Laurentiu Damir - Price Action Breakdown: Exclusive Price Action Trading Approach to Financial Markets

WHY HAVE I WRITTEN THIS BOOK?

If you are reading this, there is a goodpossibility that you have read material from me in the past. I wrote a numberof short books some years ago explaining my trading ideas and methods. Thoseshort eBooks had quite a bit of success as it turned out. One of them wasactually bestseller in its category for more than 6 months with the othersfollowing closely. I, of course, left my email address for readers to contactme. And that they did. It has been almost four years without writing anythingbut the emails keep coming every day. The most popular request I get is towrite more about price action, to publish a material where to explain comprehensivelythe price action techniques I use to trade the markets with. It has taken mequite some time as you see, to follow up on this request.

WHO IS THIS BOOK FOR?

This material assumes the reader has knowledge ofbasic functionalities of the market or markets he wants to trade. Things like howto open up a trade, how to switch between timeframes on your tradingplatform, how trading with leverage works, what is a futures contract, whatstocks are best to trade and why or what is a forex pair and which are bestto trade will not be covered in this material. With minimal effort, you canfind all this basic information freely on the internet and, to be honest, itwill probably be better organized and explained than my version of the same. Iwill be focusing solely on technical analysis with price action alone. If youhave read one of my books before you are aware of the fact that I do not liketo write just for the sake of writing. My writing style has always been to thepoint, without any trading stories or redundant information. This might havesomething to do with the fact that English is not my native language, but thefeedback I get is that this concise way of writing is a plus. Also, I dontlike telling stories and speaking off topic in my native language either.

All of this said, if you are at the very beginningwith respect to trading, I suggest you do some online searching and acquirebasic knowledge of the market or markets you want to start trading. Familiarizeyourself with your trading platform and then come back to reading this book. Aswell, this material is for people who are actually at ease with doing the hardwork of becoming a very good trader. This type of person has to be of ananalytical nature, and by no means superficial. Being profitable consistentlyin trading requires hard work. If you expect some type of extraordinarysolution that will make you rich overnight with a minimal amount of effort fromyour part then you will be disappointed. Such a thing does not exist. If youwant to become a top trader you need to work hard and be passionate about trading.The sooner you understand this, the better. You will stop fishing for the magicindicator or some sort of automated program that will do all the trading foryou and provide good returns. Instead, you will begin to concentrate all yourefforts on what really matters. Every movement that price makes, interpretingit and putting it together to help you make the best trading decisionspossible.

The trading style presented is highlydiscretionary, you definitely cannot wrap it into an expert advisor orsomething of the sort. There is nothing mechanical in the way I trade. Everytrade has its own particularities, your trained eye and experience will be thebest tool you can have to make trading decisions. I suggest that you treattrading like a business and do the hard work, which is analyzing the priceaction on a daily basis. It is the only way if you want to become profitableconsistently and eventually make a living out of trading.

One more thing I would like to add here concernstimeframes. You can use what is presented in this book on any timeframestarting from the five minutes timeframe up. If you prefer a swing tradingapproach to fit your busy schedule you can use the one hour or four hourcharts, if you have more time on your hands to dedicate to trading, you can usethe thirty minutes charts or even the fifteen or five minutes zoomed outcharts. I do not recommend trading a timeframe lower than a zoomed out fiveminutes one because it will expose you to the daily trading noise and randommovements, to the point where your trading will start to resemble gambling.

WHY SHOULD YOU READ IT?

First of all, let me say that this book will beorganized in chapters, each building on the next one. Every concept, technique,trading idea will be thoroughly explained. The logic behind it, what purpose itserves and how you can benefit from each concept or technique in actual tradingwill also be explained. I will use a lot of chart examples, and I do mean alot, because the best way to learn is to visualize what is being discussed.

As you surely have guessed from the title, this isa book about price action, about price movements, how to interpret them, how toput them together to formulate trading ideas. The type of trading you willlearn by reading this book applies to all financial markets. This is because Ido not use any technical indicators whatsoever or some other type of tools thatcan be suitable for some markets while, at the same time, not applicable inothers. I do not use a sort of market dependent technical analysis techniquethat can be more efficient in one market and less in another because of marketparticularities. If you have read something of mine in the past you know that Ido not recommend using technical indicators in your trading as they are all constructedon past price action that you can see with your naked eye on the chart. Theyare all lagging. The best indicator you can have is your brain analyzing theraw price movements. This doesnt necessarily mean that you cannot make someprofits trading with indicators. However, my experience is that these profitswill not be consistent. You will win some, you will lose some, you will losesome more, depending on how the market is moving. If you are not completely newto trading and you have tried out some of the most popular technical indicatorsyou probably know what I mean.

The type of trading that will be discussed isbased on the underlying forces that make the price of any particular financialinstrument move up or down. That is supply and demand and crowd behavior. Thetechniques you will learn are based solely on reading the price action on thenaked chart in front of you, with the main purpose of discovering what are thebuyers and seller doing, and what are they most likely to do next. The pricemovements on any financial market have one common denominator. Crowd behavior.This crowd consists of people who buy and people who sell. The selling andbuying process is what creates the price movements you see on any chart. Thepeople who buy and sell are called traders but, before being traders, they arepeople with emotions which always exhibit the same type of predictable behaviorwhen engaging in the processes of buying and selling. This being said, you canuse the methods learned here to trade any electronically traded financialinstrument. If that instrument is traded by people like you and me, with allsorts of emotional behavior, it does not matter if it is the Stock market, the Forexmarket, Futures, Commodities, Indices, Options, Bonds, CFD, ETF and so forth. Itwill work just as good in any of these because peoples fear or greed makesthem act in predictable patterns.