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    ADVANCE MArket Structure_2

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    ADVANCE MArket Structure_2

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    mr.z
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    ADVANCE MArket Structure_2

    Uploaded by

    mr.z

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    © All Rights Reserved
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    of 13

    ADVANCE MARKET

    STRUCTURE & SMC


    BY- VAIBHAV TADVI
    &
    ATUL PATIL
    (TECHNICAL & FUNDAMENTAL ANALYST)
    4 YEARS EXPERIENCE
    BASIC OF FOREX TRADING
    (PART2)
    Types of Analysis
    Technical Analysis
    Fundamental Analysis
    Sentiment Analysis

    Candlesticks
    Timeframes
    Risk Management
    Position Sizing
    Stoploss and Take Profit

    Market Trends
    Uptrend
    Downtrend
    Rangebound or Sideways
    TECHNICAL ANALYSIS

    Technical analysis is a method in finance that


    assesses and predicts future price movements of
    assets by analyzing historical price data and trading
    volumes. It involves identifying patterns, trends, and
    potential reversal points using tools like charts,
    indicators, and statistical analysis. Traders use this
    information to make informed decisions about
    buying or selling assets
    FUNDAMENTAL ANALYSIS
    In foreign exchange (FX) trading, fundamental analysis
    involves evaluating and analyzing economic indicators,
    geopolitical events, and macroeconomic factors that could
    impact the value of currencies. Traders using fundamental
    analysis in FX consider data such as interest rates, inflation
    rates, economic growth, employment figures, and political
    stability to assess the overall health of a country's
    economy and the strength of its currency. This analysis
    helps traders make informed decisions about currency
    pairs, anticipating potential movements in exchange rates
    based on fundamental economic factors. Fundamental
    analysis in FX trading is complementary to technical
    analysis, with many traders using a combination of both
    approaches for comprehensive decision-making.
    SENTIMENTAL ANALYSIS
    in FX trading involves evaluating and interpreting the
    collective mood or sentiment of market participants
    towards a particular currency or currency pair. Traders use
    various tools and techniques to gauge whether the overall
    sentiment is bullish (positive) or bearish (negative). This
    analysis often involves monitoring news, social media, and
    market reports to understand how factors such as
    economic data releases, geopolitical events, or other news
    might be influencing trader sentiment.
    T he idea behind sentiment analysis is that market
    sentiment can impact currency prices, sometimes leading
    to trends or reversals. For example, if the majority of
    traders are optimistic about a currency's prospects, it may
    lead to increased demand and a potential rise in its value.
    CANDLESTICKS

    In forex trading, candlesticks are graphical representations of price movements over a specific time period. Each candlestick provides
    information about the opening, closing, high, and low prices within that time frame. The visual appearance of a candlestick resembles
    a rectangular shape with thin lines, or 'wicks," protruding from the top and bottom.
    
    Body: The rectangular area between the opening and closing prices. If the closing price is higher than the opening price, the body is
    typically filled or shaded. If the closing price is lower, the body is usually left unfilled or empty.
    
    Wicks (or Shadows): The lines extending above and below the body represent the highest and lowest prices during the specified time
    period
    The upper wick extends from the top of the body to the highest price, and the lower wick extends from the bottom of the body to the
    lowest price
    TIMEFRAMES

    In forex trading, candlesticks are graphical representations of price movements over a specific time period. Each candlestick provides
    information about the opening, closing, high, and low prices within that time frame. The visual appearance of a candlestick resembles a
    rectangular shape with thin lines, or 'wicks," protruding from the top and bottom.
    
    Body: The rectangular area between the opening and closing prices. If the closing price is higher than the opening price, the body is typically
    filled or shaded. If the closing price is lower, the body is usually left unfilled or empty.
    
    Wicks (or Shadows): The lines extending above and below the body represent the highest and lowest prices during the specified time period
    The upper wick extends from the top of the body to the highest price, and the lower wick extends from the bottom of the body to the lowest
    price

    
    In forex (foreign exchange trading, timeframes refer to the duration over which price data is plotted on a chart. Traders use different
    timeframes to analyze and make decisions based on market movements. Here are some common timeframes used in forex trading:
    
    Monthly (MN): Each candlestick represents one month of price data.
    
    Weekly (W): Each candlestick represents one week of price data.
    
    Daily (D): Each candlestick represents one day of price data.
    
    4-Hour (H4): Each candlestick represents four hours of price data.
    
    1-Hour (H1): Each candlestick represents one hour of price data.
    
    15-Minute (M15): Each candlestick represents fifteen minutes of price data.
    
    5-Minute (M5): Each candlestick represents five minutes of price data.
    
    1-Minute (M1): Each candlestick represents one minute of price data.
    TRADING STYLES

     hoosing the right timeframe depends on a trader's trading style,


    C
    strategy, and the amount of time they can dedicate to monitoring
    the market.

    Here's a general breakdown:

    Long-Term Investors: May use monthly or weekly charts for a


    broader view of the market

    Swing Traders: Often use daily and 4-hour charts to capture short
    to medium-term trends.

    Day Traders: Typically focus on 1-hour, 15-minute; or 5-minute


    charts to make multiple trades within a single day

    Scalpers: Use very short timeframes like l-minute or 5-minute


    charts to make quick, small-profit trades within minutes.
    TRADING STYLES
    &
    RISK MANAGEMENT
     hoosing the right timeframe depends on a trader's trading style,
    C
    strategy, and the amount of time they can dedicate to monitoring Lot Sizes
    the market.
    Setting SL & TP
    Here's a general breakdown: Risk Size
    Eg- 1000$
    Long-Term Investors: May use monthly or weekly charts for a
    Daily risk limit- 1-2 %
    broader view of the market
    1000 (1-2)% = 10-20$

    Swing Traders: Often use daily and 4-hour charts to capture short so if 2% - 50 trades
    to medium-term trends. or 1% - 100 trades

    Day Traders: Typically focus on 1-hour, 15-minute; or 5-minute


    charts to make multiple trades within a single day
    Lot size n SL-
    0.05 - 40pip for 20$
    Scalpers: Use very short timeframes like l-minute or 5-minute 0.1 - 20pip for 20$
    charts to make quick, small-profit trades within minutes.
    Minimum R:R - 1:2
    TRADING STYLES
    &
    RISK MANAGEMENT

    I n the forex market, a trend refers to the general direction in which the
    prices of currency pairs are moving over time. There are three main types
    of trends:

    Uptrend: An uptrend occurs when the prices of a currency pair are


    generally increasing over time. In an uptrend, each successive high is
    higher than the previous one, and each successive low is also higher.

    Downtrend: A downtrend occurs when the prices of a currency pair are


    generally decreasing over time. In a downtrend, each successive high is
    lowe than the previous one, and each successive low is also lower.

    Sideways or Range-Bound Trend: In a sideways or range-bound trend, the


    prices move within a horizontal range, with no clear upward or downward
    direction. The highs and lows are contained within a specific price range
    Bullish or Uptrend
    An uptrend in the foreign exchange (forex or FX) market
    is characterized by a consistent and overall upward
    movement in the prices of a currency pair over time.
    Here are some key features of an uptrend:
    Higher Highs: In an uptrend, each peak or high point on
    the price chart is higher than the previous one. This
    indicates that buyers are willing to pay higher prices for
    the currency pair.
    Higher Lows: Along with higher highs, each low point in
    the price chart during an uptrend is higher than the
    previous low. This signifies that even during pullbacks or
    corrections, buyers are stepping in at higher levels.
    
    Overall Ascending Trendline: Trendlines drawn along
    the lows of an uptrend will generally have a positive
    slope, indicating the upward direction of the market.
    
    Bullish Price Action: Uptrends are often associated with
    bullish candlestick patterns and positive price action.
    Bearish or Downtrend
    A downtrend in the foreign exchange (forex or FX) market is
    characterized by a consistent and overall downward
    movement in the prices of a currency pair over time. Here
    are some key features of a downtrend:
    Lower Highs: In a downtrend, each peak or high point on
    the price chart is lower than the previous one. This
    indicates that sellers are driving prices down, and buyers
    are unable or unwilling to push the prices higher.

    Lower Lows: Along with lower highs, each low point in the
    price chart during a downtrend is lower than the previous
    low. This signifies that even during brief rallies or bounces,
    sellers are stepping in at lower levels.

    
    Overall Descending Trendline: Trendlines drawn along the
    highs of a downtrend will generally have a negative slope,
    indicating the downward direction of the market.

    Bearish Price Action: Downtrends are often associated


    with bearish candlestick patterns and negative price
    action. Red or black candlesticks (indicating downward
    price movement) may dominate the chart.
    Rangebound or Sideways
    A sideways or range-bound trend in the foreign exchange (forex
    or FX) market refers to a condition where the prices of a
    currency pair move within a horizontal range with no clear and
    sustained upward or downward direction. In a sideways market,
    the price fluctuates between a defined support level (the lower
    boundary) and a resistance level (the upper boundary). Here
    are key characteristics of a sideways or range-bound trend:

    Horizontal Price Movement: Prices move within a relatively


    narrow range, forming a horizontal channel on the price chart.

    Similar Highs and Lows: The highs and lows during a sideways
    trend are often at simila or consistent levels, creating a visual
    pattern of price consolidation.
    Lack of Clear Trendlines: Trendlines drawn along the highs or
    lows do not show a distinct upward or downward slope. Instead,
    they tend to be relatively flat.

    Choppy Price Action: The price action within the range can be
    choppy, with frequent back-and-forth movements between
    support and resistance.

    Neutral Market Sentiment: Traders may be indecisive, resulfing


    in a lack of strong buying or selling pressure. This can be due to
    market consolidation, economic uncertainty, or other factors.

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