What Is the RTM Method?

RTM stands for بازار را بخوانید. It is a pure price-action method: no indicators, no oscillators, nothing attached to the chart but price.

It teaches you to read where large orders were placed, where they were filled, and — the part that matters most — why price was moved to where those orders could be filled at all.

That last clause is where RTM has changed, and it is where most of what you’ll read about RTM online is a decade out of date.

The short version, if you only read one paragraph

Markets do not move because a shape appeared on a chart. They move because someone with size needs volume to trade against, and the cheapest volume in the world is a retail trader’s stop-loss. Getting that stop where it can be taken requires the retail trader to be positioned first, and confident, and early. Everything visible on the chart — the clean breakout, the obvious support, the textbook pattern — is the mechanism by which that happens.

RTM is the discipline of reading that process instead of the shapes it leaves behind.

Where RTM came from

It started with me, IfMyante, being obsessively compulsive about having to know how everything works.

The first time I saw a price chart, in 2010, I saw a type of order I couldn’t put my finger on, and solving the market became my new Sudoku. Like a troublesome motorcycle, I took it apart, turned it over, studied it from every angle, and after a few months I could predict what it would do, very accurately.

That is what you see in all the old material of mine floating about the internet. You see that I knew what it does.

A decade and a half later I see it very differently. I see the why and the how, and that is where the whole market opens up like a flower. It can still be explained in the old ways, but now I see it as a simple dance between predator and prey. The way it flows is fascinating, and utterly macabre.

The vocabulary — and why it is not the method

RTM has its own vocabulary. You need it to have the conversation, so here it is plainly. But hold on to this while you read: learning these names is not learning RTM. Every one of these terms is freely available online, taught by people who have never spoken to me, and knowing all of them will not make you profitable.

They are the alphabet. They are not the language.

The LS and the LS Kink — the only two things we draw

Everything we put on a chart consists of one line and one rectangle.

The LS is the line: a spike that cost a lot of money to break. Somebody spent to get through it, and that spending leaves a mark that matters long after the candle has gone.

The LS Kink is the rectangle: the shape that crosses that line after it broke.

That is it. One line, one rectangle. Everything else on this page is a way of reading what those two marks are telling you.

If the shape looks familiar, it should — our logo and our front page are built from it.

Bases

A base is a pause — a tight consolidation where price stopped moving before it moved again. RTM names them by what came before and after.

FTB and FTR

FTB — First Time Back. Price returns to a level for the first time since it left. The first return is the one that matters, because what was left unfilled is still there.

FTR — Failure to Return. Price breaks a barrier, tries to come back inside it, and doesn’t. That makes a new supply or demand, early, at which retailers get invited to enter — with their stops beyond it.

Generally, our entries lie beyond the FTR. Because we know the dance.

Quasimodo, and the Diamond

Very often a reversal structure resembling a head and shoulders, but the resemblance is where the usefulness ends. What defines a QM is a false break: a higher high that fails, a sharp move to a lower low that collects the stops sitting beneath, and a return to the level the first shoulder left behind.

The pattern is famous. The reason it works is not the pattern.

We used to use the right shoulder for entries.

A Diamond is a QM that happened slightly early — before the last of the stops got taken. Which is exactly why entering on the right shoulder can hurt: the structure completed, but the job hadn’t.

Compression

Compression is where supply works and demand doesn’t, or the other way round. It is a lot of money being put into greasing a pole for price to slide down quickly.

It brings enormous confusion to those who don’t know it, or who misunderstand it — and it shows just how much control some people have over the market.

MPL and BSZ

Let’s begin with the MPL. When I coined that phrase I was more correct than I could have imagined at the time.

I spent a while in a trading room with Red — the giant, Redsword11 — and he was very good at finding targets for price. Regularly, price would get extremely close to his target and then bounce away before hitting it. This is where I learned many new curse words, as Red’s open profit diminished by the minute. But he’d hang in there, often for hours — he was a scalper, so hours were years — pulling his hair out, until price went back his way and hit the target he’d called all along.

He was right every time. It just cost him everything he had to sit through it.

And once price had finally hit and he’d come back to calm, Red would always say the same thing.

I laughed a great deal at Red at the time, not realising his frustration would become the foundation of my entire understanding of price. A lot of pain went into holding for that target, and the bounce before it taught me one of the most important moves of the dance: the BSZ — the Breakout and Stops zone. That space beyond the early supply or demand, where we consider entering the market.

Red died some years ago. Half of what follows on this page started with him swearing at a chart.

PAZ and flag limits

Price is kept within a certain range for a certain duration, so that certain economic stories can be told. The edges of these ranges are very clear, each delineated by a rectangle crossing over a line. The one above is an Upper Flag Limit (UFL); below is a Lower Flag Limit (LFL). The space between them is the PAZ — the Price Action Zone.

No price action is made until an upper or lower flag limit is broken, at which point the PAZ expands to the next UFL or LFL.

That is the fundamental rule of the market.

What we got wrong

For a long time RTM was taught as structure. Find the base, mark the zone, wait for the return, enter at the edge. It worked, and it worked well enough that it spread — which is why almost everything written about RTM by other people describes exactly that.

Here is the problem with it.

A structural read tells you where. It does not tell you why, and without the why you cannot tell the difference between a zone that will hold and a zone that looks identical and won’t. Students who learned only the structure ended up with a rule set and no judgement. It limits a trader to hunting for particular patterns, while the very same pattern of behaviour is going on all around them, offering far better returns.

Look elsewhere and you’ll see that we always used to wait for confirmation that price had turned — trading the right shoulder of the Quasimodo, for instance. That works. But there is also the Diamond to contend with, which can hurt the QM trader, or massively diminish the R.

What the market actually runs on

Strip away the vocabulary and one mechanism is left.

Large participants need liquidity. Not “want” — need. An order of institutional size cannot be filled at one price by one counterparty; it needs a crowd on the other side, and it needs that crowd to appear at a moment and a price of someone else’s choosing. The crowd does not appear spontaneously. It is produced.

There are only two reliable ways to produce it.

Seeing it happen — AUDUSD.

Nothing in those two charts is drawn after the fact. The level was marked on the monthly before the move. The waiting was the trade.

Reading intent instead of shapes

Once you accept that the visible structure is a by-product, the question you ask a chart changes.

Same chart. Different question. The second one is harder, is not reducible to a rule set, and is the reason RTM takes months rather than weekends.

What this changes in practice

We no longer react to the market with good R. We move with the people who create price, for higher R.

These days we want our graduates able to trade right alongside the ITs — the institutional traders who control price — and to trade the very tops and bottoms, where all the stops lie. Done correctly, in the right place, it makes for enormous R. And it allows something we never used to do: bank some profit very early to cover the stop, so that even when the trade loses, it wins.

In learning the psychology behind the market, you learn more about yourself than you knew there was to learn. That understanding tends to change what you want from life. Don’t be surprised if, once you understand how the money is really made, you would rather grow food and keep chickens instead.

What RTM is not

• It is not an indicator. Nothing goes on the chart but price. There is a drawing tool that renders zones from lines you place yourself, sold separately — a convenience for people who already know the method. It is not part of the membership, and it teaches you nothing.
• It is not signals. No trade calls, ever.
• It is not a promise about returns. No returns claims, no equity screenshots, no “founding price” that resets when you reload the page.
• It is not supply and demand with new labels. Standard supply-and-demand marks a zone where price reversed and waits for a return. RTM asks how price left, how it is coming back, and who is trapped between those two facts.
• It is not quick. Most people need six to twelve months of real chart work before their reading is consistent.

How RTM is taught here

Every aspect of RTM, old and new, is here. We have deleted nothing, so every lesson survives, as do hundreds of thousands of posts about them. The search button is your way into an encyclopaedia of RTM knowledge, written from every viewpoint.

The lessons section is the blackboard. The forum is the classroom.

Built on the promise of traders helping traders, we teach as we learn — so that the teaching solidifies our own understanding.

Common questions