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3 Hidden Elements

Price Action & Income presents...
3 Hidden Elements of
Market Geometry
By Senior Trader & Market Analyst, Richard Krugel.
Thanks for downloading my eBook!
My name is Richard Krugel, and I’m the Senior Trader and Market Analyst at Price
Action & Income.
Before we dive in, I want to give you a brief backstory about the concepts you’re going
to see in this eBook.
Firstly, I am a real trader that trades for a living. Like so many traders out there, I have
had a very difficult path to becoming consistently profitable. After spending thousands of
dollars on gimmicks and so called “expert advisers,” trying to make an honest living
from trading, I was at wit’s end.
So I started developing ​my own​ strategy. I combined a few powerful analytical
techniques that compliment each other very well, and after a few years of rigorous back
testing and experimenting, it resulted in a low-risk, high-yield strategy that has
performed very well for me over the years.
I’ve always wondered how much money, time, and effort I could have saved if I had my
strategy sooner, however, which is why I genuinely market this strategy: to help fellow
traders understand price action for what it is, and to trade it with discipline.
​ ichard Krugel
In this eBook, you’ll see that when I say “Hidden Elements,” I’m ​not​ referring to the
individual analysis components. The components we will discuss are actually widely
popular. However, it is the science of pulling the “predictable” elements together to
create a winning strategy that’s hidden from almost everyone trading today.
I call that science “Market Geometry,” which is just a fancy way of saying that you
measure and forecast based on the predictable aspects of Price Action trading.
**Remember: The majority of market moves are not patterns, but patterns do exist
within the chaos if you know what to look for. If you focus on the predictable
aspects of the market and ignore the chaos, you can approach trading in a
scientific and highly profitable manner.
Before You Get Started…
Please remember that this eBook will only scratch the surface of what you’ll need to
know to truly ​master​ market structure.
Yes,​ it is extremely important to understand these elements first, but you’ll still need to
work hard to develop your strategy and the rest of your knowledge around these
If you want the shortcuts to really master this stuff, I have put my life’s work into a true
curriculum that will give you every tool and resource you need to become a successful
So if you want to be ​fully​ immersed in these strategies, you can grab one of my training
videos for just $14.​ ​Click here to get started.
Now, on to the 3 Hidden Elements of Market Geometry…
Element 1: Waves
It’s not a new practice to use waves to analyze or forecast markets. However,
understanding the real balance of these waves and how to apply the other elements to
these waves is what will give you a significant advantage over other traders.
When you understand how the waves work, where you are within a given cycle, and
how to forecast multiple future price possibilities, you’ll be in a prime position to make
winning trades - which is what this eBook is all about.
Like most things in trading, it’s easier to learn by visualizing the concepts, so let’s take a
look at two examples of the wave patterns you’ll want to recognize.
Uptrend Pattern:
Downtrend Pattern:
The structure of a trending market is evident in both of these images.
The basic market structure of an uptrend tells us that while price is moving up, it will
make a series of Higher Highs (​HH​), and as the market briefly pulls back downwards, a
series of Higher Lows (​HL​) before continuing the uptrend.
Inversely, a downtrend will make a series of Lower Lows (​LL​), and as it briefly corrects
upwards, a series of Higher Lows (​HL​) before resuming the trend downwards.
R.N. Elliot defined market structure by labeling these trends and corrections with
numbers and letters. He used numbers to label the trends (as well the main trend), i.e.
1–5​, and the letters ​A–B–C​ to mark out corrections.
My use of the Elliott Wave Principle is to define trends and identify corrections within the
confines of market geometry.
Let’s take a look at a detailed example:
The image above depicts the nature of wave structure within a trend.
If you look at the overall trend, it is clearly up, and I used labeling to define the evolution
of the trend with numbers ​1 – 5​ in black.
These are your primary wave counts. The primary wave counts subdivide into smaller
waves as follows:
● Wave 1:​ 5 waves up (marked in grey).
● Wave 2:​ a – b – c (marked in red) and making a higher low and not going lower
than the start of wave 1.
● Wave 3:​ Again 5 waves up, but this time the magnitude of wave 3 is much larger
than wave 1.
● Wave 4:​ A repeat of wave 2’s structure, once again in an a – b – c format.
● Wave 5:​ Another 5 smaller waves up, typically preceding the high of wave 3.
Trends tend to tell a story that can help us in our overall analysis. They are also
repetitive in nature.
To be able to “read” a trend we need a way to “measure” a trend, and identify our
position within such a trend, in order to make better trading decisions.
Wave 1:​ Typically the shortest of all the waves. We generally won’t know that it’s wave
1 until it’s followed by a corrective wave that does not break the starting point of wave 1.
Wave 2:​ A Corrective Wave that tends to move in an overlapping fashion (corrective
waves will be studied in detail later), and does not go lower than the origin of wave 1
before moving up again, creating a higher low in this example.
Wave 3:​ Is what we call an Impulse Wave, as this wave’s magnitude is always larger
than wave 1. The impulse wave also tends to have a steeper angle of ascent than wave
1. ​**If you look closely at the 5 wave structures, even the smaller sub structures, you will
notice that wave 3 is always the longest. This is a very important characteristic to take
note of.
Wave 4:​ Another Corrective Wave, and this wave should never retrace lower than the
high of wave 1. If wave 4 was to go lower than the high of wave 1, it will provide us with
a sign that the previous wave structure was in fact ​not​ a trend, but probably some sort
of correction instead!
Wave 5:​ Will generally break the high of wave 3 in another 5 smaller waves, and is
generally the same measured length as wave 1. It is during this wave that we need to
be cautious of a possible change in trend direction. In a lot of cases, wave 5 won’t move
in an impulsive manner and have a flatter angle of ascent compared to wave 3.
Knowing where you are within a trend is one of the most powerful tools for any trader,
and understanding the geometry of market waves is critical to being able to do it.
Element 2: Implementing Pitchforks
The pitchfork (image below) is used to determine market direction and structure, almost
as if we’re “mapping” the possible path of price in the future. This will, of course, helps
us make winning trades.
A pitchfork is typically drawn using 3 major pivots on a chart (marked ​A–B–C​) and
projected forward in time. The first pivot is the starting point of the pitchfork and is
named the Median Line (​ML​).
The second and third pivots are used to determine the final angle, or slope, which is
always parallel to the ​ML​. These are called the Upper Median Line (​UML​) and Lower
Median Line (​LML​). The Median Line dissects pivots ​B​and ​C​ in the middle (halfway
between ​B​ and ​C​).
Most charting software has the ​Andrews Pitchfork​ as a standard drawing tool. By
simply selecting the starting pivot first, then selecting two additional pivots after, the
drawing tool will automatically draw itself at the right angle forward in time, making it
very easy to use.
We use the Wave element to know where we are within the trend so that we know
which direction is a more profitable opportunity for us to trade. Now, by adding the
Pitchfork to the appropriate pivot based on our wave forecast, we can identify potential
price movement and can hone in on high-probability trade setups.
Element 3: Fibonacci
Some of the most widely used technical tools in trading are Fibonacci Ratios.
These ratios were discovered by a thirteenth century mathematician named Leonardo
Fibonacci. Traders commonly use these ratios to identify possible areas of support or
There is a wealth of knowledge to be found about Fibonacci ratios by doing a quick
internet search; however, all you need to know about them for our current purposes is
the very basics.
Fibonacci Retracements
A Fibonacci retracement can be drawn when connecting two extreme points on a chart,
usually a previous high to a most recent low in a downward trending market, or a
previous low with a most recent high in an upward trending market.
I also use them to measure specific characteristics that corrections and waves tend to
The ratios we recommend using for trade decisions are as follows:
● 38.2%
● 50.0%
● 61.8%
● 78.6%
Below these retracement ratios are displayed as vertical lines on a downward trending
To draw a retracement in the example above, I selected two swing points: I used an
important high from which price moved strongly down (Point A), and connected it to a
most recent swing low (Point B) from which price moved up.
If we are of the opinion that price will continue lower at some stage, without taking out
the high at point A, we would expect our Fibonacci ratios to act as resistance.
In this example, price respected the 50% level briefly, but touched the exact 61.8% ratio
shortly after, and reversed strongly down.
This is the power of Fibonacci Ratios and why so many traders use them!
Fibonacci Extensions
We will be using another Fibonacci trading tool, called Fibonacci Extensions, in our
technical analysis. Fibonacci Extensions are a way of projecting these ratios forward in
time to find possible areas of support or resistance in the future.
Price tends to react to these extensions when they eventually reach them, and they
make good targets to trade toward when entering a position. We will also use them to
measure corrections and for identifying wave characteristics.
The ratios we recommend using for trade decisions are as follows:
● 100.0%
● 127.2%
● 138.2%
● 161.8%
● 200.0%
Below, these extension ratios are displayed as vertical lines on an upward trending
In the example above, I selected three swing points to draw an extension. I used an
important low, from which price moved up (​Point A​), and connected it to a most recent
swing high (​Point B​). Price then made a higher low (​Point C​), and moved upward
again, breaking the high of Point B.
Before we draw our extensions, we need a higher low followed by the break of a
previous high.
If we are of the opinion that price will continue higher, we would expect our Fibonacci
ratios to act us resistance.
In this example price respected the ​100%​, ​161.8%​, and ​200%​ levels.
It should now be fairly evident that Fibonacci ratios are very important technical analysis
tools that can help us measure market structure.
You can see that by combining these elements together we have built an incredibly
scientific and predictable approach to trading price action.
Rather than looking for a special candlestick pattern (which is like trading based on
flipping a coin!), we are trading ​within​ ​market structure by scientifically analyzing
market components to tell us the 4 most important things any trader can know:
1. What is the trend doing?
2. Where are we within the trend cycle right now?
3. Where are viable entry points to enter during the next trend move?
4. Where are viable exit points to take my profit once it’s achieved?
When you know those 4 pieces of information, you are leaps and bounds
ahead of the average trader. By studying market geometry and applying
your own strategy to what you’ve learned in this free eBook, I’m confident
that you will see vast improvement.
To your trading success,
Richard Krugel
Senior Trader | Market Analyst
Price Action & Income
Looking Ahead: More of My Methodology
We’ve only scratched the surface of understanding market structure and how to trade
within it.
If you’d like to see my ​complete​ trading strategy – plus my own ​exact​ entry criteria for
finding the highest profitability trades that most traders completely miss – I ​highly
recommend my video training.
It’s called the ​Propulsion Method​, and it’s the next step in learning how to master
market structure and take control of your trades.
Click here to grab video #1 for just $14.
In my​ Propulsion ​training, you’ll quickly discover:
● How to spot 100%, 300%, and even 800% ROI trades, including
REAL examples of these exact types of trades – and how to
manage those positions until you take profit
● How to apply a specific set of Market Geometry tools to find
these entries – including the most overlooked tool in your trading
● How to see through the “noise” and identify natural market
● How it all ties together and how you can start applying it to your
trades right away
Click Here to Get Started
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