Measure the distance between your planned entry point and your stop-loss level. Adjust your total lot or share size to ensure your total financial risk does not exceed your strict percentage limit.
Before drawing lines on a chart, you must understand the foundational principles established by Charles Dow, the father of modern technical analysis. Price Discount Everything
A series of lower highs (LH) and lower lows (LL).
: Moving boundaries calculated by indicators that change with every new price bar. High-Probability Chart Patterns
A sequence of Lower Highs (LH) followed by Lower Lows (LL). Supply consistently overwhelms demand. trading technical analysis masterclass pdf
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Characterized by a continuous sequence of Lower Highs (LH) and Lower Lows (LL) . Supply controls the market.
Swing High -------------------------------------------- 100% | Soft Retracement Zone (38.2%) | Golden Pocket Reversal Zone (61.8% - 65%) Swing Low -------------------------------------------- 0%
A true technical analysis masterclass begins with three fundamental assumptions that govern market behavior: The Market Discounts Everything Measure the distance between your planned entry point
3. Support and Resistance: The Market's Invisible Floors and Ceilings
Indicators should be used to confirm price action, not to dictate it. A masterclass teaches you to use them without getting trapped in "analysis paralysis." 1. Moving Averages (MA)
A pin bar features a small body at one end and a long wick extending to the other.
Buyers attempt to push the trend higher but fail to exceed the peak of the head. This lower high signals that demand is drying up. Price Discount Everything A series of lower highs
A small body with a long lower wick. This signals that sellers pushed price down, but buyers aggressively bought the dip, indicating a potential bullish reversal.
The thin lines above and below the body showing the highest and lowest prices reached during that period. High-Probability Candlestick Patterns
A large candle body completely swallowing the prior candle's body. This signals a total shift in market control.
" typically covers everything from the basics of reading price to advanced psychology-driven strategies. Key guides like the one by Rolf Schlotmann and Moritz Czubatinski emphasize that trading isn't just about patterns—it's about understanding the "why" behind price movements. Core Modules of a Technical Analysis Masterclass
A major bullish signal (Golden Cross) occurs when the 50-day MA crosses above the 200-day MA. A major bearish signal (Death Cross) occurs when the 50-day MA crosses below the 200-day MA. Momentum Oscillators
