LFX

MANIPULATION
PATTERNS WITH
SMART MONEY
PSYCHOLOGY
EXPOSED
BY LEMA JAMES

The Smart Money has successfully made market manipulation a lucrative business
putting thousands of retail traders at loss. This publication will take you through
key manipulation price action setups with a detailed illustration and explanation of
what the Smart Money are doing in the background. This publication will come
with a few tasks aimed at improving your understanding of the markets. I credit
part of my knowledge to Mr. Ayanda Ayih Sokhela, the founder of Forex World
Changers (FXWC) and I believe this publication will change your approach of
market analysis.
 SHORT RULES OF THIS eBOOK
1. This book is priced at 20$ (twenty dollars)
2. This book after purchase, comes along with a free market manipulation
pattern handout and a folder of PDFs that built up my trading strategy
3. You are not allowed to sell this book
4. This book is under LFX

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 TABLE OF CONTENTS
SUPPLY & DEMAND ................................................................................................................................. 5
Smart Money psychology on Supply & Demand ..................................................................................... 5
Summary ................................................................................................................................................... 6
Trading Approach ..................................................................................................................................... 6
TASK ONE ............................................................................................................................................... 7
COMPRESSION........................................................................................................................................... 8
Smart Money psychology on Compression .............................................................................................. 8
Summary ................................................................................................................................................. 10
Trading Approach.................................................................................................................................... 10
TASK TWO ............................................................................................................................................ 11
QUASIMODO PATTERN ......................................................................................................................... 12
Smart Money psychology on Quasimodo ............................................................................................... 12
Summary ................................................................................................................................................. 13
Trading Approach.................................................................................................................................... 13
TASK THREE ............................................................................................................................................. 14
SUPPORT RESISTANCE FLIP (SRF) ...................................................................................................... 15
Smart Money psychology on Support Resistance Flip (SRF) ................................................................... 15
Summary ................................................................................................................................................. 16
Trading Approach ................................................................................................................................... 16
TASK FOUR .......................................................................................................................................... 17
RESISTANCE SUPPORT FLIP (RSF) ...................................................................................................... 18
Smart Money psychology on Resistance Support Flip (SRF) ................................................................ 18
Summary ................................................................................................................................................. 19
Trading Approach ................................................................................................................................... 19
TASK FIVE ............................................................................................................................................ 20
FAKE OUT ................................................................................................................................................. 21
Smart Money psychology on a FAKE OUT ........................................................................................... 21
Summary ................................................................................................................................................. 22
Trading Approach ................................................................................................................................... 23
TASK SIX............................................................................................................................................... 23
SMART MONEY PYSCHOLOGY ANALYSIS REVIEW ...................................................................... 24
CONCLUSION ........................................................................................................................................... 25
 ACRONYMS
CP COMPRESSION
LQ LIQUIDITY
MPL MAXIMUM PAIN LEVEL
QM QUASIMODO
QML QUASIMODO LEVEL
R RESISTANCE
S SUPPORT
SRF SUPPORT RESISTANCE FLIP
RSF RESISTANCE SUPPORT FLIP
RBD RALLY BASE DROP
DBD DROP BASE DROP
DBR DROP BASE RALLY
RBR RALLY BASE RALLY
FTR FAIL TO RETURN
FTB FIRST TIME BACK
FOZ FAKE OUT ZONE
L LOW
LL LOWER LOW
H HIGH
HH HIGHER HIGH
SM SMART MONEY
IT INSTITUTIONAL TRADER
 ___________DISCLAIMER___________

THIS PDF IS MEANT FOR EDUCATIONAL PURPOSES ONLY. FOREX

TRADING CARRIES A HIGH LEVEL OF RISK, AND MAY NOT BE
SUITABLE FOR ALL INVESTORS. PAST PERFOMANCE IS NOT
INDICATIVE OF FUTURE RESULTS. THE HIGH DEGREE OF LEVERAGE
CAN WORK AGAINST YOU AS WELL AS FOR YOU. BEFORE DECIDING
TO INVEST IN FOREIGN EXCHANGE YOU SHOULD CAREFULLY
CONSIDER YOUR INVESTMENTS, OBJECTIVES, LEVEL OF EXPERIENCE
AND RISK APPETITE. THE POSSIBILITY EXISTS THAT YOU COULD
SUSTAIN A LOSS OF SOME OR ALL OF YOUR MONEY AND THEREFORE
YOU SHOULD NOT INVEST MONEY THAT YOU CANNOT AFFORD TO
LOOSE.

lema james
 SUPPLY & DEMAND
Supply and Demand are the major forces that move price in the markets. Prices
drop at supply and prices rise at demand. Supply zones form from the Rally Base
Drop (RBD) and Drop Base Drop (DBD) price movements while Demand zones
form from the Drop Base Rally (DBR) and Rally Base Rally (RBR) price
movements. (Refer to market manipulation patterns pdf for details)

Smart Money psychology on Supply & Demand

Point 1
Smart Money creates a supply zone with the intention of selling at a high price.
Point a
Smart Money begins to sell at a high price by dropping.

Point 2
Due to the low price reached, Smart Money create a demand zone with the
intention of buying at a low price

Point b
Smart money begins to buy at a low price by going bullish.

Point 3
The process that occurred at (Point 1) occurs again at this point and Point 3 can
only be broken once Smart Money removes all its pending orders from the supply
zone.

Summary
Smart Money sell at supply since the prices are high and Smart Money drop price
towards demand with the aim of buying at a low price

Trading Approach
Always sell at supply and buy at demand with your stop losses above these zones
 TASK ONE
In your note book, write down what the Smart Money are doing at each point using
the market structure below
 COMPRESSION
Compression (CP) is a manipulation pattern used by Smart Money as they move
price towards a major supply zone or demand zone. The aim of compression is to
trap as many traders as possible as liquidity (LQ) is being fetched from the stop
losses taken out.

Smart Money psychology on Compression

Point 1
A supply zone is created with the aim of selling at a high price by the Smart
Money
Point 2
A low price is reached, as a result, Smart Money create a demand zone with the
aim of buying at a low price

Point 3
 Smart money move price to this point luring many long retail traders who
believe price will continue rallying.
 Smart money then reverses price taking out all the stop losses of most long
retail traders and luring in more short retail traders who believe price will
continue dropping.
 Most of the short retail traders will put their stop losses above this point

Point 4
 Smart money reverses price at this point taking out short retail traders who
entered between point 3 & 4.
 As the short retail traders are being taken out, more long retail traders are
being lured to enter the market since they believe price will continue
rallying.
 Price will continue rallying up to point 5 which will take out all the stop
losses of short retail traders who entered at point 3

Point 5
 Long break out traders who entered at the break of point 3 are taken out as
price reverses here.
 Most of the manipulation that occurred at point 3 also occurs here

Point 6
The same manipulation process that occurred at point 4 occurs here

Point 7
The same manipulation process that occurred at point 5 occurs here
Point 8
The same manipulation process that occurred at point 6 occurs here

Point 9
The same manipulation process that occurred at point 7 occurs here

Point 10
The same manipulation process that occurred at point 8 occurs here

Point 11
The same manipulation process that occurred at point 9 occurs here

Point 12
The same manipulation process that occurred at point 10 occurs here

Point 13
 Smart Money finally reach supply zone after gathering as much liquidity as
possible.
 Price will then fall at this point.

Summary
As compression heads towards supply, demand levels will be cleared and as
compression heads towards demand, supply levels will be cleared

Compression is also aimed at causing confusion as emotional traders are tired out.

Trading Approach
Always make your entries at supply or demand and never enter in the compression
phase because you will enter into a manipulation zone. Place your stop loss above
supply or demand
 TASK TWO
In your note book, write down what the Smart Money are doing at each point using
the market structure below
 QUASIMODO PATTERN
The Quasimodo pattern is a complete manipulation pattern used by Smart Money
to take out all categories of traders. Long, short and break out traders are usually
taken out by this manipulation pattern.

Smart Money psychology on Quasimodo

Point 1
Price makes a high (H) and reverses luring in many short retail traders who will
place their stop losses above the high.
Point 2
Price makes a low (L) and reverses luring in many long retail traders who will
place their stop losses below the low

Point 3
Long break out retail traders enter at this point, putting their stop losses below
point 3

Point 4
Price makes a higher high (HH) and reverses towards point 5, taking out the stop
losses of the long break out retail traders who entered at point 3

Point 5
Short break out retail traders enter at this point, putting their stop losses above
point 5

Point 6
Price makes a lower low (LL) and then reverses towards point 7, taking out all the
stop losses of short break out retail traders who entered at point 5

Point 7
At this point, the Smart Money has taken out all categories of retail traders and
now price will fall

Summary
Smart Money use the Quasimodo pattern as a lethal stop hunt strategy taking out
all categories of traders before moving price in their long term direction

Trading Approach
Always endeavor to enter at the QM level or place entries at levels that form after a
breakout or fake out. Place your stop loss above supply or demand
 TASK THREE
In your note book, write down what the Smart Money are doing at each point using
the market structure below
 SUPPORT RESISTANCE FLIP (SRF)
Support Resistance Flip sometimes termed as change of polarity is a
manipulation market maneuver used by Smart Money during a market down
trend.

Smart Money psychology on Support Resistance Flip (SRF)

Point 1
A support level is formed

Point 2
Support level is broken
Point 3
 Short retail traders are lured to make late entries at this point believing price
will continue dropping.
 Their stop losses are placed between point 2 and 3.
 Price then reverses at this point towards point 4 taking out all the short retail
traders.

Point 4
Support becomes resistance at this point and the market will drop in its intended
direction

Summary
Support Resistance Flip occurs during a down trend and is intended to trap short
retail traders who enter too early before price continues dropping

Trading Approach
Always enter at resistance or retest level and place your stop loss above the
resistance level
 TASK FOUR
In your note book, write down what the Smart Money are doing at each point using
the market structure below
 RESISTANCE SUPPORT FLIP (RSF)
Resistance Support Flip sometimes termed as change of polarity is a
manipulation market maneuver used by Smart Money during a market up trend.

Smart Money psychology on Resistance Support Flip (SRF)

Point 1
A resistance level is formed

Point 2
Resistance level is broken
Point 3
 Long retail traders are lured to make late entries at this point believing price
will continue rallying.
 Their stop losses are placed between point 2 and 3.
 Price then reverses at this point towards point 4 taking out all the long retail
traders.

Point 4
Resistance becomes support at this point and the market will rally in its intended
direction

Summary
Resistance Support Flip occurs during an up trend and is intended to trap long
retail traders who enter too early before price continues rallying

Trading Approach
Always enter at support or retest level and place your stop loss below the support
level.
 TASK FIVE
In your note book, write down what the Smart Money are doing at each point using
the market structure below
 FAKE OUT
A fake out is a classic manipulation maneuver used by Smart Money to take out
long, short and breakout retail traders. A fake out ideally occurs after a significant
area of resistance or support is formed.

A fake out usually targets supply, demand and Quasimodo levels before
reversing back in to the intended direction.

Smart Money psychology on a FAKE OUT

Point 1
Smart Money creates a supply zone with the aim of selling at a high price

Point 2
Smart Money creates a resistance level R1 which lures short retail traders to enter,
putting their stop losses above resistance
Point 3
 Smart Money creates another resistance level R2 that respects the previous
resistance level R1.
 Short retail traders are lured to enter enticed by the fact that the resistance
level is significant.
 Their stop losses are placed above resistance.

Point 4
 Smart Money creates another significant resistance level R3 that respects the
previous resistance levels R1 & R2.
 Due to the significant level of resistance created, more short retail traders are
lured to enter, putting their stop losses above resistance

Point 5
 Due to the significant resistance levels formed at R1, R2 & R3 by Smart
Money, more short retail traders are lured into placing pending sell limits at
this point with their stop losses placed above the level.
 Long break out retail traders will also place their buy stops at point 5 with
their stop losses below the point.
 Smart money at this point would have created a perfect trap with many stop
losses visible to them above the resistance level.
 Smart Money will then trigger a fake out up to the supply zone at point 6,
taking out all the stop losses of short retail traders and triggering the buy
stops of long break out retail traders

Point 6
After taking out all the stop losses and gaining liquidity, Smart Money will then
reverse at this point (supply zone) and drop taking out the stop losses of long retail
break out traders who entered at point 5.

Summary
A fake out is triggered after Smart Money has trapped as many traders as possible
before stop losses can be swept out
 Trading Approach
Always place your entry at the supply or Quasimodo level above the significant
level of resistance.

You can also place your entry at the demand or Quasimodo level below the
significant level of support.

TASK SIX
In your note book, write down what the Smart Money are doing at each point using
the market structure below
 SMART MONEY PYSCHOLOGY ANALYSIS REVIEW

Identify the Quasimodo, fake out, compression and supply zone points on the set
up below and in your note book, write down what smart money was doing in the
background
 CONCLUSION
Analyzing the markets with knowledge of what Smart Money are doing in the
background will give you a cutting edge in your market approach.

Having a confluence of most of these manipulation patterns on one set up usually

increases the probability of the trade working out.

I believe with this knowledge you will be able to make right entries and exits and I
wish you all the best in your trading.