Lx global
- 1. Let’s Start
- 2. • The financial markets are risky. There is a real risk of losing money in any Stocks or Futures or Currency markets or Options market, and the individual must decide his or her own financial ability to trade in such markets. Mirror Forex Pvt. Ltd. ,its directors, officers and or employees are not Responsible for any Investment for trading. • No guarantees nor warranties have been implied as to the profitability of any individual who may use the techniques and indicators learnt or used in this Forex, Stocks, Futures and Options course. No advice has been offered as to the individual’s financial decisions or ability to execute transactions in any trading market with the course contents learnt in this course. RISK DISCLAIMER
- 3. FOREX MARKET • Opened to small investors in 1995 • Prior to 1995, the requirement was to have $1 million USD in cash or assets to trade Forex • Margin requirements have changed for the small investor since then • Small investor can even open an account with $500 USD and trade Forex
- 4. FOREX MARKET De-centralized market. Many locations in the world. For example: Sydney, Tokyo, Hong Kong, Singapore, Frankfurt, London, and New York Starts: New Zealand/Sydney Ends: New York
- 5. Comparison Volume in Forex is more then all other world Markets COMBINED $5 Trillion $300 Billion $100 Billion US Stock Market US Treasury Bond Market FOREX
- 6. • To make money • To learn a technique of making money • Be your own boss and choose your own hours • Trade comfortably from home • To have more time for what you want to do: ► spend more time with your families ► to play Golf. WHY TRADE?
- 7. KEYS TO SUCCESS • STRONG DESIRE/INTEREST • PATIENCE • A VALID TRADING PLAN • CONFIDENCE IN TRADING PLAN • EMOTIONAL DISCIPLINE • RIGID MONEY MANAGEMENT • ADEQUATE CAPITAL
- 8. Success = SELF DISCIPLINE + KNOWLEDGE + EXPERIENCE + SKILL = Profits FORMULA FOR SUCCESS
- 9. A TRADING SYSTEM • Watch the markets religiously but without trading • Begin demo trading the most promising ideas • Know the primary chart pattern that repeats everyday • Learn the techniques necessary to be a consistent winner in the forex market • Know why market act in a non-random pattern that repeats everyday
- 10. Market Nature • Struggle between bulls and bears • Market moves in waves . At any given time, market is doing one of the following 3 things: – Trending UP – Trending DOWN – Sideways movement
- 11. Trending UP Trending DOWN Higher highs, Higher Lows Lower Highs, Lower Lows Sideways Movements
- 12. Trading as an Ideal Business • NO Boss, NO employees • Work from home or ANYWHERE IN THE WORLD • No Selling, No inventory • Minimal investment • Unlimited potential • Low overhead • Part time or Full time
- 13. WHY SOME TRADERS LOSE MONEY • NO EXPERIENCE • LACK OF KNOWLEDGE • NO SELF DISCIPLINE • NO TRAINING • NO FOCUS • NO MONEY MANAGEMENT
- 14. CHARACTERISTICS OF A SUCCESSFUL TRADER • A SENSE OF HUMOR • EMOTIONAL CONTROL • ABILITY TO FOCUS • FOLLOW THE TRADING PLAN • ALWAYS SEEKING TO IMPROVE AND LEARN • LITTLE OR NO EGO – STRONG SELF CONCEPT • ACCEPTANCE OF LOSING TRADES
- 15. CRITICAL MISTAKES TO AVOID • TRADING WITHOUT A PLAN - Relying on “Gut Feel” - Not paying attention to news reaction (forexfactory.com) • IMPATIENCE - Trading too frequently - Overconfidence – “This is easy” • POOR MONEY MANAGEMENT - Not using stops – Trading too large - Hoping the pain will end - Trades becoming “Investments”
- 16. MONEY MANAGEMENT • Don’t trade with ‘scared money’ • Don’t risk more than 5% of your capital on any trade • If your trading performance is struggling: - Reduce lot size, revert to demo trading or take a vacation - Key: Learn to succeed before going broke on the learning curve
- 17. PUT THE POWER OF PATTERN RECOGNITION IN YOUR TRADING • Learn how to put the probabilities of winning in your favor by focusing on the price • Know the primary chart pattern that repeats everyday • Learn to trade without fear • Learn the techniques necessary to be a consistent winner in the stock market • Understand the harmony in the forex market and why it must move up and down
- 18. FOREX MARKET • Trade possibilities in approx. 30 currency pairs • Focus on 6 currencies: USD, GBP, JPY, CHF, CAD, AUD, EUR • Best pair to trade in terms of volume and volatility is EUR/USD • No gaps • Immediate execution • Leverage 500:1
- 19. FOREX MARKET • 1 standard lot = $100,000 1 pip = $10 USD • 1 mini lot = $10,000 1 pip = $1 USD • 1 micro lot = $1,000 1 pip= $0.10 USD • Our objective is to capture pips
- 20. Bearish Market Uptrend Uptrend Uptrend Downtrend Downtrend Downtrend Sideways Trend Sideways TrendSideways Trend
- 21. Timing in the Forex Market • Forbidden timing to trade : 1 am – 5 am – No major markets open – Minimum movement – Financial institutions are still executing transactions but not large enough to move the market – Market consolidates (sideways/choppy) and moving in the range of 5-20 pips – During this time, there is more risks, can have losing trades and may be frustrating • Best time to trade : 2pm – 11 pm – During these times there are major movements in the market due to some fundamental economic news announcements
- 22. Trading Types • Short term trading (Day trading) – Closing all positions at the end of the day – Swing trading (3-10 days) • Long term trading (6 months – 2 years) • Note: Day trading margins are much less then swing or long term trading margins
- 23. SWAP/Rollover Swap is the fee that the broker/bank/market maker charges or pays for any open position that is not closed before the end of the trading day. SWAP is based on the interest rate as determined by the central banks of the country/region of the currency pair. SWAP is determined by the lot size of the open position per day. The fee will be tripled on Wednesday.
- 24. Break Time
- 25. LEVEL 2
- 26. Candlestick Anatomy High “Upper Shadow” Low “Lower Shadow” Range Open Close Open Close Japanese Candlestick:
- 27. Reversal Price Patterns Candle types Doji Engulfing Hammer Hanging man Harami Harami Cross Inverted Hammer Shooting Star • Morning Star • Evening Star • Tweezers top • Tweezers bottom • High Wave Candles • Spinning Tops
- 28. Doji Four types of Dojis: Common, Long-Legged, Dragon Fly and Gravestone Dojis open and close are at the same price level. Common Doji
- 29. Engulfing Bullish Pattern Forms when a small red candlestick is followed by a large green candlestick that completely eclipses or "engulfs“ the red candlestick. The shadows or tails of the small candlestick are short, which enables the body of the large candlestick to cover the entire previous candlestick.
- 30. Engulfing Bearish Pattern Consists of a small green candlestick with short shadows or tails followed by a large red candlestick that eclipses or "engulfs" the small green one. Smaller body
- 31. Hammer Occurs when a security trades significantly lower than its opening, but rallies later to close either above or close to its opening price. This pattern forms a hammer-shaped candlestick. Body is red if stock closed lower. Body is green if it closed higher.
- 32. Hanging Man A bearish candlestick pattern that forms at the end of an uptrend. It is created when there is a significant sell-off, but buyers are able to push this stock back up so that it closes at or near the opening price. Generally the large sell-off is seen as an early indication that the bulls (buyers) are losing control and demand for the asset is waning.
- 33. Bullish Harami Bullish Harami Pattern is characterized by a small green real body contained within a prior relatively long red real body. “Harami” is an old Japanese word for “pregnant”. The long red candlestick is “the mother” and the small candlestick is “the baby”.
- 34. Bearish Harami Bearish Harami Pattern is a two-candlestick pattern composed of a small red real body contained within a prior relatively long green real body. “Harami” is an old Japanese word for “pregnant”. The long green candlestick is “the mother” and the small red candlestick is “the baby”.
- 35. Bullish Harami Cross Bullish Harami Cross Pattern is a Doji preceded by a long red real body. The Bullish Harami Cross Pattern is a major bullish reversal pattern. It is more significant than a regular Bullish Harami Pattern.
- 36. Bearish Harami Cross Bearish Harami Cross Pattern is a Doji preceded by a long green real body. The Bearish Harami Cross Pattern is a major reversal pattern and is more significant than a regular Bearish Harami Pattern
- 37. Bullish Inverted Hammer Bullish Inverted Hammer Pattern is a candlestick characterized by a long upper shadow and a small real body preceded by a long red real body.
- 38. Bearish Inverted Hammer There is a long string of green candles, and then suddenly a red candle appears. The body is very short and has a sizeable upper wick. Prices have started at a low point, but made up for it.
- 39. Shooting Star Shooting Star Pattern suggests that prices may be approaching to a top. It looks like its name, a shooting star. The shooting star is a small real body characterized by a long upper shadow, which gaps away from the prior real body.
- 40. Morning Star This is a three-candlestick bullish formation that signals a major bottom. It is composed of a first long red body, a second small real body, green or red, gapping lower to form a star. These two candlesticks define a basic star pattern. The third is a green candlestick that closes well into the first session’s red real body. Third candlestick shows that the market turned bullish now.
- 41. Evening Star This is a major top reversal pattern formed by three candlesticks. The first candlestick is a long green body; the second one is a small real body that may be green. It is characteristically marked with a gap in higher direction thus forming a star. In fact, the first two candlesticks form a basic star pattern. Finally we see the red candlestick with a closing price well within first session’s green real body. This pattern clearly shows that the market now turned bearish.
- 42. Tweezers Top High at the same price. Size of body is irrelevant. Lows can be uneven but tops have to be the same
- 43. Tweezers Bottom Low at the same price. Size of body is irrelevant. Highs can be uneven but bottom have to be the same
- 44. High Wave Candles Bearish pattern
- 45. Spinning Top Small real bodies Bearish pattern
- 46. Types of Orders Market Order Limit Order Stop Market Stop Limit
- 47. Market Order When you want to buy or sell at current market price Limit Order When you are expecting a market to fill your buy/sell order at your predetermined price
- 48. Stop Market An order placed with a broker to close a position when it reaches a certain price. A stop-loss order is designed to limit an investor's loss Stop Limit An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
- 49. Support The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock The price at which a stock or market can trade, but not exceed, for a certain period of time Market is Nothing but support or resistance. Resistance
- 50. Swap Interest for holding position over night. From 5 pm ET (2pm PST) to 5pm ET (2pm PST) the next day. Based on the Central Bank Interest Rates of each country or region. Example: Buy EURUSD - Negative 4.00% - 5.25% = -1.25% Sell EURUSD - Positive 5.25% - 4.00% = 1.25% Buy USDJPY - Positive 5.25% - 0.50% = 4.75% Sell USDJPY - Negative 0.50% - 5.25% = -4.75%
- 51. Break Time
- 52. LEVEL 3 COURSE
- 53. Fixed Resistance & Support for USDJPY and EURUSD Milestones Consists of three sets of umbers for major milestones. Every time these two pairs come to these milestones, the price hesitates figuring out or hinting what to do next. 00-15 45-65 75-85 Minor milestones: 95, 50 or 55 and 35 USDJPY
- 54. The 3 major milestones are at the price 0-15, 45-65 and 75-85 If the trend is up, when the price passes 0, the price trend will try to reach 15, but before it tries to pass 15, it will stay between 0-15 for awhile. Milestone Theory “Works when Applied to the EUR/USD and USD/JPY Pairs”
- 55. Milestone Theory If the trend is up, when the price passes 45, the price trend will try to reach 65, but before it tries to pass 65, it will stay between 45-65 for awhile.
- 56. Milestone Theory If the trend is up, when the price passes 75, the price trend will try to reach 85, but before it tries to pass 85, it will stay between 75-85 for awhile.
- 57. Bollinger Bands
- 58. Bollinger Bands “Bollinger Bounce” Sel l Sel l Sel l Sel l Sel l Buy Buy Buy Buy
- 59. Bollinger Bands “Bollinger Squeeze” Candle breaks out of upper band.
- 64. TIPS • Always take a look at the time frame larger than the one you've chosen to trade with. It gives the bigger picture of market price movements and thus helps to clearly define the trend. For example, when trading with 15 minute time frame, take a look at 1 hour charts. • Simplicity is the key when choosing a Forex system A trading system which is overloaded with indicators and trading rules stands little chance to become a winner. Watching to many charts and indicators makes a mess on the working table, while trading signals begin contradict each other... So, keep it simple. If doing it right, Simpler can be smarter!
- 65. Why there is so much talk about having a Forex trading system? If you want to be consistently successful in Forex, you need a Trading System, and here is why:- Without a trading system you won't be able to analyse what you did right and what you did wrong. - Without a trading system your trading preferences will change all the time: every new trade could easily have different reasons behind it. -Without a trading system you can be late on entries due to constant hesitation as a result of battling with your intuition or a sudden second opinion. - Without a trading system you'll have more doubts about the best time to exit a trade or the best place to keep a protective stop. -Without a trading system you cannot trade consistently and demand a disciplined trading from yourself. - Without a trading system you cannot fully work out your money management and risks. - Without a trading system you'll be prone to fear of losing and every time you would need to regain the confidence. TIPS