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FOREX 101:Mastery for Beginner and

Intermediate Traders

Welcome

Day 1

Copyright, 2014 Chima Burey.

All rights reserved.

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Copyright, 2014 Chima Burey. All rights

reserved.

[ Disclaimer ]

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The rich invest in time, the poor invest in money.

-Warren Buffet

Introduction

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[ Introduction ]

What you will learn, and what to expect from Day 1:

- FOREX Foundations

- FOREX Terminology and Market Structure

- Currency Pairs

- What is a PIP?

- Understanding a Currency Chart

- How to read a chart

- Different types of charts

- Understanding Candlesticks

- 13 bars to success

- Law of Momentum

- The 4 trading time frames

- The 3 analytical timeframes

- Moving Averages

- Continuation: The Power of Follow Through- Understanding market movement

- Pivot Highs and Pivot Lows

- Trailing Stops: How to lock in profit

- Spotting the three market trends

- Q&A

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FOREX FoundationsDay 1



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[ FOREX Foundations ]

What is FOREX?

FOREX means Foreign Exchange Market and it is a global market

where world currencies can be traded against its other.

The FOREX market is huge, with daily volumes of about four trillion

dollars. It is the most liquid financial market in the world.

FOREX currencies fluctuate according to actual monetary flows, but

additionally according to anticipations about global economic

conditions.

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The History of FOREX?

Prior to 1971, speculation was not permitted in the currency markets due

to something called the Bretton Woods Agreement.

The Bretton Woods Agreement was set up in 1945 with the purpose of

stabilizing international currencies and preventing money fleeing across

nations.

This agreement fixed all national currencies against the dollar and set the

dollar at a rate of $35 per ounce of gold.

In 1971, the Bretton Woods Agreement was finally abandoned, and theUS dollar was no longer convertible to gold.

By 1973, currencies of the major industrialized nations were floating

more freely, helped by the forces of supply and demand.

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Prices were set, with volumes, speed and price volatility, all increasing

during the 1970s. This guided the way to new financial instruments,

market deregulation and open trade. It also led to a rise in the power of

speculators.

Accelerated with the arrival of computers during the 1980s, the

movement of money across borders became a continuum, trading

through the Asian, European and American time zones.

The big banks created dealing rooms where hundreds of millions of

Dollars, Euros, Pounds and Yen were exchanged within minutes.

Today electronic brokers trade daily in the FOREX market.

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The market has changed considerably with the majority of international

financial transactions being carried out not just to buy and sell goods but

to speculate on the market with the intention of most dealers being to

make money out of money.

London has developed to become the worlds leading international

financial center and is the worlds largest FOREX market. This occurred

due to its location, operating during the American and Asian markets, as

well as its creation of the Euro-Dollar market.

The Euro-Dollar market was created during the 1950s when Russia's oil

revenue, which was all in US dollars, was deposited outside the US withthe concern of being frozen by US authorities.

By 1996, FOREX trading became more practical when new market makers

took advantage of developments in web-based technology.

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Who Participates in the FOREX Market?

FOREX market incorporates many different types of participants, the most

important are:

1. Central and Commercial Banks

2. International Trade Companies

3. FOREX Brokerage Companies

4. Large, Medium and Small Institutions (Investment Companies, Hedge Funds)

5. Common Retail Traders

6. World Travelers

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FOREX Market Hours?

Usually, the best time to enter FOREX markets is when large volumes of currencies

are being traded. At those hours, traders can take full advantage of FOREX

benefits.

Since the FOREX market trades 24 hours a day, the best time to enter is whenseveral countries are trading at the same time. In each time zone across the world,

FOREX markets operate from 8am to 4pm.

So, to take advantage of heavy trading volume, its worthwhile to determine when

the FOREX market hours in different countries overlap. The more countries

actively trading, the larger the trading volume and the bigger the PIP movements.

When currencies are the most active, thats when traders have a better chance of

making a profit. Slow markets offer little chance of profit and therefore FOREX

traders usually stay away.

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FOREX Market Hours?

FOREX Trading Hours (EST):

Sydney: 5pm - 1amTokyo: 7pm - 3am

Singapore/Hong Kong: 9pm - 5am

Frankfurt: 2am - 10am

London: 3am - 11am

New York: 8am - 4pm

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FOREX Terminology and Market Structure

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[ FOREX Terminology and Market Structure ]

Major Currency Acronyms

GBP = Great British Pound

EUR = Euro

CHF = Confoederatio Helvetica Franc (Swiss Franc)

USD = United States Dollar

CAD = Canadian Dollar

JPY = Japanese Yen

AUD = Australian Dollar

NZD = New Zealand Dollar

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Common Terms

Ask (Offer) price of the offer, the price you buy for.

Bank Rate the percentage rate at which central bank of a country lends money to the

country's commercial banks.

Bid price of the demand, the price you sell for.

Broker the market participating body which serves as the middleman between retail traders

and larger commercial institutions.

CFD a Contract for Difference special trading instrument that allows financial speculation

on stocks, commodities and other instruments without actually buying.

Commission broker commissions for operation handling.

EA (Expert Advisor) an automated script which is used by the trading platform software to

manage positions and orders automatically without (or with little) manual control.

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Common Terms

Fed (Federal Reserve) the main regulatory body of the United States of America financial

system, which division FOMC (Federal Open Market Committee) regulates, among other

things, federal interest rates.

Flat (Square) neutral state when all your positions are closed.

Fundamental Analysis the analysis based only on news, economic indicators and global

events.

Gap a difference between the previous period's close price and the next period's open

price. In FOREX usually only occurs during weekends between the Friday's close and the

Monday's open price.

Market Order order to buy or sell a lot for a current market price.

Market Price the current price for which the currency is traded for on the market.

Spread difference between ask and bid prices for a currency pair.

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Market Structure Hierarchy

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Centralized Market

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Decentralized Market

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Currency Pairs

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[ Currency Pair ]

What is a Currency Pair?

A currency pair is the quotation of the relative value of a currency unit

against the unit of another currency in the foreign exchange market.

The first currency of a currency pair is called the base currency, while

the second currency is called the counter currency. The currency pair

shows how much of the counter currency is needed to purchase one

unit of the base currency.

USD/JPY

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[ Currency Pair ]

What is a Base Currency ?

The first currency quoted in a currency pair on FOREX. It is also typically

considered the domestic currency or accounting currency. For

accounting purposes, a firm may use the base currency to represent allprofits and losses.

It is sometimes referred to as the "primary currency.

USD/JPY

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[ Currency Pair ]

What is a Quote Currency ?

The second currency quoted in a currency pair in FOREX. In a direct

quote, the quote currency is the foreign currency. In an indirect quote,the quote currency is the domestic currency.

Also known as the "secondary currency" or "counter currency.

USD/JPY

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[ Currency Pair ]

Most Popular Currency Pairs

EUR/USD

GBP/USD

AUD/USD

USD/CAD EUR/JPY

NZD/USD

USD/CHF

USD/JPY

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What is a PIP?

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[ What is a PIP? ]

What does PIP mean?

A PIP is a very small measure of change in a currency pair in the FOREX

market.

It can be measured in terms of the quote or in terms of the underlying

currency.

A PIP is a standardized unit and is the smallest amount by which a

currency quote can change, which is usually $0.0001 for U.S. dollarrelated currency pairs, which is more commonly referred to as

1/100th of 1%, or one basis point.

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[ What is a PIP? ]

What does PIP mean?

A retail example:

At your local coffee shop, a cappuccino is sold for $3.49.

However, in the FX market that cup of coffee is quoted

at 3.49000. The change in that fourth decimal point is

called 1 PIP. The 5th and final decimal place measures a

fraction of a PIP.

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[ What is a PIP? ]

Understanding a Currency Quote

AUD/USD

0.89305 0.89396

Youve just completed your first trade of the day, you went

long the AUD/USD currency pair.

How many PIPs did you make?

9.1 PIPs

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[ What is a PIP? ]


Account Types

Micro

Mini

Standard

1K

10K

100K

$0.10

$1.00

$10.00

Contract Size PIP Value

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[ What is a PIP? ]


AUD/USD 0.89305 0.89396

Now that you have calculated how many PIPs, How much money did you make?

In a mini (10k) account, each PIP is worth roughly one unit of the currency in which your

account is denominated. If your account is denominated in USD, for example, each PIP

(depending on the currency pair) is worth about $1.

9.1 PIPs X $1/PIP = $9.10

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[ What is a PIP? ]


Account Types

Micro

Mini

Standard

1K

10K

100K

$0.10

$1.00

$10.00

Contract Size PIP Value

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[ What is a PIP? ]

FOREX Volume vs. Equity Markets?

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[ What is a PIP? ]

Average Daily Range

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[ What is a PIP? ]

Average PIP Range by Day of the Week

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[ What is a PIP? ]

Average PIP Range by Trading Session

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[ What is a PIP? ]

ATR: Asian Session

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[ What is a PIP? ]

ATR: European Session

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[ What is a PIP? ]

ATR: U.S. Session

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Understanding a Currency Chart

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[ Understanding a Currency Chart ]

US500 (S&P 500)

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EUR/USD

Which one is the base currency

and which one is the quote

currency?

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EUR/USD

EUR: Loses Value

USD: Gains Value

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EUR/USD

EUR: Gains Value

USD: Loses Value

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How to Read a Chart

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[ How to Read a Currency Chart ]

EUR/USD

Base Currency: Euro Dollar

Quote Currency: US Dollar

H4: Bars are displayed in 4 hour segments

Price Quote Order: OPEN HIGH LOW - CLOSE

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[ How to Read a Currency Chart ]

NZD/USD

Base Currency: New Zealand DollarQuote Currency: US Dollar

M15: Bars are displayed in 15 minute segments

Price Quote Order: OPEN HIGH LOW - CLOSE

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Different Types of Charts

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[ Different Types of Charts ]

Line Chart

The most basic of the four charts is the line chart because it represents

only the closing prices over a set period of time. The line is formed by

connecting the closing prices over the time frame.

Line charts do not provide visual information of the trading range for the

individual points such as the high, low and opening prices.

However, the closing price is often considered to be the most important

price in currency quote compared to the high and low for the day andthis is why it is the only value used in line charts.

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Line Chart

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Bar Chart

The bar chart expands on the line chart by adding several more key pieces of information to

each data point. The chart is made up of a series of vertical lines that represent each data

point.

This vertical line represents the high and low for the trading period, along with the closingprice.

The close and open are represented on the vertical line by a horizontal dash. The opening

price on a bar chart is illustrated by the dash that is located on the left side of the vertical

bar. Conversely, the close is represented by the dash on the right.

Generally, if the left dash (open) is lower than the right dash (close) then the bar will beshaded green, representing an up period for the pair, which means it has gained value.

A bar that is colored red signals that the stock has gone down in value over that period.

When this is the case, the dash on the right (close) is lower than the dash on the left (open).

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Bar Chart

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Candlestick Chart

The candlestick chart is similar to a bar chart, but it differs in the way that it is

visually constructed.

Similar to the bar chart, the candlestick also has a thin vertical line showing theperiod's trading range.

The difference comes in the formation of a wide bar on the vertical line, which

illustrates the difference between the open and close. And, like bar charts,

candlesticks also rely heavily on the use of colors to explain what has happened

during the trading period.

When the price of the pair is up and closes above the opening trade, the

candlestick will usually be green. If the pair has traded down for the period, then

the candlestick will usually be red.

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Candlestick Chart

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Point and Figure Chart

Conventional technical-analysis charts tend to be the open-close/high-low chart. In the creation

of P&F, the emphasis is only on the closing price of the currency pair. The developers of P&F

charting were interested in trend development and thus were concerned not with the noise

created daily by minor moves up or down, but with the larger picture and how that plays out in

the areas of supply and demand.

The key to P&F charts is the establishment of the unit of price, which is the unit measurement

of a price movement that is plotted on the graph. On P&F charts, there is no time axis, only a

price axis. Rising currency prices are shown with X's and falling prices are shown with O's. These

points appear on the chart only if the price moved at least one unit of price in either direction.

So say the closing prices of the Euro moved up one price unit three times. This would appear as

a column of three X's. If the price movement reverses direction, the chart shows a new columnof O's, wherein an O is plotted for each unit of price movement. X's and O's never appear in the

same column. The chartist, however, must establish how many price units make up a box, which

is how much the price must move in the opposite direction for the chart to begin a new

column.

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Point and Figure Chart

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Understanding Candlesticks

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[ What is a Candlestick? ]

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[ What is a Candlestick? ]

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[ What does it all mean? ]

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13 Bars to Success

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[ 13 Bars to Success ]

5 Bullish Candles Found in Trading

Bullish

Wide-Ranging

Bar

Bullsih

Hammer

(Pin Bar)

Bullish

Normal Ranging

Bar

Bullish

Doji

Bullish

Inverted Hammer

(Pin Bar)

Strongest Weakest

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Bearish

Wide-Ranging

Bar

Bearish

Inverted

Hammer

(Pin Bar)

Bearish

Normal Ranging

Bar

Bearish

Doji

Bearish

Hammer

(Pin Bar)

5 Bearish Candles Found in TradingStrongest Weakest

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Dragonfly

Doji

Standard

Doji

Gravestone

Doji

Strongest Weakest

3 Colorless Candles Found in Trading

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13 Bars to Success : Candlestick Math

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[ Candlestick Math ]

HighHigh

LowLow

HighHigh

LowLow

Bulls are in Good control

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HighHigh

LowLow

HighHigh

LowLow

Bulls are in Good control

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HighHigh

LowLow

HighHigh

LowLow

Bears are in Good control

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HighHigh

LowLow

HighHigh

LowLow

Bears are in Good control

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HighHigh HighHigh

LowLowLowLow

Bulls have Weak control

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HighHigh HighHigh

LowLowLowLow

Bulls have Weak control

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Bears have Weak control

HighHigh

LowLow

HighHigh

LowLow

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Bears have Weak control

HighHigh

LowLow

HighHigh

LowLow

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Bulls have Lost control

HighHigh HighHigh

LowLowLowLow

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Bulls have Lost control

HighHigh HighHigh

LowLowLowLow

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Bears have Lost control

HighHigh

LowLow

HighHigh

LowLow

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Bears have Lost control

HighHigh

LowLow

HighHigh

LowLow

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Bulls have Totally Lost control

HighHigh

LowLow100%

HighHigh

LowLow

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HighHigh

LowLow100%

HighHigh

LowLow

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Bears have Totally Lost control

HighHigh

LowLow

100%

HighHigh

LowLow

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HighHigh

LowLow

100%

HighHigh

LowLow

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HighHigh

LowLow

100%

LowLow

HighHigh

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HighHigh

LowLow

100%

LowLow

HighHigh

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HighHigh

LowLow100%LowLow

HighHigh

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HighHigh

LowLow100%LowLow

HighHigh

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[ Exercise: Candle Identif ication ]

What do you see?

1. __________

2. __________

3. __________

5. __________

4. __________

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FOREX 101:

Mastery for Beginner andIntermediate Traders

"I will tell you how to become rich. Close the doors.

Be fearful when others are greedy. Be greedy

when others are fearful.

-Warren Buffet

13 Bars to Success: Excitable Events

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[ Excitable Events ]

Its All About Emotion

Understanding how to interpret candlestick pattern is like

learning a new language.

Coupling an event (Candlestick Patterns) along with a

location (Support and Resistance) gives the trader the

best opportunity to read the emotion of the market.

There are certain Candlestick patterns that indicate serious

cash flow in the market. These are the key to understandingmarket direction.

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Bullish Bearish

Excitable Events are always 2-3x bigger that the average size candle

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[ Exercise: Exci table Events ]

Which ones are

Excitable Events?

1

2

3

4

5

6

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Cash flow and volatility rule the markets. Candlesticks help with

understanding the amount of fear and greed thats currently in

the market.

Spotting exactly when these emotions take place are vital to getting

into a trade before its too late.

Remember: Seeing greed gets you into the market, recognizing fear

gets you out.

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Its All About EmotionCan you spot the fear and

greed?

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Its All About EmotionGREED

FEAR

The gap in the priceaction show the

aggressiveness of the

buyers.

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Its All About EmotionGREED

FEAR

Notice: Back-to-back excitable

events at the end of a run is asign that the current trend

may be in trouble.

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GREED

FEAR

1

2

3

4

5

6Exercise: Describe what

makes each event important.

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Law of Momentum

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[ Law of Momentum ]

Something to Remember

Sir Isaac Newton postulated that a body in motion will tend to

stay in motion until it is acted on by an outside force.

While Newton's law is inextricably tied to physics, it can be

applied to financial markets as well. Your financial investments

don't exist in a vacuum.

They are constantly acted on by outside forces that create price

movements, either up or down. Momentum refers to the speedof a currency pair's price movements.

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[ Law of Momentum ]

What to look for

1) Major market events (i.e. Wide Ranging Bars, Hammers, Inverted Hammers, etc. )

2) Does the market continue with its bias?

3) If it doesnt, then be ready for a directional shift in the opposite direction.

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[ Law of Momentum ]

Can you spot the areas of momentum?

[ L f M ]

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[ Law of Momentum ]

1

2

3

4

5

6

7

8

9


Discussion

[ L f M t ]

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[ Law of Momentum ]


[ L f M t ]

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[ Law of Momentum ]


1

2

3

4 5

Discussion

6

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The Four Trading Time Frames

Day 1



[ Th F T di Ti F ]

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[ The Four Trading Time Frames ]

M5: 5 Minute

M15: 15 Minute

M30: 30 Minute

H1: 1 Hour

Used by many active traders (day-traders) to

capture the volatility intra-day market movement.

This chart allows traders to utilize intra-day volatility

without the speed of the lower time-frames.

This time frame is the perfect middle ground

between finding intra-day trades and trades that

can held overnight.

Perfect for traders who look to take advantage of

market moves that range from 1-5 days.

[ M5 5 Mi t Ch t ]

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[ M5: 5 Minute Chart ]

EUR/USD

Discussion: Using volatility

to your advantage.


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GBP/USD

Discussion: What do you notice?


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GBP/USD

Discussion: What do you notice?


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S&P 500

Discussion: What stands out to

you? And why?


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S&P 500

Discussion: What stands out to

you? And why?

[ H1: 1 Hour Chart ]

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[ H1: 1 Hour Chart ]

EUR/JPY

Discussion: What happens whenthe momentum runs out?

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The Three Analytical Time Frames

Day 1



[ Three Analytical Time Frames ]

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D1: Daily

W1: Weekly

H4: 4 HourThis chart is great from analyzing short to mediumterm trades. Many traders actually use this as a

trading time frame as well. It is very versatile to

understand price action during weekly trends.

The daily time frame is a must for all traders.

Understanding daily market emotion is key to day

traders and long term traders alike. This chart is

rarely used by retail traders as a trading time frame.

Every week should start and end with this time

frame. The ability to recognize setups from thischart will greatly improve the trading decisions on

the lower time frames.

[ Three Analytical Time Frames ]

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Moving Averages

Day 1



[ Moving Averages ]

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[ Moving Averages ]

Among the most popular indicators used in technical analysis, moving

averages are used to gauge the direction of the current trend. This

indicator is so widely used because it helps to smooth out price action

by filtering out the noise from random price fluctuations.

Every type of moving average is a mathematical result that is calculated

by averaging a number of past data points.

Once determined, the resulting average is then plotted onto a chart in

order to allow traders to look at smoothed data rather than focusing onthe day-to-day price fluctuations that are inherent in all financial

markets.

What are they?

[ Moving Averages ]

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[ Moving Averages ]

Before

[ Moving Averages ]

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[ Moving Averages ]

After

Discussion: Which one do youprefer?

[ Moving Averages ]

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[ Moving Averages ]

After

Discussion: Use the MAs asfloating support and resistance,

NOT for the crossover!

[ Moving Averages ]

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[ Moving Averages ]

How to use the MAs?

The most common applications of Moving

Averages are to:

1) Identify the trend direction.

2) Determine support and resistance levels.

Which MAs to use?

1) Fast: 8ma

2) Slow: 20ma

3) Long Term: 200ma

[ Moving Averages ]

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8 period MAThe 8ma is great for catching fast moving aggressivetrends. This fast moving average is the one that is

often closest to price action and reacts the fastest

to temporary directional changes.

This moving average is known for being more of a

trend following guide. When price breaks the 8mait often finds stability in the trend at the 20ma.

The most popular moving average is the 200ma.

This is used by both retail and institutional traders

alike. Given the amount of data that is used to

calculate this average, price action often reacts toviolently any encounter with this moving average.

[ Moving Averages ]

20 period MA

200 period MA

** All Moving Averages are simple Moving Averages **

[ 8-period Moving Average ]

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[ 8 period Moving Average ]

8ma

20ma

NOTICE: How price action hugs

the 8ma as it aggressively higher.

GBP/AUDHourly


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[ 8 period Moving Average ]

8ma

20ma

NOTICE: Price rides the 8ma for

1.5 years on this chart before it

falls to secondary support levels.

USD/JPYWeekly


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[ 0 pe od o g e age ]

8ma

20ma

NOTICE: How the 20ma holds

price down as it continues alongits bearish move toward lower

prices.

EUR/JPY

15 min


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[ p g g ]

8ma

20ma

EXERCISE: Candlestick Identification

1._______________________

2._______________________3._______________________

4._______________________

XAG/USD

4 Hour

1

2

3

4


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[ p g g ]

8ma

20ma

NOTICE: The reaction to the

200ma from price.

AUD/USD

1 Hour

200ma

1

2

34 5


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[ p g g ]

8ma

20ma

Lesson: Timid and Forceful

interactions between price and

the 200ma.

Dow 3030 min

200ma

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FOREX 101:

Mastery for Beginner and


Continuation: The Power of Follow Through

Day 1



[ The Power of Follow Through ]

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[ g ]

A temporary reversal in the direction of a currency pair's price that goesagainst the prevailing trend.

A retracement does not signify a change in the larger trend. On a chart

where a currency pair's price is generally headed upward, retracements are

the small dips in price that the stock experiences during its overall upward

trend.

What is a Retracement?


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[ g ]

Technical analysts make an important distinction between retracements

and reversals.

Retracements are short-term changes within a longer-term trend, whilereversals indicate the end of a larger trend and the beginning of a new

trend.

When a retracement first begins, it is difficult to tell whether it is a

retracement or a reversal.

Technical analysts try to distinguish between the two using Fibonacci

retracements, pivot points, trendlines, and moving average support and

resistance levels.

What is a Retracement?


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?

List 3 types of support that

would cause price action to

stop its retracement.

1) ___________________

2) ___________________

3) ___________________


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?

List 3 types of candlestick

formations that you would

look for to signify that the

trend might continue?

1) ___________________

2) ___________________

3) ___________________


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8ma

20ma

NOTICE: After price action

moves above the movingaverages, they act as support to

maintain the up-trend.

CHF/JPY

1 Hour

Moving Average Support


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8ma

20ma

NOTICE: Price action uses all 3

major moving averages for

support during this up-move.

FTSE 100

4 Hour

Moving Average Support

200ma


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8ma

20maMomentum: Stacked WRB kicks

start the move lower which was

maintained by the decliningmoving averages.

AUD/NZD

1 Hour

Moving Average Resistance


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8ma

20maCandlestick Math: This moves

begin with a series of bearish

candle formations which leads tobig gains.

USD/JPY

5 min

Moving Average Resistance

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FOREX 101:



Understanding Market Movement

Day 1



[ Understanding Market Movement ]

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8ma




USD/JPY

5 min

Spott ing the Signs of a Market Reversal


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8ma




USD/JPY

5 min


Why is this important?

USD/JPY

5 min

NOTICE: During the

down-trend, price actionpauses 5 times before

making a higher low.


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8ma




USD/JPY

5 min


USD/JPY

5 min

NOTICE: That after the

higher low, price action

began to prove itself by

settling above the moving

averages


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8ma

20ma


USD/CHF

30 min

NOTICE: That after the

WRB, the momentum

stopped and a newdowntrend began. Why

did this happen here?

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FOREX 101:



Pivot Highs and Pivot Lows

Day 1



[ Pivot Highs and Pivot Lows ]

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What are they and Why are they

important?

A price-bar formation that gives real-time price signals of support and resistance.

When a series of price bars reverses direction, it is considered a structural pivot

(not a calculated pivot).

The price bar has an open, high, low and close. The pivot is composed of a

minimum of three bars and occurs in every time frame. The pivot lows and highs

are used to draw trendlines to show support, resistance and trend direction.

Pivot High Pivot Low

[ Higher Highs and Higher Lows ]

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KEY: Recognizing thesubtle transition between

trends can turn in to

huge profits.

AUD/NZD1 Hour

[ Higher Highs and Higher Lows ]

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KEY: Spot where priceaction finds support

and look for distinctive

candlestick formations.

GBP/USD

1 Hour

[ Lower Highs and Lower Lows ]

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KEY: Spot where price

action finds support



USD/JPY

15 min

[ Lower Highs and Lower Lows ]

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KEY: Spot where price

action finds support



USD/JPY

15 min

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FOREX 101:



Trailing Stops: How to Lock in Profit

Day 1



[ The Importance of Stops ]

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What is a trailing stop?

A stop order that can be set at a defined percentage away from a security's

current market price.

A trailing stop for a long position would be set below the securitys currentmarket price; for a short position, it would be set above the current price.

A trailing stop is designed to protect gains by enabling a trade to remain

open and continue to profit as long as the price is moving in the right

direction, but closing the trade if the price changes direction by a specified

percentage.


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Why teach about stops before teaching

how to buy?

My two rules of investing: Rule one never lose money. Rule two never forget

rule one.

-Warren Buffet

"The four most dangerous words in investing are: 'this time it's different.

-Sir John Templeton

Capital Preservation


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Trailing stops and Discipline?

The trailing stop is more flexible than a fixed stop loss, since it

automatically tracks the currency pairs price direction and does not have

to be manually reset like the fixed stop loss.

Like all stop orders, the trailing stop enforces trading discipline by taking

the emotion out of the sell decision, thus enabling traders and investors

to protect profits and investment capital.

[ Trail ing the 20-period MA ]

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USD/JPY

Daily

Notice: The buyers

ability to keep price

action above the MAs

for so long. Why didthis change?


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USD/JPY

Daily

Action: Exit position at

the violation of this

low.


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Evaluation: How did

the decision to trail the

20ma work out? And

why?

USD/JPY

Daily


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Crude Oil

15 min

Notice: After and

aggressive push lower,

Price action finally

moves above the 8ma.


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Crude Oil

15 min


the violation of thishigh.


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Crude Oil

15 min

Evaluation: How did

the decision to trail the

8ma work out? Andwhy?

[ Trail ing each Candle ]

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CHF/JPY

1 HourNew Rule: Watch for Clearing Bars

after consolidation as they take out

previous highs. This is normally a sign

of a bigger move to come.

[ Trail ing each Candle ]

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CHF/JPY

1 Hour

Notice: Price action

has exploded away

from the MAs.

[ Trail ing each New Candle ]

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CHF/JPY

1 Hour


the violation of this

low.

[ Trail ing each New Candle ]

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CHF/JPY

1 Hour

Evaluation: How didthe decision to trail

using this technique

work out? And why?

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FOREX 101:

Mastery for Beginner andIntermediate Traders

Spotting the Three Market Trends

Day 1



[ The Three Market Trends ]

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Up-Trends

As price action moves higher, it has distinctive

characteristics. The chart will make a series of higher

highs and higher lows. The strength of the move with be

seen by which of the two MAs it respects. If it hugs the

8ma it is a more aggressive move than those that only hug

the 20ma.

This type of trend is one where price consolidates with

equal highs and equal lows. I have nicknamed this areas

as the trenches. It is important to what to look for

during this type of trend.

Down-Trends

Sideways-Trends

As price action moves lower, it has distinctive

characteristics. The chart will make a series oflower highsand lower lows. The strength of the move with be seen

by which of the two MAs it respects. If it hugs the 8ma it

is a more aggressive move than those that only hug the

20ma.

[ Up-Trend 8ma ]

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Discussion: What

happened here?

What type of trend is this?

Normal or Aggressive

GBP/USD

1 Hour

[ Up-Trend 20ma ]

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Discussion: What

happened here?

What type of trend is this?

Normal or AggressiveWhat type of trend is this?

Normal or Aggressive

FTSE 100

4 Hour

[ Down-Trend 8ma & 20ma ]

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Discussion: What

happened here?

AUD/NZD

Daily

[ Sideways-Trend The Trenches ]

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Discussion: What

happened here?

AUD/NZD

Daily

Discussion: This example

has a consolidation area

with a downward bias.

How would you trade

this?

Crude Oil

4 Hour


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Discussion: What

happened here?

AUD/NZD

DailyCrude Oil

4 Hour

Step 1: Identify

consolidation area


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Discussion: What

happened here?

AUD/NZD

DailyCrude Oil

4 Hour

Step 2: Pull back

and look at the

overall picture to

find clues.

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Discussion: What

happened here?

AUD/NZD

DailyUSD/CAD

4 Hour

Step 1: Identify

consolidation area


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Discussion: What

happened here?

AUD/NZD

DailyUSD/CAD

4 Hour

Step 2: Pull back

and look at the

overall picture to

find clues.

forex101 day1

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