📖 Market Structure – Master Notes (Draft)
1️⃣What is Market Structure?
Market structure is the framework of price movement.
It shows how price flows in trends, ranges, and breakouts.
Traders analyze structure to:
Identify trend direction
Mark entry/exit levels
Understand where liquidity is hiding
2️⃣Components of Market Structure
🔹 A) Trends
1. Uptrend (Bullish)
o Higher Highs (HH) & Higher Lows (HL)
o Market controlled by buyers
o Example: Price moves 100 → 120 → 115 → 130
2. Downtrend (Bearish)
o Lower Lows (LL) & Lower Highs (LH)
o Market controlled by sellers
o Example: Price moves 200 → 180 → 190 → 170
3. Sideways/Range
o Price oscillates between support & resistance
o No clear direction, liquidity building
🔹 B) Support & Resistance
Support = A level where buyers step in (floor).
Resistance = A level where sellers step in (ceiling).
Stronger when tested multiple times.
Often used for entries & stop-loss placements.
🔹 C) Breakouts
When price breaks above resistance → bullish breakout.
When price breaks below support → bearish breakout.
Fakeouts are common → always wait for confirmation.
🔹 D) Market Structure Shifts (MSS)
A sudden break of Higher Lows → Lower Low = trend reversal (bullish → bearish).
A sudden break of Lower Highs → Higher High = trend reversal (bearish → bullish).
3️⃣How to Trade Market Structure
✔ Step 1: Identify overall trend (up, down, range).
✔ Step 2: Mark support & resistance zones.
✔ Step 3: Look for candlestick patterns (confirmation).
✔ Step 4: Wait for breakout or rejection at key levels.
✔ Step 5: Manage risk with stop-loss below/above structure.
4️⃣Example Trade Setup (For PDF Diagram)
Uptrend with HH & HL
Price retraces to support (HL)
Bullish engulfing forms → Entry Buy
Stop-loss below support, Target at next resistance
5️⃣Pro Tips
Market structure is the foundation of price action.
Don’t trade against the major trend.
Use multiple timeframes (HTF trend + LTF entry).
Combine with liquidity & candlestick confirmation.
📖 Risk Management & Trading Psychology –
Master Notes (Draft)
1️⃣What is Risk Management?
Risk management = protecting your capital while trading.
It ensures you don’t blow your account even after losing trades.
2️⃣Core Risk Management Rules
🔹 A) Position Sizing
Never risk more than 1–2% of your capital per trade.
Formula:
Position Size = (Account Balance × Risk %) ÷ Stop Loss (pips/points)
🔹 B) Stop Loss (SL)
Always place a stop loss below support (for buys) or above resistance (for sells).
Avoid emotional trading → SL protects you from big losses.
🔹 C) Risk-to-Reward Ratio (RRR)
Ideal: 1:2 or higher (risk ₹100, aim profit ₹200).
Never enter trades with poor RRR (like 1:0.5).
🔹 D) Diversification
Don’t put all money into one asset.
Spread risk across stocks, forex, crypto, indices.
3️⃣Trading Psychology
🔹 A) Common Trader Emotions
1. Fear → leads to hesitation, missed trades.
2. Greed → over-leverage, over-trading.
3. Hope → holding losing trades longer than needed.
4. FOMO → jumping into trades without confirmation.
🔹 B) Discipline Habits
✔ Follow a trading plan.
✔ Accept losses as part of the game.
✔ Journal every trade → learn from mistakes.
✔ Trade only high-probability setups.
4️⃣Example Risk Management Setup (for PDF diagram)
Account: ₹1,00,000
Risk per trade: 1% = ₹1,000
Stop loss = 50 points → Position size = 20 lots
Target = 100 points → Profit = ₹2,000
RRR = 1:2 ✅ (Good trade)
5️⃣Pro Tips
Protect your capital first, profits second.
Small losses are okay → avoid big losses.
Your mindset decides your trading career more than your strategy.
Trading = 20% strategy, 80% psychology.
# 📖 Trading Strategies – Master Notes (Draft)
1## 1 Why Strategies Matter?
1️⃣
A strategy = **rules + discipline**.
It removes emotion and guesswork.
Good traders don’t trade “randomly” → they **wait for setups** that match their rules.
2️⃣
## Core Strategy Building Blocks
✔ Market Structure (trend, support, resistance, breakouts)
✔ Candlestick Patterns (reversals, continuations)
✔ Liquidity Zones (stop hunts, false breakouts)
✔ Indicators (confirmation, not decision makers)
✔ Risk Management (position sizing, SL, TP)
3️⃣
## Proven Trading Strategies
### 🔹 A) Breakout + Retest Strategy
* Market consolidates (sideways box).
* Price **breaks resistance** with high volume.
* Wait for **retest of breakout zone**.
* Enter long (buy) after bullish candlestick confirmation.
* SL = below breakout zone.
* TP = next resistance.
✅ Works well with **Bollinger Band squeeze**.
### 🔹 B) Moving Average Trend Strategy
* Use EMA 20 & EMA 50.
* If EMA 20 crosses **above** EMA 50 → Buy trend.
* If EMA 20 crosses **below** EMA 50 → Sell trend.
* Entry: pullback to EMA 20 line.
* SL = below EMA 50.
* TP = 2x risk.
### 🔹 C) RSI Divergence Reversal Strategy
* Price makes **new high**, RSI does **not** = Bearish divergence.
* Price makes **new low**, RSI does **not** = Bullish divergence.
* Enter reversal trade after candlestick confirmation (Engulfing/Pin bar).
* SL = above/below structure.
* TP = next key level.
### 🔹 D) Liquidity Grab (Stop Hunt) Strategy
* Market sweeps liquidity above resistance or below support.
* Large wick forms (stop hunt).
* Enter opposite direction trade.
* SL = just above/below wick.
* TP = mid-range or next support/resistance.
✅ Works best with **candlestick confirmation** (Pin Bar, Engulfing).
### 🔹 E) Multi-Timeframe Confirmation
* Higher Timeframe (HTF) = Trend direction.
* Lower Timeframe (LTF) = Entry trigger.
* Example:
* Daily = Uptrend (higher highs).
* 15-min = Bullish engulfing after pullback.
* Enter long with SL & TP based on structure.
4️⃣
## Strategy Checklist Before Entry
✔ Market structure aligned?
✔ Liquidity zone identified?
✔ Candlestick confirmation?
✔ Indicator support?
✔ Risk/Reward ≥ 1:2?
If all ✅ → Enter trade.
If ❌ → Wait.
5️⃣
## Pro Tips
* Trade **quality setups, not quantity**.
* Backtest strategy before live trading.
* Stick to **1–2 strategies** until mastered.
* Journal trades → refine over time.
