Accolades for Todd Hanson Ph.D.Accolades for Todd Hanson Ph.D.

General Program ConceptsGeneral Program Concepts

Mirror of LTS Equity and Futures ProgramsMirror of LTS Equity and Futures Programs

Risk ManagementRisk Management

Professional CoachingProfessional Coaching

Grey and Black Box SystemsGrey and Black Box Systems

Ph.D. in Applied MathematicsPh.D. in Applied MathematicsProfessional TradersProfessional TradersFirm and Fund OwnersFirm and Fund Owners

Advantages of the LivetradesignalsAdvantages of the Livetradesignals Forex ProgramForex Program

•Trade alongside veteran traders in our chat room•Free continuing education•Free access to our proprietary Grey Box signals will help to limit bad trading habits•Institutional-quality no-nonsense trading platform•Aggregate feeds from multiple banks resulting in tight trading spreads•Ability to scale size gradually to ensure account integrity•Tight risk management

How will the Program How will the Program Teach us to Trade?Teach us to Trade?

The best way to learn to trade is by trading. Mirroring someone successful is the easiest way to learn any new skill. We give you access to professional traders and grey box trading systems.

On our trading platform, you can establish ongoing relationships with other traders that want to share ideas and experiences.

With a flexible environment we learn by trading FX and because we wanted to be able to trade profitably there are many rules to learn such as:

1. Exiting a loss immediately 2. Don't exit winners too quickly 3. Hold tight stops and many more

Free Grey Box Signals to Free Grey Box Signals to Registered TradersRegistered Traders

Livetradesignals Members have access to our proprietary Grey Box Signals. Our Grey Box signals have a proven track record for picking trades with a high success rate. Beginning traders take these signals as a means of supporting the profitability ratio in their accounts as they learn to trade with discipline. Experienced traders often take advantage of these signals to fill in dead time when their own systems are not generating trade signals. The beauty of the Grey Box system is that subscribers have discretionary access to mechanically generated trades from our own servers. Unlike a “Black Box,” which would mechanically force the trade into an account, subscribers have the option to take each trade or not, depending on their moment to moment requirements.

The Major Players in Forex

• Central Banks• Investment Banks• Commercial Banks• Corporations• Hedge Funds• Trading Institutions• High Net-Worth Individuals• Individual Investors

Advantages of the Forex MarketAdvantages of the Forex Market

• High liquidity

• Tight trading spreads

• Scale up/down in size with no appreciable difference in trade fill

• Far fewer instruments to track than in equities or futures markets

The Key to Forex is Simplicity:The Key to Forex is Simplicity:The main currency pairs are fewThe main currency pairs are few

• 85% of Forex consists of transactions within only four (4) major currency pairs, and many traders make a living by following only one or two.

• EUR/USD• GBP/USD• USD/JPY• EUR/JPY

• Every trade is both a long and a short position • (EUR/JPY) Buy Euro in exchange for selling the Yen• (USD/JPY) Sell the Dollar in exchange for buying the Yen

• Thus, the balance: there are no Bear or Bull Markets because the trader is always long one currency and short the other.

MAJOR CURRENCIES TRADED MAJOR CURRENCIES TRADED Against the US Dollar (USD)Against the US Dollar (USD)

Euro 38% British Pound 10%

Japanese Yen 28% Swiss Franc 8%Other 16%

Forex pairs at LivetradesignalsForex pairs at Livetradesignals

EUR/USDEUR/USD USD/JPYUSD/JPY

EUR/JPY EUR/JPY AUD/USDAUD/USD

GBP/USDGBP/USD USD/CHFUSD/CHF

Forex Market BasicsForex Market BasicsThe Language of the TradeThe Language of the Trade

Foreign Exchange Basics:Foreign Exchange and Currency Pairs

• The Foreign Exchange market– Is the market where one buys or sells the currency of country A

in terms of the currency of country B

• A currency exchange rate– Is simply the amount of currency of country B required to

purchase a unit of the currency of country A.

– i.e. To say the EUR/USD (A/B), or “Euro,” is trading at 1.4500 means that one Euro (€1.00) (A) costs one Dollar and forty-five cents ($1.45) (B).

A Currency Pair

• Base CurrencyBase Currency

• Quote CurrencyQuote Currency

• Bid PriceBid Price

• Ask PriceAsk Price

Market Terminology• Currency: the lawful currency of any country, such as the US

Dollar (USD); or a “composite currency” such as the European Composite Currency (EUR).

• Cross Rate: The exchange rate between two foreign currencies, i.e. an exchange that does not involve the local currency.

• Exchange Rate: compares the value of a foreign currency to that of the local currency

• Forex: Foreign Exchange; simply put, the business of trading one currency for another

• Interbank Market : An international network of private banks and government banks to trade spot currencies.

• Spot Market: Market for the immediate delivery of the actual currency, as opposed to derivative trading in the form of futures or options

Trade Terminology• Currency Arbitrage: A trading strategy used to profit from a

short-term temporary imbalance of 2 or more currency prices.

• Currency Hedging: A transaction strategy used to protect against severe fluctuations in currency exchange rates.

• Delivery: The tender and receipt of the actual cash currency.

• Going Flat: Closing all open trades.• Leverage: The use of borrowed money based on a smaller

amount on deposit – with forex trading the leverage runs from 50:1 to 200:1. Often referred to as “margin” in equities.

• Pip: Currency price movement is discussed in terms of “pips,” much as dollar-based equity price moves are discussed in terms of “points,” or cents. An individual pip is generally one ten-thousandth the size of a point, give or take, depending upon the currency. More on this later

What is a Pip?• 1 pip is equal to a 1 point move in any currency

• Value of a pip of any currency quoted in USD is normally noted as $10:00, because a full-size lot equals $100,000.

• Exact value of a pip where US Dollar is the base currency fluctuates with the exchange rate

• The standard minimum tradable amount is 100,000 of the quoted currency: Full size lot– Some brokers or prop traders have access to Micro and

Mini lots as well• 100’s = 100 units, therefore $0.01/pip• Micro = 1000 units, therefore $0.10/pip• Mini = 10,000 units, therefore $1.00/pip• Full Size = 100,000 units, therefore $10.00/pip

Calculating Pip ValueCalculating Pip Value

• There are 2 ways of calculating a “PIP”. The first is EURUSD a movement from 1.3794 to 1.3798 is four (4) PIPS or .0004

• In the second case USDJPY a movement from 102.21 to 102.25 is four (4) PIPS, or .04

• The easiest way to calculate based on one unit for example is:– AUDUSD is quoted with four decimals, cancel out the four zeros on the

amount traded and you get one (1) PIP.

Any currency pair ending in USD = $10.00 per PIP for Any currency pair ending in USD = $10.00 per PIP for Full Size contract of 100,000 unitsFull Size contract of 100,000 units

Basic Charting:Basic Charting:Drawing Bar (OHLC) ChartsDrawing Bar (OHLC) Charts

• Each bar is composed of 4 elements:– Open– High– Low– Close

• When price closes higher than it opens on a given bar, you have what is called an “up” bar, and vice-versa with “down” bars.

• Note that the candlestick body is empty (white) on “up” bars, and filled (some color) on “down” bars

• Often “up” bars are green whilst “down” bars are red

Open

Close

High

Low

StandardBar Chart

JapaneseCandlestick

Open

Close

High

Low

StandardBar Chart

JapaneseCandlestick

“Up” Bars vs. “Down” Bars

Basic Mechanics Basic Mechanics of a Forex Tradeof a Forex Trade

• Trades are a combination of two currencies or currency pairs

• Each trade is long one currency and short the other

• The first currency in a pair is the currency quoted– EUR in EUR/USD is the currency being quoted

• Profits or losses are in the second currency– EUR/USD in this pair the profit or loss is in US Dollars

and will be converted into US Dollars when it settles

• In futures or equities the equivalent of a “PIP” is called a “TICK”

How do we profit from a trade?How do we profit from a trade?

An Example TradeAn Example Trade

• EUR/USD is BID 1.4576 and ASK 1.4577 (1 PIP Spread)• BUY 1 EURUSD (100,000 units) for 1.4577 USD at the ASK• Market moves higher and we decide to sell “Go Flat”• Current quote is 1.4591-92, or BID 1.4591 vs. ASK 1.4592• We sell at the BID 1.4591 to close the position• Profit calculation:

– (Sell price – Buy price) X Size of trade = (1.4591 – 1.4577 = .0014) X $100,000 = $140 – So, 14 PIPS profit when trading $100,000 = $140.00, or ten

dollars per pip ($10/pip)

• Profit/Loss is always shown in the Secondary Currency, in this case USD

Fulcrums:Fulcrums:Fixed price points that Fixed price points that

act like magnetsact like magnets

What is a Fulcrum?What is a Fulcrum?• The support about which a lever turns The support about which a lever turns • Statistically to be points of inflexionStatistically to be points of inflexion

To fine tune our trading plan—in volatile, liquid To fine tune our trading plan—in volatile, liquid instruments we add the Fulcrum grid:instruments we add the Fulcrum grid:

• 00: aka “the figure” fulcrum00: aka “the figure” fulcrum• 20: - pips over “the figure”20: - pips over “the figure”• 50: aka “half the figure” fulcrum50: aka “half the figure” fulcrum• 80: - pips over “the figure”80: - pips over “the figure”

FulcrumsFulcrums

Fulcrum ExamplesFulcrum Examples

EURUSDEURUSD EURJPYEURJPY1.40001.4000 134.00134.001.40201.4020 134.20134.201.40501.4050 134.50134.501.40801.4080 134.80134.801.41001.4100 135.00135.00

Fulcrum ExamplesFulcrum Examples

FulcrumsFulcrumsNatural Support and ResistanceNatural Support and Resistance

Making Use of FulcrumsMaking Use of Fulcrums• Fulcrums are natural points of confluence “Magnets”

• Prices gravitate from fulcrum to fulcrum so entering At or Near a fulcrum is key

• When entering the trade, look for the opportunity where the pair exhausts itself on a retracement to the last passed fulcrum

• When possible, avoid entering trades that are at midpoints between fulcrums

Fulcrum KeyFulcrum KeyFulcrumsFulcrums “Midpoint Danger Area”“Midpoint Danger Area”

00009090

80806565

50503535

20201010

0000

You are allowed +/- 3 PIPS from the FulcrumsYou are allowed +/- 3 PIPS from the Fulcrums

Pivot Points:Pivot Points:Calculated Support and Resistance;Calculated Support and Resistance;

We all see them because we all use themWe all see them because we all use them

Forex Pivot PointsForex Pivot Points• Professional traders and market makers use

pivot points to identify important support and resistance levels.

• Simply put, a pivot point and its support/resistance levels are areas at which the direction of price movement can possibly change.

BEGINNING OF TRADING DAY WORK SHEET• DATE:DATE:

• Important NewsImportant News: Let’s see if there are any important news that happen for : Let’s see if there are any important news that happen for the past few hours: the past few hours:

• Important Economic Indicators/numbers Important Economic Indicators/numbers for todayfor today

• Key Supports/ Resistance Levels/ pivotKey Supports/ Resistance Levels/ pivotUse calculator and 5pm (NYC) prior day closeUse calculator and 5pm (NYC) prior day close

Resistance 3 = High + 2*(Pivot - Low)Resistance 3 = High + 2*(Pivot - Low)Resistance 2 = Pivot + (R1 - S1)Resistance 2 = Pivot + (R1 - S1)Resistance 1 = 2 * Pivot - LowResistance 1 = 2 * Pivot - LowPivot Point = ( High + Close + Low )/3Pivot Point = ( High + Close + Low )/3Support 1 = 2 * Pivot - HighSupport 1 = 2 * Pivot - HighSupport 2 = Pivot - (R1 - S1)Support 2 = Pivot - (R1 - S1)Support 3 = Low - 2*(High - Pivot)Support 3 = Low - 2*(High - Pivot)

S3 S2 S1 Pivot R1 R2 R3

EURUSD

GBPUSD

EURJPY

USDJPY

Forex Pivot Point Trading Tips

Here are some easy to memorize tips that will help you to make smart pivot points trading decisions.

• If price at PP, watch for a move back to R1 or S1.• If price is at R1, expect a move to R2 or back towards PP.• If price is at S1, expect a move to S2 or back towards PP.• If price is at R2, expect a move to R3 or back towards R1.• If price is at S2, expect a move to S3 or back towards S1.• If there is no significant news to influence the market, price will

usually move from P to S1 or R1. • If there is significant news to influence the market price may go

straight through R1 or S1 and reach R2 or S2 and even R3 or S3.• R3 and S3 are a good indication for the maximum range for extremely

volatile days but can be exceeded occasionally. • Pivot lines work well in sideways markets as prices will most likely

range between the R1 and S1 lines. • In a strong trend, price will blow through a pivot line and keep going

PIVOT

S1

S2

S3R3

R2

R1

Forex Pivot Point Trading Tips

DAILYPIVOT

PR ICE RANGE

Forex Pivot Point Trading Tips

Confluence:Confluence:Where two, three, the more the better, Where two, three, the more the better,

of the Hanson puzzle pieces come togetherof the Hanson puzzle pieces come together

Confluence – Noun

1. a place where rivers flow into one another

2. a gathering [Latin confluere to flow together]

Market ConfluenceMarket Confluence

Points of ConfluencePoints of Confluence

Points of Confluences that we look Points of Confluences that we look for include:for include:– Moving AveragesMoving Averages– Support and Resistance on the chartSupport and Resistance on the chart– FulcrumsFulcrums– Previous High/Low PointsPrevious High/Low Points– Breakdown & Retest levelsBreakdown & Retest levels– Pivot PointsPivot Points

False ConfluenceFalse Confluence

Traders often imagine false confluence as Traders often imagine false confluence as a result of the following pitfalls:a result of the following pitfalls:– Wishful thinkingWishful thinking– Picking tops and bottomsPicking tops and bottoms– Impatience or need to be in a tradeImpatience or need to be in a trade– Trading too many pairs at onceTrading too many pairs at once– Fear and GreedFear and Greed