X-Ray Strategy Beat The Market Makers
X-Ray Strategy Beat The Market Makers
X-Ray Strategy Beat The Market Makers
As you navigate through these concepts, remember that forex trading is not just
about understanding the market's movements; it's about understanding how to
move with them. "X-Ray Strategy: Beat the Market Makers" is more than just a
book; it's a tool that empowers you to look beneath the market's surface and make
strategic moves with confidence. Let's begin this journey together.
Market Maker Manipulations
Is it true that the forex market is manipulated and controlled by a number of banks
and market makers? If so, how can we tell when they are manipulating the forex
markets in their favor?
Let's get a few facts straight. First of all, it is correct that the Forex markets are
manipulated, and you don't need sophisticated tools to understand how this is
done. However, for the majority of retailers, it is not easy to determine WHEN and
HOW this happens.
Most traders don't understand what the financial markets really are, and most of
them don't know how to properly trade forex. A forex market is a place where
buyers and sellers come together who get supported by brokers and market makers,
who try to make a profit through a commission for every transaction.
Every transaction that is carried out in the foreign exchange markets must have a
buyer and a seller. When that happens, we have a trade. This is usually done
electronically in a fraction of a second. In essence, every time you step into a buy
deal, you are matched with someone who is happy to be sold and take the other
side of your deal. If this does not happen, there would be no trade.
Why is that so important? Because it highlights the problems that big banks have,
but small traders don't. Every retailer is able to bring any desired position size to the
market without fear of slip-ups. Important news events like central bank
announcements can cause a slip up for a retail trader, but regularly most trades are
executed instantly.
If you trade one standard lot as a retailer, you will have no problems getting a
position in the market at the price you want.
But Imagine you want to trade much higher volumes, just like banks and institutions
do.
They cannot bring these big volumes to the market at any time! And it's much
harder to find someone to take over the other side of the trade at the exact price
and time they want.
As a market maker, what could you do in such a situation? You have one of three
options:
Option 1:
They could either bite the bullet and accept the price they get. The big problem with
this is that they are not getting the best asking price to profit.
Option 2:
They can wait for the price to reach the price level they want to get the best
execution possible. If the price does not reach the desired level for them to
complete the trade, they get forced to leave without making a trade, or they have to
take whatever price they can get because the trade is absolutely necessary.
Option 3:
They bring the price to the level where they want to open the transaction by
manipulating other smaller traders with their big trading volume (LOT). How they do
that?
To steer the market in the right direction, they take large positions in the market,
buy, or sell. This is similar to the case in which large companies and conglomerates
compete aggressively to drive smaller companies out of the market.
Option 3, of course.
This is how the manipulation works. The big players who have the money to steer
the market in the direction they want, do that regularly. Furthermore, they do that
because if they don't manipulate the market, they won't be able to carry out their
large orders!
Think about it - what makes the price goes up?
An imbalance of buy and sell orders, where there are more buy orders than sell
orders. This means that there is more demand than supply for that particular
currency pair. Conversely, what causes the price to fall - a larger build-up of sell
orders than buy orders, so that supply exceeds demand, causing prices to fall. So if
a market maker steps into the game with a massive order to buy a currency, what
happens to the price? It will start to rise. That means that the market maker offers a
higher price and is forced to buy at even higher prices until his order is fulfilled. That
doesn't sound attractive to a business of this size, as the market maker wants to
maximize profits.
By creating artificial pressure to sell or buy. Smaller retailers are forced to buy or
sell, depending on the direction in which the market is being manipulated.
Once the market maker has received the order for the transaction, its job is to
convert the conglomerate's money from euros to USD. You will therefore trade the
EUR / USD pair, sell Euros and buy USD. Since this transaction of selling euros and
buying USD takes place immediately, the market maker must achieve the highest
possible exchange rate for euros in USD. The way they do this is very important as
it will affect the commission they will earn. In this example, it is in the market
maker's interest to achieve the highest possible profit. This is done by first
increasing the exchange rate and then starting to sell the euro at this higher price.
They keep selling where everyone else thinks the price will keep going up. Until they
finally sell all euros and convert them to USD, and complete the transaction.
What is happening now is that the pressure to sell has become stronger than the
pressure to buy. The price is falling rapidly, and everyone tries to get out of the
trade as soon as he realizes he is wrong. The market maker sends the wrong signal
that the market moves long to get smaller traders to buy. Once the little traders find
out that they have made a mistake in assessing the market direction, they are
getting out of their positions quickly. This is what we call the trap, and it happens
multiple times every week in the forex market.
Now that we know why the forex market is being manipulated. How can we identify
the manipulation? To do this, we need to open a chart and identify areas where the
price has moved in one direction and then aggressively switch to the other.
What happened?
In the graph on the left, we can see that the price was rising steadily and many
traders were tempted to buy. What actually happened was that the market makers
offered a higher price. Above in the red circle (stage 1), we can see a consolidation.
Market makers use this opportunity to take more buy orders. Eventually, they push
the price out of consolidation, to lure the last remaining buyers who are sitting on
the sidelines, waiting for a breakout trade opportunity to buy.
Once the market makers have accumulated their total amount of orders, they push
the price down, which is usually done aggressively. As soon as market makers have
reached their goal in stage 1, the price goes down, leading many traders to think
about selling now. Market makers continue to push the price down, causing many
traders to really start selling now. Sellers are entering the market more
aggressively as they see the Trend continue. Market Makers create a consolidation
pattern at the bottom of stage 2 to collect more sell orders. This is followed by a
push-down to force all remaining sellers to enter the market. And guess what
happens after that?
The price goes in the opposite direction, which most traders did not expect. That
means that most of them missed that move. The only thing that happens is that the
market makers have moved the forex market from one point to another. By using
some clever manipulation techniques that work effectively. That doesn't mean that
it always works like that, as market makers sometimes work against each other. But
one thing is guaranteed, retailers who don't know what's going on in the forex
market when such moves occur are cannon fodder for the big boys.
The market maker will soon reverse this movement. That's how market makers do
two jobs in one go:
1. Knock out the stops from those who went wrong in the market.
2. Take traders into position with the Trend, which will soon turn - then traders
will lose their positions too, but a little later.
3. Clear the stop losses from those who have entered in the right direction.
Conclusion: Only if you understand how the market makers work in the market,
what they pay attention to, and how they move the price - only then you got a
chance to make money.
Trend & scaling of the chart
The global Trend in the forex market is pretty long-term! The price does not change
in the direction of the global movement every Day, sometimes not even every week!
This is a very important point in understanding trading. Without understanding, it
will be difficult to get good results. The movement along the Trend can be shown
schematically as follows:
Obviously a "sell trend" (downward Trend). However, the price moves in the "buy
direction" (upward Trend), practically on every trading day, confusing traders who
trade within the trading day and often making mistakes as a result.
It is important not to confuse the concepts of a global trend and a corrective trend!
The global Trend in the direction of price movement is mostly fairly stable and long-
term. A corrective tendency is almost a daily price movement against a trend; this
can be thought of as an extended correction of the global Trend.
Do a simple test for yourself and ask some traders: "What is the current trend?" the
answers could confuse you. One will say downward Trend, another will say an
upward trend, and the third will say the price is in a flat movement. Even though
they are analyzing the same currency pair at the same time. The fact is about 98%
of traders have no idea of the time scale.
In this strategy, there is a reference point and a scaling that we use. Activate period
separation in your trading terminal. The period separation on the M5-H1 time frame
will visually divide the price movement for yesterday and today. This is an important
reference point from which we will look for the location of prices on the M5 and H1
time frame. The X-Ray-Strategy comprehensively analyzes the price, so all time
frames from M5 to D1 (more often M5 to H1) are summarized in the system.
On the H1 or M30 Time Frame, we define a global trend and record the strongest
levels of the system. M5 Time Frame we record impulse levels and reversal levels.
(Later you will find out what all this is and how it works). Therefore it is necessary to
analyze the price movements on 2 timeframes. All other time frames are considered
as derivatives of these two. And so the Trend is a directional long-term price move
on H1.
Red arrow - downward Trend. Blue arrow - upward Trend. The trend movement is
pretty stable and doesn't change every Day. It is necessary to memorize that!
But despite the fact that, for example, it is now up and you can see the price
movement for Sell on M5 during the Day, this is the correction tendency, a short-
term price movement against the global Trend. And it can change up to 5 times in a
trading day. Examples:
In most cases, a trend change occurs 1-3 times per trading day, and there is a
tendency for the price to move with at least two impulse levels!
In the following picture, we see up and down movement with three impulse levels:
The X-Ray-Strategy offers intraday trading, so our entry points can be used not
only in the direction of the global Trend but also on the correction tendency
(against the global trend). However, one important rule arises from understanding
the differences between these trends: we always want to act in the global trend
direction because it's safer! We trade in the trend direction until we see a trend
reversal on the H1 time frame.
And now, let's explore the logic we are going to use for price analysis and trading.
We got some tools that we use. I am sure that many of you have known most of
them for a long time, but not everyone knows where and how to use them
correctly.
Impulse levels
The impulse levels are based on an M5-M15 time frame. If you keep thinking about
trends, you can see that the price movement is at certain levels. These levels are
impulse levels! This is one of the most important tools in the X-Ray-Strategy that
makes up the entire diagram. On the chart below, they are indicated by blue and
red rectangles.
Examples:
During the price movement, these impulse levels form a kind of "trend stages." This
is very important for visual perception in the chart. It is necessary to draw them
while the price is moving! I draw impulse levels in red when the price is falling and
blue when the price is rising.
Note: Impulse levels do not have a standard width or length. They have to be built
as accurately as possible, just as the price "draws" them. Simply connect the places
where the price bounces and where the price finds support.
Reversal levels
The reversal level is the first impulse level of the "Trend Stages "(on the time frame
M5-M15). Let me explain - the price movement in the Trend is the construction of
the impulse level. For example, if the trend is an uptrend, then there will be a buy
impulse level. Then another buy impulse level, and then another buy impulse level.
But sooner or later, one way or another, the first sell impulse level will appear. And
this will be the reversal level!
A simple example:
In the morning, I open the trading terminal. I'm drawing an impulse level that has
already been build (blue rectangle):
This is the buy impulse level, the first for today but not the first in this Trend! We
can see that the Day before there was an upward trend. It means that before this
level appeared, the price had already moved up (blue arrow). So we are not entering
the market at the appearing level. We wait until the first Sell-Impulse-Level
appears. And that will be the reversal level! This will indicate a trend or trend
reversal.
Take a look at the following picture. Another buy impulse level forms. We don't care
either because this level is towards the same Trend:
This is the reversal level for a new downtrend or corrective move. After the price
gets fixed at the level (support), you can enter the market with Sell, but only if this
level was formed in the "reversal zone "or around the "total impulse level "zone! You
will learn what the reversal zones and the total impulse level are later.
After the appearance of the reversal level, the price begins to develop into a new
trend or tendency. As usual, the new impulse levels are formed, which you have to
draw for yourself.
In this picture, you can see the impulse levels, but only one of them is the reversal
level! Of course, everyone chooses the color for themselves.
Types of reversal levels
There are 4 types of reversal levels. It is essential to understand how these reversal
levels differentiate in order to avoid errors at the Trade Entry. This will make it easier
for you to visually notice the reversal of trends. We mostly interpret this on M5 and
rarely on the M15 time frame.
Reversal Level 1:
Reversal Level 2:
The most accurate reversal level! The Impulse got a lot of momentum.
Impulses
An impulse is a unidirectional sharp price movement that makes at least 7-10 pips
on average. Exceptions are for some currency pairs such as AUD/USD - these
currency pairs and some others have smaller impulses. With XAU/USD (GOLD) and
some other cross pairs, the impulses are usually bigger.
Reversal moment
The reversal moment is when the market maker enters (or re-enters) the market or
rebuilds its positions in the opposite direction. Due to the extensive order volume of
the market makers, the re-entry usually takes place with clearly visible impulses!
For example, consider the downward movement of the price: when the price begins
to go short, it means that the majority of the participants have been long. BUT IT IS
IMPORTANT TO UNDERSTAND: Any subsequent price movement in the short
direction will change the mismatch between the lots of market participants from
long to short. That means, sooner or later, the Trend will change!
Reversal moment = failed breakthrough
The breakthrough of the level (support or resistance) and immediate return below or
above the level. 80-85% of market reversals arise from this reversal moment!
The total impulse level is a type of level that is structured similarly to IMPULSE
LEVELS, but on the higher time frames, M30-H1 to H4, and sometimes on D1.
These total impulse levels should be viewed as possible reversal zones. (In the next
part, you will find out what the reversal zone is.) Because they usually have a
significant price pullback or even a trend reversal. There can also be a breakthrough
with ongoing movement. Total Impulse Levels are used to enter the market on
reversals and against the Trend. We only have to recognize which kind of entry
scenario is formed in this zone. It can be a "reversal level "or a "breakthrough with
ongoing movement" entry scenario. Remember that almost all market reversals
occur on a failed breakthrough of the level. This is the safest and most profitable
entry we can get in the market!
1. The price cannot and does not have to reach the total impulse level ideally.
These levels or zones, which you draw as total impulse levels, are only an indication
for you that there can be a price reaction in the total impulse level zone! And we
can visually see how the price reacts to the total impulse level and what the price
will do next. If a reversal level is formed in the total impulse level area, then this is a
good sign for an entry.
2. During trading, only obvious total impulse levels need to be drawn. One above
and one below so that other levels do not bother you and do not distract you.
Reversal Zone
Why do we need reversal zones, and how do you build them up correctly?
We need the Reversal Zones to understand in which zone or area of the diagram we
should look for entry points. Reversal zones are the accumulation of stop-loss and
limit orders! A place where a lot of money sits! This is the area in which the market
maker drives the price before it reverses in order to displace many participants from
the market and make business with their stops! In other words, if a market maker
wants to sell profitably, he will drive the price where many traders want to
buy. Only in this way is it possible for him to carry out his big position. The
price goes against the crowd. This means that it moves from one zone of
accumulation of orders to another zone.
All you need to understand is that we will only enter the market when the
price enters a reversal zone - or a total impulse level zone after a reversal
level is formed! This is a requirement!
First, you need to find the latest tendency (Trend) on the chart M5-M15.
Next, you need to check whether these movements can be called trends. We need
to find at least two impulse levels. To do this, let's take the first upward Trend.
After we have found and recognized at least two impulse levels (blue rectangles),
we know that we got a trend. Then we can draw a buy reversal zone. Buy reversal
zone is only acceptable for long positions and is located at the bottom.
After we have found and recognized at least two impulse levels (blue rectangles),
we know that we got a trend. Then we can draw a buy reversal zone. Buy reversal
zone is only acceptable for long positions and is located at the bottom.
Schematic representation:
This describes the technical process of finding reversal zones. You have to
understand that the reversal zones are useful because they are places where many
stop-loss and limit-orders from market participants sit.
Addition:
This rule is necessary for our trading when the market is developing strong
(quickly). In this situation, when the price moves on a high time frame with large
pulses and small corrections, it is difficult to find a reversal zone. If the reversal zone
is far from the current price, you need to switch to the H1-H4 or D1 time frame and
find a large, closest total impulse level. Priority should always be set in the trend
direction. If it is difficult to recognize the total impulse level at the moment, then
please don't invent it! If the total impulse level is not there, then there is no reversal
zone and therefore no good entry point! In that case, it is better not to trade!
There are also exceptions to the definition of reversal zones:
c. When the market is at the bottom/top: we have to assume that the price is
already in the reversal zone.
b. Reversal zone of deep correction: A deep correction is what I call a price move
with a reversal level, but not in the reversal zone! So it can happen that you have
entered the right entry point, for example, a buy position (blue rectangle):
The price went your way, and then it started going down, even with a reversal level.
But there was no sell-reversal zone for this move! We take such a price move as a
deep correction (green circle). Just ignore this price movement or use the safe
method (The safe method gets described later). Once you understand how deep
correction works and how it develops, you just need to have enough courage to
wait. Because the trend reversals mostly only happen in the reversal zones.
Optional possibility: Use the safe method. Or close an open order to get in later at a
better price.
It is better to consider the reversal zone from the deep correction in the trend
direction as significant for our trading decision. That means, for example, in the case
of the downtrend: We look for the reversal level around the reversal zone of the
deep correction to get our entry in the trend direction:
c. Situations in which the reversal zone cannot be determined:
It happens that the price is at the highs or lows of the market where the reversal
zone cannot be determined from the past Trend. In such situations it is assumed
that the price is already in the reversal zone.
Important:
Don't forget that every new trend change results in the formation of a new reversal
zone! Therefore we forget the old reversal zone and look for the entry point in a new
reversal zone!
The rule of construction of the reversal zone: To define the reversal zone, you have
to define the last terminated Trend and from the reversal level of the reversal (above
and below), the reversal zone is marked. It may sound complicated, but in practice it
is not difficult. Now I'm going to show you this in detail. Example:
Actually the reversal zone is nothing more than a place for the accumulation
of stop loss and limit orders. (A place where a lot of money sits)! This is
exactly where the market maker has the opportunity to trade his large
positions because a bigger number of orders sitting there! The market maker
can immediately throw large volumes into the market and cause the price to
move in our favor.
High / Low from the previous Day
For trading, it is also necessary to mark the lowest and highest prices from the
previous Day as a level on the chart. Because many times the price bounces off
these levels. Therefore, these zones must be considered for future entries. You have
to switch on the period separation on your chart, so that you can see where
yesterday is and where today is. The level is not a line, it is a zone of order
accumulation. You need to mark them with rectangles as shown in the following
pictures. You can only open a position after the reversal moment when a reversal
levels have formed around the reversal zone!
Sharp trend reversal levels
The Sharp Trend Reversal Level is a powerful indicator of price within the trading
day. It is the narrow zone from the sharp turnaround, where we open a position or
close a running position.
The Sharp Trend Reversal is a combination of several candles, often even the tip
of a candle on which the price turned sharply in the opposite direction. The price
only reacts to it the first time it approaches the level (only once)!
This is a necessary element to get profit acceleration if you are using this. (Find out
more about Profit Acceleration below.) After responding to the Sharp Trend
Reversal, the level marker can be removed. We won't use this level anymore! Rules
of working with Sharp Trend Reversal Levels:
The market maker knows the trader's psychology, and he knows where the crowd
places their stop-loss and limit orders. For him, these places mean potential profit,
so he will drive the price there in order to clear stop-loss and limit orders. We need
to understand the action of the market maker! A market maker also carries out such
actions at the high/low of the price (at the support and resistance levels)
Now try to understand the logic of my explanations! And I ask you for your visual
perception to look at the chart and find the logic that I explain here!
How does the mass trade in flat conditions, and how does the market maker act!?
The strategy of the market maker is always (not only in the flat) to fake out the
participants and not give them any opportunity to earn money. About 90% of
participants will lose their money in flat conditions. Practically almost every morning,
you can observe the same chart situation. The market maker wants to consolidate
the price to accumulate as many participants as possible and to build his own
positions. "This is how the flat is made."
Example
Someone will go long or short here. Some of them will place buy/Sell orders below
and above the flat limits.
Only when you can see that a flat has been formed will other participants join.
Some participants open short positions with small Stop Losses at the top of the
consolidation and open long positions at the bottom of the consolidation. And some
Traders have placed orders above and below the consolidation.
As soon as it is clear that the flat has been formed, it won't last long! Otherwise,
participants will make profits with the consolidation. The market maker will not
tolerate this for a long time.
The price only leaves the flat when the market maker has built up his position! (But
do not think that it does not take the economic situation into account! If the price
has to rise after the positive data, it will usually appear on the chart that the price
wants to fall. It creates extra volatility to fool traders first. When many are trapped,
the price continues in his direction.)
Let's continue: Price exit from the flat clears the stop lots below and opens sell stop
orders from several traders.
That brings even more imbalance into the market. In this case, buy lots will be less
and sell lots will be more! This move attracts many other traders in sell positions.
Many indicators will now also signal short!
If the market maker has restructured its own orders and wants to buy now, the price
will go up! He cleared so many stop losses and triggered many limit orders, which
means he gets a much better entry price for his buy positions, plus it created
enough volume to build up the long position.
The price is the only indicator that tells us everything! Of course, there are not
always the same price fluctuations. And you have to be able to wait for these
moments like a sniper!
Find such flat scenarios on your charts and take a closer look at them to
understand the trading logic. Continuously look at the charts without even
trading. Find market maker traps, behavior, and manipulation. Use it to train
your visual perception.
It is almost always the same behavior pattern that is shown on the chart. I would
say around 80%. We should use it in our trading.
If you look closely at the scenarios for the flat development opportunities, there
aren't that many of them.
Search on M5-M15 charts and see how the flat situation developed. The most
important thing to understand is; the price usually reverses after clearing the stops!
1a. Consolidation Flat (usually not more than 18 pips wide). Often but not
always, the price comes out of the consolidation and goes in one direction all
Day:
2a. In that case, the price comes out and goes in one direction all Day or most
of the Day.
Possible trading logic:
Trade first exit from consolidation in the trend direction. The consolidation flat
should be a continuation of the Trend!
Let us assume that the Trend is directed upwards: The priority is in the direction of
the Trend!
Common mistake:
The basic entry point
Let's start with the basic entry point. This is the main entry point into the market.
On the principle of which trend reversals and reversals after consolidation are
defined. This element can bring you some big profits. However, without knowing
certain rules, it is quite difficult to put them into practice. The basic entry point
appears when the Trend or tendency changes. (Now, of course, I'm talking about
the movement of the M5-M15 Time Frame.) This is the very first reversal level in a
price trend. To determine the correct entry point, we need another confluence as a
filter. This will protect us from false entry signals! We need a total impulse level (TIL)
or a reversal zone (RZ) as confluence. In other words, a reversal level has to be in at
least one of these zones!
The basic entry point often brings the best trades. You can't find it every Day. But, if
you only trade this entry, you will get really stable good results.
There are two basic rules for using the base entry point:
The Formula:
The total impulse level or the reversal zone should always be there, and there are
no entries without at least one of both!
Yesterday the Total Impulse Level was formed and the market came to it today. I
have marked this point with a blue circle on the Time Frame M30:
Now we consider this location (red circle) in the time frame M5.
Here you can clearly see the transition of the Trend, from buy tendency to sell
tendency, which we can use for a potential profit.
After the buy impulse level (marked in blue) I could see a sell Reversal Level
(marked in red):
This happens in the zone of the TIL. For me, this means that all the conditions of
the formula are met, and I can open a sell order.
IMPORTANT: Don't watch out for reversal levels unless they are in a reversal zone.
There are no entry points and no exit points in such places.
This is an important point. Understand the market maker logic in a situation where
the price is facing resistance or support.
Let's look at the charts on how price can confuse inexperienced traders to trade the
wrong direction:
Look at the other situation; how the market turns to a known area of resistance or
support. Such situations are very common.
Resistance breakout without delay opened many Buy Limit orders and cleared a lot
of stop losses. "The money is now with the market maker, and the train can leave."
A reversal level appears for us, and we can enter the sell position and move with
the market maker on the same train.
Stop loss (SL)
According to the „X-Ray-Strategy“, trading without stop-loss is prohibited! Moving
is also undesirable. At 60-70% of the correct entry points according to the system,
the price "returns" to the entry. Therefore, a stop loss can only be moved to the
positive zone in extreme cases, and that would be:
I think it is better to use the SAFE Method instead of moving the stop-loss.
Safe method
Do you know how to enter the market more safely when opening the first order? All
you have to do is follow a few simple rules. Always use a stop loss, of course!
The maximum loss on a single transaction should not exceed 1-2% of the total
capital!
First, an expected reversal level is formed, then we enter the market according to
the rules of the strategy. But the price went against our trades, and the order closes
after a stop loss. Annoying, but you have to stay cool and calm, no emotions! We
just have to wait for the next reversal level. (See pictures below.) Furthermore, the
second reversal level is formed. Since the price is already in a reversal zone, we will
enter the market after the formation of the second reversal level and look forward to
a significant profit.
Breakthrough of the current movement
The breakthrough of the current movement is the entry point, which we define as a
continuation of the Trend! This entry point is also used very often by me. If I missed
the first reversal level or am not sure if this is the correct reversal level. I just enter
the market later.
When the price approaches the level, there are two ways to react to the level, and
these are:
1. Bouncing off the level and reversing: That is the trend reversal!
2. Breakthrough of the current movement and continuation of the Trend.
Here are a few examples of the breakthrough and continuation of the Trend:
This is a difficult entry point, and first, you need to understand the logic of this entry
point before you can start using it. The BOM entry point can only be used after the
first or the latest after the second impulse level. At the third or fourth impulse level,
it is forbidden to enter the market! The potential movement in price is too small. I
ask you to find such moments on the chart and analyze them very carefully. And
the more of it, the better. Practice makes it perfect! Constantly train your visual
view!
At the entry point, it is important to ensure that there is enough distance to the
next reversal zone. Otherwise, it is not worth entering the market.
Retest
RETEST often occurs after a reversal level got formed. This price movement against
a trade can scare novice and impatient traders. But get used from the beginning not
to move your SL after you have placed your position! The retest rule enables market
entry with a minimum stop loss and a maximum profit target. Often this is the entry
at the top or the bottom of the market. The stop loss on such trades rarely exceeds
8-10 pips. The task of this price movement is to switch off and confuse the
inexperienced traders after a correct entry or to force them to leave the market
before a good trend movement. For most traders, the retest is a terrible surprise, but
for us it is a unique opportunity to enter the market with minimal risk and make
even better profits. A stop-loss can often occur during retesting - this is normal,
especially at the beginning. With experience, however, such entries will bring
significant gains.
We can only accept a retest after forming a reversal level in a reversal zone or
in the zone of the total impulse level. Without a reversal level, it is not a
retest!
Notice:
Important: The retest cannot be used if the price has reached the opposite reversal
zone from the entry point. Since this is already a new trend and not a retest!
Risk Free Profit Acceleration
Profit acceleration is a tactic for a RISK-FREE increase in order volume in the
market. With the correct use of the acceleration tactic, it is possible to increase the
deposit many times faster and with absolutely no risk. Without hurting money
management. Profit acceleration is based on the correct understanding of the
system levels. You should understand what a price reaction is to system levels
(total impulse level and sharp trend reversal levels). This reaction or rebound occurs
at 80-90% at these levels. And so the acceleration can be applied in our favor. To
be able to use Profit Acceleration, we must already have an open order on the
market as usual, and the order should be in profit!
To properly perform the profit acceleration for the rebound, you must:
- Open an order according to the basic rules of the strategy.
- For example, it is an order at the turn of the Trend on the RL.
1. You have to find a strong level that is on the path of the Trend (Total Impulse
Level or sharp trend reversal level). If the level is in the reversal zone, the
rebound will usually be greater.
2. When the price approaches this level, we open an order with an increased, and
correctly calculated lot volume for a rebound/bounce at this level. However, the
increased lot of the order must be calculated so that there is no risk of losing
something because the main rule of the strategy is to protect our money!
1. Open the first order according to the basic rules of the strategy (basic entry
point).
2. Open an acceleration order on the next trend change. See the following
Picture!
3. Hold the position until the price changes the Trend again or until one of the
stop-loss orders is reached. (Then close the second order by hand.)
If the profit acceleration order is closed with a stop loss, you still have $ 400 profit.
1900 - 1500 = 400
The lot size of the acceleration order has to be calculated so that the first
order's profit remains greater than the loss of the stop loss from the second
order.
Profit acceleration on a rebound/bounce and further trend reversal
The profit acceleration for the rebound/bounce & the further reversal takes place
according to the same rules as the profit acceleration for the rebound. With one
exception, we don't know in advance whether we will hold the profit acceleration
order or if we close it after the rebound/bounce. The profit acceleration takes place
only in the reverse zone in the opposite direction to the first order. This means that
the profit acceleration order is opened at the total impulse level or at the sharp
trend reversal level. After that, wait for the reversal level to appear. If the reversal
level shows up, then you should hold the profit acceleration order. This creates an
excellent profit result because the acceleration order was placed at the top of the
trend reversal with a tighter stop and more potential.
If the reversal level does not show up, you close the accelerate order depending on
the situation. But do not wait for the position to be closed by stop loss. Here you
have to be "flexible." (So I want you to analyze the charts and see how the trend
reversals develop. It is very important to pay attention to where this is happening
and in which zone.) Soon you will understand and also be able to recognize how the
market maker works against us in the market. Only this mind can be turned into a
trading tactic in our favor.
Basic rules of the X-Ray Strategy
1. In the middle of the price movement "between the sell-reversal zone and the
buy-reversal zone" there are no entry points! Only trade the most accurate setups in
the reversal zones!
2. The larger time frame is more important. First, I look at H1 and identify the
direction of the Trend. Draw the levels and reversal zones. Then look for an entry
point or wait for a signal on the M5 time frame.
4. Better a more precise entry (above / below) than 2-3 imprecise entries.
5. Keep a "trading diary" (take screenshots of all your transactions and explain why
a position was opened/closed? Why such a stop-loss? Etc. You should analyze your
diary two times a week!
6. If the loss is more than 8% in one Day, you should temporarily stop trading.
Come to rest and analyze all of your mistakes and thoughts. Be sure to analyze
every failed entry!
7. If the price is moving sharply in one direction, do not enter the market. "No
additional movements".
8. According to the strategy, the daily profit goal is 30-40 pips. If you already have
made the required profit, you can close all positions and relax.
9. The main thing is that the mathematical expectation of your profit is reasonable.
1 : 1 bad
1 : 1.5 satisfied
1 : 2 – 1 : 3 good
1 : 4 very good
11. A maximum of 1-2 transactions per Day. Visually train the entry point accuracy
on historical data.
12. Treat the results of transactions as statistics! There shouldn't be any emotion
when you get a stop loss. The same goes for your profit! We, as traders, have to see
ourselves as robots that guarantee the functioning of the trading system. One of the
most serious psychological mistakes in becoming a successful trader is the
retention/relation to the money. The goal shouldn't be to make money instantly.
The goal should be developing the right thinking and the right experience. This is
the correct approach to trading and it will make you more money in the long run.
13. Daily check of the economic calendar. It is better not to open a trade 20-40
minutes before the major news gets published!
Here I have come to the end of describing all the trading tools and the trading logic.
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Live Trade Examples for X-Ray Strategy EUR/JPY
Let's continue with the practical explanation and application of all rules
Now you will be familiarized step by step with the logic of the X-Ray-Strategy. I will
show and explain everything precisely. You will understand how to use all of the
tools and knowledge described above to get a much better understanding of the
price movement, which is the most critical part. It's not easy to break the old false
trade stereotypes that are ingrained deep in our minds, but we have to think
differently. We have to think like the Market Maker. You have to be patient,
attentive, and determined.
Trade 1. (Monday)
Trend - this is obviously a downward trend on H1
The price is now on the H1 Time Frame under a strong Total Impulse Level.
FLAT: Breakout of the flat, reversal with sell-reversal level to sell. This reversal level
gives confidence because the Trend is downward. All entry rules are in place:
(Trend + TIL + RL), I'm selling:
Draw all "impulse levels" in the direction of the price movement. This is very
important!
The profit grows.
That was one of the classic market movements, with 2.0 Lot over $ 1455 profit.
Today is very important. The Day started with a consolidation flat; the consolidation
flat zone is a special type of flat. If the consolidation flat is so tight that the market
maker "does not allow anyone to escape from the flat", the transactions in the zone
are practically not completed. So in this consolidation flat there is already a strong
imbalance between buyers and sellers. The market maker collects some more
orders, and soon the train will continue to move. Notice how the trend reversal
happens - with strong market fluctuations (with a lot of money), but there are no
such fluctuations here! A consolidation flat is not a market reversal! Therefore,
the exit from the consolidation flat is almost always a continuation of the market
movement according to the previous Trend (here, the previous Trend is downward).
A consolidation flat is a flat, elongated, very narrow, regular, and rectangular flat:
Best of all when the price froze yesterday and the consolidation flat moved to the
very bottom / (top) of yesterday's market in the morning. Such a consolidation flat
is the most accurate. In six months, you won't even find such a consolidation flat
that hasn't moved well.
I'm a little late to enter the market today, but I'm still going in late. I use the
breakthrough of the current movement as my entry point.
The development scenarios for the rest of the situation are the same as for a normal
consolidation.
You have probably already noticed that this order is against the Trend! Let's see: I
will either hold the majority of the trading day on this buy or close it and then sell
when the sell reversal level appears.
Price keeps moving:
Here I want your attention - the reversal zone for Sell is very far away. Even a
strong Total Impulse Level for Sell (from which you could build a reversal zone) is
also far away.
Keep watching the position. It doesn't mean you should always be in front of the
monitor. You can make it a habit to approach the terminal for a few minutes every
half hour. But the trade against the Trend needs to be watched more carefully!
The time has come, I can close my position, the profit is good. + $ 1394 for today.
Trade 4. The next Trading day (Thursday)
The Trend has changed. I buy after the price has left the flat, and the reversal level
appears. The price is in the Total Impulse Level reversal zone for BUY.
It looks like the price will move to the retest zone.pulse Level reversal zone for BUY.
Retest has been done, but I'm already in the market, no need to open another
position and put more risk on the table.
Price is not moving.
A relatively rare scenario for a consolidation. The price didn't go anywhere all Day.
The market maker "handled" the crowd and attracted a large number of traders into
the market. The most popular indicator trading systems today gave an average of
3-5 entry signals. And many traders did not have the best results. The defense of
the X-Ray-Strategy worked 100% again - I have a small plus: the position has to be
closed.
The price has risen. I enter the market with a sell position from the alleged retest.
My doubts were not in vain, but I did everything as reasonably as possible. The
result is a small minus of -$253.
Trade 6. The next Trading day (Monday)
The next day I see a breakout out of the consolidation flat (Green rectangle.)
Wait for a buy reversal level in the reversal zone. The entry in the direction of the
Trend takes place from a retest zone.
The retest's entry didn't work out. I caught a small stop loss again. Wait for the re-
entry.
I mark another impulse level in red. If this level gets broken, it will act as Reversal
Level to buy. But the price may continue to drop, and I'll mark the next impulse
level.
Now the reversal level appears to buy, but unfortunately, I was not at the PC, so I
entered later with the "breakthrough of the current movement "entry.
With the second-order, I compensated the loss of the first order. If I had entered the
market exactly after the first Reversal Level, I would have a much better profit.
It's late at night, and it's time to close the position.
The daily result is alright. The first order was - $348, and the second-order was
+$288
In this case, it is important to understand that the trend direction is long. I assume
that the down movement is shorter. because it is against the Trend. Moves towards
the Trend are much more significant.
Therefore, there is now an excellent way of making a profit from the rules of "profit
acceleration".
The price is in full swing down to the next reversal zone.
The Price swing creates a strong Total Impulse Level for buying. Since the trend is
buy and the total impulse level is strong, I open another order for profit acceleration
in the reversal zone, with NO RISK. I'm in the market with 5.0 Lot.
A little later, however, I see a signal for a possible correction, so that I close my
positions.
+$1526 for this trade sequence.
An excellent result that can be achieved with the X-Ray-Strategy on almost every
trading day! Apply the rules correctly, and don't be afraid to make mistakes while
learning! Every mistake you make today is a win tomorrow! Mistakes help to
understand better, and the most important thing is - REALIZE - your actions in the
market. Work on yourself, strive for the ideal. I hope that you will grow from your
experience every day.
I think you learned the most useful and important lesson in this section of the
course.
Let's continue with some more examples of different trading scenarios on
GBP/AUD.
Trade 1. (Tuesday)
The trend is upwards. It is advisable to go in the direction of the trend, but we can
go against the trend with shorter targets.
Sell reversal levels appeared. I enter the market with a short target.
Price is moving.
I love trends like that. Everything is very clear and logical. If you are not tied to a
certain pair - first look where there are trending pictures that tell you that it is better
to trade this pair today. The price moved to a very serious total impulse level. This
level is against the trend (resistance). According to the theory of our Strategy, the
likelihood that this level can beat the trend, is much lower, than losing this battle
against trend. But in 70% we will see a definitive reaction to such a level, and that's
what we need. Look carefully at M5.
And here is the reaction – It starts to move against the trend from this Total
Impulse Level (resistance). Excellent - this is a good opportunity to go against the
trend with minimal risk. And then it may be possible to enter the market with a large
position, but a little later and in the direction of the trend.
Let's wait…
Now I will find out the development of the further scenario. We look at the picture
on the H1 chart.
Excellent impulse level for profit acceleration. The market is up, and I have a lot
more chance of making money with a profit acceleration order than with a sell
position.
Notice how clearly the breakthrough of the current movement in buy direction forms
on H1.
This is a profit acceleration order in the direction of the trend. This means that we
can still hold the profit acceleration order.
The price approaches the stop loss of the first sell order with 2.0 lot. But at this
point, the profit acceleration order of 6.0 lots in the buy direction is in big profit. The
trading sequence is complete WITHOUT RISK!
I'm going to close the position because it's late in the evening. It is no longer
possible to control the transaction, and the price is already at the stop loss of the
sell position.
Look at the time frame H1. Here is the moment of truth. A new breakthrough of the
current movement in the buy direction. The trading day's result is + $ 2500 with the
profit-accelerating tactic in trend direction.
Trade 3. The next Trading day (Thursday)
Very interesting and important trading day. The market has so far been in the buy
trend. During the night, there was a strong news movement in the market, with
more than 300 pips. On the higher time frame, this movement formed a Total
Impulse Level for sell. But I can't believe that the trend has changed! But denying
the existence of a huge sell-total impulse level doesn't make sense either. Today I
have to act without understanding the priority of market direction.
The situation is very interesting. The buy reversal zone is already here. The
breakthrough of the ongoing movement for the buy position is also there. BUT on
the screen you cannot see the scale of this sell movement, so you cannot see this
great distance in pips from a possible buy order to its stop-loss! There are more
than 100 pips for stop loss (red arrow). I cannot afford this risk. My first job is to
protect myself from risk. And then think about the profit. So of course I'm not going
to open such a deal. Then what can I do today?
1) rest.
2) I can wait for the next level of reversal.
3) I can wait for the buy retest order.
In various cases, the retest does not work as expected. However, it is sufficient if
the retest works in 30% - 40% of the case to generate an excellent profit! It's about
the proportionality of the stop loss to the potential profit of such transactions!
Because the stop loss could only make us a small minus and the expected profit
would be many times bigger than that.
And now it's very interesting…
Another buy reversal level appeared. My position is at the bottom of the market,
and there is almost no risk. This is an excellent trading condition. The market is
approaching the evening, and I can no longer watch and control the trade today.
Normally I would close the position with a profit. But not today! Why? - Because the
deal is from a retest with minimal stop loss, and I see the buy reversal level as
confirmation of a move up. I decide to let a trade like this run until tomorrow
morning. If I get stopped - no big deal. Stop loss is very small!
The next day:
These are the options that you have with the X-Ray-Strategy. Go with a stop loss of
10 pips or 20 pips, and make a profit of 150 or 200 pips with one trade! Now I can
already see the sell-reversal level, so it's time to get out.
The same principle as yesterday. I'm entering the market with 2.0 lot.
Stop loss is around 12 pips. This is a minimal risk with huge potential rewards!
Retest didn't work, suffered a small loss. But in order not to lose today, I will wait for
a position to re-enter.
I want to wait until a reversal level has formed around this zone.
The price keeps going up, I'm still building impulse levels and waiting for the
reversal level to appear.
The price keeps going up, I'm still building impulse levels and waiting for the
reversal level to appear.
The trade starts to go in the right direction. But a little later, the market declines,
and the entrance at the retest closes with a stop loss.
Great entry point to enter the market! Clear buy reversal level in the buy reversal
zone. This is what the market looks like on H1 - it is clear that the trend is aiming
for a change:
Let's look at the development of price.
Great opportunity to trade a retest! The market offers many retests for this currency
pair! But I'm already in the market, so I'm not doing anything.
I keep watching.
Since I have generated a small profit, I am considering how to proceed. Because I
just can't see in which direction the price will continue. I'll look for a place to close
my position or get a profit acceleration order at the bounce. I calculate the lot size
for my profit accelerator order. I'll wait and see how the situation develops.
The price moved to a strong total impulse level. I opened the sell acceleration order
with 5.0 lot without risk at all.
I won't wait long because I can't see the global trend of the market.
I have marked the sell reversal zone in red and the buy reversal zone in blue. I wait
for the price to get there.
But the price barely moved all day. I’m not taking a trade.
Trade 8. The next Trading day (Thursday)
The trend can now be determined. This is a downward trend. During the night the
market continued to decline, which broke the current move in the sell direction.
Priority is SELL.
Today, the market on the M5 Time Frame is not the easiest. But I will go into the
market after the reversal level has appeared. (blue)
The price is skyrocketing, but this move is against the trend. If there is a huge sell-
total impulse level nearby, I can then use the profit acceleration method.
On H1 I draw the total impulse level as precisely as possible and see that there is
even a false breakthrough on this level. Which signals to me that there will at least
be a good rebound. As the trend is in the sell direction, this false break will most
likely turn the market down.
I didn't make it to this Buy-reversal level, wasn't on the PC. But since a sell reversal
level has now appeared (red) from yesterday's total impulse level, I will go short
there.
Anticipated option from the consolidation:
I will look at the development of the situation, already the second turnaround for
today. Perhaps there will be another trend reversal - in which case I will step in the
opposite direction of the market. If I don't see a reversal then I will continue to hold
the sell order or there will be a Total Impulse Level where I can open a profit
acceleration order.
Now I just have to wait and keep my short position.
Still hold.
The price is good in Profit, but I still don't see a reversal level. The sell order can be
closed. Finally, I also want to switch off and relax.
There is now a trend reversal in the sell direction on M5: Sell-Reversal Level +
Reversal Zone at Total Impulse Level.
Below is a huge buy total impulse level, I'm going to look at the price reaction on
the Buy Total Impulse Level.
The market is slowly creeping down...
Price is slowly coming to the buy total impulse level. Look closely!
I will not use a profit acceleration method here because the price is falling very slowly
(there is no impulse), and the trend is looking down. I think the total impulse level
may not be able to give a good jump in price.
I draw impulse levels when price breaks above - it will be a buy reversal level.
The price breaks through and signals the closing of the position.
Profit of the day: + $ 600.
In fact, I am ashamed to admit it, but I have to do it. I did not mark the reversal
level correctly. All day today it doesn't go the way I wanted it to.
Note that the impulse levels must be marked more precisely. That's why I got my
well-deserved stop loss!
When the price moves above the blue level, a buy reversal level occurs. If below
this, then a sell entry point arises from the consolidation.
In this case (although it is quite rare) it is pretty safe to place a StopOrder. That is
when you cannot control the situation every 10 minutes so as not to miss the
opportunity to accurately enter the market.
Market looks down. Based on the development scenarios for the Flat situation, I see
roughly this outcome of events for today. Without waiting for the reversal, I close
the position with a good profit.
After the formation of the reversal level in a reversal zone, I enter the market against
the trend! I drew all possible development scenarios for the flat.
The order is kicked out of the market with a stop loss.
As we draw the curtains on this enlightening journey through the world of forex
trading, it's crucial to reflect on the ground we've covered and the future that lies
ahead. "X-Ray Strategy: Beat the Market Makers" was not just a guide; it was a
pathway to empowering you with the knowledge and tools necessary to navigate
the often turbulent waters of the forex market.
But remember, the true essence of this journey lies not just in the strategies, but in
the mindset. Trading is an art as much as it is a science. It requires patience,
discipline, continuous learning, and above all, resilience. The market will test you,
sometimes harshly, but it is in these moments that your greatest growth occurs.
Take these lessons and build upon them. The market is dynamic, and so should be
your learning and adaptation. Never stop exploring, questioning, and refining your
strategies. The path of a trader is not a destination but a journey – one of constant
evolution.
And as you step forward, remember that the greatest trades are not just about
profit, but about the knowledge gained and the experience earned. Every loss is a
lesson, and every win, a testament to your strategy and resolve.
You are now more than just a trader; you are a strategist, an analyst, and an artist.
The market is your canvas, and your decisions, the strokes that define your
masterpiece. Go forth with confidence, humility, and the courage to make your
mark.
In the words of the great market strategists, "The best investment you can make is
in yourself." May this book be a milestone in that investment and a beacon in your
journey towards trading mastery. If you need help along your journey, you can
always reach out to me on telegram.
Sign up on ottmarkets.com.
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Are you ready to explore the world of trading and financial success? Join our
community where trading results are shared, strategies are proven, and success is
celebrated together.
Trading Signals: Receive real-time trading signals that you can effortlessly
replicate, ensuring you stay ahead in the market.
Community Support: Our Discord group is not just a platform; it's a space
where members share experiences, expand their knowledge, and celebrate
successes together.
By joining the Genius Trading Masterclass Course + Community, you're not just
signing up for a course; you're becoming part of an elite circle of traders who are
committed to success. Our community is a melting pot of ideas, strategies, and
support – a place where winning traders are made.
Make a Living with Trading
Our promise to you is simple: we guide you step-by-step on your journey to
becoming a successful trader. With our resources, community support, and your
dedication, making a living through trading is not just a dream – it's a reachable
goal.
We use a part of the membership fee to give away trading capital to our members
every month. Join the inner circle of our team today.