read.

plan.
Execute.

an e-book by
ZAHID HUSSAIN
 AN E-BOOK BY ZAHID HUSSAIN

TECHNICAL
ANALYSIS

Technical analysis concepts are levels on a chart

where an asset/coin's price has historically found
support or resistance. These levels are thought to
represent points in time when supply and
demand are imbalanced, causing the price to
bounce off or break through them.

It is argued, however, that support and resistance

levels don't always work based on their subjective
nature and aren't always clearly defined.
Moreover, market conditions can quickly change,
making the level obsolete. If a major news event
or a significant shift in market sentiment affects
the price action, support and resistance levels
can be easily broken.

As well as taking into account only support and

resistance levels, they do not take into account
other important factors, such as fundamental
analysis, market trends, or macroeconomic
factors.

Support and resistance levels can be useful tools

for technical analysis, but they shouldn't be used
exclusively to make trading decisions. To obtain a
high level of accuracy you must consider several
key factors to equip yourself with proper trading
analysis in order to avoid losing a fortune.

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TECHNICAL
ANALYSIS

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WHY DO RETAIL
TRADERS LOSE
MONEY?
Retail traders are usually inexperienced,
unqualified, and lack a proper understanding of
the financial markets and the trading world,
several reasons why they often lose money in
trading;
1. Lack of Experience: Limited experience and lack
of knowledge are the top two reasons why they
often fail in the financial markets. They are
unqualified and the majority are untrained and
unaware of the risks attached to the trading
world. One of the most important factors is not
realizing how to manage their risks accordingly
and often end up making huge losses before
they finally realize that discipline in trading is
extremely important to be successful in the
financial markets.
2. Emotions and greed: Retail traders are usually
emotionally attached to their trades and most of
their trading decisions are based on greed, fomo
and irrational thinking which leads to
uncertainty hence the big losses over the time.
They often ignore the importance of a defined
trading discipline and end up mixing up several
trading disciplines and therefore lose control
over their trades which leads to countless stop
losses and unprofitable trades.

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WHY DO RETAIL
TRADERS LOSE
MONEY?
3. Lack of control and trading discipline:
Professional traders usually have very sound
and defined trading plans which is one of the
reasons for their success in the financial
markets. They go by a set of rules which
includes everything from the entry to take
profits to predetermined risks and it is always
well calculated before they jump onto a trade
unlike retail traders who often seem to enter a
trade first and then try to figure out exit points,
stop losses and risk associated with a
particular trade. This habit can easily aid an
unprofitable trade and eventually lead to huge
losses.

4.Lack of understanding of the market

manipulation & dynamics: The markets are
easily manipulated and controlled. The
institutions involved in this market often takes
advantage of the retail traders knowing very
well that the retail trading concepts are easily
predictable hence with the data available to
them they can spot retail trading activity, i;e,
their entry points, liquidations, stop losses,
supports & resistance levels which makes it an
easy trap for the retail traders.

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WHY DO RETAIL
TRADERS LOSE
MONEY?

Financial markets have a deep connection with

the global economic conditions and news events
which can easily impact the price of any asset in
question hence leaving retail traders confused
and lost not knowing what went wrong with their
trades and they often find themselves on the
losing side. Failure in understanding these
factors also means that retail trades are
analyzing the markets solely based on their
charting concepts which tend to fail quite often
and end up being a false assumption and
inaccurate

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CONTROLLING FEAR,
LIQUIDITY & IRRATIONAL
THINKING DURING HIGH
VOLATILITY IN THE
MARKETS.
Often when the market breaks its resistance/support
levels, we witness an impulsive move initiating a
trend either to the downside or towards the upside.
This impulsive trend direction brings with it an
increased amount of volatility which is often
misunderstood by retail traders causing FOMO and
wrong and untimed entries into the market.

The liquidity provider plays a very important role in

the market, ‘’he’’ is the reason why the market moves
and functions 24/7 to enable the participants to
open/close positions at any time. Their job is to make
sure there’s enough liquidity in the markets to fulfill
the demand of the participants in the financial
markets.

Market maker also benefits the most by cross-

trading the participants and often hedge against the
trades. Here is a simple example of how they
manipulate the market;

When a price breaks a support or a resistance level, it

usually comes back to retest it which in case of a
bearish breakout is called a ‘’bearish retest’’ and in
case of a bullish breakout a ‘’bullish retest’’.

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CONTROLLING FEAR,
LIQUIDITY & IRRATIONAL
THINKING DURING HIGH
VOLATILITY IN THE
MARKETS.
Bearish Re-test
This means that when the price breaks it’s support
level it usually drops rapidly before turning back up to
retest it’s previous support level which was recently
broken down. The market maker in this case trades
against the participants who open their short trades
at the breakdown of the support not knowing that the
price will turn back up to retest the same level, this
causes irrational thinking, getting retail traders
scared, emotional and sentimental about their trades
which leads to an EXIT or a breakeven while the
market maker doubles down on his trade and bring
the price back down. This often causes countless
liquidations of the short sell trades.

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CONTROLLING FEAR,
LIQUIDITY & IRRATIONAL
THINKING DURING HIGH
VOLATILITY IN THE
MARKETS.

Bullish Re-test
This means that when the price breaks it’s resistance
level it usually pumps rapidly before turning back
down to retest it’s previous resistance level which
was recently breached. The market maker in this
case trades against the participants who open their
long trades at the breakout of the resistance level not
knowing that the price will turn back down to retest
the same level, this causes irrational thinking, getting
retail traders scared, emotional and sentimental
about their trades which leads to an EXIT or a
breakeven while the market maker doubles down on
his trade and bring the price back up. This often
causes countless liquidations of the buy long trades.

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CONTROLLING FEAR,
LIQUIDITY & IRRATIONAL
THINKING DURING HIGH
VOLATILITY IN THE
MARKETS.
The reason we get bearish and bullish retest is due to
the market makers that provide liquidity in the
market for the other participants to actively make
trades and in both the cases of a breakout to the
upside or to the downside, the price does come back
to retest and this is the reason why;
1. If a coin breaks out of a range to the upside, it often
comes back to that level and that is due to the
sellers that usually add positions it plays a very
important role in aiding the price to form a
temporary downtrend however the market makers
see this as an opportunity to take the price to the
opposite direction to trap and cause liquidations or
stop loss hunts on these traders

2. Same with a breakdown below support, price

comes back to retest the previous support which
has now turned resistance, many traders actively
add positions to save their trades this is why the
price approximation to the previous support is often
witnessed, having said that, this is yet again an
opportunity for the market makers to cause a drop
in the markets to trap the investors and lead the
price to the opposing direction to cause both
liquidations and stop loses.

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VOLUME INDICATORS
AND MANIPULATIONS

1. Volume indicators can be helpful to spot overall

trading activity in the financial markets and in this
case, the crypto market. However, keep in mind
that the volume indicators are more accurate with
the historical data in the past reflecting volume
impact on the price action but it does not provide
accuracy in real-time trading.

2. Volume indicators can be misleading and are

usually manipulated by institutions. Often times
when trading in a defined range, the volume
increase does not necessarily mean that the asset
is being accumulated or distributed nor does it
indicate fresh volume coming into the markets.
Since this factor is unknown to retail traders, they
get trapped easily which leads to irrational
thinking, untimed trades, and decisions based on
pure FOMO & emotions.

3. It is also important to realize that the volume

sometimes does not impact price action, meaning,
regardless of how much the volume seems to
come in on any particular asset, it might not reflect
on the price action itself, this is called ‘’bot trading
activities and manipulation’’

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CORRELATION BETWEEN
THE STOCK MARKETS
AND CRYPTO

1. It is important to note that the stock markets and

crypto markets are positively correlated and this is
due to the institutions that often swing between
USD, stocks and crypto. Often times when
institutions enter the stock markets they also
happen to enter crypto with large amounts of
volume which is why we have seen that both the
markets trend simultaneously. There are several
reasons as to why the correlation still remains
valid;

2. Both the markets are considered risky assets and

the fact that institutions swing between USD crypto
and stocks is due to following factors;

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INCREASE/DECREASE IN
INFLATION AND
HIGH/LOW INTEREST
RATES
When the economy seems to gain strength and the
inflation including interest rates are controlled or
decreasing, it allows institutional investments to enter
both the stocks and the crypto markets which leads to
a positive correlation thus providing a good
opportunity for the participants in both the markets for
a profitable ROI.

When the interest rates are high, it is more profitable

for the institutions to get back to investing in USD
rather than riskier assets, in this case stocks and
crypto markets. This is when we experience long
periods of sideways/ consolidation period purely due
to absence of institutional investments leaving the
markets for a better and fixed returns in USD.

Another important thing to note is that the crypto

market depends entirely on institutional investments
and these are the people who run the entire
financial markets which makes them absolutely
necessary and vital for the markets to trend or even to
be profitable for the retail investors. They always focus
on multiple factors before making their investment
decisions, some of them are as listed below;

Global economy, major news events or a

fear of recession/raise of interest rates

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INCREASE/DECREASE IN
INFLATION AND
HIGH/LOW INTEREST
RATES
If any of the abovementioned factors indicate a
negative impact on the markets, the institutional
investment tend to shift their investments from riskier
assets, in this case stocks and crypto markets over to
USD/Gold or governments bonds/securities causing a
plunge in the riskier assets or in other words a bear
trend for a sustained period of time. This is usually
misunderstood and an uncleared concept among the
retail investors which leads to more confusion and
they eventually incur huge losses.

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WHAT IS THE BEST

WAY TO MAKE MONEY
IN CRYPTO MARKETS?

We have already discussed a few factors that needs to

be taken in account before jumping into such a volatile
market which often leads retail traders to countless
liquidations and huge losses. Some of them were;
Defined trading disciplines: It is important to
understand that you must have a well-defined trading
discipline. Trading discipline in the world of trading
means the interval on which you trade, for instance,
there are 3 different trading disciplines known in the
crypto markets;

SCALP TRADING
DAY-TRADING
SWING TRADING

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WHAT IS THE BEST

WAY TO MAKE MONEY
IN CRYPTO MARKETS?

SCALP TRADING
Beginners or anyone who has been actively participating
in crypto markets for less than a year must not consider
scalping. It is one of the best traps the
institutions/market makers have set to trap more
liquidity. Often times it is the retail traders that lose the
majority of the money while scalping. The reason why it
is absolutely dangerous for beginners and even
advanced traders to an extent is due to the leverage
factor allowed by the exchanges to borrow money on
their initial margin which automatically leads to higher
risk and since the retail traders have absolutely no
understanding of the entire functions and mechanisms
of these trading disciplines and how volatility can catch
you off-guard leaving you liquidated or best case
scenario getting your stop loses hit, it makes it a
wonderful liquidity trap for the liquidity provide and the
institutions including the exchanges.

In order for you to scalp trade, you must be a good day-

trader. This is absolutely unheard of by the retail traders
who often start off with scalp trading and later on shift to
day-trading. It is absolutely wrong and the majority of
them lose a bunch of money before they sub-
consciously realize they must avoid scalping due to its
increased volatility and complex price behavior.

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WHAT IS THE BEST WAY

TO MAKE MONEY IN
CRYPTO MARKETS?
DAY-TRADING
Day-trading is a better choice for beginners or even the
advanced traders including the intermediate. The
volatility factor is automatically reduced to a great
extent and allows the traders to be more relaxed and
rational with their trading strategies, on-going trades
and choice of trades overall. The room for error is
another factor where it can easily be managed
compared to scalping. For those who don’t know what it
means, day trading allows you to trade within a 24 hour
time period and close it within the same day for instance,
if you trade at 10am in the morning and close it an hour
later or even 15 hours later, it is still considered a day
trade.

This is beginner friendly and the best trading discipline to

master and to begin with.

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WHAT IS THE BEST WAY

TO MAKE MONEY IN
CRYPTO MARKETS?
SWING TRADING
Swing trading is usually for those who are looking to take
advantage of an entire trend, this could be beneficial
both for longs and shorts or simply while spot trading.
The time period here is usually 2 days - 2 weeks or even
longer. This requires a lot of practice, experience and
precision since it could very easily go against you. The
risk management here is crucial to make sure you get in
at the right time otherwise you could easily end up with
huge losses

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INSTITUTIONAL TRADING
ACTIVITY & SECRET PRICE
ACTION
For retail traders to make sure they are profitable and
especially to make a living out of crypto, it is important to
start tracking institutional trading activities. There are
several ways/methods that you can use to get a step
closer to how they run the markets.

Secret price action: This is very different from SMC & the
common retail trading concepts. It is not found on the
internet neither is it discussed

anywhere online. Secret price action refers to some

specific areas/levels usually very close to the common
retail support & resistance levels where the price drops
and engulfs a flagged zone. A flagged zone is the tiny
consolidation area often found after the breakout above
resistance or a break of a support level. This tiny
consolidation area is called a ‘’flagged zone’’.

The secret price action however can be spotted if you

track these flagged zones and understand when the
price engulfs (pierce through) these zones. This is often a
sharp signal that indicates the entire trend of the market
from the flagged zone area leaving retail traders caught
up with support and resistance levels while the
institutions passing on signals to one another while
building liquidity.

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INSTITUTIONAL TRADING
ACTIVITY & SECRET PRICE
ACTION
If the price seems to engulf these flagged zone, it makes
a wonderful opportunity for both a long and a short trade
depending on where this flagged zone is taking place, it
could be above a resistance level or below a support
level.

This is important when you trade at the breakout of a

resistance/support level but soon find that the price
rejects from these flagged zones and seem to drop back
down or pump back upwards in a rather impulsive
manner

The practical implementation of this very

strategy will be only available in the 4
months challenge group where we
demonstrate it live

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UNDERSTAND
ENGULF

Engulf in this context does not mean a bullish or a

bearish engulf, it rather indicates price action to
breach a certain level and pierce through it.

If retail traders understand the concept of flagged

zones and engulf, it will become much easier for them
to trade with an improved level of accuracy and the
advantage of this simple strategy can also lead to
rational thinking and totally erase the concept of
FOMO, revenge and over-trading leaving you with
better and profitable trades.

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 Closing Note
I tried to write it as simple as I could. The technical
aspects of trading are somewhat difficult to be
described in a simple manner. However, having
said that, this is it for now, there are lots of
strategies, training videos and concepts to be
shared but it’s fair enough to just keep it to the
members at the 4 months challenge group. I hope
you enjoyed reading it.
Zahid Hussain

If you want to join the 4 months challenge group, here

is the link.
Remember, until 10th may it is available at a
discounted rate 26 USD, after 10th may, it will be back
to 200 USD per month.
Good luck.
https://naz.capital/products/4-months-challenge/