[Book] Price Action Breakdown - Laurentiu Damir

I have seen the text mentioned on the book lists of a few respected traders, but in spite of that, the book has a relatively small online footprint. The point of the thread is to share insights, forecasts and everything else related to Laurentiu's strategy.

Laurentiu has written multiple books, but my understanding is that 'Price Action Breakdown' is his Magnum Opus, with a completely different way of analyzing the markets compared to his prior texts.

I don't have a vested interest in whether you buy the book, but the more people learning/sharing knowledge, the more skilled everyone can become, including me. Amazon (or other more ethical companies) have the eBook available for $10.

Whether you are a newbies, a seasoned vet or somewhere in the middle you are more than welcome to contribute & chime in!

Finding Value Area
Price consolidation is the easier way to understand a value area. One of the key characteristics of consolidation is that price stays in a range... For example, if price moves beyond that range, then sellers see a bargain and flood the market with supply which pushes price lower. On the other hand, if price gets too low, buyers see a bargain and flood the market with demand which pushes price higher. A Value Area is the price range when sellers and buyers both think the price is fair and aren't constantly flooding the market with supply/demand because they see a bargain.

Below is a recent example of GBPZAR creating a value area by consolidating for a days on the 5m. Notice that whenever price moves a little too far from the highlighted range, price eventually gets pushed back into the range. This is the fair value showing it's legitimacy:

Hi Macallik, I just finished this book, it's pretty straightforward and I'm trying to apply the teachings . How have you been doing with it? How has it been for you? I'm not new to trading but still not where I want to be.

Thanks for this post.

p.s.: In your image, at the lower value limit, shouldn't it say: Buyers come in and push price back in to the value area whenever price goes to low? I may be wrong.

I think it is total under the radar if I talk with other trader. Many do not know about this book. For me this is now the basis for my Trading and it is lighter as the informations wyckoff gave decades back. Do not mean wyckoff is irrelevant, for more deeper study here to go.
Hope this thread can someday move on.

Yup you're right, it was a poor copy/paste job re: the label on the chart

What I liked about his strategy is that he has his own insights baked into a loose amalgamation of existing strategies. For example:

1. The initial trade setup (Figure 39) that he teaches is basically Wyckoff 101 on a shorter timeframe:
   1. Wait for a Value area to form (in Wyckoff, this is the range formed via a Selling Climax & Automatic Reaction)
   2. Wait for a pin bar at the low/high of the value area (In Wyckoff this is known as Spring/Upthrust in Phase C)
   3. Wait for an initiative move away from the value area, followed by a responsive pullback (In Wyckoff this is known as the 'Back Up to the Edge of the Creek' or 'Break Below Ice' in Phase D)

2. One of his three methods of a turning market (Figure 28) is known as a Steidlmayer Distribution in Market Profile

Some of his unique insights that stuck with me include:

1. Initiative & Responsive trading (specifically responsive): The ability to eyeball what a market is trying to do is something underrepresented in most trading strategies imo. His way of seeing tepid price action as unlikely to achieve its goal/not backed by smart money is very useful
2. Using channels to predict future price action: IMO, what he is conveying from Figures 32 -> 35 is so dense with useful info that I always struggled to completely grasp/execute. Not only does he predict whether a trend channel is sustainable but if/when price breaks, he is predicting the control price/subsequent trend very very early in the game.
3. His approach to Value Areas/Trend Channels: Via Market Profile, a value area is where ~70% of trading occurs on the profile, but LD is the first person I came across who applied that approach directly on a chart.

I think the biggest issue for me in retrospect was entries. His first/main setup is buried in the middle of a chapter and literally gets like maybe one page in a +100 page book. I also had trouble gaining conviction around the idea of diagonal support/resistance levels within a channel (Figure 46). I can convince myself to buy at the edges, but I couldn't believe that the diagonal value areas were anything other than random.

I simulated +100 trades or so via manual backtesting and couldn't achieve consistency but I do recall quite a few Amazon reviewers who were successful with the methodology. (Also, IIRC, before Amazon removed comments on reviews, Laurentiu chimed in on a few reviews to help people struggling with the strategy). I think my lack of success had more to do with my own shortcomings as opposed to the strategy itself.

Feel free to share some charts and breakdown how you view the markets in this thread to get some reps in/help others! I'm overdue for a reread and think I might have better luck with my current understanding of price action so I'll probably be doing the same in the near future.

Marked up the S&P 500 via Laurentiu's method:
(Used the Weekly chart initially for brevity, and then switched to the 2D to fit in the recent price action (too much data for the Daily chart)

Strong Initial Uptrend that starts to fail

Weakness is clear. Can we predict the future trend?

Attached Image (click to enlarge)

Requires some wiggling as the trend progresses, but overall, in the words of Barack Obama, "Yes we can"

High level analysis of the current trend

EURUSD M30 ... see how the value zone is building.

My update to the eurusd M30 is now this here ...


I have bought in the last years many books, but this here is in my top 3.

Have a look for the build of a new control price! Watch M30 and you will see we are about ready for the correction target the daily.
EURUSD

EURUSD - Huge move up. If you read this book you will be able to make further thoughts on this case. Good signs will be come!

Came across this post which made me think immediately of Laurentiu's method. What makes it unique for me is that he uses value areas as price breaks outside of a range to help predict whether the trend is sustainable or likely just excess price or a tail that is likely to revert back to the initial trading range:

... the system corner is not a good place to share further informations. If you want to get a deeper view this book is the only you will need. Unbelievable that the author have put this for nearly free (what is the cost of the book?) all together.

To my chart. If you read it, you can had a good trade that end in that straight spike.