How to trade?

2 23
PRACTICE.
+27 INDICATORS

+59 TECH ANALYSIS PATTERNS

+ SMART MONEY CONCEPT

CRYPTO & STOCKS & FOREX

BEST MODERN GUIDE

OF 2023 TRADING
The market is no place for
easy money.

Any trading concept

requires systematic
application and risk
management.

Become PRO!
Book content:

Part 1.
Technical Analysis Patterns
(pages 12- 49)

Part 2.
Candle Patterns
(pages 51 - 78)

Part 3.
Indicators Data
(pages 80 - 107)

Part 4.
Combinations
(pages 109 - 111)

Part 5.
Smart Money Concept
(pages 113- 155)
 Beginning!
This book gives you processed material for practical application. You don't
have to watch dozens of hours of video courses or read lengthy
descriptions that try to explain market phenomena.

All that is required of you is to realize the philosophy of the book. The task
of the book is to show and fix for you the maximum number of filters to
increase the % of successful trades. Any open position must be logical,
systematic and tested. Believe me, it's more profitable to open 4 confident
positions a month, than 50 chaotic trades.

The market is a living mechanism that works by the rules. You cannot break
those rules. You can't make up your own. You trade against major market
participants and their software. Consequently, any actions you take should
maximize your profits, but never lead to risky situations.

So, filter your entries into a position as much as possible. Apply technical
analysis, smart money, indicators, anything that maximizes the potential
success of your trades.

Futures. Separate speech about this mechanism of increase of potential

profit, or download more honestly "mechanism of increase of risks". Futures
are debt that you trade. You are exposing your deposit to terrible risks. So
use leverage up to x5. The best medium-term trade for you is margin
trading, not futures trading (because its three times a day commission is too
expensive).

I strongly advise you to trade spot. Much less risk. Believe me, the risk from
the futures does not cover the potential profit. Be careful and never trade
with large funds. Learn, practice, and increase your balance as you go
along.

If you feel too greedy or have a feeling "here comes a good deal, I'll
increase the risk" - skip those trading days. If you disobey my advice, you
are not ready for the market.

Good luck!

1
Part 1.
Technical Analysis Patterns

Page 12 Page 13 Page 14

Three Rising Valleys Three Falling Peaks Rising Wedge

Page 16 Page 18 Page 20

Falling Wedge Symmetrical Triangle Descending Triangle

Page 22 Page 24 Page 25

Ascending Triangle Rounding Top Rounding Bottom

Page 26 Page 27 Page 28

Rectangle (Bottom) Rectangle (Top) Bearish Pennant

2
Page 29 Page 30 Page 31

Bullish Pennant Head and Shoulders Head and Shoulders

(Mirrored)

Page 32 Page 33 Page 34

Bearish Flag Bullish Flag Double Top

Page 35 Page 36 Page 37

Double Bottom Diamond (Top) Diamond (Bottom)

Page 38 Page 39 Page 40

Cup and Handle Cup and Handle Broadening

(Mirrored) (Bottom)

3
Page 41 Page 42 Page 43

Broadening (Top) Broadening Broadening

(Horizontal support) (Horizontal
resistance)

Page 44 Page 45 Page 46

Broadening wedge Broadening wedge Bump and Run

(Ascending) (Descending) (Bottom)

Page 48

Bump and Run (Top)

4
Part 2.
Candle Patterns

Page 51 Page 52 Page 53

Bullish Engulfing Dark Cloud Cover Advance Block

Page 54 Page 55 Page 56

Bearish Engulfing Evening Star Piercing

Page 57 Page 58 Page 59

Three Black Crows Tri-Star (Top) Tri-Star (Bottom)

Page 60 Page 61 Page 62

Doji Gravestone Doji Dragonfly Doji

Page 63 Page 64 Page 65

Hammer Inverted Hammer Rising Three

Methods

5
Page 66 Page 67 Page 68

Falling Three Methods Tweezer (Top) Tweezer (Bottom)

Page 69 Page 70 Page 71

Shooting Star Hanging Man Three White Soldiers

Page 72 Page 73 Page 74

Bullish Belt Hold Bearish Belt Hold Morning Star

Page 75 Page 76 Page 77

Spinning Tops (Top) Spinning Tops Tower (Top)

(Bottom)

Page 78

Tower (Bottom)

6
Part 3.
Indicators Data

Page 80 Page 81 Page 82

Commodity Channel Standard Deviation Parabolic SAR

Index Indicator

Page 83 Page 84 Page 85

Supertrend On Balance Volume Average True Range

Page 86 Page 87 Page 88

Williams Percent RSI Bollinger Bands

Range

Page 89 Page 90 Page 91

Volume MACD Money Flow Index

7
Page 92 Page 93 Page 94

Technical Analyst by Trading Psychology Pivot Boss

DGT

Page 95 Page 96 Page 97

Quadratic Regression Reverse Cutlers ADX+DMI

Trend Channel Relative Strength
Index (RC RSI)

Page 98 Page 99 Page 100

ADX Boxes Gaps/Imb/Wicks Open Interest

Profile

Page 102 Page 103 Page 104

Liquidation Levels Up/Down Volume + Trade Manager Pro

Delta

Page 105 Page 106 Page 107

Linear Regression Williams Market Structure

Channel Accumulation/
Distribution

8
Part 4.
Combinations

Page 109 Page 110 Page 111

Supertrend+Parabolic S&D Zones+RSI Trend line &

SAR resistance level

Part 5.
Smart Money Concept

Page 113 Page 113 Page 117

Structure Upward trend Downtrend

Page 119 Page 121 Page 122

Range Swing High & Swing Types of structure

Low

9
Page 127 Page 130 Page 135

The Fibonacci The Liquidity Imbalance

Page 138 Page 141 Page 146

Orderblock Breaker block Mitigating block

Page 151

Risk Management

10
 Part 1.
Technical Analysis
Patterns

11
Part 1. Technical Analysis Patterns

THREE RISING VALLEYS

Trend Bullish

Type Trend continuation

Timeframe From 1H

Entry point After price closes above second high

Three bottoms, lows and highs of each next

Shape bottom higher than the previous one. All three
bottoms look about the same

The pattern is confirmed when the high of the

Confirmation third bottom closes above the high of the second
bottom

Most traders will start closing their trades on the

Note break of the third high, so the bullish move may
not last long

12
Part 1. Technical Analysis Patterns

THREE FALLING PEAKS

Trend Bearish

Type Trend continuation

Timeframe From 1H

Entry point After price closes below second low

Three peaks, lows and highs of each next peak lower

Shape than the previous one. All three peaks look about the
same

The pattern is confirmed when the low of the third

Confirmation
peak closes below the low of the second peak

Most traders will start closing their trades on the

Note break of the third low, so the bearish move may not
last long

13
Part 1. Technical Analysis Patterns

RISING WEDGE

Trend Bullish/Bearish

Type Bilateral

Timeframe From 1H

Entry point After the price closes outside of the pattern

Two narrowing support and resistance lines between

Shape
which the price moves

Differences from a The main difference from the triangle pattern - is the
triangle slope of the resistance and support lines

The minimum number of touches is 5, three on one line

Touches
and two on the other

14
Part 1. Technical Analysis Patterns

The slope of the support line is steeper than the slope

Line angle
of the resistance line

Volume Increase of the volumes in the breakout zone

The pattern is confirmed when the price closes outside

Confirmation
one of the trendlines

Support/ After the price closes outside of the pattern, the

Resistance support or resistance line may become a mirror level

Breakout chance 70% - Downward/30% - Upward

15
Part 1. Technical Analysis Patterns

FALLING WEDGE

Trend Bullish/Bearish

Type Bilateral

Timeframe From 1H

Entry point After the price closes outside of the pattern

Two narrowing support and resistance lines between

Shape
which the price moves

Differences from a The main difference from the triangle pattern - is the
triangle slope of the resistance and support lines

The minimum number of touches is 5, three on one line

Touches
and two on the other

16
Part 1. Technical Analysis Patterns

The slope of the resistance line is steeper than the

Line angle
slope of the support line

Volume Increase of the volumes in the breakout zone

The pattern is confirmed when the price closes outside

Confirmation
one of the trendlines

Support/ After the price closes outside of the pattern, the

Resistance support or resistance line may become a mirror level

Breakout chance 70% - Upward/30% - Downward

17
Part 1. Technical Analysis Patterns

SYMMETRICAL TRIANGLE

Trend Bullish/Bearish

Type Bilateral

Timeframe From 1H

Entry point After the price closes outside of the pattern

Shape Looks like a symmetrical triangle

Two narrowing resistance and support lines forming

Trendlines
a symmetrical triangle

Candles completely fill the channel of the figure

Intersection
without empty space

18
Part 1. Technical Analysis Patterns

The price touches the resistance and support lines, at

Touches
least two times each

Volume Increase of volumes in the breakout zone

The pattern is confirmed when the price closes outside

Confirmation
one of the trendlines

After the price closes outside the pattern, the support

Support/Resistance
or resistance line may become a mirror level

Breakout chance 55% - Upward/45% - Downward

19
Part 1. Technical Analysis Patterns

DESCENDING TRIANGLE

Trend Bullish/Bearish

Type Bilateral

Timeframe From 1H

Entry point After the price closes outside of the pattern

A triangle with a horizontal support level and a

Shape tightening resistance line. The price is pressed to the
support level by the resistance

Two resistance and support lines that form a triangle,

Trendlines while the support line is horizontal, and the resistance
diagonally pushes the price to the support level

The price touches the resistance and support lines,

Touches
from two times each

20
Part 1. Technical Analysis Patterns

Candles completely fill the channel of the figure

Intersection
without empty space

Volume Increase of the volumes in the breakout zone

The pattern is confirmed when the price closes outside

Confirmation
one of the trendlines

After the price closes outside of the pattern, the

Support/Resistance
support or resistance line may become a mirror level

Breakout chance 65% - Downward/35% - Upward

21
Part 1. Technical Analysis Patterns

ASCENDING TRIANGLE

Trend Bullish/Bearish

Type Bilateral

Timeframe From 1H

Entry point After the price closes outside the pattern

A triangle with a horizontal resistance level and a

Shape tightening support line. The price is pressed to the
resistance level by the support

Two resistance and support lines that form a triangle,

Trendlines while the resistance line is horizontal, and the support
diagonally pushes the price to the resistance level

Candles completely fill the channel of the figure

Intersection
without empty space

The price touches the resistance and support lines,

Touches
from two times each

22
Part 1. Technical Analysis Patterns

Volume Increase of the volumes in the breakout zone

The pattern is confirmed when the price closes outside

Confirmation
one of the trendlines

Support/ After the price closes outside of the pattern, the

Resistance support or resistance line may become a mirror level

Breakout chance 75% - Upward/25% - Downward

23
Part 1. Technical Analysis Patterns

ROUNDING TOP

Trend Bearish

Type Continuation/Reversal

Timeframe From 1D

Entry point After the price closes below the edges of the pattern

Shape Shape looks like a hill

The maximum that is formed during the formation of

Hill line
the hill creates a horizontal line of the hill

Both edges have almost the same price. Permissible

Left and right edge
fluctuations from 1% to 3%

Confirmation When price closes bellow the support level

After reaching the right edge, the pattern may go

Note further up, if the price closes above the hill line, this
means a buy signal

24
Part 1. Technical Analysis Patterns

ROUNDING BOTTOM

Trend Bullish

Type Trend continuation

Timeframe From 1D

Entry point After the price closes above the edges of the pattern

The figure is very similar to the figure of a bowl with a

Shape
handle, but does not have a handle, but only a bowl

Both edges have almost the same price. Permissible

Left and right edge
fluctuations from 1% to 3%

Confirmation When price closes above the resistance level

25
Part 1. Technical Analysis Patterns

RECTANGLE (BOTTOM)

Trend Bearish

Type Bilateral

Timeframe From 1H

Entry point After the price closes outside of the pattern

It consists of two parallel horizontal lines between

Shape which the price moves. The price enters the
boundaries of the bullish rectangle, from above

At least 5 touches in total. 3 touches of the support

Touches
level and 2 touches of the resistance level

If on the last touches has not reached one of the levels,

Indicator there is a high probability of movement towards the
"Indicator"

Breakout chance 45% Upward/55% Downward

26
Part 1. Technical Analysis Patterns

RECTANGLE (TOP)

Trend Bullish

Type Bilateral

Timeframe From 1H

Entry point After the price closes outside of the pattern

It consists of two parallel horizontal lines between

Shape which the price moves. The price enters the borders of
the bearish rectangle from below

At least 5 touches in total. 3 touches of the resistance

Touches
level and 2 touches of the support level

If on the last touches has not reached one of the levels,

Indicator there is a high probability of movement towards the
"Indicator"

Breakout chance 40% - Upward/60% - Downward

27
Part 1. Technical Analysis Patterns

BEARISH PENNANT

Trend Bearish

Type Trend continuation

Timeframe From 30m

Entry point After the price closes outside of the pattern

It looks like a flag figure, only it does not have

Shape
diagonal parallel lines, but symmetrical and tapering

Trendlines The price moves between two converging trendlines

The pattern like the flag, has a formation length of 4

Duration to 12 candles. Formations longer can be considered as
a wedge

Breakout chance 60% - Downward/40% - Upward

28
Part 1. Technical Analysis Patterns

BULLISH PENNANT

Trend Bullish

Type Trend continuation

Timeframe From 30m

Entry point After the price closes outside of the pattern

It looks like a flag figure, only it does not have

Shape
diagonal parallel lines, but symmetrical and tapering

Trendlines The price moves between two converging trendlines

The pattern like the flag, has a formation length of 4

Duration to 12 candles. Formations longer can be considered as
a wedge

Breakout chance 60% - Upward/40% - Downward

29
Part 1. Technical Analysis Patterns

HEAD AND SHOULDERS

Trend Bullish

Type Reversal

Timeframe From 1H

Entry point After breaking the neckline

The pattern consists of three tops, the middle one is

Shape the highest. The pattern resembles a head and
shoulders

Two shoulders are at the same level and are almost

Symmetry symmetrically located from the head and similar to
each other

Volume Ascending at left shoulder or head

Neckline Lows between shoulders are forming a horizontal line

The pattern is confirmed when the price closes below

Confirmation
the neckline

30
Part 1. Technical Analysis Patterns

HEAD AND SHOULDERS

(MIRRORED)

Trend Bearish

Type Reversal

Timeframe From 1H

Entry point After breaking the neck line

Shape Inverted head and shoulders pattern

Two shoulders are at the same level and are almost

Symmetry symmetrically located from the head and are similar
to each other

Volume Increasing at the left shoulder or head

Highs between shoulders are forming a horizontal

Neckline
line

The pattern is confirmed when the price closes above

Confirmation
the neck line

31
Part 1. Technical Analysis Patterns

BEARISH FLAG

Trend Bearish

Type Trend continuation

Timeframe From 30m

The entry is carried out after the breakout of the

Entry point
support level inside the diagonal channel of the figure

A strong downward impulse, and then a price

Shape increase inside the diagonal channel, after the
breakout of which another impulse follows

Smooth upward movement. Price moves between

Diagonal channel
two parallel diagonal trendlines

Flag body Consists of 4 - 20 candles

Goal Usually equals to the height of the first pulse

Breakout chance 75% - Downward/25% - Upward

32
Part 1. Technical Analysis Patterns

BULLISH FLAG

Trend Bullish

Type Trend continuation

Timeframe From 30m

The entry point is carried out after the breakout of the

Entry point resistance level inside the diagonal channel of the
figure

A strong upward impulse, and then a price decline

Shape inside the diagonal channel, after which another
impulse follows after the breakout

Smooth downward movement. Price moves between

Diagonal channel
two parallel diagonal trendlines

Flag body Consists of 4 - 20 candles

Goal Usually equals to the height of the first pulse

Breakout 75% - Upward/25% - Downward

33
Part 1. Technical Analysis Patterns

DOUBLE TOP

Trend Bullish

Type Reversal

Timeframe From 5m

Entry point After breaking the neckline

Two separate highs similar to each other, can

Shape sometimes even stab the local resistance level. Peaks
are narrow and inverted V-shaped

Maximums Price difference between two highs within 1%

Neckline This is the middle between the two highs

The pattern is confirmed when the price closes below

Confirmation
the neckline

Increase of the volumes on the formation of the first

Volume
high

34
Part 1. Technical Analysis Patterns

DOUBLE BOTTOM

Trend Bearish

Type Reversal

Timeframe From 5m

Entry point After breaking the neck line

Two lows that look like the letter “W” double bottom.
Shape Sometimes the low itself can be formed by a single
price low

Neckline This is the middle between the two lows

Lows Price difference between two lows within 1%

The pattern is confirmed when the price closes above

Confirmation
the neckline

Volume Increase of the volumes on the formation of lows

35
Part 1. Technical Analysis Patterns

DIAMOND (TOP)

Trend Bullish

Type Reversal

Timeframe From 5m

Entry point On the breakout of the support level

Shape Looks like a rhombus

It consist of two triangles diverging and converging,

Trendlines
inside which the movement occurs

The price touches the support and resistance lines, at

Touches least one or two times. Minor breakouts of pattern
lines are allowed

A rhombus does not have to be perfectly shaped and

Note
have equal sides

65% - Downward breakout if the price closes bellow

Breakout chance
the support line

36
Part 1. Technical Analysis Patterns

DIAMOND (BOTTOM)

Trend Bearish

Type Reversal

Timeframe From 5m

Entry point After the price closes above the resistance level

Shape Looks like a rhombus

It consist of two triangles diverging and converging,

Trendlines
inside which the movement occurs

The price touches the support and resistance lines, at

Touches least one or two times. Minor breakouts of pattern
lines are allowed

A rhombus does not have to be perfectly shaped and

Note
have equal sides

75% - Upward movement if price breakouts above

Breakout chance
resistance line

37
Part 1. Technical Analysis Patterns

CUP AND HANDLE

Trend Bullish

Type Trend continuation

Timeframe From 1H

Entry point After breaking the cup level

Shape The completed figure resembles a cup with a handle

U-cup The bowl should be U-shaped, not V-shaped

Handle The handle must be on the right

Cup duration from 1 week to 2 months

Minimum 1 day. Not breaking the price highs of the

Handle duration
bowl

The edges of the cup should be approximately at the

Cup
same level. (Minor breakout is allowed)

38
Part 1. Technical Analysis Patterns

CUP AND HANDLE (MIRRORED)

Trend Bullish

Type Trend continuation

Timeframe From 1H

After the completion of the pattern and the retest of

Entry point
support level

Shape Mirrored cup with handle

Bowl rim The edges should be approximately the same level

Cup handle Handle is on left

The pattern is considered confirmed after the

Confirmation completion of the cup pattern and retest of the
support level

39
Part 1. Technical Analysis Patterns

BROADENING (BOTTOM)

Trend Bearish

Type Reversal

Timeframe From 5m

Entry point After the breakout of the resistance line

Shape Broadening triangle

The resistance line is going up and the support line is

Trendlines
going down

At least 4-5 touches of the figure. The last touch

Touches
should be along the line of resistance

The price movement is from side to side, crossing the

Volatility
pattern

Volume Increasing

Breakout chance 65% - Upward/35% - Downward

40
Part 1. Technical Analysis Patterns

BROADENING (TOP)

Trend Bullish

Type Reversal

Timeframe From 5m

Entry point After the breakdown of the support line

Shape Broadening triangle

The resistance line is going up and the support line is

Trendlines
going down

Touches At least 4-5 touches of the figure

Volume Increasing

Breakout chance 65% - Downward/35% - Upward

41
Part 1. Technical Analysis Patterns

BROADENING (HORIZONTAL
SUPPORT)

Trend Bullish/Bearish

Type Bilateral

Timeframe From 5m

Entry point After the breakout of the support line

Shape Broadening triangle with horizontal support

Trendlines The lower line - horizontal. The upper line - ascending

Touches At least 4-5 touches of the figure

Volume Increasing

Breakout chance 55% - Downward/45% - Upward

42
Part 1. Technical Analysis Patterns

BROADENING (HORIZONTAL
RESISTANCE)

Trend Bullish/Bearish

Type Bilateral

Timeframe From 5m

Entry point After the breakout of the resistance line

Shape Broadening triangle with horizontal resistance

Trendlines Upper line - horizontal. Lower line - descending

Touches At least 4-5 touches of the figure

Volume Increasing

Breakout chance 55% - Upward/45% - Downward

43
Part 1. Technical Analysis Patterns

BROADENING WEDGE
(ASCENDING)

Trend Bullish/Bearish

Type Reversal

Timeframe From 5m

Entry point After the breakout of the support line

Shape Broadening wedge

Both lines are directed upwards. The angle of the top

Trendlines
line is steeper than the angle of the bottom line

At least three touches of the lines of the figure before

Touches
the breakout

Volume Increasing

Breakout chance 55% - Downward/45 - Upward

44
Part 1. Technical Analysis Patterns

BROADENING WEDGE
(DESCENDING)

Trend Bullish/Bearish

Type Reversal

Timeframe From 5m

Entry point After breaking through the resistance line

Shape Broadening wedge

Both lines are directed down. The angle of the lower,

Trendlines
steeper than the angle of the upper

At least three touches of the lines of the figure before

Touches
the breakout

Volume Increasing

Breakout chance 55% - Upward/45 - Downward

45
Part 1. Technical Analysis Patterns

BUMP AND RUN (BOTTOM)

Trend Bearish

Type Reversal

Timeframe From 1H

After hitting the support line and fixing above the

Entry point
bearish trendline

It is even price drop along the trend line at an angle of

Shape 30 - 45 degrees, then a change in the angle of fall to
45 - 60 degrees. Which in turn looks like a sharp fall

A bearish trendline, along which a uniform decline in

Trendlines
price occurs

Along the first fall, candles of same size, do not have

Candles
long and aggressive shadows

46
Part 1. Technical Analysis Patterns

The depth of the bottom is approximately twice the

Bottom
height of the candles

The bottom bounces off the support level. After that,

Bounce we expect the price to fix above the bearish trendline
to confirm the figure

The pattern is confirmed when the price closes above

Confirmation
the bearish trendline

47
Part 1. Technical Analysis Patterns

BUMP AND RUN (TOP)

Trend Bullish

Type Reversal

Timeframe From 1H

After making a hit and fixing the price below the

Entry point
trendline

It is even price increase along the trend line at an

angle of 30 - 45 degrees, then a change in the growth
Shape
angle to 45 - 60 degrees. Which in turn looks like a
sharp grow

Trendline Bullish trendline along which the price rises evenly

Along the first growth candles of same size, do not

Candles
have long and aggressive shadows

48
Part 1. Technical Analysis Patterns

The height of the hill is approximately twice the height

Top
of the candles

The high bounces off the resistance level. After that,

Bounce we expect the price to fix below the bullish trendline
to confirm the figure

The pattern is confirmed when the price closes below

Confirmation
the bullish trendline

49
 Part 2.
Candle Patterns

50
Part 2. Candle Patterns

BULLISH ENGULFING

Trend Any trend

Information Indicates a possible price reverse

Timeframe From 1D

One bearish candle that is completely engulfed by the

Shape
bullish candle

The smaller the shadow on the candles, the greater

Body
the chance of the pattern triggering

The lows and highs of the second candle mostly are

Lows and Highs
greater than those of the first

Volume Volumes of the second candle exceed the first

If the second candlestick tested the support level and

Support Level engulf the first one, this is another confirmation of the
pattern

51
Part 2. Candle Patterns

DARK CLOUD COVER

Trend Bullish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

One bullish candlestick followed by a bearish one that

Shape
closes below the middle of the first

The lower the second candle closes, the more bearish

Middle
the pattern

If the second candle tested the resistance level and

Resistance level bounced below the middle of the first candle, this is
another confirmation of the pattern

52
Part 2. Candle Patterns

ADVANCE BLOCK

Trend Bullish or consolidation

Information Indicates a possible consolidation or price reverse

Timeframe From 1D

Shape Three gradually decreasing bullish candles

The first candlestick has a body with or without short

shadows, the second candlestick is smaller and has a
Candles long shadow on top, the third candlestick is the
smallest and, like the second one, has a long shadow
on top

The shadows of the second and third candles indicate

Resistance level a possible resistance level in which the price will
bounce in the future

53
Part 2. Candle Patterns

BEARISH ENGULFING

Trend Any trend

Information Indicates a possible price reverse

Timeframe From 1D

One bullish candle that is completely engulfed by the

Shape
bearish candle

The smaller the shadow on the candles, the greater

Body
the chance of the pattern triggering

The lows and highs of the second candle mostly are

Lows and Highs
greater than those of the first

Volume Volumes of the second candle exceed the first

If the second candlestick tested the resistance level

Support level and engulf the first one, this is another confirmation
of the pattern

54
Part 2. Candle Patterns

EVENING STAR

Trend Bullish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

The first bullish candle, after which a GAP is formed -

an empty space. Then a small candle with short
Shape
shadows (bullish or bearish) followed by a bearish
candle

The third bearish candle should close below the

Candles
middle of the first bullish candle

Volume Increase on the next candle after the evening star

Pattern formation does not have to occur near

Note
support or resistance levels

55
Part 2. Candle Patterns

PIERCING

Trend Bearish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

One bearish candlestick followed by a bullish one that

Shape
closes above the middle of the first

The higher the second candle closes, the more bullish

Middle
the pattern

If the second candle tested the support level and

Resistance level bounced above the middle of the first candle, this is
another confirmation of the pattern

56
Part 2. Candle Patterns

THREE BLACK CROWS

Trend Any trend

Indicates a possible price reverse or continuation of

Information
the trend

Timeframe From 1D

Three bearish candles, each closing below the

Shape
previous one

The minimum and maximum of each next candle,

Candles below the minimum and maximum of the previous
one

57
Part 2. Candle Patterns

TRI-STAR (TOP)

Trend Bullish or consolidation

Information Indicates a possible consolidation or price reverse

Timeframe From 1D

Shape Consists of three "Doji" candles

Candles are approximately at the same level, the

Candles central candle is higher and it's shadow is higher than
shadow of the candles on the sides

58
Part 2. Candle Patterns

TRI-STAR (BOTTOM)

Trend Bearish or consolidation

Information Indicates a possible consolidation or price reverse

Timeframe From 1D

Shape Consists of three "Doji" candles

Candles are approximately at the same level, the

Candles central candle is lower and it's shadow is lower than
shadow of the candles on the sides

59
Part 2. Candle Patterns

DOJI

Trend Any trend

Information Indicates a possible consolidation or price reverse

Timeframe From 1D

A small candle that almost or completely has no body

Shape
and also sometimes has long shadows

The formation of such a candle on any trend may

Bullish/Bearish
indicate the uncertainty of sellers and buyers and a
trend
possible consolidation or price reverse

60
Part 2. Candle Patterns

GRAVESTONE DOJI

Trend Bullish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

Shape Doji candle that have a long shadow from above

The candle has a long shadow on top and a very small

Shadow
or completely absent lower shadow

61
Part 2. Candle Patterns

DRAGONFLY DOJI

Trend Bearish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

Shape Doji candle that have a long shadow from below

The candlestick has a long shadow on the bottom and

Shadow
a very small or completely absent upper shadow

62
Part 2. Candle Patterns

HAMMER

Trend Bearish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

Shape Looks like a hammer

The figure has a long shadow on the bottom and a

Candles
small or no shadow on top

The longer the lower shadow, the more bullish the

Shadow
candle can be considered

Bullish and bearish

The bearish hammer is not as strong as the bullish one
hammer

If the price of the next candle closes above the high

Additional
price of the hammer, this confirms upward price
confirmation
reverse

63
Part 2. Candle Patterns

INVERTED HAMMER

Trend Bearish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

Shape Looks like an upside down hammer

The figure has a long shadow at the top and a small

Candles
or no shadow at the bottom

Bullish and bearish

The bearish hammer is not as strong as the bullish one
hammer

If the price of the next candle closes above the high

Additional
price of the hammer, this confirms upward price
confirmation
reverse

64
Part 2. Candle Patterns

RISING THREE METHODS

Trend Bullish

Information Indicates a possible trend continuation

Timeframe From 1D

An impulse bullish candle followed by two to four

down candles with a small body. Then another
Shape
impulsive bull move occurs, continuing the bullish
trend

Falling candles The number of descending candles from two to four

The closing of the last impulse candle must occur

Completion
above the first candle, then the pattern is correct

65
Part 2. Candle Patterns

FALLING THREE METHODS

Trend Bearish

Information Indicates a possible trend continuation

Timeframe From 1D

An impulsive bearish candle followed by two to four

rising candles with a small body. Then another
Shape
impulsive bearish move occurs, continuing the bearish
trend

Rising candles The number of rising candles from two to four

The closing of the last impulse candle must occur

Completion
below the first candle, then the pattern is correct

66
Part 2. Candle Patterns

TWEEZER (TOP)

Trend Any trend

Information Indicates a possible price reverse

Timeframe From 1D

Shape Two candles with the same high

Bullish reversal The first bullish candle which high is equal or very
candle close to the high of the next bearish candle

Volume Increase on the second candle

67
Part 2. Candle Patterns

TWEEZER (BOTTOM)

Trend Any trend

Information Indicates a possible price reverse

Timeframe From 1D

Shape Two candles with the same low

The first bearish candlestick which low is equal or

Bearish reversal
very close to the low of the following bullish
candle
candlestick

Volume Increase on the second candle

68
Part 2. Candle Patterns

SHOOTING STAR

Trend Bullish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

It looks like an inverted hammer pattern, only the

difference is that the “Hammer” and “Inverted
Shape
Hammer” are upward price reverse, while the
“Shooting Star” is a downward price reverse pattern

The figure has a long shadow at the top and a small

Candles
or no shadow at the bottom

Bullish and bearish A bullish shooting star is not as effective as a bearish

shooting star shooting star

If the price of the next candlestick closes below the

Additional
high price of the shooting star, this confirms a price
confirmation
reverse to the downtrend

A shooting star can create a local level of resistance

Resistance level
after bouncing from it

69
Part 2. Candle Patterns

HANGING MAN

Trend Bullish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

It looks like a hammer pattern, only the difference is

that the “Hammer” and “Inverted Hammer” are price
Shape
reverse up, and the “Hanging Man” is a price reversal
down pattern

The figure has a long shadow on the bottom and a

Candles
small or no shadow on top

Bullish and bearish

A bullish formation is not as effective as a bearish one
hanging man

If the price of the next candle closes below the high

Additional
price of the hanging man, this confirms the price
confirmation
reversal down

The pattern can create a local resistance level after

Resistance level
bouncing from it

70
Part 2. Candle Patterns

THREE WHITE SOLDIERS

Trend Any trend

Indicates a possible price reverse or continuation of

Information
the trend

Timeframe From 1D

Three bullish candles, each of which closes higher than

Shape
the previous one

The high and low of each next candle is higher than

Candles
the high and low of the previous one

71
Part 2. Candle Patterns

BULLISH BELT HOLD

Trend Bearish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

Shape A strong Bullish candle with or without lower shadow

The larger the candle, the more likely the price will
Candle
turn up

72
Part 2. Candle Patterns

BEARISH BELT HOLD

Trend Bullish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

A strong bearish candle with or without upper

Shape
shadow

The larger the candle, the more likely the price will
Candle
turn down

73
Part 2. Candle Patterns

MORNING STAR

Trend Bearish or consolidation

Information Indicates a possible price reverse

Timeframe From 1D

The first bearish candle, after which a GAP is formed -

an empty space. Then a small candlestick with short
Shape
shadows (bullish or bearish) followed by a bullish
candle

The third bullish candle should close above the middle

Candles
of the first bearish candle

Volume Increase on the third candle

Pattern formation does not have to occur near

Note
support or resistance levels it could be anywhere

74
Part 2. Candle Patterns

SPINNING TOPS (TOP)

Trend Bullish

Information Indicates a possible consolidation or price reverse

Timeframe From 1D

Small candles with small shadows. Candlesticks are

similar to Doji but have a bigger body. Spinning tops,
Shape
like Doji, indicate the uncertainty of market
participants

Quantity From two to ten candles at the same price level

Also if Spinning tops have large shadows, it shows a

Big waves
high level of uncertainty

Bearish reverse Formation after a bullish trend

75
Part 2. Candle Patterns

SPINNING TOPS (BOTTOM)

Trend Bearish

Information Indicates a possible consolidation or price reverse

Timeframe From 1D

Small candles with small shadows. Candlesticks are

similar to Doji but have a bigger body. Spinning tops,
Shape
like Doji, indicate the uncertainty of market
participants

Quantity From two to ten candles at the same price level

Also if Spinning tops have large shadows, it shows a

Big waves
high level of uncertainty

Bullish reversal Formation after a bearish trend

76
Part 2. Candle Patterns

TOWER (TOP)

Trend Bullish

Information Indicates a possible price reverse

Timeframe From 1D

Consists of 2 large candles on the sides. Connect of

these two candles are small candles (Spinning Tops or
Shape
Dojis) between them, which are approximately at the
same price level

The first big candle is bullish, followed by a series of

Large candles Spinning Tops or Dojis (from 3 to 10), after which the
same as the first bearish candle is formed

Spinning Tops and Dojis which are approximately at

Connecting candles
the same price level, creating a local resistance level

77
Part 2. Candle Patterns

TOWER (BOTTOM)

Trend Bearish

Information Indicates a possible price reverse

Timeframe From 1D

Consists of 2 large candles on the sides. Connect of

these two candles are small candles (Spinning Tops or
Shape
Dojis) between them, which are approximately at the
same price level

The first big candle is bearish, followed by a series of

Large candles Spinning Tops or Dojis (from 3 to 10), after which the
same as the first bullish candle is formed

Spinning Tops and Dojis which are approximately at

Connecting candles
the same price level. Creating a local level of support

78
 Part 3.
Indicators Data

79
Part 3. Indicators Data

COMMODITY CHANNEL INDEX

The CCI crosses below -100 and has started to curve

upward. There is a bullish divergence between the
Buy CCI and the actual price movement, characterized by
upward movement in the CCI while the price of the
asset continues to move downward or sideways.

When crosses above 100 and has started to curve

downward. There is bearish divergence between the
Possible Sell CCI and the actual price movement, characterized by
downward movement in the CCI while the price of the
asset continues to move higher or moves sideways.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Commodity Channel
Index"

Better to use with Price Channel and index of volatility

80
Part 3. Indicators Data

STANDARD DEVIATION
INDICATOR

Indicator shows the volatility of the price, the higher

Volatility indicator the higher price volatility, if indicator goes
down that means that the volatility decreasing too

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Standard Deviation"
(posted by: stefan1234)

81
Part 3. Indicators Data

PARABOLIC SAR

Buy after the indicator appears below the price chart,

Buy
and shows the beginning of an upward trend move

Sell after the indicator appears above the price chart,

Sell
and shows the beginning of a downward trend move

The closer the indicator line (dots) to the price chart,

Trend change
the more chances that the local trend will change

Timeframes The higher timeframes the better results

It is best adjusted on the 1h chart. Changee of the

trend should be filtered by other indicators. The
Features
success of the indicator signals depends on its settings
for your desired asset and timeframe.

Go to Tradingview.com website, go to the chart, open

How to get
"Indicators", then search for "Parabolic SAR"

82
Part 3. Indicators Data

SUPERTREND

Buy after the indicator appears below the price chart,

Buy
and shows the beginning of an upward trend move

Sell after the indicator appears above the price chart,

Sell
and shows the beginning of a downward trend move

The closer the indicator line to the price chart, the

Trend change
more chances that the local trend will change

The indicator is extremely useful in an active market,

when the price changes quickly. During a flat (no
activity) there are a lot of false signals. In any case,
Important
you will need to filter them using the indicators
described in the book, as well as the theory of Techical
Analysis and Smart Money.

It is necessary to study the settings by yourself

through trial and mistakes. You do not need to trade,
just tune the indicator and look at the history of the
Settings
chart, so that the signals are of high quality. Also, you
can adjust for several charts at once, to confirm the
trend on different timeframes.

Try to use it on larger timeframes to add greater

Features
confidence.

Go to Tradingview.com website, go to the chart, open

How to get
"Indicators", then search for "Supertrend"

83
Part 3. Indicators Data

ON BALANCE VOLUME

Buy Buy after bullish divergence is confirmed

Sell Sell after bearish divergence is confirmed

Notice, that the bullish divergence is drawn at the

Bullish divergence
lows of the price and the lows of the indicator data

Notice, that the bearish divergence is drawn at the

Bearish divergence
highs of the price and the highs of the indicator data

Go to Tradingview.com website, go to the chart, open

How to get
"Indicators", then search for "On Balance Volume"

84
Part 3. Indicators Data

AVERAGE TRUE RANGE

Shows the average price change for the specified

periods. That one is good for calculation of your stop-
Price change
loss. If you want yo know how to do it, go to the
"Combo' chapter

Go to Tradingview.com website, go to the chart, open

How to get
"Indicators", then search for "Average True Range"

85
Part 3. Indicators Data

WILLIAMS PERCENT RANGE

When indicator shows that price is in oversold zone 0-

Buy
30% it's a "Buy" signal

When indicator shows that price is in overbought

Sell
zone 70-100% it's a "Sell" signal

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Williams Percent
Range"

86
Part 3. Indicators Data

RSI

When indicator shows that price is in oversold zone 0-

Buy
30 it's a "Buy" signal

When indicator shows that price is in overbought

Sell
zone 70-100 it's a "Sell" signal

the default setting is 14 (length). I advise you to use

different timeframes and try different values, such as
Settings
30/50 and even 100 on a very large timeframe. You
may notice patterns that will help you to trade.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "RSI" or "Relative
Strength Index"

An important note:
You can use different levels to determine if an asset is oversold or
overbought. 30 and 70 are common, however I suggest looking to buy
when the asset is below 25 and sell when the asset reaches 85.
Above 90 means it is heavily overbought.

87
Part 3. Indicators Data

BOLLINGER BANDS

When the price approaches the upper band of the

Buy
channel, a downward movement is possible

When the price is at the lower band of the channel, an

Sell
upward movement is expected

If the channel is narrowing, a breakout is expected

Narrow channel
and a new trend begins

Go to Tradingview.com website, go to the chart, open

How to get
"Indicators", then search for "Bollinger Bands"

88
Part 3. Indicators Data

VOLUME

After appearing of big green volume candle, and

Buy
closing the price above resistance level

After appearing of big red volume candle, and closing

Sell
the price bellow support level

Go to Tradingview.com website, go to the chart, open

How to get
"Indicators", then search for "Vol" or "Volume"

89
Part 3. Indicators Data

MACD

Buy After MACD line crosses indicator line from bellow

Sell After MACD line crosses indicator line from above

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "MACD" or " Moving
Average Convergence/Divergence"

The MACD should not be used in isolation, as it can produce false

signals. It is best used in conjunction with other technical indicators
such as trend lines, moving averages, and Bollinger Bands.

Confirm signals with price action: It's important to always look at the
price action and confirm any signals generated by the MACD with
price movements. A buy signal, for example, is only valid if the price is
also trending upwards.

Be patient: The MACD is a lagging indicator, which means that it

tends to generate signals after a trend has already begun. This means
that it's important to be patient and not trade on every signal
generated by the MACD.

90
Part 3. Indicators Data

MONEY FLOW INDEX

The Money Flow Index (MFI) is a momentum oscillator that uses both
price and volume to measure buying and selling pressure.
Use it on different timeframes, such as daily, weekly, or monthly
charts.
It's important to keep in mind that the MFI indicator should be used in
conjunction with other technical analysis tools, such as trend lines,
support and resistance levels, and other indicators, to confirm signals
and make informed trading decisions.
Adjust the indicator according to the trend! Each indicator behaves
differently depending on the trend!

Indicator typically moves above 50 and forms higher

highs, which suggests increasing buying pressure.
Bullish Market When the MFI crosses above 50 and then forms a
peak above this level, it can be an indication of a
potential trend reversal to the upside.

Indicator typically moves below 50 and forms lower

lows, which suggests increasing selling pressure.
Bearish Market When the MFI crosses below 50 and then forms a
trough below this level, it can be an indication of a
potential trend reversal to the downside.

Go to Tradingview.com website, go to the chart, open

How to get
"Indicators", then search for "Money Flow Index"

91
Part 3. Indicators Data

TECHNICAL ANALYST BY DGT

The indicator aggregates data from different indicators. Extremely

useful on large timeframes. Instead of opening a large number of
classic indicators, you can use it to quickly view the state of the
market.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Technical Analyst by
DGT" (posted by: dgtrd)

Again, this indicator is not a strategy, so use it

to filter your trades.

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Part 3. Indicators Data

TRADING PSYCHOLOGY

The indicator tries to predict the prevailing emotions on the market.

Stages Extreame greed, greed, neutral, fear, extreame fear

You can change the data type in the settings, which

Settings will not significantly affect the data, but change the
display format

Uses the data from Price Momentum, Money Flow,

Data
Market Volatility

A very famous phrase "Buy in times of fear, sell in

Note
times of greed"

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Trading Psychology"
(posted by: dgtrd)

93
Part 3. Indicators Data

PIVOT BOSS

An excellent complex indicator suitable for different timeframes.

When breaking through the orange level, which is also signed
"Breakout"/"Break Down" indicator predetermines the potential line of
closing your positions. It is suitable for all timeframes.

In the indicator settings, pay attention to the very first

line, the inscription "Type". In the second field, you
can select the timeframes from which the levels will be
Type
built. Being on the 4h, you can indicate Weekly and
obtain weekly levels. On the 30-minute timeframe
you can use Daily levels.

On the same first line, enter the last value of 30. Then
find the option "Show Only Last Period" and activate
Show Only Last
it, so you can see the past 30 periods, by which the
Period
levels are plotted. It is convenient to adjust the
indicator by history

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Pivot Boss" (posted by:
TeamTaurus)

94
Part 3. Indicators Data

QUADRATIC REGRESSION
TREND CHANNEL

The indicator detects dynamic trend lines. Usually you use straight
trend lines, which often break. This indicator automatically determines
a more accurate price direction.

The higher the "Regression period" value, the more

Regression period chart will be used to determine the trend. Try a value
of 200 on the 4h chart of Bitcoin for a test.

The indicator can be useful in determining changes in

Features
the trend

Go to Tradingview.com website, go to the chart,

open "Indicators", then search for "Quadratic
How to get
Regression Trend Channel" (posted by:
ImmortalFreedom)

95
Part 3. Indicators Data

REVERSE CUTLERS RELATIVE

STRENGTH INDEX (RC RSI)

Improved version of the classic RSI indicator, which determines the

overbought or oversold market. Important changes have been made
to the indicator code, which make it more accurate than the original.

Shows if an asset is overbought or oversold. If the

Features asset is overbought, the price is likely to fall. If it is
oversold, it is likely to start local growth

Try changing the indicator length setting. The higher

Settings the timeframe, the longer is needed. Explore this
setting on different timeframes and assets.

Go to Tradingview.com website, go to the chart,

open "Indicators", then search for "Reverse
How to get
Cutlers Relative Strength Index" (posted by:
The_Caretaker)

96
 Part 3. Indicators Data

ADX+DMI

*1

*2

A unique indicator, able to work ahead and show the strength of the
trend (whether it will continue or will gradually weaken), before the
price starts moving.

The lines DI+ (blue) and DI- (red) indicate the direction
of the trend. If the blue one is above the red one, it
means that the trend is upward, and the opposite
DMI (*1) means that the trend is downward. The green line
(ADX line) indicates the intensity of the trend. If the
line rises, it means that the trend is accelerating, and
if it falls, it means that the trend is slowing down.

You can open a standard ADX indicator in

TradingView without add-ons. It will show 1 line if the
Only ADX (*2) ADX value is below 20 - be extremely careful with
your positions. Very often this is an indication that a
position opening is highly undesirable.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Indicators", then search
for "DMI" or "Directional Movement Index"

97
Part 3. Indicators Data

ADX BOXES

Whenever the ADX falls below a certain threshold (which can be

managed in the user input settings) a box will appear. The box will
continue to grow as long as the ADX stays below the threshold. Once
the ADX goes back above the threshold, the box will stop growing and
will set its right border.

There are two modes, which can be used to determine the upper and
lower border of the box. The first one is called "Extremes", which plots
the borders the highest high and lowest low for the range below the
threshold. The second one is called "Avg. High/Low", which plots the
borders at the average high and average low within the range.
Furthermore, the indicator contains an option to show the average
value of the detected range below the ADX threshold.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "ADX Boxes" (posted by:
paaax)

98
Part 3. Indicators Data

GAPS/IMB/WICKS

This indicator will identify and draw price gaps, wicks and imbalances
with customizable fill conditions, multi-timeframe function, zone size
filtering, volume comparison, lookback filtering, as well as highly
customizable appearance and settings.

The Imbalance “pattern” consists of 3 candles (1-

candle before the sharp move, 2 - sharp move candle
and 3- candle after the sharp move). When price
Imbalances (Fair
makes a move downwards, the imbalance zone is
Value Gap/FVG/
defined as the area between the low of 1 and the high
Inefficiency etc.)
of 3 When price makes a move upwards, the
imbalance zone is defined as the area between the
high of 1 and the low of 3.

A price gap is an area on a chart where no trading

activity has taken place. A gap up means that the low
of the current candle is higher than the high of the
Gaps
previous candle and a gap down means that the high
of the current candle is lower than the low of the
previous candle.

Wicks are used to indicate where the price has

fluctuated relative to the opening and closing price of
Wicks
the candle. An upper wick is the zone between candle
(shadows/tails
high and candle close/open (whichever is higher) and
etc.)
a lower wick is the zone between candle’s low and
candle’s close/open (whichever is lower).

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Gaps + Imb + Wicks"
(posted by: LeviathanCapital)

99
Part 3. Indicators Data

OPEN INTEREST PROFILE

This indicator help you analyze the activity of traders and identify the
price levels where they are opening/closing their positions. This data
can serve as a confluence for finding the areas of support and
resistance , targets and placing stop losses. OI profiles can be viewed
in the ranges of days, weeks, months, Tokyo sessions, London sessions
and New York sessions.
Open Interest is a metric that measures the total amount of open
derivatives contracts in a specific market at a given time. A valid
contract is formed by both a buyer who opens a long position and a
seller who opens a short position. This means that OI represents the
total value of all open longs and all open shorts, divided by two. For
example, if Open Interest is showing a value of $1B, it means that
there is $1B worth of long and $1B worth of short contracts currently
open/unsettled in a given market.
A cluster of large green nodes can be used for support and resistance
levels (*trapped traders theory) or targets (lots of liquidations and
stop losses above/below), OI Profile gaps can present an objective
for the price to fill them (liquidity gaps, imbalances, inefficiencies,
etc), and more.

100
Part 3. Indicators Data

OI increasing New long and short contracts are entering the market

OI decreasing Long and short contracts are exiting the market

The net amount of positions remains the same (no

OI unchanged new entries/exits or just a transfer of contracts
occurring)

Green nodes OI increase

Red nodes OI decrease

The indicator calculates the profile based on candles -

the more candles you can show, the better profile will
be formed. This means that it's best to view most
sessions on timeframes like 15min or lower. The only
Advice
exception is the Monthly profile, where timeframes
above 15min should be used. Just take a few minutes
and switch between timeframes and sessions and you
will figure out the optimal settings.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Open Interest Profile"
(posted by: LeviathanCapital)

101
Part 3. Indicators Data

LIQUIDATION LEVELS

This indicator generates liquidation levels of over-leveraged traders

and utilizes a variety of different tools to analyze data such as Open
Interest and Volume to provide an edge in your trading system and
help you with valuable market insights. The script offers a lot of
flexibility in settings, so test out different parameters to see what
works best for you.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Liquidation Levels"
(posted by: LeviathanCapital)

102
Part 3. Indicators Data

UP/DOWN VOLUME + DELTA

In this indicator the delta between the buys and sells is plotted in
columns style above the regular up/down volume columns. This gives
a better visual of the dominant volume and is useful to spot
divergences in tops and bottoms.
The indicators uses data from lower timeframe volumes. By default the
lowest timeframe it will use is 1m, but for those that have a premium
account you can try using a custom LTF set to seconds when scalping
on the 1m chart.

Go to Tradingview.com website, go to the chart,

How to get open "Indicators", then search for "Up/Down
Volume + Delta" (posted by: FractalTrade15)

103
Part 3. Indicators Data

TRADE MANAGER PRO

This Indicator allows the user to select directly on the chart the entry
time/candle for a trade, its entry price, stop loss price and take profit
price, and will quickly calculate the position size for the trade.

The indicator is very useful in active trading. You need

to add the indicator to the chart, then specify the
Note entry, stop loss and take profit. Instructions on the
necessary actions will be described at the bottom of
the chart in the blue element of the website.

Go to Tradingview.com website, go to the chart,

How to get open "Indicators", then search for "Trade
Manager Pro" (posted by: FractalTrade15)

104
Part 3. Indicators Data

LINEAR REGRESSION CHANNEL

The Linear Regression indicator visualizes the general price trend of a

specific part of the chart based on the Linear Regression calculation.
The central line of the indicator is the linear regression calculation
itself, and the lines above or below it are X number of standard
deviations removed from the main one. This is a good tool to use to
determine when a price is unusually far away from its baseline.
The bands indicate support and resistance; when the prices stay
outside the channel for a significant period of time, the reversal might
be expected ahead

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Linear Regression
Channel"

105
Part 3. Indicators Data

WILLIAMS
ACCUMULATION/DISTRIBUTION

This is an indicator described by Larry Williams in one of his books.

Larry won the 1987 World Cup Championship of Futures Trading, where
he turned $10,000 to over $1,100,000 in a 12-month competition with
real money.
Larry used this indicator to track divergences between price action
and volume , which he called patterns of accumulation ( bullish
divergence ) and distribution( bearish divergence). Its logic is similar
to On Balance Volume (OBV), where it accumulates up and down
volume in a single line, but also takes into account the size of the
candle in its calculation, by taking the difference between the open
and close, and the high and the low.

Go to Tradingview.com website, go to the chart,

open "Indicators", then search for
How to get
"Williams Accumulation/Distribution"
(posted by: FractalTrade15)

106
Part 3. Indicators Data

MARKET STRUCTURE

This indicator helps you identify market structure by plotting swing

highs and lows (HH, LH, HL, LL), BOS/CHOCH and 0.5 retracement
levels.

The lower the value, the more swing points are shown
and the higher the value, the less swing points are
Swing Length
shown. I suggest adjusting it to fit your style and
switch between different timeframes.

Using the "Wick" confirmation option will result in

Bos Confirmation
more breaks of structure.

Turning this ON renames the first counter trend Break

ChoCh of Structure (BOS) to CHoCH (Change of Character)
and therefore signaling a possible trend shift.

This will show a level halfway between a swing low

and a swing high of an impulsive move, which can act
as an approximate retracement point if the trend
continues. In uptrends, 0.5 level is drawn between
0,5 Retracement Higher Lows (HL) and Higher Highs (HHs). Long
Level entries can be placed around that level if you suspect
that the uptrend will continue. In downtrends, 0.5
level is drawn between Lower Highs (LH) and Lower
Lows (LLs). Short entries can be placed around that
level if you suspect that the downtrend will continue.

Go to Tradingview.com website, go to the chart, open

How to get "Indicators", then search for "Market Structure"
(posted by: LeviathanCapital)

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 Part 4.
Combinations

The following section shows an example

of a combination of trading concepts,
strategies and indicators. The more
false signal filtering techniques you use,
the more successful your trades will be.

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Part 4. Combinations

SUPERTREND+PARABOLIC SAR

Indicators should confirm one another, regardless of

Confirmation whether it is a buy or sell signal. The best way is to
open a trade after the confirmation

The closer the indicator line (dots) to the price chart,

Trend change
the more chances that the local trend will change

You can additionally use an EMA indicator (e.g. with a

setting of 50 or 200) to filter out false trades.
Indicator settings can be changed depending on the
Filtering the trades timeframe and even the asset. The less trades on the
chart, the better quality they will be. Adjust the
indicators that way so it won't be too"sensitive" for
reactions on the market.

Extremely effective to use together with ADX/DMI

Extra
indicator to filter the trend

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Part 4. Combinations

S&D ZONES+RSI

If the price has reached a support level or a demand

zone, and the RSI indicator shows Oversold level, this
Buy confirmation
means that the price is most likely will bounce from
this level in opposite direction

If the price has reached a resistance level or a supply

zone, and the RSI indicator shows Overbought level,
Sell confirmation
this means that the price is most likely will bounce
from this level in opposite direction

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Part 4. Combinations

TREND LINE & RESISTANCE

LEVEL

Combine multiple strategies for better results

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 Part 5.
Smart Money
Concept

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Part 5. Smart Money Concept

SMART MONEY
What is it?
A smart money strategy involves opening trades with large capitals,
(banks, funds, market makers)

Structure
Market structure - is a sequence of highs and lows that allows you
to determine the trend and possible price movement in the future.

The trend - is the general direction of the price movement, the main
goal is to determine the trend and trade in its direction.

Trend is your friend. When trading smart money, we trade

only on the trend

In order to correctly identify the structure it is necessary to find the

Lows and Highs on the chart. The market can be in three states:

Upward trend

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Part 5. Smart Money Concept

The confirmation of the Higher Low (HL) will be the Break of

structure (bos) of the previous Higher High (HH). To determine the
structural elements, pay attention to the swing high and low.

Bullish structure (Uptrend) - each new High and Low is higher than
the previous one. Higher High (HH) and Higher Low (HL)

After the formation of a higher high (HH), with a high probability will
begin a correction, which forms a higher low (HL) - this is an
opportunity to enter the long position in order to update the next
(HH).

How the structure is formed

The structure should be used in combination with other tools -

support and resistance zones (orderblocks, imbalance, liquidity,
discount/premium zones), which we will talk about next.

The higher low (HL) should be formed from the support zone, then it
will be relevant for opening a long position. As in the example above,
the price tests the order block and fills the imbalance.

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Breakdown of the ascending

structure (BOS)
Fixing the price below the confirmed (HL) will be considered as a
break of the bullish trend and the formation of a Lower Low (LL). After
that the development of the downtrend is expected.

Breaking the structure (BOS) allows you to open a position at the

beginning of the formation of the opposite structure. That is, you have
the opportunity to open a trade (Short) after the formation of Lower
High (LH)

The upward trend is confirmed by the formation of three

structural elements: (HH) - (HL) - (HH).
Downward trend in the formation of (LL) - (LH) - (LL)

As can be seen in the example after the update (HL) was formed a
downward structure (LL, LH, LL) after which the trend has changed.

Each (HL) should be formed from local support zones

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Part 5. Smart Money Concept

Fake BOS of the ascending

structure

When (HL) WAS NOT formed from a support zone (orderblock,

imbalance, discount zone), an uptrend is allowed to continue,
especially if the breakout (touch of the support) was made by a
shadow of the candle, and then there was a test of the support zone.

The update of (HL) was made and touch of the support zone was
made by a shadowwof the candle, which increase the probability of a
false break in this context. Price continued to move in a bullish trend

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Part 5. Smart Money Concept

Downtrend

How the structure is formed

Bearish market structure - each new High and Low is lower

than the previous Lower High (LH) and Lower Low (LL)
Opening a short position is best considered on the formation
(LH) in the premium zone.

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Part 5. Smart Money Concept

Breakdown of the Downward

Structure (BOS)
The downtrend will be broken when the confirmed lower high (LH) is
updated, after that, the uptrend is expected to start

Determination of the broken structure opens the possibility to trade at

the beginning of a new trend (Uptrend). After breaking the
downtrend it would be interesting to consider opening a long position
on the formation of a higher low (HL)

Higher Low (HL) is the key element. Identify the potential reaction
zone between Lower Low (LL) and Higher High (HH) (the
support/imbalance/discount zone), and wait for a reaction in this
area to open a position. Based on the reaction at this stage it will be
possible to know if the breakdown was real.

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Part 5. Smart Money Concept

Fake BOS of the downward

structure
When the (LH), which WAS NOT formed from the resistance zone
(orderblock, imbalance, premium zone), the continuation of the
downtrend is possible, especially if the breakout (touch of the
resistance) was made by a shadow of the candle, and then there
was a test of the resistance zone. The scheme of a false break
structure on a bullish trend works similarly on a bearish trend, only in
the opposite direction.

In fact, it was a corrective movement to create a new (LH)

Range
Range (flat, consolidation) - no higher highs or lower lows, price
moves sideways. The market enters the consolidation stage after an
impulse price movement. The big player is distributing or accumulating
a position.

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Part 5. Smart Money Concept

Most of the time the price is in a sideways movement, in most cases

the exit from the flat will be in the direction of the general price
direction. It is necessary to properly consider the context for a high
probability of determining a price move from the rand.

In the example above, the price formed a new (HH) on the higher
timeframes, and the correction began. At the lower timeframes it's
considered as an uptrend.

Correction on higher timeframes is a

trend on lower timeframes

An example of collecting liquidity from the previous high and re-

accumulating from the resistance zone (orderblock, imbalance) and
further exit from the ridge towards the general price direction.

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Part 5. Smart Money Concept

Definition of Swing High and

Swing Low
Swing High and Swing Low are (HH,HL, LH, LL)

Swing High is formed by three candles. The highest candle in the

middle, and one candle each on the left and right.

The more obvious, yet important, swings are formed in five candles.
The highest candle in the middle, and two candles each on the left
and right.

Swing Low is formed by three and five candles. The lowest candle in
the middle, and one/two candles each on the left and right.

Using both together is not a mistake. Practice with a

backtest.

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Part 5. Smart Money Concept

Types of structure

Swing structure
Swing structure - a standard structure whose significant elements
(HH, HL, HL, LL) forms the general direction of the price

Substructure - a corrective movement within a standard (swing)

structure. This structure forms (HL) for an uptrend, and (LH) for a
downtrend.

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Part 5. Smart Money Concept

Minor structure - swings (highs and lows) in the

direction of the general price direction inside the swing
structure. The movement from (HL) to (HH) on the
uptrend, and the movement from (LH) to (LL) on the
downtrend is a Minor structure

MBOS - minor bos - breakdown of minor structure by substructure

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Part 5. Smart Money Concept

Failure Swing
SMS - shift in market structure. The case when the primary trend
can not reach the new (HH) on an uptrend or the new (LL) on a
downtrend. This tells us about the beginning of a corrective
movement - substructure.

On a high timeframe it is a corrective

movement, while on a lower timeframe
it is the beginning of a new trend.

In the example above, the general direction of the asset is uptrend.

Subsequently, the price failed to update the previous (HH), and
started a local downtrend (substructure) to overlap the imbalance
and test the support zone, after which the (HL) was formed, and after
(HH), and the uptrend continued.

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Part 5. Smart Money Concept

Also with an example of a downtrend swing. A rising substructure was

formed, which formed (LH), after which a new (LL) was formed, and
the downtrend continued.

Working with timeframes

Effective use of the structure is possible when analyzing the chart
from higher timeframes to lower timeframes. To determine the general
direction of the price, it is sufficient to analyze the five main
timeframes. Higher timeframes are always in priority.

The main timeframes:

1 month, 1 week, 1 day, 4 hours, 1 hour
15m - 5m - to open the position

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Part 5. Smart Money Concept

During the formation of (HL) after (HH) on 1W, most likely on the
timeframes 1D, 4H, 1H the trend will change to a downtrend
(substructure), and after the formation of (HL) when the price will
test support area, the structure on these timeframes will synchronize
again (minor structure)

Identification of structural elements

and structure break

The first method - Сonservative

Structure identification:
candlestick body
Structure break: candlestick
body

The second method - Average

Most common
Structure identification:
candlestick shadow
Structure break: candlestick
body

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Part 5. Smart Money Concept

The Fibonacci
Fibonacci levels are used to determine the potential for a correction,
as well as to set goals after its completion. The tool works best when
the market is in a trend move.

While an uptrend, the goal is to determine the potential for a

correction, and further entry from (HL) into the long position to
form (HH). While the downtrend you need to determine the
potential for correction, with the formation of (LH), and the
search for an entry point to short position.

Rules:
1) Identify the trend and work with it
2) Extend the Fibonacci grid extends from (HL) to (HH) on an uptrend.
After breaking of the downtrend from (LL) to (HH).
3) On a downtrend, the Fibonacci net is stretched from (LH) to (LL).
After the breaking of the uptrend from (HH) to (LL).
4) Be sure to correctly identify the Swing High and Swing Low for
correct use of the tool.

The settings of the tool for corrective movements:

0.5 - a fair price.
0.62; 0.705; 0.79 - OTE (optimal trade entry) zone.

This is a modified version of the tool used by Smart Money traders with
the highest mathematical expectation of price reversal. To open a
position, we are always interested in the price behavior above or
below 0.5. To open a short position, we should look at the price
above 0.5, which is considered the premium price. To open a
long position we look at price behavior below 0.5, which is
considered a discount price.

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Part 5. Smart Money Concept

The Fibonacci Discount

The Fibonacci Premium

The Fibonacci OTE

The OTE zone is a modified grid. It's always in the premium zone, to
search for a short position, or in the discount zone, to search for a
long position. These levels act as an optimal entry point (OTE).

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Part 5. Smart Money Concept

The Fibonacci OTE Discount &

Premium

The Fibonacci Discount

The Fibonacci Discount

Fibonacci levels alone are not support or resistance levels. Price

reverse happens from specific areas such as orderblock, imbalance
in discount, premium or OTE zones

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Part 5. Smart Money Concept

The Liquidity
Liquidity is the open interest of buyers and sellers in the market. During
trading, traders create liquidity by opening positions and placing
pending orders.

Liquidity is money and is measured by stop-losses. Smart capital is

always in search of liquidity in order to fill their buy or sell orders.
Small traders (retail) are not the main target for large capital, as they
are a small percentage of the total market volume (approximately
5%).

Types of liquidity
Buy Stops Liquidity (BSL) - stop losses of traders who opens short
positions. Banks use buy stops to place sell orders.

Sell Stops Liquidity (SSL) - stop losses of traders who opens long
positions. Banks use sell stops to place buy orders.

How to find Buy Stops Liquidity?

Above each swing high, there are buy stops. The largest accumulation
of orders will be above the significant highs and you should focus on
them first.

Previous Month High (PMH) - The maximum of the previous month;

Previous Week High (PWH) - The maximum of the previous week;
Previous Day High (PDH) - The maximum of the previous day;
Old High;
High Of Day (HOD);
Equal Highs (EQH);
Downward Trends.

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Part 5. Smart Money Concept

Buy Stops Liquidity

In the first example, Swing High is designated. This could be PMH,

PWH, PDH, Old High, HOD.

In the second example, equal highs. Do not look for perfect EQH at
the same level, they may be near each other

Note
After the BSL is activated, the price will reverse in a downward
direction. It is important to consider the context in which the
activation of stop losses occurs.

For greater efficiency, pay attention to significant pools of liquidity,

which are in front of the resistance zone in the premium zone.

Taking liquidity will not be taken into account if the price

rises above the high by only a few points.

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Part 5. Smart Money Concept

Downward trendline

Trend lines are often used by retail traders as a support line or, as in
this case, resistance. When price will form lower lows and highs, a
test of the trend line will be used to open a short positions by a large
number of traders
During such periods, the price often accumulates or reaccumulates.
The income of less informed money into a particular area or level
provides liquidity for the Market Maker. A rally begins, and liquidity at
buying will move the price in an upward direction, providing profits for
the big player. Retail traders will remain in a losing position.

Often the removal of trend liquidity will be an impulsive

move.

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How to find Sell Stops Liquidity?

Previous Month Low (PML) - The minimum of the previous month;
Previous Week Low (PWL) - The minimum of the previous week;
Previous Day Low (PDL) - The minimum of the previous day;
Old Low;
Low Of Day (LOD);
Equal Lows (EQL);
Upward Trends.

Sell Stops Liquidity

In the first example you can see a Swing Low. It can be PML, PWL, PDL,
Old Low, LOD.
In the second example, the equal lows. Do not look for perfect EQLs
at the same level, they may be near each other.

Note
After the SSL is activated, the price will reverse in an upward
direction. It is important to consider the context in which the stop loss
activation occurs.
For greater efficiency, pay attention to the significant pools of
liquidity that are in front of the support zone in the discount zone.

Taking liquidity will not be taken into account if the price

falls below the low by only a few points.

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Part 5. Smart Money Concept

Upward trendline

When the price will form higher highs and lows, the trend line test will
be used by more traders to open a long position.

During such periods, the price is often allocated or redistributed. The

income of less informed money into a certain area or level provides
liquidity for the Market Maker. The markdown will begin and the
liquidity to sell will move the price in a downward direction, providing
profits for the big player. Retail traders will remain in a losing position.

Often the removal of trend liquidity will be

an impulsive move.

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Part 5. Smart Money Concept

Imbalance
Imbalance (fvg, inefficiency) - impulse price movement, which
shows disequilibrium between buyers and sellers in a certain range
due to lack of liquidity. The algorithms tend to overlap the imbalance
and trade the range in which it was formed, it is a magnet for price.

Efficient pricing Inefficient pricing

The empty space between the shadows of the first and third candle is
called imbalance.

Imbalance will not be used as an independent instrument for entering

a position. Quality trades can be opened in combining with an
orderblock (OB), breaker block (BB), or mitigation block (MB).

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Part 5. Smart Money Concept

Trigger zones for price reverse will be a 50% of

imbalance fill or full fill.

0.5 Imbalance Full fill of the Imbalance

Use the Fibonacci grid to determine the 0.5 imbalance.

Full fill is a fill of the emptiness all the way down.

You can not enter on the basis of imbalance only, you need to
consider evety factor to find an entry point in the position.

The most common reaction from a 50% imbalance can be seen in

combination with a breaker or a mitigation block.

The use of imbalance allows you to increase the accuracy of the entry,
as well as the ratio of risk/profit.

Higher timeframes will always take priority over

lower ones (1M - 1W - 1D - 4H - 1H - 30m - 15m - 5m).

Market Maker
Smart money is large market participants Market Makers (MM)
with basically unlimited volume to trade, mostly it's a banks and
financial funds. They use algorithms to trade that runs price to certain
price levels to realize certain goals, depending on the context.

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Part 5. Smart Money Concept

You will not be able to trade successfully against large market

participants, you need to understand their goals and follow them.
Trading against smart capital makes no sense. Retail traders are just a
liquidity needed in any market to fill orders. The main task of a smart
money trader is to identify the traces of smart money on the chart that
they leave in their orders and bids, and to follow the big market
participants.

What does MM do?

They lead traders into misleading, forcing them to open positions in
one direction or the other. Traders at this time often open unjustified
positions, their stops are triggered by liquidity. As soon as big capital
has enough of its position, they start actively marking up or marking
down the asset.

Creating of panic and false excitement to induce

traders to become reckless and think irrationally.

This is often done in the following ways:

Quick moves
Candles with long shadows
Press releases
Consolidations

Stop Loss Hunting

Market Makers is always looking for liquidity - that's traders' stop
losses. Stops are interesting not for the sake of retail traders to not
make money, but simply because position volumes are so huge that it
can take a huge amount of time to accumulate or allocate a position.

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Part 5. Smart Money Concept

The Orderblock
Orderblocks (OB) are specific candlesticks that, when viewed
correctly in an institutional context, can highlight the buying or selling
of a major player.

Such candlesticks act as a support or resistance zones. This happens

because a large trader has shifted the price to one side by buying or
selling in search of liquidity. This way a lossmaking position was
opened, and in order to close it, we expect a return to the orderblock
and a move in the opposite direction.

Bullish orderblock
The lowest candlestick that
takes off the liquidity (SSL
candle), which is in the
support zone.

Engulfing of the lowest

candle confirms the
orderblock and leaves an
imbalance after the engulfed
candle.

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Part 5. Smart Money Concept

The first zone where you can

expect a reaction will be the
maximum of the orderblock.
Often the shadows are
ignored, because the main
volume of orders was traded
in the body of the
candlestick.

The second reaction zone is

50% of the orderblock body
(use the Fibonacci grid to
determine the 0.5 level).

To determine which orderblock is most likely to give a

reaction, choose an OB below which there are no FVG and
no significant liquidity pools.

Stop Loss
Stop-loss is placed behind the shadow of the orderblock - minimum of
a candle. After the test and the formation of a new HH, the stop loss
can be moved below 50% of the candle to reduce risk.

Use an orderblock along with the shadows to be more likely to

open a position. The price can fill the imbalance and turn in the
opposite direction without testing the body of the candle, which
acts as an orderblock

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Part 5. Smart Money Concept

Bearish orderblock
The highest rising candle that
takes off liquidity (BSL), which is in
the resistance zone.

Engulfing of the highest candle

confirms the orderblock and leaves
an imbalance after the engulfed
candle.

The first zone where you can

expect a reaction will be the
minimum of the orderblock body.
Often the shadows are ignored,
because the main volume of orders
was traded in the body of the
candle.

The second reaction zone is 50%

of the orderblock body (use the
Fibonacci grid to determine the
0.5 candle)

To determine which orderblock is most likely to

react, choose an OB above which there is no
FVG and no significant liquidity pools.

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Part 5. Smart Money Concept

Stop Loss
Stop-loss is placed above the shadow of the orderblock - maximum
candles. After the test and the formation of a new LL stop loss can be
moved above 50% of the candle to reduce risk.

Use an orderblock along with the shadows to be more likely to

open a position. The price can fill the imbalance and turn in the
opposite direction without testing the body of the candle, which
acts as an orderblock

The main criteria for the formation of an

orderblock:
Engulfing of a candle that takes off the liquidity;
Imbalance after engulfing;
Breakdown of the structure (an additional factor);
Formation of a orderblock at the support zone/resistance.

The Breaker
The breaker can be used as a reversal or trend continuation model.
Represents a impulsive move breakthrough orderblock after formation
of a new structural element (HH/LL).

Bullish Breaker
Before a bullish breaker is formed, the price takes off the liquidity
(SSL) from the previous structural element:
From HL to continue the uptrend;
From LL when the structure changes to an uptrend.

After which the movement begins in the opposite direction. The

breaker is confirmed by an impulse breakthrough the orderblock.

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Part 5. Smart Money Concept

*Bullish Breaker

The highest rising candle of the impulsively broken orderblock will act
as a bullish breaker - a new support zone. When the price returns to
the that area, it will be a bullish set-up, which can be considered for
finding an entry point into the position.

The breaker is defined with the shadows of

the pierced orderblock.

Before an impulse breakout, the price can test or trade in a bearish

(OB) without going over its upper boundary: this will not affect the
relevance of a future breakout.

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Part 5. Smart Money Concept

For more efficient operation, use 50%/full fill FVG in

combination with a breaker.

Stop Loss
The stop loss can be placed under the breaker - this is considered as
an aggressive stop, which has a high probability of being taken out,
but allows you to open positions with a high ratio of risk/profit.

You can also put a stop below the low that takes off the liquidity. This
is considered a conservative stop that is safe. And, most likely, price
will not activate it if your analysis is correct.

Bearish Breaker
Before a bearish breaker is formed, the price removes liquidity (BSL)
from the previous structural element:
From (LH) for the continuation of the downtrend;
From (HH) when the structure changes to a downtrend.

After which the movement begins in the opposite direction. The

breaker is confirmed by an impulse breakthrough the orderblock.

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Part 5. Smart Money Concept

*Bearish Breaker

The lowest falling candle of the impulsively broken orderblock will act
as a bearish breaker - a new resistance zone.
When the price returns to the that area, it will be a bearish set-up,
which can be considered for finding an entry point into the position.

The breaker is defined with the shadows of the

pierced orderblock.

Before an impulse breakout, the price can test or trade in a bullish

(OB) without going over its lower boundary: this will not affect the
relevance of a future breakout.

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Part 5. Smart Money Concept

For more efficient operation, use 50%/full fill

FVG in combination with a breaker.

Stop Loss
The stop loss can be placed over the breaker - this is considered as an
aggressive stop, which has a high probability of being taken out, but
allows you to open positions with a high ratio of risk/profit.

You can also put a stop abowe the high that takes off the liquidity.
This is considered a conservative stop that is safe. And, most likely,
price will not activate it if your analysis is correct.

The main criteria for the formation of

the breaker block:
Taking off the liquidity from the maximum/minimum;
Impulsive breakthrough an orderblock;
Formation of a breaker block after the test of support/resistance
zone.

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Part 5. Smart Money Concept

Mitigating block
The mitigating block can be used as a reversal model as well as a
trend continuation model. It represents an impulsively broken
orderblock. The main difference from the breaker is the absence
of liquidity gathering.

Bullish Mitigating Block

Price should test the support zone and then form a higher low (HL)
before momentum. The mithigating block is confirmed by an impulsive
breakdown throug the orderblock. The highest rising candle of the
broken high, will act as a bullish mitigating block.

When the price returns to mitigation block area, it will be a bullish set-
up, which can be considered for finding an entry point into the
position.

The mitigation block is defined with the shadows of the

pierced orderblock.

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Part 5. Smart Money Concept

Before the impulse breakout, the price can test or trade in a bearish
(OB) without going over its upper boundary: this will not affect the
relevance of the future mitigation block.

When price returns to the mitigation block, you may see a its trading in
this range. Often the price reaccumulates and continues the uptrend.

For more effective use of the tool, use 50%/full fill

of the FVG in combination with the mitigation
block.

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Part 5. Smart Money Concept

Stop Loss
The stop loss can be placed under the mitigation block - this is
considered as an aggressive stop, which has a high probability of
being removed, but allows you to open a position with a high ratio of
risk to profit.

You can also put a stop loss behind the low that formed the (HL) - this
is considered as a conservative stop loss

Bearish Mitigation Block

Price should test the resistance zone and then form a lower high (LH)
before an impulse. The mitigation block is confirmed by an impulsive
breakdown throug the orderblock. The lowest falling candlestick of
the broken minimum will act as a bearish mitigating block.

When the price returns to mitigation block area, it will be a bearish

set-up, which can be considered for finding an entry point into the
position.

The mitigation block is defined with the shadows of the

pierced orderblock.

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Part 5. Smart Money Concept

Before the impulse breakout, the price can test or trade in a bullish
OB without going over its lower boundary: this will not affect the
relevance of the future mitigation block.

When price returns to the mitigation block, you may see a its trading in
this range. Often the price reaccumulates and continues the
downtrend.

For more effective use of the tool, use 50%/full fill of

the FVG in combination with the mitigation block.

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Part 5. Smart Money Concept

Stop Loss
The stop loss can be placed over the mitigation block - this is
considered as an aggressive stop, which has a high probability of
being taken out, but allows you to open a position with a high ratio of
risk to profit.

You can also put a stop loss over the high that formed the (LH) - this is
considered as a conservative stop loss

The main criteria for the formation of

the Mitigation block:
Test of the support/resistance zone;
No removal of the liquidity, the formation of (HL)/(LH);
Impulsive breakthrough the orderblock.

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Part 5. Smart Money Concept

Risk Management
Stop Loss - is a loss limiter

Inability to comply with the risk systemleads to the loss of the deposit.
Trader,who opens a trade without any fixed risk does not understand
what is happening on the market, is not confident in his analysis and is
afraid to put stop loss. He knows in advance that he's opening a losing
position, but hopes that today his intuition won't fail him.

First of all, the price will start to develop against him, and he will
average the position. After a while, if the trade was opened in the
right direction, he will will be lucky and he will be able to take a profit,
break-even or a small profit. This way he gets adrenaline and
emotions, which is missing in his life. A huge percentage of loss that
was just a short time ago, turned into a few percent of profit.

After a successful experience, the same thing will happen again

sooner or later, he will rethink and identify the mistakes he made, and
the next time he will try to avoid them. Regardless of his deposit the
result at the distance will be the same - liquidation.

Big losses always start from a small ones, that was uncontrolled. They
can be seen as a failure and are accompanied with a corresponding
emotional and physical condition.

The benefits of many months of systematic trading

can be wiped out in a few emotional trades.

You can make money by trading if you professionally manage your

capital. Losses are the cost of doing business. You need to
normalize the loss process and you need to normalize the process of
losing and make it a habit.

Before opening a trade you should calculate the maximal loss and
potential profit. This makes it possible to trade systematically and not
to rely on a single trade. Priority is given to the result of open trades in
a series of trades. One mistake per series of trades will not affect
significantly on the overall result, and it won't change your emotional
or physical state of mind.

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Why don't traders use a stop loss?

Lack of a theoretical base;
Lack of a practical base;
Desire to earn without loss;
Naivety.

Where to place the stop loss?

The stop-loss should be placed where the set-up, on the basis of
which the position is opened, loses its relevance. All instruments and
setups have rules for the stop loss placement. To place a stop loss on
the basis of intuitive abilities, unverified facts, psychological levels is
not required.

Positions sorting
In many situations the future direction of the price may seem obvious,
but there will be no reasonable place for a stop loss, or the risk/profit
ratio will be unacceptable. Such trades should be to be skipped.

Each unprofitable trade must be carefully analyzed. Revealing

mistakes that have been made is an essential process of improving
the quality of future trades.

When the price activates the stop loss and reverses in the
direction of the trade it is a mistake, an incorrect analysis of the
market market situation.
When the price activates a stop loss and continues in the same
direction - it's a setup mistake.

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The importance of the stop loss

Trading without a stop makes a trader to constantly monitor the chart.
This often causes problems with the psychological state, which affects
their personal life and day-to-day affairs.

The desire for the price to go in the direction of an opened trade will
minimize objectivity of analysis.

Increased emotionality for an uncertain amount of time and

continuous thoughts about the market during the day, falling asleep
and waking up, will categorically change life for before and after.
After liquidation, the trader's condition will get better.

Risk/Reward Ratio
Optimal risk and reward ratio allows the trader to make mistakes and
be profitable even with a very low percentage of successful trades.
When you open a trade it is important to determine how much you are
risking to get a certain amount profit.
A series of trades should be opened with an acceptable ratio of risk
and reward. By trading with an optimal (RR) good setups, the trader
has an opportunity to achieve a stable positive result.

The minimum ratio of risk/reward, which is recommended is

1/3.
When opening four trades, lossless is provided by the presence of one
profitable position. When there is more than one, the trader makes a
profit.

High RR
A high ratio of risk/reward would not be a good basis for a profitable
trading for a beginner. It will be psychologically difficult to handle a
series of unprofitable positions and the extremely low win rate, that
will be in this system.

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When opening trades with a risk/reward ratio of 1/10 the win rate for
break-even should be 10%. Out of 100 trades it is enough to open 10
profitable trades, then the trader will be left with his own money.

Determining the appropriate (RR) ratio

Every trader has a different temperament and trading style.
Determining the best ratio of risk and reward is determined by testing
and weighing the pros and cons of each approach.

Optimal risk/reward ratio (1:3) - many trading opportunities.

Average risk/reward ratio (1:5) - average number of trading
opportunities.
High rist/reward ratio (1:10) - few trading opportunities.

The percentage of profit will not depend on of the chosen system.

Traders who trade with RR 1/3 can make significantly more than
traders who trade with (RR) 1/10.

First of all, it is necessary to set the goal of reaching positive

dynamics, the optimal and the average ratio of risk and reward
will be the best option.

What happens to trading when there is

a fear of making a loss
Fear of loss contributes to making decisions based on fear.
Losing is inevitable - making decisionsbased on fear keeps the
focus on the unfortunate outcome.
Fear-based decision making contributes to trader's paralysis or
inability to perform effectively.
Capital managed by a trader who does not who does not know
how to accept losses, cannot make a profit in the long run.

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Profits are achievable in spite of

reasonable losses
A professional money manager understands that "losses are the
costs of doing business"
The use of smart capital management and high probability setups
brings significant % of profits.
Trading scenarios that contribute to potential risk/reward ratio of
3/1, provide an initial foundation.
Identifying trading setups that provide a risk to profits 5/1 or
greater - it is effective loss coverage.

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