Rocket Profit Module 2

MODULE : DUMB MONEY LESSON 1
UNDERSTANDIN
G PRICE ACTION
FOREX TRADING PROGRAM
LESSON: UNDERSTANDING PRICE ACTION
1 OVERVIEW OF PRICE ACTION

2 PRICE AND CHARTS
3 WHAT IS TREND, CANDLESTICK PATTERN,

CHART PATTERN
4
INTRODUCTION TO INDICATORS
OVERVIEW OF PRICE ACTION
• Price action is the study and analysis of the historical and current
movements and patterns of a financial instrument's price, without
relying on fundamental factors.
• Price action traders believe that all relevant information about a

market, including economic data, news, and other underlying factors,
is already reflected in the chart.
• Price action is the study and analysis of the historical and current
movements and patterns of a financial instrument's price, without
relying on fundamental factors.
• Price action traders believe that all relevant information about a

market, including economic data, news, and other underlying factors,
is already reflected in the chart.
• In other words, price action trading focuses solely on analyzing the

actual movement of prices over time, identifying repeating patterns and
trends, and using that information to make trading decisions.
• Price action traders believe that by studying these price patterns, they
can predict the most likely future direction of the market, regardless of
the fundamental reasons behind the price movements.
PRICE AND CHARTS
What is price?
• Price is value given to a particular instrument usually value is
dependent on supply and demand.
This is as any other market place

• If the demand is more, price increases as more traders start buying and
driving prices up.
• If there is an oversupply, price falls as there are more seller and less
buyers.
PRICE AND CHARTS
What is price?
• Price is value given to a particular instrument usually value is
dependent on supply and demand.
This is as any other market place

• If the demand is more, price increases as more traders start buying and
driving prices up.
• If there is an oversupply, price falls as there are more seller and less
buyers.
PRICE AND CHARTS
• If the market is going up, what does that tell you about the demand and
supply then? It means there’s a lot of demand for that instrument.
• what if the market is going down then what does that tell you about the
demand and supply then? There’s a less demand and lots of supply.
• But there’s something else about price…it has a time component.
• So the price of something today at this time will not be the same
tomorrow or in a month orin a year. Supply and demand over time
drives up and down the price.
PRICE AND CHARTS
The 3 types of charts that can represnt that :
1. The bar chart

PRICE AND CHARTS
• The stick represents the price movement during a certain time period,
like a day or an hour. The top of the stick is the highest price reached
during that time, and the bottom of the stick is the lowest price
reached.
So, the bar chart looks like a simple stick, with:
1. The left knob showing the opening price

2. The right knob showing the closing price
3. The top of the stick showing the highest price during that time period
4. The bottom of the stick showing the lowest price during that time
period
PRICE AND CHARTS
• It's a visual representation of the price movement during a specific

timeframe. The stick shows the range of prices, and the knobs on the
left and right indicate the opening and closing prices.
PRICE AND CHARTS
2. The candlestick chart

PRICE AND CHARTS
• A candlestick chart…is like the same with the bar chart but adding
body to it (we will discuess about this in detail because we are going to
use them every day).
PRICE AND CHARTS
• The red colour is most often used to indicate a bearish(sell) candlestick

which means the price opened up high and closed lower.
• A green candlestick represents a bullish(buy) candlestick and is the

exact opposite.
PRICE AND CHARTS
3. The Line Chart

PRICE AND CHARTS
• The line chart is one of the least favourite of charts for trading. A line
chart is simply drawn by connecting either the closing, high or low
price and that’s how you get the line on a chart.
• Line charts can be useful for looking at the “bigger picture” and finding
long term trends but they simply cannot offer up the kind of information
contained in a candlesticks chart.
PRICE AND CHARTS
DEEP INTO CANDLSTICK CHART
• The colour of the candlestick chart tells you if price was up or down in
a particular timeframe which means that candlesticks are either bullish
or bearish candlesticks this is not always the case u can custmize it
but at first to help you understand just leave it like that.
PRICE AND CHARTS
THIS CANDLESTICK SHOWN BELOW IS AN EXAMPLE OF BULLISH

CANDLESTICK.
PRICE AND CHARTS
• A BULLISH CANDLESTICK SIMPLY MEANS THE PRICE OPENED

LOWER AND CLOSED UP HIGHER AFTER A CERTAIN TIME PERIOD,
WHICH CAN BE 1MINUTE, 5MINUTE, 1HR OR 1 DAY ETC.
• The candle body represents the distance price has moved from the
opening price to the closing price. The longer the body, means price
has moved a great deal upward after opening. The shorter the candle
body means the exact opposite.
• The high is the highest price that was reached during that time period.
• The low is the lowest price that was reached during that time period.
PRICE AND CHARTS
• NOW, THE CANDLESTICK SHOWN BELOW IS AN EXAMPLE OF A

BEARISH CANDLESTICK. A BEARISH CANDLESTICK SIMPLY MEANS
THAT THE CANDLESTICK OPENED UP AT A HIGH PRICE AND CLOSED
LOWER AFTER A CERTAIN TIME PERIOD.
PRICE AND CHARTS
• BEARISH CANDLESTICK: THE PRICE OPENED HIGHER AND CLOSED

LOWER DURING THE TIME PERIOD.
• Candle Body: Represents the distance the price moved from open to
close. A longer body indicates a larger downward price movement.
• High: The highest price reached during the time period.
• Low: The lowest price reached during the time period.

PRICE AND CHARTS
UNDERSTANDING BUYING AND SELLING PRESSURE ON CANDLESTICKS

PRICE AND CHARTS
• The concept of buying and selling pressure and how it can make a
seemingly bullish candlestick bearish, or a bearish candlestick bullish
is really important to understand the true story behind each
candlestick.
• Each candlestick shows who won that round.
• A long bullish body means the bulls overpowered the bears, driving the
price up.
PRICE AND CHARTS
• If the upper shadow (wick) is long, it shows that the bears fought back
hard, making the candlestick bearish despite its bullish appearance.
• A long bearish body means the bears dominated, driving the price
down.
• If the lower shadow is long, it shows the bulls fought back, making the
candlestick bullish despite its bearish appearance.
• The key is to look beyond the body color and size and analyze the
shadows to understand the true balance of power between buyers and
sellers.
PRICE AND CHARTS
ASSIGNMENT 2.1
• Mastering charts in tradingview.

TREND, CANDLESTICK PATTERN, CHART
PATTERN
TRENDS
• Trend is the overall direction in which the price of a currency pair is

moving over a period of time.
• In simple terms, a trend is when price is either moving up, down or

sideways.
PATTERN
TRENDS
There are 3 types of trends

PATTERN
TRENDS
1. UPTREND
⚬ An uptrend is when the price of a currency pair is making higher
highs and higher lows over time.
⚬ This means that the price is moving in an overall upward direction,

with each successive high and low being higher than the previous
ones.
⚬ Traders often look for opportunities to buy or go long in an uptrend.

PATTERN
TRENDS
1. UPTREND
PATTERN
TRENDS
2. Downtrend
⚬ A DOWNTREND IS WHEN THE PRICE OF A CURRENCY PAIR IS
MAKING LOWER HIGHS AND LOWER LOWS OVER TIME.
⚬ THIS MEANS THAT THE PRICE IS MOVING IN AN OVERALL

DOWNWARD DIRECTION, WITH EACH SUCCESSIVE HIGH AND
LOW BEING LOWER THAN THE PREVIOUS ONES.
⚬ TRADERS OFTEN LOOK FOR OPPORTUNITIES TO SELL OR GO

SHORT IN A DOWNTREND.
PATTERN
TRENDS
2. Downtrend
PATTERN
TRENDS
3. Sideways or Range-Bound Trend

⚬ A SIDEWAYS OR RANGE-BOUND TREND IS WHEN THE PRICE OF
A CURRENCY PAIR OSCILLATES BETWEEN A WELL-DEFINED
SUPPORT AND RESISTANCE LEVEL, WITHOUT MAKING ANY
CLEAR DIRECTIONAL MOVE.
⚬ IN THIS CASE, THE PRICE IS NOT MAKING HIGHER HIGHS AND

HIGHER LOWS (UPTREND) OR LOWER HIGHS AND LOWER LOWS
(DOWNTREND).
⚬ TRADERS MAY LOOK FOR OPPORTUNITIES TO BUY AT THE

SUPPORT LEVEL AND SELL AT THE RESISTANCE LEVEL DURING A
PATTERN
TRENDS
3. Sideways or Range-Bound Trend

PATTERN
HOW YOU CAN IDENTIFY TRENDS
1. Identifying an Uptrend (Bull Market)
a. Higher Highs (HH): The price of the currency pair or asset is making
successive higher highs, where each new high is higher than the
previous one.
b. Higher Lows (HL): The price is also making higher lows, where each
new low is higher than the previous low. This creates a stair-step
pattern of higher highs and higher lows.
PATTERN
PATTERN
• The key signal that an uptrend is in place is when the price makes a
higher high and a higher low, compared to the previous swing high and
swing low.
PATTERN
2. Identifying a Downtrend (Bear Market)
a. Lower Highs (LH): The price of the currency pair or asset is making
successive lower highs, where each new high is lower than the
previous one.
b. Lower Lows (LL): The price is also making lower lows, where each
new low is lower than the previous low. This creates a descending
pattern of lower highs and lower lows.
PATTERN
PATTERN
• The key signal that a downtrend is in place is when the price makes a
lower high and a lower low, compared to the previous swing high and
swing low.
PATTERN
• BUT YOU KNOW THAT IN REALITY, THE MARKET IS NOT LIKE THAT,
IT’S MORE LIKE THIS CHART SHOWN BELOW.
PATTERN
• THE CHART ABOVE SHOWS AN INITIAL DOWNTREND AND ALONG

THE WAY THERE IS A FALSE UPTREND WHICH DOES NOT LAST AND
PRICE MOVES DOWN AND THEN EVENTUALLY ANOTHER UPTREND
MOVES IS HAPPENING BECAUSE ANOTHER LOWER HIGH HAS BEEN
INTERSECTED(WHICH SIGNALS END OF DOWNTREND).
PATTERN
REVERSALS
• PRICE REVERSALS. A REVERSAL IS WHEN THE PREVAILING TREND

IN THE MARKET CHANGES DIRECTION. UNDERSTANDING WHERE
THESE REVERSALS ARE LIKELY TO OCCUR IS CRUCIAL FOR
IDENTIFYING POTENTIAL TURNING POINTS IN THE MARKET.
PATTERN
MAJOR AREAS FOR PRICE REVERSALS
THERE ARE THREE PRIMARY AREAS WHERE WE OFTEN SEE PRICE

REVERSALS TAKE PLACE:
1.Support Levels and Resistance Level
• Support levels are areas on the chart where buyers tend to step in and
prevent the price from falling further. When the price approaches a key
support level and then reverses, this can signal a potential reversal of
the downtrend.
PATTERN
• RESISTANCE LEVELS ARE THE OPPOSITE OF SUPPORT - THEY ARE

AREAS ON THE CHART WHERE SELLERS TEND TO EMERGE AND
PUSH THE PRICE BACK DOWN. IF PRICE REACHES A MAJOR
RESISTANCE LEVEL AND THEN REVERSES, THIS MAY INDICATE THE
START OF A NEW UPTREND.
PATTERN
• NOTHING IS MORE NOTICEABLE ON ANY CHART THAN SUPPORT

AND RESISTANCE LEVELS. THESE LEVELS STAND OUT AND ARE SO
EASY FOR EVERYONE TO SEE!
Now, in here, I talk about 3 types of support and resistance levels and they
are:
• The normal horizontal support and resistance levels.
PATTERN
• BROKEN SUPPORT LEVELS BECOME RESISTANCE LEVELS AND

BROKEN RESISTANCE LEVELS BECOME SUPPORT LEVELS.
PATTERN
• DYNAMIC SUPPORT AND RESISTANCE LEVELS

PATTERN
ASSIGNMENT 2.2
• Find 5-10 different currency pairs screenshot selecting area you want
to determine and draw support and resistance on and determine
whether they are uptrend, downtrend, or ranging.
• For each chart, carefully examine the price movements and identify the
support and resistance type that capture the overall direction of the
price trend.
PATTERN
2. Candlestick and chart pattern
• Candlestick patterns and chart patterns are visual representations of

price action that traders often use to try and predict future market
movements. These patterns can take on various geometric shapes and
candlestick formations.
• However, we don't actually use these patterns in our trading approach.

We'll discuss in more detail in future episodes why we don't rely on
these types of pattern-based analysis.
PATTERN
• For now, just understand that candlestick patterns and chart patterns
exist, and traders sometimes use them to try and forecast the market.
But we'll cover our own unique approach that doesn't involve these
types of pattern recognition techniques.
• The key in our approach is finding liquidity and understanding how the
smart money moves. The institutional traders don't rely on simplistic
chart patterns, but rather use those patterns against the masses.
PATTERN
• For now, just understand that candlestick patterns and chart patterns
exist, and traders sometimes use them to try and forecast the market.
But we'll cover our own unique approach that doesn't involve these
types of pattern recognition techniques.
• The key in our approach is finding liquidity and understanding how the
smart money moves. The institutional traders don't rely on simplistic
chart patterns, but rather use those patterns against the masses.
PATTERN
• We'll explore our unique trading methodology in-depth in the coming
lessons. The focus will be on identifying and capitalizing on the flows of
smart money, rather than trying to interpret chart patterns.
• For now, don't worry about memorizing or analyzing specific

candlestick or chart patterns. Those techniques may work for some
traders, but our approach is centered on tapping into the behavior of
institutional investors and market makers.
PATTERN
• In the lessons ahead, I'll show you how we can leverage our
understanding of liquidity and smart money flows to generate
consistent profits, without getting invlove in pattern-based analysis.
This is the core of our trading edge, so stay tuned as we dive deeper
into these concepts.
PATTERN
There’s a difference between chart patterns and candlestick patterns.
Chart patterns are not candlestick patterns and candlestick patterns are
not chart patterns:
• Chart patterns are essentially geometric shapes that traders use to

understand the underlying price action. These patterns can provide
valuable insights and help traders make predictions about the likely
future direction of the price.
• Chart patterns are visual representations of the price action that can
guide traders in making informed decisions about market trends and
potential future price movements
PATTERN
• Candlestick patterns are another powerful tool that traders use to
analyze market trends and make informed trading decisions.
• Candlestick patterns are visual representations of the opening, closing,

high, and low prices for a given time period, usually a day or a few
hours. These patterns form distinctive shapes, such as hammers,
engulfing patterns, and dojis, that can provide valuable insights into
market sentiment and potential future price movements.
PATTERN
• Just like with chart patterns, the key is to understand the meaning and
significance of the different candlestick formations. Some patterns may
signal bullish or bearish reversals, while others may indicate
continuation of the current trend.
PATTERN
CHART PATTERNS
These are the 9 chart patterns you will learn about today:
1. Triangle chart patterns-symmetrical, ascending and descending (3
patterns)
2. Head and shoulders and Inverse Head and Shoulders (2 patterns)
3. Double Bottom and Double Top (2 patterns)
4. Tripple Bottom and Tripple Top (2 patterns)
PATTERN
1. Triangle chart pattern
PATTERN
• Symmetrical Triangle chart pattern
PATTERN
• Ascending Triangle Chart Pattern
PATTERN
• Descending Triangle Chart Pattern
PATTERN
2. Head and shoulders and Inverse Head and Shoulders
PATTERN
• Head and shoulders
PATTERN
• Inverse Head and Shoulders
PATTERN
3. Double Bottom and Double Top
PATTERN
• Double Bottom
PATTERN
• Double Top
PATTERN
4. Tripple Bottom and Tripple Top
PATTERN
• Tripple Bottom
PATTERN
• Tripple Top
PATTERN
ASSIGNMENT 2.3
• Research three of the most common chart patterns used in

technical analysis. Identify the key characteristics of each pattern,
and develop a hypothetical trading strategy for how you would use
stop losses and take profit levels if you were to trade based on
those patterns.
PATTERN
CANDLESTICK PATTERNS
• Candlestick patterns are visual representations of price action that

traders often analyze in conjunction with other technical indicators like
support/resistance levels and Fibonacci retracements. The specific
shape and positioning of candlestick formations can provide insights
into market sentiment and psychology.
• Traders may look for candlestick patterns to confirm or complement

signals from these other technical tools when making trading
decisions.
PATTERN
• There are lots of candlesticks, but out all of them only 3 are i am going
to show you as you dont really need them.
1. The Doji Candlestick Patterns

The doji candlesticks are single (individual) candlestick patterns. There are
4 types of doji candlesticks as shown below.
PATTERN
A. The doji cross can be both considered a bullish or bearish signal
depending on where it forms.(its considered reversal pattern).
B. The long-legged doji shows a period of indecision by bulls and bears

and depending on where it forms (uptrend/resistance level=bearish signal,
downtrend/support level=bullish signal)
C. The dragonfly doji is considered a bullish candlestick pattern when

formed in a downtrend or in a support level.
D. The gravestone doji is considered a bearish reversal candlestick when

formed in an uptrend or in a resistance level.
PATTERN
2. The Engulfing Candlestick Patterns
• The engulfing patterns are 2 candlestick patterns. For a bullish

engulfing pattern, you will see that the first candle is bearish followed
by the second candle which is very bullish and this 2nd candle
completely engulfs.
PATTERN
A. Bullish Engulfing-when formed in a support level or in a downtrend, this

can signal that the downtrend is potentially ending.
B. Bearish Engulfing-when formed in an uptrend or or in a resistance level,

this is a signal that the uptrend may be ending.
PATTERN
3. Shooting Star & Hammer Candlestick Pattern
• The shooting star is single candlestick pattern and when it forms in an

uptrend or in a resistance level, then it is considered as a bearish
reversal pattern and so you should be looking to sell.
PATTERN
• The hammer candlestick is a single candlestick pattern pattern and its
is considered a bullish reversal candlestick pattern and it’s the
opposite of the shooting star candlestick pattern.
PATTERN
ASSIGNMENT 2.4
• For this assignment, spend 30-45 minutes reviewing real price charts
and identifying 3-5 different candlestick patterns that you observe.
• Indicators are tools that traders use to analyze price movements and
market trends. They take the raw price data and transform it into
different visual representations, like lines, signals, or other graphics on
a chart.
• The idea behind indicators is to provide traders with additional

information that can help them make better trading decisions. Things
like moving averages, oscillators, and momentum indicators are all
common examples of technical analysis tools that traders use.
• However, the reality is that many traders end up getting overly complex
with their use of indicators. They'll load up their charts with dozens of
different lines, signals, and oscillators, thinking that more information
will lead to better results.
• But in practice, this can actually be counterproductive. All those busy,

crowded charts can be overwhelming and confusing. It becomes
difficult to clearly see the real market dynamics and make sound
trading decisions.
• The big banks and institutional traders don't rely heavily on these
complex indicator setups. In fact, they often use them against smaller
traders to trigger stop losses and hunt for liquidity. Keeping your charts
clean and simple can help avoid falling into these traps.
• Most indicators are simply different mathematical representations of

the underlying price data. They take the raw price and volume
information and apply various formulas and calculations to generate
those visual lines and signals on the chart. But at the end of the day,
they are still just interpretations of the same fundamental price action.
• So while indicators can be useful, it's important not to get carried away
with using too many at once. Simplicity is often the key to consistent
trading success. Focus on mastering a few core technical tools, rather
than trying to process a complex web of signals and lines.
• We'll be discussing the specific indicators we'll be using in our

approach, but the general principle is to avoid overwhelming your
charts and trading decisions with too many complex technical tools.
ASSIGNMENT 2.5
• Define and explain one technical indicator that you find useful in
your trading.
• Explain why you find this particular indicator helpful in your trading
approach.
• Share an example chart demonstrating how you would use this
indicator in a real trading scenario.
UNDERSTANDING PRICE ACTION
ASSIGNMENT 2.6
Applying Your Trading Knowledge to Demo Trading.

• Objective: To put the trading knowledge and skills you've developed so
far into practice by executing 10 trades over the next 1-2 weeks, using
stop loss and take profit levels.
MODULE : DUMB MONEY LESSON 2
DEFINING
DUMB MONEY
FOREX TRADING PROGRAM
LESSON: DEFINING "DUMB MONEY" AND ITS CHARACTERISTICS IN THE FOREX MARKET
1 WHAT IS MASS PSYCHOLOGY IN

TRADING?
WHAT IS MASS PSYCHOLOGY IN
TRADING?
• One common belief about price action in the retail world is that it
represents a collective human behavior or mass psychology.
• The idea is that price action in the markets represents the collective
behavior and sentiment of all the participants.
• The theory is that you can identify repetitive patterns in the way traders
think and react, and then use that to predict future market movements.
TRADING?
But is that really the case?
• All human beings have evolved to respond to certain situations in

certain ways. And you can see this happen in the trading world as well:
the way a multitude of traders think and react forms patterns –
repetitive price patterns that one can observe and then predict with a
certain degree of accuracy where the market will most likely go once
that particular pattern is formed.
TRADING?
• For example, if you see a major resistance level, and the price hits the
level and forms a 'shooting star' – a bearish reversal candlestick
pattern – you can then say with greater confidence that the price is
going to head down.
TRADING?
• However, the reality is that this kind of simplistic pattern-finding and
prediction doesn't work as easily as it may seem. The market is not
moved by the collective behavior of retail traders, but rather by the
actions of large players, such as big banks and institutional investors.
TRADING?
• The retail crowd may think they are capitalizing on mass psychology,
but in reality, the institutions are using their superior resources to
identify those patterns and then take the opposite side of the trade.
They essentially "run over" the majority of retail traders who are all
piling into the same direction.
TRADING?
• The market is driven by supply and demand, but what creates that
supply and demand? It's the large money players. Even if you have a
million-dollar account, you don't have the power to move the market,
as the market is too big, and the big players are also trying to profit
from it. The banks aren't running a charity; they're trying to make
money.
TRADING?
• So, how does the market actually move? It's the big banks, not the
retail traders, who have the control. The retail traders' theories about
mass psychology and price action patterns are often flawed because
they fail to understand the true dynamics of the market.
TRADING?
• The market often moves against the majority of traders. You can look
at the Forex Factory sentiment analysis to see how many traders are on
the buying side and how many are on the selling side. Most of the time,
the market will run over the majority traders, as the big players trade
against the crowd.
TRADING?
• The retail traders' beliefs about price action being a representation of
mass psychology and the markets being moved by the activities of
traders are often misleading. The reality is that the market is primarily
driven by the actions of large, institutional players, who are not
interested in giving away easy profits to the retail crowd.
TRADING?
• Here's the thing - if the average trader truly understood how the game
is rigged against them, they would quickly lose motivation to keep
playing. The institutions thrive on having a constant flow of new traders
entering the market, hoping to capitalize on patterns and indicators,
only to have their accounts slowly whittled away over time.
TRADING?
• By feeding the narrative of "price action represents mass psychology",
the big players are able to hook new traders into thinking they can
outwit the market using these kinds of strategies. But in reality, the
institutions are simply using the herd mentality of retail traders to their
own advantage.
TRADING?
• They know the average person desperately wants to believe they can
"beat the market" through technical analysis and reading "the mind of
the market." So the institutions skillfully propagate these ideas,
meanwhile using their superior speed, technology, and capital to
systematically take money from the less experienced traders.
TRADING?
• It's a classic game of cat and mouse. The institutions need a steady
supply of new traders to fleece, so they perpetuate the myth that mass
psychology and price patterns are the keys to trading success. But the
reality is the game is rigged, and the true edge lies in understanding
the institutional flow of capital that drives the markets.
TRADING?
• Unless a trader can fully grasp and counteract this dynamic, they will
continually find themselves on the wrong side of the trades, with the
big players extracting profits from their accounts. It's a sobering truth,
but an essential one to recognize for anyone hoping to achieve
long-term success in the markets.
TRADING?
• The strategy is to offer just enough occasional "wins" to the retail
crowd to keep them hooked and thinking they can beat the system.
The institutions don't need to completely wipe out traders' accounts all
at once. Instead, they are content to slowly chip away at them, giving
small rewards here and there to maintain the illusion of profitability.
TRADING?
• This is why you often see retail traders reporting modest gains, like
hitting 5-10% returns per year. The big players are fine with letting
them have those small wins, because it keeps them believing they can
succeed at trading. If the institutions simply crushed the retail traders
mercilessly, many would give up in frustration.
TRADING?
• But by dangling the carrot of occasional profitability, the institutions
are able to string along the average trader, keeping them engaged and
providing a steady flow of capital for the institutional players to extract
from. It's a predatory practice, but an extremely effective one.
TRADING?
• The reality is, the true edge in the markets lies with those who can
understand and counteract the institutional manipulation. Unless a
trader develops that level of sophistication, they will constantly find
themselves on the wrong side of the trades, with the big players
systematically siphoning away their account balance over time.
TRADING?
• It's an unpleasant truth, but one that must be grasped in order to have
any chance of long-term success as a trader. The sooner the retail
crowd recognizes the game that's being played, the better equipped
they'll be to navigate these treacherous waters.
TRADING?
ASSIGNMENT 2.7
Analyzing Trader Sentiment on ForexFactory

• Objective: To gain insights into overall market sentiment by closely
tracking the trader sentiment indicators provided on the ForexFactory
website.

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MODULE : DUMB MONEY LESSON 1

1 OVERVIEW OF PRICE ACTION

3 WHAT IS TREND, CANDLESTICK PATTERN,

• Price action traders believe that all relevant information about a

• Price action traders believe that all relevant information about a

• In other words, price action trading focuses solely on analyzing the

This is as any other market place

This is as any other market place

• But there’s something else about price…it has a time component.

The 3 types of charts that can represnt that :

1. The bar chart

So, the bar chart looks like a simple stick, with:

1. The left knob showing the opening price

• It's a visual representation of the price movement during a speciﬁc

2. The candlestick chart

• The red colour is most often used to indicate a bearish(sell) candlestick

• A green candlestick represents a bullish(buy) candlestick and is the

3. The Line Chart

DEEP INTO CANDLSTICK CHART

THIS CANDLESTICK SHOWN BELOW IS AN EXAMPLE OF BULLISH

• A BULLISH CANDLESTICK SIMPLY MEANS THE PRICE OPENED

• NOW, THE CANDLESTICK SHOWN BELOW IS AN EXAMPLE OF A

• BEARISH CANDLESTICK: THE PRICE OPENED HIGHER AND CLOSED

• High: The highest price reached during the time period.

• Low: The lowest price reached during the time period.

UNDERSTANDING BUYING AND SELLING PRESSURE ON CANDLESTICKS

• Each candlestick shows who won that round.

• Mastering charts in tradingview.

• Trend is the overall direction in which the price of a currency pair is

• In simple terms, a trend is when price is either moving up, down or

There are 3 types of trends

⚬ This means that the price is moving in an overall upward direction,

⚬ Traders often look for opportunities to buy or go long in an uptrend.

⚬ THIS MEANS THAT THE PRICE IS MOVING IN AN OVERALL

⚬ TRADERS OFTEN LOOK FOR OPPORTUNITIES TO SELL OR GO

3. Sideways or Range-Bound Trend

⚬ IN THIS CASE, THE PRICE IS NOT MAKING HIGHER HIGHS AND

⚬ TRADERS MAY LOOK FOR OPPORTUNITIES TO BUY AT THE

3. Sideways or Range-Bound Trend

1. Identifying an Uptrend (Bull Market)

2. Identifying a Downtrend (Bear Market)

• THE CHART ABOVE SHOWS AN INITIAL DOWNTREND AND ALONG

• PRICE REVERSALS. A REVERSAL IS WHEN THE PREVAILING TREND

THERE ARE THREE PRIMARY AREAS WHERE WE OFTEN SEE PRICE

1.Support Levels and Resistance Level

• RESISTANCE LEVELS ARE THE OPPOSITE OF SUPPORT - THEY ARE

• NOTHING IS MORE NOTICEABLE ON ANY CHART THAN SUPPORT

• BROKEN SUPPORT LEVELS BECOME RESISTANCE LEVELS AND

• DYNAMIC SUPPORT AND RESISTANCE LEVELS

• Candlestick patterns and chart patterns are visual representations of

• However, we don't actually use these patterns in our trading approach.

• For now, don't worry about memorizing or analyzing speciﬁc

• Chart patterns are essentially geometric shapes that traders use to

• Candlestick patterns are visual representations of the opening, closing,

• Research three of the most common chart patterns used in

• Candlestick patterns are visual representations of price action that

• Traders may look for candlestick patterns to conﬁrm or complement

1. The Doji Candlestick Patterns

B. The long-legged doji shows a period of indecision by bulls and bears

C. The dragonﬂy doji is considered a bullish candlestick pattern when