UNDERSTANDING

PRICE ACTION
Learn how to study the market and make trading
decisions based on actual price movements

BRAVE FX ACADEMY
 WHAT IS PRICE ACTIO?N

Price action is simply the movement of the price of an asset over

time. This forms the basis and foundation in which trading
strategies are built.

In this lesson we're going to discuss about the following points

because they play a very important role when dealing with price
action

Price Movement Dynamics

Price Consolidations

Multiple Time Frames

 PRICE MOVEMENT DYNAMICS

How Does Price Move In The Market?

We all know price can move up, down or sideways. But most traders
assume price moves in a straight line, that's not true. Price moves in
waves. Even when you know price is likely to go bearish, price would
not move straight down.

Instead, price moves in waves. If price intends to go higher over a

certain period of time, it will move slowly in waves.

Reality Of A
Bullish Price Movement

Wrongly Assumed
Bullish Price Movement
 PRICE CONSOLIDATIONS

A price consolidation is simply a struggle between bulls and bears

deciding the direction of the market.

We get price consolidations usually after a significant bearish or

bullish move.

After a consolidation, the market picks a direction in form of a

breakout depending on who wins the market over, either the bulls
or the bears.

Breakout
Consolidation
 MULTIPLE TIME FRAMES

This is the process of looking at the price action of a trading asset on

different time compressions also called time frames.

Most traders carry out technical analysis on a single time frame, this
is less effective compared to analysing charts on multiple time
frames.

The best approach to this is first analysing your charts on the higher
time frames like 1 day then 4 hours and lastly 1 hour. Doing this will
give you a clearer view of the market.

You can focus on opening trades on the lower times frames like 1
hour if you're a day trader.

This is the best way to approach the markets from a price action
standpoint because analysing charts on multiple time frames gives
you a clearer picture of the market therefore helping you make
effective trade decisions
THE JAPANESE
CANDLESTICK CHART
Learning about Japanese candlesticks and how to
take advantage of their bullish and bearish
reversal patterns.

BRAVE FX ACADEMY
 CANDLESTICKS
Japanese Candlesticks are a visual representation of price
movements. Generally, green candles signifies price going up and
red signifies price going down.

Below is a description of a basic candlestick.

HIGH HIGH

CLOSE OPEN

BODY BODY

OPEN CLOSE

LOW LOW
 REVERSAL PATTERNS

These are candlestick patterns that indicates the end of an ongoing

trend (uptrend or downtrend).

Reversal patterns are grouped in two, they are Bullish reversal and
Bearish reversal patterns.

BULLISH REVERSAL:

These are candlestick patterns that signifies the potential start

of a bullish move and buy trade opportunities.

BEARISH REVERSAL:

These are candlestick patterns that signifies the potential start

of a bearish move and sell trade opportunities.
 BULLISH
REVERSAL PATTERNS
Here are six basic bullish reversal candlestick pattern: When
these types of candlesticks appear on a chart, Traders tend to
see buy trade opportunities.

HAMMER BULLISH ENGULFING THREE WHITE SOLDIERS

INVERTED HAMMER TWEEZER BOTTOMS THREE INSIDE UP

 BEARISH
REVERSAL PATTERNS
Here are six basic bearish reversal candlestick pattern: When
these types of candlesticks appear on a chart, Traders tend to see
sell trade opportunities.

HANGING MAN BEARISH ENGULFING THREE BLACK CROWS

SHOOTING STAR TWEEZER TOPS THREE INSIDE DOWN

UNDERSTANDING
MARKET STRUCTURE
Learn about the way a market is positioned in a
broad sense in terms of market direction

BRAVE FX ACADEMY
 MARKET STRUCTURE

In forex trading, market structure is simply a form of price action that

shows a visual representation of the overall price direction.

We've got different types of markets and their structures. These market
structures would help you decide the kind of trades you'll be taking.

TYPES OF MARKETS / STRUCTURES

Bullish Markets / Structure (Up Trend)

Bearish Markets / Structure (Down Trend)

Ranging Markets / Structure ( Sideways Trend)

 BULLISH MARKET STRUCTURE
This is a market structure that shows price is going up when price starts to
make series of HIGHER HIGHS (HH) and HIGHER LOWS (HL). In this kind of
market structure, we only tend to look for Buying Trade Opportunities.

Higher High
Higher Low

Only look for buy trade opportunities in this

type of market
 BEARISH MARKET STRUCTURE
This is a market structure that shows price is going down when price starts
making series of LOWER HIGHS (LH) and LOWER LOWS (HL). In this kind of
market structure, we only tend to look for Selling Trade Opportunities.

Lower Highs
Lower Lows

Only look for sell trade opportunities in

this type of market
 RANGING MARKET STRUCTURE
This is a type of market structure where price moves back and forth
between an area of resistance and an area of support but unable to break
through those areas. In this kind of market you can look to buy near the
lows (Support) and sell near the highs (Resistance).

Highs
Lows
 MARKET STRUCTURE
TRADING TIPS

Only look for buy trade opportunities when you have a bullish
market structure

View your chart from left to right for easy identification of a

market structure and pay attention to major swing points

Only look for sell trade opportunities when you have a bearish
market structure

If a chart makes you feel confused, remember, you always have

the option to stay out of that market.

NOTE:

The ranging market structure can also be referred to as an area of

consolidation, meaning, buyers (Bulls) and sellers (Bears) are struggling
in a battle for the price. If bulls win, then we see price breaking through
resistance and if bears win, we see price breaking through support
 IMPORTANT NOTES ON
SUPPORT & RESISTANCE

5 TIPS TO EFFECTIVELY TRADE

SUPPORT & RESISTANCE
1
SUPPLY & DEMAND
The idea with support & resistance is identifying
areas of high buying pressure (area of demand)
or area of high selling pressure (area of supply)

With this concept, support is equal to demand

while resistance is equal to supply
2
PROBABILITIES
Support & Resistance are not perfect.

There is a level of probability that these

levels might hold or break. We need to find
out the highest probable outcome.

This is why we need multiple confirmation

before trading support & resistance
3 TRENDS
In a bullish trend, support levels are
likely to hold while resistance levels are
likely to break.

In a bearish trend, resistance levels are

likely to hold while support levels are
likely to break.
4 PSYCHOLOGY
As far as trading is concerned, the ideal
thoughts of traders is to sell for profit
when price are high and invest (buy) for
bigger gains when price are low (cheap).

These concept are part of what makes

support & resistance levels
5 BREAKOUTS
Support & resistance are not always going
to hold. This is where we get the concept
of a breakout

A breakout is simply a broken support

becoming a potential resistance while a
broken resistance becoming a potential
support
UNDERSTANDING
CHART PATTERNS
A comprehensive guide to understanding chart
patterns and how to apply them for effective results

BRAVE FX ACADEMY
 CHART PATTERNS
INTRODUCTION

Chart patterns are one of the basics of technical analysis as far as

trading is concerned. They're simply special shapes formed by
price movement over time.

These chart patterns can give insights on what to expect from the
market depending on how and where they are formed.

They basically act as signals signifying when to go long (Buy) or

short (Sell)

There are two types of chart patterns:

Bullish Chart Patterns

Bearish Chart Patterns

 BULLISH
CHART PATTERNS
These are the chart patterns that tells us price could be getting
ready to go up. With this information, you can prepare for an
opportunity to open a buy trade.

There’s a lot of bullish chart patterns, but we would mention just a

few important ones.

Inverse Head & Shoulder

Bullish Flag

Double Bottom

Ascending Triangle

Falling Wedge

Bullish Pennant
 BULLISH CHART PATTERNS
Bullish
Continuation
Bullish Flag
Bearish Trend Buy Area

Neckline Buy Area

1 2
Left Shoulder Right Shoulder
Head Upward trend

Buy Area
Resistance Level
Buy Area
neckline

3 s 4
Low
her
support Hig
Bottom 1 Bottom 2

Declining Resistance
Buy Area

Buy Area
Bullish Trend
Pennant
Bullish Move
(Flag Pole)
5
Falling Wedge
6
Rising Support
 BEARISH CHART
PATTERNS

These are the chart patterns that send signals indicating that price
could be getting ready to go down. With this information, you can
prepare for an opportunity to open a sell trade.

There are so many bearish chart patterns, but we would highlight

just a few important ones.

Head & Shoulder

Bearish Flag

Double Top

Descending Triangle

Rising Wedge

Bearish Pennant
 BEARISH CHART PATTERNS
Bearish flag
Downward Trend
Head

Left Shoulder Right Shoulder

Neckline Sell Area

1
Bullish Trend
Sell Area 2

Bearish Continuation
Top 1 Top 2

Resistance
Low
er H
3 igh
s

neckline 4
Potential Sell Area Support Level
Sell Area

Bearish Trend Resistance

5 Bearish Trend
(Flag Pole)
Pennant

Rising Wedges Sell Area 6

Sell Area

Support
 CONTINUATION & REVERSAL
CHART PATTERNS

Bullish & bearish chart patterns are classified into two basic concepts,
these are the continuation & the reversal chart patterns.

CONTINUATION CHART PATTERN

As the name implies, If price is in a bullish trend, a bullish continuation

pattern indicates that price will likely continue to rise & as for a bearish
trend, bearish continuation patterns indicates that price will likely
continue to drop

REVERSAL CHART PATTERN

A reversal pattern shows that price is about to start moving in the

opposite direction. So a bullish reversal pattern indicates that price is
likely going to stop dropping & start rising. While a bearish reversal
pattern indicates that price is likely going to stop rising and start falling
 BULLISH CONTINUATION

Buy Area
Buy Area
Buy Area

FALLING WEDGE ASCENDING TRIANGLE BULLISH PENNANT

BEARISH CONTINUATION

Sell Area
Sell Area Sell Area

RISING WEDGE BEARISH PENNANT DESCENDING TRIANGLE

 BULLISH REVERSAL

Buy Area
Buy Area
Buy Area

INVERSE HEAD & SHOULDER DOUBLE BOTTOM FALLING WEDGE

BEARISH REVERSAL

Sell Area

Sell Area Sell Area

HEAD & SHOULDER DOUBLE TOP RISING WEDGE

BULLISH & BEARISH FLAGS
CHART PATTERN
Learn to take advantage of one of the best trend
continuation patterns, bullish & bearish flags.

BRAVE FX ACADEMY
 FLAGS
CHART PATTERNS

Flags are areas of price consolidation usually after a breakout or

heavy price moments.

These flags are used to confirm trade setups because they verify
breakouts and they also act as continuation Patterns to confirm
ongoing trends.

There are basically two types of flags:

Bullish Flag

Bearish Flag
 BULLISH FLAGS
CHART PATTERNS
A bullish flag is a buy signal validating price breakout either from
resistance levels or other bullish chart patterns.

They also signify that price will continue moving up after a previous
bullish price move. This is why they are sometimes referred to as
continuation patterns.

Bullish
Continuation

Bullish Flag

Buy Area

Upward trend or
price breakout
 BULLISH FLAG CHART

Buy Here
Flag

Only enter a buy trade

when there's a clear price
breakout from the flag
 BEARISH FLAGS
CHART PATTERNS

A bearish flag is a sell signal validating price breakout either from

support levels or other bearish chart patterns.

They also signify that price will continue going down after a previous
bearish price move.

Downward Trend

Sell Area

Bearish flag
Bearish
Continuation
 BEARISH FLAG CHART

Flag Only enter a sell trade

when there's a clear price
breakout from the flag

Sell Here
TRIANGLES
CHART PATTERN
Learn how to identify and trade the different
triangle chart patterns.

BRAVE FX ACADEMY
 TRIANGLE
CHART PATTERN

The triangle chart pattern involves price moving into a tighter and
tighter range over time and provides traders with possible buy or
sell trade opportunities, depending on the triangle formed.

There are 3 main triangles:

Symmetrical Triangle

Ascending Triangle

Descending Triangle
 SYMMETRICAL TRIANGLE
CHART PATTERN
This is a neutral chart pattern with no clear direction on where
price is headed. The direction can only be determined after a clear
price breakout from the pattern either up or down.

This is usually a consolidation after a bullish or bearish move.

Low
er H
ighs

r Lows
e
High
SYMMETRICAL TRIANGLE
CHART
 ASCENDING TRIANGLE
CHART PATTERN
This is classified as a bullish chart pattern. Buying pressure is built
from below forming higher lows up to a resistance level.

Eventually, there's a price breakout and traders are happy to take

advantage of the buy opportunity

Resistance Level

ows
erL
h
Hig
ASCENDING TRIANGLE
CHART
 DESCENDING TRIANGLE
CHART PATTERN
This is classified as a bearish chart pattern. Selling pressure is built
from upward forming lower highs down to a support level.

Eventually, there's a price breakout and traders are happy to take

advantage of the sell opportunity

Low
er
Hig
hs

Support Level
DESCENDING TRIANGLE
CHART PATTERN

Sell Here
 TRIANGLE
EFFECTIVE TRADING TIPS

Never assume to know the direction of a symmetrical

triangle. Wait for a clear breakout before taking a trade.

All triangles can breakout in any direction, even ascending or

descending triangles. Wait for a clear price breakout to
determine their true direction.

The higher the number of lower highs, the higher the validity
of a descending triangle and vice versa for a ascending
triangle.

Taking a buy trade is much more reasonable for an ascending

triangle and a sell trade for a descending triangle.
RECTANGLES
CHART PATTERN
Take advantage of one of the most important
chart patterns. Bullish & Bearish rectangles.

BRAVE FX ACADEMY
 RECTANGLES
CHART PATTERN
A rectangle is a chart pattern formed when price is moving between
support and resistance levels parallel to each other.

This chart pattern shows a period of consolidation or struggle

between buyers and sellers.

There are two types of rectangles:

Bearish Rectangles

Bullish Rectangles
 BEARISH RECTANGLES
CHART PATTERN
A bearish rectangle is formed when price consolidates during a
downtrend, This occurs because the bears need to take a break
after a declining price movement before continuing to go lower.

This is sometimes called a bearish continuation pattern. Traders

look for sell trade opportunities here.

Resistance
Downtrend
Consolidation

Support Downtrend
Sell Here Continues
BEARISH RECTANGLE
CHART
 BULLISH RECTANGLES
CHART PATTERN

A bullish rectangle is formed when the price consolidates during

an uptrend. It's the exact opposite of a bearish rectangle.

It's also referred to as a bullish continuation pattern. Traders look

for buy trade opportunities here.

Uptrend Continues

Buy Here
Resistance

Consolidation

Support
Uptrend
BULLISH RECTANGLES
CHART
HEAD & SHOULDERS
CHART PATTERN
Learn to identify and trade head and shoulders, one
of the most important trend reversal patterns.

BRAVE FX ACADEMY
 HEAD & SHOULDERS
CHART PATTERN

Head & shoulders is generally considered to signify the potential

reversal of a bullish trend, meaning price is likely to start going
down. Traders see this as an opportunity to take sell trades.

This pattern has a right and left top (Shoulders) that's a little lower
than the middle top (Head)

Head

Left Shoulder Right Shoulder

Neckline

Sell Area

Bullish Trend
HEAD & SHOULDERS CHART

The best confirmation for

a Sell Trade is waiting for
a price breakout & retest
of the neckline
 INVERSE HEAD & SHOULDERS
CHART PATTERN

This is a head & shoulders pattern that's upside down. This pattern
signifies the potential reversal of a bearish trend, meaning price is
likely to start going up. Traders see this as an opportunity to take
buy trades.

This pattern has a right and left low bottom (inverse Shoulders)
that's a little higher than the middle low bottom (Head).

Bearish Trend Buy Area

Neckline

Left Shoulder Right Shoulder

Head
INVERSE HEAD & SHOULDER
CHART

Potential buy area after price

breaks out from Neckline

Best Buy
Entry

Neckline Retest
DOUBLE TOP & BOTTOM
CHART PATTERN
Learn one of the most important chart patterns. they
are also great indicators of a potential trend reversal.

BRAVE FX ACADEMY
 DOUBLE TOP
CHART PATTERN

A double top has two distant high points (time frame dependent)
located approximately on the same resistance price level.

A double top has an 'M' shape and indicates a bearish reversal after a
bullish trend. Traders look for sell trade opportunities when price
breaks the neck line.

Top 1 Top 2

Resistance

neckline

Potential Sell Area

 DOUBLE TOP CHART

Top 1 Top 2

Price Retesting
neckline to confirm
breakout

Neckline Region

Neckline price breakout

and possible Sell Entry

rice
p
fter
The best sell entry for a a
nt ry line
double top pattern is after k
e ll E nec
the price breakout and S t
est etes
retest of the neckline. B r
 DOUBLE BOTTOM
CHART PATTERN
A double bottom has two distant low points located approximately
on the same support price level.

A double bottom has a 'W' shape and indicates a bullish reversal

after a bearish trend. Traders look for sell trade opportunities when
price breaks the neck line.

Potential Buy Area

Neckline

Support

Bottom 1 Bottom 2
 DOUBLE BOTTOM
CHART
Be
st
The best Buy Entry for a Bu
double top pattern is after re y En
te
the price breakout and st try
ne aft
retest of the neckline. ck er
lin pr
e ice

Neckline price breakout

and possible Buy Entry

Neckline Region Price Retesting neckline

to confirm breakout

Bottom 1 Bottom 2
DOUBLE TOP & BOTTOM
EFFECTIVE TRADING TIPS

Only look forward to making sell trades after a confirmed

double top and buy trades after a confirmed double buttom.

Only enter the respective trade (either buy or sell) when

price breaks through the neck line of a double top or bottom
pattern

For a better confirmation before taking trades, Wait for a

price break and retest of the neckline.

Make sure to observe these patterns on multiple time

frames for accurate results.
RISING & FALLING WEDGE
CHART PATTERN
Rising and falling wedge are important chart patterns
that gives signals towards potential bullish and
bearish moves.

BRAVE FX ACADEMY
 WEDGE
CHART PATTERN

Wedges are one of the most important trading chart patterns. They
point out potential bullish and bearish moves, giving traders hints
on what to do next following price action.

They also help determine potential trend continuation or reversals.

There are basically two types of wedges and they are highlighted
below:

Rising Wedge

Falling Wedge
 RISING WEDGE
CHART PATTERN

Rising wedges are generally classified as bearish chart patterns.

They can either signify potential bearish trend continuation or
bullish trend reversal.

Rising Wedges

Trend Reversal

Bullish Trend

Rising wedge signifying a bullish trend reversal.

 Rising wedge signifying a bearish trend continuation

Bearish Trend

Bearish Trend Continuation

Rising Wedges

NOTE:

Traders tend to find sell trade opportunities with rising wedges but the only
confirmation is waiting for price to break the wedge in the expected
direction before taking the sell trade.

Rising wedges can also break to the upside for potential buy opportunities.
 RISING WEDGE CHART

Rising Wedge
Sell Here

Bearish Trend
Bullish Trend

Bullish Trend Reversal

Sell Here

Bearish Trend
Rising Wedge Continuation
 FALLING WEDGE
CHART PATTERN

Falling wedge are simply the opposite of rising wedge. they are
simple bullish chart patterns that can signify potential bullish
trend continuation or bearish trend reversal.

Bullish Trend Continuation

Bullish Trend

Falling Wedge

Falling wedge signifying a bullish trend continuation

 Falling wedge signifying a bearish trend reversal.

Bearish Trend

Bearish Trend Reversal

Falling Wedge

NOTE:
Traders tend to find buy trade opportunities with falling wedges but
the only confirmation is waiting for price to break the wedge in the
expected direction before taking the buy trade.

Falling wedge can also break to the downside for potential buy trade
opportunities.
 FALLING WEDGE CHART

Buy Entry Bullish Trend

Continuation

Falling Wedge

Bullish Trend

Bearish Trend Reversal

Bearish Trend

Buy Entry
Falling Wedge
 WEDGE TRADING TIPS

A Rising wedge formed during an uptrend signals an opportunity

to go short, thereby acting as a potential bearish reversal pattern

A Rising wedge formed during a downtrend signals an

opportunity to go short, therefore acting as potential continuation
of the downtrend

A falling wedge formed during an uptrend signals a potential

buying opportunity which will result to a bull trend continuation.

A falling wedge formed during a downtrend signals a potential

buying opportunity which will result in a trend reversal

Only take a buy or sell trade on wedges after price breaks the
wedge in the expected direction.
RELATIVE STRENGTH
INDEX (RSI)
TECHNICAL INDICATOR
Learn how to trade with the Relative Strength
Index (RSI) Indicator.

BRAVE FX ACADEMY
 RELATIVE STRENGTH INDEX
TECHNICAL INDICATOR

The relative strength index (RSI), tells us when the price of an asset
is either oversold (Too Cheap) or overbought (Too Expensive).

Therefore, it alerts trader letting them know that price might

become bullish after being over sold or become bearish after being
over bought.

READINGS

The RSI indicator is scaled from 0 to 100.

By default, a reading of 30 or lower indicates that price is over sold
signifying that there might be a potential increase in price.

While a reading of 70 or higher indicates that price is overbought

and there might be a potential decrease in price, thus an
opportunity to go short.
RELATIVE STRENGTH INDEX
TRADING INDICATOR

Support Level

overbought

70%

RSI INDICATOR
30%

oversold
 GOING LONG & SHORT
WITH RELATIVE STRENGTH INDEX

The logic behind trading with the RSI is that they must be paired
with price action and chart patterns to work effectively. They are
never to be meant as signals to enter trades. Just an additional tool
for trade confirmations.

GOING LONG
A good example on how to go long with the RSI is waiting for price
to reach key levels like a solid support level with the RSI also
showing that price is over sold, then you can consider looking for an
opportunity to go long.

GOING SHORT
Here, we wait for price to reach key levels in addition to the RSI
showing price is over bought before looking for opportunities to go
short.
 GOING LONG
WITH RELATIVE STRENGTH INDEX

BUY HERE

SUPPORT LEVEL

Price rejected from a major support level in confluence with RSI

showing price is oversold & double bottom

RSI INDICATOR

OVERSOLD LEVEL
 GOING SHORT
WITH RELATIVE STRENGTH INDEX

Price in major resistance level in confluence

with RSI showing price is over bought

RESISTANCE LEVEL

SELL HERE

OVER BOUGHT

RSI INDICATOR
RELATIVE STREGTH INDEX
EFFECTIVE TRADING TIP

They are indicators & not meant to be treated as signals for

trades. They must be paired with proper price action.

The 30% RSI level which is the oversold level, signifies

buyers might step in to push price higher.

The 70% RSI level which is the overbought level, signifies

sellers might step in to push price lower.

The RSI can stay overbought & oversold for days & weeks. So
be careful while trading to avoid fake outs

The fact that price is overbought or oversold doesn't mean

price will become bullish or bearish immediately.
MOVING AVERAGE
TECHNICAL INDICATOR
Learn about the simple and exponential moving
average. Use Them to detect trends and points of
possible price reversals

BRAVE FX ACADEMY
 MOVING AVERAGE
TECHNICAL INDICATOR

Moving average is a technical indicator that helps smooth out

price data. They show the average price of an asset over a specific
period of time.

For trading, they can be used to determine underlying trends,

support & resistance levels and also as points of possible price
reversals.

There are different types of moving average, we've got:

Simple Moving Average

Exponential Moving Average

 SIMPLE & EXPONENTIAL
MOVING AVERAGE

SIMPLE MOVING AVERAGE

1. The simple moving averages is best for long term traders
2. The 50-200 day MA is the best settings for long term traders
3. They respond slowly with price action and will save you from
spikes and fake outs

EXPONENTIAL MOVING AVERAGE

1. The exponential moving average is best for day trading.

2. The 8-20 day moving average is the best settings for day trading

3. They respond swiftly with price action and are prone to spikes

and fake outs

 MOVING AVERAGE
AS SUPPORT / UPTREND

For day trading, in order to spot trends with the moving

average, we recommend adjusting the length settings of
the MA to 50. for an ongoing uptrend the moving average
can acts as a support level and traders can go long when
price bounces off the moving average.

BUY HERE

Support/Resistance
50 MA
Level

2nd touch

Adding chart patterns or important

levels to your MA will further validate
1st touch your trades. SL can be placed below
the 50MA line
 MOVING AVERAGE
AS RESISTANCE / DOWNTREND

1st touch
2nd touch

50 MA SELL HERE

Support/Resistance
Level

Same principle applies, adjust the length settings of the MA to

50. for an ongoing downtrend, the moving average can acts as a
resistance level and traders can go short when price bounce off
the moving average.

Adding chart patterns or important levels to your MA will further

validate your trades. SL can be placed above the 50MA line
 MOVING AVERAGE
FOR LONG TERM TRENDS

For long term traders, we recommend using the 200 Day MA as

the default length setting to determine long term trends. this
helps you understand the kind of trades that's most favourable by
the market.

BULLISH TRENDS

It is a bullish trend if price continues to move above the 200 Day

MA. This means ideally, the market will be much more favourable
to traders who could find technical setups to go long.

BEARISH TRENDS

The trend is bearish if price continues to move below the 200 Day
MA, Which means the market is likely to favour technical
opportunities to go short
 MOVING AVERAGE
FOR LONG TERM BULLISH TRENDS

SUP/RES ZONES

SUP/RES ZONES
BUY HERE

BUY HERE

200 Day MA

In this scenario, the 200MA tells us that price is in a long term

bullish trend, therefore, ideally, finding technical setups to go
long would be more favourable.
 MOVING AVERAGE
FOR LONG TERM BEARISH TRENDS

200 Day MA

Sell Here
SUP/RES ZONES Sell Here

SUP/RES ZONES

Same concept but in this case, price is moving below the 200
Day MA. In this scenario, the 200MA tells us that price is in a long
term bearish trend. so ideally, it will be more favourable to find
technical setups to go short.
 MOVING AVERAGE
FOR LONG TERM BEARISH TRENDS

For day trading, the length settings of your MA can be adjusted

between 8 to 20 to suite the chart you're analysing

A moving average with three or more touches during an

ongoing trend is considered a major sup/res zone.

Only trade moves after pullbacks when there is a

confirmation of trend continuation.

Plot different types of moving average so you can see both

long-term and short-term movement

Trading with moving averages must be combined with

technical setups like support/resistance or chart patterns for
effective results
DIVERGENCE
TRADING STRATEGY
Learn how to identify and trade the market using the
divergence trading strategy

BRAVE FX ACADEMY
 DIVERGENCE
TRADING STRATEGY

This is a type of trading strategy that is utilised when the price of an

asset seems to be moving in the opposite direction of a momentum
indicator. In this lecture, we would be making use of the Relative
Strength Index (RSI)

Some popular momentum indicators include MACD and Stochastic,

TYPES OF DIVERGENCE

Regular Divergence

Hidden Divergence
 REGULAR DIVERGENCE

This kind of divergence mostly signals a potential reversal in

trends. There are two types of regular divergence. The regular
Bullish & Bearish divergence.

REGULAR BULLISH DIVERGENCE

This occurs when the price of an asset starts making a Lower Low
(LL) and the RSI indicator makes Higher Low (HL). The first low of
the RSI needs to be oversold to be considered valid.

Price Making
Lower Low

LL

Indicator Making
Higher Low
HL
REGULAR BULLISH DIVERGENCE
CHART

DO
W
NT
RE
ND

D
EN
R
PT
U

LO
W
ER
LO
W
S BUY HERE

SIGNS OF A TREND
REVERSAL

S
HIGHER LOW

Oversold RSI
 REGULAR BEARISH DIVERGENCE

This occurs when the price of an asset starts making a Higher High
(HH) and the RSI indicator makes Lower Highs (LH).

The first high of the RSI needs to be overbought for the divergence
to be considered valid.

HH
Price Making
Higher High

Indicator Making LH
Lower High
 REGULAR BEARISH DIVERGENCE
CHART

HIGHS
ER
HIGH SELL HERE

DO
WN
TRE
ND

END
PTR
U

SIGN FOR TREND

REVERSAL

Overbought RSI

LOW
ER H
IGH
S
 REGULAR DIVERGENCE
TRADING TIPS

The RSI must either be over sold for a bullish divergence or

over bought for a bearish divergence in order to be considered
valid for trading.

This strategy can be combined with other trading elements

like support & resistance or chart patterns for higher success
rate.

Only trade bearish divergence if it occurs after an uptrend and

bullish divergence after a downtrend for effective results.

For bullish regular divergence, connect lower lows on price and

higher lows on RSI.

For bearish regular divergence, connect higher highs on price

and lower highs on RSI.
 HIDDEN DIVERGENCE
This divergence do not signal a potential change in trend rather,
they are used as possible signals for a potential trend continuation.
There are bullish and bearish hidden divergence.

HIDDEN BULLISH DIVERGENCE

This happens when the price is making a higher low [HL], but the
indicator is showing a lower low [LL]. This can be seen when the
market is in an UPTREND.

Price Making
Higher Low

HL

Indicator Making
Lower Low
LL
HIDDEN BULLISH DIVERGENCE
CHART

BUY HERE

ATION
U
NTIN
O
LOW
S ENDC
ER TR
HIGH

SIGN FOR TREND

CONTINUATION
END
TR
UP

LOWER
LOWS

Oversold Divergence
 HIDDEN BEARISH DIVERGENCE

This occurs when price makes Lower High (LH), but the indicator
seems to be making a Higher High (HH). This Usually occurs in a
DOWNTREND.

Also take note that this bearish divergence is considered valid and
acceptable only if the higher high of the indicator is overbought.

LH
Price Making
Higher High

Indicator Making HH
Lower High
 HIDDEN BEARISH DIVERGENCE
CHART
DO
WN
TR
EN
D LOW
ER H
IGH
S
SELL HERE
DO
W
NT
RE
ND
CO
NT
IN
UA
TIO
N
SIGN FOR TREND
CONTINUATION

Overbought RSI
ER HIGHS
HIGH
 HIDDEN DIVERGENCE
TRADING TIPS

The RSI must either be over sold for a bullish divergence or over
bought for a bearish divergence in order to be considered valid
for trading.

This strategy can be combined with other trading elements like

support & resistance or chart patterns for higher success rate.

Only trade bearish hidden divergence if it occurs after a

downtrend and bullish hidden divergence after an uptrend for
effective results.

For bullish hidden divergence, connect higher lows on price and

lower lows on RSI

For bearish hidden divergence, connect lower highs on price and

higher highs on RSI.
FIBONACCI
RETRACEMENT
TRADING TOOL
Learn the basics of the fibonacci retracement
tool and how to apply it to your charts.

BRAVE FX ACADEMY
 FIBONACCI RETRACEMENT
TRADING TOOL

There are different types of Fibonacci tools, But we would be paying

more attention to the Fib retracement. Before we go deeper, let's
understand what a retracement means when trading.

RETRACEMENT

This term in trading is often used to describe a minor pullback in

price after a bullish or bearish move or trend.

These pullbacks / retracements are temporary in nature and do not

indicate a change in the main trend. Price usually continue in their
normal trend direction after a retracement.

Take a look at the chart on the next page for a clearer

understanding
 CHART RETRACEMENT
BEARISH TREND

Trend
Continuation

Trend
Continuation

Bullish Bullish
Retracement Retracement

Bullish
Retracement

Here's a bearish trend with examples of retracements and then

trend continuation. This is how retracements work
 FIBONACCI RETRACEMENT
TRADING TOOL

The fibonacci retracement is meant to be used as a tool to spot

possible support and resistance levels during price retracements in
a trend (Bullish or Bearish).

These Support and Resistance levels are then used as possible buy
or sell trade entries. They can also be used as take profit (TP) and
stop loss (SL) levels.

NOTE:

The most significant fibonacci levels are the 38.2%, 50% and 61.8%
level. Those are the retracement levels to watch out for.

Let's take a look at how to place the fibonacci retracement tool on a

bearish and bullish trend.
 HOW TO DRAW THE
FIBONACCI RETRACEMENT
ON A BEARISH TREND

Fib Point one at the swing

high

Fib Point two at the

swing low

For accurate results, the first point of the fibonacci tool is place
on the swing high of the bearish trend and the second point
on the swing low of the trend
 HOW TO DRAW THE
FIBONACCI RETRACEMENT
ON A BULLISH TREND

Fib Point two at the

swing high

Fib Point one at the

swing low

For accurate results, the first point of the fibonacci tool is place
on the swing low of the bullish trend and the second point on
the swing high of the trend
 FIBONACCI RETRACEMENT
IMPORTANT NOTE

We would take a break here as this is just the first part. In Part 2 we
will discuss more about taking trades with fibonacci as well as how
to set TP and sL.

For an up trend, you draw the fibonacci retracement by placing

point 1 at the swing low and point 2 at swing high of the trend

For a down trend, you draw the fibonacci retracement by placing

point 1 at the swing high and point 2 at swing low of the trend

The fibonacci retracement tool can be used to take trades and

also set potential TP and SL levels

Pay attention to the 38.2%, 50% and 61.8% level, they are the
most important levels
 TRADING WITH
FIBONACCI RETRACEMENT

The fibonacci retracement tool works for confirming trades based on

trending markets

The logic behind this is that the fibonacci retracement helps you find
suitable support levels to go long & resistance levels to go short.

We'll be dealing with the following in this lecture:

Going long & short With Fib Retracement

Setting TP & SL With Fib Retracement

NOTE:

Fibonacci Retracement is meant to be used only as an extra layer of

confirmation for your trade setups not as a signal for trade entries
 GOING LONG WITH
FIBONACCI RETRACEMENT

The first thing that comes to mind looking at an

uptrend is that we want to take BUY trades. Then the
next step is when do you go long?

Ideally we would be going long the next

time price bounces off our bullish trend line

Bullish Trend Line

This is where the Fibonacci Tool comes in to verify if

we should go in for a buy trade or not

We drew our fibonacci by placing the first point

at swing low and second at swing high
 GOING LONG WITH
FIBONACCI RETRACEMENT

Swing High

The 38.2% Fib level Aligns perfectly with our trend line,
thus boosting our confidence in taking the BUY trade

STOP LOSS

We Buy

Swing Low We go long at the bullish bounce and set SL at

Next FIB level which in our case is the 50% FIB
level and TP above swing high
 GOING LONG WITH
FIBONACCI RETRACEMENT
Take Profit

And there you go, TP was crushed. The Fibonacci tool

has to be merged with chart patterns or price action to
be considered for trade entry.
Swing High

STOP LOSS Buy Entry

 GOING SHORT WITH
FIBONACCI RETRACEMENT
Swing High

On a down trend, we look forward to taking sell trades. In

our case, the next possible location for a SELL trade is at
the nearest resistance level as marked on the chart

Resistance Level

To verify our resistance level, we put on the fibonacci tool.

Point one placed at swing high and point 2 at swing low.

Swing Low
 GOING SHORT WITH
FIBONACCI RETRACEMENT

Swing High
Our Resistance level aligns with the 50% fibonacci level, a
very strong level. This further validates our resistance level
and downward trend for going short.

STOP LOSS
Sell Here

We go short at Resistance and set SL at the upper

Fib level which is the 61.85% level in our case. TP is
placed below swing Low

Swing Low
 GOING SHORT WITH
FIBONACCI RETRACEMENT

Swing High

STOP LOSS Sell Entry

And there you go, that's how Fibonacci is used for

trading. never rely on fib alone. it works better on
trends and with important levels
 FIBONACCI RETRACEMENT
TRADE TIPS

Never trade or rely only on fibonacci level. They must be combined

with important patterns and price action to be considered for
trading.

For a down trend, you draw the fibonacci retracement by placing

point 1 at the swing high and point 2 at swing low of the trend

For an up trend, you draw the fibonacci retracement by placing

point 1 at the swing low and point 2 at swing high of the trend

Pay attention to the 38.2%, 50% and 61.8% level, they are the
most important levels

The fibonacci retracement tool can be used to take trades and

also set potential TP and SL levels
 PRO TIPS FOR
TREND FOLLOWING

7 PRO TIPS TO HELP YOU

RIDE MASSIVE TRENDS
1
FOLLOW MARKET
STRUCTURE
The first thing to note before riding any trend
is to determine its direction. Is the market
bullish or bearish?

The best way to find out is to check out the

market structure through price action.
2
CHECK DIFFERENT
TIME FRAMES
This will help you determine if it's going to
be a long or short term trend.

If the market structure shows a trend on

lower time frames like 30 min, then it's
likely going to be a short term trend and If
it's on higher time frames like 4H, 6H, 1D,
then it could be a long term trend.

Taking note of these will help you prepare

and follow accordingly.
3
CHECK MOVING
AVERAGE
Checking if a moving average aligns with
the trend will build stronger confidence in
the trend as you ride it.

Try out the 50, 100, or 200 MA on different

time frames to see where they fit so you can
trade accordingly.
4 TRADE FROM
AREA OF VALUE
As price moves, they create support and
resistance levels. In a bullish trend, you
should look for opportunities to go long at
support bounce or at resistance breakout

While in a bearish trend, look for

opportunities to go short at resistance
bounce or at support breakout.

You could also trade the bounce off the

moving average.
5
TRADE BREAKOUTS
This is one of the easiest ways to ride trends.

Trade breakouts that signify a trend

continuation. These can be breakouts from
continuation chart patterns or breakout from
support levels in a bearish trend or breakout
from resistance levels in a bullish trend.
6 BEWARE OF
PULLBACKS
There would always be pullbacks when riding
trends so beware and be patient with these
pullbacks before taking trades.

If you're already in a trade, you can take profit

at signs of a pullback because you never know
how long they will last.
7
THE TREND IS YOUR
FRIEND!
Trade in the same direction as the trend.
In a bullish trend, look for opportunities to
go long, and in a bearish trend find
opportunities to go short.

It's safer not to trade in the opposite

direction of the trend!