Top US Market Moving Reports

• Employment Growth
• Interest Rate Decisions
• Trade Balance
• Gross Domestic Product
• Retail Sales
• Durable Goods
• Inflation Reports (Consumer Price Index & Producer Price Index)
• Foreign Purchase Report (TIC Data)

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Trading The News

Which pairs should I trade anyway?

USD, EUR, JPY, GBP, CHF, CAD, AUD, NZD

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What Should Be In Your Trading Plan?

1. A Trading System

• System that you have thoroughly backtested & traded for at least 2 months.
• Currency pairs you trade & how many lots you trade.

2. Your Trading Routine

• When will you analyze the market & plan your trades.

3. Mindset

• Put away all your emotions when trading.

4. Your Weaknesses

• How you will ever getting better.

5. Your Goals

• To be confident & discipline.

6. Your Trading Journals

• Evaluate all your trades & see your progressing.

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Money Management

Plan Your Trade & Trade Your Plan

Why have a trading plan?

1. It keeps you in the right direction.
2. Trading is a business & successful businesses ALWAYS have plans.

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Market Hours (Know When To Trade)

Market Hour
3 major trading sessions: Tokyo Session, London Session & US Session

Worst Time To Trade

• Fridays
• Sundays
• Holidays
• News Events

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Create Your Own Trading System

Goals Of Your Trading System

1. Your system should be able to identify trends as early as possible.
2. Your system should be able to avoid you from whipsaws.

6 Steps Setting Up Your System

1. Timeframe

• What kind of traders you are. (Swing or Day Trader?)
• Which timeframe you will use to trade.

2. Find Indicators that help identify a new trend.

• Use Moving Averages (MA) to identify a trend.
• Use 2 Moving Averages (1 fast & 1 slow) and wait until fast crosses slow.

3. Find Indicators that help CONFIRM trend.

• MACD, Stochastic, RSI.

4. Define Your Risk.

• The amount you're willing to lose.

5. Define Entries & Exits.

• Where to enter & exit to get most profit.
• Wait until candle close.

6. Write Your System Rules & Follow It.

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ABC Correction (Corrective Waves)

The 5-wave trends are then corrected & reversed by 3-wave countertrends.
Letters are used instead of numbers to track the correction.

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Wave 2

Wave 2
As the point enough people who were in the original wave consider the stock overvalued & take profits which caused the stock to go down for a while but not going down to its previous lows and move up again.

Wave 3

• Longest and strongest wave.
• Has caught the attention of the mass public.
• More people find out about the stock & went to buy it.

Wave 4

• People take profits because the stock is considered expensive again.
• Tends to be weak because there are usually more people on bullish & waiting to buy.

Wave 5

• This is the point most people get on the stock.
• The price is going up.

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5-wave Impulsive Pattern (impulse waves)

Wave 1

Caused by a relatively small number of people that all of the sudden feel that the price of the stock is cheap so its perfect time to buy & cause the price to rise.

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Elliot Wave Strategy

The 5-3 Wave Patterns

It shows that a trending market moves in a 5-3 wave pattern. The 1st 5-wave pattern is called impulsive waves and the last 3-waves pattern is called corrective waves.

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Summary

Summary

1. You have to decide what the correct time is for YOU.
2. Once you've preferred time frame, go up to the next higher time frame to make a strategic decision.
3. Make a habit to look at multiple time frame when trading.
4. Choose a set of time frames that you are going to watch (15min, 4hr, Daily preferred).
5. Don't look too many time frames.
6. Stick to 2 or 3 time frames.
7. Use a long-term chart to find the trend.

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Intraday Trading

Intraday

• Use minute charts (1 min, 5 min).
• Traders are held intraday & exited by market close.

Advantages

• Lots of trading opportunities.
• Less chance of losing months.
• No overnight risk.

Disadvantages

• Transaction costs (spread) will be much higher.
• Mentally are more difficult due to frequency trading.
• Profits are limited by needing to exit at the end of the day.

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Short Term Trading

Short Term
Traders use hourly time frames & hold trades for several hours to a week.

Advantages

• More opportunities for trades.
• Less chance of losing months.
• No overnight risk.

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Multiple Timeframes

When comes to choosing best time frames for trading, we should consider which one works well with our personality.

Trading time frames are usually categorized into 3 types:

1. Long-term.
2. Short-term or swing.
3. Intraday or day-trading.

Time Frame Breakdowns
It depends on your personality.

Long-term
Traders will usually refer to daily or weekly charts.

Advantages

• Don't have to watch markets intraday.
• Fewer transactions means less paying or spreads.

Disadvantages

• Large swings require large stops.
• Usually 1 or 2 good trades a year so patience is required.
• Bigger account needed to ride longer term swings.
• Frequent losing months.

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Summary

• A technique used by pro traders & market makers to make entry & exit points for the day.
• Useful in forex since many pairs fluctuate between these levels.
• Range-bound traders enter buy order near identified levels of support & sell new resistance.
• Allow breakout traders to identify key levels that need to be broken for a move to qualify as a bonafide breakout.
• Allow to see possible areas to cause price movement.
• Good to use with other indicators.

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Forex Pivot Point Trading Tips

• If price at PP, watch 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 news to influence the market, price will usually move from P to S1 or R1.
• If there is news to influence the market, price may go straight through R1 or S1 & reach R2 or S2 and even R3 or S3.
• R3 & S3 are good indications for the maximum range.
• Pivot lines work well in sideway markets.

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Range-Bound Trades

• The strength of support & resistance at the different pivot level is determined by the number of times the price bounces off the pivot level.
• The more times a currency pair touches a pivot level than reverses, the stronger the level is.
• If the pair is nearing an upper resistance level, you could see the pair & place a stop above the resistance level but if the price is moving up & break the resistance level & considered "upside breakout", get stop of your entry order.

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How To Trade With Pivot Points

Breakout Trades

• The pivot point (PP) should be the 1st place to look at to enter a trade, since it is the primary support/resistance level.
• When price reaches the pivot point (PP), you will be able to determine whether to go long or short, set your profit targets & stops.
• If prices are above the pivot it's consider bullish.
• Let's say the price is hovering around the pivot point and closes below it so you decide to go short. Your stop-loss would be above PP & initial profit target would be at S1. If you see prices continue to fall between S1, move your existing stop-loss order just above S1 & wait till hit S2.
• The same thing if prices move during an uptrend.

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Forex Pivot Points

Professional traders & market makers use pivot point to identify important support & resistance levels.

Calculating Pivot Points
Calculated by using the last trading session's Open, High, Low & Close.

PP=(High+Low+Close) / 3
First level support & resistance
1st Support (S1) = (2*PP) - High
1st Resistance (R1)= (2*PP) - Low

Second level support & resistance
2nd Support (S2) = PP - (High - Low)
2nd Resistance (R2) = PP + (High - Low)

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Reverse Head & Shoulders (Important Chart Patterns)

A trend reversal pattern formed by a valley (shoulder), lower valley (head) and another higher valley (shoulder).

Summary

• Happens after an extended downtrend.
• Place your long entry above the neckline.
• Calculate our target by measuring the distance between the low point of the head & the neckline. This is the approximate distance that the price will move after it breaks the neckline.

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