FTTA FORMATION EDITION


TRADING FOR A LIVING

WITH PRICE ACTION














TABLE OF CONTENTS




Preface How to make trading a living with
price action ? …………………………………………..



Introduction What trader are you ?…………..…….





FRIST PART : TRADING WITH PRICE ACTION :
DEFINITIONS ET FOUNDING PRINCIPLES 





Chapter 1 Reminder of the Dow theory…………..



Chapter 2 The market structure…………………..



Chapter 3 The importance of symmetry in trading.



Chapter 4 The Top Down Analysis ………………





SECOND PART : INCREASE SUCCESS RATE IN
TRADING WITH PRICE ACTION





Chapter 5 Tendencies are secondary compared
to market structure ………………………………..…



Chapter 6 How to win through fake-outs ? ………
Chapter 7 Role and limits of price patterns………



Chapter 8 Supports and resistances traps to
avoid ……………………………………………………



Chapter 9 The highest and the lowest historic
………………………………………………………..…





THIRD PART : HOW TO USE PRICE ACTION
WTH SUCCESS 





Chapter 11 Identity the best trading setups in three
steps……………………………………………….……



Chapter 12 Trade with price corrections
…………………………………………………………..



Chapter 13 Law draw-down, huge risk/reward
ratio …………………………………………………….



Chapter 14 Trades management……………………















Preface 





HOW TO MAKE TRADING A LIVING WITH PRICE

ACTION ?





This manual explains the price action strategies
that will lead you to success. You will learn page by
page, how to apply the strategies used by 5% of
the winning traders on the markets.





What allows a trader to make a living from his
trading over several years? What are the technical
analysis methods to apply on a daily basis in
trading? What are the pitfalls to avoid in trading?





What if trading was simpler than people think? I
think the answer is definitely yes. 





This strategy manual is a summary of my
experience spread over several years and which
has allowed me to live fully of my trading. 





It is also a summary of an experience as a mentor
in the field of traders coaching.





I have so far helped and educated several hundred
traders around the world who have succeeded in
developing a new source of revenue thanks to the
expertise and education that I have brought them. 



This manual is therefore a summary of the trading
coaching sessions that I can give to the people who
are my trading students and who have joined me. 





If you want to go further in understanding the
markets as a result of reading this book, you can
become one of my students too by contacting me
on my social networks.





Before starting the introduction, I wanted to make a
short sketch to thank all the supporters who follow
me. I can count them in thousands now as well as
my students; If this strategy manual comes into
being, it is primarily thanks to you.











 Introduction 





WHICH TRADER ARE YOU ?





In all chapters of this strategy manual, you will learn
the secrets of price action that will allow you to win
in your trading. 



During those last years we saw many new
strategies of miracle trading arriving, but many of
them are not effective, the reason is often the same
one: too many technical indicators and a low or
non-existent understanding of price action. 





You must understand that professional traders do
not focus on technical indicators but on price
movements.





There is a precise way to study price action and it is
not innate. 



I like this metaphor, trading is like sport: you have
to learn to play football, if it is the first time you
have a ball in front of you, you will be lost: 



- You do not know the rules

- You are going to make mistakes 

- You will even be surely disqualified




This is the same thing in trading, the rules have to
be known like the back of your hand to limit errors. 





A mistake is expensive in trading, we invest our
money. 





That is why you have to know the right rules to be
brilliant on the markets. 





This is the interest of this strategy manual, I will
give you my secrets of success as a self-taught
trader for many years now.













































FIRST PART : 



PRICE ACTION : 



DEFINITIONS AND 

FOUNDING PRINCIPLES













 CHAPTER 1 : 





REMINDER OF DOW THEORY





"The public as a whole, buys at the wrong time and
sells at the wrong time" 



- Charles Dow




The objective of this chapter is to give a brief
reminder of what Dow's theory is and how to apply
it daily in its trading. 



This theory is meant to be simple, but perfectly
defines all the market movements still to this day. 



As a trader, it is important to know this theory,
especially if like me, you base your approach on
the price action, without technical indicators.




Definition of the theory:





In this theory, Dow said that the market was
composed of three trends and that a trend breaks
down into three parts: 





1. The primary trend 

2. The secondary trend 

3. The minor trend




What is this theory’s interest in trading ?





In order to make this theory simple, we can
compare it to the famous metaphor of the tide : 





The primary trend represents the movement of the
tide, the secondary trend represents the wave and
the minor trend corresponds the bubbles formed
above the waves. 





Simply, the primary trend is an impulse phase, the
secondary trend is a correction phase of the
primary trend, and the minor trend which is less
important is a continuation of the secondary trend.





You and I are traders who trade full time, so it is
important to understand this theory in practice. 

The idea of this theory is to know how to position
oneself at the right moment on a market to take
advantage of the impulses that the market can offer
us. 





The dream of all traders you will tell me, is not it? 





Dow also explains that markets are composed of
peaks and troughs, regardless of the direction of
the trend:



1. The bull trend : 





See illustration below :



(Here it’s an uptrend: the price is forming tops and
bottoms higher and higher)





2. Bear trend :





See illustration below :








(Here it’s a downtrend: the price is forming tops and
bottoms lower and lower)





3. Trading range :





See illustration below :












(Here is a market without trend: tops and bottoms
are equal)











My strategy in practice :





I would add that for this theory to work, it is
imperative to apply it on time frames : 





- The monthly time frame

- The weekly time frame 

- The daily time frame




Those are the three units of time that must be
favored in your trading. 



Why ? 



These time frames are monitored by institutional
investors, banks, hedge funds, certain brokers and
therefore market makers.




Indeed, on the markets there are two types of
traders: 





1. Retail traders 



2. Markets makers 



The retail traders are you and me, our work is
therefore to follow those markets makers who will
create this first primary trend as Dow explains in
his theory.



Indeed, if I had to summarize trading in a simple

and intelligent way, it would be : "buy and sell the
market when it's not too late". 





On the markets you have several time frames,
several price movements and therefore several
possibilities to invest.




The problem with those lower time frames (1
minute, 3 minute, 5 minutes etc ...) is that you are
very often late if you use them. 





Very often the primary tendency emerges from the
big units of time. 





What I do in my trading: 





I always start my technical analysis from the Daily
to know the meaning of the primary trend. 

The weekly and monthly time units are also
excellent, but they are very long-term, starting Daily
is already a very good method.



See illustration below: 








As shown in this illustration above, the price here
forms clear price movements and it is very easy to
identify: 





1. Impulse phases 

2. Correction phases 

Our objective as traders is to buy at the end of the
correction in order to take advantage of the market
momentum movement, like this below:











(How to enter, place your stop loss and target will be explained to you in the
rest of this manual, the idea here is to see the impulse that the price has
given us through the Daily)









 CHAPTER 2 :





THE MARKET STRUCTURE





Now that you know Dow's theory, it's imperative to
put it into practice and mark it on your chart. 





The purpose of this chapter will be to focus on the
importance of the market structure in your trading. 





Instead of looking for the latest buzzword for your
moving average or how to set up your RSI when it
is overbought or oversold, you need to know when
the market is creating a new high point and a new
low point. 





Simple you will tell me, but in practice it requires
some training and a certain logic that should not be
neglected ...










How I identify the market structure :





As I explained to you in the previous chapter, I
attach a particular importance to the Daily. 





It is therefore imperative to start the technical
analysis from the Daily whatever happens to avoid
mistakes. 





1. The case of an uptrend:




See illustration below :



Here the price is clearly in an uptrend, you know it
visually, but it is now necessary to materialize this
rise, so we will mark all the high points and recent
low points on the chart to be ready at the right time.




HH : Higher highs

HL : Higher lows



2. The case of a bear trend :










Same thing for a downtrend, here we mark the
highs and lows of the market.
LH : Lower highs

LL : Lower lows





3. The trading range :












H : Highs

L : Lows









As you understood, the goal is to mark highs and
lows in order to monitor the next phases of
impulses and corrections on the market.
The market structure is the basis of trading, you
can monitor the balance between buyers and
sellers




Please make sure to permanently mark your
market structure on your charts.




Make sure you understand what you're looking at,
some market structures have a lot of noise and you
can score a lot of points.












That’s the case here for example :























It’s a bull trend but with a lot of shadows. That’s not
a clear bull structure.













Another example :



















It’s a bear trend but with a lot of shadows on the
candles.





This type of structure is to be banned, you must
ignore the charts that are not clear, only use
symmetrical market structures.












 CHAPITRE 3 :





THE IMPORTANCE OF 

SYMMETRY IN TRADING 





And if the secret of success laid on price
movements? 





The answer is yes. 





Symmetry in trading is of enormous importance. 





By symmetry, I mean: trade only with the clearest
movements on the market. 





Basically trading is a mathematical art. There are
several mathematical tools on several scales.



Geometry is also an integral part of those
mathematical tools. The best-known example is
price patterns (double top, double bottom, shoulder
head shoulder etc ...) 

The symmetry reflects two things: 



1. Quantity of buyers on a market 

2. Quantity of sellers on a market 





That's why you have to get used to symmetrical
price movements. 





It's a very simple concept that will greatly increase
your success rate.




Success rate = average of winning trades and
losing trades




When you analyze your markets, there is no point
to trade on all assets. Indeed, some assets have
movements that are not clear: it is not
symmetrical. 





In your trading, you have to be selective, only trade
when market movements are clear.




You saw in the previous chapter the importance of
the market structure.



Market structure and symmetry are linked.




Here is an example of clear symmetrical movement
below:










Once again, symmetry is even more important to
watch if you work in Daily. 





In this example above, the uptrend is clearly
marked on the chart, the price forms highs and
lows and the movement is perfectly symmetrical.




What is an asymmetrical movement ?






This is an example below :












In this example, despite the fact that we start from
Daily, we notice that there are many shadows
coming from the candles and it is not directional. 





If starting from this stage, you are facing this kind of
market. The only advice I can give you is to stop
analyzing this asset. 





You must only favor symmetrical movements. 





This way, you will simply identify the number of
buyers and sellers but also place yourself at the
same time as everyone else.




See illustration below :



In this example, "everyone" sees this support, so
there will be much more buying order on this
support, than on a support that is difficult to identify.






So why complicate things ? 





Trading is an art that must remain simple. Your goal
is to buy at the lowest and sell at the highest. 





How to get there? By following the mass. Follow
other traders to return at the same time as them. 





Many people think that you have to find some kind
of "loophole" to make money on a market: it's
totally wrong. 





You surely know the saying: " The trend is your
friend". 





This saying explains that the tendency makes it
possible to increase its probabilities: it is totally
true.
Following the trend, you simply follow other traders. 





We can take the metaphor of the surfer waiting for
the best wave. 





You are the surfer, that is to say, the trader; the
trend is the wave. 





But remember, this trend must be symmetrical in
order to get back at the best time. 





Forget charts in which shadows are too present, in
which corrections are too important.










Here are some examples of symmetrical bull trends
:






















































Here are some examples of symmetrical bear
trends
:






As I said, it's a very simple concept: knowing how
to identify the clear movements of the market. 





But this concept is not applied by all traders, they
prefer to use technical indicators that will indicate
when the trend will turn around. 





Do a simple exercise: get used to symmetrical
markets. 





Log onto your trading platform, select 10 currencies
at random, ask yourself if the pair you are looking
at is enough symmetrical. 





You will note that in the end you will only have 3 or
4 pairs in your watchlist and that's what really
matters. 





You must become a selective trader. Give priority to
quality and quantity at all times.










 CHAPTER 4 : 





THE TOP DOWN ANALYSIS 





You know the importance of symmetry on the
markets, you must now be aware of the importance
of the chronological order of time frames. 





Indeed, when one arrives at his trading platform,
one can wonder as a beginner by which unit of time
one must begin his analysis. 





Few traders know it, but time units are important. 





The larger the time frames are, the greater the
probabilities of success are. 





That's why you must start your analysis from the
Daily.




I have already made a start on this concept in the
previous chapters, but it is now time to develop it
here. 



The interest of starting from the Daily is simple: to
have a global vision of the market, a big image of it.
This is the concept of this chapter. 





You must break down your technical analysis as a
puzzle and add pieces gradually. 



But it is imperative to start with large parts, to
facilitate the arrival of small parts, that is lower time
units.




Indeed, if you are : 



- A Scalper

- A Day trader

- A Swing trader





ALL TIME FRAMES ARE IMPORTANT.




Once again, this simple concept is not applied by
all traders who are bounded on a specific unit of
time. 





This is an important mistake, even a Scalper must
watch the Daily. 





In any case, the best Scalpers do it. 





How to put this concept into practice? 





This concept applies to all time frames, but
everything starts from the Daily as you know. So
every Friday night (closing) or Sunday night (pre-
opening), you have to watch the candle close of the
previous day, to give you information on the likely
direction that the trend will take the next day.




See illustration below :























In this example above, we are in Daily, the red
candle (previous day), announced a bearish day,
the green candle has encompassed the latter; this
is what we call: a bullish engulfing.





It is the return of buyers in a way. 





By watching this simple candle close, you already
have a clue of what the trend will be like the next
day. 





Careful ! We are here in Daily, this concept works
because we start from this big time frame. 





The example would be different if we started from
m1 for example.








Another example below :















In this example, we can find a green candle near a
resistance and finally a pinbar next door (there are
several names for this configuration, but the
principle is the same: buyers or sellers are out of
breath, here, the buyers are the one out of breath)




Following this candle, the market turned around
and dropped down. 





The two configurations that I watch are: 





1. The all-encompassing candles 

2. The pinbars 





There are dozens of candlestick patterns,
98% of those are useless or misunderstood by
traders.




Don’t use all of these in your trading, it’s useless. 



Once again, do some trading with what you
understand. 





In all cases the principle is the same: 



1. Buyers are out of breath 

2. Sellers are out of breath 





Remember that trading is a business in which
buyers and sellers meet, so your goal is to know
when to buy to the lowest and sell to the highest.













Once you have identified the probable direction
your market is going to take, you will have to mark
your market. 





To mark a market is to identify areas on which the
price will potentially rebound. 





Usually, we trade supports and resistances to
identify zones of interest. 





However, once again, if you start from the m1 for
example, you can draw tens and tens of supports
and resistances, as below:
It is obviously a waste of time and you prefer the
quantity and not the quality.




That's why on this Daily time frame, we will only
select zones according to 2 criterions : 



1. Where is the recent price action? 

2. Where are the close areas to the price action? 





It is totally useless to use a 2001 zone if you are
trading in 2020 for example. 





Only use areas close to the recent price action. 





To do that, I advise you to use the online graph,
with this one, you will remove the noise on your
graphs and you will only identify the relevant areas.








See illustration below : 















In this example, we can easily notice the resistance
on the left thanks to the top; we must trace it
because it is close to the price. 

Below, we also have a major support that must be
marked on the graph.
When you draw your zones, it is imperative to draw
them on a round number; so go and refine your
line in the settings. 





If your line is at 1003 at the time you draw it, for
example, place your line at 1000 or 1010 . 



Using round numbers will allow you to make your
graphs clearer, but also to position you at the right
time.
Another example : 








Here we see an old support, which can potentially
become a new resistance, so it must be traced. 





Despite the fact that you have understood the
importance of the Daily, you must ask yourself at
this very moment why it is so important to draw the
zones in Daily. 





As explained above, the objective of the retail
trader (you and me) is to follow the market makers
(banks, hedge funds). 





Those market makers use big time frames to place
their orders for purchases and sales. 





The interest here is to follow the most important
areas of the market.



It’s useless to draw 15 zones in m5 or m1…






In trading, we call this the institutional trading
zones. 





It simply means that you will follow the traders who
use the most liquidity on the markets. 





Once again, the larger the unit of time is, the more
important the confirmation is.


















Once you have marked your chart, you will
obviously return to a candlestick chart to take
advantage of the information that the candlesticks
give you. 





Remember that the best traders in this world are
those who use clear graphics.





I therefore advise you to draw 3-4 zones at most. 





Our human brain thinks that by plotting for example
10 areas, our success rate will be increased, but
that's wrong. 





It's an illusion, you must have already heard that
you have to work more to earn more.


It's half wrong and half true. 



You have to work smart, you do not have to work
hard. Working hard can sometimes make work
sloppy.










You now know that it is necessary to: 

1. Watch the candle fence in Daily 

2. Mark your market in Daily by drawing the zones 





As a general rule, candle fires in Daily are very
important, that's why you are going to have to
constantly monitor the candle when it is close to an
area. 







In the example below:







The candle is close to a support and forms a pinbar
candle, it is a reversal index. 





The support acts as an area of interest and the
candle shows that traders react to this area. 





So you have to exploit this candle by getting ready
to buy in this example. 



The buy trade is possible thanks to this candle, but
also because the trend is bullish and
symmetrical.

Those last years, Japanese candlesticks have

fascinated traders. To the point where books have
come out on the subject. 



Japanese candlesticks have revolutionized trading
thanks to the information that it bring to investors. 



In the past, traders traded with an online chart,
which has made trading much less accurate.




Today, almost all traders use a candlestick chart to
make buying or selling decisions on a market. 





That's why exploiting them on big time units
increases their efficiency even more, because they
are seen by everyone. 





If you go on m1 or m5, you will find maybe 15
engulfings and 25 pinbars in a very short time.




That's why small time frames are not efficient, they
offer far too many false signals. 



If all the above conditions are gathered, you can
now move to the last step which is: how to find an
entry on 1 trade ? 



You will now switch to a lower unit of time, this is
the concept of "the top down analysis"; we start
with the largest image and then reduce to lower
time frames. 





Now, you will have to wait for a break of the
previous structure in the direction of your trade.




I advise you to monitor the H4 and H1 which are
very efficient time frames for this approach.




Example : 








Here, the price is close to the support from the
Daily, we must now wait for a break of the old
structure, ie the downtrend, because we want to be
a buyer.








See illustration below :











Here, the price broke the last top on the left: LH.




We will wait for a new HL to buy the market that
corresponds to the beginning of the buying trend.




















Another example :










The price here is close to resistance, we must wait
for the breakout of the old buying structure to sell,
we want to be a seller.








See illustration below : 











Here, the price has broken the old low and forms a
new LH, which corresponds to the beginning of the
downtrend.






In H4 or H1, the Japanese candlesticks are still
important, that's why you have to wait for the
candle closing to confirm the sense of your trade.






1. The case of a buying trade :







In this example, it’s an engulfing.





2. The case of a selling trade :



























In this example, it’s a pinbar candle.





To place your stop loss, I advise you to have a stop
loss of 25 pips on average. If the market does not
allow you that, use the last high point ou the last
low point and place some safety pips.






See illustration below :










Here, it is a buying trade, so you place your stop
loss a few pips below a last low.






Another example :












Here, it is a selling trade, so you place your stop
loss a few pips above a last high.






You remember when I told you that it was important
to draw 3-4 lines in order to be selective.




It is also important to have several price lines to
identify a target. 





Indeed, it takes a single line for the price to turn.





You can find the proof with trades we identified in
examples. 





We enter when the price is close to an area, but we
will do the same when it comes to taking profits. 





If the price is close to an area that has been
previously identified, we will close the trade. 





Indeed, the risk of pullback is important.




Pullback = situation in which the market turns in
the opposite direction.




Example :








Here the buying trade is on the target, we close the
trade to avoid a pullback.








Another example :

















Here the selling trade is on the target, we close the
trade to avoid a pullback.





As a smart trader, you must always learn how to
close your trades at the right time. 





Nobody can know if 1 trade will fall of 500 pips or
50 pips. 





Trade 1 and Trade 2 are different. Every trade is
different in a market. 

So do not be greedy even if the potential seems
huge, you are not immune to a possible trend
reversal against you.












































































SECOND PART : 



INCREASE YOUR SUCCESS 

RATE IN TRADING














 CHAPTER 5 :





TRENDS ARE SECONDARY

COMPARED TO THE MARKET 

STRUCTURE 





As you read, you already know more about the
tricks of winning traders. 





It is now time to approach the trends’ topic. 





The trend is the number 1 tool for traders around
the world. All traders have already heard about
trends. 





Are trends really effective? 





The answer to this question is yes if they are well
used.




Trends are misinterpreted by 95% of traders.
Indeed, trends are secondary. 





The market structure is always first. 





Many traders buy or sell the market when the price
is close to a trend, this is one of the biggest
mistakes you can make.




How to define a trend ?





I reckon the most accurate definition is: a trend is
an oblique price line around which the price will
react. 





Once again, on a market, there is a balance
between buyers and sellers. 





It is the role of trends, we will identify at a given
moment when the price can react. 





You will notice that the word "around" is underlined,
it is not a coincidence.



The trends are not precise, it gives the trader a clue
on when the price will potentially react. 





Horizontal lines: supports and resistances are
much more efficient because they are horizontal
and better visible, so accuracy is more important. 





Remember that in front of you, you have other
traders. They are humans. 





Those human traders have emotions, vision and
brain abilities similar to yours. 





You should therefore use trends as a price indicator
rather than a zone.






















If you only rely on trends, you will have a lot of false
signals, break-outs and pullbacks. 





An example below:






































In this example, we can trace a downtrend, but the
market structure indicates a reversal upward with
the break of the last LH top and the creation of a
new bottom (HL).




Here, 95% of traders will ignore the price and fix
their eyes on the trend: it is a serious mistake. 





The price always comes before the trend. Because
remember, the price represents the balance
between: 





1. Buyers 

2. Sellers




A trend does not represent a balance but just an

indication, so it is a price indicator and not the
price itself. 





Another example :






















In this example, 95% of traders will come to buy the
market because the price has closed above the
trend, they think it's a break. But it's wrong. 





In this case, it is not a break but a fake-out.




That is a false signal, regardless of your time unit,
even in the Daily; if the price closes above a trend it
is not a buying signal. 





This is not a buying signal because the price
structure has not been broken and has not created
a new HL.




Another example :























Same thing here, closing below trend does not
mean selling. It's a fake selling signal. 





The price was not broken and did not create a new
top (LH).
















































 CHAPTER 6 :





HOW TO WIN THROUGH FAKE- 

OUTS ?





Fake-outs are a very good strategy when it comes
to generating profits fairly simply on the markets.




Fake-out = fake signal of a break-out.





Indeed, if you know how to find them, you will know
how to exploit them easily in order to make profit.





As I explained in the previous chapter, buying or
selling because the price closed above or below a
trend is not enough.




In 95% of the cases it’s a fake-out.




And if you were among those who understand how

to exploit the fake-outs?
In order to increase your quality of signal, I advise
you to include fake-outs in your confirmations.




Of course, we will not be trapped by the fake-out by
buying after a break after a false break. 





We will just do the opposite, taking advantage of
the fake-out.




Initially, a fake-out is very often created by a market
maker. That is, a person who is able to manipulate
the market. 





It should be known that in 95% of cases an alone
break is a false signal.




If: 



- The trader 1 wants to buy 

- The trader 2 (you) will have to sell 





If: 



- The trader 1 wants to sell 

- The trader 2 (you) will have to buy




It's very simple, you have to do the opposite of what
the graph shows you. 





Careful ! we are talking about trends here. 





This rule does not apply to supports and resistors
which are reliable areas; more reliable than trends
because they are horizontal.






Examples of fake-outs :



Here, you can be sure that many retail traders have
bought the break (which is a fake-out) after the
candle close; it was therefore necessary to sell at
that moment.




Here :



- The retail trader 1 buys 

- The market maker 2 sells 

- The trader 3 ideally you, is about to sell the
market




Being a trader is also learning to understand
human behavior, you have in front of you human
beings who have brains and emotions. 





In trading, the goal is not to know when X or Y will
be trapped, but you must be aware of pitfalls that
come on the markets. 





Being aware of pitfalls is creating a strategy to
make profits. If you add fake-outs in your
confirmations, your success rate will increase
dramatically if you follow experienced and
knowledgeable traders.
Another example of fake-out :










The price closed below the trend. 





Here: 



- The retail 1 trader sells 

- The market 2 maker buys 

- The trader 3 ideally you is about to buy the market



CHAPITRE 7 :





ROLE AND LIMITS OF PRICE

PATTERNS





In the previous chapters, I explained that trends
have limits and that they can sometimes create
false signals.




Is it the same for patterns? 



The obvious answer is yes. 





Many traders a lot of importance to patterns and
make it the Grail for trading. 





Patterns are important, but once again, patterns are
just a price indicator.




This price indicator allows to know if: 



1. The price continues? 

2. The price consolidates? 



That's it.




To know if the price will change direction, it is once
again the structure of the market that must be
monitored: the high points and low points of the
market.




The goal is not to mention all the patterns because
it is very basic, but among those patterns some
deserve to be deepened.




1. The ascending channel :









In this example, it is an ascending channel, that
means, the price is uptrend and reacts around both
lines of the channel.




The most common mistake is to buy when the price
is on the channel’s bottom.
Buying on the channel’s bottom makes no sense.




If you want to buy that way, the price must also
allow you, because it has to: 



1. Meet a zone. 

2. Have broken its last top (HH) and have formed a
new bottom (HL).












Another example, the descending channel :



















In this example, it is a descending channel, ie the
price is in a bearish trend and is reacting around
the two lines of the channel. 





The most common mistake is to sell when the price
is on the top of the channel. Selling on the top of a
channel does not make sense either.




If you want to sell on the channel’s top, the price
must allow it too because it has to :



1. Meet a zone. 

2. Have broken its last bottom (LL) and have
formed a new top (LH).
Once again, you must use price patterns as a price
indicator. 





Price patterns are obviously useful and have a
meaning, otherwise they would not have been
created. 





However, you have to use it as a real trader, a
trader who uses price action.




You must buy at the lowest and sell at the highest.
You must not be based on price indicators; you
must do it only on a price action basis. 





Again and again ... It's only the price that shows the
balance between buyers and sellers. 





It's the same thing, fake-outs on patterns are
common.












For example, if you want to sell after the breakout
of an ascending channel, you have to wait for a
new high of the price, like this: 










The price here is a new top (LH), after breaking the
trough (HL) . 









Another example, the case of a descending
channel: 













To buy here, the price forms a new bottom (HL),
after breaking the last top (LH). So it's time to buy.
































 CHAPTER 8 :





SUPPORTS AND

RESISTANCES TRAPS TO AVOID





If you are a trader, you all know what support or
resistance is. To give a simple definition, a support
or resistance is an area of interest. 





However, a belief explains that it is necessary to
sell precisely on the resistance and to buy precisely
on the support. 





In 95% of the cases, you will see that the price will
return close to the resistance and close to the
support. 





The word "close" is underlined here, it is not a
coincidence. Indeed, once again, the supports and
the resistances are an average.




Horizontal lines are much more effective than
trends, of course. We have demonstrated it in the
previous chapters.




However, you must change your beliefs about
supports and resistances. 





It can happen that the price is getting closer to a
resistance and is turning a few pips higher than the
resistance.




This is particularly the case here:




Here the price has reacted close to the resistance,
not exactly on the line.







The case of a support, another example:



















 CHAPITRE 9 :





THE HIGHEST AND LOWEST 

HISTORICALS





As a price action trader, you have to use the
highest and lowest historicals and mark them in
your markets.




Those points are so important that I advise you to
mark them of a different color in your markets.




Probabilities of pullbacks on these zones are
extremely important.






First, how do you define a higher and a lower
historical?




A higher and a lower historical is a point dating
back several months, even years that has not
been touched.

That is, the price has formed a resistance or
support in the past and the price has not been yet
touched a second time.





From experience, you will know that when the price
meets a higher or a lower historical, pullback
probability is going to be huge.




These are quite rare setups, but when they are
present you have to know how to exploit them.




First of all, I advise you here to use the Daily, even
the Weekly to have a clear vision to identify those
setups.




Remember, a higher or a historical low is a point
that has not been touched for months or even
years.




Having a global vision allows you to have a simple
reference.






Example of historical highs :





Example 1 :














Example 2 :







Example of historical lows :





Example 1 :










Example 2 :





When you find these kind of setups on a market,
you can very slightly increase your lot size on 1
trade.





Please always respect your money management,
possibly go from 1% to 1.5% for example.




Those setups are quite rare, so when you are going
to identify them, other traders will also be ready to:




1. Buy the market

2. Sell the market





Remember, the more identifiable the setup is, the
higher the probability of success is.










































THIRD PART : 



HOW TO USE THE PRICE 

ACTION WITH SUCCESS



























 CHAPTER 11 : 





IDENTIFY THE BEST TRADING

SETUPS IN 3 STEPS





You have seen in previous chapters what are the
foundations of price action. It is now time to
combine all the elements to identify the best trading
setups.




By trading setup I mean a configuration in which
the elements are all gathered to confirm the
probability of success.




Because yes, in trading, you must act with
probabilities.





You have to be selective to optimize your success
rate. That means privileging setups in which all the
elements are favorable to you.








Which are the confirmations to choose?




I suggest you wait for 3 confirmations, if these 3
confirmations are not gathered, the setup is not
interesting.




In his 3 confirmations we have: 



1. A zone (Top Down Analysis) 

2. A fake-out 

3. A Japanese candlestick configuration (bounding,
pinbar)




In this chapter I will only talk about technical
analysis, objectively we need 4 confirmations that
will be approached in the following chapters, the
other is the risk / reward ratio.




In order to maximize your profits, you must favor
certain risk / reward ratios.




Here is a plan of how your setup should look:










We have here firstly a zone coming from Daily.






Then :





We have the opportunity to trace a trend, very
simply, but this trend has been crossed by the price
up.




We know as we are savvy traders that there is a
possibility of pullback.




The balance between buyers and sellers, will tend
more towards the sellers, because in 95% of the
cases, this kind of setup represents a false break, it
is necessary to exploit it.






Finally :





Before :





After : 








We have here a pinbar candle, that means here
that buyers are out of breath, a return of seller
traders is possible.





This is how you intelligently exploit a chart.




There are two important things you need to know
about your trading:




1. L’order flow : it represents the average of the
orders of purchases and sales on the market, that
means the direction that takes the market (the trend
in a simple way).
2. L’overflow : we can meet this situation in the
case of a fake-out for example, it is when the price
did not respect the levels and closes above or
below a threshold: it is an overflow.




You must always follow the mass.





Remember : « the trend is your friend ».





But in some cases, it is also necessary to know
how to identify mistakes made by the traders.




Because some market makers like to abuse it.




This is not a myth, trading is a ruthless world, only
savvy traders are profitable in the long run.




Everyone knows how to draw support or resistance,
especially thanks to internet and its flow of
information, but not everybody knows how to
exploit them in a professional way.




It's quite normal, trading and wealth accumulation
more generally is elitist. 



You know a very few people who earn a lot of
money, there are a very few; it's normal, the secrets
are well kept.
















































 CHAPTER 12 : 





TRADING WITH THE PRICE 

CORRECTIONS





Price correction = a price correction is the phase
that occurs after the impulse by the price. For
example from HH to HL, there is a correction from
LL to LH, there is a correction.




As you have seen, the price works in cycles.




Buyers cycles and sellers cycles.




But buying and selling trends are not vulgar straight
lines, there is always a phase of correction or a
phase called retracement after an impulse.




It is therefore possible to trade this impulse phase
as I have demonstrated by trading with the trend,
but you can also trade with the correction phases.




Be careful, when you are trading with the correction
phases, you are doing counter-trend trading.





When you are against the trend, probabilities are
lower, that's why I suggest you to favor trades
trends.




But in some configurations, you can take
advantage of the correction phase of a market.




The example of a buying correction : 








Once again, we are here in Daily, trading with price
corrections does not change the usual rules, we will
always favor the Daily.

Here we have: 



1. An area. 

2. An overflow from the price, closing above
resistance: this is the concept of overflow that I
introduced earlier. 

3. A bearish all-encompassing candle announcing a
potential reversal




We have here 3 confirmations, the principle is the
same as the trade in trend.




You should also here go to H4, H1 to identify the
structure and find an entry point in position.




See illustration below :



Here we will wait for a new low (LL) and a top (LH)
to sell the correction.




For the target, we will target the next zone in target
1.





The principle is the same. But you have to keep in
mind that the momentum in Daily is bullish.




Momentum = major trend of the price.





The example of a bearish correction : 



We’re here in the Daily.





Here we have: 



1. An area. 

2. An overflow from the price, closing below
support. 

3. A bullish engulfing announcing a potential
reversal




We head for H4, H1 to find a point of entry into
position.




See illustration below :





Here we will wait for a new high (HH) and a low
(HL) to buy the correction. 





For the target, we will target the next zone in target
1.
















































For this kind of setups, I advise you to use a lower
risk on your trades. 





For example, if you risk 1% usually, you will risk
here 0.5%




Use short SLs so you do not get carried away by
the momentum coming from the Daily. 





By being selective, price corrections are effective
setups if they are well identified.




The price will always correct an impulse. 





You must be aware that a trend does not evolve in
a straight line, but in the form of stairs. 





So you can use every step of the stairs to generate
profits.










 CHAPTER 14 : 





TRADE MANAGEMENT 





There is a step before taking profits on 1 trade.
You must be able as a savvy trader to manage your
position.




Indeed, a trader is also a manager. Trading is not
just buying, selling and waiting for your target. You
must also monitor the price while you are in
position.




For several reasons: 





1. Nothing is 100% safe, a target is hypothetical 



2. You can close your trade before your SL roof hit
by monitoring the price 



3. You may need to close your trade before your
target by monitoring the price 



4 By monitoring the price, you increase your
probabilities of success because you will have an
advantage over other traders: you know when to go
out




Indeed, the target is only a line on which a reversal
is probable; so you have to take profits. 





Most traders wait for the target to be hit or the SL
roof hit, but they forget an important concept: the
break-even.




Break-even = price line representing the entry in
position = position exit line




Simply, you will place your stop loss at 0. 





If the price touches your break-even, you will not
generate profits, but the most important: you will
not lose on your trade.




As a trader, your priority before being profitable,
must be to secure your account.




For that an only SL is not enough, you must use
the break-even. 



When should you place your SL at 0?





Personally, I have a very simple method:





Before your target, you will need to identify an
intermediate line on the H4 and H1. 





Remember, your target comes from a Daily line. 





In H4 and H1, we will seek a resistance or a
support on which the price can probably turn.




The goal is to take some of the profits on this area
and then place SL at 0, if the market turns around.




I advise you to take either 25%, 50% or 75% of
your profits and let the rest run risk-free.






Risk-free = the risk on 1 trade is set to 0, it is no
longer possible to lose.




Why do you have to do this? 





Once again, in trading we use probabilities,
everything is hypothetical; nothing is 100% sure.




You must be aware of this and prepare yourself for
a possible market reversal. 





Many traders are frustrated because the price was
10 pips from their target and suddenly turns
around: no one can predict this situation.




That's why you have to cash a portion of your
profits before the target. 





To go further, you can even divide 1 trade into 3.




For example : 





- You take 33.3% on the first zone 

- You take 33.3% on the second zone 

- You take 33.3% on the last zone





This makes a total of 100%.




Like in this example :










Zone 1, zone 2 and zone 3.





Or in this way:









You take 50% on zone 1, 25% on zone 2 and 25%
on zone 3. 



It's up to you to decide what best fits your trading
personality. You have to be comfortable with how
you manage your profits
Now that you know how to divide your trade, how
are you going to have to manage your position as
such?
The principle is always the same: monitor the
market structure: 





- If you enter a trade buyer, you must be sure that
the price does not break the buying structure 





- If you enter a trade seller, you must be sure that
the price does not break the selling structure




Let's take a first example, a buying trade :







Here we entered on this buying trade, however, the
market broke the last HL before the target, the price
forms a new low (LL); so it's time to close the trade
if a top (LH) is created.


Why ? It is simply the beginning of a selling

structure, which would go against our trade.




Bearish structure : LH LL





This is the way to act, because the price can turn
around at any time. 





Remember that every trade is unique. 





Let's take another example, a sell trade :













































END.