Study Guide

LESSON #1 - THE MARKET MAKERS

THE MARKET MAKERS

The Forex market is controlled through the BROKERS, HEDGE-FUNDS & BANKS, with
the HIGHEST market share percentage.

Below we can see a chart of the banks with the highest percentage of market shares in
the year of 2016.
These top market share holding banks work with professional traders known as "Market
Makers" AT (CITADEL) to "Generate Business" with clients and "Make markets" in
assets such as currencies.

So what do we mean by "Generate business" and "Make Markets"?

A market maker generates "Business" with his clients (YOU AND I), (the retail traders) ,
by creating patterns on the charts that we can recognize.

The market maker uses the LIQUIDITY PROVIDERS shares to "make markets", his job
is to create a trading environment that entices the retail trader to enter the market.

YOU ARE OF NO VALUE TO THE DEALER (MARKET MAKER), IF HE CANNOT GET

YOU INTO THE MARKET!

Once the majority of the "retail traders" recognize the pattern that is presented on the
chart, the market maker will then either show the retail traders a bit of profit (to entice
them to use higher risk, leverage more & over trade), then once you (the retail trader)
are in over your head in trades with risk at max, the dealer SHIFTS the market
completely against you, and hits your stop loss before you know how to react.

HAS THIS HAPPENED TO YOU BEFORE? THOUGHT YOU WERE IN A PERFECT

TRADE? THOUGHT NOTHING COULD GO WRONG, THE PERFECT TRADE SETUP
WAS IN PROGRESS, A GREAT ENTRY. YOUR FIRST POSITION IS IN PROFIT, YOU
ADD A FEW MORE POSITIONS. THEN SUDDENLY THE MARKET SWINGS IN THE
OPPOSITE DIRECTION LEAVING YOU PANICKING AND BLOWING ACCOUNT
AFTER ACCOUNT?

NO MORE.
 WHAT YOU WILL BE TAUGHT IN THE NEXT FEW LESSONS WILL CHANGE
EVERYTHING YOU'VE THOUGHT ABOUT FOREX, AND HOW THE MARKET
REALLY WORKS.

OVERVIEW

We will go over market structure and patterns that the DEALERS use to entice traders
into the market.

We will also be going over how to enter the market against the retail trading heard, and
in line with the Forex Dealers (Market Makers).

WHAT IS THE BENEFIT OF TRADING IN LINE WITH THE DEALER?

ONCE THE DEALER MAKES HIS MOVE, THE MARKET CAN SWING HUNDREDS
OF PIPS, AND IF YOUR TRADING "IN LINE WITH THE DEALER" YOU WILL HAVE A
MUCH HIGHER POTENTIAL FOR PROFIT IN A VERY SHORT PERIOD OF TIME!

We will also go over trading psychology and patience, how to obtain trades with up to
1:10 or even 1:20 risk reward ratios with little to no drawdown.

Don’t think this is possible? You will be very surprised with what you will learn in the
next few lessons. Be prepared to enter a new paradigm.

THE DEALERS

THE DEALER HAS MANY NAMES. MARKET MAKER, LIQUIDITY

PROVIDER, SMART MONEY, ECT...

The "SMART MONEY" sells to and buys from its clients and is
compensated by means of price differentials for the service of
GENERATING liquidity, MINIMIZING transaction costs and facilitating
TRADE.
As of 2008 there were over two thousand "known" market makers in the
US.

SO WHEN DO THESE "MARKET MAKERS" ACTUALLY MAKE THE

MARKETS?

Market makers are mostly active during london and new york session.
During asian session, market makers will be replaced with what is known
as a "liquidity-sensitive automated market maker" that will move the
market sideways in perpetual consolidation for about 8 to 10 hours.

This is normally done during asian session as many retail traders in the
usa will be trading during this time. (1pm to 10pm~ct)

This short 10 hour consolidation phase is absolutely key for the london
and new york dealers, this phase gives the dealers an added amount of
liquidity that is needed to move the market when the dealers are ready to
do so.
 Upon doing some simple research, we can see 2 main Market Maker
sessions. The New York Session and the London Session.

During these times the market will move much faster. you will many
times see that once asian consolidation is over, and london session
begins, the market may move in one direction for the entire length of
london session, then coming into new york session, completely reverse
and go in the opposite direction of london session.

If you trade london and new york session you know this is true, many
times one session is used to fake-out or give a false directional bias to
retail traders (dumb money), then the session changes over and a
complete reversal happens.

You see retail traders are extremely predictable, they see this 5.5 trillion
dollar a day market as some type of magical get rich quick "giving tree".
 They think just because they watched a few youtube videos on how to
spot a "head and shoulders" pattern or "how to graph a trendline" that
suddenly they are given they key to success in this market...

Trading is much more than just finding patterns..!

On the outside, trading is watching charts, spotting fake-outs, trap

zones, consolidation, ect.

This is the easy part.

But it’s what you cannot see which is the hardest to overcome, what is
on the inside...

Emotion... Can you mentally handle drawdown? Are you confident in

your trades? Are you taking trades because of impulsive emotional
response, or do you let the trade come to you?

Let me introduce you to something called…

PATIENCE. TIME

IS YOUR ONLY FRIEND IN THIS MARKET

If you are still not sure if what i am telling you is the truth, you may visit
one of the various market makers websites at www.citadelsecurities.com

Citadel is the leading liquidity provider for the financial markets and
manages assets of nearly 150 billion dollars.
If you are still not sure if what I am telling you is the truth, you may
visit one of the various market makers websites at
www.citadelsecurities.com

Citadel is the leading liquidity provider for the financial markets and
manages assets of nearly 150 billion dollars.

LESSON #2 - THE MOST VALUABLE

CURRENCY IN THE WORLD

THE MOST VALUABLE CURRENCY

IN THIS WORLD IS TRUTH
“Unless you’ve worked at a proprietary firm, you have NO IDEA of what you’re going
against!
A single proprietary trading firm can have enough computers to fill your house ten times
and then some. Each of these computers can easily be $50,000 or more. These firms
have zero problem hiring the best programmers in the world for $500 per hour or more
to program some of the most complicated programs that ever existed. I’m telling you
that people trading at proprietary firms are at least as smart as NASA engineers and
sometimes smarter. Except for a tiny number of individuals devoted to making this world
a truly better place, in this world, money is a much more powerful motivator than the
pursuit of scientific progress. Don’t believe me? A NASA engineer earns something like
$100,000 per year. A good trader can EASILY earn $100,000 per DAY. EASILY.

In my career, I saw a data center used for trading that was so large I couldn’t see the
back wall. “We haven’t even used most of the computers you see here,” said the guy to
me. The firm had been operating been for more than ten years. That gives you an idea
of how just well-equipped and well-capitalized these guys is.

These guys have no problem investing millions to cut their ping from 2s to 1.99s. They
have no problems paying an additional $10,000,000 per month rent just to have a office
that is half a mile closing to Wall Street just so their orders will pass through a
milli-second faster. These people have no problems offering a $500,000 signing bonus
to grab the best financial engineering grads and then offering millions of dollars in
bonuses every year, even if the trader doesn’t perform all that well.

These people can test BILLIONS of possible technical analysis indicators and
combinations on about every single product that exists a million times by the time you
notice your little “A heads and shoulder pattern is forming!” These people can send a
million trade by the time your finger hits the “buy” button. These people can backtest
millions of strategies in real time by the time you blink your eyes. And despite all that,
the vast majority of these funds do not beat the market on a risk-adjusted basis over an
extended period of time.”
-Anonymous
Does this change your perspective a bit?.. Believe what you want, you can choose to
believe that the market is based upon the constant "fighting" of buyers and sellers,
or "bulls vs bears" and believe that invisible lines on the charts will help you succeed
and give you confidence...!

I once believed this to be true, until I changed my perspective. did the research, I
followed the money. The banks own the media who created the idea of mainstream
Technical Analysis as we know it today.

The future lessons will help you come to your senses and clear some of the
programming you were taught to believe.

What if I told you all you needed was 2 or 3 trades per week? what if I told you I had a
strategy that can perform at a 90+ percent win ratio? What if I told you, you could
potentially find trades with risk reward ratios of 1:10 or 1:20? What if I told you the
trades you will learn to take will instantly shift into profit and drawdown would be a
thing of the past? Would you believe me? It sounds crazy.. almost impossible.

These outcomes are all achievable with what you will be learning in future lessons.

THE MOST DIFFICULT TASK IN SPECULATION IS NOT PREDICTION

BUT SELF-CONTROL. SUCCESSFUL TRADING IS DIFFICULT AND
FRUSTRATING. YOU ARE THE MOST IMPORTANT ELEMENT IN THE
EQUATION FOR SUCCESS.

With this being said take a moment and realize the truth in this
statement. I am not going to be pressing the buy or sell button
for you, I am not going to be there for you when you get greedy
or fearful. These aspects are completely out of my control.

This journey begins with you, I can only show you the door. I
cannot force you to walk through it. I can give you water, but I
cannot make you thirsty.
 Before this journey can begin you must part from your retail
trading ways that you have been taught.

The job of the market maker is to create panic in the marketplace, an

old saying goes "stir the waters to catch the fish" essentially this is
all they are doing. relying on your emotional response to get you to
lose confidence in your trades and make irrational decisions.

LESSON #3 - EMOTIONS AND

TRADING
 EMOTIONS AND TRADING

Your emotions will drive the decisions you make today, and your success WILL
depend upon your ability to understand and interpret them. When an emotion is
triggered in your brain, your nervous systems responds by creating feelings in
your body (what many people refer to as a "gut feeling") and certain thoughts in
your mind.

A great deal of your decisions are informed by your emotional responses

because that is what emotions are designed to do: to appraise and summarize an
experience and inform your actions.

When you are trading and the market suddenly spikes an emotion is triggered,
just how much do you pay attention to your visceral response and the thoughts it
creates?

Emotions, when they are not disordered, provide information about your
circumstances in a simple, quick way that does not involve a lot of cognition
(thinking about it).

Have you ever been in a trade and making good profits, suddenly the market
spikes in the opposite direction, leaving you at break even or very little profit and
you close the trade instantly because of this rapid movement, only to see it was a
fakeout and price continued in your intended direction?

Your emotions WILL attempt to tell you if a situation is optimal or not aligned with your
goal, and how you might approach it.

However, when you get greedy and over leverage or over risk your account, your
emotions will be magnified and you will become delusional.
 How many times have you over risked your account and stayed up for 2 days straight
babying your trades and hoping that your account doesn't get margin called..?

What is the Market Makers job? To get you to become an emotional wreck..

Market Makers cause THESE spikes and crazy movement in the Market to create an
emotional response inside you, this response created inside you will be DOUBLED if
you are over risking , causing you to lose control of your actions.

Have you ever been in a trade and you know the SL is going to get hit, but you still stay
in anyway?
How many times have you over risked and stopped yourself out because of a small
swing against you, only to see seconds later the trade goes profitable again?

How many times have you entered a trade just because of a spike YOU THOUGHT
WAS MOMENTUM? only to get stopped out mins later…

This is how the market maker gets into your MIND and controls what you do.

“There is a pattern in the markets…, not in the chaotic series of transactions, but in the
MINDS of the market participants THEMSELVES”

HOW EMOTIONS MANIPULATE OUR PERCEPTION

Fear, for example, can affect low-level visual processes, sad moods can alter
susceptibility to visual illusions, and goal-directed desires can change the apparent size
of goal-relevant objects. In addition, the layout of the physical environment, including
the apparent steepness of a hill and the distance to the ground from a balcony can both
be affected by emotional states. We propose that emotions provide embodied
information about the costs and benefits of anticipated action, information that can be
used automatically and immediately, circumventing the need for cogitating on the
possible consequences of potential actions.
Most of us assume quite reasonably that as we look at a hill, for example, the steepness
of the incline in our visual image is more or less the steepness of the hill in the world.
The reality, however, is that the incline is far less steep than it appears (most people
perceive a 5 degree hill to be 20 degrees or more). Moreover, our perception of the
steepness will change from one occasion to the next depending on our mood. For
example, when we are feeling sad, we will perceive the hill to be steeper than when we
are feeling happy. Such findings indicate that the perception of spatial layout is in fact
influenced by non-optical factors, including emotion.

A chief function of emotion is to interrupt and reorder processing priorities.

Thus, even the most avid trader is likely to close his position upon noticing that his
house is on fire.. Even though the danger is not in the Market, but in his own mind.

People sometimes say that a person “can’t see the forest for the trees.” In doing so,
they imply an incompatibility between perceptions of details and perceptions of wholes.

Emotion also influences whether people focus on the forest or the trees.

When investigators induce happy or sad moods (for example, by having participants
spend a few minutes writing about a happy or sad event from their lives), participants in
happy moods often adopt a global perceptual style, whereas those in sad moods adopt
a local perceptual style

Now take this into the market place, when you are happy you look at the larger picture
(market traps, trend, general direction of market). however when you are sad or in fear,
you may pay closer attention to each individual candlestick on your chart and try to
interpret their meanings
LESSON #4 - A TRAUMA
BASED MARKET

The market makers main goal is to make money, he will do this by any
means necessary. even if this means mimicking the emotional response
structure of a catastrophic disaster. Yes, this is the game they have
played on us. By entering the market we have submitted ourselves into
an emotional battlefield and I can prove it.
ABOVE IS A CHART DEPICTING THE EMOTIONAL RESPONSE OF A
DISASTER.

HERE IS GBPUSD ON A 4HR TIME FRAME

The exact same structure! this structure plays out on every
timeframe and is sometimes referred to as the dealers
"play book" or his "business model".

The dealer is in the business to take your money, and this

is how they structure the market to do so!

This is why success in these markets are 90% dependent

on emotional control and 10% strategy!
LESSON #5 - MICRO AND
MACRO

This pattern plays out in micro and macro to form on all time frames. Above is an
example image of the micro within the macro.

Examples of macrocosm and microcosm are found throughout nature. It is also

the structure of a hologram, each part is contained within the whole and the
image of the whole is reflected within the confines of each part.
 ANOTHER WORD TO DESCRIBE THIS CONCEPT IS "FRACTAL"

FRACTALS are never-ending patterns... Fractals are infinitely complex patterns that are
self-similar across different scales. They are created by repeating a simple process over
and over in an ongoing feedback loop. Driven by recursion, fractals are images of
dynamic systems – the pictures of Chaos. Geometrically, they exist in between our
familiar dimensions. Fractal patterns are extremely familiar, since nature is full of
fractals. For instance: trees, rivers, coastlines, mountains, clouds, seashells, hurricanes,
etc. Abstract fractals – such as the Mandelbrot Set – can be generated by a computer
calculating a simple equation over and over.

The dealer has to make different variations of the pattern micro/macro pattern
above, in order to keep retail traders blinded to what is really happening.

BELOW ARE A FEW EXAMPLES OF THESE VARIATIONS OR "FRACTALS"

It is the same pattern , expressing itself in many different forms and variations
but with the same principle.

We must realize that the people that created this system had a very great
understanding of human nature and the fractal geometry that make up our
thoughts, emotions and reality.

This is how the market is structured! this works on every market and every
currency pair, why? Because the only thing in common with all markets, is the
market participants. the emotional response to price will always be the same no
matter what market or currency you are trading.

Your task will be to recognize this pattern as it is being made and not take any
trades until you fully understand this structure. once you have seen different
variations of this pattern, it will become much easier to recognize them as the
dealer created them. We will go more into detail on exactly how and why the
dealers structure the market this way in coming lessons.
LESSON #6 - MANIPULATION
BASICS
To understand how the market is manipulated, let’s forget everything we were
ever taught as a retail trader about technical analysis.

If it were really that easy why do 95% of all traders fail? Why does the average
trader using the mainstream form of technical analysis blow his account within
the first 3 months of trading? Why is it that most traders using technical analysis
take 10+ years to even become profitable?

OMS ~ ORDER MANAGEMENT SYSTEM

What is the order management system?

When a retail trader places a trade through his or her broker, the broker then
transfers all the orders into an order management system and sends that
information to the bank where a "Market Maker" can use the information and put
it through an algorithm that will make specific patterns in the market according to
where retail traders have their orders.

So, your order is going through an algorithm that scans your entry point, stop
loss, and take profit. this algorithm then fluctuates according to the mass amount
of orders it is receiving and where the retail traders have placed their stop losses,
with the intent to hit as many stop losses as possible while at the same time
avoiding to hit take profit level areas of retail traders.

You see we are the retail herd, we are very susceptible to persuasion in any way
or form and will do what the majority of others are doing just because we feel
more confident in our trades when someone else can back us up.
ABOVE WE CAN SEE WHAT IS THE MT4 MANAGER STATION OR OTHERWISE KNOWN AS
THE “DEALERS DESK” USED TO MANIPULATE SPREAD, MARKET PRICE, OPEN AND
PENDING ORDERS, ECT.

OUR MAIN GOAL IS TO GO COMPLETELY AGAINST THE RETAIL TRADER HERD.

WHAT YOU LEARNED AS A RETAIL TRADER, IS WHAT IS KEEPING YOU FROM

GOING ANYWHERE. FOLLOW THE PATH LESS FOLLOWED AND YOU WILL SEE
SUCCESS!
 MANIPULATION OF SPREAD

The difference between ask and bid is called spread. It represents the brokerage
service costs and replaces transactions fees. Spread is traditionally denoted in
pips ~ a percentage in points, meaning fourth decimal place in currency
quotation.

Almost all retail traders are using what is called a variable spread. Variable
spreads are set by brokerage firms / hedge funds to fluctuate in correlation with
market conditions. Generally variable spread is low during times of market
inactivity (1-2 pips), but during volatile market times such as news events. The
market maker can actually widen the spread to as much as 40 to 50 pips or more!

BUT!! Not only is spread used as service cost, it is also used to pick up the
orders "break out traders" place on the other side of trendlines and in certain
zones of high liquidity! See the example below.
 STOP HUNTS
A "STOP HUNT" IS WHEN THE MARKET SPIKES IN ONE DIRECTION OR THE
OTHER HITTING THE STOP LOSSES OF EITHER SELLERS OR BUYERS, WHILE
AT THE SAME TIME INDUCING TRADERS TO ENTER THE MARKET.

STOP HUNTS CAN OCCUR AT ANY TIME, BUT ARE MOST LIKELY TO OCCUR
DURING VOLATILE NEWS EVENTS.

BELOW ARE A FEW EXAMPLES OF "STOP HUNTS" AND "WHIPSAWS"

WHAT IS A "WHIPSAW"?

A WHIPSAW IS A TERM USED WHEN MARKET MAKERS MAKE THE PRICE OF A

CURRENCY PAIR SPIKE IN ONE DIRECTION, BUT IS FOLLOWED QUICKLY BY A
MOVEMENT IN THE OPPOSITE DIRECTION.
 PATTERN MANIPULATION

Pattern Price Manipulation: "A known pattern forms on the chart, once the market
maker completes the pattern and Induce the masses to enter the market, they will
be shown profit for a short time (20 to 30 pips) tricking the weak amatures to risk
more money and take more trades. The market then goes completely against
them the opposite way hitting stop losses and blowing accounts.

TRAP ZONES

The dealer uses “Trap Zones” to trap a certain amount of liquidity in a specific
price range then swings the market in one direction leaving the liquidity in that
zone trapped.

HOW TO DRAW AND CONFIRM A TRAP ZONE & A TRAP MOVE

TRAP MOVES OCCURON EVERY PAIR

& EVERY TIMEFRAME

HERE IS AN EXAMPLE ON THE 1 MIN CHART PAIR: USDCHF

TRADER BEWARE! THIS TRADE IS ONLY VALID IF PRICE ENTERS OUR ZONE A
CERTAIN WAY.. NOT ALL MOVES ARE TRAP MOVES, WE MUST BE ABLE TO
IDENTIFY OUR CONFIRMING ENTRY TO VALIDATE THE TRADE.

WHAT IS OUR CONFIRMING ENTRY?

...ONCE PRICE ENTERS OUR ZONE, WE WAIT THE NEXT 3 CANDLES TO SHOW
THE GENERAL DIRECTION OF THE PRICE .

HOW TO DETERMINE IF A TRAP MOVE HAS BEEN VALIDATED?

1. LOOK FOR A LARGE "WICK CANDLESTICK" INSIDE OUR TRAP ZONE (SEE
EXAMPLES BELOW)

2. LOOK FOR A SET OF "RAILROAD TRACKS" THAT CLOSE OUTSIDE THE ZONE
AND RAPIDLY REJECT

3. "STAR" FORMATION, RAPIDLY FORMING AND REJECTING IN AND OUT OF

OUR ZONE.

4. A MARKET GAP INTO A ZONE (RARE, BUT HAPPENS)

BELOW ARE SOME EXAMPLES OF A CONFIRMING ENTRY

LESSON #7 - HIGH IMPACT
NEWS EVENT MANIPULATION
HIGH IMPACT NEWS EVENTS PLAY A MASSIVE PART IN MARKET
MANIPULATION. MANIPULATING A MULTI TRILLION DOLLAR MARKET
WITHOUT GETTING CAUGHT ISN'T EASY, BUT WHAT IF THE MANIPULATION
COULD BE HIDDEN IN PLAIN SIGHT?

DEALERS USE THESE HIGH IMPACT EVENTS TO HIDE THEIR MOVES. DEALERS
NEED TO TRAP AS MANY TRADERS AS POSSIBLE AND AS FAST AS POSSIBLE,
A NEWS EVENT IS A PERFECT DISTRACTION USED TO SPIKE THE MARKET IN
THEIR FAVOR. THINK ABOUT IT, EVEN SPREAD IS WIDEND ON MOST
BROKERAGES DURING NEWS EVENTS... JUST ANOTHER ADVANTAGE FOR
THE DEALER TO TRAP MORE RETAIL TRADERS!
IN THE EXAMPLE ABOVE WE CAN SEE MULTIPLE "TOOLS" BEING USED ON
OUR GRAPH.

USING A COMBO OF TREND LINES, LEVELS OF SUPPORT AND RESISTANCE

AND ZONES, WE CAN SEE EXACTLY WHERE PRICE HAS THE HIGHEST
PROBABILITY TO TRAP AND DROP!

IMPORTANT! ~ THE CHART ABOVE SHOWS A CLEAR DOWNTREND. NEVER

TRADE AGAINST THE MAJOR TREND

TRADING AGAINST THE TREND IS NOT RECOMMENDED.

THE TREND IS YOUR FRIEND

LOOKING AT THE ANALYSIS ABOVE, WE CAN SEE CLEAR TRAP AND DROP
ZONES IN WHICH THE MARKET HAS THE HIGHEST PROBABLE CHANCE OF
CONTINUING THE DOWNTREND.
 Above is one of the largest market crashes in GBP history, Brexit. The news said
Brexit was an impossibility. Yet you can see the perfect whipsaw pattern playing out
days before Brexit actually happened!
LESSON #8 - MARKET
STRUCTURE

The graph above is a normal cycle of the market based on a 15 min candle chart. Daily
market cycle consists of consolidation, whipsaw, then a continuation of the main trend.
 CONSOLIDATION

THE DAILY CONSOLIDATION PHASE STARTS AT SESSION

CHANGEOVER (4PM~CT) AND CAN LAST ANYWHERE FROM
4 TO 8 HOURS.

DURING THIS PHASE, THE MARKET WILL CREATE A 25 TO

35 PIP CHANNEL AND MOVE SIDEWAYS IN THAT CHANNEL
UNTIL LONDON SESSION.

THIS CONSOLIDATION PHASE HELPS CREATE A FEELING

OF SUSPENSE IN THE MINDS OF RETAIL TRADERS AND
ALSO HELPS SHORTEN THE TIMEFRAME IN WHICH THE
MARKET CAN MOVE.
You will see variations of this structure on every graph of every currency pair! This is the
fundamental framework on which the market is designed.
The consolidation phase is setup to keep traders jammed up in the same price range
with very little movement for extended periods of time thus creating a state of fear and
panic in the retail traders mind forcing the weak out of their positions.

WHIPSAW

A fake-out or whipsaw will almost always be formed after consolidation. this is to make
traders believe that the market is going in a certain direction then pull the market in the
opposite direction of the fake-out!
We can see moments after consolidation, the market creates a new high of the day and
breaks out of consolidation. most retail and technical traders would buy as soon as they
see a breakout of consolidation, but it turns out it was only a fake-out to induce buyers
into the market.

You can see the market moved substantially in the opposite direction after the fakeout
occurred. this is to move the price away from the fakeout zone and and to hit buyers
stop losses before the retail traders can react.

This race to hit stop losses also creates a new low of the day, inducing sellers to enter
the market, price then swings up to hit stop-losses of sellers. this motion of creating
both a high and a low and inducing both buyers and sellers is called a whipsaw!

Now you might be thinking.. how do i trade the whipsaw?

Combine the knowledge of theconfirming entry with the fakeout after consolidation, then
ride the whipsaw. these trades can be hard to catch because they happen fast, but are
very rewarding if mastered correctly.

CONSOLIDATION AND WHIPSAW VARIATIONS

Consolidation occurs at the very beginning of every session and

at the very end of every session creating a zone of
consolidation during every session changeover.

If you use tradingview.com, you can right click on the graph to

see a list of settings, scroll down to the "time scale" tab and
click on "session breaks."
This helps spot exactly when the session changeover /
consolidation period is taking place.
 WEEKLY MARKET STRUCTURE

IN THE WEEKLY CYCLE WE SEE A CLEAR EXAMPLE OF AN

UPTREND, HIGHER HIGHS AND HIGHER LOWS. WE CAN ALSO SEE
THAT THESE "HIGHER HIGHS" AND "HIGHER LOWS" ARE CREATED
BY THE "WHIPSAW" ACTION THAT HAPPENS ON OUR DAILY
CYCLE. THIS WHIPSAW ACTION IS WHAT GIVES THE MARKET IT'S
continuous up and down RYTHM.
 SUNDAY-FRIDAY

THE BEGINNING OF THE WEEK AND THE END OF THE WEEK ARE "FAKEOUT
DAYS."

SUNDAY IS A FAKEOUT DAY BECAUSE THERE ARE MILLIONS OF RETAIL

TRADERS AT THE EDGE OF THEIR DESKS WITH TWITCHING FINGERS ON
THEIR KEYBOARDS JUST WAITING FOR THE MARKET TO OPEN!
BELIEVE IT OR NOT, THE DAYS THAT THE MARKET ISNOT OPEN IS SIMILAR TO
THE "CONSOLIDATION PHASE" THAT HAPPENS. TRADERS ARE HELD IN
SUSPENSE FROMFRIDAY TO SUNDAY... AND AS SOON AS THE MARKET
OPENS THE SUSPENSE IS FREED AND THE RETAIL TRADERS FEEL THE NEED
TO TRADE.

ONE THING YOU WILL NEED TO LEARN TO BECOME A MASTER AT TRADING IS

THAT IT TAKES TIME AND PATIENCE. THE ENTIRE MARKET IS DESIGNED TO
TAKE MONEY FROM THE IMPATIENT RETAIL TRADERS WITH THE "GET RICH
QUICK" MENTALITY.

BELIEVE IT OR NOT.. FRIDAY IS ALSO A "FAKEOUT" OR "TRAP" DAY. THIS IS

BECAUSE THE MARKET CLOSES ON FRIDAY AND DOESN'T OPEN UNTIL
SUNDAY. TRADERS THAT LEAVE THEIR POSITIONS OPEN OVER THE
WEEKEND, ARE AT RISK TO HAVE THEIR STOPLOSSES JUMPED AND THEIR
ACCOUNTS BLOWN.

WAIT WHAT? MY STOPLOSS CAN BE JUMPED?

 YES. THE MARKET CAN LITERALLY OPEN ON THE OTHER SIDE OF YOUR
STOPLOSS AND DRAIN YOUR ACCOUNT WHILE YOU SIT BACK THINKING
YOUR STOPLOSS WILL SAVE YOU IF ANYTHING HAPPENS OVER THE
WEEKEND.

IT IS BEST NOT TO LEAVE POSITIONS OPEN OVER THE WEEKEND BECAUSE

OF THIS.

WEDNESDAY~THURSDAY

THE "MIDDLE" OF THE WEEK IS THE MOST VOLATILE TIME IN THE MARKET.
check your forex news calendar and see for yourself. Wednesday and thursday
are always the days with the most "high impact" events.

this is all setup like this for a reason.

Wednesday and thursday are usually correction days, where the market corrects
against or with the trend depending on which direction the market was going at
the start of the week.

FOREX TIME CYCLES ~ WHEN TO TRADE

THERE IS A TIME TO TRADE, AND A TIME TO REST. IF YOU DONT KNOW WHEN
THE MARKET MAKES ITS MOVES.. YOU COULD BE WAITING FOR HOURS
BEFORE YOU REALLY SEE THE TYPE OF VOLATILITY IN THE MARKET THAT
YOU WERE WAITING FOR. YOU SEE THE MARKET MAKERS USE TIME TO THEIR
ADVANTAGE AND WILL KEEP PRICE IN A SPECIFIC ZONE FOR EXTENDED
PERIODS OF TIME BEFORE MOVING TO A DIFFERENT ZONE TO CONTINUE THE
CONSOLIDATION CYCLE.
 THE CONSOLIDATION CYCLE WILL BEGIN 5 HOURS BEFORE SESSION
CHANGEOVER AND LASTS NORMALLY 10 HOURS OR MORE. DURING THIS
CONSOLIDATION PHASE PRICE WILL MOVE SIDEWAYS IN A GIVEN RANGE,
THIS RANGE IS NORMALLY 20 TO 35 PIPS. THIS HAPPENS ON EVERY PAIR IN
FOREX! THIS IS WHEN THE AUTOMATED MARKET MAKER ALGORITHM TAKES
OVER TO "GENERATE LIQUIDITY".
 ONCE YOU CAN SPOT THESE TIME CYCLES , KNOWING WHEN TO EXECUTE
YOUR TRADES BECOMES MUCH EASIER.

FOREX IS DESIGNED THIS WAY BECAUSE IT MIMICS THE STOCK MARKETS

BEHAVIOR WHICH IS SETUP TO FUNCTION AROUND THE BEHAVIOR OF RETAIL
TRADERS TARGETED IN THE UNITED STATES. YOU SEE THE MARKET IS
DESIGNED TO MOVE THE MOST WHEN THE "DUMB MONEY" IS SLEEPING, AND
MOVE THE LEAST WHEN "DUMB MONEY" IS ACTIVELY TRADING. ALTHOUGH
THERE ARE TRADERS BASED ALL AROUND THE WORLD, THE SYSTEM WILL
ALWAYS MIMIC THE DESIGN OF THE STOCK MARKET BECAUSE THEY BOTH
WORK OFF THE SAME CONCEPTS.
LESSON #8 - REVERSAL
FORMATIONS
Remember a few lessons ago when I promised to teach you how to catch trades with up to 1:10 or even 1:20
risk reward ratio with little to no drawdown? This is that lesson.

Just in case you doubted what I said about making 1:20 risk reward ratio trades, I saved my MyFXBook Stats
from my first week of trying out this strategy. Here are my results.
THE TRADES YOU SEE ABOVE ARE ALL SECOND LEG "M" OR "W" REVERSAL
FORMATIONS. LOOK AT THE TIME SPENT PROFITABLE, AN AVERAGE OF
OVER 85% OF THE TIME I WAS IN PROFIT ON ANY TRADE I TOOK!

CHECK OUT THE RISK VS REWARD ON SOME OF THE TRADES ARE OVER
1:21!! IF I DIDN'T HAVE THESE STATS TO PROVE IT IM SURE YOU WOULD
OTHERWISE THINK I WAS LYING. I SURE WOULD BE SKEPTICAL TOO, BUT THE
UNDERSTANDING OF THE REASONING BEHIND WHAT IS HAPPENING IS WHAT
MAKES IT ALL OF THESE TRADES POSSIBLE!

THIS IS THE LAST FOREX STRATEGY YOU WILL EVER NEED.

M / W FORMATIONS OR "DOUBLE TOPS/BOTTOMS" ARE COMMON REVERSAL

SIGNS.

NOW BEFORE GOING OFF TO THE CHARTS AND START TRADING EVERY M / W
YOU SEE, LETS GO OVER SOME CHARACTERISTICS OF THESE PATTERNS,
AND WHY THEY HAPPEN.

CAN YOU SEE THE "M" ?

MARKET MAKERS NEED TO MAKE TRADERS BELIEVE THAT THE TREND WILL
CONTINUE, SO THEY WILL OFTEN SPIKE TO OR PAST THE HIGH VERY FAST
WITH ONE LARGE CANDLE.
NOW THAT WE HAVE SEEN THEIR MAIN PATTERN, WE HAVE TO INTERPRET
THE VARIATIONS OF THE PATTERN BECAUSE THE DEALER IS NEVER GOING
TO GIVE THE EXACT SAME PATTERN EVERY TIME.

BELOW ARE A FEW VARIATIONS OF THE M AND W PATTERNS THAT OCCUR

M FORMATION AT HIGH OF DAY LONDON SESSION
M AND W FORMATIONS CAN BE TRADED ON ANY TIMEFRAME, HERE ARE
SOME EXAMPLES OF THE M'S AND W'S ON HIGHER TIMEFRAMES

**THESE ARE ONLY RANDOM EXAMPLES DEPICTED, NOT EVERY PATTERN WILL BE THE
SAME. EACH PATTERN IS A FRACTAL OF THE SAME VARIATION. DO YOUR HOMEWORK
AND LEARN TO SEE THESE DIFFERENT VARIATIONS.
 THESE M AND W FORMATIONS ARE FOUND THROUGHOUT ALL
TIMEFRAMES,THE TIME FRAME DOES NOT CHANGE THE PATTERN, BECAUSE
THE PATTERN IS BASED OFF THE FEAR AND GREED INSTINCTS OF ALL
HUMANS. YOU COULD EVEN SAY THAT THE PATTERN IS NOT DUE TO THE
CHAOTIC SERIES OF TRANSACTIONS, BUT DUE TO HOW ALL HUMANS REACT
TO FEAR AND GREED.

WE NOW HAVE A GREATER UNDERSTANDING OF WHY THE DEALER FORMS

THESE M AND W PATTERNS. BELOW I HAVE LISTED SOME CHARACTERISTICS
OF WHAT TO LOOK FOR WHEN TRADING THE SECOND LEG M OR W.
 ENTRY/EXIT
THE MOST IMPORTANT ASPECT WHEN TRADING M AND W FORMATIONS IS
YOUR ENTRY. YOU CAN AND WILL START TO GET TRADES WITH 0
DRAWDOWN IF YOU KEEP PRACTICING PATIENCE. LET THE PRICE COME TO
YOU, THERE IS NO ABSOLUTELY NEED TO GET EMOTIONAL WHEN YOU ARE
TRADING M AND W FORMATIONS!!!! UNLESS YOU ARE OVER LEVERAGING
YOUR ACCOUNT, YOU SHOULD NEVER FEEL LIKE YOUR EMOTIONS WILL GET
THE BEST OF YOU WHEN TRADING. THESE M AND W SETUPS ARE DESIGNED
TO BE EXECUTED WITH PRECISION AND ACCURACY TO HELP ACHIEVE THE
BEST POSSIBLE RISK REWARD RATIO. YOUR GOAL IS TO ENTER SELLS AS
CLOSE TO THE HIGH AS POSSIBLE AND ENTER BUYS AT THE LOWEST POINT
POSSIBLE SO YOU CAN HAVE A VERY SMALL STOP LOSS AND MORE
POTENTIAL FOR REWARD!
STEP 1
STEP 2
 YOUR GOAL FROM NOW ON WILL BE TO LIMIT YOUR TRADES TO
ONLY SECOND "LEG" M AND W FORMATIONS, THROW EVERYTHING
ELSE AWAY THAT YOU HAVE LEARNED IN YOUR RETAIL REALITY AS
IT HAS DONE YOU NO GOOD, AND THIS IS WHY YOU ARE NOW HERE,
READING THIS.. YOU WANT TO FIND SOMETHING THAT WORKS! NOW
THIS IS OBVIOUSLY NOT A PERFECT STRATEGY, AND BY NO MEANS
AM I SAYING IT IS.. BUT IT IS A STRATEGY THAT CAN BE PERFECTED.

M/W REVERSAL FORMATION CONFIRMATIONS

* DID THE SECOND LEG OF THE M/W SPIKE PAST THE FIRST LEG?

* DID M OR W FORM AT HIGH OR LOW?

* DID M OR W SECOND LEG FORM OUR OF A WEDGE?

* WAS SECOND LEG REJECTED AT HIGH/LOW?

*DID THE SECOND LEG M OR W FOR A CONFIRMING ENTRY CANDLESTICK

PATTERN?
EXAMPLES OF M AND W FORMATIONS