For Day, Retail, & Swing Traders
Risk Management & Capital Preservation Guide — the 18 Do & Don't trading rules that dictate your survival, prioritized from the highest threat to your account equity down to lower operational risks.
Core chart-reading terminology every trader should know
Horizontal levels drawn from a prior swing high to swing low (23.6%, 38.2%, 50%, 61.8%, 78.6%) that mark where a pullback is likely to end. The 61.8% 'golden ratio' is the most watched retracement for re-entering a trend.
Price pushing decisively through a defined resistance or support level after a period of consolidation. Valid breakouts come with above-average volume; without volume expansion they frequently fail and reverse back into the range.
A confirmed change in trend direction, not just a pause. Signalled by structure breaks (a lower high in an uptrend), momentum divergence on RSI/MACD, and reversal candles at a key level — confirmation requires a close beyond the level.
A model that maps market psychology as five impulse waves in the direction of the trend followed by three corrective waves (A-B-C). Waves 3 are typically the longest and strongest; wave 5 often shows momentum divergence before the correction.
A three-candle imbalance where the middle candle moves so fast that the wicks of candle 1 and candle 3 never overlap — leaving an unfilled price gap. Markets frequently return to 'rebalance' that gap, making it a high-probability target or entry zone.
Each candle shows open, high, low and close for a period. Body size measures conviction, wicks show rejection. Key patterns: engulfing, pin bar/hammer, doji (indecision), and inside bar (compression before expansion).
Averaged candles that smooth out noise to make the underlying trend obvious. A run of green candles with no lower wicks signals a strong uptrend; the first candle with a long opposite wick warns that momentum is fading. Prices shown are averages, not real fills.
Charts built from fixed-size price bricks that ignore time entirely — a new brick prints only after price moves a set amount. This filters out chop and sideways noise, making trend direction and reversal points visually unambiguous.
Geometric price structures defined by precise Fibonacci ratios — Gartley, Bat, Butterfly, Crab. Each completes at a Potential Reversal Zone (PRZ) where the trade is taken with a stop just beyond the pattern's extreme.
Diagonal trendlines drawn at fixed price-to-time ratios, with the 1x1 (45°) angle representing balance. Price above the 1x1 is bullish, below is bearish; the angles act as dynamic, sloping support and resistance.
Tools measuring the speed of price change: RSI (overbought >70 / oversold <30), MACD (crossovers and histogram), and Stochastics. Their highest-value signal is divergence — price making a new high while momentum does not.
Zones — not lines — where institutional orders previously caused an aggressive move away from price. Demand zones sit below price where buyers stepped in; supply zones sit above where sellers overwhelmed. Fresh, untested zones are the strongest.