In the following
section we are going to give you a
"sneak peak"
at some of the training you can expect in the
GET READY, GET SET, GO FOREX
CD!
Getting to know the
terminology.
Module 1 consists of seven sections and a quiz at the end of each
section.
In these sections you will learn:
market terminology
currency codes
the structure of each currency pair
the five major instruments
buying and selling
bid and ask
lot sizes
pips and pip values
margin accounts
market orders
stop orders
limit orders
roll over
profit and losses
We will show you:
Module 2
Times and time frames
Module 3
Technical Analysis
Patterns: Head-and-Shoulders
Scenarios: Market Cycle Models
Module 4
Profit Locking Techniques
Setting Goals
Risk Management
Module 5
Indicators
Banded Oscillators
Probability Work Sheet
Module 6
Track Records
Module 2
Preparing for your trading career
Module 2 consists of nine sections and a quiz at the end of each section.
You will be shown:
the tools used to build your trading
business
what to do to become a successful
trader
how to
build the right expectations
to frame your trading
time
how to exercise
discipline
in-depth training on the
software
At the end of this module you will be asked to complete your assignments and
forward them to the training class where a professional trader will mark your
assignments, and communicate directly with you via e-mail regarding your
progress.
In module 2 you will be shown the tools used to build your trading
business, what to do to become a successful
trader, how to
build the right expectations, how to frame your trading
time, how to exercise
discipline and in-depth training on the
software.
For now we will show you some of
the features mentioned above.
Before you
can start you need to establish your time frame. What we are going
to discuss here is the human reality vs. market
reality. As humans, we may have a certain way we do things everyday. We have
routines.
You and your reality
Your
daily routine might sound like this.
You
get up in the morning at 6 o’clock and prepare for the day.
Either you go to work or play golf. You
have tea at 11 o’clock, lunch at 1 o’clock, finish work at
4.30, play with the dogs or children, at 5.30 spend time in the gym
and have supper at, 7 o’clock.
This
is your reality as a person.
Let's look at the market reality
As we know by now, the Forex market is fully decentralized and traded through a computerized intra-bank system, unlike other investment markets that trade on central exchanges. There are no official opening and closing hours for trading, keeping the
market open around the clock. The market opens on Sunday night (8:00 PM EST) and remains active until closing hours on Friday afternoon (3:00 PM EST), providing nearly six full days of activity. The
market only closes on world holidays and is traded in five major world
markets.
The chart below lists the major world markets' opening and closing times (EST) along with the daily trading
volumes.
World Markets
Open
Close
Daily Volume
Australian
3 PM
11 PM
3%
Asian
7 PM
3 PM
27%
Europe
2 AM
11 AM
18%
United Kingdom (London)
3 AM
13 PM
32%
United States
8 AM
2 PM
20%
The market moves from Monday to
Friday. Every trade done anywhere in the world shows on the charts as the market changes and the prices
are updated. Eight hours out of every 24 hours, are more active than the rest of the day. Banks,
hedgers and crowds move these markets and only on weekends do the markets
rest.
This is market reality.
The chart below illustrates the three major markets and the time zones these markets are open.
Banner
New York London
Tokyo
Module 3
Module 3 is probably one of the most important
sections of the training modules. Here you learn all
about the technical issues and terms that traders use to determine
whether a market is tradable or not. Here we discuss: what the market is,
what makes the market
move, charts and candle
sticks, market predictability in
trends, support
and resistance, peaks and troughs, drawing trend lines, price patterns, positioning yourself in the correct
scenario and how fundamentals influence
your trading.
The below content is to give
you an idea of what you can expect in module 3.
How to get to know the market and
position yourself in a position with the highest
probability for trade profitably
Module 3 consists of five sections and a quiz at the end of each section.
In these sections you will learn:
what the market is
what makes the market
move
about charts and candle
sticks
the market predictability in
trends
support
and resistance
peaks and troughs
drawing trend lines
price patterns
positioning yourself in the correct
scenario
how fundamentals influence
your trading
Each section contains practical lessons, which are easy to follow.
At the end of this module you will be asked to complete your assignments and
forward them to the training class where a professional trader will mark your
assignments and communicate directly with you via e-mail regarding your progress.
Technical Analysis
The Art of Technical Analysis
The Art of technical analysis is not perfect and we must remember that we always deal in probabilities and never certainties and keep the analysis as simple as possible.
Patterns: Head-and-Shoulders
Head-and-shoulders is one of the most common and certainly the most notorious of the various price patterns. These patterns occur as reversals, both up and down, and as continuation or consolidation formations.
The pattern is as follows:
Sellers come in at the highs (left shoulder) and the downside is probed (beginning neckline.)
Buyers soon return to the market and ultimately push through to new highs (head.)
However, the new highs are quickly turned back and the downside is tested again (continuing
neckline).
Tentative buying re-emerges and the market rallies once more, but fails to take out the previous high. (This last top is considered the right shoulder.)
Buying dries up and the market tests the downside yet again.
Head-and-shoulders tops mark the end of
up trends on low volume.
The classic head-and-shoulders consists of the rally, the head, separated by two smaller (though not necessarily identical) rallies known as the left and the right shoulders.
It is possible to construct a trend line joining the low of the left shoulder and the head. This is known as the neckline.
The neckline does not have to be horizontal: it may be flat, rising, or falling.
The pattern is completed when the price breaks decisively below the neckline.
The lower peak is at X and the neckline marks the
breaking of the preceding low. The violation of the neckline B confirms that a series of declining peaks and troughs is now in force.
After breaking the neckline, prices sometimes pull back to it.
There is an excellent opportunity to short the
market when prices pull back to the neckline from below on low volume. The distance from the top of the head to the neckline (H) provides a target for profit.
Measure the distance from the head to the neckline, and
project it down from the breakout point to obtain a minimum ultimate price objective.
The deeper the pattern the greater its importance.
Scenarios: Market Cycle Models
Module 4
In module 4 you learn the valuable lessons of
how to manage your money through risk management, profit targeting, where to place stops,
applicable psychology and how to draw up your trading business
plan. In the information following you get an idea of the
sections taught in this module.
Learn how to protect your capital and become a professional
Module 4 consists of 3 sections and a quiz at the end of each section.
In these sections you will learn:
the valuable lessons of money
management
risk management
profit targeting
where to place stops
applicable psychology
how to draw up your trading business
plan
At the end of this module you will be asked to complete your assignments and
forward them to the training class where a professional trader will mark your
assignments and communicate directly with you via e-mail regarding your
progress.
Profit Locking Techniques
Editing stops and capturing profits
Once you are in a trade you can capture you profit by removing your limit order and editing your stop the following
way.
For example:
Let us assume that trading is long and one entered the Euro at 1.6010. The market moves to 1.6040 and
retraces to 1.6025. The market goes to a new high of 1.6070. If one were chasing the market, one would be constantly moving one's stop and placing it at the low or a few pips below the low, locking in profit. Should the market reverse, it would stop one out.
Setting Goals
We
all have dreams and hopes about things we want if
everything goes well. A goal is not just a pipe dream, it is
an objective. It is something we work hard towards. Once you start
setting goals, you are serious about becoming a successful trader.
Are
your goals achievable? If you set a goal that is unrealistic, you
are setting yourself up for failure. A new trader who sets the
goal of making $20 000 with a $3000 account in the first month may
be setting himself up for major disappointment. It is possible for
a new trader to accomplish this goal. Probably somewhere in the
world a trader has done this, but you will agree that this would be
the exception and rather than the norm.
Setting
effective goals requires that you start doing your homework. Do not write down what you
hope will happen, write down what
you truly believe is going to happen.
Risk Management
Extensive testing has shown that the maximum amount a trader may lose on a single trade without damaging his long-term prospects is 5 percent of his equity. This limit includes slippage.
On a $20,000 account, you may not risk more than $1000 on any
trade
On a $100,000 you may not risk more
than $5000 on a trade
On a $10 000 account you may not risk more than $500 on a trade
On a $3000 account never risk more than
$150
Most amateurs shake their heads when they hear this. Many have small accounts and the 5 percent rule
spoils their dreams of quick profits.
Most successful professionals, on the other hand, consider the 5 percent limit too high. They do not allow themselves to risk more than 1 or 1.5 percent of their equity on any single trade. The 5 percent rule puts a solid floor under the amount of damage the market can do to your account. Even a string of five or six losing trades will not cripple your prospects.
In any case, if you are trading to create the best track record, you will not want to show more than a 6 percent or 8 percent monthly loss. When you hit that limit, stop trading for the rest of the month. Use this cooling off period to re-examine yourself, your methods, and the markets. The 5 percent rule keeps you out of riskier trades.
When your system gives an entry signal, check to see where to place a logic stop. If that
exposes more than 5 percent of your account equity - pass up that trade. It pays to wait for trades that allow very close stops. Waiting for them reduces the excitement of trading but enhances profit potential. You choose which of the two you really want. The 5 percent rule helps you decide how many contracts to trade.
For example, if you have $20,000 in your account, you may risk up to $1000 per trade. If your system flags an attractive trade with a $575 risk, then you may trade only one contract. If the risk is only $275, then you can afford to trade two contracts. This can determine if you are going to be in the trading business for a long or short time.
Module 5
In module 5 you will learn
about indicators, bear and bull fields of moving averages and the
MACD and the stochastic indicators. Following is some of the content you
can expect.
Indicators and probability studies
Module 5 consists of five sections. You will learn about:
indicators
the bear and bull fields of moving
averages
the MACD and the
stochastic
You will be given a probability
worksheet which you will use for years to
come.
At the end of this module you will be asked to complete your assignments and forward
them to the training class where a professional trader will mark them and communicate directly with you via e-mail regarding your progress.
The Use of Indicators
This module is designed to introduce the concept of indicators and explain how to use them in your analysis.
Indicators are grouped into two main categories:
Leading indicators
A leading indicator is one that indicates where support or resistance is likely to
be, before the market gets there.
Lagging indicators
A lagging Indicator is one that requires market action before the indicator turns. It confirms support or resistance rather than predicts it.
It s always easy to analyze a chart with the benefit of
hindsight. It is quite another matter to analyze a chart in real time, with actual trading decisions dependant on the outcome.
With this in mind, we will look into the benefits and drawbacks of the indicators discussed in this module.
Later in this module we will turn our focus to specific indicators and provide examples of signals in action.
Definition of an Indicator
An indicator is a formula that is applied to the currency price data,
it consists of a combination of the open, high, low, or close over a period of time. The price data
are entered into the formula and a data point is produced.
For example, the average of five closing prices on the Euro is one data point
(1.0833 + 1.0834 + 1.0835 + 1.0836 + 1.0837/5
= 1.0835). However, one data point does not offer much information and does not make an indicator. We need a series of data points over a period of time to create valid reference points and to be able to do our analysis. Indicators can provide unique perspective on the strength and direction of the underlying price action.
Rules for Using Indicators
Indicators serve three broad functions: to alert, to confirm and to
predict.
Indicators indicate. Traders tend to ignore the price action of a chart and focus solely on an indicator.
An indicator can act as an alert to study price action a little more closely. It may be a signal to watch for a break of support or resistance.
Even though it may be obvious when indicators generate buy and sell signals, the signals should be taken in context with other technical analysis tools.
Indicators can be used to confirm other technical analysis tools. If there is a breakout on the price chart, an indictor could
confirm the breakout.
When choosing an indicator to use for analysis, choose carefully and moderately. Attempts to cover more than five indicators are usually futile. It is best to focus on two or three indicators and learn their intricacies
thoroughly.
Banded Oscillators
Banded oscillators fluctuate above and below two bands that signify extreme price levels. The lower band represents oversold readings and the upper band represents overbought readings. These set bands are based on the oscillator and change little from currency to
currency, allowing users to identify overbought and oversold conditions easily.
Probability Worksheet
A probability worksheet will help you with the context analysis of the market. It is vitally important to determine whether or not a market is suitable for trading or not, and
the direction in which the highest probable move
will occur. Trading within these high probability areas will greatly increase your trading profitability.
Below you will find a worksheet that has already been completed. In module
5.5 we explain exactly how we got to the example below.
Your Probability Worksheet will look something like this:
Trend
Primary - Bull/Bear
Secondary - Bull/Bear
Current - Bull/Bear
Scenarios
Secondary/Primary
4
5
6
7
8
9
Current/Secondary
4
5
6
7
8
9
4 Hour
MACD
Bull
Fresh
Strong
Staggering
Old
Dead
Neutral
Dying
Bear
Fresh
Strong
Staggering
Old
Dead
Neutral
Dying
Stochastic
Bull
Fresh
Strong
Staggering
Old
Dead
Neutral
Dying
Bear
Fresh
Strong
Staggering
Old
Dead
Neutral
Dying
Patterns
1 Hour
MACD
Bull
Fresh
Strong
Staggering
Old
Dead
Neutral
Dying
Bear
Fresh
Strong
Staggering
Old
Dead
Neutral
Dying
Ind 75
Bull
Bear
MVA
Bear Field
Bull Field
Even Field
Patterns
This probability worksheet gives you context for this specific currency. The first important thing is that both scenarios are 4. This bodes very well for high probability trades in a bullish direction.
Looking at the indicators, we see an overall bullish picture, with only the stochastic giving a contradictory view. It is important to remember that context is about the bigger picture. If you look at your probability sheet, do you get an overall bullish or overall bearish impression?
Depending on the type of entry system you apply, you will decide whether to use both scenarios or maybe only one (Refer to Module 6). Also the type of indicators we use
have been chosen because of their various attributes (Refer to Section 5.1 - 5.3). It is quite possible for you to end up using different indicators or no indicators at all - it all depends on the final entry system that you apply within your context analysis.
Using trend analysis and the probability worksheet to define context within the market is an excellent way to start your trading day.
Module 6
Get Set, Ready, and Go!
In Module 6 you will learn why we need to do a probability study and what is
required to compile such a study. We will show you how:
to do your checklist before
trading (like a pilot before a flight)
entry point systems that have been traded successfully for
many months
a track record of every
trade
how to
run the trades parallel when starting to trade your demo account, this will
familiarize you with the systems before risking real money
additional resources and what happens after the
trade
At the end of this module you will be asked to complete your assignments and
forward them to the training class where a professional trader will mark your
assignments and communicate directly with you via e-mail regarding your progress.
Below you will find an extract of one of our Track Records. Here you can get a
very good idea of how your Track Record should look. It provides you with
detailed information of the date and time of your trades, the currencies you
traded, lots, pips, profits and losses, equity and so on.
Module 2 consists of nine sections and a quiz at the end of each section.
You will be shown:
In Module 6 you will learn why we need to do a probability study and what is
required to compile such a study. We will show you how: