value Gap and the horizontal volume profile. Finally, it concluded with a comprehensive explanation of Ross Cameron's VP Fair Value Gap indicator, which combines all these concepts. This aims to help viewers understand the investment strategy step by step.

The source code for the VP Fair Value Gap indicator introduced in the video can be requested via a link in the video's comment section. After applying, if you leave a comment saying 'subscriber', the channel will verify your subscription status and provide the indicator for free only to 'true subscribers' who are subscribed to the channel. This is a measure to provide practical help to viewers.