WELCOME

Transcription

1 WELCOME

2 Part 1: Building the Forex Traders Foundation Greg Michalowski Twitter: gregmikefx

3 Disclaimer Disclaimer High Risk Warning: All news, opinions, research, data, or other information contained within this presentation are provided as general market commentary and do not constitute investment advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. ADVISORY WARNING: FXDD provides sources of economic and market information during this broadcast as an educational service to its clients and prospects. The opinions or recommendations expressed during the broadcast are not intended as investment advice and are based on data reasonably believed to be accurate at the time of publication. Clients and prospects are advised to carefully consider the opinions and analysis offered in the context of your individual analysis and decision making. None of the statements of opinions or recommendations are to be considered as constituting a track record. Past performance is no guarantee of futures results and FXDD specifically advises clients and prospects to carefully review all claims and representations made during the broadcast in light of your particular analysis, trading style and objectives. All news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

4 Disclaimer I will be presenting my method for trading. There are other trading methods available. Please always do their own research and due diligence before adhering to anyone s trading opinions.

5 Today s Agenda 1. Building the Foundation for Trade Entry 2. Formulating and Executing your Forex Trading Plan/Strategy 3. Managing and Exiting

6 Building the FOUNDATION for Trade Entry

7 More Important? REWARD or RISK VS. I sold the EURUSD at I am TARGETING I sold the EURUSD at my STOP is at

8 Focusing on RISK is more important I sold the EURUSD at I am targeting I sold the EURUSD at my stop is at

9 Targeting Reward = Risk Unlimited LIMITED Traders who focus on TARGETING REWARD are saying RISK is potentially UNLIMITED.

10 Targeting Risk = Rewards Unlimited UNLIMITED Traders who focus on DEFINING and LIMITING RISK are saying REWARDS are UNLIMITED. UNLIMITED

11 Focusing on RISK > REWARD

12 QUESTION How is RISK Defined and Limited?

13 ANSWER By trading near key technical levels called BORDERLINES

14 REQUIREMENTS OF BORDERLINES Bullish Bearish FEAR Define Risk Tend to have Energy near the level Bullish above and Bearish below Seen and used by many Help define trends Reduce FEAR

15 TECHNICAL TOOLS for DEFINING BORDERLINES

16 MY TECHNICAL TOOLS FOR BORDERLINES 1. Moving Averages a. 100 bar SMA b. 200 bar SMA Defines Risk Tends to have Energy near the level Bullish above and Bearish below Seen and used by many Helps define trends Reduces FEAR 200 BAR MA (GREEN) 100 BAR MA (BLUE)

17 RISK STOP 200 BAR MA SELL 100 HOUR MA +60 POTENTIAL PROFIT +145 POTENTIAL PROFIT +192 POTENTIAL PROFIT

18 +102 POTENTIAL PROFIT +140 POTENTIAL PROFIT RISK BUY STOP

19 When MAs are so close, look/anticipate a momentum BREAK.

20 29 Pips Where is RISK of LOSS DEFINED? Since the price goes lower in the example and the STOP LOSS is not triggered, the trader has a POTENTIAL PROFIT +43 POTENTIAL PROFIT STOP/ STOP/ SELL/ POTENTIAL PROFIT +97 POTENTIAL PROPFIT When the trade is initiated against the 100 bar MA, the POTENTIAL STOP LOSS is defined using the 200 MA (1.6037) and/or the high for the day (1.6045). If the price goes higher, a LOSS is REALIZED.

21 Range is narrow over with the price moving above and below 100 and 200 day MA +320 PIPS BUY RISK At the price moved above the 200 day MA (green MA line). Bias turns from bearish to bullish. This is the start of the Bullish move in the USDJPY. A trade initiated on the move above the 200 day MA (green line), has DEFINE RISK OF LOSS against the 100 day MA (blue line). If the price moves below the 100 day MA, the trade is STOPPED at a LOSS (85 pip LOSS/RISK)

22 Only one close below the 200 day MA. Key support holding.

23 MY TECHNICAL TOOLS FOR BORDERLINES 1. Moving Averages a. 100 bar SMA b. 200 bar SMA Defines Risk Tends to have Energy near the level Bullish above and Bearish below Seen and used by many (Simple) Helps define trends Reduces FEAR 2. Trend Lines

24 MY TECHNICAL TOOLS FOR BORDERLINES 1. Moving Averages a. 100 bar SMA b. 200 bar SMA Defines Risk Tends to have Energy near the level Bullish above and Bearish below Seen and used by many (Simple) Helps define trends Reduces FEAR 2. Trend Lines a. Up Trends b. Down Trends c. Channels d. Ceilings/Floors

25 POTENTIAL PROFIT POTENTIAL PROFIT POTENTIAL PROFIT POTENTIAL PROFIT RISK BUY #3 STOP BUY #2 BUY/RISK #2-20 RISK

26 FOMC DAY Event Risk is HIGH Liquidity Risk is High Market Risk is High BUT PIPS BUY RISK Trend Line AND 100 hour MA AND Low DEFINE and LIMIT RISK BEFORE the release. If price goes below this level, trade is closed with a LOSS REALIZED

27 FAILED BREAK STOP RISK SELL 4 5 BREAK 1 Anticipate a momentum BREAK when there are a number of points on a trend line. Other traders see the same thing and will be prepared to react POTENTIAL PROFIT +266 POTENTIAL PROFIT

28 MY TECHNICAL TOOLS FOR BORDERLINES 1. Moving Averages a. 100 bar SMA b. 200 bar SMA Defines Risk Tends to have Energy near the level Bullish above and Bearish below Seen and used by many (Simple) Helps define trends Reduces FEAR 2. Trend Lines 3. Fibonacci Retracements

29 KEY FIBONACCI RETRACEMENT LEVELS There are three main retracement levels % 2. 50% % The 38.2% and 50% = Correction Zone

30 Stay below the Correction Zone, keeps the sellers in charge Trend move Borderlines Correction

31 Price stays below the Correction Zone (Borderlines), and sellers reenter. Trend move Borderlines Trend move

32 USING FIBO.mpr4 VIDEO

33 FOUNDATION SUMMARY 1. Focus on Risk. Reward may follow. 2. Trade near key technical levels (Borderlines). 3. Three technical tools, Moving Averages (100 and 200 SMA) Trend lines Fibonacci Retracements

34 +111 REWARD +78 REWARD -20 RISK SELL -23 RISK SELL BUY -20 RISK LOSING -28 RISK TRADE BUY +71 REWARD +114 REWARD +138 POTENTIAL PROFIT

35 -24 RISK -24 SELL RISK SELL +75 POTENTIAL +101 PROFIT REWARD This is the same trade but just a little later. Define risk. Limit Risk. Reward is the unknown, but that is OK POTENTIAL +197 REWARD PROFIT

36 +72 POTENTIAL PROFIT POTENTIAL REWARD BUY -21 RISK

37 BUY -25 RISK STOPPED OUT Trading Account Loses (25) Pips What Happened? UK Inflation Report came out which sent the price down on initial headlines. STOPPED OUT. EVENT RISK INCREASED.

38 +156/+197 ORIGINAL TRADE 200 hour MA BUY here 100 hour MA (STOP LOSS LEVEL -24 pips) Failed BREAK What if BOUGHT here on the BREAK OF THE 200 bar MA on the 5 min. chart? STOP LOSS What if you waited and BOUGHT here AFTER THE EVENT RISK and Failed BREAK? Same STOP LOSS

39 Other Borderline MA levels in the GBPUSD into September

40 Part 2: Formulating your FOREX Trading Plan/Strategy Greg Michalowski Twitter: gregmikefx

41 Disclaimer Disclaimer High Risk Warning: All news, opinions, research, data, or other information contained within this presentation are provided as general market commentary and do not constitute investment advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. ADVISORY WARNING: FXDD provides sources of economic and market information during this broadcast as an educational service to its clients and prospects. The opinions or recommendations expressed during the broadcast are not intended as investment advice and are based on data reasonably believed to be accurate at the time of publication. Clients and prospects are advised to carefully consider the opinions and analysis offered in the context of your individual analysis and decision making. None of the statements of opinions or recommendations are to be considered as constituting a track record. Past performance is no guarantee of futures results and FXDD specifically advises clients and prospects to carefully review all claims and representations made during the broadcast in light of your particular analysis, trading style and objectives. All news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

42 Disclaimer I will be presenting my method for trading. There are other trading methods available. Please always do their own research and due diligence before adhering to anyone s trading opinions.

43 FORMULATING YOUR FOREX TRADING PLAN/STRATEGY

44 Formulating your Trading Plan Odds of success in your trading may be in your favor simply by trading near BORDERLINES, DEFINING RISK, LIMITING RISK and hoping the market agrees with the TOOLS YOU USE and WHAT YOU SEE

45 Formulating your Trading Plan If the market is active (i.e., not sitting in a narrow range), and you define your risk, you have the potential to: RISK A LITTLE (LOSE) OR MAKE MORE THAN A LITTLE (WIN)

46 100 HOUR MA 200 HOUR MA RISK STOP SELL STOP RISK SELL 100 HOUR MA POTENTIAL REWARD STOP RISK SELL 100 HOUR MA POTENTIAL REWARD POTENTIAL REWARD POTENTIAL REWARD STOP SELL POTENTIAL REWARD RISK 100 HOUR MA BUY STOP

47 STOP RISK SELL POTENTIAL REWARD POTENTIAL REWARD POTENTIAL REWARD RISK BUY STOP BUY RISK STOP POTENTIAL REWARD STOP RISK SELL BUY RISK STOP POTENTIAL REWARD

48 Trends Correct RISK STOP SELL POTENTIAL REWARD

49 Trends Correct The price fell back below the % retracement at , but moved back above the 50% at Trade is STOPPED OUT for a LOSS STOPPED OUT RISK

50 Combining THREE TOOLS

51 RISK STOP SELL PRIMARY TOOL TRADING FACTS 1. Current Price < 100 SMA 2. Current Price < 200 SMA 3. Price below TREND LINE 4. RISK CAN BE DEFINED AND LIMITED POTENTIAL REWARD When the price move cannot reach the lower trend line or moves above the topside trend line, it is time to EXIT the TRADE.

52 PRIMARY TOOL TRADING FACTS 1. Current Price < 100 SMA 2. Current Price < 200 SMA 3. PRICE below 50% retracement 4. RISK CAN BE DEFINED AND LIMITED RISK STOP SELL When the price moves above trend line resistance, it is time to EXIT the TRADE. EXIT AREA. POTENTIAL REWARD

53 Timing your Trade Entries

54 ENERGY

55 ENERGY in trading is created by having Multiple reasons to trade which moves the market away from the point of the trade.

56 More M = More E U LT I P L E R E A S O N S t o T R A D E N ER G Y

57 More Energy = Risk a Little Make More than a Little

58 You just need to get the DIRECTION RIGHT Some of the Times (40%-50%)

59 USDJPY

60 147 Pips 200 HOUR MA Days 100 HOUR MA CHART FACTS USDJPY 1 Hour Chart Current Price: Simple MA: Simple MA: Days 147 Pip Range PRIMARY TOOL TRADING FACTS 1. Current Price < 100 SMA 2. Current Price < 200 SMA 3. Topside Trend line held 4. Price < Bottom Trend line SECONDARY TRADING FACTS 1. 4 Day Range Narrow (147 Pips) 2. Current Day Range Narrow (89 pips) and 200 Hour MA flat * 4. Two Moving Averages Converging w/ the Price *

61 Non TRENDING Key Concept: Non Trending transitions to TRANSITIONS Trending TRENDING

62 147 Pips Days 100 HOUR MA -25 BUY or SELL? STOP SELL RISK? 200 HOUR MA

63 RISK STOP SELL STOP SELL POTENTIAL REWARD = +82 POTENTIAL REWARD = +173 POTENTIAL REWARD = +208

64 GBPUSD

65 T R E N D M O V E CORRECTION ZONE - RISK CHART FACTS GBPUSD 1 Hour Chart Current Price: Simple MA: Simple MA: Not in Play In Correction Zone between 38.2% and 50% of a Trend move higher

66 BUY or SELL? RISK? -15 RISK Risk is DEFINED RISK is LIMITED MULTIPLE REASONS ACCEPT RISK?

67 POTENTIAL REWARDS WHERE S THE ENERGY?

68 H Pips 170 Pips 100 H MA C-ZONE 1 2

69 LOOK AT OTHER TIME FRAMES By looking at key technical level on other time period charts, traders can often get additional clues for trade bias and trade entries

70 LOOK AT OTHER TIME FRAMES By looking at key technical level on other time period charts, traders can often get additional clues for trade bias and trade entries

71 What are the Longer Term Traders focused on?

72 CHART FACTS GBPUSD DAILY Chart Price is between the 100 and 200 day MAs but the 38.2% of year range is slowing the move. Also area of ENERGY from past. KEY BORDERLINE Time to Move

73 What are the Intraday Traders focused on?

74 Price is going above and below MAs FAILED BREAK TWICE RISK HERE SELL HERE? CHART FACTS GBPUSD 5 Minute Chart Price above and below 100 and 200 bar MA (sideways/converged) Price failed on BREAK higher. Need to BREAK below low. Range Narrow.

75 What are the 3 types of Trader s Trading Bias? BULLISH or BEARISH?

76 Hourly: Non-Trending below ceiling at Above 100 hour MA at BIAS: NEUTRAL, but LOOKING FOR A BREAK

77 Daily: Key resistance against 38.2% retracement at is holding. BIAS: BEARISH. Holding ceiling at

78 5 Minute: Falls below the converged 100 and 200 bar MA at BIAS: BEARISH below 100 and 200 bar MA and Correction ZONE

79 If different TYPES OF TRADERS (i.e., Short Term, Swing and Long Term) are in agreement to bias If risk can be DEFINED and LIMITED If there are MULTIPLE REASONS to trade TRADE

80 RISK SELL BREAK HOLD BREAK TRADE FACTS GBPUSD 1 HOUR Chart Price moved below 100 MA and stayed below Price tested 200 MA,100 MA (between Goal Posts) Broke 100 MA Price moves to channel trend line and stalls (+131) Accelerates trend through trend line (liquidation) Stops at before consolidating (+235) +131 POTENTIAL PROFIT +235

81 SUMMARY: FORMULATING YOUR FOREX TRADING STRATEGY 1. Trade near BORDERLINES 2. FIND Multiple Reasons to TRADE 3. RISK a LITTLE to MAKE MORE than a LITTLE (DEFINE and LIMIT RISK) 4. NON TRENDING TRENDING 5. AGREEMENT from MULTIPLE TIME PERIODS

82 TRADE FACTS GBPUSD DAILY Chart Price holds below 38.2%. Borderline to lean against Price BREAKS trend line at Price BREAKS below 100 day MA NOW WHAT? PUT in FIBONACCI FOR TARGETS. BREAK BREAK

83 TRADE FACTS GBPUSD DAILY Chart Price BREAKS 38.2% retracement. Trend continues. Price STOPS at 50% retracement target. Take profit at limit of Consolidation ZONE. BREAK BREAK KEY TARGET REACHED AT 50% FIBO.

84 Part 3: Exiting your Forex Trades with a purpose Greg Michalowski greg@fxdd.com Twitter: gregmikefx

85 Disclaimer Disclaimer High Risk Warning: All news, opinions, research, data, or other information contained within this presentation are provided as general market commentary and do not constitute investment advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. ADVISORY WARNING: FXDD provides sources of economic and market information during this broadcast as an educational service to its clients and prospects. The opinions or recommendations expressed during the broadcast are not intended as investment advice and are based on data reasonably believed to be accurate at the time of publication. Clients and prospects are advised to carefully consider the opinions and analysis offered in the context of your individual analysis and decision making. None of the statements of opinions or recommendations are to be considered as constituting a track record. Past performance is no guarantee of futures results and FXDD specifically advises clients and prospects to carefully review all claims and representations made during the broadcast in light of your particular analysis, trading style and objectives. All news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

86 Disclaimer I will be presenting my method for trading. There are other trading methods available. Please always do their own research and due diligence before adhering to anyone s trading opinions.

87 More Important? ENTRY or EXIT VS.

88 Most Traders focus on. VS.

89 What bothers me is.

90 What are YOUR Reasons to Exit? I made 20 pips. I have a profit. No one ever went broke taking a profit Bulls and bears make money. Pigs get slaughtered I am afraid the market will correct and my profit will disappear FEARING SUCCESS

91

92 Traders can look to ride winners especially in a trending market to get ahead in your trading.

93 After all, if we are going to work so hard in trying to increase the odds of success, why not take advantage of that work.., WITH CONFIDENCE

94 Mindset on a Trade Taken 1. Risk is Defined at the beginning of the trade. Either you lose or you win. DO NOT FEAR. LOSING IS PART OF TRADING

95 Mindset on a Trade Taken 1. Risk is Defined at the beginning of the trade. Either you lose or you win. DO NOT FEAR. LOSING IS PART OF TRADING. 2. If you win - and want take profit - look to take partial profit where Pips Gained = Risk Pips on Trade Entry. Optional: Move stop closer to Breakeven

96 Mindset on a Trade Taken 1. Risk is Defined at the beginning of the trade. Either you lose or you win. DO NOT FEAR. LOSING IS PART OF TRADING. 2. If you win - and want take profit - look to take partial profit where Pips Gained = Risk Pips on Trade Entry. Optional: Move stop closer to Breakeven 3. Define targets in the direction of the trade. When a target is reached, move stop.

97 What is a Target? Target = Defined Technical Borderline in the direction of the trade/trend

98 What is a Target? Targets can be entry levels for traders looking to get in on the trade

99 What is a Target? Targets get harder and harder to pass as a trend move continues. This leads to corrections.

100 Mindset on a Exiting 1. Risk is Defined at the beginning of the trade. Either you lose or you win. DO NOT FEAR. LOSING IS PART OF TRADING. 2. If you win - and want take profit - look to take partial profit where Pips Gained = Risk Pips on Trade Entry. Optional: Move stop closer to Breakeven 3. Look for targets in the direction of the trade. When a target is reached, move stop. 4. Trades will often have corrections. Traders invest profit during corrections. If a correction is too deep, look to exit (> 50% of the last trend leg). 5. If a Target level/area has a cluster of technical borderlines (multiple reasons to trade), consider exiting the trade or taking more profit.

101 EURUSD

102 TARGET 50% Retracement at % at TARGETS 200 hour MA at Retracement at Recent High at hour MA at

103 Price> 100 and 200 DAY MA... BULLISH What Price are held the the LONGER 50% retracement TERM TRADERS support focused level.bullish on in this CHART?

104 More Important? Entry or Exit

105 ANOTHER EXAMPLE

106 THE PRICE SHOULD NOT GO BELOW THIS AREA

107 TARGETS PIPS / THE PRICE > 100 and 200 HOUR MA Above /90 87 PIPS for WEEK BULLISH

108 1 2 PRICE is holding above SUPPORT BULLISH

109 Price is above = 50% of move down from 2011 high.

110

111 THANK YOU Commentary at and

112 All information on this site is provided for informational and educational purposes only, not intended for trading purposes or advice. As with all such advisory services, past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.