1.

Understanding Price Action

Psychology:
A Comprehensive Tutorial
Before we delve into actual price action, it is important for you to understand the
most basic concept that when you look at a chart, you should not see candles or
numbers and lines. The true price action trader sees a chart and sees orders, money
exchanging hands and different traders taking different trades in response to
different news and events. The intricate world of crypto trading revolves not just
around numbers or news but also into the realm of market auction psychology.

How market participants perceive and react to information plays a monumental role
in shaping price trends. How the market moves and why it moves is just as important
as where it moves to. Your job as a price action trader is about understanding the
first two and then taking a bet on the third phenomenon.

Price over everything:

Authors like Murphy, Fring and others give importance to price and nothing else. In
the early days of Ren Tech, even Jim Simmons applied machine learning algorithms
and other statistical techniques on the price history of the asset. The basic
assumption which is still true to this day is that price contains all the information
that a trader requires to make a decision, hence, no other analysis is necessary.
Let us next demystify some concepts:

1. Perception Over Reality:

The news doesn't shape the price of an asset directly. Instead, it's how the market
perceives and digests this news that matters. If news alters the market's psychology
about an asset, that's when you'll see price shifts.

This is why as a crypto trader, it is important that you have two options, either you
trade only the price action in front of you and have set set-ups that you take
regardless of what happens (which works very well for disciplined traders) or you
form a Higher Time Frame (HTF) bias based on how price reacts to different news.
Example:

Figure 1. Fake Bullish News Pushed Bitcoin higher

False bullish news pushed Bitcoin more than 12% higher and once it was confirmed
to be false, price hardly retraced that move by moving down 5% momentarily. The
reaction of price to the news here was a pivotal hint that the market is indeed bullish
and a bias for traders should be to long.

2. Subjective Valuation:
Assets don't have an intrinsic worth set in stone. So regardless of what
tokenomics a coin has or what profit/earnings ratio a stock has, it has a very limited
effect on the actual price of the asset.
Example:

Figure 2. Best Spot Play for 2021 Bull Market

DOGE was one of the best spot holds of the entire 2021 bear market where it made
its way from a meme coin to being in the top 20 coins by market capitalization. Why
was this?
It was always an inflationary shitcoin, did the fundamentals change? No, market
perception changed when Elon Musk and other people started to promote it. There
are many similar examples of similar things happening like Gamestop in the stock
market.

This should teach you that assets will never have any particular intrinsic value based
on some numbers and the best way to decide an asset’s worth is simply its price.

They're worth what people believe they're worth. As this psychology shifts from one
participant to another, a trend forms. This collective psychology, evolving over time,
leads to the visible price trends on charts.

3. Earnings & Advancements vs. Market Perception:

A company's revenue growth, technological advancements, or soaring
earnings don't directly determine its asset's price trend. Historical examples
include McDonald's in the '70s, where despite booming earnings and franchise
expansion, stock prices dwindled. Another is Amazon, whose stock took a decade to
return to its 1999 value despite its consistent technological advancements. It wasn't
about the actual growth but the market's perception of this growth.

Example:

Figure 3. Amazon Weekly Chart

4. Timescale Relevance:
Price is a fractal and chart patterns act similarly and are predictable on all
timeframes. However, no pattern or set-up will play out a 100% of the time and set-
ups and patterns must be implemented thousands of times to judge profitability.
Some traders are able to scalp on the tick charts and 1 minute charts with price
action concepts but it is very rare to be able to do that consistently, while price action
trading concepts are valid for any timeframe, it is important that we don’t blindly look
at patterns on lower time frames but also the context behind the price movements as
we have discussed so far. Additionally, it is important to keep in track chapter 1 and
chapter 4 concepts. Even if you have a strategy that is consistently profitable 40% of
the time, it is possible to be a profitable trader, but it is necessary to apply that over
and over again with the same execution technique.

You should also note that if everyone expects a price pattern to play out then it
probably won't happen. This is the same as counter-trading sentiment and the basic
logic that you should buy when others are fearful and sell when everyone is greedy.

5. Action, Not Just Price:

The concept of support and resistance is not about specific horizontal price points;
it's more about the behaviour of the market participants around those price
points.

S/R levels are better understood as zones where a significant amount of buying or
selling activity has historically occurred. These zones are psychological in nature
because they represent the prices at which sentiment and market dynamics have
previously shifted.

The way prices break or react from these levels can give clues about the potential
market action. If a price approaches a resistance level with strong momentum and
high volume, this suggests conviction among buyers, which could lead to a breakout.
But if as shown below, the breakout is with low volume and next to follow through
after the breakout, it could indicate a lack of momentum and increase the chance
that the resistance will hold.
 Figure 4.

Basic rule is that breakouts with high volume and momentum are often considered
more valid and likely to result in a sustained move away from the level. If the
breakout occurs with low volume and momentum, it may be a false breakout, and the
price might retreat back below the resistance or above the support level. Technical
indicators can also play a role in reinforcing the strength or weakness of support and
resistance levels. Indicators such as moving averages, volume profiles, and
oscillators can add an extra layer of validation to the significance of these levels. We
will only focus on price action (the most important factor) and maybe a couple of
basic indicators for this chapter.

In summary, support and resistance levels are not just static lines drawn on a chart;
they are dynamic and reflect ongoing market psychology and participant
actions. This is why it is also important to not see S/R as pinpoint levels but as
zones.
Orderflow in Price Action:
Contrary to popular belief, an upward price movement isn't due to more buyers
over sellers or larger buy orders than sell orders. Every transaction requires a
buyer for every seller. The distinction lies in aggressiveness. An uptick in price
reflects heightened buying enthusiasm compared to selling.

Figure 5

We will learn orderflow properly in the following chapters but it is important to note
that for now, every single order in the market has a buyer and a seller, both have set
prices they would like to buy or sell at, but the difference is when one of them is so
eager that they meet the best offer on the other side. For example, if a buyers is so
eager to buy Bitcoin that he meets the selling price on “offer” from the cheapest
seller (he takes the market price and hence market buys) while ignoring the highest
“bid” from the buyers’ side.
 ATTENTION ❗

If you are looking for an Exchange with Zero Fees, Or need a No

KYC Exchange because you can't access Crypto trading anymore,
You can Sign up on Bytrade.

They also have a 50 Dollar Sign up Bonus. Just Sign up, trade
and get 50 Bucks.

(It might not be a lot for a lot of you but sharing just in case
someone needs a new exchange with no KYC and free sign up
Bonus of 50 dollars)

Link to Exchange
https://tinyurl.com/Bytrade-Reg

P. S. Contact their support to the sign up Bonus.

Sorry for the Cringe if this is not your thing.

 2. Trading- Level to Level
By the end of this tutorial, you will be able to identify what levels are and how to trade
them. I will repeat the following over and over again.
1. Levels trading is the most important AND LOGICAL system in the traditional trading
system. 100X more important than chart patterns, classical divergences etc.
2. If you do not understand a concept, simply slow down, read it again or read the
references. It is okay to not understand things in one go but stick around and you WILL
understand. Remember this; Reading it a few times and slowly will remove all doubts.
Almost every profitable trading strategy factors in using Support & Resistance (S/R)
or simply, horizontal levels correctly.
Levels help us make a roadmap of the market. Levels combined with other indicators
give an entry but levels are the trigger.

What are levels?

These are not simply the lines on a chart but a representation of the areas where the
market would like to enter or has already decided to enter.
Support and resistances are formed since the market decides to sell/buy at those
levels and create a S/R pressure.
If we had to represent Levels on a chart, we could assume that the below heat map
which shows the Limit orders, shows the levels of interest or the S/R of the chart. The
lines below the current price show the buy orders and the lines above show the sell
order.
P.S. This is for illustration only and heatmaps don’t necessarily form S/R, as Market
Makers place spoofing orders to deceive the market very often. 90% of orders on most
shitcoins are all fake orders.

Sell Orders

Buy Orders

Figure 6: Levels
One thing to understand before we get to charting is that each level must be
thought of as a zone and not one single line. Therefore, you can use HTF charts like
the monthly/weekly to form a bias and trading plans but it’s difficult to take a DAY
TRADE off a weekly level as it is not an exact horizontal line but a zone, a small zone
on the weekly TF might be a large zone on the 4-hour TF.

What exactly is support and resistance?

In the next few pages, I have given a tip on how to arrange your lines. Most people
draw horizontal levels on a chart and think support and resistance
are just actual lines that provide support and resistance. Support/Resistance is made
up of bids/asks (long/short positions) and contrary to popular belief, they do not get
stronger with time. In fact they get weaker with time as orders lying at those levels get
filled with multiple touches over time.
Longing support and shorting resistance every time as you don’t have exact
entries and exact invalidation for stop loss placement won’t work all the time.

What does this mean? Before entering a trade you need to calculate position size
and exactly where to place the stop loss. If you follow the above strategy, you’ll not
be able to do that.
Link to position sizing and risk management tutorial: https://bit.ly/2WjqQqk

Figure 7: Support/Resistance

Never blindly long support and short resistance. Below you’ll learn everything
there is to trading levels, for now understand what goes on behind the scenes
and how a level becomes significant. We will rather focus on playing the
support/resistance flip on our levels.

THIS is where your discipline as a trader will get tested. One thing deeply rooted
while trading should be to never blindly place limit orders when trading
from the same side. What this means is we should never blindly long a level that has
acted as support previously as vice versa.

Drawing levels based on Footprint data will be learnt later (P.S. it’s not necessary).
For now remember that they are created due to passive liquidity (limit orders that you
can see on the order book and market orders that are executed instantly, most used
by retail).

Figure 8. Buy and sell orders

For now, we’ll use price action to draw out our horizontal levels, but it is important that
you always think of our levels as areas of interest where bids are placed rather than
simple lines.
Tip 1: Colour code your lines
Try to colour code your lines and use a different thickness for the same. You can use
Red weekly. Blue for Daily and Green for Hourly etc and remember it as RBG. OR if
you don’t like the colours, simply right click and label your lines as such.
REMEMBER each level must be visible on TFs lower and equal to. For example,
a daily level must be visible on the hourly time frame, 4 hourly and daily charts but not
on the weekly chart. Let’s say you are trading the weekly charts, then there is no point
in having the millions of hourly levels visible on it.

Figure 9

Before we move further, you need to have a decent understanding of

support/resistance. If not, use this: https://t.me/EmperorbtcTA/18
Tip 2: Use Object Tree as explained here
https://www.youtube.com/watch?v=RxylIh9IChk

How to decide the importance of a level?

The importance of a horizontal level is decided by. Dante explained it as:
● Number of touches
● Duration of time since the level has been in play
● Nature of reaction: If price reacts violently to a level (large percentage swings
in price caused at that level.
● Recency: Pro traders look at their levels from right to left and not in a left to
right manner. The levels where price has reacted recently is much more
important than what price did at a level years ago.

First, zoom out to see the individual candles and wicks clearly but include as many
candles as possible on the chart.

Figure 10. Importance of levels

An illustration of how I would draw the levels on a weekly chart, arrows show you many
reasons for marking it. Before you start to get overwhelmed with all the levels, just
mark all of them out first. Note the 4 points which make a level
important. Which levels to keep on your chart after this process? The ones which you
want to trade off.
Which levels do you mark out?
Just look for simple support and resistance points on the chart using the
importance roadmap.

Figure 11. Levels to mark out

Daily levels marked out on the same chart as above. Daily chart also seems to respect
the weekly levels we marked out in the first chart (this is a sign that
you’re doing this right). Always keep in mind to look right to left while marking
your levels.
There can be 100 levels drawn on this chart. Here’s how to further reason the
drawing and importance of your levels:

Figure 12. DASHUSDT 1H chart, just open 7 Sep 2021 1H chart and zoom out
IMPORTANT: Please study the chart above and the commentary and see how a level
loses its importance as the market moves and starts trading in that region. Level L1 is
not not important; a price starts trading there for a while.

2.1 How to refine your levels for trading

Many traders are very profitable trading level to level but it’s not as simple as throwing
your lines on a chart to buy support and sell resistance.
Level tuning: It’s as simple as one important saying, “Recent price action is the best
price action.”
Example:

Figure 13(A) : A zoomed out 4 hour chart with levels marked out

Figure 14 (B) : A zoomed out 4 hour chart with levels marked out
Let’s assume you’re looking for a trade in the blue box. When you’re confused about
where to place your level. Don’t end up with “analysis-paralysis” and place your level
in the middle of the zone you’re looking at, with the most touches.

Example of tweaking levels using this middle of the zone concept is:

Figure 15: Tweaking levels using this middle of the zone concept

It is obvious you want a level between the 2 dashed lines. These scenarios are
slightly tricky. You must pick a final level (non-dashed line) close to the middle of
the zone. Just go for any one with the most touches.
You still get 4 clean touches with the final pick. The exact middle is not important, don’t
let the imperfection of it upset you.
Remember how you discussed orderflow earlier? S/R flips are just orders being placed
and mitigated. When we get to trading these levels, you’ll learn to think of S/R as zones
and not pitch perfect lines.

Q: When should you not use the mean of the “zone” that we discussed?
A: When price breaks out violently from a range.
In case there’s a violent break of a range high level, price is more likely to dip
only slightly to retest the highs and fly off from the highs rather than the mean. Same
concept for the range breakdowns.
Example:

Figure 16: Mean level

One final tweak example of how to use slight adjustments to fix up your levels.

Figure 17. How novice traders draw levels

A level such as this screams liquidity grab on the retest. Why? Simply because there’s
a lot of sell orders (stop losses on longs + breakout traders looking to short price
losing this level).

This means a Swing Failure Pattern will probably form here to trap them, how
and why do you tweak this level then?
 Figure 18. Swing Failure Pattern

Keeping in mind the SFP tutorial, once you are waiting for one to form, this is
how you decide till where the SFP wick could go.

As with any strategy, drawing levels is a skill but also an art. It needs to be refined with
time and practice. The more you trade, you automatically understand certain tweaks
needed to refine your levels.
No one can teach you how to EXACTLY tweak your levels. You will get front ran; you
will get scam wicked but keep following this system and keep reviewing your trades
and you will definitely be a master.

Takeaways
Before we dive deeper into using strategies based on levels drawn. You want
to practise your levels first as areas of interest, areas where price reacts and
nail them down first. Your best judge is always the market, best feedback is always
price action, remember this. You should be able to:
● Identify zones
● Mark level at mean of zone/tweak it as discussed for most touches
Recent price action is the best price action. Look right to left and fix your levels
as per what you expect the price to do upon reaching them. Cannot stress this enough.

2.2 Taking trades once your levels are refined

Any kind of knowledge about price action is not enough to make you consistently
profitable. To be able to achieve that, you need to form a strategy, a system that you
stick to regardless of what your feelings are. Then you need to backtest it and track
your success rate over time. Taking 2:1 R setups with a 50% success rate is enough
to be a trading legend, remember that. Using the knowledge of levels we now have,
we will trade the following scenarios.
1. 3 touch level:

Figure 19. 3 touch level

3 touch levels can automatically be assumed to provide us with at least a short-term

S/R flip to mitigate orders as you have learnt in the order flow basics tutorial. Link:
twitter/EmperorBTC

These are very effective if traded properly; enter on the first touch of the level
from the other side. Place limit orders for entries.
You always hear that you need to have multiple plans for every single pair.
We’ll learn about another strategy on the same chart with a different plan.

2. 2 touch level or a level already flipped and tested as resistance/support:

Figure 20. 2 touch level

When trading levels such as L1, you want to have multiple confluence factors:
● Daily bias (Most of what we do is against trend, but you want to fade LTF trend
and follow HTF trend)
● Fib levels, I draw my fibs between the Daily swing highs and lows (extremes).
You want your levels to align with the 0.382, 0.5 and 0.618 to add confluence
to setups.

3. One touch: you normally don’t want to trade levels like these unless
there’s very high confluence. You can even use the RSI & MACD for
confluence here.
Important clarification:

Figure 21. 1 touch level

2.3 Targets and stop/trade management

One thing to keep in mind is that you want to look at different TFs and draw
out your levels as described. Your fibs should be drawn from daily swing highs
to lows (and vice-versa), not the smaller TFs. But your execution TF where you
take your trade must be pre-defined (1 hour for me) and should give you a
clear trade idea.
Once you get good at drawing levels, EVERY LEVEL you draw, price will have a
reaction there. Don’t trade them all, in trading, patience makes perfect. Trade
levels where you think you can catch a decent swing as the charts will show
You.

Trade entry can be at any level. I’ve categorised those entries into 3 sections
each with their own requirements to actually enter a position.

Figure 22. LINKUSDT chart 11 Nov 4H

Stop placement can be any level above the weekly level, here if the 4-hour level above
is flipped to support means our idea for an SFP/Rejection at the weekly level is
completely wrong. Thus, you exit the trade when your idea for entering in invalid.

Target is always first trouble area (FTA) which could be the lower 4 hour level,
but the final target was at blue daily level. If price would have found support at that
level, we would have gotten out while in profit. Normally you want to scale out from
trades at different areas where price could bounce and keep some part of the position
running(on shorts of course).
Price goes much lower than the blue daily level as target, we get out regardless for a
great 4.8R trade, once you’re at target, get out, take profits, no emotions.
NOTE: There’s no specific way for price to “reach” your level. If price rallies into
a level where you want to short, just short, violent price rally into your level means
more people are trapped in the process. This style of trading is very profitable, but you
need to practise drawing those levels and have conviction. Don’t be scared if price
slams into your level, “trading the trend” on LTFs means nothing.
 Figure 23. First Trouble Area (FTA)

Figure 24.

We mark out all the levels, even if the chart gets crowded. You need to know all the
trouble spots beforehand and manage your trade carefully if you want to trade levels
like this.

NOTE: Once price moves over an important level, you can move your stop loss up to
below that. If we form a new support, I want price to hold it before reaching target, that
is how you manage longs.

2.4 Most important factor when trading levels

Place limit orders when trading levels which change roles. Wait for an SFP when
trading levels where you expect a similar role as before.
 Figure 25. SFP

Reasoning is simple, if a level has already behaved as support once, then everyone
is expecting it to do the same again. Market makers will exploit that
to run stops and you want to be on their side as always.

Now that is cleared, in ranging environments, sometimes a support/resistance will be

held multiple times. A 3-touch level in the same role is the only time I use an indicator,
the MACD.
For a level tested for the 3rd time, we first look for another SFP (it is fine if we
don’t get it). Regardless of that, we need a MACD divergence, even better if
you have an RSI divergence as well. (Read my divergence content here.)
 Figure: 26. MACD divergence

Obvious target at important 4H level. Stop below SFP wicks on a lower time
frame level.

NOTE: If a market is constantly moving to a level, it wants to obviously get through

there. Some traders say that if price “holds” a level multiple times then it’s a great sign
to bid the level, that makes zero sense.
Levels flipping as we discussed are areas to bid as they become stronger with touches.
Levels with the same role on multiple touches get weaker and weaker.
Weaker level = Requires more confidence to take trades
 3. Levels Based on Events
In the next section, we will learn how to mark levels on our chart that are based on
specific price points at event.

This can either be an isolated event like FTX bankruptcy dump low, or a recurring one
like Last week’s high or last monthly open. These are levels that indicate how the
market is doing with respect to last week, month or when the news was released and
hence buyers/sellers might step up at to defend those levels based on their bias

3.1 Start with the Monthly charts

This gives us the macro level and highlights where we are in the grand scheme of
things.

1. Use the linear chart to get a perspective of how high the run has been.
2. Mark the Monthly levels for each cycle.
Note: We will stick to closes and open as levels. Hence the resistances and support
for various time frames will be the closes and the opens.
The 4 levels to be marked on each time frame are open, close, high low.
Example of Monthly Resistance below.

The monthly linear helps us to determine how big the move has been and if any pull
back occurs, it isn't anything extraordinary considering the move up.
 Figure 27. Drawing Monthly High Levels

Figure 28. Previous Monthly High Levels

To further illustrate how to draw the monthly levels, have a look at the previous cycle.
I have marked the previous ATH close. Notice how exactly after a year, a re-test of the
same level happened followed by a Breakout. Levels tend to get re-tested often,
returning to a mean where the buyers weren't able to enter previously.

To be noticed, after the Breakout of this level at end of 2020, the next candle
crossed below the level to claim liquidity.
For now, just notice the same movement after the Breakout candle BELOW the
Breakout level to claim liquidity. We will learn about claiming liquidity later on.
Points to learn
1. Please see how huge the run has been from the previous ATH. This should
prepare you to always understand that any amount of pull back is NOT inorganic,
manipulation, or dumping. If an asset price can climb so high, it should and can
come down to the same degree. A trader shouldn't assume it to be the end of the
asset or asset class.
2.
Monthly linear levels should prepare you to anticipate all kinds of movements.

Figure 29. Label your line (A)

Figure 30. Label your line (B)

3. Always label your lines to make it clear. This will avoid clutter and give you a
clear picture of what the level stands for. This can be done by Right clicking on
the Link and then go to text. This is how I place my labels for the line. You can
save this as a template for future use.

3.2 The Monthly chart

Figure 31. Monthly Chart

Coming back to the monthly chart, these levels are what I would consider important
for my trading and to always be aware of how to tackle any movement.
I have labelled the previous:
● ATH level.
● Previous ATH.
● Year open for the current year.
● Current monthly range.
● ATH Monthly resistance.
Note:
1. Depicts the re-test in the previous cycle.
2. Notice how at number 2, we came back to re-test the yearly open. During a
Dump, placing small orders at these levels by assuming that at the year open
re-test, prices could see some demand wouldn't have been a bad bet. So if I
was trading or even holding, these are the Levels I would watch at the Macro.
Bitcoin going to any of these levels shouldn't make you scared or surprise you.
The aim of recognising levels is to be ready to trade when they occur. We will learn
about trading levels later, and find better probability. Please look at the chart and
practice marking these levels on your own.
The Weekly
Now after we have seen how to mark monthly levels, let's move on to the weekly. My
Previous weekly levels are shown, and notice how they are completely different from
the monthly. To reiterate, when we talk about levels, we are talking about the close
and the open.

Figure 32. The weekly level

To keep the charts clean, I have only marked the Levels of close and open. Later we
will also mark the high and the low.
If you see the level marked above, you will see that we have essentially a range where
the market spent a lot of time, about a month... Once we zoom in, we will get a better
idea about how to trade it.
Before we zoom in, let us quickly review how to trade a range

Figure 33. How to trade range

1. Look for shorts at highs and longs at lows of the range.

2. Don't assume a range will break until it does.
 3. Repeating 1 and 2 will make you gain until you are wrong one and taking one
wrong trade after trading the range is positive.
I will leave links at the end to understand range better.

The Weekly range

Figure 34. Weekly range

Let's take a look at the Weekly Range. The range shown above is the same as we
have earlier marked, but on a daily
graph for a zoomed in version. The range tutorial graph on the previous page can be
used to trade this range easily.
Notice how easy trading becomes when we know the range.
The only problem you will face here is dealing with deviation and false Break-
outs which we will deal with in the price Action tutorials.

Again, assume that a range will continue to exist forever and just trade it, both
long and short, until it breaks.
I hope the weekly zoomed in levels have shown how to utilise the range. Look at the
number of trades we could have entered by just playing the range.
Of course, Ranges will not occur in a straight line and a straight point. This is
what we need to deal with in future by studying liquidity grabs.
Ranges tend to repeat. A classic example of this move is illustrated in the chart below.
 Figure 35: Range

Notice how the current dump from the ATH came back to the same range as we
defined on the weekly. It is common for Ranges to be tested again, and the price to
completely come back in the same range.
1. The above should make it clear that the Dump was not a surprise or anything
to be scared of.
2. The Dump was simple price Action taking place and rotation of price to the
mean. Knowing the above, the range marked and the probability of Ranges to
come back to their levels should prepare you for all kinds of movements, without
fear. Level lost? Prepare for the next level.

The Daily range

Let's see how we draw the Levels in the daily time frame. I have marked the price from
which the Levels have been drawn. Close and open have been used to establish the
Levels.
Notice how these levels have existed for so long and worked even after the
Dump. Count the number of touches.
 Figure 36. Daily range

Figure 37. Daily range (B)

Moving forward, let's mark the high and the low at the same place to see how the
future range reacts to it.
Notice how in future, after the Dump from ATH, the wick respected the previous range
highs and lows almost perfectly.
Note:
1. Mark the Levels in the daily and establish a range.
2. Play it and be ready for buys/sells at the touch in the future.
3. The Levels are mostly respected until they are not, as shown in the chart above
which respects the same level even after months.

4. Confluence
After we have seen how to draw the Levels, let's look at how the confluence of
levels work.
Confluence means a point where multiple reasons for entry/exit exist. If a certain point
in the chart is having levels based in different Time frames, it
can be said that it has a level of confluence.

Figure 38. Confluence (A)

Notice in the graphs, there is a confluence from 2 different time frames: weekly and
daily at a similar price range. This is an area of confluence. This could be termed as
an area of high confluence for a trade.
Note: Whilst trading, look for confluence of levels, Fibs, EMA and Volume Profile.
These levels are respected and a confluence of the same works as a good point for
entry

Figure 39. Confluence (B)

Here is a graph showing all the important levels I would have on a graph. The Levels
would act as the Ranges that I would be looking at for opportunities and changes in
market structure.

These are Macro structures for the longer term, which means I should be looking at
these in the long term. If prices come to any of these levels, it shouldn't be a surprise.
This is what being prepared means.
I have labelled all the Levels for your convenience. Also, look at the yearly and
monthly opens as an area of high probability re-test. These levels make your view of
seeing the price easier.

You are prepared in advance and NOTHING is a surprise. Instead of wondering where
the price will drop, your view changes to 'This is where it could drop.'
Tip: If you are trading a time frame which doesn't need the higher time frame
levels, you can hide those levels. However, there's a better way to manage your charts
and make them look cleaner.
4.1 The object tree option in Tradingview

Figure 40. The Object tree option (A)

Click on the Object View tab and it will show you all the Drawing and indicators
available on your chart. You can choose to hide or unhide the lines and objects you
need/don't need.

Figure 41. The Object tree option(B)

To make it more organised, you can click on create folder and put all the objects in a
similar category in that folder.
Eg. I have put everything of the monthly level under one folder and hide/unhide it if
need be.

Figure 42. The Object tree option (C)

Figure 43. The Object tree option (D)

Learning the Object Tree feature will help you keep the charts organised and
help in analysis, so you don't have to delete and rearrange things again.
Take the time over the weekend to learn about it. I will share the link to the tutorial of
it, as shared by TradingView. Make objects and play around with this feature.

4.2 Deviation

A brief talk about Deviation. Market always tries to stop retail, this is how it has always
been. This is called a liquidity tap or liquidity grab. The market tries to knock out trades
and orders that are placed at obvious levels and hence this is why the majority is
always wrong.
Example of liquidity grab below.

Figure 44. Deviation

Look at the Price structure above. A falling wedge, conventionally breaks to the
upside. Maybe retail traders would take an entry at the lower support and
expect a Breakout.
As you can see, the Breakout happened perfectly here. But notice a dip below
the support of the falling wedge.

Why does the market do this?

Many retail traders would have placed their stop loss below the support. This would
have led to many traders getting stopped out EVEN THOUGH their prediction of a
Breakout was right. This is an act of stopping out the retailers and it can happen often.
This is a liquidity grab event and stop loss placed provides liquidity for the buyers to
buy at a lower price (Stop Loss placed is a sell order). We have discussed the ways
to prevent such losses in PA threads.
However we will talk in detail about it later.

4.3 Reclaim
I will briefly describe what a reclaim of a level is. Price Action traders look for this action
while deciding if the range has been broken and if they should take a trade for the
higher levels.
A reclaim happens when the price moves past a certain level and pulls back to reclaim
and test the level. The price Action would look as denoted in the charts below. This is
when according to Price Action, an entry can be taken. This is applicable both for longs
and shorts.

Figure 45. Reclaim

Conclusion:
If you’ve made it this far, thanks for bearing with me. This was the first
part of the complex Price Action Trading Encyclopaedia.

I aim to make sure that when this series is complete, it will be a one
stop shop for all trading techniques and education related to price
action. This is my largest project yet and I hope I am able to live up to
the best standards for all my friends and followers on CT. This
community is the reason for all my success and this is my contribution
for all of you.