The basics of trading: markets, stock market, charts and candles
Introduction to the training trading
Welcome to ALGO DEUS training! You are about to begin a journey that will transform your view of trading and financial markets.
Before diving into charts and strategies, let's take a moment to lay the groundwork. This training is not like the others. She won't promise you easy wealth or guaranteed winnings. It will teach you a structured method, tested and proven to trade the Nasdaq with discipline.
Whether you are a complete beginner or you already have market experience, this training will give you a clear and actionable framework.
This training covers all the essential aspects to become an autonomous and profitable trader:
The fundamentals (Modules 1-5)
Advanced tools (Modules 6-10)
The ALGO DEUS method (Modules 11-15)
Each module builds on the previous one. Don't skip steps! Even if you think you already know certain concepts, you will probably discover a new angle or an important nuance.
1. Be patient
Trading is not a sprint, it's a marathon. You won't be profitable in a week. Accept that learning takes time.
2. Be humble
The market is always right. Your opinions are worthless in the face of price movements. Learn to observe before wanting to be right.
3. Be disciplined
The difference between an amateur trader and a profitable trader? Discipline. Follow the rules, even when it's frustrating.
4. Be curious
Ask questions. Question what you learn. Test for yourself. This is how we really progress.
Let's be clear from the start:
This is NOT a promise of easy gains
Trading is a difficult profession. The majority of retail traders lose money. This training gives you the tools to be part of the profitable minority, but it takes work.
This is NOT a magic method
There is no strategy that wins 100% of the time. You will have losses. The key is to gain more than you lose over time.
This is NOT a shortcut
Even with the best training in the world, you will have to spend hours practicing, analyzing your mistakes, and improving.
By following this training, you agree to:
In the next lesson, we will see in detail the precise objectives of this first module and what you will be able to do at the end. Here we go!
What you will know at the end of this module
Before diving in topic, let's take a moment to understand exactly what you're going to learn in this first module and why it's fundamental to the rest of your journey.
Many beginner traders want to jump straight into strategies and trades. This is a fatal error. Without understanding the fundamentals of the markets, you are building on sand.
This module is the foundation of everything that will follow. Take the time to assimilate it.
At the end of this module, you will be able to clearly explain:
Why is it important?
Many traders lose money because they don't understand who they are playing against. Knowing the rules of the game is the first step to winning.
You will discover the main markets that you can trade:
Why is it important?
Each market has its characteristics. Knowing which one is right for you is essential for your success.
You will understand the fundamental mechanism that makes all prices move:
Why is it important?
Everything in trading follows from this principle. Once you master it, you see the market differently.
You will learn to:
Why is it important?
The chart is your main tool. You will spend hours analyzing it. You might as well know how to read it correctly.
At the end of the module, you will know:
Why is it important?
Trading is 80% psychology, 20% technique. Understanding your role and your state of mind is crucial.
After this module, you will be able to:
At the end of this module, ask yourself these questions:
If you answer "yes" to all of these questions, you are ready for Module 2.
Level 1 - You have seen the content
You have watched the lessons but you would have difficulty explaining the concepts.
Level 2 - You understand
You can explain the concepts in your own words.
Level 3 - You have assimilated
You can apply these concepts by looking at a real graph.
Level 4 - You have mastered
You can teach these concepts to someone else.
Aim for level 3 minimum before moving on to next module.
1. Going too fast
"I already know that, I'll pass." Error. Even basic concepts have important nuances.
2. Don't take notes
Your brain forgets 70% of what it learns in 24 hours. Write to remember.
3. Not practicing
Watching videos is not enough. Open a graph and observe.
4. Want to trade right away
This module is theoretical for a reason. Practice will come later.
Now that you know what to expect, let's get to the heart of the matter. In the next lesson, we will answer THE fundamental question: What is a financial market?
Understanding the basic principle of markets
You've probably already heard about "financial markets" in the news or on social media. But do you really know what it is?
Before placing your first trade, it is essential to understand where you are putting your feet. A financial market is not a casino, although many treat it as such. It is a complex ecosystem with its rules, its actors and its own logic.
In this lesson, we will demystify this concept together, in a simple and concrete way.
A financial market is a place (today mainly virtual) where buyers and sellers meet to exchange assets
These assets can be:
Financial markets have existed for centuries. The first organized stock exchange appeared in Amsterdam in 1602 with the East India Company.
Since then, the markets have evolved:
Today, financial markets represent thousands of billions of dollars traded every day.
Contrary to what many think, you do not buy directly from "the stock market". You go through an intermediary called a broker (broker) who transmits your order to the market.
When you click on "Buy":
All this happens in a few milliseconds.
Equity market
This is the best known. You buy shares of listed companies (Apple, Amazon, Total...).
Foreign exchange market (Forex)
The largest market in the world. We trade currencies: EUR/USD, GBP/JPY...
Index market
We trade baskets of stocks: the Nasdaq 100 (100 largest US tech companies), the S&P 500 (500 largest US companies), the CAC 40 (40 largest French companies).
Commodity market
Gold, oil, natural gas, wheat, coffee... Commodities as we call them.
Cryptocurrency market
The new kid on the block: Bitcoin, Ethereum, and thousands of others.
Each market has its opening times (Paris time):
| Market | Opening | Closing |
|--------|----------|-----------|
| Tokyo | 01:00 | 07:00 |
| London | 09:00 | 5:30 p.m. |
| New York | 3:30 p.m. | 10:00 p.m. |
| Forex | Sunday 11 p.m. | Friday 10 p.m. |
Forex is almost always open because there is always a financial center open somewhere in the world.
Imagine that you want to buy Apple shares.
It is 4:00 p.m. in Paris (10:00 a.m. in New York). You open your trading application and you see that Apple stock is worth $185.50.
You decide to buy 10 shares. You click "Buy".
At this precise moment:
If tomorrow Apple is worth $190, your 10 shares are worth $1,900. You earned $45.
If Apple goes down to $180, your 10 shares are worth $1,800. You lost $55.
That's the basic principle of trading.
Think of a flea market on Sunday morning.
There are people who want to sell their old items, and people who are looking for bargains.
Financial markets work exactly the same, but on a global scale and in milliseconds.
The only difference? At the flea market, you see people. In financial markets, you only see prices that move.
1. Believing the market is against you
The market has no feelings. He doesn't know you exist. It simply reflects all the buying and selling decisions of millions of participants.
2. Thinking it's a game of chance
Prices move for specific reasons: economic data, business decisions, mass psychology, institutional flows. Understanding these reasons is your job as a trader.
3. Underestimate the size of the players
You with your €1,000, you are facing banks that are making billions. You don't move the price, you adapt to those who do. This is a reality to accept.
4. Ignoring Times
Trading when the market is closed or illiquid is a recipe for losing money. Every market has its optimal times.
You now know what a financial market is in broad terms. But how does it actually work when the price moves?
In the next lesson, we'll look at a simple, visual example so you understand exactly how a price goes from 100 to 105, and what that means.
The law of supply and demand
In the previous lesson, you discovered what a financial market is. Now, let's see concretely how it works with a simple example that you will never forget.
Many beginners think that prices move mysteriously or randomly. In fact, it makes a lot of sense once you understand the basic mechanism.
Ready to see the market from a new perspective?
Imagine a table with two columns:
This is what we call the order book.
The current price of an asset is the last price at which a transaction took place.
If the last Apple stock traded at $185.50, then the "price" of Apple is $185.50. Simple.
But this price is constantly changing because new transactions take place every second.
At any time, there are two important prices:
The difference between the two is called the spread.
Example:
If you want to buy immediately, you pay the Ask ($185.52).
If you want to sell immediately, you receive the Bid ($185.48).
Let's imagine a fictitious stock "TechCorp" which opens at €100.
9:00 a.m. - Market opening
9:15 a.m. - Good news falls
TechCorp announces better than expected results. Buyers are rushing.
Price: 100€ → 100.50€ in a few minutes.
10:30 a.m. - The frenzy continues
12:00 p.m. - Break lunch
2:30 p.m. - An analyst expresses doubt
A respected analyst says that TechCorp is overvalued. Panic sets in.
5:30 p.m. - Closing
The price moved because of:
It's not magic, it's pure logic.
Imagine an auction.
A Picasso painting is put up for sale. The auctioneer announces: “Auction: 1 million euros!”
The price rises because there are several buyers competing.
If suddenly, an expert says that the painting could be a fake:
In the financial markets, this is exactly the same thing, but with millions of participants and milliseconds between each "auction".
When you look at a price chart, you see the result of all these transactions.
Price
|
105| *
104|
103| **
102| *
101| *
100|*
|________________________
9 a.m. 12 p.m. 3 p.m. 5 p.m.
Each point on the chart represents the price at a given time, itself the result of thousands of transactions between buyers and sellers.
Below the chart, you will often see bars of volume.
Large volumes often appear:
1. Thinking that price “should” go somewhere
Price goes where buyers and sellers take it. Not where you think it should go.
2. Ignore the spread
On small accounts, the spread can eat up a significant portion of your winnings. Take it into account.
3. Trading during off-peak hours
When there are few participants, prices can move erratically. Spreads are widening. Avoid these moments.
4. Forget that every transaction has a counterpart
If you buy, someone sells to you. If you sell, someone buys from you. Always ask yourself: "Who is in front of me?"
You now understand how the price is formed in concrete terms. But why are companies listed on the stock exchange? What is it really for?
This is what we will see in the next lesson: What is the stock market for?
The role of the stock market for businesses
You now know what a financial market is and how prices are formed. But a fundamental question remains: why does the stock market exist?
It is not just a big casino where traders play with money. The stock market has a crucial economic role that every trader should understand.
In this lesson, we'll explore the real purpose of the stock market, and why it's important to you as a trader.
Let's imagine you're creating a tech startup. At the beginning, you use your savings. Then you call on your family, your friends. Then private investors (business angels, venture capital funds).
But there comes a time when you need much more money to develop: build factories, recruit 1000 employees, conquer new markets.
This is where the stock market comes in.
IPO = Initial Public Offering (Initial Public Offering)
This is the moment when a private company goes public by selling shares (shares) to the general public.
Famous example: Facebook
With these $16 billion, Facebook was able to:
Without the stock market, Facebook would probably have remained a small social network among others.
1. Raising capital
This is the most obvious. The company gets new money to invest.
2. Gain credibility
A listed company is perceived as more serious, more transparent.
3. Attract talent
Stock options (free shares for employees) are a powerful recruitment tool.
4. Allow founders to “exit”
Founders and first investors can sell part of their shares and recover their investment.
Being listed is not free:
1. Mandatory transparency
The company must publish its financial results every quarter. Everything is public.
2. Shareholder pressure
Shareholders want dividends and an increase in share price. This can create short-term pressure.
3. Significant costs
Introduction fees, lawyers, audits, financial communication... It adds up.
4. Vulnerability to Takeovers
A listed company can be bought if someone buys enough shares.
2003: Tesla is founded by Martin Eberhard and Marc Tarpenning
2004-2009: Private fundraising, Elon Musk becomes the main investor
2010: Tesla goes public (IPO)
Without the stock market, Tesla would probably no longer exist. She would have gone bankrupt due to lack of financing.
Imagine that you want to open a restaurant but you don't have enough money.
Solution 1: The bank
You borrow €100,000. You have to repay with interest. If your restaurant fails, you have a debt.
Solution 2: The stock market (on a small scale)
You “sell” 40% of your restaurant to investors for €100,000. You don't have to repay anything. In exchange, they own 40% of your restaurant and will receive 40% of the profits.
This is exactly what listed companies do, but on a large scale with millions of shareholders.
When Tesla went public in 2010, it sold its shares directly to investors. This is the primary market.
After the IPO, these shares are exchanged between investors. This is the secondary market.
You, as a trader, operate on the secondary market. You do not buy from Tesla directly, but from another investor who wants to sell.
You participate in the price formation and the liquidity of the market.
Without traders, the market would be illiquid and inefficient. Companies would have more difficulty raising capital.
Let's be honest: most retail traders don't care about the economic role of the stock market. They just want to make a profit.
And that's OK. But understanding the broader context helps you:
1. Confusing investment and trading
The investor buys to become a long-term owner. The trader seeks to profit from short-term price variations. Two different approaches, both valid.
2. Ignoring the fundamentals
Even if you're a technical trader, understanding what the company does helps you anticipate reactions to news.
3. Believe that the price always reflects reality
The price reflects the PERCEPTIONS of the participants. A company can be overvalued for years before reality catches up.
The stock market therefore has an important economic role. But concretely, what does this mean for you as a trader?
This is what we will see in the next lesson.
The basic principle of trading
You now know that the stock market is used to finance businesses. But you are not here to finance Tesla or Apple. You are here to trade.
What is the difference between an investor and a trader? What are the different types of traders? And above all, where do you fit into all of this?
This lesson will clarify your role and your options.
The fundamental difference:
The Investor
The Trader
Both approaches are legitimate. They require different skills.
1. The Scalper
2. The Day Trader
3. The Swing Trader
4. The Position Trader
Ask yourself these questions:
8:00 a.m. - Preparation
9:00 a.m. - 3:00 p.m. - Waiting
3:30 p.m. - US opening
4:00 p.m.-5:30 p.m. - Market slot trading
5:30 p.m. - End of session
Total active time: ~2-3 hours
That's day trading. This is NOT looking at screens 12 hours a day. It's being present at the right times with the right method.
Think about fishing.
The investor is like a deep-sea fisherman who goes out to sea for a week. It targets 200 kg tuna. He doesn't fish often, but when he catches something, it's huge.
The scalper is like someone fishing for shrimp with a net. He catches hundreds of small catches every day.
The day trader is like an angler on a lake. He catches a few nice fish every day and then goes home.
No method is better than the other. But you don't fish for tuna with a shrimp net.
1. 90% of retail traders lose money
This is a real statistic, not an empty number. Most drop out within the first year.
2. It's a job, not a hobby
Profitable traders treat it like a profession. Fixed schedules, routine, discipline, continuing education.
3. The gains are not regular
You can have 3 losing weeks then one very winning week. Regularity comes with experience.
4. The starting capital counts
With 500€, even with 10% gain per month (which is excellent), you earn 50€. Be realistic about your expectations.
5. Emotions are your worst enemy
Technique can be learned. Managing your emotions is the real challenge.
1. Wanting to become a scalper without experience
Scalping requires perfect execution and psychology of steel. Start with swing or day trading.
2. Trade every day at all costs
Some days there is no setup. Not trading is sometimes the best decision.
3. Change your style constantly
“Monday I scalp, Tuesday I swing, Wednesday I position trade.” Choose a style and master it before branching out.
4. Compare your beginnings to the results of the pros
A trader with 10 years of experience and you, a beginner, are not comparable. Focus on your own path.
You now know what type of trader you want to become. But what are you going to trade exactly?
In the next lesson, we will explore the different instruments available: stocks, Forex, indices, crypto... and which one is best suited to your profile.
The different financial instruments
Now that you know what a market is and what type of trader you want to become, a crucial question arises: what are you going to trade on?
Apple stocks? Bitcoin? EUR/USD? Nasdaq? Gold?
Each instrument has its characteristics, advantages and disadvantages. In this lesson, we'll explore the main options so you can make an informed choice.
1. Stocks
These are shares of companies listed on the stock exchange.
Examples: Apple (AAPL), Tesla (TSLA), Amazon (AMZN), LVMH
Advantages:
Disadvantages:
For whom?
Long-term investors term and swing traders
2. Forex (Foreign Exchange)
This is the currency market. You exchange one currency for another.
Examples: EUR/USD, GBP/JPY, USD/CHF
Advantages:
Disadvantages:
For whom ?
Day traders and scalpers who want time flexibility
3. Stock Market Indices
An index represents a basket of stocks. You trade the overall performance of a group of companies.
Examples:
Advantages:
Disadvantages:
For whom?
Day traders - This is what we trade in ALGO DEUS (Nasdaq 100)
4. Commodities
These are natural or agricultural resources.
Examples:
Advantages:
Disadvantages:
For whom?
Experienced traders and those who want to diversify
5. Cryptocurrencies
Decentralized digital assets.
Examples: Bitcoin (BTC), Ethereum (ETH), Solana (SOL)
Advantages:
Disadvantages:
For whom?
Traders with high risk tolerance and good asset management capital
Let's imagine the same day of trading on different instruments:
Apple stock (AAPL)
EUR/USD (Forex)
Nasdaq 100 (Index)
Bitcoin (Crypto)
Note: these figures are illustrative. Potential gains are accompanied by equivalent risks of losses!
Imagine that you want to play sports.
You don't train the same way for each sport. Same for trading.
In this training, we focus on the Nasdaq 100 for several reasons:
1. Optimal Volatility
Enough movement to make significant gains, not enough to get out of control.
2. Maximum liquidity
Millions of contracts traded every day. You can always come in and out.
3. Concentrated schedules
You don't need to be in front of screens 24 hours a day. The best opportunities come in specific niches.
4. Own technical trends
Nasdaq respects technical analysis and market structure concepts well.
5. Representativeness
It is the heart of the global economy (tech US). Understanding the Nasdaq means understanding the overall market.
We'll look at all of this in detail in Module 5.
1. Wanting to trade everything
“One day Forex, the next day crypto, then stocks…” You will never master anything. Focus on an instrument.
2. Choosing an instrument for the wrong reasons
“I heard Bitcoin is going up” is not a reason. Choose according to your strategy and your profile.
3. Ignore fees
Spread, commissions, overnight swap... Some instruments cost more to trade than others.
4. Underestimating the complexity of Forex
This is the market where central banks and large institutions dominate. Not the easiest place to start.
5. Being seduced by crypto without understanding
Volatility is seductive but dangerous. Many have lost fortunes in crypto.
You now know the different instruments available. But what actually moves the prices of these instruments?
In the next lesson, we'll dive into the fundamental mechanism: supply and demand.
The origin of price movements price
You have seen what a market is, how a price is formed, and on which instruments you can trade. Now, let's get to the heart of the matter: why do prices move?
Some people think it's random. Others believe it is manipulated. The truth is simpler and deeper: prices move because of the imbalance between supply and demand.
This lesson will change the way you view the market.
When there are more buyers than sellers, the price rises.
When there are more sellers as many buyers, the price goes down.
That's all. Everything else follows from this principle.
No need for complicated theories, conspiracies or mathematical formulas. This simple law governs 100% of price movements in all markets around the world.
Demand
It is the set of buyers and the quantity they want to buy at a given price.
Supply
This is the set of sellers and the quantity they want to sell at a given price.
The current market price is the point where supply meets demand.
At this exact price, there are as many buyers as sellers. The market is in "equilibrium".
But this balance is constantly disturbed by:
Each disturbance creates a imbalance, and the price moves to find a new equilibrium.
Initial situation
The announcement falls
Apple unveils the iPhone 20 with revolutionary features. Analysts predict record sales.
Reaction of participants
Imbalance created
New equilibrium
At $190, some former shareholders decide to take their profits and sell. New buyers find it too expensive and no longer buy.
Supply and demand rebalance at $190.
When you look at a chart, you see the trace of successive imbalances.
Price
|
190| **
185| **
180|**
|_________________
Time
Support Zone
This is a price level where historically, buyers have intervened. Demand is strong at this level.
Resistance zone
This is a price level where historically, sellers have intervened. The supply is strong at this level.
We will deepen these concepts in the next modules.
Imagine the real estate market in your city.
Normal situation
Houses sell for around €300,000. There are as many buyers as sellers.
A large company sets up shop
Google announces the opening of a campus of 5,000 employees in your city.
Balance regained
At €450,000, some find it too expensive and will live elsewhere. Owners are tempted to sell at this high price. Supply and demand rebalance.
Financial markets work exactly the same, but in seconds instead of months.
1. Institutionals
2. Central Banks
3. Companies
4. Retail Traders (You)
You cannot create imbalance. You must identify the imbalances created by the big players and position yourself in the right direction.
That's the whole art of trading.
1. Thinking the price “should” go somewhere
The price goes where supply and demand take it. Not where you think it should go.
2. Ignoring Context
An imbalance is not created without reason. Always try to understand WHY the price is moving.
3. Fight the trend
If demand is clearly greater than supply, don't try to sell. You face the train.
4. Overreacting to small movements
Every micro-movement is not a signal. Learn to filter out the noise.
Supply and demand are influenced by a crucial factor that many traders ignore: emotions.
The fear and greed of participants create irrational movements that savvy traders exploit. This is what we will see in the next lesson.
The impact of emotions on the market
You now know that Prices move thanks to imbalances between supply and demand. But what drives people to buy or sell en masse at the same time?
The answer can be summed up in two words: fear and greed.
Markets are a reflection of human emotions on a large scale. Understanding these emotions means understanding why certain price movements seem irrational - and how to take advantage of them.
Greed
The desire to earn more, faster. It encourages:
Fear
The fear of losing. It pushes you to:
Markets follow a predictable emotional cycle :
1. Optimism
“The market is rising, it’s time to buy!”
The first buyers are coming in.
2. Excitement
“It’s really going up! I made 20% in a month!”
More people are buying. The movement accelerates.
3. Euphoria
"I'm a genius! It's going to go up forever!"
Everyone buys, even those who don't know anything about it.
This is the point of maximum risk.
4. Anxiety
"Why is it falling? It's just a correction, it will go back up."
The price starts to fall, but people hold on.
5. Denial
"No, no, it will come back. It's just temporary."
The price continues to fall.
6. Fear
"I'm losing a lot... but I can't sell now."
The first sell at a loss.
7. Panic
"SELL EVERYTHING! Save what you can!"
Massive sale. The price collapses.
This is the point of maximum opportunity.
8. Capitulation
"It's over, I will never touch the stock market again."
The last ones sell at the lowest.
9. Return to optimism
The cycle begins again...
November 2021 - Euphoria
December 2021 - Anxiety
May 2022 - Fear
November 2022 - Panic/Capitulation
2023-2024 - Return to optimism
Traders who bought in panic ($15,000) and sold in euphoria ($69,000) made a fortune.
Those who made the opposite have lost everything.
Imagine a party with a buffet.
At the beginning (optimism)
The first guests arrive. There is a lot of food and few people. They help themselves quietly.
Later (excitement)
More people arrive. The buffet is filling up. The mood rises.
At the peak (euphoria)
Everyone is there. People jostle to get the best dishes. Some people take too much.
The turnaround (anxiety)
Someone says the food wasn't fresh. A few people leave.
Panic
A rumor of food poisoning. Everyone runs towards the exit at the same time. Stampede.
After (surrender)
The room is empty. Those who stayed calm realized that the food was excellent.
The market works the same way: collective emotions create excessive movements.
"Everyone is buying, I'm going to miss the train!"
You buy because you're afraid of miss an opportunity. Often, you buy at the worst time: when everyone has already bought.
Solution: Your strategy defines when you buy, not market movements.
You look for information that confirms what you want to believe.
Solution: Actively look for arguments contrary to your position.
Losing €100 hurts more than winning €100 feels good.
Result: you keep your losing trades (hope they go up) and you cut your winning trades (fear of losing your winnings).
Solution: Fixed rules. Non-negotiable stop loss. Take profit planned.
After a few winning trades: “I have become good, I can take more risks!”
This is often the moment when the big losses happen.
Solution: The same position size, the same risk management, always.
1. Trading under emotion
Have you just lost a trade? Do not take revenge by resuming a trade immediately. Take a break.
2. Follow the crowd
When everyone is bullish, the turnaround is near. When everyone is bearish, the rebound comes.
3. Ignore your emotional state
Before trading, ask yourself: “How do I feel?” Stressed, tired, euphoric = no trading.
4. Thinking you're immune
"These biases are for others, not for me." Fake. Everyone is subject to it.
Emotions are reflected on the charts of price. Now, let's learn how to read these charts.
In the next lesson, we will see what is a price chart and how to interpret it.
Introduction to price charts trading
So far, we have talked about markets, prices, emotions... But you see all this through a fundamental tool: the price chart.
The chart is the window on the market. This is where all the action takes place. Knowing how to read it is like learning to read a language: at first it's gibberish, then the patterns become obvious.
Welcome to the world of chart analysis.
A price chart is a visual representation of developments of a price over time.
It has two axes:
Each point on the graph tells you: "At this precise moment, the price was at this level."
1. The Simplest Online Chart
. A line that connects successive closing prices.
Price
| /\
| / \ /\
| / \ / \
| / \/ \
|__/____________\___
Time
Advantages: Simple, clear, shows the general trend
Disadvantages: Loses a lot of information
2. The Bar Chart (OHLC)
Each bar represents a period (1 minute, 1 hour, 1 day...) and shows:
| ← High
_|_ ← Close
| |
|_| ← Open
| ← Low
Advantages: More information
Disadvantages: Less visually readable
3. The Candlesticks Chart
Traders' favorite. Same information as the bars, but more visual.
| ← High wick (High)
███ ← Body (Open/Close)
| ← Low wick (Low)
Advantages: Very visual, recognizable patterns
Disadvantages: Requires learning
This is the type of graph that we use in this training.
Each candle represents a period of time :
| Timeframe | Each candle = |
|-----------|-----------------|
| M1 | 1 minute |
| M5 | 5 minutes |
| M15 | 15 minutes |
| H1 | 1 hour |
| H4 | 4 hours |
| D1 | 1 day |
| W1 | 1 week |
| MN | 1 month |
Important: The same graph can appear totally different depending on the time unit!
Let's imagine a trading day on the Nasdaq with the following data:
| Time | Price |
|-------|------|
| 3:30 p.m. (opening) | 18,000 |
| 4:00 p.m. | 18,050 |
| 5:00 p.m. | 18,120 |
| 6:00 p.m. | 18,080 |
| 7:00 p.m. | 18,150 |
| 8:00 p.m. | 18,200 |
| 9:00 p.m. | 18,180 |
| 10:00 p.m. (closing) | 18,220 |
On a line chart: You see a line that rises globally from 18,000 to 18,220.
On an H1 chart: You see 7 candles, each with its body and wicks, showing intra-hourly variations.
On a daily chart: You see only ONE candle :
This candle tells you: "The Nasdaq opened at 18 000, went up to 18,220, never went back below 18,000, and closed at the highest."
Imagine you're watching a marathon race.
The M1 chart (1 minute): It's like you were filming a runner for 1 minute. You see every step, every micro-acceleration. It's very detailed but you don't see where the race is.
Graph H1 (1 hour): You take a photo every hour. You see the overall progress with less detail.
The D1 graph (daily): You have a summary of the entire race. "The runner started here, finished there."
The more you "zoom out", the less detail you see but the more you see the general trend.
The more you "zoom in", the more detail you have but the more noise you see.
TradingView is the charting platform we use in this training.
Why TradingView?
What you can do on TradingView:
We will see the installation and configuration in detail in the following modules.
1. The General Trend
Is the graph rising overall? Does he go down? Is it stable?
2. Important Price Levels
Are there areas where the price bounces regularly?
3. Momentum
Are the movements strong (large candles) or weak (small candles)?
4. Changes in Direction
Where has the price changed direction?
5. Volume (bottom of graph)
Are there a lot of participants or very few?
Don't worry if it all seems blurry. We will detail each element in the next modules.
1. Watch only one timeframe
You must always analyze several units of time to get the complete picture.
2. Overload your chart
Too many indicators = confusion. Start simple.
3. Confusing noise and signal
In M1, many movements mean nothing. Learn to filter.
4. Ignoring Context
A chart out of context doesn't tell the whole story. News, times, overall sentiment matters.
5. Not practicing
Looking at screenshots is not enough. You have to open TradingView and manipulate it yourself.
Now you know what a chart is. But these little colorful shapes that make up the candle chart, what exactly do they mean?
In the next lesson, we'll dive into the anatomy of Japanese candles.
Introduction to Japanese candlesticks
Japanese candles are the most powerful chart reading tool you can master. Invented in Japan in the 18th century to trade rice, they are used today by all professional traders.
Each candle tells a story: who won the battle between buyers and sellers during this period?
A candle is made up of 4 elements:
The Body: Central rectangle, represents the difference between the opening and the closing
The Upper Wick: Thin line above the body, shows the maximum price reached
The Low Wick: Thin line below the body, shows the minimum price reached
The Color: Indicates whether the price has risen (green/white) or fallen (red/black)
Large body = Strong movement, conviction of participants
Small body = Indecision, buyer/seller balance
Long high wick = Rejection of high prices (powerful sellers)
Long low wick = Rejection low prices (strong buyers)
Understanding the colors of candles
Now that you know the anatomy of a candle, let's see what the colors mean.
A green candle means that the closing price is higher than the opening price. Buyers have won the battle.
What it reveals: Demand has been stronger than supply during this period. The sentiment is positive.
The larger the body: The stronger the buying conviction.
A red candle means that the closing price is lower than the opening price. The sellers won.
What it reveals: Supply has exceeded demand. The feeling is negative.
The larger the body: The more intense the selling pressure.
A series of green candles = buyers dominate, uptrend
A series of red candles = sellers dominate, downtrend
Green/red alternation = indecision, range
The main players in the market
You now know how to read candles. But who creates these movements? Who really moves the market?
You can't beat the institutional ones. You have to follow them.
The objective is not to predict where the price will go, but to detect where the big players are positioning and put yourself in their wake.
The trader's posture
Now that you understand the markets, prices and stakeholders, let's clarify your role as a retail trader.
You are an opportunistic observer. Your role:
Humility: The market is always right. Your opinions are worthless.
Patience: The best opportunities are rare. Knowing how to wait is a skill.
Discipline: Follow your rules even when it's frustrating.
Adaptability: The market changes. Your method must adapt.
Process > Result: A losing trade can be a good trade if you followed your rules.
Module 1 summary
You have just completed Module 1: Understanding financial markets.
✅ What a financial market is and how it works
✅ How prices are formed (supply and demand)
✅ What is the stock market for? for Business
✅ The Different Types of Traders and Where You Stand
✅ The Instruments You Can Trade
✅ Why Prices Really Move
✅ The Role of Emotions in Trading
✅ How to Read a Price Chart
✅ The Anatomy of Japanese Candles
✅ Who Moves the Market
✅ Your Role as a Trader retail
If you answer YES to everything, you are ready for Module 2.
In Module 2, we will delve into Japanese candles: the different types, what they reveal, and how to use them to anticipate movements.
Here we go ! 🚀
Mastering candles: indecision, encompassing and rejections
Introduction to Japanese candles
Welcome to this second module devoted to Japanese candles! You discovered the basics in the previous module. Now we're going to dig deeper and give you the tools to really read what the market is telling you.
Japanese candles are much more than just a graphical display. Each candle tells a story: the battle between buyers and sellers during a given period. Learning to read these stories is like learning a new language - the language of the market.
In this module, you will discover the main candle configurations that every trader must know: indecision candles, encompassing candles, rejections... These patterns will serve you every day in your trading.
market
We will study in detail:
Whether you then use indicators, Order Blocks, or Volume Profile, it all starts with reading the candles. It is the fundamental skill that underlies all the others.
A trader who does not know how to read candles is like a doctor who does not know how to take the pulse. It lacks the most basic information.
Japanese candles are a universal tool:
It is the simplest and most powerful tool at your disposal.
Let's start with a basic reminder: what exactly is a candle? Even if you think you know it, this next lesson will anchor the basics and ensure that you have a thorough understanding of the anatomy of a candle.
Reminder about candles
Before we go any further, let's make sure the fundamentals are solid. What exactly is a Japanese candle?
You saw the basic anatomy in Module 1. Here, we will delve deeper into each component and understand precisely what it reveals.
Each candle contains 4 essential information :
Open
The first prize of the period. This is the starting point of the "battle" between buyers and sellers.
High
The maximum price reached during the period. Represents the level where sellers have gained the upper hand and pushed the price back.
Low
The minimum price reached during the period. Represents the level where buyers took over and pushed the price back up.
Close
The last price of the period. This is the final result of the battle. It is the most important of the 4.
The body is the colored rectangle between the Open and the Close.
Green body: Close > Open → Buyers won
Red body: Close < Open → Sellers won
Body size indicates the intensity of the victory:
Wicks are the fine lines above and below the body.
High wick: Shows that the price went up and then was pushed back down
Low wick: Shows that the price went down and then was pushed back up
The interpretation of wicks :
Let's imagine an H1 candle on the Nasdaq with these values :
Analysis:
Interpretation :
Facing each candle, ask yourself these questions:
Close is the truth.
No matter what happened during the period, the closing price is the final result. This is the price that all participants "agreed" on at the end.
1. Ignore the strands
The strands contain as much information as the body. A small body with a long wick is very informative.
2. Forgetting the context
A green candle after 10 red candles does not have the same meaning as a green candle after 10 green candles.
3. Confusing timeframes
An H1 candle does not have the same weight as an M5 candle. The timeframe changes the importance.
Now that you have the anatomy, let's look at the two basic types: bullish and bearish candles, and what they reveal really.
The two types of candles
You now know the anatomy of a candle. Let's delve deeper into the two fundamental categories: bullish and bearish candles.
These two types of candles are the building blocks of any price movement. Understanding their nuances will allow you to better read market momentum.
A candle is bullish when the Close is greater than the Open.
Visually: the body is green (or white depending on the platform).
Buyers dominated this period.
The price closed higher than it opened. During this period, demand was higher than supply.
Strong bullish candle (Marubozu)
Candle bullish with wicks
Small bullish candle
A candle is bearish when the Close is lower than the Open.
Visually: the body is red (or black depending on the platforms).
Sellers dominated this period.
The price closed lower than it opened. During this period, supply was higher than demand.
Strong bearish candle (Marubozu)
Candle bearish with wicks
Small bearish candle
Green Candle Sequence = Bullish Momentum
Buyers are in control. Each candle confirms the previous one. The trend is up.
Sequence of red candles = Bearish momentum
Sellers are in control. Each candle confirms the previous one. The trend is downward.
Alternating colors = Indecision
Neither buyers nor sellers take control. The market hesitates.
Compares the sizes of bodies in a sequence:
Let's imagine a sequence of 5 H1 candles:
Conclusion: The bullish momentum is weakening. Be careful of a possible reversal.
1. Look only at the color
A small green candle is not a signal to buy. Size matters as much as color.
2. Ignoring relative size
A 50-point candle after 5 100-point candles shows running out of steam, even if it is in the direction of the trend.
3. Forgetting the big picture
A green candle in a downtrend may just be a temporary bounce.
We have seen the candles that show a clear direction. But what happens when neither buyers nor sellers win? This is where Indecision Candles come in.
When the Market Hesitates
We've seen the candles where one side clearly wins. But sometimes, no one wins. This is called an indecision candle.
These candles are among the most important to recognize because they often announce a change: either a pause before continuation, or a reversal.
A candle of indecision has a very small or non-existent body compared to its locks.
This means that the Open and the Close are very close: neither the buyers nor the sellers have managed to impose themselves.
Balance of power. After the battle of this period, the result is a draw. Both camps are tied.
The classic indecision candle. Open = Close (or almost).
Doji Standard
Doji Dragonfly (Dragonfly)
Tombstone Doji (Gravestone)
When you see an indecision candle, the market tells you:
"Stop. You have to think."
Participants hesitate. Something has changed in their perception. They are waiting for more information.
1. Pause before continuation
After a trend, the market takes a breather. The indecision candle is a rest. Then the trend resumes.
2. Preparing for a reversal
After a trend, the forces balance out. This is the first sign that the movement is weakening. A reversal may follow.
3. Waiting for news
Participants are waiting for an event (economic publication, Fed decision, etc.). They do not want to take any risk beforehand.
The Nasdaq has been rising for 5 candles H1. Each green candle is approximately 60 points.
Candle 6: Doji with small body and long wicks
Analysis :
Interpretation:
The bullish momentum is weakening. Sellers are starting to show up. This is a warning signal: either the rise will resume with force, or a reversal is brewing.
What matters next:
The next candle will say everything. If it is strong green → continue. If it is red → reversal confirmed.
1. Trading on an indecision candle alone
Indecision alone is not a signal. She says “wait”. You have to wait for confirmation.
2. Ignoring the context
A doji after 2 candles does not have the same importance as a doji after 10 candles in the same direction.
3. Confusing small candle with indecision
A small green candle CAN be indecision, but not necessarily. Look at the size of the strands in relation to the body.
You now know how to identify indecision. But why is it so important? In the next lesson, we'll look at how indecision can herald major moves.
The Importance of Indecision Candles
You know how to recognize an indecision candle. But why is it so important? Why do experienced traders monitor these patterns closely?
The answer: indecision often precedes big moves.
When the market is in indecision, it is in a state of unstable equilibrium - like a ball. top of a hill. The slightest breath can cause it to roll to one side or the other.
This accumulated tension is generally released in a rapid and powerful movement.
Imagine a spring that is compressed:
The indecision candles represent the compression phase. The next candle is often relaxation.
Indecision after a trend is often the first sign that something is changing.
Before a movement reverses, it must first stop. Indecision is stopping.
Indecision creates a clear moment when the market must choose. This "moment of truth" gives precise entries:
The extremes of the doji (high and low) define clear levels:
This is the most powerful scenario.
Setup:
What happens:
Participants who have "pushed" the trend take their profits. New participants are reluctant to enter so late. Equilibrium is created.
Probability:
Frequent reversal, or at least prolonged consolidation.
When a doji appears on significant support or resistance.
Configuration:
What happens:
The market “tests” the level. Indecision shows that the level is holding - defenders are resisting.
Probability:
Frequent bounce on the level.
Before a major economic announcement.
Configuration:
What happens:
Participants do not want to commit before knowing the information. They wait.
Probability:
Explosive movement after the announcement, unpredictable direction.
Context:
The Nasdaq has been rising since the opening. 6 consecutive green H1 candles, gain of 150 points.
Indecision appears:
Candle 7: Doji with body of 5 points, wicks of 30 points on each side.
Confirmation:
Candle 8: Large red candle of 80 points which breaks under the low of the doji.
The action :
Risk/reward ratio: 1:4 - excellent setup.
1. Indecision does not predict direction
It says “watch out, something is going to happen.” Not WHAT.
2. Not all dojis are meaningful
A doji in the middle of nowhere, without context, has no value.
3. Confirmation may not come
Sometimes after indecision... nothing happens. The market can remain undecided for a long time.
1. Anticipate the direction
“A doji after a rise = it will fall.” NO. Wait for confirmation.
2. Ignore indecision
“It’s just a small candle, not important.” Indecision is ALWAYS a warning sign.
3. Overtrading Dojis
Not every doji is an opportunity. Only those in meaningful context.
Indecision can signal a reversal. But there is another pattern that is even more powerful for identifying reversals: the encompassing candle. This is what we will see now.
Understanding Encompassing Candles
The Candle encompassing is one of the most powerful and reliable patterns in technical analysis. It represents a sudden change of power between buyers and sellers.
If indecision says "the market is hesitating", the encompassing says "power has just changed sides".
An encompassing candle is a candle whose body completely encompasses the body of the previous candle.
Mandatory criteria:
It is a sharp reversal of forces in a single period.
The previous candle showed one direction. The enclosing candle completely cancels this move AND goes further in the other direction.
Imagine this scenario:
The sellers have not only erased all the buyers' work, but they have gone even further. It is a humiliating defeat for the buyers.
Yesterday's buyers:
New sellers:
This circle reinforces the movement in the direction the encompassing.
1. The body must encompass the body (not the wicks)
We compare body to body, not the entire candle.
2. Mandatory opposite colors
A green that encompasses a green is NOT an enclosing one in the technical sense.
3. Size matters
The larger the enclosing body in relation to the enclosing body, the stronger the signal.
___
| | ← Candle 2 (green)
| | encompassing
___ | |
| | | |
|___| | |
|___|
Red GreenCandle 1 (red): Open 110, Close 100
Candle 2 (green): Open 98, Close 115
The green body (98-115) encompasses the red body (100-110) ✓
___
| |
|___| ___
| | ← Candle 2 (red)
Green | | encompassing
| |
|___|
RedCandle 1 (green): Open 100, Close 110
Candle 2 (red): Open 112, Close 95
The red body (95-112) encompasses the green body (100-110) ✓
1. Same color
A green larger than a previous green = continuation, not reversal.
2. Partial enclosing
If the body only encompasses 80% of the previous one, it is not a true encompassing.
3. Inclusion of locks only
We look at BODIES, not locks. A candle can be longer (with the wicks) without being encompassing.
1. Look for bounding boxes everywhere
A bounding box in the middle of nowhere has no value. It must appear after a movement to be reversed.
2. Ignoring the context
A encompassing against the underlying trend (higher timeframe) is less likely to succeed.
3. Entering too early
Wait for the encompassing candle to close. Before closing, the pattern does not exist.
Now let's see in detail the bullish enclosing: where to look for it, how to use it, and what are the best contexts.
The Bullish Engulfing Candle
The Bullish Engulfing Candle is one of the most sought-after reversal signals by traders. It appears after a decline and signals that buyers have just taken control.
Sellers controlled the market. In a single period, buyers have:
This is a power move from the buyers.
1. On support
When the price reaches an area where it has bounced in the past, a bullish bounding box confirms that the support holds.
2. After a pullback in an uptrend
In an underlying uptrend, the price corrects temporarily. The encompassing mark marks the end of the correction.
3. At the bottom of a range
In a consolidation zone, the bounding line at the bottom signals a rebound towards the top of the range.
4. After an oversell
After a prolonged and excessive decline, the all-encompassing can mark the exhaustion of sellers.
Context:
The Nasdaq has been correcting for 2 days. It went from 18,500 to 18,100 (-400 points).
The pattern:
Analysis:
Possible action:
1. High volume on the bounding box
If the volume is above average, large participants are involved.
2. Close near high
If the candle closes near its high (small high wick), buyers are in control until the end.
3. Confluent technical level
Horizontal support + encompassing = double confirmation.
4. Multi-timeframe alignment
An encompassing H1 in the direction of the Daily trend is more reliable.
1. Large high wick
If the price has risen and then been pushed back, sellers still resist.
2. Encompassing too small
An encompassing with tiny bodies lacks conviction.
3. Against the underlying trend
Looking for bullish bounding boxes in a bear market is risky.
4. No prior movement
Encompassing in the middle of a range without context = weak signal.
1. Enter before the close
The candle may appear all-encompassing as it forms and then changes. Always wait for closure.
2. Ignoring the macro context
A bullish engulfment in an underlying downtrend is a counter-trend trade - more risky.
3. Stop loss too tight
Place the stop below the low of the bounding band, not in the middle. Leaves margin.
Now, let's see the opposite pattern: the encompassing bearish, the reversal signal for sellers.
The Bearish Engulfing Candle
The bearish engulfing is the mirror of the bullish engulfing. It appears after an increase and signals that sellers have just taken brutal control of the market.
Buyers controlled the market. In a single period, the sellers:
This is a power move by the sellers.
1. Below resistance
When the price reaches an area where it has been rejected in the past, a bearish bounding box confirms that the resistance holds.
2. After a rally in a downtrend
In a basic downtrend, the price temporarily rebounds. The encompassing mark marks the end of the rebound.
3. At the top of a range
In a consolidation zone, the bounding line at the top signals a move back to the bottom of the range.
4. After overbought
After a prolonged and excessive rise, the all-encompassing can mark the exhaustion of buyers.
Context:
The Nasdaq has been rallying for 3 hours. It went from 18,100 to 18,350 (+250 points) and is approaching Daily resistance.
The pattern:
Analysis:
Possible action:
1. High volume across the board
Participation of major players confirmed.
2. Close close to low
Small low wick = sellers control until the end.
3. Confluent technical resistance
Horizontal + trendline + encompassing resistance = triple confirmation.
4. Multi-timeframe alignment
Encompassing H1 in the bearish direction of the Daily = high probability.
1. Large low wick
The price went down and then the buyers pulled it back up. Battle not over.
2. Strong underlying upward trend
Shorting in a bull market is counter-trend and risky.
3. Encompassing on small body
Less convincing if both bodies are tiny.
4. After a single bullish candle
The engulfing makes more sense after 3+ candles in the same direction.
Recent buyers:
Sellers:
Virtuous circle (for sellers):
Buyer stops → more sales → price falls → more stops → etc.
1. Shorter in a strong bull market
The trend is your friend. Counter-trend enclosers have a high failure rate.
2. Do not respect the stop
If the high of the enclosing boundary is broken, the pattern is invalidated. Get out.
3. Aim too far
Take partial profits. The market can rebound.
The encompassing are powerful for reversals. But there is another pattern that is just as important: the rejection candle. This is what we will discover now.
Understanding rejections
The rejection candle is a crucial pattern which shows that a price level has been refused by the market. It is as if the price has "tested" a level and been pushed back.
These candles often appear at turning points and provide precise trading opportunities.
A rejection candle has a long wick in one direction and a small body in the opposite direction.
The wick represents rejection: the price went in that direction but was pushed back.
The most famous rejection pattern.
Pin Bar Bullish:
Bearish Pin Bar:
Specifically after a downtrend.
Signal: Sellers tried to continue the decline, but buyers bought everything back. Bullish reversal potential.
Same shape as the Hammer, but after an uptrend.
Signal: Despite the shape bullish of the candle, its appearance at the top of a trend signals possible weakness. Sellers begin to show up.
Signal: The buyers tried to continue the rise, but the sellers brought everything back. Bearish reversal potential.
Minimum wick/body ratio: 2:1
The reject wick must be at least 2 times larger than the body.
Example :
Ideal ratio: 3:1 or more
The higher the ratio, the greater the rejection strong.
Take the example of a bullish pin bar:
Message: “This low level is defended. The buyers are there.”
The length of the wick tells you:
The longer the fuse, the more violent and significant the rejection.
Context:
The Nasdaq is approaching Daily support at 18,000. In previous days, it has bounced off this level several times.
The H4 candle:
Analysis:
1. Ignoring context
A pin bar in the middle of nowhere has no value. It must be on a significant level.
2. Insufficient ratio
A “long” strand that is 1.5x the body is not a real rejection.
3. Trading the wrong way
Bullish pin bar = long trade. Do not short a bullish pin bar.
4. Ignore the underlying trend
A counter-trend pin bar has less probability of success.
Now you know what a rejection is. But how can you tell a real rejection from a fake one? This is what we will see in the next lesson.
Identifying rejection candles
You now know what a rejection candle is. But the market is full of long strands that lead nowhere. How to distinguish a meaningful real rejection from a simple noise?
This lesson will give you the filters to keep only high probability rejections.
Minimum: 2:1
The wick must be at least 2 times larger than the body.
Ideal: 3:1 or more
The higher the ratio, the more significant the rejection.
How to measure:
A rejection only makes sense if it rejects something.
Levels to watch:
The test: Can you explain WHY the price was rejected at this level?
In the direction of the trend → High probability
Rejection confirms the underlying trend. Pullbacks are rejected.
Against the trend → Low probability
The rejection goes against the dominant move. More risky.
Good fence:
Bad fence:
Compares the rejection wick to previous candles.
Good rejection:
The wick is longer than the last 5-10 full candles.
Bad rejection :
The wick is similar to many other recent wicks.
The “nose” (the wick) must clearly exceed the level of the adjacent candles.
Good rejection:
The pin bar low is the lowest low of the last 5-10 candles.
Bad rejection:
The low is at the same level as other recent lows (no overshoot).
A real rejection shows a direction clear.
Good rejection:
Long wick on one side, very small or no wick on the other.
Bad rejection:
Long wicks on both sides = indecision, not rejection.
Rejections on large timeframes are more significant.
Hierarchy:
H4 candle on Nasdaq:
Why it's valid :
H1 candle on Nasdaq:
Why it is invalid:
Before considering a reject as tradable:
Rule: At least 4/5 to consider the trade.
1. Seeing Rejects Everywhere
The market is constantly creating wicks. 90% is noise.
2. Ignore context
A nice pin bar without level = random trade.
3. Force the trade
"It's almost a good rejection..." → NO. Next.
4. Forget the timeframe
An M5 rejection does not have the same weight as an H4 rejection.
You now know how to identify quality rejections. But candles don't work in isolation - they tell a story in sequence. This is what we will see in the next lesson.
Market intent
The candles do not work in isolation. They tell a story in sequence. Learning to read this narration gives you a considerable advantage.
Each candle is a chapter. The candle sequence is the complete book.
Questions to ask yourself:
Healthy trend: Large candles of the same color → small pause → resumption
Shortness of breath: Candles that gradually shrink
Return: Indecision → Encompassing in the other sense
Accumulation: Small tight candles → Explosive breakout
The classic mistake to avoid
Beginners often make the same fatal mistake with candles: they trade on a single candle isolated.
A single candle says nothing without context:
Always analyze:
Summary of the candles
| Pattern | Description | Signal |
|---------|-------------|--------|
| Marubozu | Great body, no highlights | Strong directional conviction |
| Doji | Non-existent body, strands | Indecision, waiting |
| Bullish Encompassing | Green encompasses red | Bullish reversal |
| Bearish Encompassing | Red encompasses green | Bearish reversal |
| Pin Bar Bullish | Long low wick | Low rejection, upside potential |
| Bearish Pin Bar | Long high wick | High rejection, potential drop |
| Hammer | Low wick, after drop | End of potential decline |
| Shooting Star | High lock, after raising | End of potential rise |
Preparation for the next module
You have completed the Module 2: The main Japanese candles.
✅ The complete anatomy of a candle (OHLC)
✅ Bullish and bearish candles
✅ Indecision candles (Doji, Spinning Top)
✅ Encompassing candles (bullish and bearish)
✅ Rejection candles (Pin Bar, Hammer, Shooting Star)
✅ How to filter real rejections from false ones
✅ Narrative reading of candle sequences
✅ Mistakes to avoid
Candles give you micro-information. But to trade effectively, you need to see the overall structure of the market.
In Module 3, we will study:
This is the basis of technical analysis. Let's go! 🚀
Understanding HH, HL, LL, LH, BOS, SOSH and trend lines
Introduction to market structure
Welcome to what is probably the most important module of your entire trading education.
You can know all the Japanese candles by heart, master dozens of indicators, have the best risk management... If you don't understand the structure of the market, you will trade blindly.
The structure is the skeleton of the market. It's what tells you if the price goes up, down, or hesitates. It is what allows you to make informed decisions rather than flipping a coin.
In this module, you will learn to read the market like an open book. You will be able to identify trends, spot turning points, and understand why price behaves the way it does.
Market structure is simply the way prices change over time. It manifests itself as a succession of peaks (high points) and troughs (low points).
By observing this succession, you can determine:
The market can only be in three states:
1. Bullish trend
2. Downtrend (Bearish)
3. Range (Consolidation)
Imagine trying to swim against the current of a river. You get exhausted and you don't move forward. Now imagine swimming in the direction of the current. You move forward effortlessly.
The structure of the market is the current. Trading in the direction of structure means trading with the wind at your back. Trading against the structure means fighting against forces much more powerful than you.
Let's take the Nasdaq on a typical day:
09:30 a.m. (US opening): The price is at 18,500 points
10:15 a.m.: The price rises to 18,550 (new high)
10:45 a.m.: The price goes back down to 18,520 (lower trough than the open)
11:30 a.m.: The price goes back up to 18,580 (even higher high)
12:00 p.m.: The price goes back down to 18,545 (even higher low)
You see the pattern ? Higher Highs + Higher Lows = Uptrend
In this context, looking for buying opportunities makes sense. Seeking sales would go against structure.
Think of a staircase.
When you climb a staircase, each step is higher than the previous one. This is an upward trend.
When you go down a staircase, each step is lower than the previous one. It's a bearish trend.
When you're on a level, you neither go up nor down. It's a range.
Market structure is simply recognizing whether you're going up, down, or on a plateau.
1. Ignoring Structure to Follow an Indicator
An oversold RSI in a strong downtrend does not mean buying. Structure always takes precedence over indicators.
2. Looking for reversals too early
“The price has gone up a lot, it will inevitably come down” – NO. A trend can last much longer than you think.
3. Confusing time units
The structure can be bullish in Daily and bearish in M15. You need to know what structure you follow.
In the next lesson, we will delve deeper into why the structure is so importantand see real-life examples of traders who failed by ignoring it.
The importance of understanding structure
You now understand what market structure is. But why is it so crucial? Why make a whole module out of it?
The answer is simple: the structure is the only objective element of the market. Indicators can be interpreted in a thousand ways. Patterns can be seen differently by different traders. But the structure? It is there, visible, indisputable.
In this lesson, you will understand why ignoring structure is the guaranteed recipe for emptying your trading account.
Imagine yourself lost in the forest without a compass or GPS. You walk randomly, hoping to come across the exit. The chances of success are low.
Now imagine that you have a compass. You know where north is, so you can steer consistently.
Market structure is your compass. It tells you which direction the market wants to go. Without it, you trade at random.
1. Filter trades
Without structure: you see a “nice pattern” and you enter
With structure: you first check if the pattern is in the direction of the trend
2. Determine entries
Without structure: you enter anywhere
With structure: you wait for a pullback towards a bottom to buy in an uptrend
3. Place stops
Without structure: you place a stop “by feeling”
With structure: you place your stop below the last significant low
4. Define goals
Without structure: you close "when you feel it's right"
With structure: you aim for the next significant high
Professional and institutional traders base all of their decisions on structure. Before even looking at an indicator or pattern, they analyze:
Only after this analysis do they look for opportunities entry.
The statistics are clear: 80% of retail traders lose money. And guess what they have in common? They trade against the structure. They try to catch turnovers that don't happen. They ignore the obvious direction of the market.
Trader A (without structure analysis)
Trader B (with structure analysis)
The difference? 5 minutes of structure analysis.
Imagine that you are on a boat.
The wind (the market structure) is blowing towards the East. You want to go west because you saw a "signal" telling you to go.
You can try rowing against the wind. You will exhaust yourself and you will hardly move forward.
Or you can use the wind. You are going east, in the direction of the wind. You move forward quickly and effortlessly.
Winning traders sail with the wind, not against it.
1. Believing that an indicator can replace the structure
"My indicator says buy" - What if the structure says sell? Structure always wins in the long run.
2. Trading "reversals"
Seeking to catch tops and bottoms is a beginner's fantasy. Pros trade trend continuations.
3. Underestimating the strength of a trend
A trend can last for days, weeks, or even months. "The price is too high" is never a valid argument.
Now that you understand the importance of structure, we will see the three types of markets: bullish, bearish, and range. You will be able to recognize them in a few seconds.
The three types of markets
The market can only be in three states. Not four, not ten. Three.
When you master the identification of these three states, you already have 50% of the skills necessary to trade effectively. Because depending on the state of the market, your strategy changes completely.
In this lesson, you will learn to instantly recognize whether the market is bullish, bearish, or neutral (in range).
A bull market is characterized by:
Visually, the price forms a series of ascending stairs. Each “step” is higher than the previous one.
Underlying psychology:
Buyers are confident. With each drop, they see an opportunity to buy cheaper. This constant buying pressure pushes the price upwards.
How to trade:
Underlying psychology:
Salespeople dominate. With each bounce, they see an opportunity to sell higher. This constant selling pressure pushes the price down.
How to trade:
A range market is characterized by:
Visually, the price oscillates horizontally between two bounds.
Underlying psychology :
There is a balance between buyers and sellers. Neither side gains the upper hand. The market "breathes" while waiting for a catalyst.
How to trade:
Nasdaq, week of January 15:
Monday: Opening 18,200, price rises to 18,350 (+HH), falls to 18,280 (+HL)
Tuesday: Rises to 18,420 (+HH), falls to 18,340 (+HL)
Wednesday: Rises to 18,500 (+HH), drops to 18,410 (+HL)
Conclusion: Clearly bullish market. Each day, the high is higher than the day before, and the low too.
Strategy: Look for buy entries on pullbacks towards the HL (18,280, 18,340, 18,410).
Think of a yo-yo.
Trend bullish: You make the yo-yo rise by holding the string higher and higher. Even when it goes down a little, it remains higher than before.
Downward trend: You make the yo-yo go down by lowering your hand. Even when it goes up a little, it remains lower than before.
Range: You keep your hand at the same level. The yo-yo moves up and down around this fixed point.
1. Forcing a trend where none exists
Not all markets are trending. Accepting that you are in range avoids a lot of losses.
2. Confusing a pullback with a reversal
In an uptrend, a temporary decline is not a reversal. This is a buying opportunity.
3. Not adapting your strategy
A breakout strategy works well in trend, poorly in range. And vice versa.
In the next lesson, we will zoom in on peaks and troughs: how to identify them precisely, which are true vs. false, and how to use them in your analysis.
Identifying the key points
All structural analysis is based on a simple concept: identifying the peaks and troughs.
It seems obvious said like that. But on a real chart, with dozens of candles forming ups and downs everywhere, it quickly gets confusing. What are the “real” peaks? What are significant lows?
In this lesson, you will learn to accurately identify pivot points in the market.
Top (Swing High): A high point surrounded by lower points to the left AND to the right.
In practice, it is a candle (or group of candles) of which:
Swing Low: A low point surrounded by higher points to the left AND right.
In practice, it is a candle (or group of candles) of which:
For a top or bottom to be considered "significant", there generally needs to be at least 3 candles on each side.
Example for a top:
This rule avoids considering each small fluctuation as a pivot point.
Not all peaks are equal. We distinguish:
Major Vertices/Valves:
Minor Vertices/Valves:
Step 1: Zoom out enough to see at least 100 candles
Step 2: Locate the points that "stand out" visually - the obvious extremes
Step 3: Check that they respect the 3-bar rule (at least 3 candles on each side)
Step 4: Mark them on your chart with horizontal lines
On a Nasdaq H1 chart :
You see the price oscillate between 18,400 and 18,600 during the day.
Looking carefully:
Structure = Bullish (HH + HL)
Think of a mountain range seen in profile.
The summits are the peaks of the mountains - the highest points.
The hollows are the valleys between the mountains - the lowest points.
You're not going to call every little rock a "summit." Only the real peaks that dominate the landscape count.
Similarly on a chart, you are not going to consider each small high candle as a significant peak.
1. Seeing highs/lows everywhere
Every candle has a high and a low, but they are not all pivot points. Apply the 3-bar rule.
2. Ignore timeframe context
A vertex in M1 does not have the same importance as a vertex in H4. Prioritize your pivot points.
3. Draw lines on all points
If your graph looks like a barcode, you have too many lines. Keep only major levels.
4. Adjust points after the fact
Once a peak/trough has been identified, do not move it to “fit” your thesis. Be objective.
Now that you know how to identify peaks and troughs, we will go into detail about the 4 types of pivot points: Higher High (HH), Higher Low (HL), Lower High (LH), and Lower Low (LL). These are the fundamental building blocks of the structure.
Understanding HH
The Higher High (HH) is one of the four pillars of structural analysis. This is the clearest signal of an active uptrend.
When you identify an HH, the market is literally telling you: "The buyers are in control, they are pushing the price to new highs."
In this lesson, you will learn how to spot HHs and understand what they mean for your trading decisions.
A Higher High occurs when the price reaches a new high higher than the previous high.
It's simple:
An HH indicates:
1. Buyers are stronger than sellers
Despite selling pressure at the previous high, buyers managed to push higher.
2. Demand exceeds supply
There are more people willing to buy (even at a higher price) than there are people willing to sell.
3. The uptrend continues
An HH confirms that the general direction remains up.
For an HH to be "valid", it must:
A “false HH” occurs when the price barely touches the previous high or exceeds it by a few pips before being rejected violently.
A healthy uptrend shows:
LH (point of start)
↓
HL (first low higher)
↓
HH ✓ (trend confirmation)
↓
HL (new low higher)
↓
HH ✓ (continuation)
↓
etc.
Each HH reinforces conviction bullish.
Nasdaq, session of January 15, 2025
Phase 1 - Establishment of the first peak:
Phase 2 - Pullback (creation of the HL):
Phase 3 - Formation of the Higher High:
Conclusion: The structure is officially bullish. Purchasing opportunities are validated.
Imagine a high jumper during a competition.
With each successful attempt, the bar is set higher. If he jumps to 2m00 then to 2m05, he has made a "Higher High".
As long as he continues to pass higher and higher bars, he is "in an uptrend". The day it fails to exceed the previous bar, the trend is called into question.
1. Consider each small peak as an HH
An HH must be significant. A candle that exceeds 2 pips is not necessarily a valid HH.
2. Ignore the timeframe
An HH in M1 may be just noise in an H4 downtrend. Context!
3. Enter as soon as the HH forms
The HH confirms the trend, but it is not an immediate entry signal. Wait for the pullback.
4. Forgetting to update your levels
Each new HH becomes the new reference. Update your charts.
The HH only makes sense if it is accompanied by a Higher Low (HL). In the next lesson, we will discover this second pillar of the uptrend.
Understanding HL
If the Higher High is the visible signal of the bullish trend, the Higher Low (HL) is the silent but essential confirmation.
The HL is where the buyers intervene. This is the level where demand takes over. It is also, for informed traders, the best entry point in an uptrend.
In this lesson, you will understand why the HL is often more important than the HH for your trading decisions.
A Higher Low (trough higher) occurs when the price forms a trough higher than the previous trough.
It's simple:
An HL indicates:
1. Buyers defend their territory
Even during corrections, buyers intervene before the price falls back to the previous level.
2. Selling pressure is exhausted more quickly
Sellers are no longer able to push the price as low as before.
3. Buying opportunity
The HL is the point where the pullback ends and a new upward movement can start.
The HH confirms the trend, but the HL is where you want to buy.
Reasoning:
Professional traders "buy the dips" - and the dips are the HLs.
The challenge: you don't know that an HL is formed before the price
Confirmation method:
→ 18,430 > 18,350 = HIGHER LOW confirmed!
Optimal entry point: Around 18,430-18,450, with stop below 18,350 (the previous trough).
Imagine a person who climbs a staircase with a bouncing ball.
With each step, she throws the ball down. The ball bounces on the step below and goes back up.
The point where the ball bounces is the Higher Low.
As long as the ball bounces on higher and higher steps, the person continues to go up (upward trend).
The day the ball bounces on a step lower than the previous one, something has changed.
1. Anticipating the HL too early
"The price has fallen by 50 pips, it must be the HL" - NO. Wait for confirmation.
2. Placing the stop too tight
The stop must be below the previous low (not just below the current HL).
3. Ignoring if the HL really holds
An HL that gets broken invalidates the entire analysis. Be ready to go out.
4. Confusing temporary rebound and HL
An HL must be significant and lead to movement towards the HH.
We have seen the components of the uptrend (HH + HL). In the next lessons, we will discover their opposites: the Lower Low and the Lower High, pillars of the bearish trend.
Understanding the LL
Having explored the bullish side, let's move on to the dark side: the downtrend. And the Lower Low (LL) is the first signal.
An LL is the market telling you: "Sellers have taken control. The price is reaching levels that buyers can no longer defend."
In this lesson, you will learn to identify LLs and understand their importance in your reading of the market.
A Lower Low occurs when the price forms a bottom lower than the previous low.
It's simple:
An LL indicates:
1. Sellers dominate
They managed to push the price below the level where buyers had previously defended.
2. The supports are broken
A level that was holding up before has given way. This is a sign of buyer weakness.
3. Bearish continuation potential
Where there is one LL, there are often others to follow.
The LL is particularly important when it occurs after a series of HLs (upward trend).
Sequence:
In an established downtrend, each new LL is a confirmation.
HH (last high of the uptrend)
↓
LH (first sign of weakness)
↓
LL ✓ (confirmation of the reversal)
↓
LH (bearish pullback)
↓
LL ✓ (bearish continuation)
↓
etc.
Nasdaq, end of uptrend:
Background:
What is happening:
18,380 < 18,450 = LOWER LOW!
Interpretation:The bullish structure is broken. Buyers defending 18,450 were overtaken. Maximum caution for long positions.
Imagine a dike that protects a city from flooding.
The water (selling pressure) rises against the dike (support).
Normally, the dike holds. The water reaches a maximum level and then goes back down.
But one day, the water exceeds the previous level. Then it submerges the dike.
The moment when the water passes over the dike is the Lower Low.
Once the dike is crossed, nothing stops the water until the next dike.
1. Ignoring an LL in an uptrend
"It's just a small break, it will come back up" - Maybe, but the LL is a warning sign that should be taken seriously.
2. Short immediately on the LL
The LL confirms the selling pressure, but it is not an entry signal. Wait for the pullback (LH).
3. Averaging Down a Long Position
If an LL forms while you are in a long position, it is time to reconsider your position, not add to it.
4. Confusing volatility and LL
A bearish spike on news is not necessarily a structural LL. Analyze the context.
An LL alone does not make a bearish trend. It must be accompanied by a Lower High to confirm the reversal. This is what we will see in the next lesson.
Understanding LH
The Lower High (LH) is the fourth and final pillar of structural analysis. It is the mirror of the Higher Low.
If the LL shows that the sellers have broken the defenses, the LH shows that they maintain their pressure. Buyers are no longer able to regain lost ground.
It is also, for bearish traders, the optimal entry point for short positions.
A Lower High occurs when the price forms a peak lower than the peak previous.
It's simple:
An LH indicates:
1. Buyers are weakened
They tried to push the price back up but failed to reach the previous level.
2. Sellers control bounces
With each attempt to move higher, sellers come back sooner and stronger.
3. Sell Opportunity
The LH is the point where the bearish pullback ends and a new downward movement can start.
The complete sequence of a bearish reversal:
Nasdaq, formation of a downtrend:
Phase 1 - Last bullish breath:
Phase 2 - Technical rebound:
Phase 3 - Formation of the Lower High:
Optimal short entry point: Around 18 480 with stop above 18,600.
Imagine a ball that you are trying to keep underwater in a swimming pool.
You let it go, it rises (bounces). But your hand (the sellers) is there to push it back down.
Each time you let it go, it rises a little lower. Your hand pushes it back earlier and earlier.
The maximum point the ball reaches before being pushed back is the Lower High.
As long as the ball goes lower and lower, the sellers maintain control.
1. Confusing a simple rebound with a bullish reversal
"The price is rising, the downtrend is over" - Not if the price forms an LH.
2. Shorting too early before LH confirmation
Price could still make a new HH. Wait for confirmation.
3. Placing the stop too close
The stop must be above the previous high (last significant HH).
4. Ignoring the LH after being stopped
An LH following a stop can be a new opportunity.
You now know the 4 pillars of the structure: HH, HL, LL, LH. In the next lesson, we'll do a full summary with visual diagrams to anchor these concepts.
Summary HH HL LL LH
Congratulations! You have now learned about the four pillars of structure analysis: Higher High, Higher Low, Lower Low, and Lower High.
This lesson is a comprehensive recap to anchor these concepts in your memory and give you a quick reference to consult during your trading sessions.
| Item | Meaning | Context |
|-------|---------------|----------|
| HH (Higher High) | Summit higher | Uptrend |
| HL (Higher Low) | Hollow higher | Uptrend |
| LL (Lower Low) | Lower trough | Downtrend |
| LH (Lower High) | Lower peak | Bearish Trend |
HH₂
/ \
/ \
HH₁ \
/ \ \
/ \ HL₂
HL₀ HL₁
Characteristics :
―――― Resistance ――――
| |
| Oscillation |
| |
―――― Support ――――――
Features:
Bullish → Bearish:
Bearish → Bullish:
Reading a chart in real time:
You open the Nasdaq chart in H1:
Your decision:
Think of a tennis match.
The score (15-0, 30-15, etc.) is like the pivot points. Each point gained (HH/HL for one player, LL/LH for the other) indicates who is leading.
The trendis the player who is currently winning. As long as he continues to score (HH + HL), he maintains the advantage.
The change of structure is when the other player starts to take over.
1. Analyze without having identified the 4 points
Before each trade, you must know where the last HH, HL, LL, LH are.
2. Mixing timeframes
The pivot points of the M5 are not those of the H4. Stay consistent.
3. Ignoring transitions
The point at which the structure changes is most important to identify.
4. Overinterpret every move
Not all small ups/downs are significant structural points.
Now that you have mastered the pivot points, we will discover a powerful complementary tool: the trend lines. They will allow you to visualize and trade the structure even more precisely.
Introduction to trend lines
Trend lines are the trader's simplest and most powerful visualization tool.
A trend line is simply a straight line drawn on the chart that connects several pivot points. It shows you the direction of the trend and gives you potential intervention levels.
Simple in theory, but extremely effective in practice.
A trend line is a straight line that connects at least two pivot points of the same type:
Trend lines represent the collective psychology of the market.
When thousands of traders see the same line on their chart, they make similar decisions:
This is called a prophecy self-fulfilling: the trend line works because everyone uses it.
1. Bullish Trend Line (Dynamic Support)
2. Bearish Trend Line (Dynamic Resistance)
1. Minimum 2 points of contact
A line between two points is valid. Three or more points reinforce its reliability.
2. Significant points
Uses significant peaks/troughs, not small fluctuations.
3. Recent non-crossing
A trend line that has been broken recently loses its validity.
4. Respect the angle
Avoid trend lines that are too flat (range) or too steep (unsustainable).
Draw a bullish trend line on the Nasdaq:
Step 1: Identifies the upward trend (HH + HL present)
Step 2:Locate the first significant low (HL₁) at 18,300 on January 10
Step 3:Locate the second significant low (HL₂) at 18,450 on January 12
Step 4: Draw a straight line through these two points and extend it to the right
Step 5: On January 15, the price corrects and touches your trend line around 18,550
Interpretation: This is a potential buying zone. If the price rebounds, your trend line is confirmed.
Imagine that you are driving on a highway with guardrails.
The trend line is the guardrail. It guides the price in one direction.
As long as the price stays on the right side of the slide, the path is clear.
If the price crosses the slide (breaks the trend line), there is an "accident": the trend changes direction or stops.
1. Drawing too many trend lines
A clean graph = 1 or 2 trend lines maximum. Step 10.
2. Force the line so that it passes through the points
If you have to adjust several times, the trend line may not be valid.
3. Use wicks vs. candle bodies
Be consistent: always use wicks OR always bodies, but not a mixture.
4. Ignore the break
When a trend line is broken, it is no longer valid. Don't try to "save" it.
In the next lesson, we will see in detail how to draw a bullish trend line step by step, with concrete examples on the Nasdaq.
How to draw an uptrend
Now that you know what a trend line is, let's move on to the practical. In this lesson, you will learn how to draw a bullish trend line correctly.
This is an exercise that seems simple but where many beginners make mistakes. A poorly drawn trend line gives bad signals.
A bullish trend line:
Step 1: Confirm the uptrend
Before tracing, check that you have a sequence of HH + HL. Without an upward trend, no upward trend line.
Step 2: Identify the first trough (HL₁)
This is the starting point of your trend line. Choose a significant, clearly visible trough.
Step 3: Identify the second trough (HL₂)
This trough must be higher than the first (it is a Higher Low). It validates the direction of the line.
Step 4: Draw the line
Use the "Ray" tool on TradingView. Place the first point on HL₁, the second on HL₂.
Step 5: Extend and validate
Extend the line to the right. The price should respect this line in the future.
Step 6: Confirmation by a 3rd point
If the price touches your trend line a 3rd time and rebounds, your line is confirmed as reliable.
Two schools exist:
1. Plotting on wicks (recommended)
2. Tracing on candle bodies
My recommendation: Use the wicks to trace, but accept that the price can cross them slightly without invalidating the line.
A healthy bullish trend line has an angle between 30° and 60°.
TradingView
January 12, 4:00 p.m.: The price corrects and touches your trend line around 18,420
Result: The price rebounds and goes back up towards 18,550
→ Your trend line is now confirmed with 3 points of contact.
Think of a child sliding a toy down an inclined ramp.
The ramp is your trend line. As long as the toy (the prize) remains on the ramp, it continues to rise.
To build the ramp correctly, you need at least two support points (the HL).
The more support points you have, the stronger the ramp.
1. Plotting without a confirmed trend
No HH + HL = no bullish trend line.
2. Use a single point
A line based on a single point has no statistical validity.
3. Force the angle
If the HLs don't line up naturally, don't force it. The trend line may not be appropriate.
4. Do not update
New HLs may require slightly readjusting your trend line.
5. Ignore breaks
A broken trend line at the close is invalid. Trace a new one if the trend resumes.
You now know how to draw a bullish trend line. In the next lesson, we will see the opposite exercise: drawing a bearish trend line.
How to draw a bearish trend
After the bullish trend line, here is its mirror: the bearish trend line. The principle is the same, but reversed.
A bearish trend line allows you to visualize the selling pressure and identify potential selling zones during rebounds.
A bearish trend line:
Step 1 : Confirm the bearish trend
Check that you have a sequence of LL + LH. Without a bearish trend, no bearish trend line.
Step 2: Identify the first peak (LH₁)
This is the starting point of your trend line. Choose a significant, clearly visible vertex.
Step 3: Identify the second vertex (LH₂)
This vertex must be lower than the first (it is a Lower High). It validates the direction of the line.
Step 4: Draw the line
Use the "Ray" tool on TradingView. Place the first point on LH₁, the second on LH₂.
Step 5: Extend and validate
Extend the line to the right. The price should hit this line during rebounds.
Step 6: Confirmation by a 3rd point
If the price touches your trend line a 3rd time and starts to fall again, your line is confirmed.
When the price rises towards your bearish trend line:
On the Nasdaq H1, bearish trend:
Context: The market has just returned. The structure changed from bullish to bearish.
January 15, 11:00 a.m.: First Lower High at 18,600 (LH₁)
January 16, 10:00 a.m.: Second Lower High at 18,480 (LH₂)
Tracing:
January 17, 3:00 p.m.: Price rebounds and goes back up towards your trend line at 18,400
Observation: A rejection candle forms exactly on the line
Result: The price starts falling again towards 18,250
→ Your bearish trend line worked perfectly as dynamic resistance.
Imagine a ball rolling along of a downward sloping ramp.
Sometimes the ball bounces against the upper edge of the ramp (the trend line), but it always ends up continuing downward.
The bearish trend line is this upper edge that prevents the ball from escaping upwards.
1. Draw a bearish trend line in an uptrend
If the structure shows HH + HL, you have no reason to draw a bearish line.
2. Take the first peak of the previous uptrend
Your downtrend line starts at the first LH (after the structure change), not before.
3. Wait for the perfect touch
The price can approach the trend line without touching it exactly. An area of a few pips around is acceptable.
4. Short blindly
The trend line indicates a potential selling zone, but you need confirmation (rejection candle, pattern, etc.).
You now master the bullish and bearish trend lines. In the next lesson, we will discover a crucial concept: the Break Of Structure (BOS), which allows you to identify changes in trend.
Understanding breakouts of structure
The Break Of Structure (BOS) is a fundamental concept from institutional trading methods (ICT - Inner Circle Trader).
A BOS is the moment when the market structure confirms its direction. This is the signal that tells you that the trend is active and that it is time to look for opportunities.
Understanding the BOS allows you to trade with institutions, not against them.
A Break Of Structure occurs when the price breaks the last significant pivot point in the direction of the trend.
Bullish BOS:
The price breaks the last high (previous HH) after forming a Higher Low.
Bearish BOS:
The price breaks the last low (previous LL) after forming a Lower High.
The BOS gives you three pieces of information crucial:
Attention: any price movement is not a BOS.
For a BOS to be valid:
Uptrend :
Downtrend:
Nasdaq H1 - BOS Bullish:
Initial situation:
What happens:
Imagine a 100 meter race.
The world record (the last HH) is the bar to beat.
When an athlete exceeds this record, he makes a BOS. He proves he is the fastest.
As long as no one breaks the record, the reigning champion (the current trend) remains at the top.
1. Consider a wick as a BOS
A BOS must be confirmed by a fence. A bit that hits the level and then gets thrown back is NOT a BOS.
2. Enter the BOS immediately
The BOS confirms the trend, but it is not necessarily the best entry point. Wait for the pullback often.
3. Ignore the timeframe
A BOS in M1 does not have the same importance as a BOS in H4. Context!
4. Seeing BOS everywhere
Only SIGNIFICANT point breakouts count as BOS.
In the next lesson, we will see a concrete example of BOS on the Nasdaq with before/after analysis to anchor this concept.
BOS illustration
Theory is good, but nothing beats a concrete example. In this lesson, we will dissect a real Break Of Structure on the Nasdaq, step by step.
You will see exactly how to identify a BOS, how to confirm it, and how to use it for your trading decisions.
We will analyze a typical Nasdaq session with:
PHASE 1: Identification of the Structure (before the BOS)
January 20 session, Nasdaq H1:
What you observe :
The price has fluctuated between 18,380 and 18,490 since the opening. It has not yet broken the last HH (18,520).
PHASE 2: Build-up (preparation for BOS)
2:30 p.m. - 3:30 p.m.:
The price compresses between 18,470 and 18,510. The candles become smaller. This is a typical contraction before a movement.
What you observe:
The volatility drops, the price "breathes" before making its directional choice.
PHASE 3: The Break Of Structure
3:35 p.m.:
A large bullish candle starts. The price passes 18,510, then 18,520...
3:45 p.m.:
The candle closes at 18,545.
BULLISH BREAK OF STRUCTURE CONFIRMED!
PHASE 4: Continuation of the Movement
4:00 p.m. - 5:00 p.m.:
The price continues towards 18,600, then consolidates slightly.
5:30 p.m.:
Pullback towards 18,530 (formation of a new HL).
6:00 p.m.:
The price starts again around 6 p.m. 650 (new HH).
Scenario A: Trade on the BOS
Scenario B: Trade on the Pullback (recommended)
Conclusion: The BOS tells you WHAT to trade (bullish direction). The pullback tells you WHERE to enter (best entry point).
The BOS is like the whistle at the start of a match.
Before the whistle (BOS), the players (buyers/sellers) are in position, tense, ready.
The whistle (BOS) officially announces that the match has started in this direction.
But the best time to score (get into position) is often a few seconds after the whistle, when the play is getting underway (pullback).
1. Entering the BOS candle
You often pay “dearly” by entering at the time of the breakout. Wait.
2. Ignoring context
A BOS in the direction of the Daily is more valuable than a BOS against the Daily.
3. Setting a stop too tight
After a BOS, a retest of the broken level is normal. Let your position breathe.
4. Do not take profits
The BOS indicates the direction, not how far the price will go. Manage your outings.
The BOS confirms an existing trend. But how can you identify a change in trend? This is what we will see with the Shift Of Structure (SOSH) in the next lesson.
Understanding structure changes
If the BOS confirms a trend, the Shift Of Structure (SOSH) changes it. This is the signal that tells you that power is passing from one camp to the other.
Identifying a SOSH early allows you to take a position at the start of a new trend, when the potential for gain is maximum.
But be careful: the SOSH is also one of the most misunderstood and most dangerous concepts if misused.
A Shift Of Structure occurs when the price breaks a key pivot point against the prevailing trend, signaling a potential reversal.
SOSH Bearish (in an uptrend):
The price breaks the last Higher Low (HL), creating a Lower Low (LL).
SOSH Bullish (in a downtrend):
The price breaks the last Lower High (LH), creating a Higher High (HH).
| BOS | SOSH |
|---------|------|
| In the direction of the trend | Against the current trend |
| Confirm continuation | Signals a potential reversal |
| Less risky | More risky |
| Breaks the last peak/trough in the direction of the trend | Breaks the last pivot point against the trend |
Context: Bullish trend in place (HH + HL)
Sequence:
Context: Bearish trend in place (LL + LH)
Sequence:
A SOSH is only confirmed when price forms a pivot point in the new direction :
Nasdaq H1 - SOSH Bearish:
Situation :
What is happening:
BEARISH SHIFT OF STRUCTURE!
Confirmation:
Think of a battle for a hill.
BOS: The army holding the hill repels an attack and advances even further (it confirms its dominance).
SOSH: The attacking army succeeds in taking the hill than the other was defending (power changes hands).
The SOSH is the moment when the front line changes sides.
1. Seeing SOSH everywhere
A SOSH is a rare and significant event. Every little break is not a SOSH.
2. Trading SOSH without confirmation
A lot of “fake SOSH” happens. Wait for the confirmation LH/HL.
3. Ignore the upper timeframe
A SOSH in M15 against an H4 trend is often a simple pullback, not a true reversal.
4. Averaging Down/Up
If a SOSH occurs against your position, do not add back. Accept that the structure has changed.
Now that you know about BOS and SOSH, the next lesson will clarify their differences and when to use each.
Difference between BOS and SOSH
BOS and SOSH are two concepts that are superficially similar but have radically different implications. Confusing the two can cost you.
This lesson definitively clarifies the differences and gives you a simple framework to instantly distinguish them.
| Criterion | BOS | SOSH |
|---------|---------|------|
| Meaning | Break Of Structure | Shift Of Structure |
| Management | In the direction of the trend | Against the trend |
| What is broken | The last peak (bullish) or trough (bearish) in the direction of the trend | The last trough (in a bullish trend) or peak (in a bearish trend) |
| Message | “The trend continues” | “The trend could change” |
| Risk | Moderate | High |
| Frequency | Common | Rare |
| Action | Search for entries in the direction of BOS | Wait for confirmation before acting |
BOS Bullish:
SOSH Bearish :
BOS Bearish:
SOSH Bullish:
BOS = Break in the direction of movement
SOSH = Break against movement
Scenario: Nasdaq H1 in uptrend
Structure in place:
Case 1: BOS
The price rises and breaks 18,600, closes at 18,630.
→ Bullish BOS. The trend continues. Looking to buy on the next HL.
Case 2: SOSH
The price falls and breaks 18,450, closes at 18,420.
→ SOSH bearish. Alert ! The trend could change.
→ Wait for an LH to confirm before shorting.
Case 3: False SOSH
The price breaks 18,450, closes at 18,430...
Then the price goes back up and breaks 18,600.
→ The SOSH was invalid. The upward trend resumes.
Imagine a football team which leads 2-0.
BOS: The team scores a 3rd goal (3-0). Its domination is confirmed.
SOSH: The opposing team scores a goal (2-1). The momentum potentially changes.
SOSH confirmed: The opponent equalizes (2-2). The balance of power has really changed.
False SOSH: The opponent scores (2-1) but the team leading scores just after (3-1). False alarm.
1. Trading a SOSH like a BOS
A SOSH requires more caution and confirmation than a BOS.
2. Ignoring a SOSH when you are in position
If a SOSH occurs against your position, it is a serious red flag.
3. Confusing the levels to watch
In an uptrend: monitor the HH for the BOS, the HL for the SOSH.
In a downtrend: monitor the LL for the BOS, the LH for the SOSH.
4. Do not wait for confirmation from SOSH
A SOSH without confirmation (LH or HL) may just be a liquidity grab.
You now have a solid understanding of the structure. The next lesson covers the common mistakes that traders make with these concepts.
Traps to Avoid
Knowing structural concepts is one thing. Applying them correctly is another.
After teaching these concepts to hundreds of traders, I have identified the most common mistakes that cause you to lose money. This lesson will allow you to avoid them.
The problem:
You see HH, HL, LL, LH everywhere. Your graph is covered in lines and markings. You spend more time analyzing than trading.
Why it's dangerous:
The solution:
The problem:
You're analyzing in M15 and you see a nice bullish structure. You go in long. But the H4 is in a downtrend. You get crushed.
Why it's dangerous:
The solution:
The problem:
"The price is approaching the level, I will enter now to be sure not to miss the move."
Why it's dangerous:
The solution:
The problem:
Every small up and down is considered a structural point. “It’s a HH!” No, it's just noise.
Why it's dangerous:
The solution:
The problem:
You plotted your levels on Monday. It's Thursday. You always use the same obsolete levels.
Why it's dangerous:
The solution:
Trader B (applies the solutions):
Think of a GPS.
A good GPS (good analysis) shows you the main roads and guides you efficiently.
A bad GPS (over-analysis) shows you every dirt road, every trail. You are lost in the details.
Your chart must be a good GPS: clear, simple, with essential information.
This lesson concludes our module on structure and trend lines. In the conclusion, we will summarize everything you have learned and prepare you for the rest of the training.
Summary of module 3
Congratulations! You have just completed one of the most important modules of your trading education.
Market structure is not just another concept among others. This is THE foundation on which you will build all your strategies.
Let's recap what you've learned and prepare for what's next.
1. The Basics of Structure
2. The 4 Pivot Points
3. Trend Lines
4. BOS and SOSH
5. Mistakes to Avoid
Before each trade, ask yourself these questions :
1. What is the trend of the higher timeframe?
Daily or H4 → This is your “prevailing wind”
2. What is the structure of the trading timeframe?
H1 or M15 → This is where you look for opportunities
3. Where are the last significant pivot points?
The HH/HL (bullish) or LH/LL (bearish) → These are your benchmarks
From now on, before even looking at an indicator or pattern:
Your Analysis Routine (example):
Before the US opening (2:30 p.m.) :
Conclusion: I am looking for purchases. I'm waiting for the M15 to confirm the HL (rejection + bullish candle) then a BOS of the last small top M15.
Stop: Below 18,520 (HL Daily)
Target: 18,700 then beyond
This analysis takes 5 minutes. It gives you a clear plan for the entire session.
You have now learned how to read a map.
Before this module, you saw the mountains and valleys (the ups and downs of the price) but you didn't know how to interpret them.
Now you know:
With this map in hand, you can navigate any market.
To anchor these concepts:
The next module will teach you to combine what you know about structure with multi-timeframe analysis. You will discover how to perfectly align the different time units to take high probability trades.
You have the basics. Now let's build on it.
Congratulations for completing this module!
Overview for day trading on the Nasdaq
Introduction to multi-timeframe
Welcome to this module dedicated to multi-timeframe (MTF) analysis. This skill is one of the most important you will develop as a trader, as it will allow you to see the market from different perspectives and make more informed decisions.
Multi-timeframe analysis involves examining the same asset (here the Nasdaq) over several different time frames before making a trading decision. Instead of focusing on a single graph, you'll learn to read a coherent "story" across different time scales.
Imagine you're looking at a map: you can see the entire world, then zoom in to a continent, a country, a city, and finally a specific street. Each zoom level gives you different but complementary information. This is exactly what MTF analysis does with price charts.
The three classic levels are:
Let's take an example on the Nasdaq:
Without the Daily analysis, you might have seen the H1 pullback as a trend bearish. Without the M5, you would have entered too early or too late.
Think of a detective investigating a case. He is not satisfied with a single testimony: he collects several sources of information, compares them, and only draws his conclusion when everything converges. MTF analysis is about being a market detective.
The importance of multi-timeframe
Why bother looking at multiple graphs when you could simply analyze a single timeframe? This is a legitimate question that many beginners ask. In this lesson, you will discover why multi-timeframe is not a luxury, but an absolute necessity for successful trading.
Multi-timeframe is essential because a single timeframe never tells the complete story. Each time unit captures a different part of market behavior:
The upper timeframe tells you:
The middle timeframe tells you:
The execution timeframe tells you:
Without this vision at 360°, you are essentially trading blind.
A trader looks at the Nasdaq in M5 and sees a nice bullish setup with a reversal pattern. He enters long, confident. But what he didn't see is that in H4, the price is exactly on a major resistance, and in Daily, the trend is bearish.
Result? His "perfect" M5 trade is swept away in a few minutes by the selling pressure of higher timeframes.
Moral: The M5 was right locally, but he was wrong globally. The MTF would have avoided this trap.
Imagine that you are a meteorologist. If you only look at the sky above your head (M5), you might see some sun. But satellite images (Daily) show a huge storm front arriving. Without the big picture, you would have predicted good weather just before the storm.
Understanding timeframes
Before mastering multi-timeframe analysis, it is essential to understand what a time unit (UT) actually is. This fundamental notion determines how you will read and interpret price charts.
A unit of time (or timeframe) represents the period during which each candle (or bar) forms on your chart. It defines the time scale of your analysis.
Common time units:
What a candle contains:
A Daily candle therefore contains ALL the information from a full day of trading, compressed into a single visual element.
Let's take the Nasdaq at 2:30 p.m. on a Tuesday:
The same moment, three different perspectives. The Daily candle "absorbs" 24 H1 candles, which themselves each contain 12 M5 candles.
Think of a camera with different zoom levels:
Each zoom reveals details invisible at other levels.
The golden rule
Now that you understand what a unit of time is, let's explore the fundamental principle that governs multi-timeframe analysis. This simple but powerful rule will guide all your analyses.
The key principle of MTF can be summed up in one sentence:
The upper timeframe gives direction, the lower timeframe gives timing.
This is the natural hierarchy of the market. Movements over large units of time are created by institutional actors with massive capital. These movements "encompass" and direct what is happening in small units of time.
The hierarchy in practice:
Trading against this hierarchy is like swimming up a river: possible, but exhausting and rarely successful.
Scenario on the Nasdaq:
Application of the principle:
Without the Daily, the H1 pullback could have seemed bearish. Without the M5, you would have entered too early.
It's like the army:
Each level has its role, and insubordination (trading against the Daily) leads to chaos.
Daily Analysis
The Daily is your compass. Before diving into the details of the M5, you need to understand "the big picture." This lesson teaches you to read the Daily like an open book that reveals the market's intentions.
The Daily chart shows you what the "big players" are doing: investment funds, banks, institutions. Their decisions create major trends that last days, weeks, even months.
What the Daily reveals to you:
Structure of a Daily analysis:
Nasdaq Daily this morning:
Your Daily bias: LONG only
Consequence: Today, you will not ONLY look for buying opportunities, never sales.
The Daily is the weather forecast for the week. If the forecast calls for rain for the next 5 days, you are not going to go out in a t-shirt because there is a ray of sunshine (a bullish spike in M5). objective, not optimistic
The elements to identify
Knowing how to watch the Daily is good, but what exactly are we looking for? This lesson gives you a precise checklist of the elements to identify on the Daily chart to build your trading plan.
Your Daily analysis must answer specific questions:
1. What is the trend?
2. Where are the key zones?
3. Where is the price relative to these areas?
4. What is the momentum?
Daily Nasdaq Checklist:
Conclusion : Long bias, wait for confirmation on H1 near the support
It's like a doctor making a diagnosis. He doesn't just say "you're sick." He checks: temperature, blood pressure, blood analysis, etc. Each item in the checklist gives you part of the market diagnosis.
Refining the analysis
Between the Daily (overview) and the M5 (execution), there is the intermediate unit. It is she who builds the bridge, who structures, who refines. This lesson explains its crucial role in your analysis.
The intermediate unit (typically H1 or M15) serves as an intermediate zoom between your overall vision and your execution. It allows you to:
Structure the context:
Refine your zones:
Prepare your execution:
Daily: Bullish trend, broad support between 17,750 and 17,850
H1: Pullback in progress, price currently at 17,820
Observation H1: An order block H1 is located exactly at 17,780
Refinement: Instead of waiting for "somewhere" in the Daily area, you now have a specific level (17,780) to look for your M5 setup.
If the Daily is the area map and the M5 is your GPS, the H1 is the city map. It tells you "you are in the right neighborhood" before the GPS guides you street by street.
Precise Input
You have the direction (Daily), the structure (H1), now you need the precise timing. This is the role of the M5 and M1. This lesson teaches you how to use these small units of time to execute your trades with precision.
The M5 and M1 timeframes are your execution tools. They do not decide, they do not structure, they execute what the higher UTs have prepared.
The role of the M5/M1:
Context:
What you see in M5:
Action: Long entry after the BOS M5, stop under the wick, objective based on H1.
The M5/M1 is the sniper waiting for the perfect moment. It doesn't choose the target (Daily) or the position (H1), but when everything is in place, it pulls the trigger at the right time.
The importance of alignment
Now you know the role of each time unit. But how to make them work together? This lesson teaches you the art of alignment, the sine qua non for high probability trades.
time unit alignment means that all your TUs are pointing in the same direction and confirming the same scenario. This is the moment when the stars align and the probabilities are maximum.
The 3 levels of alignment:
1. Direction alignment:
2. Zone alignment:
3. Timing alignment:
When these 3 alignments come together, you have an "A+ setup".
Perfect alignment on Nasdaq :
Result: The 3 UTs say "long". The alignment is perfect. Now is the time to act.
Counterexample:
Here, H1 and Daily are in conflict (Daily support but resistance H1). The alignment is not complete → no trade.
It's like a green light at a crossroads. The Daily is the main light, the H1 is the directional arrow, the M5 is the pedestrian signal. If only one is red, you don't cross.
Practical application
Theory is good, but nothing beats a concrete example. In this lesson, we will apply everything you have learned to a real Nasdaq case, step by step.
Here is how a complete MTF analysis on Nasdaq takes place, from the first chart opening to entering a position.
Step 1: Daily Analysis (8 a.m.)
Step 3: Wait and watch
Step 4: Execution M5 (2:45 p.m.)
Step 5: Entry
This scenario is typical of a successful trading day. Note that:
It's like a wildlife photographer. He locates the area (Daily), sets up his lookout (H1), and waits patiently. When the animal appears (M5), it presses the trigger at the perfect time.
The trap to avoid
We all made this mistake at the beginning. It's so common that it deserves its own lesson. Find out why trading against the Daily is a recipe for disaster.
The classic beginner mistake is to see a nice setup on M5 or H1 and take the trade... in the opposite direction to the Daily.
How it happens:
Why it is dangerous:
Scenario:
The beginner thinks: "It's clearly bearish, I'm short!"
What happens: The price reaches support Daily, rebounds by 200 points in 2 hours, the beginner's stop jumps.
The experienced trader thinks: "Pullback in an uptrend = long opportunity when the price reaches the support"
It's like betting that the wind will change direction because you saw a leaf flying the other way. The leaf (M5) follows the wind (Daily), not the other way around.
The specificities of the Nasdaq
Not all markets are traded in the same way. The Nasdaq has its own characteristics that influence your multi-timeframe analysis. This lesson explains why and how to adapt your approach.
The Nasdaq (NQ/MNQ) is a particularly dynamic market which requires adaptation of your MTF analysis:
Characteristics of the Nasdaq:
Impact on your MTF :
Nasdaq vs EUR/USD:
Consequence: your Nasdaq zones must be 2-3x wider proportionally. Daily support on EUR/USD can be 20 pips. On the Nasdaq, it will be 50-100 points.
Other particularity:
If EUR/USD is a car traveling at 50 km/h, Nasdaq is a racing car at 200 km/h. You must adapt your braking distance (stop loss) and your anticipation (wider zones).
The complete process
Before we move on to the concrete strategy, let's recap the whole multi-timeframe process. This lesson gives you a clear and actionable summary that you can consult before each session.
Here is the complete MTF process summarized in clear steps:
PHASE 1: Preparation (before the session)
PHASE 2: Wait (during the session)
PHASE 3: Execution (when the price reaches the zone)
PHASE 4: Management
Quick pre-trade checklist:
It's like a cooking recipe. The ingredients (Daily, H1, M5), the steps (analysis, waiting, execution), the timing (when to add what). Follow the recipe and the result will be good.
Preparing for what comes next
You have now mastered analysis multi-timeframe. But how to transform it into concrete and profitable trades? This lesson bridges the gap between analysis (this module) and strategy (subsequent modules).
MTF analysis gives you context. The strategy gives you the signal. Both are essential, but they have different roles.
What the MTF taught you:
What the strategy will teach you :
The winning combination:
MTF + Strategy = Complete trading system
Without MTF, a strategy is blind (no context).
Without strategy, the MTF is vague (no precise rules).
Before: “I know that I have to be long and that this zone is interesting”
After the strategy: “I am long because I have an H1 engulfing on an OB with M5 BOS confirmation, my stop is at X, my TP at Y, and I risk 1% of my capital”
The strategy transforms analysis into action measurable.
In the following modules, you will discover:
Each element will rely on your mastery of the MTF.
MTF analysis is learning to read a map. Strategy is learning to drive. You need both to get to your destination.
Advantages of NQ and MNQ for day trading
Introduction to Nasdaq
Welcome to this module dedicated to Nasdaq, the index that we will trade together. Before explaining how to trade it, it is essential to understand why this asset is the ideal choice for our strategy.
The Nasdaq is one of the most popular stock indices in the world, and it is no coincidence that so many professional traders choose it as their main instrument. In this module, you will discover:
What we will cover:
Why this module is important:
Understanding your trading instrument is fundamental. It's not just an abstract chart - it's a market with its own personality, its own rules, and its own opportunities. The better you know it, the better you will trade it.
Imagine that you had to choose between driving a Formula 1 car or a city car for racing. F1 is faster, more technical, but requires specific mastery. Nasdaq is that F1: powerful, technical, and incredibly rewarding when you master it.
Choosing your market is like choosing your sport. You could play any sport, but you'll excel at the one that fits your style, your personality, and your goals. Nasdaq is a perfect fit for technical and momentum intraday trading.
By the end of this module, you will know:
Definition of Nasdaq
Before trading the Nasdaq, you need to know what exactly it is. This lesson gives you a clear understanding of this legendary index and how it works.
The Nasdaq (National Association of Securities Dealers Automated Quotations) is an American stock market index created in 1971. More precisely, when we talk about "trading the Nasdaq", we are generally referring to the Nasdaq-100.
Composition of the Nasdaq-100:
Trading hours:
When Apple announces good results, the Nasdaq reacts. When Nvidia explodes thanks to AI, the Nasdaq soars. These 100 companies are so influential that their movements create massive daily trading opportunities.
The Nasdaq-100 is like a football team made up of only the 100 best players in the world. When this team plays, the spectacle is guaranteed, the movements are spectacular, and the opportunities are numerous.
NQ and MNQ are both futures contracts on the Nasdaq-100, but with one major difference:
NQ (E-mini Nasdaq-100):
MNQ (Micro E-mini Nasdaq-100):
The ratio is simple: 1 NQ = 10 MNQ
Scenario: The Nasdaq rises 150 points
| Contract | Calculation | Profit |
|---------|--------|--------|
| 1 NQ | 150 × $20 | $3,000 |
| 1 MNQ | 150 × $2 | $300 |
| 10 MNQ | 150 × $2 × 10 | $3,000 |
The same movement, but the financial impact is 10x different.
Reverse warning: If the market goes against you by 150 points
It's like real estate: NQ is buying an entire building, MNQ is buying an apartment. Both follow the same market, but the investment and risk are very different.
The advantage of the micro contract
Are you new to trading? The MNQ is your best ally. This lesson explains why this micro contract is perfectly suited to learning and developing your skills.
The MNQ has characteristics that make it the ideal instrument for getting started:
1. Controlled risk
2. Accessible margin
3. Gradual scaling
4. Conditions identical to NQ
Typical journey of a beginner on MNQ:
| Month | Contracts | Risk/trade | Capital |
|------|----------|--------------|---------|
| 1-3 | 1 MNQ | $60 (30 pts) | $5,000 |
| 4-6 | 2 MNQ | $120 (30 pts) | $7,500 |
| 7-9 | 3-5 MNQ | $180-300 | $10,000 |
| 10-12 | 5-10 MNQ | $300-600 | $15,000+ |
Natural progression based on performance, not ego.
The MNQ is like the little wheels on a child's bike. They don't change the way you pedal, but they allow you to learn without hurting yourself too much when you fall. Once comfortable, you withdraw them naturally.
Volatility as an advantage
First major advantage of the Nasdaq: its volatility. Where other markets are dormant, the Nasdaq is stirring. This feature is a blessing for the prepared intraday trader.
Volatility measures the amplitude of price movements. The Nasdaq is among the most volatile indices in the world.
Typical Nasdaq figures:
Comparison with other markets:
Why it's an advantage:
Result: The price traveled 440 points (cumulative) in 6 hours. Multiple trading opportunities.
The Nasdaq is like a turbulent ocean: the waves are large and frequent. An experienced surfer finds the best waves there. A beginner surfer can drown. The key? Be prepared.
Nasdaq in day trading
Second advantage: Nasdaq is designed for intraday trading. Its structure, timings, and behavior make it the perfect instrument for those who want to close their trades every day.
Intraday trading consists of opening and closing all your positions on the same day. Nasdaq excels in this area for several reasons:
1. Clearly defined sessions
2. Quick but clean movements
3. Daily resolution
4. Clear windows of opportunity
Typical day for a Nasdaq intraday trader:
| Time | Action | Result |
|-------|--------|----------|
| 2:30 p.m. | Daily + H1 analysis | Bias defined |
| 3:30 p.m. | Opening observation | Setup spotted |
| 4:00 p.m. | Trade 1 | +80 points |
| 6:00 p.m. | Break | - |
| 8:30 p.m. | Trade 2 | +50 points |
| 10:00 p.m. | Flat, day over | +130 points total |
No overnight positions. Risk controlled. Peaceful sleep.
The Nasdaq intraday is like a football match: start, half-time, end. You play during the game and go home afterwards. No endless extensions or nighttime stress.
Respecting the zones
Third advantage: the Nasdaq is a technical market. Unlike some erratic assets, it respects technical analysis remarkably well. This is excellent news for us.
A technical market is one where the technical analysis tools (supports, resistances, patterns, structure) work reliably and repeatably.
Why the Nasdaq is technical:
1. Dominated by algorithms
2. Disciplined institutional players
3. Respect for psychological levels
4. Repeating Patterns
Real observation on the Nasdaq:
The level was respected to the point. That's what a technical market is.
Trading a technical market is like playing chess with clear rules. Trading an erratic market is like playing chess where the pieces can move any way you want. Which do you prefer?
The importance of liquidity
Fourth advantage: liquidity. The Nasdaq is one of the most liquid markets in the world. This characteristic has direct implications on the quality of your trading.
Liquidity measures the ease with which you can buy or sell an asset without significantly impacting its price.
Nasdaq in figures:
Why liquidity is important:
1. Execution at the requested price
2. Easy entries and exits
3. Tight spreads
4. Price stability
Liquidity comparison:
| Market | Daily volume | Typical spread |
|--------|------------------|----------------|
| Nasdaq futures | 3M+ contracts | 0.25-0.50 pt |
| Bitcoin | Varies | 5-50$ |
| Small cap stocks | <100K | Large |
| Major Forex | Very high | 0.1-1 pip |
The Nasdaq combines massive volume AND tight spread = ideal.
Liquidity is like the queue at the supermarket. On the Nasdaq, there are 50 open crates: you go through immediately. In an illiquid market, there is only one cash register and 100 people in front of you.
Reduced costs
Fifth advantage: tight spreads. Directly linked to liquidity, this advantage directly impacts your profitability on each trade.
The spread is the difference between the purchase price (ask) and the sale price (bid). It is an implicit cost of each trade.
Spread on the Nasdaq:
Concrete impact:
If you make 100 trades per month with a spread of 0.50 points on MNQ:
Comparison with other markets:
Calculation on a typical trade:
| Element | Points | MNQ ($) | NQ ($) |
|---------|--------|---------|--------|
| Objective | +50 pts | +100$ | +1,000$ |
| Spread | -0.50pt | -1$ | -10$ |
| Commission | - | -1$ | -4$ |
| Net profit | 49.5 pts | $98 | $986 |
The spread only represents 1% of the trade. Negligible.
The spread is like currency exchange fees at the airport. On Nasdaq, it's like changing money at your bank (minimal fees). On some CFDs, it's like changing in a tourist exchange office (exorbitant fees).
Recurring patterns
Sixth and final advantage: repetitiveness of movements. The Nasdaq has recurring patterns which, once identified, become predictable. This is the very essence of our strategy.
Repetitiveness means that the Nasdaq regularly reproduces the same types of movements, at the same times, in a similar way. This characteristic is your most valuable advantage.
What is repeated on Nasdaq:
1. Session patterns
2. Reactions to zones
3. Behavior after BOS
4. Candle Patterns
Recurring pattern observed hundreds of times :
This pattern occurs 3-4 times a week. Once you know it, you expect it and enjoy it.
It's like knowing someone's habits. If you know your friend goes to the coffee shop at 9am every morning, you can find him there. The Nasdaq also has its habits, and once you know them, you know where to "find" it.
The Challenges of Nasdaq
We have seen 6 major advantages of Nasdaq. But let's be honest: no market is perfect. This lesson presents the disadvantages of Nasdaq that you need to know and deal with.
The disadvantages of Nasdaq are real but manageable:
1. Volatility = amplified risk
2. Restrictive times (for Europe)
3. Sensitivity to US news
4. Entry cost
5. Possible gaps
Real negative scenario:
This is the reality of the market. These days exist.
The Nasdaq is like a sports motorcycle: incredibly capable, but requiring respect and control. A careless driver will get hurt. A prepared driver will benefit from the power.
The bottom line
We have seen the 6 pros and cons. Now, let's take stock: why do the advantages far outweigh?
Summary of the advantages:
Summary of disadvantages:
The verdict:
Each inconvenience has a concrete and applicable solution. The advantages are intrinsic to the market and exploitable on a daily basis.
Comparison with other markets:
| Criterion | Nasdaq | EUR/USD | Bitcoin |
|---------|--------|---------|---------|
| Volatility | High | Average | Extreme |
| Technical | Very good | Good | Variable |
| Liquidity | Excellent | Excellent | Variable |
| Spreads | Tight | Tight | Large |
| Schedules | US | 24h | 24/7 |
| Repetitiveness | Strong | Average | Low |
The Nasdaq checks more boxes than any other market for technical intraday trading.
Choosing the Nasdaq is like choosing a restaurant: none is perfect, but this one has the best food (volatility), the best service (liquidity), the best prices (spreads), and a predictable atmosphere (repetitiveness). Small flaws (schedules, news) are manageable.
My journey:
Start: Forex
Transition: Indices
Discovery: Nasdaq
Today:
A typical day of my trading:
Simple, effective, reproducible. The Nasdaq allows it.
Finding your market is like finding your musical instrument. I tried the piano (Forex), the guitar (DAX), the violin (S&P). When I discovered the saxophone (Nasdaq), I knew it was my instrument.
Module 5 Summary
Now you know everything you need to know about the Nasdaq. This conclusion summarizes the essential points and prepares you for the rest of the training.
What you learned in this module:
The 6 advantages of Nasdaq:
Manageable downsides:
Nasdaq is your instrument. Multi-timeframe analysis is your method. You are now missing:
This is the subject of the following modules.
You have completed the fundamental modules. You now understand:
You are ready for the advanced modules where we will build your complete strategy.
Understanding where the market is really trading
Introduction to Volume Profile
Welcome to this module dedicated to the Fixed Range Volume Profile. This powerful tool will allow you to see the market in a way that 95% of traders don't: through the lens of volume.
The Volume Profile is an analysis tool that displays the volume traded at each price level, rather than over time. Unlike traditional volume bars (at the bottom of the chart), the Volume Profile shows WHERE the volume has been concentrated.
What you will learn:
Why it matters:
Price alone only tells part of the story. Volume tells you WHERE the big players acted. These areas become magnets for price in the future.
Imagine the Nasdaq rising from 17,800 to 18,000. The price chart shows you a nice green candle. But the Volume Profile reveals that 70% of the volume traded between 17,850 and 17,900. This area is now "loaded" with positions and will become a key level.
The Volume Profile is like a heat map of a supermarket. It shows you where customers spend the most time. In trading, it shows you where traders have traded the most.
The Importance of Volume
Before diving into the Volume Profile, let's understand why volume is so important. This lesson lays the essential conceptual foundations.
The volume represents the quantity of contracts exchanged. It is the "fuel" of the market.
Volume = Conviction
What volume tells you :
Price vs Volume:
Scenario 1: Breakout with volume
Scenario 2: Breakout without volume
Same price movement, two opposite conclusions thanks to volume.
Price is the thermometer that tells you the temperature. The volume is the complete weather forecast that tells you if it's going to be hot tomorrow too. Without volume, you only see the present moment.
Defining Volume Profile
The Volume Profile is different from traditional volume indicators. This lesson explains exactly what it is and how to read it.
The Volume Profile displays the volume traded horizontally, price level by price level.
Structure of the Volume Profile:
What it reveals:
Key areas of the Volume Profile:
Reading a Volume Profile on the Nasdaq:
18,100 |▓▓
18,050 |▓▓▓▓▓▓▓▓▓▓▓▓ ← HVN (high volume)
18,000 |▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓ ← POC (max volume)
17,950 |▓▓▓▓▓▓▓▓▓▓▓▓ ← HVN
17,900 |▓▓
17,850 |▓▓▓▓▓▓
The price was most “accepted” around 18,000 (POC). The areas at 17,900 and 18,100 have little volume: price moved through them quickly.
The Volume Profile is like a density scanner. Dense areas (high volume) are like concrete walls - the price slows down and reacts there. Light zones (low volume) are like air - price passes through them easily.
The interest of the fixed range
There are several types of Volume Profile. We use a "fixed range". This lesson explains why this choice is optimal for our trading.
Types of Volume Profile:
Why the fixed range is superior:
1. Full control
2. Relevance
3. Consistency with the MTF
Practical use of the fixed range:
Scenario 1 : Analysis of the day before
Scenario 2: Analysis of a movement
It's like analyzing a store's sales. You can look at sales for the year (too broad), the hour (too short), or the last week (just right). The fixed range gives you the right level of detail.
Understanding POC
POC (Point of Control) is the most important level of the Volume Profile. This lesson teaches you how to identify it and use it in your trading.
The POC (Point of Control) is the price level where the MOST volume was traded over the period analyzed.
Characteristics of the POC:
Why the POC is powerful:
Price behavior around the POC:
POC of yesterday's session: 17,850
This morning at the opening :
During the session:
POC is like the average price of an apartment in a neighborhood. If you buy below, it's a "good deal" (the market will want to go up). If you buy above, it's "expensive" (the market could correct).
Understanding the Value Area
The Value Area is the area where 70% of the volume is traded. It is an extension of the concept of POC which gives you a more complete vision.
The Value Area (VA) represents the price zone where 70% of the total volume was traded over the period analyzed.
Components of the Value Area:
What the Value Area tells you:
Typical behavior:
Value Area from yesterday's session:
This morning at the opening at 17,800:
If the price opens in the VA (17,900) :
The Value Area is like the habitable area of a house. The living room (POC) is where everyone spends the most time. The boundaries (VAH/VAL) are the walls. Leaving the house (outside VA) is possible but temporary - we always come back.
The price reactions
Now that you understand the Volume Profile, let's see how price actually interacts with these volume zones. This lesson shows you typical reactions to exploit.
Price has predictable behaviors around volume zones:
1. Around the POC (magnet)
2. At the limits of the Value Area (VAH/VAL)
3. In the Low Volume Nodes (LVN)
4. In High Volume Nodes (HVN)
Real scenario on the Nasdaq:
Each zone produced a predictable response.
Volume zones are like toll booths on a highway. HVNs are toll booths with lots of booths (traffic slows down). The LVN are sections without tolls (traffic queues). POC is the biggest toll (everyone goes through it).
The error avoid
Volume Profile is powerful, but used incorrectly it can mislead you. This lesson reveals the most common mistake and how to avoid it.
The classic mistake: trading the Volume Profile in isolation
Many traders discover the Volume Profile and start trading solely based on the POC and the Value Area, without considering:
How to use the Volume Profile well:
Good use:
The Volume Profile is like a GPS that tells you where the gas stations (volume zones) are. But if you're driving in the wrong direction (against the Daily), knowing where the stations are won't help you get to your destination.
Module 6 Summary
You have now mastered the Fixed Range Volume Profile. This conclusion summarizes the essential points and prepares you to integrate this tool into your trading.
What you learned:
Every morning:
During trading:
The Volume Profile gives you an additional dimension: market depth. Combined with:
You will have a complete system for reading the market.
Institutional zones for execution
Introduction to Order Blocks
Welcome to this module dedicated to Order Blocks. This is one of the most powerful concepts in institutional analysis, and will allow you to identify exactly where big players are placing their orders.
Order Blocks are price areas where institutions have initiated massive positions. These zones then become powerful support/resistance levels as institutions "defend" their positions.
What you will learn:
Why Order Blocks work:
A hedge fund wants to buy 10,000 NQ contracts. He can't buy everything at once (that would make the price skyrocket). It therefore gradually accumulates in a zone of 50 points. This area becomes an Order Block. When the price returns there, the hedge fund buys again, creating a rebound.
An Order Block is like the headquarters of an army. This is where the troops (capital) are stationed. If the enemy (the prize) approaches, the army defends its base (bounce back on the area).
Definition of Order Blocks
What exactly is an Order Block? This lesson gives you the precise technical definition and identification criteria.
An Order Block (OB) is the last candle (or group of candles) in the opposite direction before a significant impulsive move.
Identification criteria:
Types of Order Blocks:
Anatomy of the Order Block:
Identification of a Bullish OB:
When price returns to 17,800-17,815:
→ Potential buying zone as institutions "defend" their positions
The Order Block is like the last stop before the highway. This is where travelers (institutions) refuel (accumulate). When other travelers pass by there, they do the same (reaction on the zone).
The importance of H4
For our analysis, we mainly use H4 Order Blocks. This lesson explains why this timeframe is optimal and how to use it.
The H4 (4 hours) is the ideal timeframe for identifying Order Blocks for several reasons:
Why the H4 is perfect:
OB H4 identification process:
Typical result:
The H4 is like the floor plan of a building. The Daily shows you the whole building, the M15 shows you a room. The H4 shows you the entire floor - enough detail to act, enough overview not to get lost.
How to plot an OB
Now that you know how to identify H4 OBs, let's see how to correctly plot them on your graph. This lesson gives you a precise and repeatable method.
Method for plotting an Order Block H4:
Step 1: Identify the impulse
Step 2: Find the OB candle
Step 3: Trace the area
Step 4: Validate
Tracing of a Bullish OB H4 :
Chart H4 Nasdaq:18,100 ─────────────────────────────
│ ▓▓▓▓ Impulse bullish
18,000 │ ▓▓▓▓
│ ▓▓▓▓ (BOS here)
17,900 │ ▓▓▓▓
├─────────────────────────────
17,850 │ ████ ← LAST RED CANDLE = OB
├─────────────────────────────
17,800 │ (previous drop)
OB Area: 17.820 - 17.850 (red candle body)
Tracing an OB is like marking the place where a diver took his last breath before diving. This is the starting point of the movement, and it will probably come back to "breathe" there.
The use of M15
The H4 gives you zones, the M15 gives you accuracy. This lesson shows you how to use M15 Order Blocks to optimize your entries.
Once the price reaches an H4 OB, you move to M15 to refine your entry. The M15 allows you to:
1. Identify an M15 OB in the H4 OB
2. See the reaction in real time
3. Optimize your stop loss
The process:
Complete scenario :
H4: Bullish OB identified at 17.820-17.850
Price descends towards zone
Transition to M15:
Entry:
The H4 OB is like the address of a building. OB M15 is the apartment number. Both take you to the same place, but the M15 tells you exactly where to ring.
The winning combination
The real power comes from combining H4 + M15. This lesson shows you the complete process of using Order Blocks on these two timeframes.
The complete H4 + M15 process:
PHASE 1: Preparation (before the session)
PHASE 2: Waiting
Complete trade from 01/25:
Morning (preparation):
3:45 p.m. (signal):
4:00 p.m. (execution):
4:15 p.m. (entry):
It's like a sniper. The H4 tells you where the target is (OB H4). The M15 tells you when to shoot (OB M15 + confirmation). You never trade without both pieces of information.
The error to avoid
Even with a concept as powerful as Order Blocks, mistakes are common. This lesson shows you the most common mistake and how to avoid it.
The Common Mistake: Treating All OBs as Equal
Not all Order Blocks are equal. Some are powerful, others are weak. The mistake is to trade all OBs without discrimination.
STRONG OBs (to trade):
WEAK OB (to be avoided):
The quality filter:
Before considering an OB, ask yourself these questions:
Minimum 4/5 “yes” to consider the OB.
OB H4 n°1:
It's like choosing fruit at the market. Not all apples are good. You check the color, the firmness, the smell. Likewise, not all OBs are good - you have to sort them.
Summary of Module 7
You have now mastered Order Blocks H4 and M15. This conclusion summarizes the essential points and prepares you to integrate these concepts into your system.
What you learned:
You now have:
The combination of these three elements creates a complete market reading system:
The following modules will give you:
MCQs and practical exercises before strategy
Validate the basics before going further
Welcome to this validation of acquired knowledge module. After having covered the fundamentals of the market, Japanese candlesticks, market structure, multi-timeframe analysis, the specificities of the Nasdaq, the Volume Profile and Order Blocks, it is time to consolidate your knowledge.
This module has a specific objective: to ensure that you have assimilated the essential concepts before moving on to the practical phase with the ALGO DEUS setup. Because understanding theoretically and knowing how to apply are two very different things.
The validation of acquired knowledge is not a simple academic test. It's a strategic checkpoint in your trading journey. Here's why:
1. Identify unclear areas
You may think you understand a concept, but the MCQ will reveal whether your understanding is solid or superficial. For example:
2. Anchor concepts through repetition
Neuroscience research shows that active retrieval (answering questions) anchors knowledge better than passive rereading. This MCQ is a learning tool, not just an assessment.
3. Prepare for the practical phase
The ALGO DEUS setup is based on a precise combination of these concepts. If one element is misunderstood, the entire system becomes fragile. Better to identify and correct now.
This validation module includes:
Let's take an example of what you should master:
Graphic situation:
Validation questions:
If you can answer these questions instantly, you're ready for what's next. Otherwise, this module will help you identify what you need to review.
Imagine that you are learning to drive:
You wouldn't want to get behind the wheel on a motorway without having validated that you know the meaning of the signs and the priority rules. It's exactly the same logic here.
| Element | Importance |
|---------|------------|
| MCQ | Identifies theoretical gaps |
| Exercises | Validates practical understanding |
| Score 85%+ | Minimum threshold before continuing |
| Targeted revision | Work only on what is missing |
💡 Fundamental principle: A trader who does not master his fundamentals is like a surgeon who does not know anatomy. Technical skill (setup) cannot compensate for the lack of basics.
This module is an investment in your future success. Take it seriously, and you will approach the ALGO DEUS setup with justified confidence.
Multiple choice questions
This validation MCQ is designed to test your mastery of fundamental concepts before moving on to the ALGO DEUS setup. It covers all of the previous modules: market basics, Japanese candlesticks, market structure, multi-timeframe analysis, Nasdaq specifics, Volume Profile and Order Blocks.
Answer honestly, without looking at your notes first. The goal is not to have a perfect score, but to identify what needs to be reinforced.
Phase 1: First passage (without help)
Phase 2: Correction and analysis
Phase 3: Targeted revision
Q1. What is a bull market?
Q2. What does the high wick of a candlestick represent?
Q3.A candlestick with a small body and a long low wick is called:
Q4. What is the difference between a Doji and a Spinning Top?
Q5. A bullish Engulfing is valid when:
Q6. HH stands for:
Q7. An upward trend is characterized by:
Q8. What is a BOS (Break of Structure)?
Q9. The difference between BOS and ChoCH is:
Q10. A SOSH (Shift of Structure) indicates:
Q11. In multi-timeframe analysis, the Daily is mainly used to:
Q12. Which timeframe is generally used for precise execution?
Q13.Timeframe alignment means:
Q14. If the Daily is bullish and the H1 bearish, you should:
Q15. The Nasdaq-100 is made up of :
Q16. The difference between NQ and MNQ is :
Q17. What time does the US market open (Paris time, winter) ?
Q18. Why is Nasdaq popular in day trading?
Q19. The POC (Point of Control) represents :
of volume
Q21. An LVN (Low Volume Node) acts as:
Q22. The VAH (Value Area High) represents:
Q23. An Order Block is :
Q24. For an Order Block to be valid, there must be :
Q25. The optimal entry zone in an Order Block is:
| Score | Interpretation | Action |
|-------|----------------|--------|
| 23-25 (92%+) | Excellent mastery | Moving on to practical exercises |
| 20-22 (80-88%) | Good base, some revisions | Review the relevant modules |
| 15-19 (60-76%) | Significant gaps | Resume modules 3-7 |
| < 15 (< 60%) | Fundamentals to review | Resume from module 1 |
💡 A score of 85%+ is the minimum before moving on to the ALGO DEUS setup. If you do not reach this threshold, revise and repeat the MCQ until you reach it.
This MCQ is not an end in itself, but a diagnostic tool. Use it to identify your weaknesses and correct them before they cost money in real trading.
Application exercises
Theory without practice is like a map without a compass: you know the territory, but you don't know how to find your way. These practical exercises are designed to transform your theoretical understanding into applicable skills on charts.
You will analyze real-world situations by applying all the concepts learned: market structure, multi-timeframe analysis, Volume Profile and Order Blocks.
Each exercise follows a standardized structure:
session
📊 NASDAQ ANALYSIS - [Date]🎯 DAILY BIAS: [Bullish/Bearish/Neutral]
Justification: [HH/HL in progress, last BOS at X...]
📈 STRUCTURE H4 :
- Trend: [...]
- Latest BOS: [level]
- Key areas: [...]
🎪 AREAS OF INTEREST:
- OB H4 @ [level] - Quality: [X/5]
Confluence: [VAL/POC/etc.]
- OB H1 @ [level] - Quality: [X/5]
📋 SCENARIOS:
A) PURCHASE if: [condition]
→ Entry: [zone], Stop: [level], Target: [level]
B) INVALIDATION if: [condition]
→ New bias: [...]
⏰ TOMORROW PLAN:
- Monitor [area] between [hours]
- Expected trigger: [...]
💡 Deliberate practice is key. Repeat these exercises every week until they become automatic.
| Exercise | Skill Tested |
|----------|---------|
| Structure | Trend reading |
| Multi-TF | Global vision |
| Volume Profile | Volume Context |
| Order Blocks | Institutional areas |
| Summary | Complete application |
These exercises directly prepare for real trading with the ALGO DEUS setup.
Conclusion of the validation module
Before moving on to the ALGO DEUS setup, let's recap the fundamental rules that will guide your trading. These principles are not suggestions, but laws to respect in order to survive and prosper in the markets.
This lesson concludes the fundamental phase of your training and prepares you to approach the ALGO DEUS methodology with the right foundations.
These rules are the fruit of the experience and mistakes of thousands of traders. Ignoring them means repeating their mistakes.
Principle: Never trade against the Daily's trend.
Why?: The Daily represents the intention of big money. Going against is swimming against the current.
Principle: An Order Block is only valid if it is followed by a BOS (Break of Structure).
Application: Before marking an OB, ALWAYS check: “Was there a BOS afterwards?”
Principle: An unaligned trade is a trade to avoid, even if it "seems" good.
Mantra: “I would rather miss an opportunity than enter a misaligned trade.”
Principle: Never enter the zone alone. Wait for a confirmation trigger.
Classic error: Place a limit order on zone without waiting for confirmation → often stopped.
Principle: Each trade MUST have a stop loss defined PRIOR to entry.
Formula: Position size = (Capital × % risk) / (Stop distance in points × point value)
Principle: Avoid trading 30 minutes before and after the announcements major ones.
Exception: If you have a trade in profit with a stop at BE (breakeven), you can leave it run.
Principle: If the market invalidates your analysis, accept it immediately.
Mindset: “The market gives me information, not insults.”
Principle: Waiting for the right setup is more profitable than forcing trades.
Statistics: Profitable traders take on average 2-5 quality trades per week, not per day.
Principle: Each trade must be documented for later analysis.
Minimum template:
Date: [...]
Setup: [OB + BOS + alignment]
Input: [level]
Stop: [level]
Target: [level]
Result: [+ or - FundamentalsWhat you learned
During these fundamental modules, you acquired:
- Market vision: How financial markets work
- Reading candlesticks: The language of price
- Market structure: HH/HL/LH/LL, BOS, ChoCH
- Multi-timeframe analysis: From Daily to M5
- Nasdaq specificities: Why this asset for day trading
- Volume Profile: The institutional context
- Order Blocks : The intervention areas of big capital
What comes next
The ALGO DEUS setup will assemble all these elements into a precise and reproducible methodology:
- How to combine these tools to identify setups
- Exact entry rules
- Trade management (trailing stop, partial)
- Psychology of execution
Key Points to Remember
💡 These 10 rules are not options. They are the result of billions of dollars lost by traders who ignored them. Respect them.
| Rule | Summary |
|-------|--------|
| #1 | Daily bias = single direction |
| #2 | No BOS = no valid OB |
| #3 | Mandatory alignment |
| #4 | Zone + trigger = input |
| #5 | Stop loss still set |
| #6 | Risk 1-2% max |
| #7 | Avoid the news |
| #8 | Accept stops |
| #9 | Profitable Patience |
| #10 | Mandatory journal |
You are now ready for the ALGO DEUS setup. These fundamentals are your compass. The setup is your map. Together, they will guide you towards professional trading practice.
Why YouTube strategies don't work
The truth about YouTube strategies
Welcome to a module that may shake up some of your beliefs. If you've ever explored trading, you've probably encountered dozens of indicators: RSI, MACD, Stochastic, Bollinger, Ichimoku... The list is endless.
This module will reveal to you a disturbing reality: the majority of losing traders are obsessed with indicators, while profitable traders barely use them, if at all.
Here's a disturbing fact:
Correlation? Not necessarily causal, but there is an important lesson here.
Indicators are attractive for several reasons:
1. The Illusion of Science
An indicator with a complex mathematical formula gives the impression of a “scientific” approach. The RSI uses an average of gains/losses over 14 periods...sounds serious.
2. The promise of simplification
“When the RSI goes below 30, buy. When it goes above 70, sell.” Simple, mechanical, reassuring.
3. The comfort of not thinking
Following an indicator avoids the responsibility of analysis. "It was not me who decided, it was the MACD which crossed."
Institutional traders, those who really move the markets, do not trade with retail indicators:
The indicators you see on YouTube charts are often there for show, not for real decisions.
A trained salesperson shows you:
"Look! When the RSI goes below 30 AND the MACD crosses upwards, the trade is a winner 8 times out of 10!"
What he doesn't tell you:
You apply this "miracle strategy":
Why? The indicator does not "know" what the institutional investors are doing. It just calculates an average of the past.
Imagine you are driving a car looking only in the rearview mirror.
The indicators are rear-view mirrors. They show you what the price has done, not what it is going to do.
The Price Action (reading the gross price) is looking out the windshield: you see the road ahead you.
| Myth | Reality |
|-------|---------|
| Indicators predict | They calculate the past |
| More indicators = better | No more confusion |
| Pros Use Secret Indicators | The pros read the gross price |
| RSI < 30 = guaranteed purchase | RSI < 30 = strong recent decline (may continue) |
💡 Key lesson: Indicators are not "bad", but their use by retail traders is generally counterproductive. First learn to read the market without them.
This reality can be disturbing if you have invested time in mastering indicators. But it is better to accept it now than to continue losing money with unsuitable tools.
Why indicators are not enough
Now that you've become aware of the disturbing reality about indicators, let's dig deeper into the fundamental problem they pose. Understanding this problem will allow you to never fall into the trap again.
An indicator is not an independent source of information. It is a mathematical calculation based on price.
It's like the difference between:
The summary gives you information (possession, shots, etc.), but it doesn't show you WHAT'S actually HAPPENING.
LEVEL 1: Price (primary source)
↓
LEVEL 2: Indicators (derived from price)
↓
LEVEL 3: Signals (interpretation of indicators)
At each level, you move away from reality. You interpret an interpretation of an interpretation.
1. Redundancy
All indicators say the same thing as the price, but late and less clearly.
2. The inherent lag
Indicators use averages over X periods. By definition, they are late.
3. False Precision
An RSI at 31.47 seems accurate. But what is the practical difference between 31.47 and 32.53? None.
4. Over-optimization
Traders spend hours optimizing settings (RSI 14 or 21? MACD 12,26.9 or 8,17.9?). This is noise optimization.
Let's take an upward movement on the Nasdaq:
What the price shows:
What the RSI shows:
The trader who reads the price enters at 2:00 p.m.
The trader who waits for the RSI either never enters, or enters too late.
Imagine you want to know if it's raining :
Option A (The Price): You look out the window. You immediately see if it's raining.
Option B (The Indicator): You install a sensor that measures the average humidity over the last 14 hours and sends you an alert when it exceeds a threshold.
Which one tells you more quickly that it's raining? Option A, obviously.
Indicators are option B. They measure an average of the past instead of showing you the present.
Step 1: Remove all indicators from your chart
For 1 month, trade only with:
Step 2: Observe what is happening
Step 3: If you MUST use an indicator
| Appearance | Price | Indicator |
|--------|------|------------|
| Information | Direct | Derivative |
| Timing | Real time | Late |
| Clarity | Visual | Abstract digital |
| Objectivity | Actual transaction | Configurable calculation |
💡 Fundamental principle: If you have to choose between looking at the price and looking at an indicator, ALWAYS look at the price. The indicator will never tell you something that the price hasn't already shown you... late.
The problem with indicators is not that they are useless, it's that they create a false sense of security that disconnects you from the reality of the market.
The problem of delay
The delay of indicators is not a design flaw - it is an inherent characteristic of their operation. Understanding WHY they are late will allow you to never use them as a timing tool again.
All popular indicators use averages or calculations over X periods. This is where the delay is coded.
Example: The Simple Moving Average (SMA 20)
SMA 20 = (Candle price 1 + Candle price 2 + ... + Candle price 20) / 20
For the SMA 20 to “react” to a change, 20 candles must integrate the new information. It is mathematically impossible for it to react instantly.
Example: The RSI (14 periods)
RSI = 100 - [100 / (1 + RS)]
where RS = Average gains over 14 periods / Average losses over 14 periods
The RSI smoothes the data over 14 periods. A sudden movement today will be "diluted" by the 13 previous candles.
Imagine a violent upward movement:
Candle 1: +50 points
Candle 2: +40 points
Candle 3: +60 points
← Here, the price has already taken 150 pointsCandle 4: RSI finally starts to rise significantly
Candle 5-6: RSI reaches the "overbought zone"
← Here the move is often over
The trader who waits for the RSI misses 70-80% of the move.
Indicators smooth the data to reduce the noise. This is their stated objective.
The problem: By reducing the noise, they also reduce the useful signal. You obtain a "clean" curve but which does not tell you anything actionable.
During an FOMC announcement (Fed rate decision):
3:30:00 p.m. - Announcement: The Fed maintains the rate
3:30:01 p.m. - Nasdaq jumps 80 points in 3 seconds
What the price is showing:
What the RSI shows:
When the RSI "signals" something, the 80 point movement is already done. The stops are already far away. The risk/reward ratio is destroyed.
On an M5 chart with an RSI 14:
70 minutes lag on an asset like the Nasdaq which can move 100-200 points per hour, that's huge.
Think about the weather:
Option A: Look at the sky
You go out, you see black clouds coming. You bring in your things. Immediately.
Option B: Weather app that averages the last 14 hours
The app tells you: “Partly cloudy weather”. The dark clouds are not yet integrated into the average.
You are surprised by the storm.
The indicators are option B. They average the past instead of showing you the present.
1. Real-time market structure
2. Order Blocks
3. Volume Profile
4. Japanese candlesticks
| Tool | Latency |
|-------|---------|
| Gross price | 0 |
| Candlestick | 0 (visible during training) |
| BOS/Structure | 0 (visible at the breakout) |
| Volume Profile | 0 (real-time data) |
| RSI 14 | ~14-20 candles |
| MACD 12.26 | ~26+ candles |
| Moving Average 50 | ~50 candles |
💡 The delay is not a bug, it's a feature. The indicators are designed to smooth the data. This smoothing mechanically creates a delay. You can't have both: smoothing AND responsiveness.
| Indicator | Periods | Typical delay |
|------------|---------|----------------|
| RSI 14 | 14 | ~20-40 min (M5) |
| MACD 12.26.9 | 26+ | ~30-60 min (M5) |
| SMA 20 | 20 | ~100 min (M5) |
| Bollinger 20 | 20 | ~100 min (M5) |
The solution is not to find a "without delay" indicator. It is to learn to read the price directly, which you do with the ALGO DEUS method.
Illustration of the problem
Theory is good. But let's see concretely how the delay of indicators manifests itself in real trading. This simple example will show you why traders who follow the indicators systematically arrive too late.
Let's take a common situation on the Nasdaq:
Phase 1: The decline (Candles 1-20)
The Nasdaq falls for several hours. The RSI gradually goes down:
At RSI 28, many traders think: "It's oversold! I'm going to buy soon!"
Phase 2: The turning point (Candle 21)
The price forms an Order Block + a bullish BOS on M15.
Phase 3: The bullish movement (Candles 22-30)
The Nasdaq rises by 80 points.
Phase 4: The RSI “signal” (Candle 31-35)
The RSI reaches 72 (“overbought”). But wait, it was supposed to be a BUY signal when it came out of oversold, right?
Suppose a trade on the Nasdaq:
| Moment | Price | RSI | Action Price Action | RSI Action |
|--------|------|---------|---------------------|------------|
| 2:00 p.m. | 18200 | 30 | Observe | “Oversold, signal soon” |
| 2:15 p.m. | 18210 | 32 | ENTRY (BOS) | Wait |
| 2:30 p.m. | 18250 | 48 | In profit +40pts | “No signal yet” |
| 2:45 p.m. | 18280 | 58 | In profit +70pts | "Neutral zone" |
| 3:00 p.m. | 18300 | 68 | OUTPUT (target) | “Maybe buy?” |
| 3:15 p.m. | 18290 | 72 | Out of position | "Too late, overbought" |
Result:
The RSI in this example went from "oversold" (28) to "overbought" (72) without never give a clear entry signal between the two.
The classic rules say:
This is the fundamental problem: the thresholds are arbitrary and the timing is always bad.
Imagine you want to catch a train:
Method A (Price Action): You look at the billboard and you see “Train approaching”. You position yourself on the platform.
Method B (RSI): You have a sensor which measures the average vibrations over the last 14 minutes. When the average exceeds a threshold, it tells you "A train may have passed recently."
With method B, the train has already left when you receive the signal.
Step 1: Bias Daily
Step 2: Zone H4
Step 3: Trigger M15
Step 4: Entry and management
No indicator was necessary. The market structure gave a clear signal and immediate.
💡 This example illustrates a TYPICAL case, not exceptional. The majority of tradable movements are missed by indicator users due to the inherent delay.
| Tool | Timing signal | Result |
|-------|---------------|----------|
| RSI 14 | Never clear | 0 points |
| BOS M15 | Immediate | +90 points |
The indicator didn't help you get in. He stopped you from entering. This is the paradox: the tool supposed to help you sabotages you.
The problem of false signals
The false signals are the bane of traders who use indicators. A false signal is when the indicator says "buy" and the price goes down, or "sell" and the price goes up. And it happens much more often than you think.
A false signal occurs when:
1. Indicators do not know the context
An RSI at 28 does not know:
It sees correctly: “Price has fallen a lot recently” → Displays a figure.
2. The thresholds are arbitrary
Why RSI 30 and not 25 or 35? Why MACD crossover and not something else?
These thresholds are conventions, not physical laws. The market does not respect them.
3. The market is evolving, the indicators are not
An RSI calibrated on the 2015 market does not work the same in 2024. The volatility, the speed, the players have changed. The indicator always calculates the same formula.
Studies on strategies based on indicators show:
And these statistics do not take into account the size of wins vs losses. Often, losses are greater than gains.
Context:
What the RSI trader does:
The reality: In a strong trend, the RSI can remain "oversold" or "overbought" for hours or even days. The threshold means nothing.
Imagine a thermometer that tells you the temperature:
The “cold” temperature (oversold RSI) does not mean it will get warmer (the price will rise). It depends on the overall context (the season = the trend).
The solution is not to find a better indicator. It's about changing your approach.
1. Respect the upper trend bias
2. Uses market structure as a filter
3. Wait for price confirmation
| Approach | False signals | Timing |
|----------|--------------|--------|
| RSI alone | ~50% | Bad |
| RSI + trend | ~35% | Medium |
| Structure + Price Action | ~20-25% | Good |
💡 False signals are not indicator “bugs”. They are a mathematical consequence of their functioning.A calculation of the past cannot reliably predict the future.
| Myth | Reality |
|-------|---------|
| “The RSI is reliable” | ~50% success (chance) |
| “False signals are rare” | They represent 40-50% of signals |
| “I can filter them” | Filters add delay and their own false signals |
Stop trying to “improve” indicators. Learn to read the price directly. False market structure signals also exist, but they are fewer and more easily identifiable.
The hidden danger of indicators
Beyond delay and false signals, there is a more insidious danger linked to the use of indicators. This danger is not technical, it is psychological. And it is often he who does the most damage.
When you use an indicator as a basis for decision, you delegate your responsibility to a mathematical calculation.
Typical internal dialogue:
This mechanism is toxic for your development as a trader.
1. You don't learn from your mistakes
If you attribute your losses to the indicator, you are not trying to understand what really happened. You are not progressing.
2. You develop an addiction
You become unable to read a chart without your indicators. The day they no longer work (and that day will come), you are lost.
3. You are looking for the "holy grail" instead of training
You spend your time looking for the perfect indicator instead of learning to understand the market. It's an endless headlong rush.
1. Indicator gives a signal
- You enter a position
- You lose
- You tell yourself "the indicator is bad"
- You look for a new indicator
- Return to step 1
This cycle can last for years. Some traders never escape.
Jean, 2 years of trading:
Year 1:
Year 2:
Result after 2 years: -60% of capital, zero understanding of the market.
If Jean had spent these 2 years learning :
It would probably be profitable or close to being profitable. Instead, he hunted chimeras.
Imagine a medical student who wants to diagnose patients:
Option A: He learns anatomy, physiology, semiology. He understands how the body works.
Option B: He uses an app that says "Symptom X = Disease Y." He doesn't understand anything, he just follows the app.
Which will be a better doctor? Obviously option A.
Trading is the same. You can use "apps" (indicators) or you can understand how the "body" (the market) works.
Step 1: Accept responsibility
Step 2: Learn the fundamentals
💡 The real danger of indicators is not that they do not work. It's because they prevent you from developing the skills that really work.
| Danger | Consequence |
|--------|-------------|
| Disempowerment | No learning |
| Addiction | Inability to read the market |
| Quest for the Holy Grail | Waste of time and money |
| Over-optimization | Strategies that fail in real life |
Ask yourself this question:
"If tomorrow, all my indicators disappeared, would I be able to trade?"
If the answer is no, you have a problem of skill, not of tools. And no indicator will solve a competency problem.
The problem of ready-made strategies
You have may have been seduced by YouTube videos that promise you “turnkey strategies”: “Use THIS RSI + MACD setup and win 80% of your trades!”. These strategies look magical on video. But why do they never work when YOU apply them?
What you see:
1. Cherry-picking
The creator selects 10 winning trades from 100. He only shows you those.
2. Hindsight bias
When you see a historical chart, the movement seems “obvious”. In real time, nothing is obvious.
3. Post-Optimization
"I use RSI 14 with threshold 32.5" - This parameter was found by looking AFTER what number would have worked.
4. Perfect conditions
The video shows ideal situations. The real market is full of noise, news, spikes.
A truly 80% profitable strategy over the long term would have a value of several million euros. Why would someone sell it for $97 or give it away for free on YouTube?
The answer: because it doesn't really work.
Title: "RSI Strategy Divergence: 85% of success!"
What is shown:
What is not said:
If you apply this strategy:
Imagine a roll of the dice:
The strategy salesman :
You:
“Technique” does not exist. It's chance filtered after the fact.
Before adopting a strategy, ask these questions:
1. What is the REAL win rate?
2. What is the risk/reward ratio?
3. Are the rules objective?
4. Why would this work?
| Red Flag | What it means |
|----------|---------|
| “Secret strategy of the pros” | Marketing, not reality |
| Only winning trades shown | Cherry-picking |
| Very precise parameters (RSI 13.5) | Over-optimization |
| “Works in all markets” | Nothing works everywhere |
| Unverifiable results | Probably invented |
💡 If a strategy was truly profitable at 80%+, its creator would be a billionaire and silent. He wouldn't sell it for €97 on a website.
| Promise | Reality |
|----------|---------|
| “80% success” | 40-50% in real (if lucky) |
| “Works every time” | Works on selected examples |
| “Pro Strategy” | Pros don't use this |
| “Turnkey” | Still requires work |
Instead of looking for a turnkey strategy, invest in your understanding of the market. It takes longer, but it is the only path to sustainable profitability.
The ALGO DEUS method is not a “magic strategy”. It is a market reading framework based on solid principles. It requires you to understand WHY it works.
The illusion of videos
You may have noticed that strategies on YouTube always seem to work perfectly. The creator shows trade after winning trade. However, when you apply them, it doesn't work. Why this difference?
In video:
In real time:
When you look at a past chart, everything seems obvious:
In real time, nothing is clear. The price can go in any direction.
💡 What works on video doesn't work in real time because video benefits from the perspective you'll never have in real time.
The solution: learn to read the market yourself instead of following "recipes" that don't work only after the fact.
The pros' approach
If indicators don't work, how do real professionals trade? This lesson reveals the methods used by those who actually make money in the markets.
1. Order Flow
2. Liquidity zones
3. Market Structure
4. Price Action
💡 Pros read the market directly. They don't need a mathematical calculation to tell them what they already see on the chart.
This is exactly the ALGO DEUS approach: structure + zones + price confirmation.
Nuance about indicators
After everything we've said, you might think that indicators should be banned completely. This is not entirely true. They have their place, but not the one generally attributed to them.
As CONTEXT, not as SIGNAL:
As a secondary FILTER:
The SIGNAL is always the price:
💡 Indicators can be useful context tools. But they never replace reading the price directly.
Use them if you want, but always in the background.
Summary of acquired
Let's take stock of everything you learned in the fundamental modules. This summary shows you the path taken and prepares you for the ALGO DEUS setup.
💡 You now have the fundamentals. The ALGO DEUS setup will assemble all of this into a precise execution method.
Module 9 Summary
You now have a clear and realistic vision of technical indicators. You know why they appeal, why they fail, and how professionals actually trade.
The ALGO DEUS setup you need will learn does not use indicators as signals. It is based on:
It is a professional approach, not a recipe magical.
💡 You are now vaccinated against the traps of indicators. This lucidity is a huge competitive advantage.
Understanding and anticipating economic announcements
Introduction to the impact of news
Welcome to this module devoted to the impact of economic news on the Nasdaq. If you have followed the previous modules, you now know how to read market structure, identify Order Blocks and analyze in multi-timeframe. But a crucial piece is missing: fundamental events.
Economic news can turn a perfectly configured trade into a disaster, or on the contrary, propel a movement in the expected direction. Understanding their impact is essential to surviving on the Nasdaq.
The Nasdaq is the index most sensitive to US economic announcements. A single word from the Fed Chairman can move the market by 200+ points in a few minutes.
What you will learn:
Many traders ignore the news thinking: "I trade technical, not fundamental."
This is a serious mistake. Even if you don't trade the news, the news trades you. A stop loss placed just before an FOMC announcement can be swept away by a 100 point spike, regardless of the quality of your technical analysis. pitfalls.
This module will give you the tools to navigate calmly in an environment where economic announcements can change everything in a few seconds.
The importance of news
Why should a technical trader care about economic news? This question comes up often. The answer is simple: news creates the volatility you trade.
Financial markets are mechanisms of anticipation. The current price reflects participants' expectations about the future. When news arrives:
The Nasdaq-100 is made up of technology companies whose valuation strongly depends on:
A 0.25% rate hike can cause the Nasdaq to fall by 3-5% in a few days, because it increases the cost of capital for tech companies.
Before the news:
During the news:
After the news news:
Context:
Reaction:
Lesson: In 5 minutes, the market moved a cumulative 300 points. A trader with a 30 point stop would have been stopped 3 times.
💡 News matters because it creates movements that technical analysis alone cannot anticipate. Ignoring the news is ignoring the fuel of the market.
| Appearance | Impact |
|--------|--------|
| Volatility | Multiplied by 3-10x during announcement |
| Spreads | Expanded (sometimes 5-10x normal) |
| Stop loss | High risk of slippage |
| Technical patterns | Temporarily invalidated |
Using the calendar
The economic calendar is the essential tool for any serious trader. This is your risk events map. Without it, you are navigating blindly in a minefield.
An economic calendar lists:
Step 1: Filter by importance
Step 2: Note the times
Step 3: Compare to consensus
| Column | Meaning |
|---------|---------------|
| News | The real figure (after publication) |
| Forecast/Consensus | What the market expects |
| Previous | The previous figure |
| Surprise | Difference between Actual and Forecast |
Date: Jan 10, 2024, 2:30 p.m. (Paris: 3:30 p.m.)
Event: Nonfarm Payrolls (NFP)
Importance: ⭐⭐⭐
Forecast: +175K
Previous: +199K
Interpretation:
Every morning, before analyzing charts:
💡 Checking the economic calendar every day should be as automatic as checking the weather before going out.
| Importance | Recommended Action |
|------------|------------------|
| ⭐⭐⭐ | Do not trade 30 min before/after |
| ⭐⭐ | Reduce position size |
| ⭐ | Monitor but trade normally |
Major announcements
Not all news is equal not. Some barely move the market, others can cause movements of several hundred points. Here are the announcements that really matter for Nasdaq.
1. FOMC (Federal Open Market Committee)
2. NFP (Non-Farm Payrolls)
3. CPI (Consumer Price Index). Fed
4. PCE (Personal Consumption Expenditures)
5. GDP (GDP)
6. Retail Sales
7. ISM Manufacturing/Services
MONDAY
- Nothing major
TUESDAY
- 2:30 p.m.: ICC ⭐⭐⭐
WEDNESDAY
- 2:30 p.m.: Retail Sales ⭐⭐
- 8:00 p.m.: FOMC Decision ⭐⭐⭐
- 8:30 p.m.: FOMC Press Conference ⭐⭐⭐
trade this week:
- Monday: Normal trading
- Tuesday morning: Trading possible, exit before 2:00 p.m.
- Tuesday afternoon: Do not trade after CPI (volatility)
- Wednesday: Very limited, wait until after FOMC
ignore FOMC (8 per year)
- CPI dates (12 per year)
- NFP dates (12 per year)
This is your “danger calendar” for the year.
Key Points to Remember
💡 FOMC + CPI + NFP = The 3 news that can make or break your trading month. Know their dates by heart.
| News | Frequency | Typical impact |
|------|-----------|----------------|
| FOMC | 8x/year | 100-300 pts |
| ICC | Monthly | 80-200 pts |
| NFP | Monthly | 50-150 pts |
| PCE | Monthly | 50-100 pts |
| GDP | Quarterly | 40-80 pts |
Step 1: Expectations are formed
Step 2: The announcement comes
Step 3: The reaction
The same news can have opposite effects depending on the context:
Example: Very strong NFP (+300K vs +175K expected)
Scenario A (Market in “growth” mode):
Scenario B (Market in “inflation” mode):
The current context determines the interpretation.
2:29:50 p.m. - The market waits, very low volatility
2:30:00 p.m. - CPI published: 3.4% vs. 3.2% expected (higher inflation)
2:30:05 p.m. - Nasdaq falls by 100 points instantly
2:30:30 p.m. - Rebound of 60 points (over-reaction corrected)
2:32:00 p.m. - New drop of 80 points
2:40:00 p.m. - Market stabilizes, net drop of 120 points
3:00:00 p.m. - Downtrend is confirmed
Lesson: The initial spike is NOT the true direction. You have to wait at least 10-15 minutes to see the real reaction.
| News | Positive surprise | Negative surprise |
|------|------------------|---------|
| Strong NFP | ↑ (growth) or ↓ (rate) | ↓ (recession) |
| Low CPI | ↑ (less rate increase) | N/A |
| CPI high | ↓ (no more rate increase) | N/A |
| dovish FOMC | ↑ (stable/falling rates) | N/A |
| FOMC hawkish | ↓ (rate increase) | N/A |
💡 Reaction to news is never mechanical. It depends on the macroeconomic context of the moment. The same number can have opposite effects depending on the period.
| Phase | Duration | Tradable? |
|-------|-------|----------|
| Initial Spike | 0-30 sec | NO |
| Counter-movement | 30s-5 mins | NO |
| Digestion | 5-30 mins | With caution |
| Post-digestion | 30+ mins | YES |
FOMC (8 times a year)
The dates are fixed and published in advance. Generally:
CPI (12 times per year)
NFP (12 times per year)
Typical hot week:
Typical calm week:
Volatile periods:
Calm periods:
WEEK 1
- Mon-Thu: Calm, normal trading
- Fri: NFP ⭐⭐⭐ (no PM trading)
WEEK 2
- Tue/Wed: CPI ⭐⭐⭐ (caution)
- Remainder: Normal trading
WEEK 3
- Possible FOMC ⭐⭐⭐ (if month concerned)
- Otherwise: Calm week
WEEK 4
- PCE ⭐⭐ (generally Friday)
- Rest: Normal Trading
💡 On average, there are 3-5 days per month when trading is risky because of the news. On the other days, you can trade normally while sticking to your plan.
| Event | Frequency | Days impacted/year |
|-----------|----------|----------|
| FOMC | 8x/year | ~16 days |
| ICC | 12x/year | ~12 days |
| NFP | 12x/year | ~12 days |
| Other majors | Varies | ~20 days |
| Total | - | ~60 days/year |
Out of 252 trading days/year, approximately 60 are "news risk" = 24% of the time.
The tools available
You don't need to pay to access a good economical calendar. Here are the free tools most used by professional traders.
1. Investing.com Economic Calendar
2. Forex Factory Calendar
3. TradingView Economic Calendar
| Feature | Investing | Forex Factory | TradingView |
|----------------|----------|---------------|-------------|
| Filter by country | ✅ | ✅ | ✅ |
| Importance filter | ✅ | ✅ | ✅ |
| History | ✅ | ✅ | Limited |
| Alerts | ✅ (app) | ❌ | ✅ |
| Mobile | ✅ | ✅ | ✅ |
On Investing.com:
On TradingView:
In the morning (5 min):
💡 All these tools are free and sufficient for professional trading. No need to pay for an economical calendar.
Choose the one that suits you best and integrate it into your daily routine.
How to handle news
In day trading on the Nasdaq, news represents a major risk. Here are the concrete precautions to take to protect your capital.
Fundamental principle:
Why?
If you have a position BEFORE a major news:
Option A: Exit completely
Option B: Reduce and protect
Option C: Widen the stop (risky)
1. The “I’m going to trade the news”
Trading the initial spike is pure gambling. The algorithms are faster than you.
2. The “this time it’s different”
Each FOMC/CPI/NFP news can surprise you. Never underestimate the potential impact.
3. The “I put a tight stop”
A stop of 20 points will be swept away by a spike of 100 points. You pay the loss + the slippage.
Situation:
Bad decision:
Keep the position as is → The spike can touch your stop at 18170, then the price goes back to 18300. You lost 30 points instead of winning 100.
Good decision (Option A):
Exit at 18240 → +40 points secured. You will come back later.
Good decision (Option B):
Take 75% at 18240, move stop to 18210 (breakeven + 10). You secure profit while keeping limited exposure.
| Location | News in < 30 min | Action |
|----------|------------------|--------|
| No position | Major news | Do not enter |
| Losing position | Major news | Cut the loss |
| Position BE | Major news | Exit or tighten stop |
| Position in profit | Major news | Take profits (at least partial) |
💡 The best way to trade the news is NOT to trade it. Protect yourself, let it pass, resume afterwards.
| Caution | Importance |
|------------|------------|
| 30 min rule | Mandatory |
| Exit before | Recommended |
| Reduce size | Minimum |
| Stop extended | Last resort |
Integration into trading
How to concretely integrate news management into your ALGO DEUS method? This lesson gives you a practical framework for combining technical analysis and news awareness.
Step 1: Daily check (5 min)
Every morning, before any analysis:
Step 2: Session planning
IDEAL session: No major news
→ Normal trading with ALGO DEUSMIXED session: Major news at 2:30 p.m.
→ Normal trading in the morning (9 a.m.-2 p.m.)
→ Break 2:00 p.m.-3:00 p.m.
→ Resumption after digestion (3:00 p.m.+)
BUSY session: FOMC at 8:00 p.m.
→ Very limited trading all day
→ Market waits, patterns less reliable
→ Possible resumed the next day
Step 3: Adaptation of the ALGO DEUS rules
Before major news (H-1 to H-30 min):
After major news (H+0 to H+30 min):
After digestion (H+30 min and more):
7:00 a.m. - Alarm clock and calendar
"CPI at 2:30 p.m. (⭐⭐⭐). I will trade this morning and resume after 3:30 p.m."
9:00 a.m. - 1:30 p.m. - Morning session
2:00 p.m. - Exit positions
2:30 p.m. - CPI published
3:00 p.m.-3:30 p.m. - Observation
3:30 p.m. - Resumption potential
Result: You have avoided the chaos of the CPI and you trade the "clean" movements which follow.
DATE: [...]
NEWS OF THE DAY: [CPI 2:30 p.m. / None / ...]TRADE 1:
- Time: 10:15 a.m. (before CPI - OK because > 4 hours before)
- Setup: OB H4 + BOS M15
- Result: +45 points
- Closed before 2:00 p.m.
TRADE 2:
- Time: 4:00 p.m. (after CPI digestion)
- Setup: New OB M15 trained post-CPI
- Result: +60 points
- Very post-news structure clean
💡 News are not obstacles, they are opportunities to reset. Post-news movements are often the cleanest and most profitable.
| Phase | Action ALGO DEUS |
|-------|---------|
| Pre-news (30 min) | Stop trading |
| During news | Observe |
| Post-news (0-30 min) | Observe |
| Post-digestion (30+ min) | Search for new setups |
Module 10 Summary
You now have an understanding comprehensive overview of the impact of economic news on the Nasdaq and how to integrate it into your trading practice.
| # | Rule | Application |
|---|-------|-------------|
| 1 | Check the calendar every day | 5 min in the morning |
| 2 | Do not trade 30 min before/after | Non-negotiable rule |
| 3 | Secure your front positions | Partial profits or exit |
| 4 | Observe the spike without acting | Chaos is not tradable |
| 5 | Trade digestion, not ad | The real setups come later |
You now have all the fundamentals necessary:
The next module introduces you to the ALGO DEUS Setup itself: the concrete method that assembles all these elements into a repeatable and profitable trading approach.
💡 News is the fuel of the market. Don't ignore them, don't trade them directly - use them as context to better time your ALGO DEUS entries.
You are now ready for the heart of the training: the ALGO DEUS Setup.