The Game of

Institutions
Smart Money: Your path to
osucesso no Daytrade.

Trading Academy | Taynã Cavalcante

 Summary
Concepts
Introductory
Types of market
Types of Analysis
Management
Emotional

Analysis
graphic
Introduction
Support and Resistance
Trend lines
Pullback/Throwback
Fibonacci
Triangulos Analysis
Patterns of Technique
continuity
Reversal patterns Introduction
Financial Volume
Volume profile
Relative strength index
(RSI)
VWAP
Types of candles
Entry Triggers
Theory of
Dow
Introduction to
module
The 8 Principles
of Dow

In this first step, you will understand how the market is

move and learn to use essential tools that will
maximize your operations.
In the second phase, we will explore how the price reacts to the actions.

institutional and how algorithms move the market in

search for liquidity.

Theory of
Elliott
Introduction
Movement of the Waves
Understanding each wave
Rules
Principles
Extensions Theory of
Targets
Types of waves
Wyckoff
corrective Introduction
Types of waves Laws
complex Market cycle
Accumulation and
reaccumulation
Distribution and
redistribution
Smart Money Phases of the diagram
Concepts Types of Captures
Introduction Importance of Volume
Supply and Demand Strategies
Market structure
Imbalance
Golden Zone
Orderblocks
Inner Circle
Liquidity Trading
Macro and Micro
Introduction
Point of Interest (POI)
Swing Points
EQH and EQL
Premium and Discount
Hierarchy of PD
Fair Value gaps
Daily Bias
Power of Three (AMD)
In the third and final phase, you will adapt your operations with
based on the teachings acquired and you will see, in practice, how the
market really behaves.

Create yours
operational
SMC/ICT and analysis
graphic
SMC/ICT and analysis
technique
Align Elliott to your
operational
Align Wyckoff to your
operational
Types of Market

Forex is a decentralized market

focused on currency transactions,
being the largest financial market
global, with daily movements that
exceed 5 trillion dollars.

The Mini Index - consists of contracts

futures based on the fluctuation of
Ibovespa index, allowing
speculations about its variation.

Futures - is especially focused on

cryptocurrency sector, allows
leveraged operations, where
we can multiply our capital
through a "loan"
temporary from the broker, maximizing
the gains (or losses) with the
price movement.
 Brokers
It is of utmost importance to understand that in order to do

To day trade, you need a brokerage.

the broker you choose depends on the type of
market you chose to start.

Futures Index
Binance
Bybit Rich
Bingx Clear
KuCoin XP
BTG Pactual

Forex
Ic Markets
Exness
XTB
Eightcap
Operational

Technical analysis
Use indicators such as
moving averages, volume, RSI and
others to identify
patterns and trends in
asset prices, assisting
in decision-making of
investment.

Graphic Analysis
Focus on the interpretation of the
price movements in
graphics, seeking to identify
entry and exit points in
operations, without the
exclusive dependence on
indicators.

Market Theory
It is based on classical theories
like Dow, Elliott, and Wyckoff
to understand the cycles of
market, the price waves and
the behavior of
investors.
Operational

Institutional
Seeks to identify the major players
of the market (institutions, funds) and
its possible impacts on prices
of the assets, through the analysis of
large volumes and movements of
prices.

Fundamentalist
Evaluate the fundamentals of a
company (results
financial, perspectives of
growth, sector of activity
to identify your value
intrinsic and opportunities of
long-term investment.

Feeling
Examine the sentiment of the
investors in relation to a
determined asset or market,
looking to identify possible
imbalances between supply and demand
demand.
Management
Day trading, a type of investment in
which operations are open and closed in
the same day requires planning and discipline
rigorosos. Dentre os diversos aspectos a
they will be considered, the management of
risk stands out as one of the most
important for the success of the trader.

Why is risk management so crucial in

day trade?

Capital protection: By limiting losses in

with each operation, the trader preserves their capital
for future opportunities, preventing a
single negotiation commits the whole
investment.

Emotional control: The establishment of

loss and profit limits help control the
emotions, such as greed and fear, that
they can lead to impulsive and harmful decisions.

Discipline: Risk management requires

discipline and adherence to a predefined plan,
preventing the trader from deviating from their
strategy.

Optimization of results: When allocating capital

intelligently manage the risks, the
trader increases the chances of obtaining results
consistent in the long term.
 Risk x Return

To maintain good management, we have two

tools in the graph that are very useful, called Long
Long Position or Long Position and Short Position
Sold. These tools are very good because we
we can see the percentage on our stop and of our
take, and also shows us how our risk and our
return in the operation. An example in the image is that using
the tools we can see in the red area the
our Stop is in the green area our Take is always showing
how are our percentages.
The risk vs return appears close to the line of the region of
entry, always showing us how worthwhile it is to enter the
operation, for example: If the risk/return is at 2,
It means that if you hit all your targets, you will earn 2.
times more than I would lose.

Knowing this, we use the tool to enter.

only in offsetting operations, an acceptable number
and what I recommend to use is 3 times risk/return, because of that
for every correct answer you have, you can make 3 mistakes and
thus it will not have ended negative on the day/week.

With a risk/return ratio of 3, your accuracy does not need to be

so good for making profits in the market because if you have 50%
even so, you will achieve good results because
quando acertar ganhará 3 vezes mais do que perderia.

Take

Entry

Stop
Emotional
Day trading is an activity that requires not only
not only technical knowledge, but also
a high level of emotional control. After all,
the fluctuations of the financial market can
unleash a series of emotions, such as
fear, euphoria, anxiety, and frustration. The
capacity to deal with these emotions of
a balanced form is essential for the
success in trading.

Why emotional intelligence is so important in

day trade?

More rational decisions: When we master

our emotions, we are capable of making
more rational decisions based on our
technical analysis, avoiding the fear of losing or
the euphoria of winning leads us to make mistakes.

Error prevention: Emotions such as greed and the

fear can lead us to carry out operations
impulsive and unplanned, increasing the
risk of losses.

Performance improvement: Traders with high

emotional intelligence tend to have a
more consistent performance and achieving your
long-term objectives.

Preservation of mental health: Day trading can

being a stressful activity, and the control
Emotional is essential to preserve health
mental and avoid burnout.
 Self-confidence
You are everything you believe you are.

Accept yourself as you are: start valuing your

qualities and skills, instead of focusing on your
defects or failures.
Define realistic objectives: set goals that are
desafiadoras, mas alcançáveis. Quando você atinge
With these goals, you boost your self-confidence.
Desafie-se: experimente coisas novas, saia da sua zona
of comfort and face your fears. The more you
facing your fears, you strengthen yourself and become
more confident.
Surround yourself with positive people: surround yourself with friends and

familiares que o apoiam e encorajam. Isso pode ajudá-lo

to feel more confident and supported.
Practice self-compassion: be kind to yourself
when facing difficulties or making mistakes.
Remember that no one is perfect and that failure
it is part of the learning process.

Remember that self-confidence is something that can be

developed over time and practice. Start small and
Take one step at a time. Over time, you will feel.
more confident and capable.
 Mental Control
Learn to master your mind and you will be able to
to conquer success in any area of life.

Stay calm and focused: negotiations can be

exciting and stressful, but staying calm and
focusing on relevant information is crucial
to make good negotiation decisions.
Keep a trading diary: write down your
decisions and the results of the negotiations for
analyze and learn from successes and failures. This
can help you identify patterns of
behavior and improve your performance.
Set realistic goals: establish goals of
realistic and achievable negotiations and stay focused
in them. This can help you stay motivated and
disciplined during the negotiation process.
Avoid overconfidence: overconfidence
can lead to reckless decisions and losses
significant finances. Always be open to
learn and adapt to changes in the market.
 Manage your emotions: emotions can affect
the negotiation decisions. It is important to manage
the emotions and keep the mind clear and objective. Avoid
impulsive negotiations and make decisions based on
in data and analysis.
Develop a negotiation plan: develop a
clear and consistent trading plan with rules
for entering and exiting the market. This can help you
to maintain discipline and avoid impulsive decisions.
Practice patience: patience is a virtue
important in negotiation. Wait for the opportunities
be certain and do not rush to make decisions
impulsive.

Remember that mind control during the

Negotiation is a continuous process that requires practice.
and dedication. Over time and with experience, you can
develop more advanced skills to control
your mind during negotiations.
 Graphic Analysis

The graphical analysis, based on the identification

of visual patterns in price charts,
has its roots in the late 19th century.
Charles Dow was one of the pioneers in this
area, developing the Dow Theory, which
even today it serves as a basis for many
technical analysts.

As the years go by, graphical analysis

evolved, incorporating new tools and
techniques. The advent of computers and
graphical analysis software allowed a
faster and more accurate data analysis,
popularizing the use of graphical figures in
financial market.

What are Graphic Figures?

Graphical figures are visual patterns that
they form in the price charts,
representing the behavior of
investors and market psychology. They
they can indicate trend reversals,
continuity of a movement or
buying and selling opportunities.
 Support and Resistance
Support and resistance levels are like invisible barriers in
a stock chart. They indicate areas where the price of a
Active has more difficulty in overcoming.

Support: It's like a floor. When the price touches the support,
it tends to rise again. It is an area seen as
purchase opportunity.
Resistance: It is like a ceiling. When the price touches the
resistance, it tends to fall. It is seen as a selling area
or to open short positions.

In summary:
By understanding support and resistance levels, investors
they can make more informed decisions and increase their
chances of success in the financial market. However, it is
It's important to remember that the market is dynamic and these levels
they can change over time.
 Support and Resistance

Resistance: The price

respect this region
always returning
for the channel and when
exceeds creates a
Support: The price new support.
respect this region
always returning to
the channel and when
surpasses creates a new
resistance.

Using this concept helps you to find stronger levels of

price, however as the material progresses I will explain that there are
more efficient methods that avoid liquidity capture.
 Trend Lines

Trend lines are graphical markings used to

identify the general direction that the price of an asset is taking.
They help us visualize whether the market is going up or down.
moving sideways.

Uptrend: When prices are rising and forming

higher tops and bottoms indicate a market
optimistic, with buyers dominating.
Downward trend: When prices are falling and
forming lower and lower tops and bottoms, indicates a
pessimistic market, with sellers dominating.
Lateral trend: When prices move within a
range, without a clear direction, indicates a period of consolidation
the indecision in the market.

In summary: Trend lines are like visual guides that help us

help to understand market behavior and make
more informed investment decisions. By identifying the
trend, we can position ourselves according to the movement
expected from the asset price.
 Trend Lines

As soon as the price breaks our channel

on the downside, we have a price reversal
and he changes the trend.

The price often respects the

bottom, in this region it is very
common for captures to occur
liquidity

Using this concept helps you find the asset's trend,

However, throughout the material, I will explain that there are methods.
more efficient and that avoids certain graphic manipulations.
 Pullback and Throwback

Pullback and Throwback are important concepts in analysis.

graph that describes temporary retraction movements in
a market trend. These retractions occur when the
the price of an asset temporarily deviates from direction
main trend, to soon return to it.

Both the pullback and the throwback are movements of

temporary corrections that occur within a trend
greater. They can be considered as opportunities for
entry for traders, as it identifies a pullback or
throwback, the trader can enter a position in the direction of the
main trend at a more favorable price.
 Pullback

The price breaks the support creating

a new resistance and after the
the price corrects to
test this region by doing the
Pullback.

Pullback:
What is: A retraction movement
in a downward trend.
How it works: The price drops, makes a
pause and rise a little, but do not
can break the resistance
previous, then returning to the
downward trend.
Example: Imagine a rolling ball
downhill. During the descent, she
can bounce a few times before
keep rolling. Each quique would be
a pullback.

Using this concept helps you to make entries with a lower risk.
below is a greater return, but as the material progresses, I will explain
that there are more efficient and profitable triggers.
 Trowback

The price breaks the resistance

creating a new support and after
the price corrects after the breakout
to test this region by doing
The Throwback is giving a
entry opportunity.

Throwback:
What is: A retraction movement
in an upward trend.
How it works: The price goes up, makes
a pause and falls a little, but not
can break the previous support,
returning then to the upward trend.
Example: Think of a rocket being
launched. During the ascent, it can
have small oscillations before
continue rising. Each fluctuation
downward would be a throwback.

Using this concept helps you make entries with a lower risk.
it is lower and a greater return, but throughout the material I will explain
that there are more efficient and profitable triggers.
 Fibonacci

The Fibonacci sequence is an infinite numerical series where

each number is the sum of the two previous ones. This sequence,
started by 0 and 1, presents a unique proportion between
your numbers, which repeat in various phenomena
natural and, surprisingly, also in the markets
financial

In the universe of day trading, the Fibonacci sequence is

used as an analysis tool. The traders
they use Fibonacci levels (38.2%, 50%, 61.8%, etc.) to
identify potential support and resistance zones in a
price chart.
 Retracement Fibonacci
We use strong confluence zones on the chart to confirm
regions during the analysis. The main areas of contraction of
Fibonacci are: 0.382 (medium zone), 0.5 (strong) and 0.618 and 0.786 (zones)
very strong). The Fibonacci retracement is used to identify
reversal points in price.

How to draw a Fibonacci retracement?

In an upward trend, we draw from the bottom to the top; in a
from low, from top to bottom. Thus, we identify the regions of
interest.

How to operate with Fibonacci retracement?

The operation is carried out by looking for reversals in strong zones,
like 0.618. Remember: Fibonacci alone is not enough.
Always combine with other analyses for greater accuracy.

This tool is one of the most important when it comes to

confirm points of interest and find triggers, I will go further ahead
mostrar como utilizar para encontrar a Golden Zone e OTE.
 Projection Fibonacci
A Fibonacci internal projection is a tool used for
project possible price targets based on movements
previous ones. Unlike the retraction, which seeks correction zones, the
Projection indicates how far the price can go after a reversal.

It is drawn between two important points (a bottom and a top,

for example), and the main projection zones are: 1.0, 1.618 and
2.618, which indicates continuation trend targets.

This resource is very useful to predict where the price may find
resistance or support, and is more efficient when combined with
other analyses.

Note: We always configure both Fibonacci's with scale.

logarithm, otherwise the graph becomes divergent.

This tool is great for designing targets and we will use it a lot in class.
of Elliott Waves.
 Triangles
The triangle is one of the most popular graphic figures in analysis.
technique and is used to identify consolidation periods in
price of an asset. It occurs when volatility decreases and the
the price starts to move within a progressively narrower range
narrow, forming converging trend lines. The triangle
it is used to predict imminent breakages and the direction that
price may follow after this period of compression.

There are three main types of triangles:

Ascending triangle: Increasing buying pressure, with
potential upside breakout.
Descending triangle: Increasing selling pressure, with
downward breakage trend.
Symmetrical triangle: Indecision in the market, with a breakout.
possible in any direction.

These patterns help to anticipate future movements and assist

in the decision-making of buying or selling.
 Ascending Triangle
The ascending triangle usually forms during a
uptrend, when the price respects a region of
resistance, but the funds are becoming increasingly higher. This
indicates a growing buying pressure, until
eventually the resistance is broken, continuing to
high.

The best entry in this pattern is upon the breakout of resistance.

or no pullback after the breakout. To set targets, the Fibonacci
can be used to design the closure of the triangle, with the
region of 50% of the projection serving as an intermediate target,
helping to optimize the operation.

This figure is quite well known in the world of graphic analysis,

however, later I will show how institutions use it to
make liquidity captures. Knowing this, do not operate blindly.
 Descending Triangle
The descending triangle is the opposite of the ascending triangle.
In this pattern, instead of having a resistance, the focus is
a support region, while the price follows a line of
downward trend. The pattern reflects selling pressure, with
lows increasingly pushing the price to break through
support.

The ideal entry occurs at the breakdown of support or at

pullback, confirming the expectation of a decline. Just like in
ascending triangle, Fibonacci can be used to
design the closing of the triangle, with the area of 50% of
projection serving as an intermediate target.

This figure is well known in the world of graphical analysis, but more so...
I will show how institutions use it to make captures of
liquidity. Knowing this, do not operate it blindly.
 Symmetrical Triangle
Unlike the previous triangles, the symmetrical triangle does not
indicates a clear direction for the price movement. It reflects
a consolidation zone, where the chart can break in either direction
up as much as down.

The ideal entry occurs during the pullback in the "X" region (point where the
the marking is located), since many times the price breaks the
figure, but returns inside before following a trend.
The pullback offers an important hint about the future
market direction. To construct this figure, we used the
closure of the triangle and the Fibonacci projection, as in us
other patterns.

This figure is well known in the world of graphical analysis.

however, later I will show how institutions use it to
make liquidity captures. Knowing this, do not operate blindly.
 Continuity Standards
Continuation patterns are graphic formations that indicate
a temporary pause in the price movement of an asset
financial, suggesting that the predominant trend should
continue after this interruption. Unlike the standards of
reversal, which indicates a possible change in direction in
price, the continuity patterns reinforce the idea that the
the asset is just consolidating before resuming its
original movement.

Among the most common continuity patterns are:

Flags: They represent a slight correction in the price,
followed by the continuation of the trend.
Rectangles: Reflect a phase of consolidation in which the
price fluctuates within a defined range before breaking out.
Banners: They suggest a brief pause in the market, before
a resurgence of the trend.
Wedges: Indicate a temporary slowdown, preparing
the path to a breakup.

These patterns are valuable tools for traders.

we will identify favorable moments to follow the trend and
maximize your earnings.
 Flag
The flag is a graphic figure that emerges after a movement.
strongly up or down, followed by a pause and a movement
lateral or diagonal. To identify it, look for a channel that
shape after a large movement, where the price corrects
before moving on.

Entries can be made on the breakout or on the pullback,

with the latter generally being more effective. To design a target,
measure the flagpole and place that measurement after the
breaking. Another approach is to use Fibonacci, which many
sometimes points to converging targets.

This figure is quite well known in the world of graphical analysis, however
but later I will show how to make more assertive entries
using Elliott waves to your advantage.
 Wedge of Continuity
There are two types of wedge in the market: the continuation wedge and the
of reversal. Continuation wedges are more assertive,
they can be combined with wave counts
Elliott corrective waves (waves 2 and 4).

These wedges have a shape similar to that of wedges of

reversal, but they present a mast, just like the
flags. To design targets, we can use the base of
crown, your mast and the internal Fibonacci.

Furthermore, just like in triangles, we can apply

counts ABCDE within the wedge, which helps us to filter and
to prepare us for possible breakups.

This figure is quite well known in the world of graphical analysis,

However, later on I will show how to make more entries.
assertions using Elliott waves to your advantage.
 Pennant
The pennant is a pattern of continuity that can occur both
in upward and downward movements. Its identification is
simple: just like in the flag, the graph performs a long
movement followed by a phase of rest, forming
a symmetrical triangle.

To design targets, we use the same approach as the flag:

we measure the size of the mast and apply Fibonacci to
define a target. Furthermore, the projection of the triangle can help us
help identify an intermediary target.

The best entry points occur at breakouts or at

pullback, always operating in favor of the trend.

This figure is quite well known in the world of graphic analysis,

however, later I will show how institutions use it to
make liquidity captures. Knowing this, do not operate blindly.
 Rectangle
The rectangle is a pattern that signals a period of stability
in the prices of an asset after a previous trend. During
during this phase, the price lateralizes, accumulating before breaking out
direction of the prevailing trend. Something quite similar to
What happens with the Darvas Box strategy?

The best entries occur when breaking the region or in

a pullback. To project targets, we use the expansion of
rectangle and the projection of the last bottom to the top of the pattern.
In this way, we are able to define two distinct targets.

This figure is quite well known in the world of graphic analysis, however
But later I will show how to use it more wisely in
top of the concepts of Wyckoff Diagrams.
 Reversal Patterns
Reversal patterns are graphical formations that indicate
a possible change in the price trend of an asset
financial. Unlike the continuity standards that signal
just a pause, the reversal patterns suggest a
change in the direction of the price.

Among the most well-known, we have:

Double Top: two peaks at similar levels, indicating
reversal from high to low.
Double Bottom: two valleys, signaling a reversal from a downtrend to
high.
Shoulder-Head-Shoulder (OCO): three peaks, with the middle one
higher, suggesting a reversal from bullish to bearish.
Inverse Head and Shoulders: the inverse of the H&S
indicating a reversal from bearish to bullish.
Cunha: it can indicate reversals, depending on the breakout.
Deriva: reflects a phase of consolidation before a
reversal.

Identifying these patterns is crucial for traders looking to

anticipate trend changes and optimize your profits.
 Cunha
The wedge is a graphic formation composed of two lines of
converging trends: an inclined resistance line for
down on the high wedge and an upward sloping support line
on the downside wedge. This figure stands out in the chart for its
triangular format.

The rising wedge can signal that a downtrend is

losing strength, suggesting a possible reversal to high. By
on the other hand, the wedge of decline indicates that an upward trend
may be weakening, indicating a downward reversal.

To design the target, we consider the closing of the wedge and

we applied this measure after the break. Another alternative is
use Fibonacci projection. The best entries occur at
breakout of the figure or in its pullback.

This figure is quite well known in the world of graphic analysis, however
Later I will show how to use it more wisely.
of the concepts of Wyckoff Diagrams.
 Derive
A Deriva is a rare reversal pattern, often
confused with the flag, which appears after a great
market movement. It is identifiable when, after a
strong thrust or repulsion, the graph forms a wedge
pointing in the direction of the current trend. However, this
usually indicates a drastic reversal.

To design the targets, we can use two approaches: measure the

closure of the wedge for a shorter target or consider the
master from Drift for a longer target. The best entries
they occur at the breakout of the figure or in its pullback.

This figure is quite well known in the world of graphic analysis.

However, later I will show how to use it with more.
wisdom on the concepts of the Wyckoff Diagrams.
 Shoulder Head Shoulder
The Head and Shoulders pattern (H&S) is often
associated with the Elliot Waves and is one of the easiest figures to
identify in graphs, appearing after a strong impulse of
high or low. The ideal entry occurs at the breakout of the base,
known as "neck", or in its pullback.

To design targets, we measure the extent of the 'head' and the

we apply to the database, obtaining a target. We can also use the
Fibonacci projection to determine a second target.

This pattern is also connected to some concepts of Smart.

Money that we will see later.

This figure is quite well known in the world of graphic analysis,

However, later I will show how to use it with more.
wisdom based on the concepts of Wyckoff Diagrams.
Technical Analysis

In technical analysis, the indicators

play a fundamental role in
decision making, helping traders to
identify patterns and trends in
market. However, to trust
It can only be risky with them.
Although the indicators are effective for
to converge regions and anticipate entries, it is
it is essential to integrate other information and
tools for a more analysis
comprehensive and precise.

In addition to using technical indicators, such as

Moving Averages, RSI and MACD, the analysis must
to be complemented by an evaluation
fundamentalist, who considers factors
economic news and events that may
impact the prices of assets. By combining
different approaches, traders can
get a clearer view of the market,
increasing the likelihood of decisions
informed and secure. The practice of analysis
holistic promotes a better understanding
the dynamics of the market, essential for the
long-term success in operations
financial.
 Financial Volume
The financial volume indicator is a crucial tool in
technical analysis, as it measures the amount of capital traded
in an asset during a specific period. It helps the
traders to understand the force behind the movements of
price, providing insights into the behavior of the
market participants. An increase in volume,
example, it can indicate that a trend is emerging
strengthening, while a low volume may signal
weakness or indecision.

Furthermore, the financial volume can be used to

identify possible market traps, such as false ones
breaks of structures. When combined with others
indicators, such as VWAP and RSI, volume provides an insight
most complete in the market, helping to validate trends and
increase the assertiveness in buying or selling decisions.
 Volume
An example of application is the use of volume
together with the figure of Cunha. This
figure usually appears within a
tendency until it reaches its limit,
indicating a possible price reversal.
To leverage the volume to our advantage,
an efficient strategy is to analyze the graph
in a longer time frame, like M15, but
observe the volume in a shorter period,
like M5. This helps to detect changes
sway in the market force and anticipate a
reversal with greater precision.

In this example, we can observe that,

as the price was falling, the
volume remained high, indicating the
sales force. However, at the moment
in which the price started to reverse,
volume decreased significantly. This
reduction in volume during the reversal
it can be a sign of weakening of
previous trend and a possible
deceleration of sellers, what
increases the likelihood of a change
of direction in the market.
 Effort versus Result
Absorption (very effort for little result)

If the price is in a strong trend, but the

volume starts to decline and the price suffers absorption,
it is common for this trend to reverse. This
it happens because the market participants
lose interest in negotiating the asset at that
moment, signaling a possible exhaustion of
movement. Absorption is when large orders
are placed in a way to hold the advance of
price.
In this example, we observe that, despite the high
initially, the price reversed halfway.
volume, por sua vez, indicava a perda de força do
movement, suggesting that the rise no longer had
support.

Exhaustion (little effort for a lot of result) 1

3
When we see strong growth in the candles, but the volume
starts to behave differently, this may indicate 2
a great initial effort, followed by a loss of strength
in the next candles. This behavior is known as
exhaustion of the movement. 3
In the example, we can clearly observe this exhaustion.
Segunda vela apresentou um volume desproporcional em
2
relationship to the others. Despite its body being small, the
the volume was high. The first and the third candle, with bodies
larger ones had much smaller volumes, signaling that the 1
the market was losing strength.
 Volume Profile
The Volume Profile is a tool that allows you to visualize the
quantity of volume traded at different price levels
during a specific period, instead of observing the volume
just by candle, as we do with the financial volume
traditional. It is essential for identifying areas of interest,
as institutional points, where there is a greater concentration of
orders.

To use it, just trace the volume profile from the beginning to
the end of a movement (horizontally). It can be
applied in both bullish and bearish trends, helping
to identify areas where the price may struggle to
move forward or backward, due to the traded volume at that
price range.
 Volume Profile
With the Volume Profile tool, we can identify ranges of
volumes that act as support and resistance, as they are areas
of great interest to market participants. In a
downward trend, for example, we can use these ranges to
find possible reversal points.

The Point of Control (PoC) is the red line that indicates the level of
price with the highest trading volume, being a key point
to monitor reversals. However, it is important to remember that
the PoC will not always be respected, especially when
next to it there are no other significant volume tracks. In this
In that case, the price may cross this region without reacting.

Therefore, it is crucial to use other confluences, such as the Value Area

High (VAH) and the Value Area Low (VAL), which represent regions of
relevant volumes within the Volume Profile, increasing the
assertiveness in reading the graph.

This tool was created based on Wyckoff's concepts, to use

it greatly enhances your alongside the Wyckoff diagrams
operational, in the next modules we will see how to combine both.
 Relative Strength Index
(RSI)
The RSI (Relative Strength Index) is a technical indicator that measures
the speed and change of price movements.
Generally, it follows the direction of the market. This means
that, when the asset price reaches a peak, the RSI does too
tends to reach high values, indicating a possible area of
buying excess. In the same way, when the market reaches a
bottom, the RSI can signal an oversold area. The use of
RSI helps to identify potential trend reversals or
corrections, but it is always important to combine it with others
indicators to increase the accuracy of the analysis.
 RSI
Using the RSI (Relative Strength Index), it is possible to anticipate
touches and entries on breakouts in the financial market. By
For example, in an operation involving a wedge, we can
to program our entry at the breakout of the chart figure.
RSI is especially useful, as it can signal a breakout beforehand.
the candles on the chart, allowing us to adjust our entries and
let's better position our operations.

However, it is crucial to remember that the use of RSI should be combined

with other technical analysis tools to ensure a
more complete and assertive assessment of the market. Furthermore,
consider factors such as volume, price trends and patterns
graphs can increase the effectiveness of your decisions. The
the confluence of multiple indicators provides a more
robust and reliable for conducting operations.
 Divergences

It will not always be possible to use the entry anticipation.

by the RSI. It is essential to observe divergences and
convergences in the indicator. In the case of convergences,
we can apply the previous example. Already upon identifying
divergences, we must consider three main types:
regular, exaggerated, and hidden divergences, each one
offering different signals of possible reversal or
continuity of the trend.
 Regular Divergence
Regular Divergence: Indicates a possible reversal of
tendency, suggesting a loss of strength in the current movement. The
the price may be rising, but the RSI shows a break in the
trend, pointing downward. This misalignment is a
sign that the buying strength is weakening,
increasing the chances of a change in direction in
market.
 Exaggerated Divergence

Exaggerated Divergence: Indicates a possible reversal, being

more visible and common in reversal patterns, such as the Top
Double Bottom and Double Top. This divergence occurs when the price
forms two similar tops or bottoms, while the RSI
shows a more evident loss of strength. Because it is easier
to identify, is a clear sign that the trend may be
about to change.
 Hidden Divergence

Hidden Divergence: Indicates a possible continuation of the

trend, appearing in overbought areas (above
70) or oversold (below 30) in the RSI. This type of
divergence suggests that, even though the price is near a
exhaustion, the trend may still continue. When the RSI
when it breaks these critical levels, it is common to see the market
maintain your direction, reinforcing the continuity scenario.
 Configuration

You can use the default RSI configuration from TradingView.

with the upper band at 70 and the lower band at 30.
 VWAP
The VWAP (Volume Weighted Average Price), or Average Price
Weighted by Volume, it is a widely used technical indicator.
used in the financial market to measure the average price of
an asset over a period, weighted by volume
negociado.

It is a popular tool among institutional and retail traders.

retail, as it helps identify the fair price of an asset in
determined moment.

The VWAP is mainly used to confirm trends and

identify entry and exit points. When the price is
above the VWAP line indicates an uptrend, and
when it is below, it suggests a downward trend. Furthermore
therefore, it can be used as support or resistance in
short-term operations.
 VWAP
As a volume-based tool, the VWAP
extremely powerful machine. It works in a way that
similar to a moving average, but takes into account the
traded volume, which makes it more accurate for identification
the volume-weighted average price of the asset.

Using the VWAP at points of interest reinforces even more.

your analysis, helping to identify entry triggers. When
the entries match areas where the VWAP is
present, this increases the likelihood of an operation
successful, since these regions reflect a balance of
important price.

Use this tool together with the Smart Money triggers and
ICT that we will see later.
 Types of Candle
Candles are one of the most important tools in
technical analysis and provide a clear view of the behavior
of the price over a certain period of time. The reading
the correction of different types of candles allows to identify the
strength or weakness of a trend, in addition to providing clues
about possible reversals or continuities of movement.
Knowing how to interpret these patterns is essential for making
more informed and assertive decisions in the financial market.

We have three main types of candles: ignition, rejection

and indecision. Each of these patterns reveals information
valuable insights about buyer and seller pressure, and when
used in conjunction with other indicators and tools,
they can significantly improve their analyses and strategies
of trading.
 Indecision
Also known as Dojis, these candles
show balance between buyers and sellers.
They have small bodies and shadows both upwards
how far down, reflecting uncertainty in the market.
Indecision candles usually arise in zones of
consolidation or in times of great expectation
before a rupture, serving as a warning
for possible changes in price movement.
 Rejection

Rejection candles appear when the price tries

move forward in one direction, but encounters strong resistance,
reverting the movement. They have long shadows and
small bodies, highlighting the failure to sustain the price
at a certain level. These candles indicate that the
market participants are not willing to negotiate the
extreme prices, which may suggest a trend reversal.
 Ignition

These candles indicate the beginning of a strong movement in

price, whether high or low. They usually have bodies
long and little or no shade, showing that there was
a strong buying or selling pressure. They are used
to confirm breakups and significant changes in
trend. They signal a clear direction in the market.
 Triggers with Candles
Candles play a fundamental role in this analysis,
providing detailed information about price action in
a certain period. By understanding the formation and the
candle behavior, it is possible to recognize triggers of
entry, which are signals or confirmations that a trend
may be about to move in a specific direction.

These triggers are essential for traders looking to optimize

your market entries, minimizing risks and maximizing
potential gains. They appear in candle patterns as
ignition, rejection, and indecision, which, when well interpreted,
can indicate the beginning of a new movement or the continuation
of an already established trend.
 1, 2, 3 of buying or selling

The 1, 2, 3 strategy is an effective technique for identifying

potential entry points for buying operations or
sell, taking advantage of specific candle patterns. This
the method focuses on observing three consecutive candles in
a possible top or bottom, where the middle candle is crucial for
the confirmation of entry.
1. Pattern Identification: For the configuration to be
valid, the middle candle (candle 2) must have the highest high
high between the three candles. This characteristic indicates that there is
a potential for reversal, as it suggests a loss of strength in the
current trend.
Candle 1: The first candle must have a close that
suggest a continuation of the current trend, whether it is upward or downward

low.
3. Candle 2: The second candle, being the one that has the highest
maximum, represents an attempt at upward movement
(in the case of a peak) or descending (in the case of a bottom).
4. Candle 3: The entry occurs on the violation of candle 3, which must
to move in the opposite direction of what was observed in the candle
2. This signals that the market may be reversing,
offering an opportunity to buy or sell.
 1, 2, 3 for buying or selling

Maximum

Violation

Entry into the violation of

third candle.
Violation

Minimum

These triggers are the main ones so that it is not necessary to memorize patterns.
of candles, remembering that later I will teach institutional triggers that
they are much more reliable and contextualized.
 Polarity Switch
The polarity reversal is a strategy that is based on analysis
of large candles, which usually indicate movements
significant in the market. This approach is used to
identify possible trend reversals, leveraging strength
two candles that break important support levels or
resistance.
1. Identification of Large Candles: The strategy begins with
the observation of candles that have long bodies and
expressivos. Esses candles podem ser indicativos de forte
pressão compradora ou vendedora, e são essenciais para a
analysis of polarity reversal.
2. Violation of the Larger Candle: The entry into the operation occurs at
violation of the larger candle. This means that, when the price
ultrapassa o fechamento ou a máxima (ou mínima, dependendo
of the trend) of this big candle, is a sign that the
a reversal movement may be underway.
Volume as Confirmation: It is essential to observe the volume
associated with the candle that is breaking. An increasing volume
during this violation reinforces the validity of the movement and
increases the likelihood of the operation's success. A volume
Low could indicate a lack of conviction, which suggests caution.
[Link] with the Engulfing: The polarity shift can be
compared to the violation of a engulfing pattern, where a
the larger body candle "swallows" the previous one. In this case, the exchange
The polarity indicates a change in the market dynamics.
reflecting the transition from a feeling of high to low, or
vice versa.
 Polarity Swap

Entry into the violation of

of polarity change.

Violation

Violation

These triggers are the main ones so that it is not necessary to memorize patterns of
candles, reminding that later I will teach institutional triggers that are
much more reliable and contextualized.
 Absorption
Absorption is a crucial concept in the analysis of candles and volume.
indicating a possible trend reversal. This pattern is
identified when the candles show long wicks and a volume
significant, suggesting that the buying or selling power is changing
exhausting.
1. Pattern Identification: Candles with long wicks indicate that,
despite a strong initial movement towards the trend,
there was a refusal of the price to continue in this movement,
resulting in a significant absorption of purchasing pressure
or sale.
[Link] as an Indicator: The presence of a high volume during
this pattern is essential. A growing volume during the
the formation of absorption candles indicates that many
market participants are positioning themselves, suggesting that
a change of direction may be approaching.
3. Entry in Violation: The entry strategy is made at the violation
of absorption candle. When the price breaks the level of the candle
which signaled the absorption, this may be a strong sign that the
the previous trend is losing strength and a reversal is
forthcoming.
4. Using Divergences: To increase the effectiveness of the entry, it is
it's important to observe divergences between the price and indicators
like the RSI or Volume. These divergences can reinforce the idea
that the trend force is running out, offering a
most reliable opportunity for entry.
 Absorption

Violation

Entry in the violation of

of the polarity change.

Violation

These triggers are the main ones so that it is not necessary to memorize.
candle patterns, remembering that later I will teach triggers
institutional ones that are much more reliable and contextualized.
Dow Theory
The Dow Theory, formulated by Charles Henry
Dow is one of the fundamental bases of analysis
technique and understanding of the markets
financial. Dow, an influential journalist and
co-founder of The Wall Street Journal,
introduced concepts that are still
widely used by traders and
investors around the world. Their vision
pioneering about the movement of the markets
financials and price behavior
established principles that continue to
influence the way we analyze and
we interpret market fluctuations.

Charles Henry Dow (1851-1902) was a

American journalist who left a legacy
durable in the field of economics. He co-
founded the renowned The Wall Street Journal and the
Dow Jones Company, besides having created the
Dow Jones Industrial Average, the second index
of the oldest market in the United States,
which measures the average of the quotes of the 30

largest publicly traded companies in the country.

The Dow Theory is fundamental for the study

of market movements and serves as the
basis for other theories, including the Theory of
Elliott. Understanding its premises is
essential for any trader who wishes
to delve into technical analysis and the
dynamics of financial markets.
 The principles of Dow
Charles Dow never wrote a book gathering the fundamentals.
from his theory. He shared his conclusions about Analysis
Technique through editorials in The Wall Street Journal. After
his death, columnist William Hamilton continued his
principles, organizing them and refining them over 27 years.

The Dow Theory, also known as chartism, has become

se essencial para traders, pois se baseia em estudos sobre
market trends. These studies consider events
past, such as closing prices, trading volume
and graphic patterns.

In the annotations of Dow, Hamilton developed 8 principles.

fundamentals that are respected to this day in
market.
 The indices and prices
everything is discounted

The fundamental principle of Dow Theory is that the indices and

prices already account for everything, that is, they reflect all
information known by the market, such as news,
corporate decisions and financial results. New events
are quickly absorbed by prices, causing them to rise or
descend.

However, among traders, it is often said that prices

they do not discount 'Acts of God', referring to events
unexpected events that have a great impact on the market, such as the
attack on the World Trade Center, the 2008 crisis and the pandemic
from 2020.
 The market moves in
waves and presents 3
trends
The second pillar of Dow Theory is the study of trends.
of the market. According to Dow, the market moves in waves and
presents three main types of trends: the primary, which is
the most enduring and comparable to the tides of the sea;
secondary, which corresponds to medium-term waves; and the
tertiary, which are short-term fluctuations.

Later on, we will explore each of these trends with practical examples.
within the theory of Elliott and its fractals.
 The Trends of High
they have 3 phases
In the primary uptrend, Dow
identified three distinct phases:

Accumulation: A group of investors

but better informed, called
insiders start to buy when the
the market is below the fair value or
shows signs of improvement. At this stage, the
the public still does not perceive the potential
discharged.
Sensitive rise: Prices begin to
rise steadily as the
companies' results improve.
Embora haja uma elevação clara, o
the public may still be cautious and
do not invest with full strength.
Burst or excess: At this stage, the
the majority of investors are convinced
from the upward trend and starts buying
aggressively. The market heats up
quickly, driven by good
news, corporate profits and
economic growth.

These phases illustrate how the market

moves from uncertainty to optimism, many
times culminating in inflated prices.
 The trends of decline
they have 3 phases
In the primary down trends, Dow also identified
three phases:

1. Distribution: This stage marks the end of the uptrend, with insiders
starting to sell your positions. The market can
appear stable or fall slightly, but the first signs
signs of reversal begin to appear.
2. Panic: Buyers lose strength and sellers
They dominate. A widespread feeling of pessimism arises,
and investors rush to divest their assets,
accelerating the decline with increasing volume.
3. Slow decline: After intense falls, prices reach levels
very low, and those who still have assets are not motivated
selling them. As a result, the trading volume decreases,
resulting in a slower decline.

These phases demonstrate the transition of an optimistic market

for a state of pessimism, with emphasis on the effect
emotional that worsens the fall during panic.
 The volume must
confirm the trend
In Dow Theory, trading volume is crucial for
confirm the strength of a trend. According to Dow, a
a trend is considered more reliable when accompanied
for an increase in volume. That is, as the trend
it develops, the volume must grow, showing that there is a
greater interest of market participants.

Similarly, when the volume decreases, it can be a sign

that the trend is losing strength and approaching
a possible reversal. Therefore, the volume acts as a
secondary indicator that reinforces or alerts about the end of a
movement.
 Two averages are
they mutually confirm
In Dow Theory, one of the most challenging principles is the
idea that two averages (generally the industrial and the)
transports) must mutually confirm to validate
a trend. According to Flávio Lemos, author of Analysis
Financial Markets Technique, if an average does not confirm
the direction of the other, this should be seen as a sign of
alert for a possible change in trend
predominant.

Moreover, Dow emphasizes that the analyses must be conducted.

based on the closing prices, as the price of
Opening has no relevance for trend evaluation.

This principle is quite difficult to work with, however, it helped in the creation of some.
concepts that we will see ahead.
 A trend is valid
until there is a reversal
In Dow Theory, a fundamental principle is that a
the trend will remain in effect until a signal occurs
reversal clear. This means that, regardless of
whether it is an upward or downward trend, it will continue until
opposing forces manifest. These reversal signals
they can manifest in various forms, such as patterns
charts, candlestick formations, moving average crossovers
furniture and other technical indicators. It is important to be
pay attention to these signs to identify the exact moment in
that the trend can change direction.
 The market can
move laterally
The market can also enter periods of consolidation.
the lateral movement, where there is no trend
clearly defined. During these moments, prices
I oscillate within a limited range, without the peaks and
funds are clearly ascending or descending. This
it occurs when the forces of supply and demand are
balanced, creating a kind of indecision in the market.
In this scenario, traders should be cautious, as it could be
hard to predict the next move until a new
upward or downward trend is established.
Elliott Theory
Ralph Nelson Elliott (1871-1948) was a
American accountant who revolutionized the
market behavior analysis
financial with the introduction of the Principle of
Waves. Observing the graphs of the assets in
stock market, Elliott identified patterns
that would repeat over time, what the
led to formulating the Elliott Wave Theory.
This theory suggests that the movement of
the market is driven by behavior
the masses, reflecting collective emotions that
they vary between euphoria and panic.

Elliott argued that market cycles

they are not just random, but reactions
structured by investors to factors
external factors, such as economic and political events
and social. He described that the market is
movimenta em padrões de ondas, alternando
between phases of advancement and correction. The theory

proposes that these movements can be

classified in impulsive waves, which follow
the main trend, and corrective waves, that
oppose her. This wave structure
allows traders and analysts to identify
potential reversal points and directions
future of the market, offering a
strategic approach to analysis
technique.
 Movement of the Waves
The Elliott Wave Theory describes the movement of
prices in the market in cycles that can be divided
in two main parts: the impulsive cycles and the
corrective cycles.
I - Impulsive Cycle: This cycle is composed of five
waves, three of which are directional (waves 1, 3, and 5) and
two non-directional waves (waves 2 and 4). The directional waves
represent the strength of the trend, while the waves
of correction indicate periods of consolidation. This
structure is always marked by numbers, reflecting the
main market movement in the direction of
predominant trend.
II - Corrective Cycle: After the impulsive cycle, a
corrective cycle that consists of three waves,
identified by letters (A, B, and C). This cycle reflects a
correction in the previous trend, where the price moves
in the opposite way to the impulsive movement. Wave A
the correction begins, wave B usually shows a
backward movement, and wave C completes the correction,
often extending beyond wave A.
 Wave Movement
III – Complete Cycle: When we combine a cycle
impulsive and a corrective cycle, we have a complete cycle
within the Elliott Wave Theory. This structure
reveals the dynamics of the market, where the alternation between
forward and correction movements are fundamental for
understanding future price expectations.
Understanding this sequence allows traders
identify strategic entry and exit points
making market analysis more effective and
based.
 Fractal Movements
The central proposal is that the market
opera according to a structure
fractal, where patterns repeat
on various scales, from the smallest
tiny to the broadest.
fractal analysis can be used in
different periods, allowing for
the traders identify both the
long-term trends regarding
the short-term movements of
market. This concept aligns with the
Dow's principle, which also
classifies the trends in
primary, secondary, and tertiary.
 Fractal Movements

In the first
for example we have
a cycle looking
no timeframe
diary, a vision
of a cycle
macro.

In the next cycle

we are looking
in graphic time
of 4 hours, this
cycle formed
our wave 1 of
diary
 Understanding Each Wave
To understand how Elliott waves work, it is
fundamentally recognize that each wave is driven by
external interests on the graph.

Wave 1: Represents the beginning of the cycle, when large institutions

they start to move the asset. At this stage, it is almost impossible
for retail traders to position themselves, as they lack
insider information.
Wave 2: Major institutions begin testing, conducting sales
partials to allow for a correction in the price and check if the
retail traders show interest in entering the market.
Wave 3: Here, retail begins to actively position itself.
Generally, this is the biggest wave, as it attracts a significant number
of investors, representing a moment of euphoria in
market.
Wave 4: This wave is characterized by the generation of liquidity, but
it is also the most challenging to operate due to manipulation
intense that occurs. Thus, Wave 4 tends to be complex in its
training.
Wave 5: At this point, the big players start taking profits,
since they have been positioned since Wave 1. With that, retail can
bear losses, as the subsequent correction begins, leading to
waves A, B and C.
Understanding Each Wave

On wave 1, the institution starts making purchases and as soon as

At a certain point, they carry out small parts of
your profit, creating wave 2, at this point it is ideal for others
experienced traders open orders.

As soon as new traders start buying, the price has

a great boost and at this point retail traders
they start to enter into the asset and with that we have a very wave
big.

The wave 4 is where the most manipulations occur so that the

price rises a little more creating wave 5, as soon as wave
5 reaches a good point where institutions make their profit
raising the price for the corrective waves.

This cycle repeats daily in all timeframes.

 Rules
There are three fundamental rules that must be
strictly followed. In case of discrepancies, the counting
the waves may be incorrect. These rules are:

Wave 2: This wave should never exceed the beginning of Wave

1. It is crucial to have a pivot at this point. In the approach
moderna, Wave 2 cannot be less than 61% of Wave
1, thus ensuring a significant correction.
Wave 3: This wave cannot be the smallest among the five.
waves of the impulsive cycle. If this happens, it is necessary
reassess the fractal movements to ensure accuracy
from the counting.

Wave 4: This wave should not exceed the territory of

Wave 1. Although it may perform a pullback, it is essential that
do not exceed the extreme of Wave 1 to maintain the
integrity of the wave counting structure.

Following these rules is vital for an effective and accurate analysis.

within the Elliott Theory.
 Validating the Rules

In this example, we have a healthy cycle,

where all the rules were respected.

The wave 2 was not larger than wave 1, the wave

3 is not the smallest of the waves and wave 4 is not either.

invaded the territory of wave 1.

Having all these rules validated you

it has a healthy Elliott cycle.
 Principles
In Elliott's Theory, there are two fundamental principles that
they guide the analysis of the waves, remembering that principles do not
there are strict rules, but standards that are generally observed:

Alternation: This principle suggests that the waves of

Correction (2 and 4) usually presents complexity.
Normally, Wave 4 is the most complex, but, in
in some situations, Wave 2 may also manifest
in a complex way. This alternation helps to identify
patterns and predicting future market behaviors.
Equity: This principle establishes that if Wave 3 is
larger than Wave 1, Wave 5 tends to have a size
similar to that of Wave 1. This relationship allows for the
traders anticipate the movement of Wave 5 and seek
retraction opportunities, improving your strategies
entry and exit in the market.

Understanding these principles is crucial for a more detailed analysis.

profound and effective within Elliott's Theory.
 Equity
To validate this principle you can use Fibonacci.
internal projection and project wave 1.

The value of 100% is the exact size of wave 1, in case wave 3

if extended, probably wave 5 will have the same
wave size 1.

With this you can take advantage of validating a trigger of

entry or using this region as a target.
 Alternation

You can use this information to predict the next corrective cycle.
We will talk more about complex waves later.
 Extensions

The movement of extended waves is a phenomenon

impulsive, characterized by its breadth and speed.
Within the impulse waves, it is common for one, or in
at most two, waves should be extended. When
we identified extended waves, the analysis of fractals is
become useful, as these extensions often
they repeat at smaller levels of fractal.

Wave 1: In some cases, Wave 1 may present

an extension, indicating a strong initial movement
of purchase and the price narrows down creating a
wedge.
Wave 3: When Wave 3 extends, it tends to
break the limits of the price channel. This breakout
it can be an opportunity for traders, as
allows us to use price progression to
anticipate and capture the subsequent correction.
 Extensions

Wave 5: Normally, if Wave 5 extends, it is

it is possible to use the 161% projection of the retracement of
Fibonacci or observe the smaller fractals to
anticipate the correction. These tools help to
identify entry and exit points, maximizing the
profit potential.

Understand these extensions and how they...

manifest in the behavior of the market is
fundamental for improving the analysis and execution of
operations.
Extensions
The most normal thing is to have a
extended wave 3 in the cycles, and
when this happens we have the
possibility of applying the
principle of equity.

Usually when wave 1

the graph extends
shaping a wedge.

The extended wave 5 happens

when we have a lot
retail movement
providing liquidity for the
institutional.
 Characteristic targets
To project the targets of Elliott waves, we use
tools like Fibonacci projection, retracement
of Fibonacci and channels. Each wave has characteristics
different ones that can help us in the analysis:

Wave 2: The target of Wave 2 is usually identified

through Fibonacci retracement, frequently
touching the levels of 50% or 61.8%.
Wave 3: Wave 3 usually plays the line of
trend (LT), but often breaks it. To
projecting your target, we can use projection of
Fibonacci at levels of 161.8% and 100%.
Wave 4: To determine the target of Wave 4,
we use Fibonacci retracement, since the end of
Wave 2 until the end of Wave 3. Normally, the price
tends to retract by 38.2% or 50%, although this does not
be a fixed rule. Wave 4 is often
more complex.
Characteristic targets

Wave 5: In most cases, Wave 5 tends to have

the same size as Wave 1, allowing for
let's use the size of Wave 1 as a basis for the
projection. A rarer scenario occurs when the
Wave 5 is extended; in this case, the projection of
Fibonacci, which goes from the beginning of Wave 1 to the end of
Wave 3 usually indicates a target of 161%. Beyond that
we can use channels and the progression of
price to help identify the targets.
Characteristic targets

Use a fibonacci for

define the target of wave 2.
You can use from
from 50% to 79%.

For wave 3 we use

the Fibonacci projection
internal, varying between the
100% and 161%.
Characteristic targets

To design wave 4.
we use the retraction
from Fibonacci and
we observe the levels
38 and 50%

For wave 5
we can use the
principle of equity
to have a
projection, using the
same size as
wave 1.
 Types of corrective waves
Elliott corrective waves can vary.
significantly from one case to another. The A waves
C, in particular, presents various possibilities, the
what makes it crucial to observe these movements to
increase the assertiveness in the analyses.

Wave B is always formed by fractals of waves A and B.

and C. The A and C waves can be composed of both
impulsive waves (1, 2, 3, 4, and 5) as for waves
corrective (A, B, and C). This leads us to different
corrective formations within Elliott's Theory,
including:

5-3-5: 5 impulsive waves, followed by 3 waves

corrective, ending with 5 impulsive waves.
3-3-3: 3 corrective waves in A, B and C.
5-3-3: 5 impulsive waves, followed by 3 waves
corrective actions in A and C.

3-3-5: 3 corrective waves in A and B, followed by 5

impulsive waves in C.

These different combinations offer a

flexibility in the analysis of corrective waves, allowing
that traders recognize patterns and make decisions
informed. The visualization of these formations in
graphics facilitate the understanding and practical application of
Elliott Theory.
Types of corrective waves
Types of waves
corrective
5-3-5

3-3-3
Types of corrective waves

5-3-3

3-3-5
 Complex Waves
Complex waves always occur within waves.
correctives in Elliott's Theory and are named as such due to the
its complexity, making them challenging to operate.
Although the principle of alternation may assist in decision-making
decision, to know the most common types of complex waves
can further facilitate the analysis. Among the most recognized,
We have six main types: Triangular, Expansive, Rectangular,
Cunha, ABCDE, Onad X.

Knowing these patterns can help traders to identify and

operate with more confidence during corrective waves,
despite its inherent complexity.
Complex Waves

Cunha: This standard is

characterized by a
convergence of lines of
tendency, where the waves go
narrow as
we often progress
indicating a reversal
potential.

ABCDE: This type of wave

complex involves a series of
corrective movements that
unfold in a sequence
of waves, reflecting the
corrections of the movement
initial.

Wave X: Wave X is a wave

that links the corrective cycles.
Many of the complex waves
they have more than one wave
corrective (many times
when they form diagrams of
wyckoff) and to connect the waves
we use wave X for corrective measures.
Wyckoff Theory
Richard Demille Wyckoff was a trader,
educator, investor, and entrepreneur of
great prominence in the financial world.
Reconhecido como um dos cinco “Titãs da
Technical Analysis next to figures like
Charles Dow, Wyckoff became notable for
its pioneering work in the study of volume, what
allowed the detection of large
market manipulations.

Among your most significant contributions

the concepts of accumulation and
distribution, which helps to understand how
the institutions move the prices. He
also developed innovative techniques
of graphical analysis, including the graph of
. point and figure, which continues to be
widely used.

In addition, it created a variety of

volume indicators that remain in
use by traders and fund managers
renowned to this day. The approach of
Wyckoff not only influenced analysis
technique, but also left a legacy
durable that still guides strategies of
contemporary trading.
 Wyckoff Theory
The Wyckoff theory emphasizes that the Big Players, such as banks
the institutions operate with insider information that
they influence the market. He formulated three fundamental laws:

[Link] of Supply and Demand: Prices are determined

through the relationship between supply and demand; when demand
demand exceeds supply, prices rise, and vice versa.
2. Law of Cause and Effect: Significant price movements
(causes) generate corresponding results; for example,
accumulation can lead to highs and distribution to lows.
[Link] of Effort x Result: The trading volume
(effort) should result in price movements
(result); if not, it may indicate loss of strength in the
trend.

These laws help traders identify opportunities for

investment based on the actions of the major players.
 The Wyckoff Laws

The three laws of Wyckoff's theory provide

a valuable framework for understanding the
market behavior. Understand the
relationship between supply and demand, identify the
causes of price movements and evaluate the
the relationship between volume and price are skills
essential for traders looking to operate from
in an informed and effective manner. These principles
allow investors to align with
the actions of the major players, increasing
your chances of success in the market
financial.
 Law of Supply and
Demand
This law states that stock prices are directly
influenced by the relationship between supply and demand. When the
demand for an asset exceeds its supply, prices tend to
rise. On the other hand, when supply exceeds demand, the
prices fall.

High demand: An increase in demand can be

caused by positive news, profits above expectations
or events that attract the interest of investors. This
results in a price increase.
High offer: The offer may increase due to sales
massive actions by insiders, disinterest from the public or
negative news, resulting in a drop in prices.

Understanding this law helps traders identify potential

reversal points in the market, allowing them to compete
contra os grandes players.

Later in the Smart Money material, we will address this in more detail.
how does the law of Supply and Demand work in the Graph.
 Law of Cause and Effect
This law suggests that for every significant price movement
In the market (the effect), there is an underlying cause that precedes it.
This cause usually manifests itself in the form of accumulation.
or distribution of shares.

Accumulation: Before a rise, a period of accumulation

it happens when the big players buy shares at
low prices. This cause is reflected in a movement
rising prices.
Distribution: Before a drop, the distribution occurs
when these same players sell their shares at prices
highs. This action results in a drop in prices.

Identifying the cause of a movement helps traders to

anticipate the effect and make informed decisions about
when to buy or sell.

UTAD
BC Resistance

ST

PSY
Support

This is the law that we will focus on in depth in this module.

 Law of Effort x
Result
This law relates trading volume (the effort) with the
price movement (the result). The idea is that an increase
significant in volume should result in a movement
proportional to the price.

Agreement: If an increase in volume results in a

significant upward movement in price, this indicates
that the trend is strong.
Divergence: If the volume increases, but the price does not
move significantly, this may indicate that the trend
is losing strength, and traders should be cautious.

This law is crucial for assessing the validity of a trend. The

traders can use this analysis to decide whether they should enter
you leave a position.

This law is linked to the concept that was explained in the technical analysis module.
When we have indicators in agreement with the price, we have a good
trend, when in divergence means that the price is losing
strength.
 Market Cycle
The Wyckoff Theory provides a structured view of the
market cycles, explaining how the major players, such as
institutions and banks (called Composite Man or Man
(Composite), control the movement of prices. Wyckoff
divided the market cycle into four main phases:
accumulation, uptrend, distribution and trend
low. These phases repeat cyclically and are driven by
interaction between supply and demand, which is manipulated by
big players.

1. Accumulation: In this phase, institutions buy assets.

low prices, generating a lateral phase in the graph. The
the general public still does not see the opportunity, and the
prices do not show significant variations.
2. Uptrend: After accumulation, demand exceeds
the offer, and prices start to rise. The increase is
driven by the audience's entry, which begins to
perceive the opportunity.
3. Distribution: Here, the major players start to sell.
your positions at high prices, taking advantage of the increase of
demand generated by the public. This phase is usually
marked by volatility, with the price starting to
lateralize.
4. Downward Trend: After the distribution phase
In the end, supply exceeds demand, leading to a decline.
of prices. At this point, the audience that entered late in
the market ends up suffering losses.

Understanding these phases is essential to anticipate reversals.

and operate in alignment with the institutions that have
greater influence power in the market.
 Market Cycle

The price starts by moving sideways, where the institutions

they open several small orders while maintaining the price
lateral.
After the accumulation, the price enters a trend of
high that is driven by retail.
When the price reaches an interesting region, the
BigPlayers create sell orders causing a lot of
volatility in the asset.
Then the price enters a downtrend.
holding the people who entered late accountable.

We will explore the market cycle in detail later.

 Market Cycle

We will explore the market cycle in detail later.

 Accumulation
The accumulation phase in Wyckoff's Theory occurs after a
downtrend, marked by a period of consolidation,
where large players, such as financial institutions, begin
to buy assets gradually and discreetly. The market
presents a narrow trading range, indicating that the
the supply is being absorbed by the buyers.

This process includes specific pricing patterns, such as the

reduction of selling pressure and increasing volumes of
purchase, suggesting a preparation for a reversal of
trend. The goal is to create a solid foundation for a new
high movement.

The Wyckoff Theory also introduces the concept of

Composite Man, representing the major players who
they manipulate prices by buying assets at low prices and
pushing the market up after absorbing all the
offer. Support tests ensure that the offer was
absorbed before a new upward movement.
 Accumulation

The Wyckoff accumulation occurs at the beginning of all

movement, based on the price.
 Reaccumulation
Reaccumulation in Wyckoff Theory occurs after a
upward trend, characterizing a consolidation period
where major players continue to accumulate assets for
sustain the next phase of valuation. Unlike the
initial accumulation, this process occurs in an existing market
on the rise.

During this phase, the price fluctuates within a narrow range,

reflecting the absorption of the remaining supply and the increase of
demand. Patterns of reduced volatility and tests of
support suggests that the market is preparing for a
new bullish momentum.

Reaccumulation also serves as a pause.

strategic, allowing large players to adjust their
positions and ensure that the offer has been absorbed before a
new appreciation movement.
 Reaccumulation

The Wyckoff reaccumulation occurs in the middle of a movement of

high, normally in the 2nd and 4th waves of Elliott.
 Distribution
The distribution phase in Wyckoff Theory occurs after a
uptrend and marks a consolidation period in which
big players, such as financial institutions, sell assets
gradually. During this phase, demand weakens.
and the supply increases discreetly, preparing the market
for a possible reversal and the beginning of a bearish phase.

The process is characterized by a trading range

narrow, where the price fluctuates steadily, indicating that
buyers lose power while sellers
they assume control. Patterns like false breakouts and
resistance tests are common, used by the big ones
players to distribute assets to smaller investors,
creating the illusion of continuity of the rise.

The distribution is crucial for large investors to execute

profits without causing sharp declines. Stress tests and
lateral movements help to deceive retail, while the
big players sell, establishing the foundation for a
new downtrend.
UTAD
BC Resistance

ST

PSY
Support
 Distribution

The Wyckoff distribution occurs at the end of all

movement, at the top of the price.
Redistribution
Redistribution, according to Wyckoff, occurs after a
downward trend and marks a period of consolidation in
which major players continue to sell assets to
buyers still present. This process prepares the
market for a new phase of devaluation, with
offer is being gradually absorbed.

Characterized by a narrow trading range, the

redistribution reveals patterns such as false breakouts and
support tests, signaling the weakening of the
demand and the control of supply. Large investors
they manipulate the market to distribute assets without causing
accented falls, creating the illusion of recovery before
of a new drop. The goal is to form a solid foundation
for a continuous downward movement.

Resistance

Support
 Redistribution

The Wyckoff redistribution occurs during a downward movement,

normally in waves 2 and 4 of Elliott.
 Phases of the market in one
accumulation
Phase A: Stopping the Downtrend
PS (Preliminary Support): First attempt to interrupt
the fall generally fails.
SC (Selling Climax): Climactic action that marks the end of the
fall.
AR (Automatic Rally): Upward movement that defines the
maximum reach.
ST (Secondary Test): Tests the level of supply, ending the
Phase A is starting Phase B.
Phase B: Construction of the Trading Range
UA (Upthrust Action): Temporary break of the
resistance, followed by a return to the range.
ST (Secondary Test): Weakness test, with rupture
temporary support.
Phase C: Final Test
SP (Spring): Test of the minimums of Phases A and B for
check the commitment of the salespeople.
LPS (Last Point of Support): A downward movement that does not
reaches the previous minimums.
TSO (Terminal Shakeout): Abrupt drop with rapid
recovery.
Phase D: Beginning of the High
SOS (Sign of Strength): Upward movement that reaches the
top of the strip.
LPS (Last Point of Support): Ascending supports in
high movement.
BU (Backup): Last correction before the final discharge.
Phase E: Solid Waste
Succession of SOS and LPS, forming a dynamic of peaks
and ascending funds.
 Phases of the market in one
accumulation

Example:
 Market phases in one
accumulation

Real Example:

This is a more common example that appears in the graph, however in some
the accumulation cases or diagram will appear differently, being able to
even forming diagonally
 Market phases in
a distribution
Phase A: Interruption of the Upward Trend
PSY (Preliminary Supply): First resistance that tries to contain
the high, but failure.
BC (Buying Climax): Buying climax point that interrupts
the upward trend.
AR (Automatic Reaction): Correction movement that
establishes the minimum range.
ST (Secondary Test): Demand level test that signals the
end of Phase A and the beginning of Phase B.
Phase B: Formation of the Cause
UT (Upthrust): Temporary break of resistance, testing the
maximum generated by the BC.
mSOW (Minor Sign of Weakness): Sign of weakness less than
temporarily interrupts the support and re-enters the range,
testing the minimum created by AR.
Phase C: Test
UTAD (Upthrust After Distribution): Break of the highs of
Phases A and B as a test.
UTAD Test: Ascending movement that checks the
commitment of the buyers.
Phase D: Downward Movement in the Range
MSOW (Major Sign of Weakness): Bearish movement after the
C phase test that reaches the bottom of the range, indicating a
change of character.
LPSY (Last Point of Supply): Last level of support for demand,
reflecting decreasing highs in the downward movement.
Phase E: Fall Outside the Trading Band
SOW and LPSY dynamics: Sequence that generates a decrease
continuous series of highs and lows.
 Market phases in
a distribution

Example:

UTAD
BC UT UT
ST

LPSY

PSY
AR
mSOW
SOW

A B C D E
 Market phases in
a distribution

Real Example:

This is a more common example that appears in the graph, however in some cases
the distribution diagram will appear differently, possibly even
even if it forms diagonally
Types of Manipulations

Subtle
The price captures the liquidity of
subtle form without you
move so much with the
price closing outside of
structure.

Sweep
The price leaves a candle
with the wick very long,
closing inside the
structure. We call it that
sweep movement
(scanning).

Strong
The price captures the liquidity of
abruptly being well
perceptible with candles well
big closing outside the
structure.

There are 3 different types of manipulations (Spring and Upthrust).

 The importance of Volume
The Wyckoff Theory highlights the relevance of volume as
one of the main indicators in behavior analysis
of the market. Richard Wyckoff, pioneer in technical analysis,
believed that the volume provides valuable insights about the
intention of major players, such as financial institutions
the institutional investors. The interaction between price and
volume is essential to understand the phases of
accumulation and distribution, allowing to identify changes
in the dynamics of supply and demand.

When the volume increases in an upward movement, by

example, this suggests that there is a strong buying interest,
confirming the trend. On the other hand, an increase in
volume during a drop can indicate that the pressure
saleswoman is intensifying. Through observation
careful of the volume, traders can discern between
genuine movements and false breaks,
helping them make more decisions
informed and operating with a higher rate of
Correct. In summary, volume is a tool.
crucial in Wyckoff's Theory, serving as
a thermometer for the actions of the greats
investors and a guide for participants
of the market.
 Strategies with
Wyckoff
Based on Wyckoff's concepts, we have a wide range
of strategies that can be implemented. At the end of this
module, it will be evident that both Wyckoff and Elliott us
they taught that the market operates in cycles, which repeat themselves
a long time. It has been over 100 years of studies that
they underpin these theories.

Wyckoff focuses on volume analysis and the dynamics between supply

and demand, allowing the identification of entry and exit points
with greater accuracy. On the other hand, Elliott's Theory offers
a framework for understanding price movements
in waves, helping to predict possible reversals and
trend continuations.

By integrating this knowledge, you will strengthen

significantly change your operational approach. I will
demonstrate how to combine both theories, using
price and volume patterns for a more robust analysis
enabling more informed and effective decisions in
market.
 Aligning Wyckoff with
Elliott
In this example, we also observe an Elliott wave uptrend,
with the principle of alternation being respected: wave 2 was
simple and wave 4 was complex.

However, in wave 4, a redistribution occurred

Wyckoff, characterized by two liquidity captures — one
above and another below — before the price resumes its
upward trend.

By aligning these concepts with the SMC analysis, we can

identify liquidity zones and ideal entry points,
increasing the accuracy of the operation and ensuring a
more favorable risk-return relationship. This combination
allows for a more refined reading of the market and a decision-making
of a safer decision.
 Aligning Wyckoff with
SMC/ICT
Combine the reading of Wyckoff cycles with the concepts of
SMC, like order blocks and liquidity. During the phase of
redistribution or Wyckoff redistribution, search for
mitigations and CHoCH (Change of Character) that confirm
that the big players are manipulating the price. This to you
will allow identifying institutional entries in areas where the
price has not yet made its main movement.

In the example next to it, we used the same previous example.

but using SMC concepts to find our trigger
initially, we had 2 triggers, being the Fair Value Gap and the
Orderblock, and along with them we had our change of
characteristic after the liquidity capture. Thus
we would have a little more context when making our entry.
Smart Money
Smart Money Concepts (SMC) emerge
as a powerful, centered approach
analysis of the actions of the major players of
market, such as financial institutions and
professional investors. These participants,
frequentemente referidos como "smart
money", have insider information and
significant capital, which allows them
influence the market effectively.

By adopting the concepts of smart money, the

traders can identify areas of
accumulation and distribution, understanding the
price control points and capture the signals
of manipulation that these big players
They exercise. This approach allows for the
traders position themselves in a more
assertive, anticipating price movements
that may not be visible only through the
traditional technical analysis.

Through careful observation of the volume,

of the market structure and the areas of
liquidity, traders can align their
operations with the intentions of the greats
investors, maximizing their opportunities
of profit and minimizing risks. In this module,
we will explore how to apply Smart Money
Concepts of no day trade, providing a foundation
solid for a well-functioning operation strategy
successful.
 Supply and Demand
The dynamics of supply and demand is the central foundation that
moves prices in the financial market. These two
concepts are at the heart of all negotiation and are
responsible for determining the direction of prices. The theory
basic suggests that when the demand for an asset exceeds its
supply, prices tend to rise, and when supply exceeds the
demand, prices drop. In the context of trading, understanding
how supply and demand interact is essential for
identify areas of interest where the major players, such as
financial institutions place their orders.

No day trading, especially based on concepts such as

Smart Money and institutional analysis, the identification of areas
of supply and demand allows the trader to predict possible
points of reversal or continuation of trends. Now,
let's detail what supply is, demand, and the concept of
balance between them.
 Offer

The offer refers to

the amount of
an asset that is
available for
sale to one
determined
price. In terms
simple, how much
more sellers
there are willing to
sell an asset
greater will be the

offer.

In the graph, the supply zones typically appear after

upward movements, where institutional sellers
they start to distribute their positions. These areas are
marked by a resistance, where the selling pressure is
greater, suggesting that the price tends to fall upon reaching this zone.
The offer reflects the desire of market participants to
They will divest their assets in exchange for liquidity.
 Demand

The demand
represents the
interest of
buyers in
acquire an asset.
The more
people or
institutions
are
willing to
buy to a
determined
price, the higher it will be

the demand.

Demand zones on the chart usually emerge after

downward movements, where the big players begin to
accumulate positions, waiting for the price to rise again.
These points are typically seen as support zones,
then indicate a favorable balance for buyers, who
inject liquidity into the market, causing the price to rise. The demand
is, therefore, the engine that drives the price up when
surpasses the offer.
 Balance
Equilibrium occurs when supply and demand are at
perfect harmony, that is, when the number of buyers
the sellers is equal, resulting in stability of
prices. In this state, the price tends to move sideways,
in a narrow trading range, without large fluctuations
up or down. This balance is temporary, as the
the market will eventually be unbalanced due to a greater
buying or selling pressure, leading to a new trend.
No day trading, identifying moments of equilibrium can help to
predict the next big movement as
the balance tilts in favor of supply or demand.
 Market structure
The market structure is a fundamental concept for
any trader, especially for those who follow
methodologies based on SMC and institutional analysis. A
market structure is the standard or cycle of behavior
that the price changes over time. It alternates between
phases of trend and consolidation, forming peaks and troughs
which indicate the predominant direction of price movement.
Understanding and identifying this structure is essential for
recognize entry and exit opportunities in the market.

Within the analysis of market structure, two concepts

are particularly important for identifying changes
of direction and continuities of trend: the Breaking of
Structure (BoS) and Change of Character (CHOCH).
 Breaking of Structure
The Breaking of
Structure (BoS)
it occurs when the
price exceeds or
break a point
key of the structure
of the market
previous, whether it is a
top or bottom. This
break
confirm to the
continuation of a
trend
predominant.

In the context of a bullish trend, the BoS is validated when

the price breaks above a previous high, confirming the strength
of two buyers and the continuation of the trend. Likewise
form, in a downward trend, the breakout of a bottom
confirms the dominance of sellers and the continuation of the decline.

The identification of the BoS is essential for traders who wish to

to operate in favor of the trend, once the breakout indicates
that the market is ready to continue in the same direction.
The BoS helps to structure entry operations, positioning-
shortly after the break of the structure with the expectation that the
the movement will continue in the direction of the trend.
 Change of Character
O Change of
Character
(CHOCH) signals
a change
potential in
direction of
market. To
opposite of BoS,
that confirms the
continuity of
a trend, the
CHOCH indicates that
a reversal can
be about to
occur.
O CHOCH happens when the market breaks a level of
support as a level of resistance within a short
period, suggesting a transition from a trend phase
for a consolidation phase or the beginning of a new one
trend in the opposite direction.

This breaking of tops and bottoms indicates that the balance between
buyers and sellers are changing, generally
suggesting that the institutions are repositioning their
orders. In day trading, the CHOCH is an important tool.
to anticipate reversal points and adjust positioning to
favor of the new direction of the market. Detecting this "change of
"character" on time can be crucial to avoid getting into or
to remain in an unfavorable position when the market
change of direction.
 Imbalances

The concept of Imbalance is

essential for traders who
they follow the methodology based
in SMC and institutional analysis. The
Imbalance refers to an area
in the graph where there is a strong
discrepancy between buyers and
sellers, resulting in
fast movements and
price imbalances.

This phenomenon is observed when the market moves in a way

so abrupt in a direction that there is no distribution
equitable of purchase and sale orders, creating a "vacuum"
or a "gap" that the market generally seeks to fill
subsequently.

For day traders who operate based on behavior

of the institutional, the identification and correct use of
Imbalances can provide valuable entry opportunities
and exit, in addition to helping to understand the behavior of
price. Let's detail the main elements of this
concept: what is an Imbalance, how it is formed and how
use it in practice.
 What is an Imbalance?

An Imbalance
it occurs when there is

a lack of
liquidity in a
price zone
creating a slope
between orders of
buy and sell.

This usually happens after explosive movements in

market, as a strong trend of rise or fall, where
large volumes of institutional orders disrupt
temporarily the market. In the chart, the Imbalance appears
as an area where the price was not able to form candles
with a full body in both directions, leaving a "gap"
or "gap" visible between the high of a candle and the low of the
next, or vice versa.

This imbalance signals that liquidity has been withdrawn in a way

abruptly, without a balanced exchange of orders
between buyers and sellers. The market, in its nature
cyclical, tends to return to these unbalanced levels to
fill the Imbalance, seeking the liquidity that remained pending.
 How does an Imbalance happen
shape?
The Imbalance is formed during
fast and aggressive movements, where
large institutions or investors
institutional execute orders
significant in a short space of
time, causing the price to 'jump' certain
negotiation areas. This leap creates
a gap in the price structure, as
there was not enough liquidity to
to attend to all purchase orders or
selling in the transition between levels.

For example, in a bullish movement

accelerated, the purchase orders
they can push the price up
so quickly that there is no
sufficient vendors to fill
the orders along the way. How
result, the graph shows a space
gap between the minimum of a candle and the
maximum of the next, indicating that the
price "jumped" this area without
complete negotiations.
 Practical Use
Imbalances are areas of great interest for the
traders because, in many cases, the market tends to
returning to these areas to seek liquidity. That happens
because the big players, such as financial institutions,
they leave unfilled orders that need to be
balanced. Thus, the price often revisits these
areas, providing opportunities for traders to
position ourselves in favor of a movement for correction or
continuation.

In practice, a trader can use the Imbalance as

reference for entries or exits of positions, waiting
that the price returns to the zone of imbalance before
continue your journey.

The input is
frequently done
when the price returns to
Imbalance and stabilizes
before resuming the
previous trend. Also
can be used as a
confirmation tool
to strengthen decisions of
buy or sell based on
em outros fatores técnicos,
as support zones and
resistance or Breaking of
Structure (BoS).
 Golden Zone
The Golden Zone is the range between the levels of 61.8% and 79% in
Fibonacci retracement tool. These levels are not
chosen at random, but are derived from the sequence of
Fibonacci and the "Golden Ratio," known for its presence
in natural and mathematical patterns. Within the context of
trading, this area represents a point where the price, after
a significant movement of rise or fall tends to retreat
before continuing your original path or reverting
completely.

This area is especially relevant because, historically,

large institutional players use this range to
reposition your orders, taking advantage of liquidity and creating
market movements around these levels. Therefore, the
price generally finds support or resistance at this
region, making it a point of interest for traders
institutional and retail.
 How to use Golden
Zone
To apply the Fibonacci Golden Zone in your strategy
In trading, the first step is to identify a movement.
clear impulsive, whether high or low. Then the
Fibonacci retracement tool is drawn from the beginning to
final desse movimento, destacando os níveis de 61,8% e
79%. It is within this range that traders seek
entry opportunities, as this region tends to act
as support in an uptrend or as
resistance in a downtrend.

In practice, many institutional traders wait for the price

reach this zone before opening positions, as this
maximize the potential of a good entry point with the
minimum risk.

If other factors of
confluence, like patterns
of candles or zones of
liquidity, also were
aligned, the probability
of a reversal or
continuation of the trend is
even bigger. Moreover,
this area is widely
used as part of
order blocks strategies,
imbalance, and others
analysis techniques
institutional.
 Order blocks
Orderblocks are a fundamental tool in analysis.
institutional, representing areas where major players of
market, such as banks and financial institutions, position
your buy or sell orders. These order blocks
indicate regions where there is a concentration of liquidity and,
consequently, a greater likelihood of reversal or
continuation of trend. Understand the different types
Orderblocks are essential for operating efficiently.
based on the concepts of Smart Money.

There are seven main types of Orderblocks, each with

characteristics and specific uses. Next, we will explore
in detail each of them.
 Extreme Orderblock

The Extreme Orderblock is the

farthest point from a
high movement or
download before a
significant change of
direction. He is graduated
after a sequence of
candles that mark the end of
a trend and the beginning of
a correction or reversal.

This block is usually the

last liquidity point,
where the institutional ones
place your orders
finals, waiting for a
great reversal of
tendency.

Identifying the Extreme Orderblock allows for entering reversal trades immediately.
at the beginning of the new trend, with lower risk and higher potential reward.
 Propulsion Block

The Propulsion Block occurs when the

market presents a strong
impulsive movement after a
consolidation period. It is the point
where a large injection of liquidity
provokes a rapid movement and
decisive. This type of Orderblock
reflects areas of high probability
for the market to continue
moving in the same direction.

The Propulsion Block is used to identify areas where the institutional

drive the market with a large volume, taking advantage of the continuation of the
trend.
 Fair Value Orderblock

The Fair Value Orderblock is

identified when the price returns
to a fair price area after a
unbalanced movement. He
represents a point of balance
between supply and demand, and the
institutional tend to use these
zones to reposition your orders,
correcting previous distortions.

This Orderblock is ideal for reversal operations, as it indicates that the price
is returning to a point where buyers and sellers agree on
the value of the asset.
 Breaker Block
The Breaker Block occurs
after the breakup of
anterior order block
where the market returns
to test this area,
before continuing your
movement in the new
direction. This
break often
confirm that the
institutional
they abandoned the level
previous and are
directing the price
for a new
trend.

The Breaker Block is useful for confirming the change of trend after a
significant break. It offers good entry opportunities in the
retest of the ruptured area.
 Mitigation Block
The Mitigation Block surge
when the institutional
need to mitigate or
reduce your losses in
a position. He
represents areas where there are
repositioning of
orders to balance or
compensate movements
previous ones. This is common
after movements
unexpected that do not
they followed the initial direction
two major players.

Identifying the Mitigation Block allows capturing correction actions that

they occur while the institutions adjust their positions, offering good
reversal opportunities. Unlike the Breaker, it does not need a
CHOCH.
 Institutional Funded
Candle
An Institutional
Funded Candle is
a unique candle and
strong,
frequently
associated with
large volumes
institutional.

This type of candle represents the

massive order entry
institutional and generally
marks the beginning of a
high or low movement. The
IFCs are wide candles and with
significant volume, which
break important levels of
support or resistance.

Institutional Funded Candles provide clear entry points for

traders, as they accurately indicate where the institutions are moving the
market. We only mark the wick in the IFC.
 Cluster
Um Cluster é uma
concentration of
several Orderblocks in
a nearby area,
indicating a region
of extreme liquidity and
institutional interest.
These zones
usually attract
many orders and they are
key areas for
reversions or big
price movements.

Clusters are areas of great importance, as they provide an overview

clear where the price may find resistance or support, based on the
accumulation of institutional orders.
 External Liquidity and
Internal
In the context of institutional analysis and Smart Money Concepts,
the concepts of internal liquidity and external liquidity are
fundamental to understand how the big players
(financial institutions) position their orders in the market,
manipulating prices to capture the available liquidity.
Liquidity, in this case, refers to the ease of buying and selling.
of assets in certain price regions, where there is a
high concentration of buy or sell orders.

Understand the concepts of internal liquidity and liquidity

external helps traders identify areas of interest
institutional and prevents them from falling into common traps, such as
false breakouts. Institutions manipulate the price to
capture the available liquidity and move the market in the direction
that benefits them. Knowing where these liquidity zones are
located provides a significant advantage for those who
wants to operate based on the principles of Smart Money.
 External Liquidity
External liquidity is the
more visible liquidity for
the traders, usually
found in the areas
where the smaller traders
(retail) put their
protection orders,
like stops and take
profits. She is
located above
maximums and minimums
important in the market
and represents a target
for the institutional ones.

This is because, when the price reaches these points, it causes

a "hunt" for liquidity, executing stop orders and triggering a
sudden movement in the opposite direction.

When the price breaks a significant high (for example, the

top of a resistance), it triggers stop loss orders of traders
that were sold and also breakout buy orders
traders. Institutions often use this liquidity
to sell at higher prices, creating a false sense of
continuation of the rise, before reversing the market.

External liquidity is the main target of institutions, as it represents areas

where there is more liquidity. They move the price to capture that liquidity
and then reposition their orders in favor of the new direction of
market.
 Internal Liquidity
The internal liquidity, due to
the other side is within
of the structure of
market and it is less
visible to traders
common. She is
located in the areas of
consolidation, or in
intermediate points
of maximums and minimums.

In this scenario, the market moves within a range,

accumulating liquidity before making a more significant move.
Internal liquidity is concentrated in areas of equilibrium, where large
players are accumulating or distributing their positions without
break external levels.

During a consolidation phase, the price oscillates between supports and

smaller resistances. In these moments, big players can
to place buy and sell orders to absorb the volume
of the market, without causing a breach. Thus, they prepare the
land for future movements of external liquidity.

Internal liquidity is crucial to understand the accumulation moment and

redistribution of institutions. When they are sure that
they accumulated sufficient liquidity, quickly moving the price to capture the
external liquidity, taking the market to the next trend phase.
 Capture and Run of
liquidity
In institutional analysis and strategies based on the concept
from Smart Money, the terms liquidity run and capture of
liquidity is essential to understand how the big players
the market manipulates the price to gain an advantage over
retail traders. Both concepts are related to
the way liquidity is sought and used to move the
market, but they have subtle and important differences.
 Liquidity Run
The liquidity run
it happens when the
market, driven
by orders
institutional,
quickly search
regions where there is a
high concentration of
stop loss orders or
pending orders from
buy/sell, be
in maximums or
significant minima.

These areas are considered "liquidity points" because it is

where retail traders usually place their orders,
believing that breaking these levels will signal a new
trend.

Imagine that the price is close to a strong resistance,

where many traders place short stops and sell orders
above this level. The liquidity run occurs when the
price is quickly driven to break this
resistance, activating these orders and creating a peak of
volatility, often generating a quick movement and
short.

The main objective of the liquidity run is to activate these pending orders.
causing a rapid price movement. This movement
it is usually done to deceive retail traders, creating the illusion of a
breakdown. After capturing these orders, the market may reverse direction.
 Liquidity Capture

The capture of
liquidity, on the other hand

side, refers to the

moment when
the institutional ones
effectively
I take advantage
the order
activated during the
liquidity run.

By moving the price to an area where there is a large number of

orders, the institutions are actually "capturing" this
liquidity, executing your own orders in volume, buying
you selling significantly, based on the orders of
minor markets (such as retail ones).

After a liquidity run, in which the price breaks a

maxima triggers several stop loss orders from short traders,
the institutions can then 'capture' this liquidity by selling their
own positions in large volume. This makes the market
reverts quickly after liquidity capture, causing losses
for those who were caught in the false breakout.

The goal of liquidity capture is to take advantage of the available liquidity at the points.
of breaking it and using it to execute large volume orders. The
institutions do this efficiently, often leading to reversals
significant after the price reaches these levels.
 Difference between Capture
of Liquidity and Run
Liquidity
Purpose:
Liquidity hunting aims to find areas where there are
concentration of pending orders, usually with the
objective of creating a false sense of break.
Liquidity capture occurs when institutions take advantage of
the movement caused by the liquidity rush for
execute your own orders in volume, causing a
reversal.
Market Moment:
The liquidity run occurs at the beginning of the movement, when the
the price is moving to seek the liquidity zones.
The liquidity capture happens right after the run, when
the institutions absorb the orders activated in the movement
initial.
Market Direction:
During the liquidity run, the price moves quickly.
towards the highs or lows to activate orders.
In liquidity capture, the price often reverses after
reach these zones, moving in the opposite direction to
initial break.
Institutional Action:
In the liquidity race, institutions actively seek
move the price to attract stop or breakout orders.
In the liquidity capture, institutions are executing their
orders, taking advantage of the newly created liquidity from the rush, and
preparing the market for the next move.
 Macro and Micro

Knowing how to analyze the graphs in

different timeframes is
essential to achieve
consistency in the market.
Operate in just one
timeframe makes you vulnerable
to institutional manipulations,
limiting your vision and
making decision-making difficult
more informed decisions.

Think this way: when you buy a car, you don't evaluate
only the exterior, right? You check the engine, the
maintenance, the interior and the state of conservation. From
the same way, when operating in the market, it is fundamental
observe the complete context. Analyze the graph in
multiple times allows understanding both the macro view
as for micro, providing a more solid perspective
for your operations. Therefore, set some times
graphics and familiarize yourself with each of them to operate
with more clarity.
 Macro and Micro
Always base your analyses on
macro trend, as it is the
dominant in the market. Use a
macro vision to define the
main direction and the micro for
identify entry regions and
triggers. This approach
allows you to have a target
larger and a very short stop loss,
optimizing the risk-reward.

For example, if the macro is in

upward trend, avoid trading
sold in micro is crucial, because the
the risk of being stopped is very high
greater. Follow the direction of the

macro trend guarantees

safer operations and
aligned with the greats
market movements.

The goal of liquidity capture is to take advantage of the available liquidity at the points.
the breaking and use it to execute orders in large volume. The
institutions do this efficiently, often generating reversals
significant after the price reaches these levels.
 Point of Interest

A point of interest is a region on the graph that gathers

various institutional traces, generating a high interest
of investors in the asset. Identifying these points can be
challenging, but following the step by step that I will give you
showing, this task will become easier.

Locating these regions is crucial for your profitability in

market, as they represent the best and safest
entry points. These locations are usually where liquidity
is larger and where institutions carry out their operations,
making them essential for effective trading and
strategic.
 How to find a POI
To find your Point of
Interest you can use the
checklist that I use for
validation. It is composed of
5 things; Structure of
market, Premium Zones and
Discount, Institutional trail,
Standard and Confirmation.

Market Structure: The

the first step is to determine the
current trend of the asset, whether it is

lateral, high or low. The

concept of Breakage
Structure (BoS) and Change of
character (CHoCH) can be
used for this
identification.

Prize and Discount Zones: After determining the trend, you

you must locate the prize and discount zones. To do this, use the
region of 50% to 100% of the Fibonacci, which helps to identify areas
of discount, avoiding the purchase of assets at high prices.

Preferably identify the macro trend and align it with the trend.
micro, trace your Fibonacci and find the Premium or Discount region, if
is looking for sales only in the Premium region, if you are looking
purchases only enter in the Discount region.
 How to find a POI
Institutional Trace: For
find the trail
institutional, apply
previous concepts
discussed, like CHOCH
(Change of Character), which
many times are generated
by large players. In
next, look for
imbalances of
price, like an imbalance,
in addition to observing volumes
institutional in areas
specifics of the graph.

Standard: With the first three elements in hand, you

you need to identify a pattern that will serve as your starting point
input. To do this, use an Order Block combined with a
Fair Value Gap, which can signal good opportunities for
entry.

Confirmation: To validate your pattern, you can use the

Volume Profile tool or the Golden Zone of your
Fibonacci, which indicates regions prone to reversals and where the
liquidity is greater.

Liquidity captures are also great indicators of institutional restro.

Inner Circle
Trading
The Inner Circle Trading (ICT) is an approach to
market analysis that focuses on understanding
the dynamics and strategies used by the great
players, such as financial institutions and investors
large scale. This methodology, developed
by Michael J. Huddleston, seeks to unravel the
secrets behind price manipulations and
the market movements, allowing that
traders and individual investors operate in a
more informed and strategic.

Inner Circle Trading is based on the idea that,

to be successful in the financial market, it is
fundamental to understand not only the analysis
technical and fundamental, but also the psychology of
market and the behavior of the participants
institutional. Through the identification of patterns
and market structures, the ICT empowers traders
anticipating movements and identifying
opportunities for entry and exit with greater
precision.

By incorporating concepts like supply and demand,

liquidity and points of interest, the Inner Circle Trading
stands out as a powerful tool for
who seeks to not only operate but to understand
deeply into the mechanics of the market. This
approach allows traders to align their
strategies with institutional movements,
significantly increasing your chances of
success.
 Swing Points
In the context of ICT analysis,
understand the concept of Swing
Points are essential for any
trader who wishes to identify
entry opportunities and
exit to the market. These points
they are important milestones for
map the structure of
market, and are used by the
big players for
determine where the liquidity is
concentrated.

They help define the direction of the trend and guide the decisions.
of decision, providing a clear view of how the price
can react in certain areas.

Understanding and identifying swing points allows you to read the

market structure with clarity, helping to predict
price movements and avoiding manipulation traps. They
they also help maintain the perspective of the macro trend,
providing valuable insights into price behavior in
different timeframes.

By mastering the swing points in ICT analysis, you gain a

strategic advantage when operating, leveraging liquidity and
positioning with greater precision within the structures of
market.
What are Swing Points
Swing Points are specific areas in
price chart that represents points
of reversion or temporary change in
market direction. They are divided into
two main types:

Swing Highs (Top): It is formed when there is

a temporary increase in price, where the
the highest level is surrounded by higher prices
low on both sides. This indicates that
the price reached a peak and started to
withdraw.
Swing Lows (Bottom): The opposite of the swing
high, where the price reaches a higher level
temporarily down, with two candles
subsequent ones at higher prices in
both sides. This suggests that the price
found support and is about to rise.

In ICT analysis, swing points are used to map the

estrutura de mercado e identificar áreas de liquidez. Eles ajudam
to recognize when there is a possible trend reversal, or
when the price is about to seek liquidity at points
critics.
 How to use the swings
points
Swing Points are powerful tools for identifying
Breaks of Structure (BoS) and Changes of Character (CHOCH).
When the price surpasses a swing high or swing low
significant, this may indicate that the market is ready to
a change of trend or a movement of continuity.
Here is how they are used:

Identification of Trends: If the swing highs and swing lows

they are in a sequence of ascending highs and lows,
this suggests an upward trend. On the other hand, a sequence of
descending minima and maxima indicate a trend of
download.
Liquidity Points: Swing points are areas of concentration
the stop-loss orders, becoming natural targets for
big players who seek to capture this liquidity. When
the price hits an important swing high or low, the big
players can take advantage of this liquidity to generate new
movements.
Entry and Exit of Operations: ICT Traders use swing
points to decide where to enter or exit a trade.
They may try to break or test these points to
validate whether the trend will continue or if the price is
about to turn over.
How to use the swings
points
 Equal High and Equal Low
In the universe of ICT analysis, two fundamental concepts for
entender a dinâmica de liquidez e manipulação de mercado
they are the Equal Highs and Equal Lows. These patterns are indicative
of areas where liquidity is accumulated, and understand
how they function can provide strategic advantages
to identify future price movements.

Equal highs and equal lows represent much more than

simple support and resistance zones. They are areas
strategies for accumulating liquidity, where large players
they seek to capture stop orders before moving the market
in a new direction. By mastering the understanding of these
formations and how they work, you can improve your
entries and exits, avoiding manipulation traps and if
positioning more effectively in the market.
What are Equal Highs and
Equal Lows
Equal Highs
They occur when two or
but consecutive peaks in
graph reaches levels of
very close price or
identical, creating a "ceiling"
horizontal. This suggests that the
price found a
clear resistance, and many
traders place orders of
sell or stop-loss soon
above this zone.

Equal Lows
They are formed when two
or more consecutive funds
they practically achieved the
same price level,
creating a "support"
horizontal. This indicates a
area where the price was
repeatedly upheld,
leading many traders to
place purchase orders or
stop-loss logo below this
level.

For this reason, operating in double tops and bottoms is

completely risky.
 Like the Equal Highs and
Equal Lows influence the
trading strategies?
Liquidity Hunt: One of the most used concepts in
ICT analysis is the manipulation of liquidity. The equal highs and
equal lows are perfect targets for this manipulation, already
that attract many traders who trust these levels
like resistance and support. Knowing how to identify these areas.
and how the big players act around them can
prevent you from being 'hunted' and instead it can
allow you to position yourself alongside the institutional.

Potential Reversal Points: When the price breaks

equal highs or equal lows and reverses quickly, this
it may signal an imminent reversal, especially if
there may be other signs, such as the formation of an order block
or an imbalance in the chart.

Break or Hold: It is important to observe the

price behavior around these levels. If the
if equal highs or equal lows are broken and the price does not
revert, this may signal a continuation of
trend. If the price fails to surpass these levels,
It may indicate a false breakout and reversal.
Como os Equal Highs e
Equal Lows influence the
trading strategies?
Premium and Discount

In the context of ICT analysis, the concepts

P
Premium and Discount are essential.
to determine ideal areas of
buying and selling within a
price movement. These concepts
help traders identify areas of
greater likelihood of reversal or
continuity, using the relationship of
current price in comparison to a
negotiation range. D

The concepts of Premium and Discount offer a view

valuable for traders who want to improve their accuracy in
ins and outs. With them, you can align your
operations with the movements of the big players, avoiding
buy when the price is high and sell when it is low
cheap. In ICT analysis, operate with these concepts in mind
helps to position oneself more efficiently, increasing the
probability of success.
 PD Hierarchy

The hierarchy of Premium and Discount is fundamental for

identify precise entry points and avoid losing
valuable opportunities in the market. It follows a structure
well defined, based on 7 crucial levels that the price tends to
respect very often. Many times, when losing
an entry, the main reason is related to
lack of knowledge of this hierarchy, as it offers a
clear logic to understand price movement in
different value zones.

This hierarchy considers both the macro context and

micro of the market, which allows for a broader view and
detailed about overbought (Premium) and oversold areas
(Discount). By ignoring this structure, the trader
often ends up operating against the trend or
entering areas where the risk of reversal is greater.
Understanding and applying these 7 points helps to minimize this.
error, improving both the accuracy of your inputs and the
risk management.
Order of Hierarchy

1. Mitigation Block
2. Breaker Block
[Link] Gap
4. Fair Value Gap
[Link]
6. Rejection Block
[Link] High/Low

By respecting this hierarchy, you not only increase

your chances of success, but also acquires a
deeper understanding of behavior
of institutional ones in the market.

Many times you miss opportunities because you don't understand this matrix.
 Fair Value Gaps

A Fair Value Gap represents a

gap created when the market makes a
fast movement, without having
there has been a balanced negotiation
between buyers and sellers. This
it means that, in a certain region,
there was an imbalance of orders, and the
the price moved strongly in
a direction, leaving a space or
"gap" between supply and demand. These
gaps usually occur in
moments of high volatility or
impact events in the market, such as
important news or orders
institutional actions being executed.

The identification of Fair Value Gaps is essential for traders who

they use the concept of ICT, as these areas tend to be
revisited by the price to fill the gap. This is the
opportunity where the price returns to "fair value"
correcting the imbalance of orders.
 How to identify a
Fair Value Gap

A Fair Value Gap can be observed when examining three

consecutive candles in the chart:

The first candle is what initiates the upward movement or

low, creating the imbalance.
The second candle is the continuation candle of the movement,
and this is where the gap becomes visible, between the maximum or minimum of
the first candle is the minimum or maximum of the third candle.
3. The third candle marks the moment when the price
continues the movement, but leaves a blank space between the
prices, which create the Fair Value Gap.

The price tends to fill these gaps, as was explained.

In imbalances, the price cannot remain unbalanced.
 Importance of Fair
value Gap
The FVGs are important
because they indicate areas in
that the market still hasn't
"liquidated" appropriately the
purchase or sale orders,
that is, there is a
imbalance that the price
can correct later.
These areas act as
potential points of
reversal or continuation,
offering good
entry opportunities
for traders who
we identify these gaps
correctly.

Traders who use ICT look for these gaps as areas of

interest, because they know that the price tends to return to
fill in these gaps before continuing your movement
This approach allows you to operate alongside the
large institutions, taking advantage of the points where they
they will possibly enter the market to rebalance their
positions.

Use these regions as entry triggers or exit points.

operation.
 Application of Fair Value
Gap

When identifying an FVG, you can use the strategy of

wait for the price to return to this area for an entry
of high probability. When the price fills the gap, there is
a high chance that the previous movement will continue in the
direction of the trend.

With this, FVGs become a valuable tool in

institutional analysis, allowing you to operate with more
trust, knowing that the market tends to correct these
imbalances, providing clear points of entry and exit
with controlled risk.
 Daily Bias
The daily bias involves the analysis of
expected market movement in
on a certain day, be it a high or
low, based on various factors,
as the macro trend, the
institutional behavior and the
liquidity points. In other words,
understanding the daily bias helps traders to
predict whether the market tends to rise or
descend, what drives your operations
to take better advantage of the movement
likely of the price.

In the ICT approach, identifying the correct bias is

fundamental to operate with the flow of the big ones
players, such as banks and hedge funds, which are the
true responsible for moving the market. This
alignment with the institutional flow offers a
competitive advantage, allowing traders to avoid
operate against the tide and thus reduce the chances of
we will be "stopped" and we can also see that
Not every day is worth trading.
 How to Mark the Bias
Diary

End of the day

previously was above
from the previous maximum

We had a Bias of
High

To identify the daily bias of the market, we will always use

the last two candles, we will mark the high and the low of
penultimate candle. To identify the bias it is necessary that the
last candle closed above or below the high or low of
anterior candle.

If it closes below, we have a bearish bias for the next day, if

closing above we have a bullish trend for the market. If
we do not operate between the maximum and minimum because the
the market will consolidate.

Observe the example beside.

Knowing the market bias for the day is extremely important, respect it.
to avoid losses. Remember that not every day is good for trading.
 How to mark the Bias
Diary
End of the day
previous was below
from the previous minimum

We had a bias of
Low

The price closed

between the maximum and the

previous minimum

We had a Bias of
Indecision

Knowing the market bias for the day is extremely important, respect it.
it is to avoid losses. Remember that not every day is good for
to operate.
 Power of Three (AMD)

The AMD Pattern (Accumulation, Manipulation, Distribution)

also known as Power of Three, is a
approach that describes the sequence of phases through which the
price passes over a certain period,
especially in intraday. This pattern reflects the
institutional strategies of manipulation and redistribution of
orders in the market, allowing traders to identify
with more clarity the ideal areas for entry and exit.

The AMD Pattern is one of the most effective concepts in analysis.

ICT, as it reveals how the big players manipulate the
market to accumulate and distribute orders. By understanding
in this cycle, traders can better predict the
price movements and adjust your strategies to
operate with the institution, not against it. This way, you avoid
liquidity traps and maximize your chances of success
in the market.
 What is the AMD standard

The AMD Pattern divides price movement into three phases

main: Accumulation, Manipulation, and Distribution. Each
one of these phases is linked to behavior of the
large players (banks, hedge funds, etc.), that
act to capture liquidity and move the market of
controlled form. Understanding this pattern is crucial for
predict the price flow throughout the day and position oneself accordingly
strategic way, taking advantage of the points where
the true movement occurs.

This concept helps us understand the cycle of a candle, you can

observe this movement happening across all timeframes.
Phases of the AMD standard

Accumulation (A):

This is the first phase of the day,

generally at the beginning of the session
of the market. During the
accumulation, the price becomes
relatively stable,
oscillating within a range
narrow, while large
players start to accumulate
your positions.
The accumulation can be
interpreted as a phase
of preparation, where the price
is kept within a zone
of internal liquidity to attract
orders before the movement
real happen.
It is at this moment that the
institutional players create
false perceptions of direction
to manipulate the liquidity of
minor traders.
Stages of the AMD pattern

Manipulation (M):

After the accumulation phase,

there is manipulation, where the
price is 'driven' in a way
quick and significant in a
specific direction. This phase aims to
deceive traders less
experienced, generating
false breaks or
liquidity traps.
Many times, the price breaks
a support area or
resistance, capturing stops and
breakout orders, before
reverse or move in the direction
planned by the institutions.
Manipulation is the phase where one
create the necessary volatility
to activate large orders
volumes.
 How to use the pattern
AMD
To use the AMD Standard efficiently, it is important
pay attention to the following aspects:

[Link]: Tracking the volume helps to identify the

accumulation and manipulation. A sudden increase in volume
Can you indicate the beginning of the manipulation?

[Link] Structure: Monitor patterns such as breakouts

false breaks and pullbacks help to confirm the manipulation phase.
3. Liquidity: Check liquidity areas (maximum and minimum)
previous) to identify where institutions can
manipulate the market.

The price works from

cyclic form, that
means that you
you will frequently see
this movement
happen on the graph,
mainly if you
no intraday operation.
Create your
strategy of
Success!
Develop your own strategy for
negotiation is essential to achieve the
success in the market. It is important
understand that there is no setup or
miraculous method; everything depends on
contexto em que você aplica seu
operational.

Another crucial aspect is management.

of risk. It must be adapted to your
financial reality. If you are
starting with little capital, it is
it is fundamental to respect this condition,
remembering that each person has a
different situation.

Now, I will show you how you can

adjust your own operations with
based on the concepts we discussed until
now, creating a strategy
personalized and effective.
 Institutional Alignment with
Graphic Analysis
Graphical analysis is undoubtedly one of the methods most
popular in the financial market. It is based on the
identification of support and resistance areas and patterns
graphics. However, precisely because it is so widely
used, the major players tend to exploit this
predictability, capturing the liquidity of traders who operate
exclusively with this approach.

But that doesn't mean the end for those who use technical analysis.
The key is to better contextualize your market perspective.
understanding how the price really moves.
Incorporating concepts of Smart Money Concepts (SMC) and
Inner Circle Trader (ICT), you can identify more triggers
precise and understand price manipulations, increasing
your chances of success.
 See how to align
both analyses
See this wedge of continuity: operate in a pattern like
this is possible, but the ideal is to avoid operating directly on
break. Instead, seek a context region in the
a chart that gives you more confidence in the entry.

In the example, we had a liquidity region and, after its

capture, the price left a Fair Value Gap within the figure.
Shortly after, a CHoCH occurred, confirming a
more solid and contextualized entry.

To complete, we place the stop just below the liquidity and the
targeting external liquidity, resulting in an excellent relationship
risk and return.
See how to align
both analyses
In this second example, we have a bearish flag.
Although you can open a sell order in
breaking, this would increase the risk of the operation.

By using SMC, it is possible to better filter your analysis and

enter even before the break. In this case, there was
an institutional trigger right above, activated after the
liquidity capture.

To define the target,

could you use
the Swing Low or the
flag master
maximizing your
efficiency and
reducing the risk of
operation.
 Conclusion
You can use graphical figures to your advantage when trading, but
It is essential to do it consciously and strategically. How
we saw throughout the entire material, the institutions manipulate the
constantly raises the price, and a large part of these manipulations
it occurs precisely over the classic figures of analysis
graphs, such as triangles, flags, and head-shoulder-head.

Knowing this, you can avoid being caught as liquidity.

Instead of acting blindly on the breakout of these figures,
I sought deeper contexts, such as the presence of
institutional triggers, liquidity zones and confirmations of
Smart Money Concepts (SMC) or Inner Circle Trader (ICT). This
it does not mean abandoning technical analysis, but rather using it
with a more refined gaze, understanding that the movements
the price usually hides institutional intentions by
behind the graphic formations.

By being aware of these manipulations, you position yourself.

strategically, anticipating movements and avoiding being
I fall into common traps that affect less experienced traders.
experienced. This way, you operate with greater security and
consistency, always a step ahead of the market.
Institutional Alignment with
Technical Analysis
Technical analysis is excellent for providing context to your
operations and is widely used by traders daily.
However, blindly operating solely with indicators
can be extremely risky, since these indicators
often reflect only the past behavior of
price and do not take into account institutional manipulations.

Therefore, it is essential not to rely solely on them.

Instead, combine your technical analysis with concepts of
SMC or ICT. This allows you to better understand the
market dynamics and identify liquidity regions
manipulations. Use the indicators as support for
validating entry triggers within this context improves
significantly the quality and safety of your
operations, bringing greater precision and confidence in
decisions.
 See how to align
both analyses
Here the price follows a
macro uptrend,
and, on the micro, it aligns
forming a mitigation
block. We know that,
within the hierarchy of
premium matrix
Discount (PD), or
mitigation block is one of
stronger triggers than
we can use.

As context, we have the VWAP serving as support for

the price, along with the mitigation block. The VWAP, being a
volume-weighted average brings even more reliability
in the analysis, as it reflects the true behavior of
market in relation to the traded volume.

To structure the operation, the ideal would be to position the stop.

logo below the mitigation block, and set the target in the region of
liquidity closer, maximizing the risk-return ratio
of your strategy.
 See how to align
both analyses
Here is an example of
how the volume can be
used to validate a
healthy trend together
to the concept of structure
of the SMC market.

A volume that
the trend is
crucial, as it indicates that the
movement is
sustained, allowing
operate with more
trust in favor of
trend.

On the other hand, a divergent volume can be a strong

sign of a change in character (CHoCH) is
next, suggesting a possible reversal of the asset, where
you can take the opportunity to operate in the opposite direction.
 Conclusion
Technical indicators, when used in conjunction with the
concepts of SMC (Smart Money Concepts) and ICT (Inner Circle)
Traders can become powerful tools for validation
your analyses and improve the accuracy of your operations.
Indicators such as RSI, Volume, Volume Profile, and VWAP
provide additional insights into market dynamics and the
behavior of institutional players.

The RSI, for example, can help identify zones of

overbought and oversold, providing more context in
moments of possible reversal or entry into regions of
liquidity. The Volume and the Volume Profile reveal the intensity
the movements and where most of the orders are
focused, allowing you to identify areas of
institutional interest and valuable support zones and
resistance.

A VWAP, being a volume-weighted average, helps to

observe points of equilibrium between buyers and
sellers and usually serves as support or resistance
dynamics. When combined with order blocks, mitigation
or other institutional triggers, further increases the
reliability of your inputs.

Therefore, by combining these indicators with the accurate reading of

SMC and ICT, you not only refine your timing of entry and
exit, but also strengthens your understanding of
price behavior, increasing your chances of
operate successfully and consistently.
 Use Elliot with any
operacional

The Elliott Wave Theory, as already mentioned, helps to

understand the market cycle and predict logically for
where the price should go. This allows you to align
any operational strategy with Elliott, as knowing the
market direction, the next step is just to find a
entry trigger.

For this, we rely on the other methods taught.

previously, like SMC and ICT, which are undoubtedly the most
effective. However, you can also combine Wyckoff
with Elliott or even using graphic figures explained in the Analysis
Graphic, creating an even stronger context for your
entries.
 Align Elliott with
Graphic Analysis
In this example, we observe an Elliott cycle in trend.
At high, and during wave 4, a symmetrical triangle formed.
As explained earlier, the entry could be
made in the rupture, but it is advisable to use a trigger
with more context to ensure a risk-return relationship
more favorable.

We know that correction waves tend to be complex

(principle of alternation). Since wave 2 was simple, it was
expected that wave 4 would be more complex, which is
confirmed with the formation of the triangle.

Thus, we are able to anticipate the movement of the market and us

prepare for wave 5. Additionally, you can use the
counting ABCDE within triangles and wedges to predict
the next price direction, increasing the accuracy of your
operations.
 Align Elliott with
Wyckoff
In this example, we also observe an Elliott bullish cycle,
with the principle of alternation being respected: wave 2 was
simple and wave 4 was complex.

However, in wave 4, there was a redistribution of

Wyckoff, characterized by two liquidity captures — one
above and another below — before the price resumes its
upward trend.

By aligning these concepts with SMC analysis, we can

identify liquidity zones and ideal entry points,
increasing the accuracy of the operation and ensuring a
more favorable risk-return relationship. This combination
allows for a more refined reading of the market and a decision-making
of a safer decision.
 Align Elliott with Smart
Money
In this example, we observe a complete cycle forming.
in a 4-hour timeframe. Shortly after the end of this cycle,
a new one begins, as explained by Elliott's Theory,
where the smaller fractals fit to form structures
greater over time. This allows us to predict that a
a new cycle is about to form, maintaining the upward trend.

With this perception, we can refine our analysis,

adjusting the entries in smaller timeframes, always
aligning our operation with the main trend. Therefore
in this way, it is possible to optimize the risk-return relationship,
taking advantage of the continuity of the movement while we
we anticipate the new cycle.
 Align Elliott with Smart
Money
Refining the analysis in the 15-minute timeframe, we identified
an Equal Low (EQL) that resulted in liquidity capture. After
this capture, the institutional left an order block and provoked
a change of characteristic in the market (CHOCH)
exactly as it was taught about points of interest.

When returning to the 4-hour timeframe (H4), we could define

our target in external macro liquidity. This would provide us
a much greater return in relation to the risk assumed.

Soon after, the price formed a new Elliott cycle, and

our target would have been reached in the middle of wave 5, with our
strategically positioned entry at the start of wave 3.
Align Elliott with Smart
Money
 Utilize Wyckoff with
any operational

The Wyckoff cycles make it clear that large institutions

they manipulate the market in search of retail liquidity. This
understanding was the basis for the development of the method
Smart Money, which was later enhanced by Michael
Huddleston in the concept of ICT (Inner Circle Trader).

We can use Wyckoff's theory in conjunction with the

institutional analysis, but it is important not to limit oneself only to
SMC. Technical and graphical analysis can be perfectly
integrated into the Wyckoff cycles, as demonstrated
previously, it is also possible to combine Elliott's Theory
with Wyckoff, creating a more robust operational
complete.
 Wyckoff and Analysis
Technique
Use the Volume Profile to identify areas of interest
institutional, known as Value Areas, where it occurs
greater concentration of negotiations. These areas indicate
where the big players are positioning their orders with
greater intensity. By combining this analysis with the
Wyckoff methodology allows you to detect crucial phases.
of accumulation or distribution. When these high zones of
volume coincides with Wyckoff phases, such as a
accumulation before a high or a redistribution before
a drop, you get a more robust confirmation from
institutional manipulation in the market. This not only increases
the accuracy of your inputs and outputs, but also helps to
predict trend changes with greater confidence,
allowing to operate in tune with the behavior of the
big players. In addition, the overlap between the zone of
value and the Wyckoff structure can provide opportunities
of more favorable risk-return, since you will be
aligned with the direction that the market is more prone to
continue.
Wyckoff and Analysis
Technique
 Wyckoff and Smart
Money
Combine the reading of Wyckoff cycles with the concepts of
SMC, such as order blocks and liquidity. During the phase of
redistribution or Wyckoff redistribution, search for
mitigations and CHoCH (Change of Character) that confirm
that the big players are manipulating the price. This makes you
will allow for the identification of institutional entries in areas where the
the price has not yet made its main movement.

In the example next to it, we used the same previous example,

but using SMC concepts to find our trigger
Initially, we had 2 triggers: the Fair Value Gap and the
Orderblock, and with them we had our change of
characteristic after the liquidity capture. In this way
we would have a little more context when making our entry.
Smart Money and Inner
Circle
Using SMC and ICT together offers a powerful approach
is needed to operate in the financial market. Both methods
are based on the idea that major players, such as institutions
financial institutions manipulate the price to capture retail liquidity,
and understanding how these movements happen is crucial for
make entry and exit decisions with confidence.

By combining SMC and ICT, you bring together the best of both worlds:
the technical bases of SMC and the analytical depth of ICT. This
results in a more refined understanding of behavior
of the price, allowing you to:
1. Find Reversal Zones with Precision: Using order
blocks and fair value gaps, you identify turning points in
market more precisely.
2. Understand Price Manipulation: Concepts of Liquidity and
CHoCH allows you to understand when the great
players are manipulating the price, avoiding falling into
traps.
3. Increase your Risk-Return Ratio: When operating in zones of
premium e discount com a matriz ICT, você entra em
safer operations with lower risk, targeting goals
larger with shorter stops.
4. Align with the Institutions: Know how the institutions
operam gives you an advantage over the retail market,
helping to operate alongside the great movements and not against them
they.
5.
In summary, the use of SMC and ICT together provides an advantage.
strategic and tactical in the market, allowing you to operate as
the professionals, with safer and more accurate inputs and outputs.
 About Us
The Trading Academy was born in August 2023 with the mission
to provide intelligent and effective teaching for those who
wants to operate in the financial market. We use concepts
proven, such as Smart Money Concepts (SMC) and Inner
Circle Trader (ICT), to ensure that our students have the
best tools and strategies at your disposal.

With more than 3,000 students already trained, we take pride in

to say that the majority of them have already achieved consistent results
applying these methods. We appreciate your trust in
our team is always available to help you
to successfully navigate the market.

Taynã Denilson Member of

Cavalcante Junior team
Assistant
Founder Marketing
Administrative