high risk investment disclaimer trading foreign exchange on margin carries a high level of risk, and...
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High Risk Investment Disclaimer
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree
of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully
consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a
loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You
should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial
advisor if you have any doubts.
Any opinions, news, research, analysis, prices, or other information contained is provided as general market commentary,
and does not constitute investment advice. ThinkForex Capital Markets Limited will not accept liability for any losses or
damages, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance
on such information. This content is provided for the sole purpose of assisting traders to make independent investment
decisions. ThinkForex has taken reasonable measures to ensure the accuracy of this information, however, does not
guarantee its accuracy, and will not accept liability for any loss or damage which may arise directly or indirectly from this
content.
This content is not intended for distribution, or use by, any person in any country where such distribution or use would be
contrary to local law or regulation. None of the services or investments referred to are available to persons residing in any
country where the provision of such services or investments would be contrary to local law or regulation. It is the
responsibility of the recipient to ascertain the terms of and comply with any local law or regulation to which they are subject.
Justin Butler
Justin Butler Institutional Sales Manager, ThinkForex
Years of Experience 7+ Years
Specialization Institutional Forex Services Retail Trading Strategy
EDUCATION DRIVES SUCCESSStrategies of a Professional FX Trader
April 26th, 2012
Justin Butler – ThinkForex.com
Agenda
• Review of Trading Strategies
• Key Elements of Successful Trading Strategies
• Trend Identification
• Defined Entry & Exit Signals
• Strict Money Management
Examples of Some Basic Strategies
• Trend Following
• Moving Averages Cross
• Channel Breakout
• Short-Term Range Breakouts
Example Trading Strategies – Trend Following
Moving Average Cross 34 / 100 Daily EMA Example
Entry
Exit
• Buy when 34 EMA crosses above 100 EMA
• Sell when 34 EMA crosses Below 100 EMA
• Close trade when 34 EMA crosses 100 EMA in opposite direction of entry
• Long view traders
• Generates a small amount of trades and few false signals
Rules
Style - Slow
Trading Strategies – Channel Breakout
Short-Term Range Breakout– Various Forms – 15 min Chart
Sell Signal
• Identify trading ranges
• Buy / Sell on breakout
• Close - Depends on custom target
• Mid to short-term traders
• Generates numerous trades
• Greater chance of false signals
Rules
Style – Moderate Speed
Sell Signal
False Sell Signal
False Buy Signal
Buy Signal
Elements of Successful Trading Strategies
Defined Entry & Exit Signals
Strict Money Management
Trend Identification
Complete Strategy
Trend Identification - How to Filter Global Information
News & Events move the markets more than ever!
Last R2 R1 Pivot S1 S2EURUSD 1.31148 1.32103 1.3168 1.31289 1.30866 1.30475GBPUSD 1.60204 1.60249 1.59737 1.59175 1.58663 1.58101USDJPY 81.24 81.286 81.059 80.694 80.467 80.102USDCHF 0.91625 0.92085 0.91797 0.91524 0.91236 0.90963USDCAD 0.99103 1.00708 0.99858 0.99251 0.98401 0.97794AUDUSD 1.03617 1.04816 1.04351 1.03695 1.0323 1.02574NZDUSD 0.81673 0.82805 0.8245 0.8197 0.81615 0.81135EURJPY 106.55 106.923 106.512 105.893 105.482 104.863GBPJPY 130.144 129.818 129.26 128.402 127.844 126.986CHFJPY 88.644 88.975 88.639 88.106 87.77 87.237AUDJPY 84.178 84.979 84.478 83.671 83.17 82.363CADJPY 81.943 82.8 82.206 81.259 80.665 79.718XAUUSD 1640.11 1668.06 1658.68 1647.22 1637.84 1626.38XAGUSD 31.417 32.172 31.923 31.623 31.374 31.074Dollar Inx 79.58 79.94 79.75 79.57 79.38 79.2
0.10%
Performance %-0.08%0.62%0.50%0.13%
0.40%-0.56%-0.81%0.03%
-0.26%-0.51%0.42%1.12%0.39%0.24%
? ?
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Where is money flowing to or from and why?
Reserve or secondary currency?
Impact Perception?
Trend Identification - Trade with the Trend
Signals in the direction of the trend have a higher probability of success
• When price crosses below the 200 EMA the trend is down
• When price crosses below the 200 EMA the trend is Up
200 Daily EMA
Defined Entry & Exit Signals - Remove Emotion
• Keep it Simple
• Limit entry / exit signals to trigger on a specific indicator or combination of 2 indicators – Avoid false signals
• Remove the emotion of the decision process
• Never trade on a non-signalConflicting Signals – 3 EMA Combination Cross signals Buy, RSI signals sell – No Trade
Strict Money Management – Control Risk Every Time!
• Most traders are wrong a large % of the time
• Successful trader limit loss
• You can be wrong and still be profitable
• Use a Risk/Reward ratio of 1: 2 or greater
Successful traders are not right they are consistent.
Strategies of a Professional FX Trader - Recap
• Trend Identification
• Defined Entry & Exit Signals
• Strict Money Management
Successful traders use a systematic process that include:
EDUCATION DRIVES SUCCESSEmail me directly for a copy of the presentation.
Jbutler@ThinkForex.com
EDUCATION DRIVES SUCCESSStrategies of a Professional FX Trader
April 26th, 2012
Justin Butler – ThinkForex.com
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