Things that are important to know in Trading

[fighter2627]

1. Fair Value GAp(FVG)  If the price moves aggressively,  it leaves an imbalance between candles. Price often come back to fill that gap before continuing.



2. Liquidity Sweep  Price takes stops above highs or below lows just to reverse after. Trading grabs liquidity before the real move.  



3. Market Structure  Uptrend means higher highs,  and higher lows,  Downtrend means lower highs, lower lows. Structure tells you the direction.



4. Break of Structure(BOS)  In an uptrend after a pullback,  when price breaks the previous high,  that's a break of structure.  It confirms continuation.



5. Order Block(OB)  The last opposing candle before strong impulsive move.  That's where institutions entered and that where price often returns.



If any of the traders could master this probably our trading stops being random What is Fair value gap(FAV)? https://www.fluxcharts.com/articles/fair-value-gaps-fvg-explained
what is Liquidity Sweep? https://www.tradingview.com/chart/EURUSD/q8GInP0z-What-Is-a-Liquidity-Sweep-and-How-Can-You-Use-It-in-Trading/
What is Market Structure? https://bookmap.com/blog/what-is-market-structure-in-trading-forex-market-structure-trading-explained
What is Break of Structure?  https://www.tradingview.com/chart/XAUUSD/yaWPnq9H-Simple-Break-of-Structure-BoS-Trading-Strategy-Explained/
what is Order block?  https://www.fluxcharts.com/articles/order-blocks-ob-explained

[Oshosondy]

If any of the traders could master this probably our trading stops being random Smiley

These are good in trading but just like indicators, they can fail at anytime. Traders need to have strategies to minimize losses and also making sure that he earn money than lose money in trading.

Another thing thaybis very important is to know that crypto can be different from stocks, forex and commodities trading. I traded gold, silver.ams oil and I know that they are somehow different. I make more money in silver.

[Stepstowealth]

...

It is also very important that you gain some knowledge in risk management after you learn all these strategies that you can benefit from because if you do not learn how to manage your risk, you will only be learning strategies that will help you loose your money faster.

For anyone new to trading, I think risk management should be something they need to learn first because a new trader who ca master risk management will be able to avoid blowing their account.

[tygeade]

Good information, and it is definitely important for anyone getting into trading to gain knowledge such as this if they are serious about their trading. However, one must not forget that such patterns and candlestick indicators don't always work the same way, they might work at times, but sometimes the market behaves differently, and that is when you need to have a backup plan, and a backup plan in trading is to close a trade before it gets too late, and that requires one to have knowledge about risk-management techniques as well.

So many traders who are new in the space often underestimate the importance of risk-management techniques and features such as stop-loss, because they believe they have learned technical analysis, so they don't need to use stop-loss because they are making trades based on their knowledge, it is good to be confident, but overconfidence will often cost you, and when you are in a very volatile and unpredictable market, you should always be cautious if you don't want to lose a lot of money because of unexpected market swings.

[Charles-Tim]

It is also very important that you gain some knowledge in risk management after you learn all these strategies that you can benefit from because if you do not learn how to manage your risk, you will only be learning strategies that will help you loose your money faster.

Risk management is the most important thing in trading. Any trader that is trading that does not follow risk management, the trader may lose huge amount of money. Also risk management can help a trader to be a patience trader. Not all the money that we have can be used to trade, only little amount like 10% is enough. All these can be seen if someone is following good risk management plan.

[Faisal2202]

1. Fair Value GAp(FVG)  If the price moves aggressively,  it leaves an imbalance between candles. Price often come back to fill that gap before continuing.

These seem like smart money concepts and pretty basics too but sometimes most of us don't remember the indicators with their names, but they do remember the market movement after detecting one of the patterns you shared. I also forgot a few names but thanks to you, I have revised them now. Anyway, these concepts are best for predicting the next candles but remember that they are very inefficient sometimes.

Literally, especially the first one, we also call it correction sometimes and this concept is valid in a few cases only, and I take it as valid when hype is real and market is pumping while there is no volume and hype but still I am seeing this that means the gap is going to be filled sooner and it has happened a lot of times now.

By the way, great post OP, can you turn this into a series? I have always wanted to have similar series here in trading section, I could not get enough time to make oney by myself if you have some time, then could you keep posting similar topics? (It sounds like a request but it is not haha)

[Jegileman]

All of the above listed plays a vital role while taking on any trade. Some of them are just concepts, while some of them are strategies that you’ll need to point out and see before validating a potential trade entry. Fair Value Gaps are created after an impulsive move, signalling a potential trade coming back to that zone to take. I see liquidity sweep as a presence of institutional moves around that zone, which signals a potential trade reversal after taking out the stop loss of many retail traders in that region.

Order blocks are created after an impulsive move, price after filling up the fair value gap tap into the order block and the trades gets going in the direction of the reversing order it triggered the Order Block from. As a trader, I’m most familiar with most of this and is what we see and learn from the charts lately.

[Jatiluhung]

Liquidity Sweeps and BOS rarely fail to confirm price movements in the market. So, while patterns like these may seem like basic knowledge for a trader, it is precisely these fundamental concepts that must be remembered and applied in every trade we make. Understanding how chart patterns form is also crucial, beyond just recognizing the patterns themselves. This allows us to interpret the underlying reasons behind price movements in the market and gauge the sentiment of market participants.

And what the OP mentioned is actually mostly part of the confirmation patterns for several common chart patterns we typically use in the market. Just don’t rely 100% on patterns alone, because sometimes market patterns can deceive us. Always also look at trading volume, sentiment levels, and fundamental news that can have a significant impact on the market.

[Alphakilo]

...If any of the traders could master this probably our trading stops being random.

I do think earnestly that it is when traders stop looking at the charts and instead focus on hunting for liquidity, that the randomness begins to fade.
You actually focused more on how price interacts with institutional interest and it's good,  but a potential successful trader would be wise to know these five pillars you stated and learn to trade with liquidity instead of making the same mistakes of setting their stop loss where institutions are clearly looking for liquidity to take advantage of.

[AmoreJaz]

All of the above listed plays a vital role while taking on any trade. Some of them are just concepts, while some of them are strategies that you’ll need to point out and see before validating a potential trade entry. Fair Value Gaps are created after an impulsive move, signalling a potential trade coming back to that zone to take. I see liquidity sweep as a presence of institutional moves around that zone, which signals a potential trade reversal after taking out the stop loss of many retail traders in that region.

Order blocks are created after an impulsive move, price after filling up the fair value gap tap into the order block and the trades gets going in the direction of the reversing order it triggered the Order Block from. As a trader, I’m most familiar with most of this and is what we see and learn from the charts lately.

Trading requires patience and due diligence from the trader himself. Without such dedication and knowing those vital factors in trading, I would say, it is quite easy to lose funds in trading. So for me, if you don't have enough time, better not go into trading. There are some unwritten rules that you need to keep an eye on. Like you need to keep up with the updates of the coins you are holding onto, otherwise, you can easily be liquidated because most alts lose its value without a warning.
Trading is not for all so to speak. If you have less time to devote into this task, better not put your money into various alts. Just stick to one or two that you think won't disappear overnight.

[joeperry]

Nice information and nice graphics, sometimes I forgot these things. Well honestly, there's a lot of important things to know in trading and these are just some of it and in reality those things comes not as like that, there are times that it already happened or it's happening and you don't have idea since the candles are not as like in the image but the most important thing is the concept behind it that should be understand. Now, I would like to add one important thing I learned in trading and it is that, no matter what your strategy win rate is if the risk and reward ratio is not good, in long term you will just going to lose.

One thing I realized in trading, that even though your win rate is around 40% if you have good R:R such as 1:2 or 1:3, you would earn in long term.

[fighter2627]

1. Fair Value GAp(FVG)  If the price moves aggressively,  it leaves an imbalance between candles. Price often come back to fill that gap before continuing.

These seem like smart money concepts and pretty basics too but sometimes most of us don't remember the indicators with their names, but they do remember the market movement after detecting one of the patterns you shared. I also forgot a few names but thanks to you, I have revised them now. Anyway, these concepts are best for predicting the next candles but remember that they are very inefficient sometimes.

Literally, especially the first one, we also call it correction sometimes and this concept is valid in a few cases only, and I take it as valid when hype is real and market is pumping while there is no volume and hype but still I am seeing this that means the gap is going to be filled sooner and it has happened a lot of times now.

By the way, great post OP, can you turn this into a series? I have always wanted to have similar series here in trading section, I could not get enough time to make oney by myself if you have some time, then could you keep posting similar topics? (It sounds like a request but it is not haha)

Yes, Sir, it is indeed actually a series, so that while I study trading, I will also share what I learn with those I read and understand from those I read various articles and topics here on the forum, even though it is not that easy to understand right away but at least I understand what I read.

It is better that we can share a little knowledge than others who know a lot about trading but have no knowledge to share about the trading they know.
It is better to be generous than never, isn't?

[waseembakr]

In trading, it’s important to understand risk management, market trends, timing, and emotional control, as well as how to properly analyze data instead of relying on guesses or hype. Many beginners focus only on profits, but long-term success comes from discipline, research, and consistency. These skills are also valuable beyond trading—for example, logistics companies in Pakistan depend on similar principles like data analysis, timing, and efficient decision-making to keep operations running smoothly

[AmoreJaz]

Nice information and nice graphics, sometimes I forgot these things. Well honestly, there's a lot of important things to know in trading and these are just some of it and in reality those things comes not as like that, there are times that it already happened or it's happening and you don't have idea since the candles are not as like in the image but the most important thing is the concept behind it that should be understand. Now, I would like to add one important thing I learned in trading and it is that, no matter what your strategy win rate is if the risk and reward ratio is not good, in long term you will just going to lose.

One thing I realized in trading, that even though your win rate is around 40% if you have good R:R such as 1:2 or 1:3, you would earn in long term.

This is why the more you know the alts you are trading with, the higher chance that you will gain profit from it. It is not an overnight task that you need to know the tricks in trading.

In my years here in crypto, trading requires you to -
> learn about the alt, its background
> check the liquidity
> is it seemingly a fly-by-night project?
> how about the developers behind?
> any solid use case?

So it means, it is not about just listening to the hype, but more on educating yourself about the real status of the project. So you know what to do when you finally execute the trade.

[Alpen]

If any of the traders could master this probably our trading stops being random

Chart patterns lack clear-cut rules. If you ask ten FVG (Fair Value Gap) analysts to look at the same chart, you’ll likely get ten different opinions.

A trader needs simple indicators with unambiguous signals for several reasons:

• Formalization: They make it easy to build a strategy and codify rules.
• Automation: Clear rules can be programmed into a trading bot.
• Verification: A bot’s performance can be objectively tested on a demo account.

Good luck trying to spot a "valid" FVG when you’re tilted after a loss or blinded by Bitcoin euphoria. Your bias will ruin your accuracy. Meanwhile, look at a standard Bollinger Band. No matter your emotional state, you can’t "unsee" a price crossing the lower band—it’s an objective long signal.



Bitcoin is too straightforward for overly complex patterns. It grows for three years and crashes into a "crypto winter" on the fourth. That’s the core cycle. All you really need is that knowledge and a solid DCA strategy.

[Perfectbaby]

If any of the traders could master this probably our trading stops being random Smiley

These are good in trading but just like indicators, they can fail at anytime. Traders need to have strategies to minimize losses and also making sure that he earn money than lose money in trading.

Another thing thaybis very important is to know that crypto can be different from stocks, forex and commodities trading. I traded gold, silver.ams oil and I know that they are somehow different. I make more money in silver.

I think the most important thing should be a good strategies and also to reduce on how often they do lose money while trading and also increase the chances of making more profits on trading. There are people who are not in forex or stock trading but they could be that good in crypto trading especially trading with bitcoin pair with any other trusted coin such usdt or ETH could reduces their chance of losing while trading because those are more trustworthy coin.

[Oshosondy]

There are people who are not in forex or stock trading but they could be that good in crypto trading especially trading with bitcoin pair with any other trusted coin such usdt or ETH could reduces their chance of losing while trading because those are more trustworthy coin.

Yes, trading a reliable coins is very important to traders, this is one of the means it can be known that they want to be patient and not  greedy traders. But it is also good to mention that they should use low leverage. Someone can trade a very good coin, but not being patient with the leverage the person is using. You will see some traders that are trading good coins, but they are using as high as 50x leverage which is the cause of their trading funds liquidation.

[Perfectbaby]

There are people who are not in forex or stock trading but they could be that good in crypto trading especially trading with bitcoin pair with any other trusted coin such usdt or ETH could reduces their chance of losing while trading because those are more trustworthy coin.

Yes, trading a reliable coins is very important to traders, this is one of the means it can be known that they want to be patient and not  greedy traders. But it is also good to mention that they should use low leverage. Someone can trade a very good coin, but not being patient with the leverage the person is using. You will see some traders that are trading good coins, but they are using as high as 50x leverage which is the cause of their trading funds liquidation.

That is right, they should also try to understand the types of trading that suits them the best. Let say there are some people who are good with the spot trading, and there are also some people who loves trading on future market, and that is not for everyone out there more especially those who are joining trading newly. They should know where that best suits them the most before rushing into trading to trade on the wrong market where they would end up losing everything they funded on their trading account.

[juttsab@]

Good  summary for smart money concepts. We are using blindly those RSI and moving averages . But learning is the real part how to read price is powerful. OP explained it correctly that if the  market moves too fast it leaves aggressive imbalance between those candles and than price always come back to fill those gaps. We will liquidate our capital If we don't understand liquidity sweeps. In reality Market structure is too basic. Higher highs and higher lows tells about the trend direction. But at some point even these concepts fails. On every single trade we have to protect our capital. These ideas give us edge but not profit for sure . Crypto is beyond those technical analysis.

[Tungbulu]

That is right, they should also try to understand the types of trading that suits them the best. Let say there are some people who are good with the spot trading, and there are also some people who loves trading on future market, and that is not for everyone out there more especially those who are joining trading newly. They should know where that best suits them the most before rushing into trading to trade on the wrong market where they would end up losing everything they funded on their trading account.

That's right, what might work for others might not work for you, which the best option for one to do, its to understand the type of trading that is easy for them to partake in, because some people fail to get the idea that in anything that involves investing money, they have to be mindful and careful about it, for them not to be in a compromise situation, where they have to lose everything and end up feeling depressed. When they could have do the right thing, even though it might not make sense to them.