Price Action Academy

📚 Price Action Masterclass

Institutional SNR, Market Structure, Sweep-and-Reclaim entries, and Stop Loss engineering.

SNR Basics

Market Structure

Sweeps

Entry Method

Stop Loss

Position Sizing

Pivots

Support & Resistance (SNR)

SNR levels are price zones where institutional orders are resting. They are not precise lines — they are zones where large buy or sell orders accumulate over time.

✅ What Makes a Valid SNR Level

• Price reversed sharply from this level 2+ times in the past
• The reversals left long rejection wicks (evidence of absorption)
• The level aligns with a round number, previous high/low, or Exness pivot

Exness Pre-Calculated Levels

The levels displayed on your Exness chart (Resistance 1/2, Pivot, Support 1/2/3) are generated by Trading Central. They are based on the previous period's High, Low, and Close using the Classical Floor Trader Pivot formula.

P = (H + L + C) / 3
R1 = 2×P − L
S1 = 2×P − H

The red downward arrow on your Exness chart at the Pivot level (3,994.00) means Trading Central's algorithm has detected that price closed below the pivot on the previous candle — this flips its directional bias to 100% bearish, targeting S1 (3,901), S2 (3,878), and S3 (3,855).

⚠️ Critical Rule

When the Trading Central arrow points DOWN at the pivot, do NOT trade longs until price reclaims the pivot. The red arrow on your chart was visible before you entered — this was a sell signal, not a buy setup.

Market Structure

Market structure tells you which side institutions are positioned on. It is the most important filter before any SNR trade.

The 4 Key Concepts

HH — Higher High

Bullish momentum

Price makes a swing high above the previous swing high. Trend is up.

HL — Higher Low

Bullish pullback buying zone

Price pulls back but holds above the previous swing low. This is where to look for buys.

LH — Lower High

Bearish momentum (failed rally)

Price bounces but can't exceed the previous high. Sellers are in control.

LL — Lower Low

Bearish breakdown

Price breaks below the previous swing low. No buying until structure shifts.

BOS vs. CHoCH

BOS — Break of Structure (Continuation)

Price breaks in the direction of the existing trend. In a downtrend, every LL is a BOS — confirming the trend continues. Do not buy BOS candles in a downtrend.

CHoCH — Change of Character (Reversal Signal)

In a downtrend, a CHoCH occurs when price breaks ABOVE the most recent LH. This is the first sign that bulls are stepping in. Only after a CHoCH should you start looking for long setups.

Your Gold situation: On November 13 at 3,931, Gold was printing LH → LL → LH → LL repeatedly on the 4H chart. This was a bearish structure — every bounce was a shorting opportunity, not a buying one.

Liquidity Sweeps vs. Genuine Breaks

This is the most important skill in price action trading. It is the difference between a \$3 stop loss and no stop loss.

Liquidity Sweep (The Setup You Want)

Step 1

Price approaches support (e.g. 3,880)

Watch from a distance. Do not touch the button yet.

Step 2

The wick pierces below support

A candle spikes below 3,880 (e.g. wick to 3,876.50). This hunts retail stop losses placed just below support. Banks need this liquidity to fill large buy orders.

Step 3

The candle CLOSES back above support

The candle body closes at 3,881.00 — above 3,880. This confirms institutional absorption. This is your entry signal.

Step 4

Entry on the close of the reclaim candle

SL = 3,876.50 − \$1.50 = 3,875.00. Distance = \$6.00. On 0.01 lot = \$6 risk.

Genuine Break of Structure (Stay Out)

🚨 BOS Identification Rule

When a 4H (or 1H) candle closes its BODY below the support level with no reclaim — this is a genuine breakdown. The level has been destroyed. Price will seek the next support (S2, S3). Absolutely no buy entry.

The key distinction: A sweep leaves a long wick. A genuine break leaves a full candle body below the level.

The Sweep-and-Reclaim Entry

This is the institutional entry method that solves your stop loss problem. It eliminates front-running and gives you a tight, logical SL.

The 4-Step Protocol

Step 1 — Identify the Level

Pick a valid SNR zone

Use Exness pivot levels (S1, S2, S3) or a previous significant swing low with 2+ clear bounces.

Step 2 — Wait for the Wick

Let price pierce the level

A candle must wick below the support. This triggers stop losses of retail buyers and fills institutional buy orders. Do not enter during the wick.

Step 3 — Confirm the Close

Wait for the CANDLE BODY to close back above the level

The candle body must close above support. If it closes below — it's a BOS, not a sweep. Walk away.

Step 4 — Execute

Market buy at candle close

SL = Sweep Low − \$1.50 buffer. TP = Resistance 1 (at minimum). This gives 1:3 to 1:5 R:R.

💡 Why This Solves Your SL Dilemma

Your problem: "SL too far away if placed below SNR."

The fix: By entering after the sweep, your SL is placed only \$1.50 below the wick low — not below the whole SNR zone. The wick low IS the new stop reference. SL distance = typically \$3–\$8 on Gold. At 0.01 lots = \$3–\$8 total risk.

Stop Loss Engineering

The correct stop loss is not about being "tight" — it is about being placed at the level that proves your thesis wrong.

The Buffer Formula

SL = Sweep_Low − Buffer
Buffer = $1.50 (Gold standard)

Example:
Sweep Low = $3,876.50
SL = 3,876.50 − 1.50 = $3,875.00

Why $1.50 Buffer?

The \$1.50 buffer accounts for spread (typically \$0.30–\$0.50 on XAUUSD) plus execution slippage during volatile moments. If the wick went to 3,876.50, your SL at 3,875.00 is safely below — if price returns below that level, the sweep has FAILED and you should be out.

🚫 Why You Must Never Trade Without SL

Your open gold positions at 4,089 and 4,001 are currently −\$158 and −\$70 with \$7.50/night in overnight fees. After 22 trading days that is \$165 in fees alone. With a proper SL at \$3,875 (using 0.01 lots), your maximum loss would have been \$3–\$6. The difference: \$3 vs. \$300+. This is not a strategy — it is gambling.

Position Sizing

Correct position sizing is the only way to control risk precisely. Never decide lot size by gut feel.

The Gold Lot Size Formula

Lot = Risk_$ ÷ (SL_Distance × 100)

Gold contract = 100 oz
1 pip = $1 per 0.01 lot

Example:
Risk = $25
Entry = 3,881.00
SL = 3,875.00
Distance = $6.00

Lot = 25 ÷ (6 × 100) = 0.04 lots

📐 Risk Per Trade Guidelines

• Account \$1,000–\$5,000: Risk 0.5%–1% per trade
• Account \$4,500 (yours): Max \$22.50–\$45 per trade
• Start conservative: Use \$20–\$25 until 10 consecutive wins
• Never risk more than 2% regardless of confidence

Exness Pivot & Camarilla Levels

The Exness pre-calculated levels are Trading Central Classical Floor Pivots. The Camarilla system (used by institutional desks) adds tighter reversal zones.

Classical Pivots (Exness Levels)

P = (H + L + C) ÷ 3
R1 = 2P − L R2 = P + (H − L) R3 = H + 2(P − L)
S1 = 2P − H S2 = P − (H − L) S3 = L − 2(H − P)

Camarilla Pivots (Tighter Zones)

H4 = C + (H − L) × 1.1/2
H3 = C + (H − L) × 1.1/4
L3 = C − (H − L) × 1.1/4
L4 = C − (H − L) × 1.1/2

🎯 How to Use Camarilla Levels

• Price between L3 and H3 = Ranging market. Fade the extremes (buy L3, sell H3)
• Price breaks above H4 = Genuine bullish breakout. Buy the pullback to H4
• Price breaks below L4 = Genuine bearish breakdown. Sell the pullback to L4

Why the $4,001.74 Trade Broke Down