How to rinse the banks - A forex guide

In short, trading is manipulated to its core so that people continue loosing money while
the big banks keep making more. Remember! In order to buy you must have someone to
sell and if you want to buy you must have someone to sell. Whoever wins takes the
money of the other. Trading is rigged so that only one side remains winning - the big
banks and institutions make an insane amount of money (more than you would believe
but we will keep this trading related). Retail traders are made to lose its that simple. All
the concepts that they use are common knowledge and even if they win it will be
manipulated.

For you now as a beginner trader or advanced this is a concept never to be forgotten. If
you trade with the retail side you are on the ultimate losing side. For purposes of keeping
this introduction short I will leave it as that. But this is the mindset you must have if you
really want to win trading.
Let us proceed.

Check this news article in which banks were actually fined 1 billion for manipulating the
markets. Unfortunately this is still the same today they have just got smarter about how to
do it.

https://www.theguardian.com/money/2019/may/16/uk-banks-barclays-rbs-fined-1b
n-by-eu-for-rigging-foreign-exchange-market

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Contents:

Chapter one : Phycology

Lesson one : Risk to Reward

Lesson two: Risk management
Lesson three: Trading in the zone

Chapter two : Market structure

Lesson one: Retail support & resistance zones

Lesson two : Supply and Demand
Lesson three: Institutional zones
Lesson four: Importance of daily time frame

Chapter three : Liquidity

Lesson one: What is liquidity ?

Lesson two: Candlesticks scam
Lesson three:Wick rejections
Lesson four: Liquidity grabs
Lesson five: True market direction and order flow

Chapter four: FU Candles / institutional candles

Lesson one: What are fu candles and what makes them valid
Lesson two: Pure examples to demonstrate its power
Lesson three: How to enter as they form on all timeframes
Lesson four: Limit order strategy

Chapter five: Imbalances

Lesson one: Imbalances for market direction

Lesson two: Refined Imalances for sniper entries
Lesson three: Imbalances as they form and how to utilize them

Chapter six: XAU/USD (case study)

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 Chapter One : Phycology

Risk to Reward

Without doubt this is the most important concept in trading, one that is overlooked by retail
traders who only focus on how many pips they have “caught” in reality they couldn't be more
wrong. This concept MUST be grasped before we even think about progressing further onto
market analysis.

In trading nothing is certain. NOTHING. No matter how good an analyst you are, the possibility
always remains that you could still be wrong. But how do we avoid this trap of trading? (because
that's what it is - a trap) simple. Risk to reward. How much are we risking ($ equivalent) for how
much reward. And this is the concept that traders don't understand hence why they will always
be losing. I feel the best way to make you as a reader understand will be a practical example.

Retail trader:

Lets see the difference between retail risk to reward (although most of them don't even know or
care for risk to reward) and institutional risk to reward. Here we have a classic example of
terrible risk to reward. It is a 1:2 RR. which means if they had risked 1% they would have made
a 2% return on that trade. Meaning their wins are only twice as big as their losses. Two losing
trades negate a winning one. Paired with the fact most retail traders have a loosing win rate
(below 50%) you can never make money trading this way. All the patterns they use to trade are

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publicly known and institutions hunt their stop loss thus further decreasing the win rate. Moving
on…

Institutional traders:

See the difference? A truly remarkable difference and honestly the biggest difference between
being profitable or a losing trader. Here we have the exact same example. However as
institutional traders we understand the importance of risk to reward and how it is EVERYTHING
trading. This particular example is a 1:103 RR trade. Meaning if you had risked 1% you would
make 103% back! See the possibilities now? Even if we lose 10 trades in a row one trade makes
it all back! This can never be done with silly risk to reward ratios such as 1:2. I personally had
the pleasure of taking this trade myself and only risked $800 for a $80000 return.

Please keep this concept in mind at all times! How do you improve as a trader? Work on
increasing your risk to reward ratio NOT the amount of pips you catch! I can't stress how
important this is if you truly want to make money and become profitable. This next picture really
says it all!

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 Risk Management

90% of all traders lose money. I'm sure you must have heard this statistic before. But why?
Surely it's not that hard? Why do people keep trading if they know 9/10 of people will lose
money? Trading is a game of the mind before anything else. This is why i have dedicated a full
chapter to just psychology because believe me… it will be hardest to master all through your
trading career. If your psychology isn't right, believe me.. No matter how good of an analyst you
are you will always lose. As a matter of fact, I haven't come across a SINGLE trader who hasn't
blown an account at least once. Now that's pretty crazy if you think about it. Everyone loses
money when they start. What puts consistent winners apart from the rest? Simple - their
phycology and ability to stick to a set of variables without letting their emotions affect them.

Two things will help you overcome this “hurdle” 1) high risk to reward trades (you risk very less
for incredible rewards) and 2) risk management - how much should one risk per trade?

We will think in terms of % (in relation to your account balance) and it is vital you do not think
in $ terms but rather %. I'm sure some of you have heard this 1% rule and for good reason too. It
means you would have to have 100 losing trades in a row to lose your capital and blow your
account (highly unlikely impossible in fact). However I disagree with this concept as we trade
with massive risk to reward so one win covers our losses by a big margin. Therefore I
recommend 3 % for larger account sizes and up to 5% for those of you growing a small account
(1% is simply impractical if you have a $100 account risking only $1 you wont make money for
a long time)

However, I must stress! Stick to a fixed % risk per trade and NEVER change it. You MUST keep
the variables on per trade as similar as possible in order to see a consistent result. Assuming you
have a 1:10 RR minimum per trade. That means even if you lose 10 trades one will cover that.
But if the % risk per trade varies this formula does not work. So stick to a fixed % risk

Why still do people blow accounts? They simply do not account for risk which is paramount if
you ever wish to be a consistently profitable trader. Humans are greedy and if you come with that
mindset in the markets.. Say goodbye to your capital. ALWAYS account for risk. It should be the
first thing you do before placing a trade.

Remember the main thing is to preserve your capital before making money. Remember this as a
rule whilst you trade and it will help you from making silly mistakes and getting emotionally
involved.

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 Trading in the zone
*A must read*

One of the turning points for my trading career was reading this book. It really is an eye opener.
If you are struggling with psychology I recommend you stop trading immediately and read this
book. It goes deep into market psychology and really gives you a whole new perspective on
trading.

I hope you as a reader don't skip this step because you will regret it. Before moving onto the next
chapter read it first. We must build the framework for a solid trading journey.

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 Chapter two: Market Structure

Retail support & resistance zones

No matter how amazing of a trader you think you are, market structure is always first. Price can
be manipulated but in the end market structure is first. Why do I teach the standard retail zones?
Because in essence it is right… price can not travel infinitely in one direction.

We will only use the daily time frame (its importance will be talked about in another lesson) and
the 4hr to refine it. Lets go through one on GBP/USD so you understand the concept.

Daily timeframe

All the places price reacted from we shall mark out. Don't worry about being 100% accurate
these purpose of us doing this is for a general understanding of the market. Then we go to the 4hr
time frame and further refine our zone. After I was done this is what I got:

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 After 4hr refinement

Now we have a much better look and understanding of the market. Reach one of these “zones”
represents an important area which price will likely react to. However it is not very precise hence
why we only use these as a possible reaction area but also to determine market direction.

Price MUST break and retest every zone before continuing in its desired direction. If price
suddenly smashes two zones we KNOW that price will have to come back for the retest in the
long run so we can determine our bais (opinion on buy/sell) using it. Maybe you will be able to
spot that instance in the above example.

Again this is not used as an entry point nor do we really care for its relevance apart from the fact
market structure is always first and must not be forgotten regardless of how experienced a trader
you are.

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 Supply and demand

Now we are getting into it. You have understood the basic principles of market structure which is
very important but also common knowledge and quite limited as these zones are very big without
any real accuracy.

Trading is always about understanding the markets, not just finding patterns and placing trades.
NO! It's far more deep than that. We must understand the principles behind each move and
supply and demand helps us with that. What is the market we see when we open up trading view
? Its nothing more than a means of showing us who is buying or selling. If more people buy -
price goes up. If more people sell- price goes down. It's as simple as that. However as the market
is full with an infinite amount of traders they often leave patterns which may be capitalized
hence how technical analysis became a thing. The point I want you to understand is that we as
people move the markets, not the charts. Maybe some of you knew this but it's an important
concept to keep in your mind

Why did I even include supply and demand? I debated with myself to include this or not as it is a
hard subject to explain and goes in a lot of depth (after all it is the fundamental of the market)

Simply put. Price will never move in one direction forever. It will ALWAYS either move
between supply and demand areas. Sort of like ping pong if the example helps you understand
better. In order to sell you must have a demand and in order to buy you must have supply!
Hopefully now you are grasping this concept and how important it is because this has to occur -
possibly the only thing certain about the markets.

See it shown in this example. It is not support /resistance but rather we identify the last area
where sellers/buyers were present. If price breaks it then we know it will move to a further area
of supply/demand

Institutional zones

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Here is where things really start to get interesting and the first step to finding sniper high RR
trades. It is truly mind blowing how just making this one tweak to your charts changes
everything.

Before we get into it we must first understand the concept of an “order block” It is an odd
bearish candle before/or during a big move up or a weird bullish candle before/or during a big
move down. This is the first concept we will learn that discusses market manipulation.

When banks/institutions want to move price up they simply can not just do so. Due to the
principle we discussed in the last subject “in order to buy you must have someone to sell and in
order to sell you must have someone to buy” Its crazy how this is exploited. What they do is
before wanting to move the price up they will open a large amount of sell orders (to push price
down) for two reasons.

1) So that they introduce sellers to the market (people seeing a bearish candle close will sell)
thus further increasing the supply - as they intend to buy.
2) So that they may get in at a “discounted” price. I.e move price down to a lower point than
it already is just so they can buy at better price

It may seem a little confusing to you at first but its important to understand the “science” behind
it. I've attached a link that will really help you understand the order block concept. We do NOT
use these for entries such as “smart money traders” do but rather we only use it to find accurate
zones (so ignore any parts they mention about entering using an order block)

https://www.priceactionninja.com/trading-ict-order-blocks/

Now that you have understood what an order block is let me demonstrate a few examples that
show its effectiveness and how to correctly draw our zones.

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