todd gordon
DESCRIPTION
Middle East Traders Expo. Todd Gordon. Senior Technical Strategist FX trader, Gain Capital Asset Management Author, Strategy of the Day Regular contributor to CNBC’s Fast Money Popular Twitter contributor FOREX.com booth # 6314. - PowerPoint PPT PresentationTRANSCRIPT
Todd GordonTodd Gordon• Senior Technical Strategist
• FX trader, Gain Capital Asset Management
• Author, Strategy of the Day
• Regular contributor to CNBC’s Fast Money
• Popular Twitter contributor
• FOREX.com booth # 6314
Middle East Traders Middle East Traders ExpoExpo
Forex trading involves significant risk of loss and is not suitable for all investors.
Forex trading involves significant risk of loss and is not suitable for all investors.
What We Will CoverWhat We Will Cover
Part 1 – Introduction and services we providePart 1 – Introduction and services we provide
Part 2 – The 3 dimensions of tradingPart 2 – The 3 dimensions of trading
Part 3 – Pulling it all togetherPart 3 – Pulling it all together
Forex trading involves significant risk of loss and is not suitable for all investors.
Part 1Part 1
IntroductionIntroduction
Forex trading involves significant risk of loss and is not suitable for all investors.
Buying BreakoutsBuying Breakouts
Forex trading involves significant risk of loss and is not suitable for all investors.
Buying BreakoutsBuying Breakouts
Forex trading involves significant risk of loss and is not suitable for all investors.
Buying BreakoutsBuying Breakouts
Forex trading involves significant risk of loss and is not suitable for all investors.
Buying BreakoutsBuying Breakouts
Forex trading involves significant risk of loss and is not suitable for all investors.
Buying BreakoutsBuying Breakouts
Forex trading involves significant risk of loss and is not suitable for all investors.
Trading and Ski Racing?Trading and Ski Racing?
Forex trading involves significant risk of loss and is not suitable for all investors.
Forex trading involves significant risk of loss and is not suitable for all investors.
SStrategy trategy OOf f TThe he DDay ay SStrategy trategy OOf f TThe he DDay ay ** **The following are my actual trades as recommended through SOTD. The following are
successful examples, though unsuccessful trades can and will occur.
Due to timing, S.O.T.D. recommendations and actual executions will vary slightly. Additionally, the spreads inherent in my performance are generally at more favorable rates than that
available to the typical retail investor. As such, you may not be able to achieve similar results as illustrated in this presentation.**
Forex trading involves significant risk of loss and is not suitable for all investors.
SStrategy trategy OOf f TThe he DDayayDecember 2009 December 2009
Forex trading involves significant risk of loss and is not suitable for all investors.
SStrategy trategy OOf f TThe he DDayayJanuary 2010 January 2010
Forex trading involves significant risk of loss and is not suitable for all investors.
SStrategy trategy OOf f TThe he DDayayFebruary 2010 February 2010
Forex trading involves significant risk of loss and is not suitable for all investors.
TwitterTwitter
www.twitter.com/ToddGordonForex•General market commentary•Trading, position, SOTD updates•Occasional attempts at humor
www.twitter.com/ToddGordonTrade•Trading, position, SOTD updates• Ideal for SMS text alerts
5213 followers
989 followers
Forex trading involves significant risk of loss and is not suitable for all investors.
Part 2Part 2The 3 Dimensions of TradingThe 3 Dimensions of Trading
Forex trading involves significant risk of loss and is not suitable for all investors.
3 Dimensions of Trading3 Dimensions of Trading
1) Intermarket analysis1) Intermarket analysis
Forex trading involves significant risk of loss and is not suitable for all investors.
Identifying Currency LeadershipIdentifying Currency Leadership
USDUSDEUR
JPY//
Forex trading involves significant risk of loss and is not suitable for all investors.
Identifying Currency LeadershipIdentifying Currency Leadership
USDUSD JPY
//
EUR
Forex trading involves significant risk of loss and is not suitable for all investors.
Identifying Currency LeadershipIdentifying Currency Leadership
EUR JPY/
Forex trading involves significant risk of loss and is not suitable for all investors.
Which Currency To Trade?Which Currency To Trade?
EUR/JPY USD/JPY
EUR/USD
Forex trading involves significant risk of loss and is not suitable for all investors.
Indentifying LeadershipIndentifying Leadership
Forex trading involves significant risk of loss and is not suitable for all investors.
““Market trends anticipate economic trends.”Market trends anticipate economic trends.”
-John Murphy
Inter-Market AnalysisInter-Market Analysis
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/JPY & Dow Overlay
Forex trading involves significant risk of loss and is not suitable for all investors.
USD/JPY & US 10-yr Yield
Forex trading involves significant risk of loss and is not suitable for all investors.
EUR/USD NOW Trades With EquitiesEUR/USD NOW Trades With Equities
Forex trading involves significant risk of loss and is not suitable for all investors.
USD/CAD & Crude OilUSD/CAD & Crude Oil
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD & High Grade Copper
Forex trading involves significant risk of loss and is not suitable for all investors.
XAU & EUR/JPYXAU & EUR/JPY
Forex trading involves significant risk of loss and is not suitable for all investors.
3 Dimensions of Trading3 Dimensions of Trading
2) Identifying trading opportunities2) Identifying trading opportunities
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
ELLIOTT WAVEELLIOTT WAVE
A A DisciplinedDisciplined Approach To Approach To Pattern Recognition and Risk Pattern Recognition and Risk
ManagementManagement*Paul Tudor Jones ..calls Prechter and Frost's standard text *Paul Tudor Jones ..calls Prechter and Frost's standard text on Elliott "a classic," and one of "the four Bibles of the on Elliott "a classic," and one of "the four Bibles of the business" --business" --
““...and...and The Elliott Wave Theorist The Elliott Wave Theorist both give very specific and both give very specific and systematic ways to approach developing great reward/risk systematic ways to approach developing great reward/risk ratios for entering into a business contract with the ratios for entering into a business contract with the marketplace, which is what every trade should be if properly marketplace, which is what every trade should be if properly and thoughtfully executedand thoughtfully executed."."[19]
* http://en.wikipedia.org/wiki/Paul_Tudor_Jones* http://en.wikipedia.org/wiki/Paul_Tudor_Jones
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
Ralph Nelson ElliottRalph Nelson Elliott(1871 - 1934)
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
BASIC 5-WAVE PATTERNBASIC 5-WAVE PATTERN
Wave 1Wave 2
Wave 3
Wave 4
Wave 5
1
2
3
4
5
Forex trading involves significant risk of loss and is not suitable for all
investors.
Forex trading involves significant risk of loss and is not suitable for all investors.
BASIC 5-WAVE PATTERNBASIC 5-WAVE PATTERN
Wave 1Wave 2
Wave 3
Wave 4
Wave 5
1
2
3
4
5Wave 1
- Fundamentals poor- Investors fully, bearishexpecting new lows-Heavy short selling - 5 wave subdivision
Wave 2 -Investors fully bearish, certain of new lows- Heavily retraces W.1- Fundamentals horrible, doom and gloom- Volumes light, as sellers dry up - 3 wave subdivision
Wave 3- Strong, deliberate, and extended price action- Fundamentals increasingly better- Investor confidence greatly improved- 5 extended subdivisions
Wave 4-Fundamentals temporarily peak, then pullback- Often shallow, yet prolonged consolidation
Wave 5- Investors extremely optimistic-Fundamentals return, but often not to W.3 levels- Price momentum less than W.3
Forex trading involves significant risk of loss and is not suitable for all
investors.
Forex trading involves significant risk of loss and is not suitable for all investors.
TREND WAVESMOTIVE WAVESTREND WAVESMOTIVE WAVES
.i
.ii
.iii
.iv
.v
.a
.b
.c
.i
.ii
.iii
.iv
.v
.a
.b
.c
.i
.ii
.iii
.iv
.v
1
2
3
4
5 • Subdivides into waves of 5Subdivides into waves of 5
• W.2 can’t go below the W.2 can’t go below the beginning of W.1beginning of W.1
• W.4 always retraces less W.4 always retraces less than 100% of W.3than 100% of W.3
• W.4 can’t go below the W.4 can’t go below the beginning of W.3beginning of W.3
• W.3 is often the longest, W.3 is often the longest, never the shortest.never the shortest.
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
BASIC 5-WAVE PATTERNBASIC 5-WAVE PATTERN
2
Forex trading involves significant risk of loss and is not suitable for all
investors.
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
WHICH COUNT IS VALID?WHICH COUNT IS VALID?
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
WHICH COUNT IS VALID?WHICH COUNT IS VALID?
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
Similar Structure At All Degrees Of TrendSimilar Structure At All Degrees Of Trend
1
2
3
4
5
A
B
C
1
2
3
4
5
A
B
C
1
2
3
4
5.3
.4
.5
.2
.1
1
3 Degrees Of TrendLargest: Middle:Smallest
1
.5
5
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
1
2
3
4
5
A
B
C
1
2
3
4
5
A
B
C
1
2
3
4
5
.4
.5
.2
1
3 Degrees Of TrendLargest: Middle:Smallest
1
.5
5
Similar Structure At All Degrees Of Trend
Similar Structure At All Degrees Of Trend
.1
.3
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
1
2
3
4
5
A
B
C
1
2
3
4
5
A
B
C
1
2
3
4
5.3
.4
.5
.2
.1
1
3 Degrees Of TrendLargest: Middle:Smallest
1
.5
5
Similar Structure At All Degrees Of TrendSimilar Structure At All Degrees Of Trend
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
1
2
3
4
5
A
B
C
1
2
3
4
5
A
B
C
1
2
3
4
5.3
.4
.5
.2
.1
1
3 Degrees Of TrendLargest: Middle:Smallest
1
.55
Similar Structure At All Degrees Of TrendSimilar Structure At All Degrees Of Trend
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
Corrective WavesCorrective Waves
• Corrective- possesses a 3-wave structure Corrective- possesses a 3-wave structure that retraces percentage of a prior motivethat retraces percentage of a prior motive• Waves 2,4 and B are correctiveWaves 2,4 and B are corrective
• Subdivision are labelled with letters.Subdivision are labelled with letters.
• Waves are corrective when trending in the Waves are corrective when trending in the opposite direction to the wave of 1 larger degree.opposite direction to the wave of 1 larger degree.
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
CORRECTIVE WAVESCORRECTIVE WAVES
.1
.2
.3
.4
.5
.A
.B
.C
UptrendUptrend DowntrendDowntrend
A
B
C
A
B
C
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
COMPLETE 8-WAVE CYCLECOMPLETE 8-WAVE CYCLE
A
B
C
1
2
3
4
5
Wave Wave 11
Wave Wave 22
Wave Wave 33
Wave Wave 44
Wave Wave 55
Wave Wave AA
Wave Wave BB
Wave Wave CC
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
COMPLETE 8-WAVE CYCLECOMPLETE 8-WAVE CYCLE
A
B
C
1
2
3
4
5
Wave Wave 11
Wave Wave 22
Wave Wave 33
Wave Wave 44
Wave Wave 55
Wave Wave AA
Wave APublic extremely bullish,
convinced pullback presents an easy buying opportunity
Wave Wave BB
Wave BHead fakes. Bullish investors from Wave A are confirmed,
just before nasty reversal below Wave A origins
Wave Wave CC
Wave CHighly discouraging, very little bullishness, stops below wave B origin triggered, capitulation
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
Completed A-B-C CorrectionCompleted A-B-C Correction
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
LABELING WAVESLABELING WAVES
Monthly I II III IV V a b c 16
Weekly .I .II .III .IV .V .a .b .c 15
Daily I II III IV V a b c 14
720-360 min 1 2 3 4 5 A B C 13
240-120 min .1 .2 .3 .4 .5 .A .B .C 12
90-60 min 1 2 3 4 5 A B C 11
45-30 min i ii iii iv v a b c 10
20-10 min .i .ii .iii .iv .v .a .b .c 9
5-1 min i ii iii iv v a b c 8
Time Frame Font Size
Forex trading involves significant risk of loss and is not suitable for all investors.Forex trading carries a high level of risk and is not suitable for all investors.
Monthly I II III IV V a b c 16
Weekly .I .II .III .IV .V .a .b .c 15
Daily I II III IV V a b c 14
720-360 min 1 2 3 4 5 A B C 13
240-120 min .1 .2 .3 .4 .5 .A .B .C 12
90-60 min 1 2 3 4 5 A B C 11
45-30 min i ii iii iv v a b c 10
20-10 min .i .ii .iii .iv .v .a .b .c 9
5-1 min i ii iii iv v a b c 8
Forex trading involves significant risk of loss and is not suitable for all investors.
Fibonacci Ratio AnalysisFibonacci Ratio Analysis
The map legend of Elliott Wave The map legend of Elliott Wave Principle…Principle…
Forex trading involves significant risk of loss and is not suitable for all investors.
0.382 0.618 squared
0.500 2nd N / 3rd N
0.618 Inverse of Golden Ratio
0.707 Square root of 2
0.786 Square root of 0.618
1.000 1.618 x 0.618
1.272 Square root of 1.618
1.618 Golden Ratio (Phi)
2.000 1st N x 2nd N
2.618 1.618 squared
FIBONACCI RATIOSFIBONACCI RATIOS
Forex trading involves significant risk of loss and is not suitable for all investors.
FIBONACCI ANALYSISFIBONACCI ANALYSIS
Retracements Extensions Projections
Forex trading involves significant risk of loss and is not suitable for all investors.
Fibonacci RetracementsFibonacci Retracements
1
2
3
4
5
A
B
C
1
2
3
4
5
A
B
C
1
2
3
4
5.3
.4
.5
.2
.1
1Used to analyze Used to analyze CORRECTIVE WAVESCORRECTIVE WAVES
Forex trading involves significant risk of loss and is not suitable for all investors.
1
2
3
4
5
A
B
C
1
2
3
4
5
A
B
C
1
2
3
4
5.3
.4
.5
.2
.1
1
100%
61.8% 100%
38.2%
Fibonacci RetracementsFibonacci RetracementsUsed to analyze Used to analyze CORRECTIVE WAVESCORRECTIVE WAVES
…….by measuring .by measuring impulse wavesimpulse waves
Forex trading involves significant risk of loss and is not suitable for all investors.
FIBONACCI RETRACEMENTSFIBONACCI RETRACEMENTS
1
2
3
4
5.1
1. Identify a completed 5-wave impulse
Forex trading involves significant risk of loss and is not suitable for all investors.
FIBONACCI RETRACEMENTSFIBONACCI RETRACEMENTS
1
2
3
4
5.1
2. Anticipate a 3-wave correction
A
B
C
.2 - ?
Forex trading involves significant risk of loss and is not suitable for all investors.
FIBONACCI RETRACEMENTSFIBONACCI RETRACEMENTS
1
2
3
4
5.1
2. Click endpoints of the impulse wave to define levels
A
B
C.2 - ?
0.000
0.3820.5000.618
0.786
1.000
0.707
Forex trading involves significant risk of loss and is not suitable for all investors.
FIBONACCI RETRACEMENTSFIBONACCI RETRACEMENTS
1
2
3
4
5.1
3. Look for end of wave C
A
B
C.2 - ?
0.000
0.3820.5000.618
0.786
1.000
0.707
Forex trading involves significant risk of loss and is not suitable for all investors.
FIBONACCI RETRACEMENTSFIBONACCI RETRACEMENTS
1
2
3
4
5.1
3. Look for end of wave C
A
B
C.2 - ?
0.000
0.3820.5000.618
0.786
1.000
0.707
Forex trading involves significant risk of loss and is not suitable for all investors.
Strategy of the DayStrategy of the DayAUD/JPY – July 6-8, 2009AUD/JPY – July 6-8, 2009
Recent Trade ReviewRecent Trade Review
Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk.
Forex trading involves significant risk of loss and is not suitable for all investors.
SOTD – Mon. July 6, SOTD – Mon. July 6, 20092009……With light size I am With light size I am shorting 1 lot at 76.05 shorting 1 lot at 76.05 and another then and another then another lot at 76.40…another lot at 76.40…
Forex trading involves significant risk of loss and is not suitable for all investors.
SOTD – Tues July 7, 2009SOTD – Tues July 7, 2009……Filled on both pieces Filled on both pieces of AUDJPY short, ….of AUDJPY short, ….
Forex trading involves significant risk of loss and is not suitable for all investors.
SOTD – Tues July 7, 2009SOTD – Tues July 7, 2009AUD/JPY is moving AUD/JPY is moving lower for us…lower for us…
Forex trading involves significant risk of loss and is not suitable for all investors.
SOTD – Wed. July 8, 2009SOTD – Wed. July 8, 2009……we are targeting we are targeting 74.00 to close our 74.00 to close our short position…short position…
Forex trading involves significant risk of loss and is not suitable for all investors.
SOTD – Wed. July 8, SOTD – Wed. July 8, 20092009……I closed the last I closed the last piece of our AUDJPY piece of our AUDJPY short at 74.00 for short at 74.00 for +215 pips….+215 pips….
……..BUT THEN…...BUT THEN….
Forex trading involves significant risk of loss and is not suitable for all investors.
Rio Tinto TradeRio Tinto Trade
Forex trading involves significant risk of loss and is not suitable for all investors.
Strategy of the DayStrategy of the DayAUD/USD – Nov 11-16, 2009AUD/USD – Nov 11-16, 2009
Recent Trade ReviewRecent Trade Review
Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk.
Forex trading involves significant risk of loss and is not suitable for all investors.
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/11/09 – 5:01 PM 11/11/09 – 5:01 PM ESTEST
“…“…I will be bidding I will be bidding for 2 units of for 2 units of AUDUSD at 0.9220 AUDUSD at 0.9220 with stops for now at with stops for now at 0.9142. If filled and 0.9142. If filled and Aussie shows Aussie shows favorable upside favorable upside action, I will quick action, I will quick trail the stop up trail the stop up behind me…”behind me…”
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/12/09 – 4:49 PM 11/12/09 – 4:49 PM ESTEST
“…“…Filled on our AUDUSD Filled on our AUDUSD bids today as the risk bids today as the risk trade was hammered trade was hammered today. EURUSD seemed to today. EURUSD seemed to the downside …Oil the downside …Oil inventories were released inventories were released today and came in higher today and came in higher than expected. And when than expected. And when combined with high risk combined with high risk aversion on the session, aversion on the session, we would expect to see we would expect to see crude breaking significant crude breaking significant support levels…. but support levels…. but support held at $76.50…support held at $76.50…as did Australia's major as did Australia's major export, Copper, hold export, Copper, hold support at around support at around 297.30 .”297.30 .”
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/13/09 – 1:51 PM 11/13/09 – 1:51 PM ESTEST
“…“…Booking half of our Booking half of our profits on 0.9220 long profits on 0.9220 long AUDUSD at 0.9285 and AUDUSD at 0.9285 and trailing trailing a stop on the a stop on the balance to entry price. balance to entry price. EURUSD is acting very EURUSD is acting very heavy into the 1.4885 heavy into the 1.4885 wave 4 resistance wave 4 resistance mentioned below…In light mentioned below…In light of fairly strong commodity of fairly strong commodity markets, a positive equity markets, a positive equity close, and dollar overlap, I close, and dollar overlap, I will remain long AUDUSD will remain long AUDUSD over the weekend with over the weekend with 0.9220 stops. 0.9220 stops. ””
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/16/09 – 2:05 PM 11/16/09 – 2:05 PM ESTEST
(Bernanke speaking at (Bernanke speaking at New York Economic Club, New York Economic Club, EURUSD was hit hard, but EURUSD was hit hard, but AUDUSD broke to new AUDUSD broke to new highs)highs)
“…“…We are still long the We are still long the final piece of AUDUSD final piece of AUDUSD from 0.9220 and I am from 0.9220 and I am actively searching for a actively searching for a final exit spot. I have final exit spot. I have moved stops on the moved stops on the balance to 0.9320 locking balance to 0.9320 locking in 100 pips on the final in 100 pips on the final piece.”piece.”
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/16/09 – 2:05 PM 11/16/09 – 2:05 PM ESTEST
“… “… **POSITION UPDATE **POSITION UPDATE ** AUDUSD ** AUDUSD
Target #1 0.9400 Met and Target #1 0.9400 Met and Held. Closing last piece of Held. Closing last piece of AUDUSD long at 0.9375 for AUDUSD long at 0.9375 for +155 pips. +155 pips.
** POSITION INITATION** ** POSITION INITATION** EURUSDEURUSD
SHORTING 2 units of SHORTING 2 units of EURUSD at MARKET - EURUSD at MARKET - 1.4975 with ORDERS to 1.4975 with ORDERS to SELL 1 unit at 1.4985 and 1 SELL 1 unit at 1.4985 and 1 unit at 1.4995. Stops for all unit at 1.4995. Stops for all 4 units are 1.5025. Looking 4 units are 1.5025. Looking to add to this position. TG. to add to this position. TG.
Forex trading involves significant risk of loss and is not suitable for all investors.
3 Dimensions of Trading3 Dimensions of Trading
3) Account management3) Account management
Calculating Stop LossesCalculating Stop Losses
Depending on your conviction in the tradeDepending on your conviction in the trade
• LOVE THE TRADELOVE THE TRADE6-8% of total capital at risk per trade6-8% of total capital at risk per trade
• Strong ConvictionStrong Conviction4-6% of total capital at risk per trade4-6% of total capital at risk per trade
• Average TradeAverage Trade2-4% of total capital at risk per trade2-4% of total capital at risk per trade
• Marginal SetupMarginal Setup1-2% of total capital at risk per trade1-2% of total capital at risk per trade
Forex trading involves significant risk of loss and is not suitable for all investors.
Capital at Risk per TradeCapital at Risk per Trade
Available Capital x 5%Available Capital x 5%-------------------------------- = Maximum Position Size-------------------------------- = Maximum Position SizeCapital Exposure per LotCapital Exposure per Lot
$50,000 x 5% = $50,000 x 5% = $2,500$2,500------------------------------------ =------------------------------------ =52 pips x $10.00 /pip = 52 pips x $10.00 /pip = $520.00$520.00
4.8 lots. 4.8 lots. 5 LOTS5 LOTS
Forex trading involves significant risk of loss and is not suitable for all investors.
Forex trading involves significant risk of loss and is not suitable for all investors.
Capital at Risk per TradeCapital at Risk per Trade
Alex is a swing trader and wants to Alex is a swing trader and wants to initiate a initiate a EURUSD position on the 3 hour EURUSD position on the 3 hour chart . Alex has strong conviction in the trade and chart . Alex has strong conviction in the trade and wants to risk 5% of total capital. He trades lots of wants to risk 5% of total capital. He trades lots of 10,000 and has a $20,000 account. The ATR as of 10,000 and has a $20,000 account. The ATR as of 3/6/09 is 67 pips. Therefore Alex should work 3/6/09 is 67 pips. Therefore Alex should work with a 134 pip stop with a 134 pip stop loss.loss.
How many lots should Alex use?How many lots should Alex use?
Forex trading involves significant risk of loss and is not suitable for all investors.
Planning TradesPlanning Trades
Create a trade journal to develop disciplineCreate a trade journal to develop discipline
Disciplined trade planning prevents an Disciplined trade planning prevents an unplanned, emotional entry into the marketunplanned, emotional entry into the market
Should include:Should include:
Forex trading involves significant risk of loss and is not suitable for all investors.
Position TrackerPosition TrackerJanuary 2010January 2010
Forex trading involves significant risk of loss and is not suitable for all investors.
Part 3Part 3
The 3 Dimensions of TradingThe 3 Dimensions of Trading
AUDUSD and EURUSD TradeAUDUSD and EURUSD Trade
Wed 11/11/09 – Mon 11/16/09Wed 11/11/09 – Mon 11/16/09
Forex trading involves significant risk of loss and is not suitable for all investors.
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/11/09 – 5:01 PM 11/11/09 – 5:01 PM ESTEST
“…“…I will be bidding I will be bidding for 2 units of for 2 units of AUDUSD at 0.9220 AUDUSD at 0.9220 with stops for now at with stops for now at 0.9142. If filled and 0.9142. If filled and Aussie shows Aussie shows favorable upside favorable upside action, I will quick action, I will quick trail the stop up trail the stop up behind me…”behind me…”
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/12/09 – 4:49 PM 11/12/09 – 4:49 PM ESTEST
“…“…Filled on our AUDUSD Filled on our AUDUSD bids today as the risk bids today as the risk trade was hammered trade was hammered today. EURUSD seemed to today. EURUSD seemed to the downside …Oil the downside …Oil inventories were released inventories were released today and came in higher today and came in higher than expected. And when than expected. And when combined with high risk combined with high risk aversion on the session, aversion on the session, we would expect to see we would expect to see crude breaking significant crude breaking significant support levels…. but support levels…. but support held at $76.50…support held at $76.50…as did Australia's major as did Australia's major export, Copper, hold export, Copper, hold support at around support at around 297.30 .”297.30 .”
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/13/09 – 1:51 PM 11/13/09 – 1:51 PM ESTEST
“…“…Booking half of our Booking half of our profits on 0.9220 long profits on 0.9220 long AUDUSD at 0.9285 and AUDUSD at 0.9285 and trailing trailing a stop on the a stop on the balance to entry price. balance to entry price. EURUSD is acting very EURUSD is acting very heavy into the 1.4885 heavy into the 1.4885 wave 4 resistance wave 4 resistance mentioned below…In light mentioned below…In light of fairly strong commodity of fairly strong commodity markets, a positive equity markets, a positive equity close, and dollar overlap, I close, and dollar overlap, I will remain long AUDUSD will remain long AUDUSD over the weekend with over the weekend with 0.9220 stops. 0.9220 stops. ””
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/16/09 – 2:05 PM 11/16/09 – 2:05 PM ESTEST
(Bernanke speaking at (Bernanke speaking at New York Economic Club, New York Economic Club, EURUSD was hit hard, but EURUSD was hit hard, but AUDUSD broke to new AUDUSD broke to new highs)highs)
“…“…We are still long the We are still long the final piece of AUDUSD final piece of AUDUSD from 0.9220 and I am from 0.9220 and I am actively searching for a actively searching for a final exit spot. I have final exit spot. I have moved stops on the moved stops on the balance to 0.9320 locking balance to 0.9320 locking in 100 pips on the final in 100 pips on the final piece.”piece.”
Forex trading involves significant risk of loss and is not suitable for all investors.
AUD/USD – AUD/USD – 11/16/09 – 2:05 PM 11/16/09 – 2:05 PM ESTEST
“… “… **POSITION UPDATE **POSITION UPDATE ** AUDUSD ** AUDUSD
Target #1 0.9400 Met and Target #1 0.9400 Met and Held. Closing last piece of Held. Closing last piece of AUDUSD long at 0.9375 for AUDUSD long at 0.9375 for +155 pips. +155 pips.
** POSITION INITATION** ** POSITION INITATION** EURUSDEURUSD
SHORTING 2 units of SHORTING 2 units of EURUSD at MARKET - EURUSD at MARKET - 1.4975 with ORDERS to 1.4975 with ORDERS to SELL 1 unit at 1.4985 and 1 SELL 1 unit at 1.4985 and 1 unit at 1.4995. Stops for all unit at 1.4995. Stops for all 4 units are 1.5025. Looking 4 units are 1.5025. Looking to add to this position. TG. to add to this position. TG.
Forex trading involves significant risk of loss and is not suitable for all investors.
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Forex trading involves significant risk of loss and is not suitable for all investors.
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