Hello and welcome to our bonus lesson and video. So we will be discussing the subject of trading in manipulated markets. Now, whether you are already aware of it or not, the fact is that trading is a zero sum game. This means that one party to win another must lose. In other words, for each position you take, there must be someone taking the opposite side. So who's taking the upside of your trades?

Now the answer is obviously the opinions and what and for whom your trade. But considering the fact that almost all retail traders conducted training through brokers, we know this usually the broker that acts as the liquidity provider or market maker. Now some brokers are not liquidity providers or market makers themselves, but they do outsource to third party liquidity providers and market makers. So this means that the liquidity providers are responsible for other offsetting positions of the Atlantic. All taking the opposite side of the trades themselves. This is sometimes referred to as liquidity providers, dark pools, you can always go and read up on that more if you like.

But remember, they can only offset positions if there is an equal amount of long and short sells, which is obviously not always the case. So to avoid being exposed to losses, if the majority of traders are successful in taking the right side of the trip, market magnets need to hedge their positions, which cost money. And this is something that obviously do not want to do. But luckily for them, market makers have many sneaky ways to make sure that they end up on the winning side. Looking at some of the tricks that market makers used to win. So keep in mind that market makers have lots of liquidity at his disposal.

This means they're they have lots of cash to either buy the market up or sell the market down, especially on short timescales. Your market makers or liquidity provider is also in full control of the spread. So during volatile times in the market or whenever they'd like they can increase or decrease spread to, however, be sitting. So he's keeping this in mind, they can use this to either trick traders into thinking the market is reacting in a certain way during high impact news events by using large scale buying or selling activity. So, right before ordering, oh very, very soon off the high impact news events you will always notice that Firstly, spread will increase dramatically. Secondly, you'd notice that they are often false spikes in price into a certain direction.

Now market makers do this to trigger and short or long stop orders that traders are placing on both sides of the market to trick them into thinking The news is going to impact them more in the same way. So, this is to some some extent actually very clear to trigger this to, to capture as much as possible those orders even stopping others out that are already in position and positions that also use the known chart patterns. For instance, any non technical chart pattern whether that be a hitter shoulders, a which flag or anything, they can use those chart patterns or even creating themselves by buying and selling the market to create these patterns, along with many other popular indicator setups to leer and trap traders into thinking a certain outcome will ensue. Now, oftentimes, you'd see that these chart patterns fail due to what we call fake outs.

In other words, the market appears to do break out of them and need to immediately reverse and go into The other direction, usually usually followed by very violent strong moves in the opposite direction. And but this is causing is it's causing those traders who have preempted those breakouts that trapping them. So, because as humans and as we have discussed already in our trading psychology module, we hate losing meaning traders get trapped, they do not they they refuse to let go of their position holding on to that loss. So, that is usually we are fake outs come from. So this is usually your market makers, forcing these positions and then using the liquidity to reverse the direction of the market, but also use large scale buying and selling activity to flush traders out of their positions by forcing the market to stop loss areas. So stop loss areas would usually be around your highs and lows.

Swing points that are upgrading the market. Also, if you have previous support or resistance, these are usually where your retail traders will place their stop losses. You can also look at your weekly highs and lows. So when the market is moving closer to these areas, your market makers can very easily use the liquidity in buy or sell the market pushing it up or down to trigger these stop losses forcing traders out of the trades. And if you think in terms of the terms such as pump and dump and dump and pump, what this means is that you oftentimes notice that before violent and strong moves in a certain direction, etc, the opposite happening. So usually you see the market strongly moving up.

In other words, to be pulling that the pump more has been pumped up and then all of a sudden that dumping is selling all of those positions. So in that process of pumping up the market that are now choosing more and more long traders interest I just go along, and all of a sudden they start reversing selling with lots of liquidity, moving the market down and forcing those long sides now to sell the long positions or being causing them to be stopped up, and then that causes a sell up in the market. Another trick they use is the widening of spreads to stop you out if prices near stop loss levels. So many traders place the stops at certain levels. Now those levels it's usually consisting of your bid and ask prices. And as we know that the spreads are the difference between the bid and ask prices.

So, if your liquidity provider or broker increases the spread significantly, they can actually cause the bid and ask prices to to move away at such such distance as an actual trigger stop losses without price even maybe touching those areas for longer than a millisecond or so. In. So, just using this spreads, they can even manipulate the market to stop you out if you are not careful or if you have placed your stop loss labels too close to very obvious. It's support and resistance or highs and lows. So only can retail traders have any chance of the answer is simple. First, you have to understand that the market is not there to give you free money, or an easy time it is designed to trick you.

It's designed to trap you and to take your money market makers and high frequency trading firms spend millions of dollars hiring the best people and developing the smallest algorithms that's running on the forces computers just to food traders. And having been a chess player since a very young age, I understand the importance of constantly looking for ways that Martin is trying to trick or to trap me. Unfortunately, it actually took quite some time to realize that I need to apply the same thinking to trading and there's this kind of thinking It is absolutely crucial if you want to be consistently successful in navigating these ebbs and flows of the manipulated market. So, over the course of the next few minutes, I will show you how you can use you can identify these traps as long as giving you some pointers and to look out for to help you keep safe.

So, first be very wary of breakouts, especially before, during or after very high impact news events. Now, as already mentioned, yo yo could you provide us market makers and makers love to chat in full traders during these events. So, I recommend using something like forex factories. Just looking at this website here www.com forward slash calendar. In here it will show you all the high impact news events for the coming week and you'll usually see the ones marked in red as your High Impact news events that you need to look out for. So, this is very useful to actually see when these high impact news events will occur and to be extra vigilant.

Now, when you are looking for breakouts or breakouts, it might be useful to look at the image of either virgins and because as we know the image either my flat index and looks at your volume in those divergences could be a telltale sign is to tell you whether or not we are seeing a false move in a certain direction. So that is one technique that you can use to try and identify these false moves. Secondly, when you are looking at the charts, it's always wise to mark the previous weekly monthly swing highs and lows because this is usually where the stop orders would be. And this is usually where the market makers with forced the market and to go in order to trigger these stop orders. stop losses. So always be clear on those levels.

And always be vigilant around him. Thirdly, and very, very importantly, stay with price action. Now price action simply means stay with the trend and stay with where the price is going. So, for example, if you use the five exponential moving average, and you use that relative to something like a 21, exponential moving average, try and stay on the front, the side of the five, and it's five ma relative to the 21 EMA that is a general rule of thumb and that will generally keep you on the right side of a trade. Next, especially when trading forex mark your forex sessions. Now there are three major decisions that is your Asia session.

That is the London session and your New York session after that, so that's what consists of 24 hour period and after that you sort of the Asia session again, London and New York and stuff So, when looking at the age position, you'd usually be looking for consolidation. And the market would usually tend to four minute range with in the Asia session. And then in the long section, you'd usually see a breakout or a breakout or both. So those usually the time to look for those traps as well as at the start, or very soon of the learning session, then when the New York session starts, we are usually looking at a reversal of direction again, so the market will tend to consolidate in fake out or break out or fake out and move in opposite direction in the New York session starts with another swing in the market.

So that is forming those waves. That's why it's important to mock and understand your different trading sessions. I'll actually show that to you. I'm using trading view as an example of how to identify these sessions then it's important to understand You need to think like a typical retail trader, which is the hood. And then consider the market makers motives and what they want the realtor to do. So if you didn't understand the typical things that I've been showing you in the schools, you would not understand or know what to look for, because you first need to understand what a retail trader wants to do, or looking for to understand what the market maker is also seen, because the market makers is completely aware of what the retail trader is thinking, and they are using that to trick them.

So it's always important to understand both sides. And then finally, before we get to the judge did not hold on to a trade if price action is against you. So we've really discussed this, but remember, if it tried to finally start moving against you, it's wrong. It's better to get out of a trade. And either stay out until you're sure of the direction or relatively Sure. Oh, At least, if you feel that there's good enough reason that the market is showing a fake out or reversal, you can actually use that to your advantage and trade with the market makers reversing the trade in the new say on the side of the five Ma, for instance relative to the 21 EMA So allow me to open up a trading view for you.

So here's a chart of the GBP USD. Currently we're in a monthly timeframe and as you know, I like to always start marking out my marking if my major support and resistance so as you can see, we are trading this area now I'm not gonna mock each and every support resistance area right now, but let's just mark the major ones. So I've said wrong about this area. And I'm just marking the obvious ones. So roundabout way as you can see the A's alone so that's always good to mock So you're looking for the tiles, the tiles are usually a telltale sign of wisdom market things to reverse. So again, say maybe ranh Bay is that at least crosses propel all three of those lower tails there and want to place on this as well but I'll maybe look at a lower timeframe.

So now I'm going to move lower to a weekly. I'm going to change the color of my support and resistance lines and undo sorry, change the color of that now. Here we go. So now we are in a weekly timeframe, and I'm going to change the color to purple. Okay, so now we can identify some more support and resistance is some support. The some support and resistance as you guys can see, just look back.

It's always important. To look back and see where those previous tails off, I think it is because some of those, and then maybe there so there's definitely something there, but actually, let's just go lower again to a dilettante for now. And I'm just going to change the color of support and resistance landscape. And I use the the colors of the lines to actually give me some indication of the I can say the severity of the, of the support resistance, usually the most is that on longer term, we get timeframes, the more respected they will be. So you can already see now on the daily, there's a lot more support and resistance areas that is just popping up. So I'm just going to continue marking all of these as you should Also do this is free, the more people tend to tune in the future is one.

And it's not necessary to force for Steam. There we go. Okay, so I'm now going to drop to four hour timeframe. And this is how this our load time from Eiger. Now what I want to show you is, remember we spoke about the market sessions. Now the first thing that you need to do is right click for instance on this trading view chart, go to time scale in tick time, and a session breaks.

So this will actually give you the 24 hour sessions that we spoke off these lines and will actually indicate to you that 24 hour sessions, I just want to continue to finish marking, finish marking my support and resistance for like, life okay. is right about there. Also. So again, don't force it, just try and look for the obvious ones when you can clearly see the market has done in the past, for instance, data turn became possible as resistance became support became support and again became resistance. Okay. So let's go, zoom in slightly to where we are currently.

I'm just gonna mark this last one. So there was a low right about there. So I'm just gonna move that area, as you can see, as that touches all three of those tails, okay, this is so low. I'm gonna go for now. What I also want to add in here is, I'm just going to move back to the daily timeframe. And I wanna I want to add the Sorry, just quickly Have a look what's chunking Here is so let's use a bit of Pitchfork I'm gonna use some modified shift Pitchfork and just draw a quick yeah as you can see, you can actually see if federal this hard is actually acted as a gentle and as gentle forward breath press actually followed by okay I'm not going to add that right now.

So I'm going to for our country segment actually makes it a bit difficult to see the session so I'm going to move down to a one hour now and a one hour time frame and now you can more clearly see these these sessions. Another nice thing is the market events so you can see that trading views also marking those market events that I've showed you on forex factory on the calendar and think you can actually find them Looking at properties, events and alerts and you just insured you take these showing your chain earnings, economic events, etc. And it will show you those events and when they're about to occur. Now that we can see the 24 hour sessions, actually just have one I have one last look at this Pitchfork. You can actually see it quite nicely our price for this area is support. Now, the last thing I want to show you is the sessions on how we can add them.

So by going to indicators starting in sessions, there is something called sessions on chart just selected and immediately it will lead to sessions. There white, it would be your asian session. The green will be the sort of London and in this is an overlap between London and you New York. So that would be London. And that would be New York. That's would be New York early in the session restarts.

So this actually clearly marks your sessions. Then what I want to show you is just marking and arranging the ranges of the Asia session. And there's a nice indicator it's called opening range. opening range cm opening range, Asia and Europe session. So if you select that, allowing it to load, as you can see, it draws a lot of it draws to Asia and range and in draw some targets. I'm just going to remove those targets.

You can see this is about a bunch of input. I'm just removing everything except the Asia range, because I want you guys to see that. I mean, it's changed the line. There we go. So now which may have been short is a very clear definition of the Asia session as well as the range that it created, then you can see that that long broken breakout that I, that I talked about. And now that often ends up as being a fake out and market reverses.

And in some way no New York session again, we reverse direction. And again, range London breakout in reversal in the New York session. And that pattern repeats itself a lot. And even if we go to a lower time frame after 15 minutes, for instance, you'd see that being repeated every time. Almost every time is a very nice exam example I actually managed to catch this trade happened. And you can see in the white board that is our Asia Asia session, you can see on the market consolidates creating a range.

So a lot of traders traders are trading this Asia session. A lot of retail traders so the market makers are using this to greater range decorators fake out you can see there's actually a mess of big red candle created this fake of luring traders to go short. And as soon as a lot of traders are short, they reverse the direction trapping traders at the bottom. Yeah. So that's something to look out for. If you see a big candle and in, you see that reversal at this point, it's actually a good place to just try and take the long position stay with your price action as mentioned.

Then you can see we have a bit of a consolidation right through up until the end of the New York session. So not much happening v. And in here again, we see we have kind of a range created. And now this is today, we had a range created in the mass of sell off big breakout, no retail is just a big breakout, no reversal and the only noun in New York session that we started to see that reversal I spoke of. So this is actually very nice to them. I'd like you to go maybe do some homework. Add these indicators in your jobs.

And especially for forex. It's important to understand your your sessions your asian session. You're London. Look at that nice fake out everybody. So we're moving from the asian session into the London session, fake out candle breaks upwards, trapping traders and immediately reverses direction. You can see there's a bit of whipsawing but trapping again trapping traders, right?

Okay, so very be very, very, very careful and vigilant, looking out for those straps. So yeah, this is just something I want to show you guys on the chart and something I want you guys to be aware of. So be aware of this Asian consultation, the London breakout fake out and in the New York reversal. Again, it's something that you guys need to be aware of. Also, maybe just to end off this video, I'd like to show you guys how fake outs also often happen around support and resistance. So we're on the 15 minute time frame and you can see how we actually had this area of consolidation right above this area of resistance.

So what they're trying to show you and do years they're trying to trap traders to go long. So even if we go to bigger time from like the one hour we Yeah, you can see what happened, but try to induce traders to go long at this point. So we have nice strong free big green candles up here trying to check those traders are going along and then they start to reverse direction. And so that is something that you need to be careful of when trading these setups. What I'm actually trying to say to you guys is you can actually trade the fake out if you see something like this happening like a breakout and then followed by a big red candle. Reversing you can know that there's definitely traders trapped up here in the market will most likely reverse.

And then you can just try and stay with price action. So every time you go to an area of an area of support and resistance, you see that those tails and it's just fake out every time looking at davia a fake out and again in a reverse So every time that's a story that will keep playing out almost every time the again, consolidation, the London breakout, fake out reversal in the new have not a reversal in your New York session. So keep keep an eye out for that. Train your eye, try to identify those fake outs. And if you want, you can always try to try those trying looking for those reversals from your breakouts. So again, here's an example by starting on sedation in the asian session, a fake out in the long session to a downside and see a reversal there's a big green candle following that one.

And in the corner you can go along with a lot of trades are short now. Then they go up and in a soft reversing and you can see as soon as we come back into this, when we started the New York session we can be starting with that reversal again. And yeah, you can go on and on like this isn't an example consolidation break out. And a lot of traders use these ranges to determine the targets but I still suggest you use your IQ America price theory when defining your targets, but a lot of traders do use these ranges that's created in your asian session as targets. So one or two times arrange for breakouts if you're during the breakout and then maybe just be wary of those fake outs as well. Look at that nice fake out again ranging fake out to the bottom reversal.

So at that point almost already, when that candle closed, you can almost already put a long order right about there and then you can try and ride that trade to the upside. So you know, that is what I'd like you guys to be aware of. Good job and now that concludes our bonus lesson lesson. Thank you very much and if you have learned something, as always you are free to mail any questions at info at FX Automator