TRADING MANUAL

RETAIL TRADING (how 95% of traders are taught to trade)

Trend
General direction which market moves

UPTREND (forms HH and HL). Market is also said to be Bullish.

(Note: An uptrend fails when price forms a new structural LL. Wait for
the new structural LH to confirm the trend change.*CHOCH *)

DOWNTREND (forms LH and LL). Market is also said to be Bullish

(Note: A Downtrend fails when price forms a new structural HH. Wait
for the new structural HL to confirm the trend change.*CHOCH *)

Support and Resistance

Support – When there are 2 or more price points at the lows it forms a
Support zone which price can react to.(DEMAND ZONE)

Resistance - When there are 2 or more price points at the highs it forms
a Resistance zone which price can react to. (SUPPLY ZONE)

Impulse and Pullbacks

Impulse → Strong and quick move in the direction of the Trend

Pullback → Weak and slow move in the opposite direction of the Trend

Fibs
61.8% Golden Ratio

All we are concerned with when using fibs is whether the Market in
Premium/Discount/Equilibrium.
We are only interested in using fibs to see if price has gone past the
50% Fib line
Fair Market Value = 50% (Equilibrium)

Discount are cheap prices (fibs are BELOW 50% fib) or

Premium are expensive prices (fibs are ABOVE the 50% fib)

Remember:
We only SELL at Premium prices (SELL HIGH) and
We only BUY at Discount prices (BUY LOW)

Wave Theory (ELLIOT)

Cycles have typically 5 moves (3 Impulses and 2 Pullbacks/Corrections)

After 1 full wave cycle is complete a NEW wave cycle can start

Inside 1 wave → you can see a full market cycle in LTF

Make sure every TF is correlating with each other

4 th and 5th Wave (towards end of the Trend) and ABC Correction =
Harmonic Patterns
The market is fractal so you can see waves within waves on smaller
timeframes.

We do not use Elliot waves but it’s good to keep in mind the fractal
nature of the market.(in simple terms “external and internal structures”)
MARKET STRUCTURE (MS)

This is THE MOST IMPORTANT PART and the basis for all our
trading.

It’s very important to analyse Market Structure (MS) and look for trades
once clear on the structure.

1) Our HTF (Daily/Weekly) will determine the OVERALL TREND

(Bearish/Bullish)
2) Hour1 & M15will determine the MOMENTUM and INTRADAY TREND
3) Min3, M5, M1 will determine the MOMENTUM

We can see that the M15 Price action (in blue) is in a strong Bearish
trend (let’s say the intraday is also Bearish).

However, we see the M3 price action (in Blue) is in a Bullish trend.

For a HTF chart (e.g. M15) to get a retracement or pullback, it means
the LTF chart (E.g. M3) needs to be bullish to price higher to form the
M15 Lower High.

It will usually do this at a DP, Decision Point (SUPPLY) where

Institutions have their orders sitting after taking out liquidity.

So, when you’re on smaller timeframes, always keep in mind the bigger
picture. Remember the W/D overall direction.
The highest probability trades are the ones where you have aligned
market structure (e.g. W, D, H1,M15 bearish, and we’re looking to take
Sells at a key area on the lower timeframes)

If we are sitting at Premium levels of our HTF Fibs (D / W), when the
smaller TF likeM5 gets aligned(meaning it goes from a bullish trend to
a bearish trend to ‘align’ with the HTF trend), we can then looking for
the continuation trade (to SELL and target he HTF to make a lower
low).

2 things we look for to see a change in Structure NOT TREND :

1) BOS (Break of Structure) – Extremely important

2) Wyckoff Accumulation /Distribution (not necessary, but you can see
it)
Momentum (MOM)

Seeing Momentum will give you a lot of clues as to what is going on

with price and what is the probability ,that price action with continue or
not.

Momentum in price action is the speed at which the price moves.

Look at M i.e. how FAST / SLOW it is.

Focus on RSP (Real Structural Points)

You can see here that there was STRONG Momentum on the Bearish
move down, but the bullish move up is just correcting via a Complex
Pullback.

Always look for a FRESH Zone

Check Momentum (MOM)

FAST MOM = Impulse Wave

SLOW MOM = Corrective Wave / Building Orders
A Wick will be a Body in a LTF
In the chart above you can see a STRONG IMPULSE move down
(STRONG MOMENTUM).

Followed but a SLOW Correction (Weak Momentum) up. This is

simply a complex pullback.

Also take note of the TIME it takes (e.g. if it takes 2 days for a strong
bearish move and it’s taking 7 days for the retracement, you know it’s a
correction/complex pullback as market doesn’t have bullish
momentum).

The RSP Real Structure Points are still valid and until the RSP High or
RSP Low isn’t broken the existing structure remains.
INSTITUTIONAL TRADING (IT)

3 Ways to identify where an IT got into the market:

1) SHC (Stop Hunt Candle) / OB/ Fake out / Large Volume Range
(Called different names)
2) Buy before you Sell / Sell Before you Buy (like an Order Block)
3) Imbalances (Lack of Buyers/Sellers in price action that eventually
needs to be filled)

SMART MONEY CONCEPTS (SMC)

Ever wondered:
1) What happens when you hit SL?
2) Who is controlling the market in an UP or DOWN Trend?
3) Why was your SL hit just before it goes in your favour?

It’s IT (Institutional Traders) seeking Liquidity

Market is a tug-of-war between Buyers and Sellers

Liquidity = Number of Buyers or Sellers ,balance of orders”who takes it

first

Order Blocks (OB)

These areas/zones are where institutions have manipulated the price and
have some of their orders in drawdown(keep it in balance to trap). This
‘footprint’ they leave can be clearly seen in an Order Block. Price
typically would return to these areas and we would have some type of
reaction to it.

Order Blocks with Imbalance (OBIM) are higher probability as the

market will always fill imbalances at some future point.
Bullish Order Block:
The LAST Sell Candle Before the Impulse BULLISH move (Last Sell
to Buy)

Bearish Order Block:

The LAST Buy Candle Before the Impulse BEARISH move (Last Buy
To sell)

These candles have institutions behind them as they have moved the
market and are in DD (Drawdown) so they need to Return Price to the
OBIM to mitigate (Breakeven) their losses.

An example of a Bearish Order Block with Imbalance (OBIM)

An example of a Bullish Order Block with Imbalance (OBIM)

The example . I’ve included it to show you the fractal nature of the
market. These Order Block and Imbalances happen on every single
timeframe.
Note that if price fails to fully close the Imbalance in the initial move, it
will come back (at some point in the future) to close the imbalance
100%

Always try to trade PRO TREND. Trade the CONTINUTATION trades.

So if the H1 charts are Bullish, and the m15 chart is Bearish, wait until
there is a confirmed BOS on m15 and it turns Bullish, so that you can
trade PRO TREND (Bullish in this case) and trade a continuation that
aligns with the HTF charts.

MITIGATION
Institutions have their Orders in Drawdown (DD), Order blocks and
imbalances are created.

They move Price back to the OBIM to the DP (Decision Point) and their
orders that were in drawdown are now Mitigated (Breakeven on their
trade)

Liquidity Providers (LP’S) have no cost of spread/commissions/swaps

etc. so they can hold their trades for a very long time until they want to
offload them.

LIQUIDITY: EQUAL HIGHS (EQH) and EQUAL LOWS (EQL)

Liquidity means Money

We have been taught to look for Double Tops and go short there, and
Double Bottoms and go long there.

What happens is there are a ton of orders sitting below DB and above
DT and that is Liquidity that Market Makers look for
Liquidity above the EQH (Equal Highs)

An IT (Institutional Trader) would never go out of their way to take out

Retail SL as the profits from Retail traders’ volume is negligible.
The REAL interaction is Interbank (Between banks)

IMBALANCE
An area of unequal trading where there are ONLY BUYERS or ONLY
Sellers in the market

Imbalance is an Inefficient/Unhealthy Price Action. It shows

IMBALANCE between Buyers/Sellers.

Market will always seek to come back to BALANCE

Look at the candle wicks on the top and bottom. If there’s a gap (with a
large candle) that’s the imbalance
In an imbalance the WICKS do NOT fill each other (If they do its
healthy price action and not an imbalance)

An Imbalance is simply Price not filled fairly. It is NOT a mitigation.

When Trading imbalances we must SEE HOW PRICE REACTS

THERE (as it’s not a mitigation, price doesn’t have to reverse from that
point).

ADVANCED SMART MONEY CONCEPTS

SHC (Stop Hunt Candle)

More likely to be an SHC

They are digital footprints of the IT (Institutional Traders)

Price is likely to return here

We do NOT trade SHC/OBIM’s ….. we wait for price to return to

them .We need to see a STRONG move after the SHC/OBIM candle to
give it importance
3 REASONS SHC/OBIM CANDLES have Institutions behind them

MEANS – Who has the Money to take the market up/down?

MOTIVE – Institutions have their orders is huge DD and they need to

mitigate these orders

MINDSET – They are not going out of their way to get Retail SL (not
worth the small profit). They’re looking

to mitigate their orders in DD. They free up liquidity to do so (Buying

@ Resistance or Selling at Support)

What we use to Enter

A TRUE/REAL OBIM is defined by an ENGULFING (Strong
movement) candle where the body engulfs the other. (The color of the
candle doesn’t matter)

Both BODY and Wick needs to be ‘consumed’/engulfed

An OB (Order Block) with Imbalance shows the True intent of the

market (injection of volume)

Order Block with Imbalance (OBIM) is the ideal thing to look for.
OBOB (Order Block within and Order Block)
An OBOB is a LTF Order block that falls within a HTF OB area. It
gives additional confirmation.

REASONS TO TRADE OBOB (ORDER BLOCKS WITHIN ORDER

BLOCKS)
1) Avoid losses / LTF confirmations
2) Re-entry if the ideal entry is missed
3) Stack entries or scale in entries (ONLY if 1st entry is risk free). Need
to have more confirmation.

You need to change your Mind set on focussing on Individual trades to

thinking about your trading PORTFOLIO.

OBOB (ORDER BLOCKS WITHIN ORDER BLOCKS) is an SHC

that is formed on LTF in the process of mitigating a previous HTF SHC

ALL SHC’s will get mitigated on EVERY timeframe. However, it is not

necessarily mitigated in the same move/wave/cycle)

VERY IMPORTANT POINT:

When trading Imbalances, note that Imbalances need to be filled
FULLY.
How to Enter A Trade:

After analyzing the Market Structure on the HTF charts and drilling
down to LTF charts, we get our DP’s (Decision Points) and then zoom
into a smaller timeframe like Min5-Min1.

Here we typically look for an Order Block with Imbalance (OBIM).

We can take the following entries:

1) SHC/ OBIM (Order Block with Imbalance)

2) BOS (Break of Structure)
3) Distribution or Accumulation on m1 chart
4) Head and Shoulders (or Inverse HNS)

OBIM on M15 = DP (Decision Point). (Now go to a lower timeframe to

reduce your SL)

OBIM on M1 = Entry/Pending Order (You can simply place a pending

order or enter at market)

When you’re looking for Order Blocks and Imbalances on H4/H1/M15

it is classed a Decision Point (DP).

Meaning you can then go to lower timeframes and make that zone
smaller for a smaller stop loss.

However, when you’re on the M1 chart and you see an OBIM, you can
simply place a pending order as your SL should typically be only a few
POINTS.

If you find several DP’s on LTF e.g. M1 charts, you can choose 2 DP’s:
1) Extreme DP (at the lowest area for Buys, or the Highest area for
Sells)
2)
2) Zonal DP (within your HTF zone but not at the extreme)
In such cases, you can split your 1% Risk on the trade into 2x positions.
In this case you could do these 2 things:
1) Place 1 x Pending order and SL at the Extreme DP (with 0.5% risk)
and
2) Place 1 x Pending order and SL at the Zonal DP (with 0.5% risk)

The Reasoning/Thought Process behind an ACCUMULATION

(or why do Institutions accumulate orders?):

Technicals
Healthy bullish favoured PA, we look for:
- Mitigation of true SHC’s
- OBOBs
- Bullish Order Flow
- Structure Interaction
- EQL and SHC candles
- Demand Zones (Decisional or Extreme DP’s)

You can see the price doing a Rounding off (bottoming curve)

What’s the Purpose of Accumulation?

Multiple Institutions (Composite Operators, CO) put a LOT of effort,
time, and money to gather enough orders for them to execute their
trades.

The Market is an Interaction between Buyers and Sellers

At a Major High in the Market, Sellers can be profit takers or new
sellers entering on hope.

Loss of momentum = Compression (Buyers getting stronger)

WHB = Weak Handed Buyers (Institutions who are looking only at

short term targets not positional trades,
so are happy to take profits earlier)
FINAL POINTS:
These trades will present themselves daily. The key thing now is to
BACKTEST. The more examples you can
do yourself, the more you will understand how this works and you will
then easily be able to ‘see’ it when analysing any chart.
ABBREVIATIONS: DD (Drawdown)
HH (Higher High) Be (Bearish)
HL (Higher Low) Bu (Bullish)
LH (Lower High) HNS (Head and Shoulders)
LL (Lower Low) IT (Institutional Traders)
Fib (Fibonacci) CO (Composite Operators
TF (TF) HNS (Head and Shoulders)
MN (Monthly) IT (Institutional Traders)
W (Weekly) CO (Composite Operators)
D (Daily) WHB (Weak Handed Buyers)
H4 (4 hour) WHS (Weak Handed Sellers)
H1 (1 hour) DP or POI (Decision Point) or (Point of Interest)
M15 (15 minute) IMB (Imbalance)
M1 (1 minute) SHC (Stop Hunt Candle)
MS (Market Structure) OB (Order Block)
BOS (Break of Structure) OBIM (Order Block with Imbalance)
MOM (Momentum OBOB (Lower timeframe Order Block within a higher
HTF (Higher Time Frame) timeframe Order Block)
LTF (Lower Time Frame) WKF (Wyckoff)
RSP (Real Structure Point) PS (Preliminary Support)
PRZ (Price Reversal Zone) PSY (Preliminary Supply)
CPB (Complex Pullback) SC (Selling Climax)
M (Momentum) AR (Automatic Rally)
RR (Risk: Reward) ST (Secondary Test)
TGT (Target) SPR (Spring)
SL (Stop loss) Test (Test)
BE (Breakeven) SOS (Sign of Strength)
PA (Price Action) SOW (Sign of Weakness)
Liq (Liquidity) LPS (Last Point of Support/Supply)
EQH (Equal Highs) LPSY (Last Point of Supply)
EQL (Equal Lows) WAS (Wyckoff Accumulation Schematic)
SMC (Smart Money Concepts) WDS (Wyckoff Distribution Schematic)
BU (Back-up) IT (Institutional Traders)
JAC (Jump across the creek) CO (Composite Operators
UT (Upthrust) LP (Liquidity Providers)
UTAD (Upthrust After Distribution)
TR (Trading Range)