A HANDBOOK ON

AND MORE INSIGHTS

BY @PAVLEADER
1

CONTENTS

Section A: Useful tweets on Price Action trading

Chapter No. Topic Page No.

A Introduction 3
1 Do you have a trading plan 5
2 Price Action, Market structure, trends & market cycles 5
3 Understand Supply & demand zones 12
4 Simplifying Trend Trading 17
5 Multi-time-frame trading 19
6 How to exit your trades 22
7 Pullback Vs Reversals 23
8 Trading price action with Fractals (A complete Trading System if followed 25
religiously)
9 Simple Price action trading strategy (Build your own system based on this 26
base)
10 Price & volume relationship 27
11 Money management & Risk management simplified 33
12 Tips for working professional on day trading 36
13 Master just 1 setup 38
14 How to trade wicks 38
15 Candlesticks patterns you need to know 40
16 What is buying & selling pressure 43
17 Build your own scanner 43
18 5 trade setups 44
19 Visualize combination of 2 or more candles 44
20 What differentiates Pro traders from Amateur traders 45
21 Best timed entries 45
22 Price speaks but you need to listen carefully 46
23 How to do Breakout trading with high probability 48
24 Learn the art of visualizing 2 or more candles together 49
25 How to remove fear of execution 49
26 Trend Strength Meter based on Moving Average slope (2 PM & 4 PM 51
setup)
27 Face to face experience sharing session with Vivek from 53
StockEdge/Elearnmarkets
2

CONTENTS

Section B: Useful tools, Amibroker AFLs, bar by bar commentaries, PAVQuiz

Chapter No. Topic Page No.

1 Google drive library for useful Price Action AFL codes for Amibroker 61
software
2 Bank Nifty Open Interest Analysis excel sheet 61
3 Download EOD Bhavcopy - Free 66
4 Gyan Tweets (There is some learning in each of these) 66
5 Commentary of Bank Nifty day trade 67
6 ICICIBank chart learning 71
7 PAVQuiz & their explanations 73

Section C: Books on Price Action & Volume analysis & people who influenced my trading

Chapter No. Topic Page No.

1 Book recommendations 84
3

Introduction

This is Your guide to kickstart your Price Action Trading learning journey

If you are here then I am sure that you are looking for resources to learn price action trading. Correct? Then your
search ends here. This document provides link to some useful Tweets to learn Price Action concepts. Remember, this
is not a way to get rich quickly & won't increase your win rate drastically. These links will help to learn Price Action
concepts in a structured manner & after you know these concepts, the real work starts - PRACTICING with patience
& perseverance. More you practice, more you learn how markets work & this will slowly build your confidence to
trade better & eventually achieve the financial freedom which is a dream for many including you and me. So good
luck my friend!

With love,

By @PAVLeader

This document is split into 3 sections -

A. Useful tweets on Price Action trading
B. Useful tools, Amibroker AFLs, bar by bar commentaries, PAVQuiz etc.
C. Books on Price Action & Volume analysis & people who influenced my trading on PA
4

Section A: Useful tweets on Price Action trading

5

Chapter 1: Do you have a trading plan

Here is the blueprint of "A Trading Plan". While overall guidelines would remain same, each individual must develop
his own trading plan based his style. No single plan would work for all. Hope this helps you to be more disciplined

Image 1-1

Chapter 2: Price Action, Market cycles, Market structure & trends

1. Price Action Trading Secrets and Market cycles

 Disclaimer: I am going to share my experience in Price Action trading. Please note this is NOT at all a Holy
Grail or even close so if you are looking for that, please stop reading here. BUT if you want to learn about
markets, supply & demand, how price moves & want to be on the right side most of the time, then
continue reading. Once you read & understood these concepts, you need to spend 1000s of hours to
screen various charts to practice what you have learnt. ONLY this way you can learn price action trading
so do I have your commitment on this?? I heard YES so get ready for the excitement.

 What is Price Action & why it is important?

We all trade price every day. Knowingly or unknowingly but we all are associated with price. You buy a
stock at 100 & I sell at 100, we traded price. So price is nothing but an agreement between two parties
to trade something mutually.
Bulls & bears often fight for a fair price which they think is right for them & they try to defend that price
to keep their hold. Price action trading is the study of analysing this tussle between them & helps you
make trading decisions purely based on the price.
It does not use any technical indicators to derive the decision to buy or sell. Price action is important to
find the right balance between buying pressure & selling pressure which actually moves the price.
6

You analyse every single candle/bar in the price chart to understand who was in control in that specific
time frame & who won the battle towards the close. It is very interesting study & keeps you on the right
side always. Hope this was helpful to understand what is price, what is price action and why it is
important to make a trading decision.

 Understand structure, trends & market cycles

What is the first thing you look when you see a new chart? Thinking???
Let me help. The first & foremost thing you should look for in any chart is “Structure” or “Trend”. It’s
easy…. right?
But question is what a structure is & how it defines a trend?
Structure is nothing but the analysis of recent peaks & troughs (in other words pivots).
Structure is to spot the following 4 things on any given chart –
1.Higher high
2.Higher low
3.Lower high
4.Lower low
But you may be thinking why should I look for the structure? What is the need & how it helps? The
objective of looking for a structure is to know whether the stock is trending (consistently rising or falling)
or in range (trading between a price range & not moving in one direction)
And why do we need to know this info? The reason is simple. Strategies are different for trending market
or range bound market & one strategy doesn’t work in other type of market. Therefore, you need to first
know the type of market you are in & only then define a strategy.
Note: If the chart you see doesn’t provide enough information to define the structure thus trend, zoom
out so that you can see the structure for more time duration i.e. if currently you see just 1 month time
chart, you should see 3 months or more to know clear picture.

 Once you understand the structure, the next logical thing to know is which cycle this stock/index is
operating in? There are mainly 4 stages/cycles for any stock & they are repetitive in nature i.e. they
move in sequence & repeat again once all 4 are completed once.
These 4 cycles are –
a. Accumulation
b. Mark up
c. Distribution
d. Mark down

 As Price Action trader you need to literally understand these concepts really well so that you can time
your entries accordingly. Though they work on every time frame, my personal experience is that they
work really well on larger time frames i.e. hourly, 4 hourly, daily, weekly, monthly. Let’s understand
these cycles one by one.
7

 Accumulation: This cycle comes after the Mark down phase where the sell-off by Smart Money (FIIs,
DIIs, big hedge funds etc.) happens to dump the stocks back to retail traders.

Image 2-1: Once they dump their stock to retail & bring the price down from top to bottom, they start accumulating
it again at lower prices (price which they think is fair for them). Therefore, this cycle runs really long & really test
patience of long term buyers.

During the accumulation stage they try to take price up multiple times to check if any supply is present or not. This
takes down the price a bit before they come back again and provide the required support to stop price fall further.

After this test, they take the price up again & this cycle repeats few times until all the floating supply is removed.
Once they drain everyone & weak buyers they take the price up via breakout & never see those levels again. To take
the maximum advantage you need to learn to spot this cycle well so that you get early entry & ride along with the
Smart Money.

 Mark Up: Once they load their trucks full, the next stage is to take the price higher & higher (making
higher highs & higher lows). This is the stage where price moves up at a very high speed because bulls
are in control.
8

Image 2-2: This happens till the point where either or both these things happens –

•Bulls feel that it’s time for profit booking or offloading the stock OR
•Bears start getting active to take control & price resist to move up

It’s a game of muscles & endurance. If bulls win this then price continues to go up after facing a small resistance but
if bears win then 2 things may happen –
•Either price falls sharply (highly unlikely in one shot) OR
•Price moves in range (beginning of distribution phase)

 Distribution: This phase is an interesting phase & price spends a lot of time here just like accumulation
phase. Whatever stocks Smart Money has accumulated at lower prices, they need to now sell.

Image 2-3: In order to sell such huge number of stocks they need to make the market where they find buyers so they
create that market. This is where price exhaustion, failed bullish breakouts, failed trend line breakouts occurs.

Price goes up fake & then comes back in the trading range giving retail buyers a feel that it’s a breakout so go for
buy. This is where they trap most of the retail buyers & dump their stock inventory to them & get their investment
with huge profits back. They make price move in a specific range where on every rise (near resistance or little above)
they sell their stocks & when price falls a bit they buy a little to create a fake or temporary support & take the price
back up where they sell again more than what they previously sold.

This happens few times at various price levels until they offload all their inventory fully which actually breaks the
interim support they created & price never look back those levels again & falls like a knife only to head towards
where the journey started.
9

 Mark Down: Once the price breaks the final support level, it falls on its own weight. Retail traders have
no clue why the hell price is falling because just now they had seen bullish breakouts.

Image 2-4: So they try to average thinking that price will come back to their buying price and they will get out at cost.
This little buying actually pulls the price little up but since there is no interest from heavy funds the price don’t go up
much. Since it doesn’t meet the average price of retail trader, they don’t sell in loss and hope that price will go up
further. Some other retail traders sell their positions in fear and book losses.

On the other hand, those who missed the initial shorts at the top or at the break of support, now get a price closer to
that level which is acting as a resistance, enter fresh shorts now because they don’t want to miss the opportunity
this time. Other retail traders who booked losses & sold in panic combined with fresh shorts accelerates the speed of
this fall taking the price further down. Now this stock becomes sell on every rise and enters a perfect downtrend
stock (making lower high, lower lows).

2. How to read Market/Price Structure

Sharing a simple example of reading a price action chart with Breakout, Pullback & Supply/Demand zone
rejection trades possibilities. I hope you will find it useful. Will it break the supply zone or reverse??

Image 2-5
10

Image 2-6: Here comes Part 2 of "How to read the market structure"

Image 2-7: Here is the explanation of Part 2. I hope this is helping you learn how to read market/price structure.

Are you excited to know what happens next (Part-3)??? Keep your analytical mindset active
11

Image 2-8: Here comes PART-3. How an Uptrend turns into a Downtrend. Simple Market Structure &
Supply/Demand combination.

Another example of Single chart depicting all 3 types of trades -

1) Pullbacks

2) Supply/Demand rejection

3) Breakout

Image 2-9
12

Chapter 3: Understand Supply & demand zones

Now that you understand what a market structure is & what are the 4 stages of a stock or index, the next logical step
is to understand the supply & demand zones & how to use them with structure to spot high probability trades. This
is different than single line S/R so pay attention.

Recap: A structure is nothing but spotting higher high, higher low, lower high & lower low on any given chart to
know the trend & to understand the context in the left as to what a stock has been doing.

Image 3-1: #BankNifty daily chart shows the structure for 1 year

I have marked pivot high by red circle/oval & pivot lows by red rectangle. See how simple it is to spot HH, HL, LH &
LL. This helps you to understand the trend.

Tip: You may be thinking how many candles/bars are good enough to understand the structure. Right?

While every individual has a different way to interpret charts but I prefer to have around 200-240 candles visible on
the chart to get a clear picture but you can go with what you are comfortable with. Let me make it simpler for you. If
you are trading 15M chart then 1 day will have 25 candles so to see 200 candles, you need 8 days of data on the
chart. So set the chart as per your needs so that you get a good view about the structure & trend.

Now I will talk about S/R so get ready!

13

Support & Resistance

Image 3-2: Now I am attaching same BankNifty chart but with simple horizontal lines to mark support & resistance.

Notice the spikes & gaps in certain areas. These lines are good enough to spot areas of support & resistance. But
many times the price either spikes up the resistance or leaves a gap in support line which leaves you surprised as to
what happened? Sometimes price moves up in your original trade direction after taking your SL. Why that happens?

The reason is simple that price needs certain area to breathe in respective support & resistance zones. You cannot
be 100% precise always in drawing these lines hence it is recommended to create a zone giving price some buffer to
breathe. When the stops are very obvious, operators hunt for your stops & then move in the same direction as you
thought. Giving your stops little room helps you trade with little higher probability though this also doesn’t
guarantee 100% accuracy.

Now that you understand the concept of Support & Resistance, let’s move to understand "Demand & supply zones".

Demand & supply zones

Image 3-3: Here is how the same BankNifty chart with “demand & supply zones” look like.
14

Notice how it covers a broader area & gives price the breathing space it needs in key areas of support & resistance.
Price has memory & it leaves footprint & it always reacts to it at least once when it reaches these zones. Also these
zones acts as magnet & they attract price. Stronger the zone, stronger the sell-off or rally from these zones. So if
price is quickly reacting to these zones then it may not break the support or resistance.

However, if price stays near to these zones & doesn’t fall much then there is a high probability that they will break
the zone. So watch out for price action once price reaches these zones. Candlestick patterns like Pin bars or
Gravestone Dojis can give good signals for reversals. Also notice the volume on these reversals. Candles forming with
high volume followed by low volume test are good signs & they are high probable trades.

Adding a couple of more charts for Tatasteel & SunPharma to explain this on a longer time frame:

Image 3-4

Image 3-5
15

Hope this concept it clear now & you will be able to spot these zones easily to improve your trading. Practice,
practice & practice & that’s the only way to train your eyes. The only way to get better in price action trading is via
screen time. More you screen a stock or index, better you get at spotting high probability trades. After learning a
new concept, all you have to do is practice. So I leave you with an old saying “Practice makes a man perfect”.

 I shared this video few months ago as well & now sharing it again for all new followers. This video will
change the way you look at charts (especially near key Support & Resistance).
Best Price Action Trading Strategy That Will Change The Way You Trade:
https://youtu.be/asDBegQaupM

 Simplifying Supply/Demand Zone Trading

Attaching a CHEAT SHEET to learn what qualifies for a Supply/Demand zone & when they work & when
they don’t

Image 3-6
16

Image 3-7
17

Chapter 4: Simplifying Trend Trading

Based on my experience I have collected some thoughts & prepared this one pager to help you spot a trend, ride,
enter, place stop loss & define target. Enjoy!

Image 4-1

Image 4-2
18

Image 4-3

Image 4-4
19

 Question: Thanks. Very nicely explained. Always felt great significance of EMA 21. Do MA intervals
change depending on the time frame?
Answer: No. I have been trading EMA21 since many years on all time frames & it works well.
However, individual stocks behavior will be different & they may react to different MA/EMA to take
support & resistance. You need to study those cases individually.
 Question: Hi do you consider test of the blue line (21 EMA) an automatic buy in this case?
Answer: No automatic buy. You have to observe how price is reacting to it. Sometimes price touches it &
bounce, sometimes it doesn’t come to it at all and sometimes it penetrates it & reverses above or below
from it. Watch out for reversal candles before you initiate the trade.

Chapter 5: Multi-time-frame trading

Sharing a new #PriceAction strategy to trade on multi-Time frame setup. This will help you time your entries in
context to the larger trend/structure. Trust it will improve your trading significantly!

Image 5-1

Understanding market structure & supply demand zone can help find good trades when pullback occurs in higher
timeframe in an established trend. Draw S/D zones & wait for a suitable entry on lower TF. Here are few timeframe
combinations you can try

M/W/D

W/D/H1

D/H1/15M

H1/15M/5M
20

Image 5-2

Image 5-3
21

Image 5-4

Image 5-5
22

Chapter 6: How to exit your trades

As promised here is the high level blueprint of "How to exit your trades". I tried to keep it as simple as possible. Hope
this will help you time your targets & SL better in future trades.

Happy Learning!

Image 6-1

I am sharing 3 methods to exit a trade:

1. Stop Loss: Can be above (for shorts) or below (for longs) the following
a. EMA/MA
b. Trend Lines
c. Channel
d. Supply/demand zones
23

e. Swing high/low
f. Previous candle
g. Fractals
h. Finally ATR (Popular)

2. Trailing Stop Loss

a. Previous candle high/low
b. Above/below recent HH/HL/LH/LL
c. EMA 5/10/21

3. Targets
a. Previous swing high/low
b. Previous supply/demand zones
c. Channel high/low
d. Fibonacci extension or retracement

Chapter 7: Pullback Vs Reversals

My quick thoughts & experience on how to trade Pullbacks Vs. Reversals. Hope it will help you improve your trading
to a great extent. Happy Learning!

Image 7-1
24

Image 7-2

Image 7-3

 Question: The last line in table is not understood correctly, can you pl explain this for pullback case?
(Best Time to Trade)
Answer: After a breakout, normally price comes back to test the BO levels. This helps in validating
whether the BO was real or fake. This is called 1st pullback after BO. If it is meeting 1 or more conditions
mentioned in the table, then you can make an entry to ride the new trend.
 Question: Can you please share this volume AFL code
Answer: You can download it from here: https://drive.google.com/drive/u/1/folders/1_sTXrouH68-t-
I2taeqE8jKkK2WePCst
25

Chapter 8: Trading price action with Fractals (A complete Trading System if

followed religiously)
Sharing a high probability #PriceAction setup based on Fractals. It can act as a confluence or additional confirmation.

Image 8-1

 Question: How to calculate higher and lower fractal?

Answer: An up fractal forms when a candle has 2 candles to the right with 2 LH & at least 2 candles to
the left with 2 further LH. A down fractal forms when a candle has 2 candles to the right with HLs & 2 in
the left with 2 further HLs. It’s a 5 candle pattern where close of 5th is must.
 Question: Sir can we enter only in first BO up side of fractal or can enter 2nd and 3rd BO up side in 15
min chart
Answer: That you have to practice & figure out what works & what doesn’t. Fractals are mere a tool to
support price action trading to make immediate support & resistance look easy on eyes. Else you have to
spot them with some efforts. Don’t just go with buy/sell setup & test what works.
26

Chapter 9: Simple Price action trading strategy (Build your own system based on
this base)

I am sharing one simple strategy of #PriceAction trading -

1. Define structure

2. Mark supply & demand zones

3. Draw trendlines or pattern as applicable

4. Wait for price to reach key levels (pivot high, low, TL)

5. Check for any confluence

6. Finally check for reversal

The objective of this setup is to trade ONLY your favourite setup or when price reaches your predefined levels in
marked zones. Post price confirmation, you need to time your entry.

Practice this setup & u won't need anything else ever. That's it. Isn't it simple??

 Question: I could understand all the points, thank you!! But what do you mean by define structure?!
Answer: Define structure means, look to the left and watch for pivot high & lows. Check if price is
making higher highs and higher lows or making lower high and lower lows. This helps in understanding
the trend & direction.
Then watch for supply/demand zones & trade. Keep it simple!
27

Chapter 10: Price & volume relationship

28
29
30
31
32
33

Chapter 11: Money management & Risk management simplified

34
35
36

Chapter 12: Tips for working professional on day trading

Question: Hi PAV, I don’t know your name, but admire a lot of your effort for knowledge sharing. Also share one
thing, how do you manage trading and job together? I am not able to manage both, also have no idea how to do it.

Answer: Thank you for your kind words. Good question & I am sure lot many other IT professionals are struggling
with this situation so let me share what I follow.

With 2 growing kids (14Y & 10Y) & a very high pressure, high visibility senior level job at one of the top IT companies,
my schedule is always crazy but due to my passion towards capital markets I manage my time to do analysis & trade.
Here is what I follow religiously –

1. I do all my analysis EOD basis & remember the stocks I need to trade next day & their key levels of
support/resistance

2. I set alerts in IIFL mobile app with Buy above, Short below levels so that I don’t need to track these during the day

3. Once I get the alert I will enter into a trade (ONLY if I am free from office work) else I don’t trade & I focus on my
work because that’s my primary bread & butter & I don’t compromise on quality of work

4. I don’t force myself into trades unless I see my setup being formed
37

5. Since my primary analysis is on EOD, I now look at Hourly & 15M charts quickly to check if everything matches my
lower TF setup. If yes, then I take trade else I give it a pass

6. I only put my SL & leave the trade. This helps me control my risk & I keep targets open

7. Based on target levels I set new reminders quickly & get back to work. Let the app do its work

8. I book profits only if I get target alert else I don’t bother. Towards the end of the day I review my open trades
quickly & take final decision to close or carry.

What is important here -

a) HOME WORK previous night

b) Not trading daily

c) Knowing key levels & trade on alerts only

d) Not hunt for any new trades during the day

e) Manage my risk via strict SL

f) Keeping targets open as per RR 1:2

g) Above all, focus 100% on office work

Question: Thanks for sharing strategy, I am curious how you would select your stock what you are going to trade
tomorrow? Is there any strategy behind choosing the stock?

Answer: I trade in limited stocks so I don’t need to worry about stock selection. I have a list which is pre-selected
based on my trading criteria & I know key levels of those stocks by heart. For others I recommend building a scanner
based on the setup they look for to trade.

Question: Thanks for sharing the experience. But don't you get distracted after taking a trade?? Because I usually
tend to watch screen more after taking the trade. I know it's comes with experience but if you have any suggestions
please share. Thank you!!

Answer: As long as your loss is fixed, you shouldn’t worry. Set an alert for SL & target and stay tension free. If SL hit,
no action required, if u get alert on target price, book profits and cancel SL. Simple!

Bottom-line is - Stay focused on your office work which feeds your family today.
38

Chapter 13: Master just 1 setup

You need to master just 1 setup to make a killer living in trading. Few examples:

 Gap up/down
 BO
 Failed BO
 Bear trap
 Bull trap
 Wedge
 Flag
 Channel

Master it at such level that people quote your name to get training. Don’t try to master all, catch all. No one could
ever do & succeeded.

Learn the setup, know when it occurs, when it works & when it doesn't. Practice is so well that you can recognize it
even in your sleep. Screen time will help you get that expertise.

Finally, you got to wait patiently to see your setup & then booooom ride it and make $$$$$$$$$

Chapter 14: How to trade wicks

Treat wicks as middle finger, longer it is, more pain it can give!

They work really well in respective strength zones (like colony) for bulls & bears. If u go in other colony & eve-tease
their girl, you get a beating by dozens of people. Same way wicks work 

Image 14-1
39

 Question: One query cam you conclude bull camp or bear camp without the follow through candles after the
wick?
Answer: No. We have to watch out for the follow through action after these long wicks. Check the long
tail/wick of #BankNifty on 21st Sep (2019). If it was buying then next 1-5 days we should have seen at least
some follow through up move but what happened next?? Let’s see:

Image 14-2
40

Chapter 15: Candlesticks patterns you need to know

All you need to know about key candlestick patterns & powerful chart patterns. These are key ingredients of
#PriceAction trading so go through these nicely.

Image 15-1
41

Image 15-2
42
43

Chapter 16: What is buying & selling pressure

What is darkness - Absence of light

Same context, understand these:

1. Absence of buying - Price don't rise or falls slow with less volume

2. Selling pressure - Price falls fast

3. Absence of selling - Price don't fall or rise with less volume

4. Buying pressure - Price rises fast

Chapter 17: Build your own scanner

Build your stock scanner

If you want to get BEST results in trading, keep eyeballing charts manually & give max time for manual screening &
scrolling. This will help you understand the behavior of an individual chart & will help you strengthen your
#PriceAction skills.

Above all it will help you build your own scanner because you know what works what doesn’t. More time you do
this, more confidence you will get on your trading skills & eventually it will help you in making more money. It's a
journey you have to travel & there is no shortcut.

Every week, I keep testing new ideas & build new scanners in Amibroker which helps me scan stocks matching my
buy/sell criteria. The criteria could be any condition, any indicator, 52HL etc. You are just translating your thoughts
into a scanner to get you the results you need.

This week, I have designed/built a very simple scanner which works on the following 4 things & gives you excellent
results (I tested it on EOD)

 Fractals
 RSI
 RMI
 EMA21

Will upload on Google Drive under scanners. Test it, use it & customize it as per your need. Happy Trading!

Here is the link for Google Drive where this scanner is available along with few other powerful scanners:

https://drive.google.com/drive/folders/1XBlTXsUDy2V1gTufYtzP4EILpcrJQTJS
44

Chapter 18: 5 trade setups

There are 5 main trade setups-

1) Trend
2) Trend continuation
3) Counter trend
4) Reversal
5) Range bound

Each requires different level of expertise, has different #PriceAction & Risk:Reward.

Chapter 19: Visualize combination of 2 or more candles

Do you see a tail/wick in this picture?

If yes, where?

Guys you don't need to look beyond this picture...don't over think.. look at these 2 candles and tell whether you can
visualize any wick in this picture...simple!

Many people could see it & many couldn’t. Objective of this quiz is to help you visualize combination of candles to
take wise decision in trading. In this pic individual candles are Marubozu but when u combine them they form
Dragonfly Doji. They work best near key sup/demand zones.
45

Chapter 20: What differentiates Pro traders from Amateur traders

What differentiates Pro traders from amateurs?!

Saw this in a video by Anton Kreil sometime ago & found it really useful so took the screen shot!

Image 20-1

Chapter 21: Best timed entries

Best timed entries give desired results in 1-3 bars.

Better timed give in 4-6 bars

Good entries in 7-10 bars

If your position isn't giving results in 10 bars then you should start getting worried & may want to exit. Your view
may be wrong & you may need to give a fresh look!

 Question: Timeframe should be the one on which entry is taken, true?

Answer: Yes. If you are taking entry on 15 minutes then count 1-10 bars for 15 minutes time frame. Same
applies to other TFs as well.
46

Chapter 22: Price speaks but you need to listen carefully

Try to spot 2 things on any given chart -

1. When price fails to fall despite of a weak or bearish setup

2. When price fails to rise despite of a bullish setup

It's a sign you need to understand. Price is trying to talk to you & you need to listen. If you don’t then you know the
result.

 Question: What are the key factor and observation point for this type of failure?
Answer: Volume will start to dry & candle size (momentum) would start getting smaller.

Pay attention to the time when price resists to go down despite of a weak setup & when price resists to go up
despite of a bullish setup. Learn to listen what price is telling you rather than trading with preconceived notion.
Often we ignore these signs thus incur losses!

An Example of this concept:

Tweet in Morning: #BANKNIFTY took resistance near previous supply zone & fell to test yesterday low. However,
volume is drying near that area & it is resisting to fall. Keep a close eye on it. If it breaks today's high & trades above
it, then it will retest 2nd supply zone possibly.

Image 22-1
47

Tweet in Evening: Hope it was a timely call to cover your shorts & go long. #BANKNIFTY performed 100% as per
#priceaction & volume. This is why I always say that listen to what price is saying. It speaks for sure, all you need is
LISTEN carefully.

Image 22-2

 Question: Sir How to interpret that Pin bar with low volume?
Answer: Pin Bar at demand zone with low volume means -
Bears tried to push the price down but there wasn't enough selling pressure. Price found support at the
lower end and bulls pushed back the price up & closed higher. If there is no Supply then will little demand
also price goes up.
48

Chapter 23: How to do Breakout trading with high probability

I am sharing my view on BO Trading & the rules I follow. Hope you will find it useful to increase your edge in BO
trading.

Image 23-1

Image 23-2
49

Chapter 24: Learn the art of visualizing 2 or more candles together

Learn to visualize Pin Bar & Shooting Star (rejection patterns) & any form of these in combination of 2 or 3 candles.
These can give you good entries at or near supply/demand zones and on pullbacks to EMA21 after the breakout.

Practice until comfort level comes!

Image 24-1

Don't just go by the names, just understand the psychology behind the price action. Excellent weapon to add to your
trading armoury!

Chapter 25: How to remove fear of execution

How to overcome fear of execution:

1. Pick a system which suits your style & gives min 1:2 RR
2. Backtest thoroughly to build conviction
3. Fix max risk 1% of capital /trade
4. Start with less capital & slowly increase
5. Don’t switch entire system if you don’t get results.

Ameliorate!
50

Image 25-1

Image 25-2
51

Image 25-3

 Question: Sir, taking into consideration 1% per trade, what % would it be for a month time as Max Loss?
Answer: That you have to define yourself. It is purely dependent on an individual how much risk capacity
he/she has.
Some people stop & review their strategy at 10% capital loss & some follow higher appetite. Choose what
works for you to stay in the game.
 Question: Sir, I have one doubt, if we are in an uptrend and price is making HH HL, and it stops making new
high but still not making LL.. is uptrend still valid.
Answer: Yes it's still valid. Until it breaks the most recent higher low which has led to last higher high, the
uptrend is still valid. If price is consolidating between last HL & HH, then better wait for the breakout in
either direction and let things become more clear.

Chapter 26: Trend Strength Meter based on Moving Average slope (2 PM & 4 PM
setup)
Moving Average slope can act as a trend strength meter & if clubbed with price action rejections it can be a killer
combination. A simple yet very effective setup if eyes are trained well to spot it.

I tried to create a simple "Trend Strength Meter" based on my experience on EMA21 but it can work with other MAs
as well. If u can read a clock, you can read the strength of a trend. Keep practicing until your eyes are trained to spot
this.
52

Image 26-1

Image 26-2

 Question: How many candles to consider and Time frame in which works best? EMA 21
Answer: There is nothing fixed like this. It depends on trader to trader. Open any chart, plot EMA21 or any
other MA which you use in your trading and see with how many candles you can easily make out what's
happening on the chart. Count that candle number & stick to it.
53

Chapter 27: Face to face experience sharing session with Vivek from
StockEdge/Elearnmarkets
54
55
56
57
58
59

Here is the link to the YouTube video -

https://www.youtube.com/watch?v=-jBrW1rJNXw
60

Section B: Useful tools, Amibroker AFLs, bar by

bar commentaries, PAVQuiz
61

Chapter 1: Google drive library for useful Price Action AFL codes for Amibroker
software

@PAVLeader Amibroker AFL Library:

https://drive.google.com/drive/folders/1spAQY5Sv1u3Hnp2Ml6GZpeFMIWC6Dc0m

Contents of the Library:

1. Chart Plotting AFLs

a. AVWAP
b. Bull Bear Volume
c. Buy Volume Sell Volume
d. Ichimoku
e. Pivots
f. SuperTrend
2. IEOD 10 years Futures
3. IEOD Data 7 years
4. NSE EOD (Nov 1994 to May 2019)
5. Scanners
a. Candlesticks Explorer
b. Fractals Buy Sell
c. High Low Scans
d. Inside Bar, Narrow Range 4 & 7
e. My Favorite Scanner
f. Pivots
g. Price Rejection Candlesticks
h. Volume Scanners

Chapter 2: Bank Nifty Open Interest Analysis excel sheet

On the request from many people, I have added a MS Word document on how to interpret #BankNifty Open Interest
excel sheet. Please refer to the link below to access the files & let me know in case you have any further questions.
Hope it helps.

Link: https://drive.google.com/drive/folders/1IcN_WleC2cgoXsBHxA5Vv-acfxpYULu0

Contents of the Link:

1. Bank Nifty Options Analysis Excel Sheet

2. How to change the Link:

Please follow these steps to change the link inside –

1. Go to NSE website (www.nseindia.com)

2. Click the search drop down & select Equity Derivatives
62

3. Type BANKNIFTY & select it from the search results

4. Click on Options Chain

5. You will see the current expiry date under Expiry Date

6. Choose the next expiry date from the drop down and select the date

7. Once you select this, the URL will change automatically. Copy the URL or web link from the top

8. Now Open the BankNifty Open Interest excel sheet

9. Click on Data from the top menu

10. Click on Connections

63

11. You will see this window. Click on Properties

12. You will get this window. Click on Definition. You can also change the data refresh time from here. By default
it is 10 minutes.
64

13. Click Edit query from the new screen

14. Paste the URL you copied from NSE website here & click on Go & after the page refreshes click on Import

15. Click OK & close the window to save the new settings
65

3. How to interpret this BankNifty Open Interest Analysis file

Before we start our analysis it is important to understand / learn the basics of Open Interest. Here are the
basics –

Call (CE) – Buy when bullish, Sell/Write when mildly bullish or feel a specific level is resistance
Put (PE) – Buy when bearish, Sell/Write when mildly bearish or feel a specific level is support

Example – If your analysis says that 27000 level won’t break on the upper side in next one week, you may
write 27000 CE. Similarly if your analysis says that 26500 level wouldn’t break in next one week on the lower
side then you may write 26500 PE to eat the premium.
In Options trading, time is like ICE. With time both melts. If volatility increases then premiums go expensive
& you may witness both sides wild moves.

Let’s understand the psychology behind this Options buy/selling –

There are 2 types of participants in the market –

1. Retail (with less capital)

2. Smart money (Big fund houses -MF, HF, FII, DII etc.)

With less money, retail traders can only buy Options (CE or PE) because Options writing requires full / huge
margin just like Futures trading. Whereas on the other hand, Smart money with huge corpus can easily write
options. They are better prepared for any wild moves & they know better how to manage their risk.
So in a nutshell, when you see huge OI (open interest) getting added to a specific strike price, it means that
retail has bought and Smart money has written. Keep an eye on 2 things –

1. Which strike price has maximum OI

2. Which strike price has maximum change in OI (this helps where the action has happened
today)
Let me share an example with picture –

In the above picture for 8th March 2019 EOD data (14th March 2019 expiry) –
66

28000CE has max OI & 28100CE has max OI change

27500PE has max OI & 27000PE has max OI change

Therefore, from count perspective, 28000 will act as major resistance & 27000 will act as a major support for
next week.

However, I have added customized this sheet & added couple of more columns (PE-CE) & PCR to understand
what is happening at each strike price. This helps the actual picture at each strike.

We all know the PCR concept – If PCR is above 1 then that level is bullish (acts as support) and if PCR is below
1 then that level is bearish (acts as resistance). With this theory if you refer to the above picture, you get to
know that 27700 is immediate support because PCR is 1.81 (+ve) & 27800 is immediate resistance with PCR
as .58 (net PE-CE OI in negative).

Note:

PE with max OI acts as major support & CE with max OI acts as major resistance. At these levels Smart
money has written Options and retail has bought (sold to Smart Money).

Also watch out for -ve OI change in CE & PE. This is called Unwinding. When CE unwinding happens, it means
bulls are getting fearful that price may rise up. When PE unwinding happens, it means bears are getting
fearful that price will fall.

Hope this helps understand the overall concept cleaner & better. Let me know in case you have any
questions.

Chapter 3: Download EOD Bhavcopy – Free

Getbhavcopy is a FREE data downloader for Indian Stock Exchanges, NSE and BSE. The data is directly downloaded
from NSE and BSE servers.

Link: http://www.getbhavcopy.com/

Chapter 4: Gyan Tweets

 No high is high & no low is low in stock market so NEVER think -

Bahut badh Gaya, ab aur upar Kya jayega OR

Bahut gir Gaya, ab aur neeche Kya girega

Remember, jab Tak hai jaan, chalti rahegi dukaan.

 In Cricket, more time you spend on the pitch, you see the ball bigger & better & your ability to score
increases.
Similarly, in trading, more time you spend on eyeballing or screening the charts, better your chances are that
your charts start speaking with you. Trust me, it works!
67

 Stock market is like Rubik cube. Every time you think, you know it all, the complexity & difficulty level
changes. Better to learn the algorithm & rules so that you can solve the challenges at your own. That's the
only way you can win!

 Don't trade anything and everything coming your way. Define your setup & wait patiently for it. This will
certainly increase your win %

Keep saying -
#ApnaSetupAayega
#MaalDekarJayega

 Never use part of your day trading profits to enter a non-planned trade. Most traders make this mistake
"they think small risk hai. Even if I lose this I'll still be in profit for the day"
This feeling itself is wrong. Mostly this trade goes wrong & dents your happiness & motivation.
If you notice a pattern, half of your profits drain down this way...Boond boond se sagar bharta hai doston...A
penny saved is a penny earned..
Being disciplined & following your trade plan to the core is the key to success in trading.

Think about it...

 99% of your trading issues will be solved automatically the moment you will start "THINKING" like a BIG fund
house
Instead of trading 1 lot IF you have to trade in 1000s lots, would you trade the same way? How will you plan
things to cover your risk & make profit?

Think about it!

 When you try to catch all the trades on all timeframes on all stocks, you end up in a big mess

Focus on your setup, your timeframe & limited set of stocks. Wait patiently for the trade to come to you
rather than you chasing it. Don't let social media noise distract you!

#TradingGyan

Chapter 5: Commentary of Bank Nifty day trades

Trade 1: Feb 26, 2019

- Looks like the day low is made in #BankNifty. Use dips to buy & keep SL 10 points below DL. Above 26855 it
can test 26965.
- 26955 done. Book full profits & exit.
- There is plenty to learn from today's #priceaction move. I will share bar by bar commentary in the evening or
by night on how I picked this. Hope you will find it useful to be on the right side.
Commentary: As promised I am sharing the commentary of today's #PriceAction on #BankNifty future 15 minutes
chart. I trust you will find it useful for learning purpose.

Each bullet point is reference with the candle number for easy understanding.
68

Image 5-1

1. Gap down open, price closed below demand zone with ultra high volume. Long upper wick, signs of selling
pressure.
2. Next candle bearish with less volume than previous candle, price closed below 1st candle, small tail. Selling
pressure continued
3. Small Doji with even lesser volume. Indecision (small candle shows bears are losing steam & bulls have
started showing interest)
4. Long lower wick/tail with higher vol than prev candle & close towards the upper range of body. Shows
buying interest from bulls. Had it been a Green candle, it would have been more stronger but still its good
candle for bulls. This is signal bar but confirmation is yet to come
5. This is bullish close towards the top with good volume. Shows strength & confirms the previous buying. If
earlier candle would have had fake buying then this candle shouldn't have closed positive.
6. Small/weak inverted hammer with lesser volume. Some bears are active but are they enough to drag the
price down again? Lets see
7. Next candle broke the low of candle 6 but price couldn't fall further. Rather it rose up with long bullish
candle & close towards the high with higher vol compared to candle 6. Shows strength.
8 & 9. Next 2 candles are weak candles (upper wicks) but without any considerable volume. Possible profit
booking by weak buyers who bought near the lows.

10. Next candle super bullish rejecting all wicks in candle 8 & 9. This shows bulls are still active & may take price
further up. This hit supply zone with confluence of EMA21 & it is prudent to book some profits. Range is
between 26950-26965 hence I advised to book profits.

11. As you can see price penetrated this supply zone briefly & fell down sharply where it found support by bulls
which has pushed price higher again & this time when it broke the previous high (candle 11) above supply zone,
it rose swiftly (taken heavy SL of all bears).

As I always say context matter. Look to the left to know the supply & demand zone. Know the key levels & watch
out for price rejection or reversal candles.

Hope this is helpful. Do share your feedback.

Keep learning, keep growing!

69

Trade 2: April 2, 2019

Image 5-2

Here is the bar by bar commentary of the #BANKNIFTY 30500CE short trade I took today. As I always say that you
need to understand the context before you enter a trade so here is the context.

Overall trend on Monthly, Weekly is up & on daily/hourly it is showing the pullback signs & short term momentum
was on downside so I tried to catch this short term counter trend trade. In such counter trend trades, you need to
act swiftly as you are swimming against the big wave & at any moment trend may reverse with power & you will see
unexpected losses if you don’t keep strict SL. You can also reverse the trade in the main trend direction whenever
you see the price confirmation but that comes with experience. For newbies I don’t recommend this counter trend
trading & I strictly advise following the main trend.

Here is the bar by bar commentary for today's trade. Bullet points below represents the candle number on the chart
for easy understanding purpose. I shorted #BANKNIFTY 30500CE at 167.68 at 12:52:44 & covered at 125.75 at
14:21:57 -

1. Wide range bar with wicks both sides & massive volume & close below yesterday's low. Shows weakness but since
there is a wick at the bottom, we need to see if that was buying or selling. So we wait. No shorts yet.

2. Price tried to move up but faced some selling at the higher levels. May be those who did bottom fishing are
booking quick profits within 30 minutes of opening. Positive close but on lower side shows weakness

3. Same behavior as 2nd candle but this time weak close in Red. It means candle 2 & 3 top wicks have bears sitting so
we need to observe how far they can push the price down.

4. Some buying has come & we see a strong positive close towards the top of the candle. It means that last 2 candles
didn’t have actual selling pressure. It was simple profit booking by weak bulls. While volume is less, next candle
couldn’t pull the price up & gave a weak closing. This shows we still don’t have strong buyers & a test is pending.

5. This candle did a beautiful low volume test & closed towards the high. Signs of selling getting dried but we need to
wait for confirmation on next candle if there is a follow through buying. Normally such tests are followed by
immediate strong bull candle. As we see next candle doesn’t gave a follow up buying & made a indecision candle
with low volume. No trades yet.
70

6. This candle gave another beautiful low volume test & closed towards the high. This shows that bulls are providing
support in the lower range of this candle & won’t allow price to fall below it easily. This means that probability of
price falling down is less & a proactive/aggressive buy order can be placed above the high of candle before 6 (red
Doji). Safe buyers can still wait for the bull candle to form to take an entry.

7. Super bullish candle taking highs of all previous candles (2-6 candles) in a jiffy & closed towards the high. Bulls
must be happy to see no resistance at this moment.

8. Here they meet bears & they reject the price brutally at EMA21 which also coincides with opening candle top
wick. That's my signal which I was waiting since morning patiently (You know I always say, wait for your favorite
setup & that's what I was waiting for). See the massive sell volume which confirms that bears are residing here.

9. Aggressive bears can short on the break of this candle low which is also a nice entry but I wanted to wait for some
more time to see if bulls are making any more attempts to test the wick made in candle 8. They tried a couple of
times in the next 2 candles after 8 but beaten badly by bears again on candle 9. This confirms that bears are getting
active in this zone. See the volume here for additional confirmation.

10. This is the last attempt made by bulls to take price up but it gave a weak close & volume was also not promising.
Shows weakness.

11. Price confirmation comes here to go short. Bear candle with higher volume than previous candle & closing
towards the low. It confirms the view & we can short either at close of this candle or open of next candle.

12. I shorted at this candle & waited for price to fall further. Next candle goes up but gave a weak closing showing
bears are present in the wick area. Next candle gave a super bearish close followed by another attempt made by
bulls to pull price higher. It shows bulls are still present and defending the low of this zone.

13. This candle breaks the lows of all previous candles & rejected the prices in the top zone as well. Super bearish
close towards the lows. It also broke the opening candle low with almost the same volume. Very bearish move.
Ideally with this force price should fall much faster. Let’s see what happens next.

14. Price made a new low but found solid buyers in that zone. Bears couldn’t push the price lower & overruled by
bulls who have pulled the price higher & massive volume and positive close. This is a sign of warning for bears to exit
shorts. If it’s buying then the up move would be faster & quicker.

15. Price made another test & comparatively lower volume than previous candle. Let's wait for next bar and see if
this was real selling. I exited my trade on this candle seeing the strength of candle 14. On 5 minutes candle it also
broke the high of previous candle so better to exit.

16. Price rejected the highs of last 2 candles (14 & 15) & closed above these with higher volume. Strength confirmed.
Bears should cover their shorts quickly & they actually did which forced the price even higher & price is pushed back
towards the morning supply zone. Aggressive buyers can take a long trade here with SL below day low.

This is exactly I thought & took my trade. I waited very patiently till 12:52 PM to get my favorite setup form before I
entered. Since it was a counter trend trade I was very quick to enter & exit to avoid losses.

Hope it was helpful in understanding the psychology behind bulls & bears mindset. It is pure price action with
additional confirmation of volume to strengthen entry & exits.

Happy Learning!
71

Chapter 6: ICICIBank chart learning

I trade what I preach & I preach what I have learnt so in simple words if you practice only what I preach, you can fast
track your learning curve.

ICICIBANK has bounced from demand zone & 350CE got more than double. I will share the chart in the evening!

Attaching the daily & hourly chart of #ICICIBANK.

#PriceAction can’t be learnt simpler than this. Just using demand zone on Daily & knowing the critical levels &
checking how price behaves on Hourly can do the trick. Hope it helps you learn demand zone better.

Image 6-1

Image 6-2

Here is the summary of 8 candles:

1. Long candle, high volume, long wick, close 30% off low
72

2. Shorter than 1 with lower volume & close 70% off low

3. Even smaller candle, buying volume, close near highs (80%)

4. Bullish candle, higher volume than previous 2 candles. Absorbed all selling

5. Long top wick candle with selling pressure, close in the near the lows but bullish close. Price didn’t fall further &
broke the low of this candle in next 2 candles. Means there wasn’t much selling pressure

6. Weak candle closing near the lows but didn’t break low of 5. Also volume is lower than 5. Next candle broke the
low of 6 but on lower volume and closed in top 70% zone. Low volume test. Successful.

7. Bullish candle, higher volume than last 6 candles & closing in top 70% zone

8. Super bullish candle taking high of 5 & closed above EMA21. Reversal confirmed.

Hope you liked the analysis & learning with me!

73

Chapter 7: PAVQuiz & their explanations

Quiz 1

Image 7-1: Quiz

74

Image 7-2: Explanation

75

Quiz 2:

Image 7-3: Quiz

Image 7-4: Chart explanation

76

Image 7-5: Explanation

77

Quiz 3:

Image 7-6: Quiz

Image 7-7: Explanation

78

Quiz 4:

Image 7-8: Quiz

Image 7-9: Explanation

79

Quiz 5:

Image 7-10: Quiz

Image 7-11: Explanation

80

Quiz 6:

Image 7-12: Quiz

Image 7-13: Explanation

81

Quiz 7:

Image 7-14: Quiz

Image 7-15: Chart Explanation

82

Image 7-16: Explanation

83

Section C: Books on Price Action & Volume

analysis & people who influenced my trading
84

Chapter 1: Book recommendations

Here are some of the books I have read & they have changed my thinking & impacted my trading positively.
Therefore, I highly recommend that you read these books -

Top 5 Volume Analysis Books:

1. A Complete Guide To Volume Price Analysis By Anna Coulling

2. The Secret Science of Price and Volume: By Tim Ord
3. Master the Markets by Tom Williams (to learn Volume Spread Analysis)
4. Trading in the Shadow of the Smart Money by Gavin Holmes
5. Trades about to Happen: A Modern Adaptation of the Wyckoff Method by David H. Weis

Price Action Books & Videos from the following trading legends:

1. Al Brooks (@AlBrooksPA)
2. Atanas Matov a.k.a. Colibri Trader (@priceinaction on Twitter)
3. Rayner Teo (@Rayner_Teo)
4. Rolf from Tradeciety
5. Galen Woods
6. Nial Fuller
7. Laurentiu Damir
8. Lance Beggs (@LanceBeggs)