FOREX IS ONE OF THE LARGEST FINANCIAL MARKET IN THE WORLD

And it would benefit everyone, if you learn how to trade it

It's going to be intensive but at the end... It would be worth the while of everyone that
was serious and learnt everything that was taught during the Training

I would drop some links of some of the Apps U all need to download before the onset of
the Training

Here are the Apps to download before the onset of the Training

META TRADER 4 OR MT4 FOR ANDROID PHONES

https://play.google.com/store/apps/details?id=net.metaquotes.metatrader4

META TRADER 4 FOR iPHONES

MetaTrader 4. Currency Market by MetaQuotes Software Corp.

https://itunes.apple.com/ng/app/metatrader-4-currency-market/id496212596?mt=8

CALL LEVEL APP FOR ANDROID

https://play.google.com/store/apps/details?id=com.calllevelsapp

CALL LEVEL APP FOR iPHONES

https://apps.apple.com/ng/app/call-levels-market-assistant/id937109871

PIVOT POINT CALCULATOR FOR ANDROID PHONES

https://play.google.com/store/apps/details?id=com.mobtower.pivotcalculatorforex

PIVOT POINTS FOR iPHONES

1
FX Calculators by Societe informatique Tyrcord Inc

https://apps.apple.com/ng/app/fx-calculators/id1427831135

Download them and keep, I would keep everyone Updated.

Here is the Outline we are going to be using during the course of the Training

Stage 1

INTRODUCTION

WHAT IS FOREX

WHAT IS TRADED ON FOREX

WHO IS A FOREX BROOKER

TRADING TIMES & TRADING SESSIONS

TERMINOLOGIES USED IN FOREX.

FORMS OF TRADING

CURRENCY PAIRS.

MT4 INTERFACE PART 1

STAGE 2

WHAT IS A PIP

CONCEPT OF BID AND ASK PRICE

WHAT IS A SPREAD

FORMS OF TRADING ORDERS

CONCEPT OF TAKE PROFIT AND STOP LOSS

LEVERAGE

2
 LOT SIZE

RISK MGT

COMMON MISTAKES BY TRADERS

TRADING PLAN

MT4 INTERFACE PART 2

STAGE 3

HOW TO KNOW WHEN TO ACTUALLY BUY OR SELL

HOW TO GENERATE SIGNALS FOR YOUR SELVES.

INDICATORS...MOVING Averages, STOCHASTIC, MACD, Bollinger bands, RSI, ADX,

Parabolic SAR, ATR, Ichimoku.... etc

TIME FRAMES ANALYSIS

SUPPORT & RESISTANCE LEVEL

CANDLE STICK ANALYSIS

FIBONNACCI LEVELS

PIVOT POINTS

ELLIOT WAVES & FRACTALS

CHART PATTERNS

DEMAND AND SUPPLY

STAGE 4

PUTTING IT ALL TOGETHER

FOREX TRADING STRATEGIES

3
 MENTORSHIP

LIVE TRADING

FOLLOW UP

INTRODUCTION AND WHAT IS FOREX

Forex is just a Short form for FOREIGN EXCHANGE

Forex is one of the largest markets in the world

With a Total Daily Liquidity of $6.6Trillion dollars

4
5
The New York Stock Exchange which is the Second Largest Market is having a Daily
Trading Volume of $169 Billion Dollars as we can see in the Statistics above

While the Crypto market, for those of us who know about Bitcoins has a Total Market
cap of just $222 Billion as of today, this is not even the Daily Volume.

All these Statistics are online, So you can do well to confirm them for yourselves

6
7
That is to show the massive Liquidity.... Which is on the Forex Market?

That is how large the Forex market is

WHAT IS TRADED ON FOREX

Someone would ask, what is traded on the Forex market.

This is not the form of market where you buy your clothes or shoes.

This is not Idumota or Oshodi Market, Sabon Gari or your normal Local markets in any
part of the world u are

In Forex market we Trade the Following

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9
10
11
So what actually do is that we are constantly Transacting in the above items I listed up
there.

I would take u all through how to Trade on them, so just follow the Lectures closely

WHO IS A FOREX BROOKER

Forex Brookers are Firms that gives you access to the FOREX MARKET .

They provide U as a Trader access to the financial market...

By providing a Trading account for U.

They gives Traders what we call Leverage. (we would see that soon)

They also provide Support Functions to the traders

There are various Brokers in the Forex Market

1. Hotforex
2. Fxtm
3. Fxcm
4. Fbs
5. LiteForex

Etc

We are still going to take time to talk about Brokers in details

But we have now aware of their Functions and what they offer the Traders

TRADING TIMES AND TRADING SESSIONS

We are entering into the most part of this Forex Training... If you were distracted
before, let's focus because your proper understanding of the Forex market would be
determined if you actually know the Forex cycle.

12
There are Various Trading Times and Trading Sessions in Forex

1. SYDNEY SESSION
2. TOKYO SESSION
3. LONDON SESSION
4. FRANKFURT SESSION
5. NEW YORK SESSION

The Sessions names are derived from the major cities in which most of the Transactions
are done

For example

Sydney Session represents Australia and other countries around that Time zone

Tokyo session, sometimes called ASIAN Session represents Japan and some of the Asian
countries.

London Session represents The United Kingdom and the countries within it.

FRANKFURT session which is in Germany represents Europe.

NewYork Session represents The Americas

Forex is actually a 24 hours market.

It is most times regarded as the Market that never Sleeps because it's open for 24 hours
of the day except on Weekends

So no matter where you are around the World, no matter your Time zone.... U can
actually Trade this Large, Highly Liquid market

Let's now get to their Trading Times....

Because each of this Session have their own Opening and Close times...

SYDNEY SESSION Opens by 9PM GMT

13
TOKYO SESSION OPENS BY 11 PM GMT

LONDON SESSION OPENS BY 7AM GMT

FRANKFURT SESSION OPENS BY 8AM GMT

NEW YORK SESSION OPENS BY 1PM GMT

Let's note these Times down in our Exercise as U all would be needing them for your
Trading.

Also Note that these Times are listed in GMT

Greenwich Meridian Time

So you should do the appropriate Calculation depending on your countries Time zone,
so as to know which session, U are currently on

All Sessions lasts for 9 hours.

So having known their Opening Times, To get their appropriate Closing Times.

Just add 9 hours to the Opening Time to get when they would Close

Example

Sydney Session that Opens by 9 PM GMT WOULD close by 6AM GMT

TOKYO Session that Opened by 11PM GMT WOULD close by 8AM GMT

NEWYORK SESSION that Opened by 1 PM GMT WOULD CLOSE BY 10PM GMT

AND SO ON FOR OTHERS..

just Add 9 hours to their Opening Times

Now there is an important thing to Note here...

This is what many Forex Traders don't actually understand because nobody taught
them.

It is always good to Trade the Market when 2 Markets are open at the same time.

Ie When 2 of the sessions are open

14
Please take note of this important point

This is because; Volatility is always more when 2 or more Sessions are Opening.

And in Forex Market, More Volatility means more money. �

As a Forex Trader, U wouldn't want to trade a Quiet market, because there won't be
much Fluctuations and it's those movements that make money for us.

U would come to understand these soon and know what I mean

Example by

12 AM GMT

Sydney Session and Tokyo Session would be open together and it would have more
Volatility than someone that is Trading at 9PM GMT because the market would be
Quiet.

Another Example is by 8AM GMT

London Session and Frankfurt Session would be open, infact even Tokyo would be with
them briefly, so you would notice that Volatility would increase during such times.

So as a Forex Trader, Always time your trading to fall in periods where 2 or more
Markets are open at the same time.

By doing that U would always have an edge in the market.

We would be learning more important things, let's just follow the Training closely

Some of You have heard about Forex before I'm aware, though U may not have known
how to Trade the Market.

U would notice that When the Trade I dropped enters profit; everyone in the group that
picked the Trade would enter profit too...

TERMINOLOGIES USED IN FOREX

Just Like every Field you try to learn, U would have to get accustomed to its Terms and
Terminologies

15
So also is the Field of Forex, U would need to learn about the Terminologies so as to be
able to communicate with the Market, Analysts and also with your fellow Traders.

U may be among the gathering of Forex Traders but U won't understand a dime of what
they are saying, this is because U doesn’t know the terms.

So that is what we would be learning in this section

So as I was saying

For every New field you embark upon in Life, U would encounter New Terminologies
and terms which is peculiar to such field.

Be it Law, Medicine, Journalism, Engineering etc

And you would have to get yourself acquainted with their Terminologies so as to be able
to communicate properly

So also is Forex, for you to be able to Learn and Trade, U should get to know some of the
term that is used in FOREX Trading.

So that u can understand the News, Flow with your Fellow Forex traders and understand
Analysts

So let's get to it

TERMINOLOGIES USED IN FOREX

TO GO LONG....means to BUY

TO GO SHORT...... means to SELL

If a Trader tells you that he went long on a Currency pair.

He meant that, He bought the pair.

While if they tell you that they short a Currency pair, it means that they sold the pair

Soon you would get to see that All what we are doing in Forex is Buying and Selling

16
The next terms we would see are

BULLISH MARKET.......

A market that is going upwards

BEARISH MARKET...... A Market that is going downwards.

When someone tells u that a currency pair or a commodity is Bullish

It's telling you that it’s going Up

While

One that is Bearish is going down

BULLS..... The Buyers are referred to as Bulls

BEARS..... The Sellers are referred to as Bears

RANGING.....A Market is said to be Ranging, if it does not have any particular direction.

It's neither moving upwards not downwards

TRENDING......A Market that is has a direction.

It's either moving upwards or downwards

So you can hear people say a market is trending upwards or the market is trending
downwards

So you may hear people tell you that the Market is just Ranging.

They are indirectly telling you that the market has not found any direction yet.

The next terminology that we would be looking at is

HAWKISH

This term is mostly used when referring to the Central Bank Governor or personnel of a
Country.

When they are Hawkish, they tend to be liberal on interest rate and are willing to
increase it.

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This is good news for investors

DOVISH

This is the opposite of Hawkish.

Financial personnel who are Dovish are very restrictive... They do not want to tamper
with the interest rate.

They even want to reduce it.

This is bad news for investors.

Like what is happening to Great Britain right now

NFP An acronym for NON FARM PAYROLL.

A very important News Event in the US.

Also Most of the Currency pairs have specific names in which they are called....

Eg

The dollar is sometimes called Greenback

The Pounds is called the cable

The New Zealand dollars is called the Kiwi

The Australian dollars is the Aussie

The Canadian Dollars is called the Loonie

Oil is referred to as the Black Gold

Etc

We would get to know them as we go along with the Training.

It's just to get you acquainted with the most popular ones so that when you see fellow
Forex Traders discussing, U would tag along easily

As we go on with the Training, We would get to see more Terminologies and Explain
them as we see them

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FORMS OF TRADING

There are basically two forms of Trading in Forex

1. FUNDAMENTAL ANALYSIS
2. TECHNICAL ANALYSIS

FUNDAMENTAL ANALYSIS

This is also known as News Trading

Here you are analyzing the Forex market with respect to the News

It's been said that News is what moves the market.

Everyday Various news are being released by these major countries

And they either positively Or negatively affect the Currency pair involved and then you
make your Trading decision based on the news u heard

We see all these News on CNN, Bloomberg, and CNBC etc

Also Your MT4 App has a Summary of News Section

Also some sites like www.forexfactory.com , www.dailyfx.com etc

Gives you summary of this News.

We would come to see them later

Now whether the News is Positive or Negative

As a Forex trader, that is none of your business because u makes money both ways.

Those into Crypto Trading would tell you that u only make money when a Coin is
appreciating.

But in Forex, we make Money both ways.

If a Currency pair is appreciating, we go long on the pair

When a Currency is also depreciating based on the News, We go short on the pair.

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Like many traders do every day, They buy some and sell some

So In Forex, U makes money on both sides of the News

We would come to see how to trade the News later

We would be discussing an Important News Released by the United States.

Even though there is News release everyday.

There is what we Forex Traders Call KING OF ALL NEWS

It's called the NFP NON FARM PAYROLL

This is News released by the United States of America.

Among all the news released by the US, this is the highest because it causes the most
Volatility in the market.

Non Farm Payroll is one of the Biggest News that every trader awaits on

Let's start with understanding what NFP is

Let's talk about what the News entails

It's News that contains various data and statistics released by the US Bureau of Labor
and Statistics

It's very influential as an indicator of US Economy because of the US Federal Reserve

makes monetary policy decisions based on this data

Hence Investors, Financial Analysts, Forex traders, Stock traders make trading decisions
with the News

It is released every 1st Friday of the Month by 8:30amEST

ie 12:30pm GMT

ie 1:30pm Nigerian time Etc

Just Calculate according to your Time zone

20
The data released include

1). Non Farm Payroll increase

This is the number of new jobs added in the US labor sector in the previous month

These data includes employment in the manufacturing sector, Construction sector,

Goods sector etc

Excluding Farm workers (hence the name), Also excluding Private Household employees
and nonprofit organizations

It is usually compared to the previous data

For example

The one we traded on Friday, 3rd of April ....is the number of new jobs added in March

That was NFP, it's usually That Massive.

It also includes

2) Unemployment rate of the US

3) Which sectors of the economy, these jobs were added mostly

It gives investors and traders where are the possible sectors to invest in as the sector
that added more jobs would be most likely to have experienced growth

4). It also includes the Average hourly earnings of the workers in the US

This is also an Economic indicator because even if the number of workers didn't change.

But however their earnings increased...

It would have the same effect as if their number increased

Same also could be interpreted in reverse, if their earnings reduced

21
5) Then lastly the data includes a revision of previous non farm payroll

Because investors compare these values together....

Whether there has been an improvement or reduction.

This also gives you an idea if the economy is growing or reducing

Let's get to how to interpret the data

INTERPRETATION OF NFP

So when more jobs are added, it means that Business ventures are growing and
remember that these newly employed would be paid....

Hence more people would have money to spend on goods and services hence increasing
the growth of the economy

However

When the number of jobs added are reduced.

The reverse occurs... People won't have money to spend on goods produced and
services... hence dwindling the economy.

Also the US govt has an amount of money paid to the unemployed.

When more jobs are added, more people would be employed.

This reduces the unemployment rate, as the unemployed citizens reduce

, less money leaves the govts pocket, hence boosting the economy

So this is just a Breakdown on What NFP entails and why it's so volatile.....

It's usually released 1st Friday of every month

So we would all be together and Trade the Next NFP, because it's better seen than
explained

No Forex Trader fixes his Wedding or Party on the First Friday of any month except it's a
Night event.

22
So as Forex Traders, Never miss it.

If you are driving and its 12:20 PM GMT

Just park, Open your Phone Trade your NFP and continue where you are going

If you are sick (God forbid), just tell them to give you your Phone that Friday, because
you can't miss NFP. That's how big it is.

Most Traders Trade once a month.

They fund their accounts specially for NFP and close for the month.

Most people make what you would be paid in a year just on an NFP afternoon

THAT’S HOW MASSIVE NFP NEWS ARE

IT CAUSES LARGE VOLATILITY IN THE MARKET

So Like I said earlier,

TECHNICAL ANALYSIS

This form of Trading is when you Analyse the Market using Indicators, Charts Patterns ,
Candlesticks, Fibonacci, Support and Resistance, Pivot Points, Elliott waves etc

When you use any of the above to analyze the market, It's called Technical Analysis.

Majority of what we listed on the Course outline are Technical Analysis

It's the most popular Form of trading....

This is because High Volatile News is not released Everyday so you can't just depend on
Fundamental Analysis alone.

Everyday can't be Xmas

So as a Forex Trader, U must learn how to trade the market using Technical Analysis.

So because everyday can't be Xmas, High Volatile News like NFP is not going to be
released every day , so you have to learn how to Analyze the market and Trade in the
absence of any major News release,

23
That's what makes you a complete Forex Trader

Among the 2 major Forms of Analysis,

No one is superior to each other and also no one is used in Isolation.

So you would learn as we move on, how to harmonies the two to constantly keep you
on top

The next topic on our outline is CURRENCY PAIRS

We are now entering the Practical Section of Forex where you all would be seeing what
we do online.

For this Next Section we would be needing our MT4 App

We would all start with DEMO ACCOUNTS

SO OPEN THE APP, IT WOULD AUTOMATICALLY CREATE A DEMO ACCOUNT FOR YOU.

U would see where is written start without Registration

That automatically creates a Demo account for you

IF YOU DIDN'T SEE START WITHOUT REGISTRATION, AND IT TAKES YOU TO A PLACE
WHERE IT'S ASKING YOU TO SELECT BROKER, JUST SELECT METAQUOTES DEMO.

THEN FILL IN YOUR DETAILS ON THE NEXT PAGE THAT WOULD COME OUT.

THIS SECOND METHOD WOULD ALSO CREATE A DEMO ACCOUNT FOR YOU

This Demo Account is what we would be using for Now

24
25
Ensure you are seeing that page containing the CURRENCY PAIRS �

on your MT4.

To Access the Page, Follow the Instructions I would Outline Below to Ensure U get to
that interface

If you can’t see the Currency Pairs

Open up your MT4 App

Click on that Double arrow icon below pointed at by the red arrow from any Screen U
are, It would automatically take you to the CURRENCY PAIRS PAGE.

26
27
28
ALSO

If your MT4 is showing an Interface, telling you MQL5 Registration

Don't bother about that, It has already opened the Demo account for you.

Just Click on that MT4 icon above pointed at by the Red arrow

It would now take you where you would see the Currency pairs by Clicking on the
double arrow icon as I earlier explained on any interface it takes u to

29
30
I BELIEVE WE ALL HAVE SEEN THE CURRENCY PAIRS PAGE THAT I OUTLINED ABOVE.

IF YOU STILL CAN'T SEE IT CHAT ME UP LET ME PUT YOU THROUGH, BECAUSE IT WOULD
BE PART OF OUR LECTURES TODAY.

We are gradually coming to the end of Stage 1 and we would soon enter Stage 2

Today we are going to look at the last set of topics on our stage 1 outline

We would be starting with

CURRENCY PAIRS

For this part to be more interactive...

We would all need to open our MT4 Apps

I Believe everyone has successfully Opened their Demo account and has Located the
CURRENCY PAIRS page just like I outlined

31
32
For Those that have Logged in, U would see where Currency pairs are listed, Like in the
image above

Even if it's in a different format, don’t worry.

The most important thing for now is that U are seeing there Currency pairs

We would address the Formats later

EUR..... EURO

USD.... US DOLLARS

GBP.... GREAT BRITISH POUNDS

CHF...... SWISS FRANC

NZD.... NEW ZEALAND DOLLARS

AUD..... AUSTRALIAN DOLLARS

CAD.... CANADIAN DOLLARS

JPY.... JAPANESE YEN

CNY..... CHINESE YUAN etc

These are some of the list of Popular Currencies traded on the Forex market

With their abbreviations and Full meanings

As u observe on your MT4.....

It's mostly written as their abbreviations

Now let’s continue with the Lectures

If you look at those Currencies listed up there...

U would discover that they are listed in pairs.

33
34
Among those pairs of Currencies

The first Currency within the pair is called

THE BASE CURRENCY

WHILE

The second Currency within the pair is called the QUOTE CURRENCY

Let's note these down

An important thing to note here is that

The Base Currency is always stronger than the Quote Currency

(With few exceptions and we would see why soon)

Let's take EURUSD as an example

Ie The first Currency pair on that image that I uploaded above

EURO is stronger than the US Dollars.( I believe we all know that)

Hence EURO is the Base while USD is the Quote

Another example is

USDJPY

The 3rd pair in that image above

In this second example

USDollars is the Base while Japanese Yen Is the Quote

Because the USD is stronger than the Japanese Yen

35
36
Also Beside each of those pairs...

U would see some set of Numbers written by the side...

Just focus on the first number for now

37
38
For Example...

In this EURUSD above... It's showing you

EURUSD.... 1.1262

That number is telling you, how many Units of the Quote Currency, U would need to
get 1 unit of the Base Currency.

Let's note the above statement down,

I would explain in details now

Let me use a Local scenario to give you guys an example

If you have a Currency pair btw USD and Naira

Ie

USD/NGN......360

This is first telling you that USD is stronger than Naira, hence USD is the Base and Naira
the Quote

Then the next important thing it's telling you is how Many Quote Currencies do you
Need to get 1 Unit of the Base Currency

So in this case, U would need 360 Naira to be able to get 1 USDollar

So that is what that number by the side, Always tells U.

How many Quote currencies do you need to get 1 Unit of the Base Currency

I believe this is clear

Let me give another example on the Chart to make it clearer

39
40
Let's Take a Look at USDJPY....

In the image above,

It's Currently at 110.37

It's currently telling that U would need 110.37 Japanese Yen to be able to obtain one US
Dollars

Like I told you guys... That the Base is always stronger than the Quote

There are occasions in which the stronger ones are written as the second pair

Examples include

AUDUSD

US dollars is stronger than Australian dollars

NZDUSD

US dollars is stronger than New Zealand dollars

EURGBP

Pounds is stronger than Euro

U always know them because they start with zero point something written beside them

Now when you see these few exceptions..

Don't bother too much.... About why the weaker one is written first even though it's
quite glaring that the Quote is stronger

What you just have to do is to take note of them,

It doesn't affect your trades.

It's just for the knowledge sake, so note them down.

They are the pairs I listed above

However Apart from those few exceptions

Generally in Forex...
41
The Base is always stronger than the Quote

Also, no matter which one is written first

Always know that the Price u see beside it is how many of the Quote Currency, u would
need to get 1 unit of the Base Currency

We will now move to another Very important Part of Forex

Let's listen closely here

This is where many people always asks Questions

However, For your Foundation to be Strong in Forex, U need to grab this concept

The Big Question is now

When Do you Buy and When Do you Sell?

Now this is where people always get confused....

Because those who taught them used the wrong semantics

U BUY. WHEN YOU KNOW THAT THE MARKET WOULD GO UP

WHILE

U SELL WHEN U KNOWS THAT THE MARKET WOULD GO DOWN

If you notice, I carefully labeled WOULD

I didn't say

U Buy when the Market is going Up

Assuming I said that, I would still be correct but you would get more confused

U would start asking, who buys any item when it's going up

Now as Usual, I would use a Local scenario to explain this topic, by the time I'm done

This seemingly complex concept, would look very easy to u

42
Believe me, nothing is hard in Forex

Just tell yourself that if Young young Boys who are not even half as educated as U can
do this, that u too can do it

So Let me explain to U guys...

What we are actually doing in Forex in very simple terms

Just follow me here closely

If you are doing anything else, just focus from now onwards

Let me use this Analogy to explain what I mean.

I would use 2 names in this brief Analogy

Name 1 : Buhari (He is the current president of Nigeria)

Name 2 : Jonathan (former president)

Now let's get to the Analogy so as to understand in a layman's way how Forex actually
works.

When Jonathan was in power.

Dollar was at a time around 180 Naira to 220 Naira

Let's just take the average and say 200 Naira.

When Buhari entered power... Some of you would recall that around 2016, at some
point Dollar shut up to 500 Naira per one.

Assuming you knew Dollar would appreciate against Naira like this and u had 2 Million
Naira lying fallow in the Bank account, U knew from your experience as a Forex trader
that uncertainty in Government weakens a currency …

Now ask yourself.....

Did you use that 2 Million Naira to do any Business?

The answer is NO

43
U practically did nothing,

What just happened right there was Forex.

U leveraged on the fluctuations in the Price of Dollar to Naira to make yourself Money.

Without doing anything. U just sat at home while the Foreign Exchange market did the
job for U.

This is basically what we do in Forex...

This is not the normal market in Oshodi or Idumota or Accra mall, Sabon Gari that You
Buy and Sell Clothes.

For some that would ask what are you Buying and Selling.

This is just a raw Analogy, because in Forex market it's even more interesting.

U doesn’t have to wait for 1 year or months to make Money.

These Currencies are Constantly Fluctuating in minutes (what I usually refer to as

Volatility) ., so it's those opportunities caused by these Fluctuations in the Price of one
Currency with respect to another that Forex traders make their money from.

Because they happens Daily.

That's why Banks would never allow you to learn Forex.

They prefer U come to their Banks and fix the money for meager interest rates.

To even shock you, Investment Banks contribute more than 70% of the total Liquidity in
Forex, they use your Money to Trade.

Drive Big cars and Live in Big Houses and give you peanuts as interest or meager
amounts As Salary.

I had to sit down to type this analogy in the lowest terms that everyone can understand.

With time it would get clearer..

But I hope you all are having an idea of how we make money in Forex

So In the above Analogy..

44
U would notice that u didn't really Buy or Sell any real commodity to make money.

U took advantage of the change in Exchange rate to make money

So why did you Buy USD/NGN

IN the above scenario

U Bought USDNGN because you knew before hand that the value Would Rise

Take note would

So in Summary

We have seen that We Buy When we know a currency Pair would Raise

And we sell

When we know a Currency pair would fall

The Big Question is how we know when it would rise and when it would fall

That is What Technical Analysis would tell you

Candlesticks

Fibonacci

Elliott waves

Indicators

Pivot point etc

We would continue with MT4 interface and Stage 2

45
 STAGE 2

WHAT IS A PIP

CONCEPT OF BID AND ASK PRICE

WHAT IS A SPREAD

FORMS OF TRADING ORDERS

CONCEPT OF TAKE PROFIT AND STOP LOSS

LEVERAGE

LOT SIZE

RISK MGT

COMMON MISTAKES BY TRADERS

TRADING PLAN

MT4 INTERFACE PART 2

TODAY MARKS THE REAL BEGINNING OF YOUR FOREX JOURNEY

ALL WHAT WE HAVE BEEN DOING SINCE IS INTRODUCTION, TODAY WE ARE STARTING
THE MAIN FOUNDATION

WHAT IS A PIP

PIP IS THE BEDROCK OF EVERYTHING; I REPEAT EVERYTHING WE ARE GOING TO

BE DOING IN FOREX.

If you miss the Concept of Pips here, believe me your foundation is going to be shaky all
through your Forex journey.

Currencies are gauged in pips, Trade orders are placed in pips, and Profits are calculated
in pips.

46
Practically everything we are doing in Forex involves Pips.

So take your time to understand this very important topic.

A PIP is the smallest unit in which a Currency pair can change.

It can also be said to be a standardized unit and the smallest amount by which a
currency pair in forex market can change

It's just like the CELL of Forex

Though as u go further, U would learn that there are smaller versions called micropips..

But let's not get anything complicated for now

Let's now get to how to calculate it

This is where I need maximum concentration from U all

If you are distracted before now, please stay focused from now onwards

For most currency pairs in Forex, We start calculating the pips from the 4th decimal
place

However there are few exceptions.

We would start with the general ones, before we go to the exceptions

47
48
So before I start, Let me repeat

The Pip is being calculated starting from the 4th decimal place.

So ignore that number superscript beside all the pairs.

So from the EURUSD in the image uploaded above...

U start calculating the PIP from the 4th decimal digit there which is ""2""

Currency moves generally in Forex are measured and calculated in pips

So how did I get 1.1293??

I added 1 to the 4th decimal placed number there and it increased from "2" to "3"

So if EURUSD which is currently at 1.1292

Makes a move of 1 pip

It's new value would become 1.1293

49
50
Let's still have another example

Let's Take a Look at GBPUSD (ie Pounds Vs US Dollars)

Which is currently at market price of 1.3031 in the image uploaded above

Now if GBPUSD makes a move of 2 pips from that Current value

..It's new Value would be at 1.3033

Now how do we get this 1.3033 ??

We added "2" to the 4th decimal placed number which is "1" and it increased to "3"

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52
Let's do one more Example...before we go to the main Calculation

Let's take a look at EURGBP, which is at a Current market value of 0.8663 in the image
above

If EURGBP makes a move of 5 pips from that value of 0.8663

The New market value would be at 0.8668

How did we get that ??

Once again, we added "5" to the 4th decimal placed number which was "3" and we got
"8"

Hence our new value was 0.8668

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54
For the example one we gave where EURUSD moved 1 PIP.

The actual calculation is 0.0001 * 1 = 0.0001

Therefore you add 0.0001 with your calculator to that original value of 1.1292

So we have.

1.1292 + 0.0001 = 1.1293

U see that this method looks longer, though it's the real way of doing it

We still got same answer

In the first method

We just directly added 1

To the last decimal placed number of that value of 1.1292

And we immediately got 1.1293

Let's see that second example above where GBPUSD moved by 2 pips

Now from that value of 1.3031

I told that GBPUSD made a move of 2 pips (remember these are just tentative
assumptions, just to make the Lectures clearer)

What would my answer be, if GBPUSD makes a move of 2 pips?

I would simply add 2 to the 4th decimal place of 1.3031

And I would have my answer as

1.3033

Let's see the long method

For the long method

Since I was told that the Market made a move of 2 pips.

55
Remember that originally

I told you guys that 1 PIP for a 4 decimal place currency pair is 0.0001

So the move made by GBPUSD is 2 pips

I would have

0.0001 * 2 = 0.0002

I would now add this 0.0002 to the original value of 1.3031

We would now have

1.3031 + 0.0002 = 1.3033

Same answer with the above

Let's go a little bit higher

I would give guys assignments for you all to practice too after today's Class

Assuming we were now told that GBPUSD made a move of 10 pips from 1.3031

We would as usual add the figure 10 from the 4th placed decimal number and we would
have our new value as

1.3031 >>>> 1.3041

Let's now see the long method again

Using the long method

The move made was 10 pips

Remember that 1 PIP = 0.0001

So 10 pips would be

0.0001 * 10 = 0.001

(notice the zeros reduced)

So to get the new value of GBPUSD we have

56
0.001 + 1.3031 = 1.3041

same answer

I know someone would ask, Since the shortcut is easy, Why teach us this long method

As we go higher, it gets more complicated especially with numbers that are not round
numbers

We would see that soon

Now for most currency pairs in Forex.... The pip Calculation, starts from the 4th decimal
place.

Now there are some currency pairs that are not up to 4 decimal place.

Some of them have specific ways of Calculating them .

Examples of those pairs are

JPY pairs

Eg

USDJPY

EURJPY

GBPJPY

AUDJPY

NZDJPY etc

Another popular Example is Gold

ie

XAUUSD

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58
LET’S START WITH JPY PAIRS

For JPY pairs Eg USDJPY..... The pips Calculation starts from the 2nd decimal place digit.
If you notice that it's not up to 4 decimal place like others that we did before...

Let's see some examples

From that image of USDJPY above... It's currently at 109.67 as pointed at by the arrow

From that Value... If it makes a move of 2 pips.

The New value would be at 109.69

How did we get this?

We started adding "2" to the second decimal place number which is "7" and it increased
to "9"

That's how we got 109.69

Let's go to the long method

For the Long method, you should take note that

For JPY pairs

1 PIP = 0.01

No longer 0.0001 , like we saw for other general pairs

So Lets use the Long method to solve the example above.

Remember that for JPY pairs

1 pip equals 0.01

Hence from the above example, since it made a move of 2 pips.

We have

0.01 * 2 = 0.02

Adding 0.02 to the Original figure, it would now become

109.67 + 0.02 = 109.69

59
Same answer as above

Let's go a little bit higher

Assuming USDJPY made a move of 10 pips from that Value of 109.67

The new value by simply adding 10 from the 2nd decimal place number would be

109.77

Using the long method

For JPY pairs 1 PIP = 0.01

Hence 0.01 * 10 = 0.1

Adding 0.1 to the original value we now have

109.67 + 0.1 = 109.77

Same answer

Let's now get to the last exception which is Gold

By seeing how to Calculate pips on Gold ie XAUUSD

Gold is represented as XAUUSD

Because, if the Chemical Formula for Gold in the periodic table is AU

So some Brookers write it as XAUUSD instead of Gold

I usually Call Gold My Boss...

The Volatility is the highest..

It can move 1000 pips on a good day

Only Gold can do that

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From Gold pair that I labelled above... The price is currently at 1325.36

....if it makes a move of 2 pips.

The New value would be 1325.56

How did we get this??

As usual using the shortcut method we added "2" to the 1st decimal place number
which is the figure "3"

Let's get to the Long but accurate method

For Gold 1 pip move = 0.1

Hence for that 2 pip move, we have

0.1 * 2 = 0.2

Adding this 0.2 to the original value of 1325.36

We have

0.2 + 1325.36 = 1325.56

Lets Go Higher

Assuming XAUUSD made a move of 5 pips from that same Value of 1325.36

It would be as follows

For Gold 1 pip move = 0.1

Hence for that 5 pip move, we have

0.1 * 5 = 0.5

Adding this 0.5 to the original value of 1325.36

We have

0.5 + 1325.36 = 1325.86

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Assignment 1

If AUDUSD at a current price of 0.6820 makes a move of 10 pips, what would be its new
value

Assignment 2

If USDJPY at a current price of 108.64 makes a move of 20 pips, what would be its new
value

Assignment 3

If XAUUSD at a current price of 1501.00 makes a move of 5 pips, what would be its new
value

LETS ALL DROP THE ANSWERS OF THE ASSIGNMENT (CLASS WORK) ON THE GROUP

63
64
UPDATE

FOR THOSE ASKING, NFP WAS SHIFTED TO 8TH OF MAY BECAUSE TODAY MAY 1ST IS
PUBLIC HOLIDAYS

THOSE WHO HAVE BEEN IN CIVIL SERVICE PREVIOUSLY WOULD UNDERSTAND THAT
TODAY IS WORKERS DAY (OTHERWISE KNOWN AS LABOUR DAY)

U KNOW WHEN EVERYONE IS STAYING AT HOME, EVERYDAY IS LOOKING LIKE PUBLIC

HOLIDAYS.

SO THAT'S THE REASON WHY NFP WAS MOVED

Yesterday we discussed extensively on Pips and saw what is a pip and how to Calculate
pip values among various types of commonly traded Currency pairs

CONCEPT OF BID PRICE AND ASK PRICE

Today we are going to be answering the question that many of you were asking before

Why are there 2 prices beside each quote?

U knows I always tell you guys that I like Teaching in steps that won't overload you who
is listening.

As we approach that area we would tackle it and you would understand it better

65
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Let's now get to what they mean

BID PRICE IS THE PRICE THAT BUYERS ARE WILLING TO BUY

WHILE

ASK PRICE IS THE PRICE THAT SELLERS ARE WILLING TO SELL

Write those definitions down.

We would break it down now

From the Image above u would see something like

EURUSD. 1.1408 1.1409

1.1408. Is the Bid Price

While

1.1409. Is the ASK Price

As usual, I would use what is happening around us to explain these concepts.

I always like simplifying things for better understanding

Forex is not meant to be hard, its people that try to make it complex so as to
monopolize the business for themselves.

Let's say u receive $10,000 ,from a friend abroad.

And u walk into a Bank to exchange it, Bank would tell you that the latest CBN rate is
let's say #350.

So they would give #3.5 Million Naira as equivalent to the $10,000

Let's say the next day.

U walks into that same back.

U had an emergency and you needed to travel abroad and you are requesting for same
$10,000.

They would now tell you that their own Bank rate is #370

67
So you would now have to pay #3.7 Million for same $10,000

In this situation, #350 here is the Bid price, while #370 is the Ask price.

That is how Bank makes their Money.

They just made #200,000 profits from U.

In just a space of 24 hours.

That is why Banks would always be King over the masses.

They control the flow of money.

And would always continue to live in big houses and Drive Big cars and pay the workers
peanuts.

That is why; they would never want you to learn FOREX.

Because Foreign Exchange is so liquid that it can change your Fortune around in just few
weeks of Trading.

However this Monopoly of knowledge is being circulated among the Elites

Let's come back to Forex

In Forex, the Bid and Ask price work same way.

However not as exuberant as the one Banks exploit us with.

The difference between these 2 in forex is just in points.

So The Bid Price is that price that Buyers also in Forex are willing to Buy while

Ask price is the price that the Sellers are willing to sell.

Here Buyers and sellers are not human beings.

It's the market in this case..

You Buy from the market and Sell to the market.

So the meaning of this above is that when you place a BUY ORDER in Forex

It would activate for you using the Ask price

68
(Remember that the Ask price is the Price that Sellers are willing to Sell to U, who is the
Buyer)

While in reverse

When you place a SELL ORDER in Forex

It would activate for you using the BID price

(Remember that the BID price is the Price that Buyers are willing to Buy from U, who is
the Seller)Let's relate it to our example of banks above

In the Example I gave above,

When you brought your $10,000 to the Bank, U are the seller at that instant while the
Bank was the Buyer.

So they gave you their Bid price of #350.

Because that is the price they are willing to Buy

While in reverse

When you came back the next day that you want to travel for an emergency

U now became the Buyer (no longer the Seller)

U needed to buy dollars to Travel urgently.

Now the Bank in this case became the Seller.

So they gave you the dollars at their Ask price which is the price that Sellers are willing
to Sell (remember they are now the sellers)

Remember from the example I gave above 370 Naira was the Ask and it's bigger than
the Bid price which was 350 Naira

So Also in Forex... The Ask is also higher than the Bid price...

Just like we saw in the example above

EURUSD..... 1.1408 1.1409

Let's now move to the next concept Related to them

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WHAT IS A SPREAD

SPREAD is the difference between the BIDS and ASK price.

In the example I gave above.

The Spread is #370 - #350 = #20

The Spread is 20 Naira.

That is the profit of the Banks.

So also in Forex, the Spread is the profit of the Brookers, however in this case, it's very
small because it's measured in pips.

The Spread varies between Trading Sessions.

When the Volatility is high and many markets are open at the same time.

The spread is always small (meaning that you pay Banks lesser commissions), that is
another advantage of Trading when many markets are open

However when only one market is open or the Volatility is low, the spreads are always
bigger

So that is how the Spread works.

We would move to another important topic today

TAKE PROFIT AND STOP LOSS

Take Profit and Stop Loss are Forms of Market orders

Let's start with TAKE PROFIT

As a trader, U would not always be online monitoring all your Trades.

It's not as if we Fx Traders just get a seat and stay in front of our laptops all day.

Some of your trades may stay over the Night; some may last for 2 days.

And U may have a date with your Babe , U have Champions League to watch, Ur
Friends that just hammered on one big trade is hosting a Party , U even have your work
to go to if you are a worker.

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So you have many engagements

That's where Market orders come in to play

So

TAKE PROFIT is a Form of market order.

That tells your Broker to Close your Trade for You and Lock in your Profit when your
Trade moves a certain number of Pips in your desired direction.

Even if you are not online

Remember in Forex we are always doing 2 things.

Buying and Selling

Let's take a scenario when we are Buying and give an example

Let's say u entered a currency pair

Let's call it AAA/BBB

And. It's currently at $40

And from your Technical or Fundamental Analysis.

U found out that it would soon rise

So you immediately opened your MT4 and Clicked on BUY

And your Target profit for this particular Trade is just 50 pips.

U doesn’t want to be Greedy.

Like I always tell people, never be Greedy in Forex.

Eliminate Greed, Pick the little U can and move on.

Even if you can't make $100 daily.

Even if it's only $50, u make daily.

My brother in a week that's $50*5= $250 (#90,000)

71
Who pays u #90K in a week?

It's good for a start and a beginner

With time, u upgrade to $100 daily

That's $500 weekly

(#180,000)

So you grow gradually

So

Let's say u entered a currency pair

Let's call it AAA/BBB

And. It's currently at $40

And from your Technical or Fundamental Analysis.

U found out that it would soon rise

So you immediately opened your MT4 and Clicked on BUY

And your target for this Trade is just 50 pips

U doesn’t want to be greedy.

For you to set a Target profit at 50 pips

U add it to the price u entered, which was $40

So your TP would be at $90

So anytime, the currency pair AAA/BBB Starts climbing and Reaches $90

Even if you are not online, Your MT4 through your Broker’s server would close the Trade
for you automatically using your MT4 and add the $50 profit to your account
immediately

So that is how TP works.

Once you set it at that particular price on your MT4 , whether you are online or not.
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It closes the Trade for U and Locks your profit.

Let's now open our MT4, to see where to set our TP on it.

So that we can also see practical example using Real pairs

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Open Your MT4...

Click on the icon pointed at by the Purple arrow from any page u are currently on to
take u to your charts (any Chart)

Then Click on the icon pointed at by the red arrow to take u to another page where you
would see where to input in your TP

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So having seen where to insert the Take Profit.

Let's now do some practical Examples of how to Calculate Take profit

The Box on the Right labeled by the Red arrow is the space for inputting in your TP.

While the space on the Left is for putting in your Stop loss which we would see next

If u are using iPhone

Just press ‘trade’ by the top right hand corner

It would take you to a page where u would see ‘stop loss’ and ‘take profit’

It is very easy to navigate with iPhones

The Box on the Right labeled by the Red arrow is the space for inputting in your TP.

While the space on the Left is for putting in your Stop loss which we would see next

77
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Assuming I want to Buy EURUSD at that Current ASK PRICE of 1.1338 seen in the image
above

And I want a Take Profit of 30 pips.

What I would just do is to Add 30 pips to that Former value of 1.1338 and I would have

1.1368

I hope everyone remembered our pips calculation of yesterday.... This is where we are
going to be using it

So My TP for that trade would be

1.1368

I would go into that TP box space and type it in.

So Immediately the Currency pair rises during its usual fluctuations and gets to 1.1368

My Broker would immediately Close the Trade for me, whether am online or not and
then Add my Profit to my account.

(Notice that I used Ask price because I was Buying, during Selling we would use Bid)

Let's see another example

For example most of my Trades.

I may place them at Night or In the Morning during London session after my Analysis.

I would log out of my MT4 after Setting my TP.

When I check back in the afternoon or in the Evening.

I would notice that most of them have been closed and my Profit added to my account.

Let's see more examples

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80
Let's take a US Dollars/ Canandian Dollars at the Current Ask Price of 1.3142

Let's say I want to BUY the pair and I want a Profit of 50 pips.

For me to get a TP of 50 pips from that trade

I would need USDCAD to rise to 1.3192 (1.3142 + 50 pips)

Hence I would go to my TP box and type in 1.3192

When USDCAD rises to 1.3192, my Broker would automatically close my Trade for me
and add my profit to my account.

Remember in Buying, we are making reference to the Ask price not the Bid price

Thats why we are making reference to 1.3142 and not 1.3140 (the other price on the
left which is the Bid price)

So When USDCAD rises and gets to 1.3192 (which would be a 50 pips move)

My Broker would close the order and Keep my profits in my Forex account.

So let’s get to the SELL SCENARIO

Let's focus closely from here onwards, this is where people always get confused and ask
questions

However encourage yourself that if people who didn't even go to school are trading
forex and doing the basic addition and subtractions that you too can do it

So let's follow closely from here

In Selling a Currency pair at the Forex Market.

U are Selling after U have found out from your Technical or Fundamental Analysis that
the Price would Fall

Hope we remember that

So as the Price is falling, U are making money.

This is the Opposite of Buying

So immediately the Price Falls from $100 to $55.

81
The Broker would add your 45 pips profit to your account.

That's the beauty of Forex, U make money both ways.

Whether a Currency is rising or falling, it's none of your business.

U just enters in the right direction and makes your bar

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Let's now see Practical Examples

Let's say after our Analysis...

We found out that AUDUSD would fall.

So we decided to Short (Sell) AUDUSD pair.

Remember now we are interested in the Bid price because we are selling.

And the Bid Price is currently at 0.7180 in the image above and I want a TP of 60 pips.

What would be the value of my TP.?

Here because we are expecting it to fall.

Our TP would be below not above.

So subtracting 60 pips from 0.7180

We have 0.7120

Hence I would input 0.7120 into the same TP box, we used when we were buying. (Same
TP box is used both when u are buying or selling)

So when AUDUSD falls and reaches 0.7120, my Broker would automatically close and
add my profit for me

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85
Let's see another example...

Let's say that after My Analysis.

USD weakened because of a Bad News and I want to Short (Sell) USDJPY...

And I only want a TP of 40 pips from that current Bid price of 109.50

Take note: Bid price, because we are selling

What would my TP be?

I would just subtract 40 pips from that current Bid price because I'm selling and I would
get 109.10

Hence I would input 109.10 into the TP box.

When price gets there, My Profits would be automatically added to my accounts

So Immediately Price Falls to that Level.

Your Broker would automatically add your profit for U.

So in summary we have seen that While Buying our TP is up

However in Reverse while

Selling Our TP is below the price

So we would stop here for today.

We would continue from where we stopped from tmrw

I Would Drop Assignments that You all would use to Practice and drop the Answers on
the page.

Throughout your Entire Forex Journey. U would always Encounter Pips Calculation in
one place or another.

So those who are still having Problems with Pips

Use this Night SCROLL UP and Revise the Lectures on Pips

Assignment 1

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Assuming, we want to Buy GBPUSD from the current ask price of 1.2824 and I want a TP
of 45 pips.

What would be my TP value

Assignment 2

Assuming, we want to Buy AUDCAD from the current ask price of 0.8911 and I want a TP
of 60 pips.

What would be my TP value

Assignment 3

Assuming, we want to sell USDJPY from the current bid price of 108.66 and I want a TP
of 40 pips.

What would I input in the TP box

Assignment 4

Assuming, we want to sell NZDUSD from the current bid price of 0.6350 and I want a TP
of 35 pips.

What would I input in the TP box

THE GROUP WOULD NOW BE OPEN SO THAT EVERYONE CAN START DROPPING THEIR
ANSWERS

Yesterday we saw what is Bid and Ask Price and the difference between them which is
the spread.

We also saw how To Calculate TP in 2 opposite scenarios Buying and Selling

Today we would be continuing with our Lectures with another form of trading order
which is

STOP LOSS

STOP LOSS is another important form of Market order, which is like the opposite of the
Take Profit order that we saw yesterday.

87
Here U are giving your Broker and Instruction to Close your trade when the market
wants to go against you.

Market is always going up and down and sometimes a News may pop up and sway the
market in the opposite direction in which your Trade was planned, But with a Stop-loss
order.

Immediately the market wants to change and go the opposite direction,

Your Broker would close the Trade for you through your MT4, even if you are not online.

Let's see where to put the Stop-loss order in our MT4

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89
Go to the same Place, where we saw where to put in TP, yesterday.

The Box on the Left is where you type in your Stop Loss

Let's say I want to buy a Currency pair named AAA/BBB.......

And the price is currently at $40

And want a TP of 50 pips

(So I would set my TP at $90, we saw this part yesterday)

Now after setting my TP, I would also tell my Broker, that look Mr. Man I'm Buying, so I
want my trade to be open only when the price is going up .

That if the price tries to go down by let's say more than 10 pips, Close my Trade for me.

So you only want to stay in the trade when the price is going up.

Now U gave your Broker a Stop-loss order of 10 pips.

Remember the initial price was $40,

So for a Stop-loss of 10 pips.

U should set it at $30, So anytime the price reverses and starts falling without your
knowledge, if it gets to $30. Your trade would close for u, preventing further losses,
even if you are not online

Let me give another tentative example, before we use Real charts and see examples

Let's say I want to buy a Currency pair

CCC/DDD

And the price is at $100

And I want a TP of 40 pips and a Stop-loss of 5 pips (meaning I don't want to loose more
than 5 pips)

My TP would be $140

While my. Stop-loss should be at $95

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So anytime the price wants to fall, and it falls by 5 pips from $100 to $95

My Broker would automatically close my Trade for me.

Preventing me from further loss, Even if you are not online.

Technology of MT4 has made Forex so interesting, U control how much you earn and
also how much you don't wanna loose in case market reverses

Let's see some real examples now

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Let's say I want to Buy USDJPY..

At that Ask price of 109.57.

And I want a TP of 40 pips and I don't want to loose more than 5 pips.

What would now be my TP and SL

My TP would be at 109.97

(ie after adding 40 pips to the current price)

And my SL

Would be at 109.52

(After Subtracting 5 pips, from the current price)

I would now type in both into the TP and SL Box respectively.

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Let's see another example

Let's say, we want to Buy USDCAD and we want a TP of 50 pips and a SL of just 10 pips...

From that Ask price of 1.3225

Our TP would be at 1.3275 (ie after adding 50 pips to the current Ask price)

While our SL would be at 1.3215 (after subtracting 10 pips from that same Ask price)

So you now go to the TP box and type in 1.3275 and go to the SL box by its left and type
1.3215, then click on Buy Button.

Once price tries to fall instead of rising and falls to 1.3215, the MT4 would automatically
close your trades for u, even if you are not online.

Now let's get to how to Calculate Stop-loss in the opposite Scenario which is Selling.

Follow closely from here, so as not to get confused, take your time to understand it.

Remember in Selling, U are only making money when the price is Falling like we saw

So let’s say I want to Sell Currency pair TTT/UUU and the price is currently at $80.

And u wants a TP of 50 pips.

Remember here u are selling, so your TP is always below, so you set It at $30. (Which
are 50 pips below the initial price of $80)

Now let's get to Stop-loss, while Selling, U don't want the price to rise (that would be
going against U)

So for Selling, U set your Stop-loss above the price.

Incase if it tries to rise, U are telling your Broker to cut you off the market.

So assuming I don't want to loose more than 5 pips.

I would now set My Stop loss 5 pips above the initial price of $80

Hence my Stop-loss would now be at $85.

If you notice this is exactly the opposite of what we did while Buying

95
While Buying, Our SL was below the price, now it's above the price

Let's see another example

Let's say I want to Sell Currency GGG/HHH

And the price is currently at $100

And I want a TP of 60 pips and I don't want to loose more than 10 pips.

My TP would now be at $40. (Below the current price because I'm selling)

While my Stop-loss would be at $110 (above the market price, because I don't want to
in the market, if the Pair wants to rise)

Let's see real examples now

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Let's say I want to Sell EURJPY (EURO Vs Japanese Yen) at the current Bid price of 124.93
because I know it would fall soon from my Analysis.

And I want a TP of 53 pips and I don't want to loose more than 5 pips.

What would be my TP and SL?

My TP would be at 124.40 (after subtracting 53 pips from that current Bid price because
I am selling while,

My SL would be at 124.98 (after adding 5 pips to the current Bid price of 124.93)

Notice that I am using Bid price here and not the Ask because we are Selling

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Let's. See another example

Let's say we want to sell AUDUSD.....Due to weakening of Australian dollars

And we are Selling from the Current Bid price of 0.7178.(take note Bid price because we
are selling,)

And I want a TP of 40 pips and a SL of just 10 pips.

Where would be my TP and SL?

My TP would be at 0.7138 (ie subtracting 40 pips from the Ask price of 0.7178)

While the SL should be at 0.7188 (after adding 10 pips to the current Bid price of 0.7178)

So Pips Calculation is basically straight forward if you learn how to calculate it

It's not Rocket science, just basically Addition and Subtraction.

Just note when you are buying or Selling

So In Summary

While Buying your TP is above (because you want the price to go up)

While your Stop Loss is below (because if it starts going down, that’s against your trade
plan).

IN REVERSE

While Selling, Your TP is below (because you want the price to fall)

While your Stoploss should be above (because if it starts going up, that's not your trade
plan again)

WE WOULD DO SOME ASSIGNMENTS, LATER AT THE END OF TODAYS LECTURE

We would Move on to another important topic for today.

The Second Question that many people have been asking.

How much do I use to start Forex., Or how much do I use to make a particular daily
target.

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After this Topic , U would have a Better Understanding of how Money is made in Forex

LOT SIZE

LOT SIZE is the amount / quantity of a Trade that u bought or Sold. It's sometimes called
your Position size / Trade size

In Forex Market, these Currencies are not Bought and Sold singly.

They are bought and Sold in Packs called Lotsizes .

That is what makes the gain appreciable, if not your profit in Forex would have been
$0.0001 or something like that.

But because u buy this Currency in Bulk / Packs known as Lotsize. That's why the gain is
appreciable.

Let's see the types

THERE ARE BASICALLY 3 TYPES OF LOTSIZES

STANDARD LOT

MINI LOT

MICRO LOT

STANDARD LOT CONTAINS 100,000 UNITS AND IS REPRESENTED ON MT4 BY 1.0

MINI LOT CONTAINS 10,000 UNITS AND IS REPRESENTED ON MT4 BY 0.1

MICRO LOT CONTAINS 1,000 UNITS AND IS REPRESENTED ON MT4 BY 0.01

I would show u where to input them on MT4 soon, let’s just explain what each of them
means

As Usual I would always use things around you, to explain complex matters of Forex to U
so as to make it simpler.

101
Let's assume we have 3 Traders A, B and C that deals on Jeans Wears

U know for them to make Profit, they can't just buy single pairs of jeans from the
Wholesaler.

They need to buy these Jeans in Bundles for the profit made to be appreciable.

Those Bundles are what we Call LOTSIZES

Assuming Trader A buys 100,000 bundles of Jeans �

And

Trader B buys 10,000 bundles of � Jeans

While

Trader C buys just only 1,000 bundles of � Jeans.

U would agree with me that Trader A would make more money than Trader B, who will
in turn make more money than Trader C.

And what determined how many Bundles of Jeans they bought is …

In the Illustration above Trader A bought Standard Lotsize

While Trader B bought Mini Lotsize

While

Trader C bought Micro Lotsize

Let's now see the Pip Equivalent of each lotsize

For STANDARD LOT SIZE 1 PIP = $10

For MINI LOTSIZE 1 PIP = $1

For MICRO LOTSIZE 1 PIP = $0.1

So If 3

Traders trades a Currency pair.

102
And 3 of them made 50 pips.

Let's say Trader A traded 1 Standard Lotsizse of the pair

While Trader B , traded 1 Mini Lotsize of the pair

And the Last Trader C, traded 1 Micro Lotsize of the pair.

Trader A would make 50 pips * $10 = $500

Trader B would make 50 pips * $1 = $50

While

Trader C would make 50 pips * $0.1 = $5

So even though they still participated in the same trade and the market moved in their
direction for the same amount of pips.

There profits were different because the amount of that particular Currency they
bought was different

I believe this concept is now clear.

Now Still on the Issue of Capital.

LEVERAGE

Leverage is the ability to use something small to control something big.

In the case of Forex, using a smaller Capital Base to control a larger lotsize

To understand this Concept of Leverage, let's take a brief history of how Forex was
initially

Initially in Forex, it's not anyone that is allowed to Trade Forex.

Just as we see currently in New York Stock exchange.

Forex are only traded by people we call the Kabals .

MEN OF WALL STREET

103
Usually Investment Banks, Rich Men, Monarchs, Big Business Men, Company owners
etc

Now let me take New York Stock exchange for example

For U to trade in The Floor of New York Stock exchange

U should be making a Specific amount of Millions of dollars per anum

U shouldn't be owing any Mortgage

Your Tax documents are up to date

With so many useless criterias just to limit it to the Elites

So also it was in Forex then

Common Men like U and Me wouldn't have benefited from this Lucrative business.

Now during the invent of the Internet, The world became a Global Village, in that U can
Buy and Sell from anywhere around the World

This led to the Proliferation of Forex Brokers

Now Forex Brokers had so many Customers around the World that They could solve that
Single problem of Capital For Us.

Now those World Banks etc requires a certain amount of Money for someone to be able
to Trade with.

But Because Brokers have Pulled many amount of money together, We are now
allowed to Trade through our Brokers.

So instead of an individual Trading with 1 million Dollars, U can actually place A Trade
with as Little as $10 because u didnt go alone.

U went to the market through your Broker , who is recognized by the World Bank as a
formidable force.

Because it has a large capital Base.

I believe this simple illustration is understood.

104
Now your Broker allows you to Trade because he offers U what they call Leverage in the
Fx Market

The principle of Leverage is virtually multiplying that your Little capital so that u can. Use
it and Buy something worth a Bigger. Value

Example

When we will be filling out our forms for opening of Trading account which we would
be seeing soon

U would see things like

1: 500

Or

1:1000

Etc

We also saw it when we were opening our Demo accounts (in some phones)

That is what is making the profit we have in Forex appreciable

TRADING ORDERS

There are Basically 3 Type of Trading Orders

INSTANT MARKET EXECUTION

STOP ORDERS

LIMIT ORDERS

Instant Market execution simply means that U are Buying at that Instantaneous Market
Price.

Let's say a Currency pair is presently at $50 and you clicked on Buy. What u did was
Instant Market Execution because you bought at that current price

105
106
107
In the image above, when you click on that drop down icon pointed at by the red arrow,
it would show all the other forms of Market orders, MT4 keeps it at Instant Market
Execution by default.

In the 2nd image, I would post below.

I would show U all where to adjust your Lotsize, which we talked about earlier
depending on how much you want to be making.

Ie whether it would be

$10 per pip or $1 per pip or $0.1 per pip. Etc

108
109
The Red arrow is pointing at the Lotsize that you have set.

While you use the other purple arrow by the sides are used to adjust the Lotsizes to
various multiples

ie whether to increase or decrease it to your desired Lotsizes

We would stop here for Today

I WOULD NOW OPEN THE GROUP FOR QUESTIONS AND CLARIFICATIONS

I believe today would mark the End of Stage 2 and we would then commence Stage 3

Here is our Outline and Schedule for Stage 3 and 4

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 STAGE 3

❇HOW TO KNOW WHEN TO ACTUALLY BUY OR SELL

❇HOW TO GENERATE SIGNALS FOR YOUR SELVES.

❇INDICATORS...Moving Averages,

Stochastic,

MACD,

Bollinger bands,

RSI,

ADX,

Parabolic SAR,

ATR, Ichimoku.... etc

❇TIME FRAMES ANALYSIS

❇SUPPORT & RESISTANCE LEVEL

❇CANDLE STICK ANALYSIS

❇FIBONNACCI LEVELS

❇PIVOT POINTS

❇ELLIOT WAVES & FRACTALS

❇NEWS TRADING & STRATEGIES

❇THE CONCEPT OF GAP TRADING

❇MARKET STRUCTURE

❇CHART PATTERNS

❇DEMAND AND SUPPLY

111
Also apart from the training, I would be dropping Live Signals for Profitable trades on
the group so that we can take on our Live accounts which we would soon all have and
grow the accounts

One thing in Forex is that your gain doesn't stop me from gaining; If all us here enter a
trade on same lot and it yielded $100. We all would make $100. Like that,

The $6.6 Trillion dollars traded per day is enough to go round; I alone can't finish it.

I enjoin us to be more serious from here... if u have the knowledge nobody can take it
away from u.

TRADING PLAN

In everything U do in life, U need a Plan

There is a saying that when one fails to plan, U are planning to fail.

So that's why U need a Written Trading plan before you kick off your Forex journey

Take note of that word written

U need to write it down

Next is that U need to follow this plan judiciously.

Never try to adjust it to suit your present market conditions or biases

Most Traders neglect this Vital aspect of Forex.

Also while forming your plan, it needs to be SMART

SPECIFIC

MEASURABLE

ACHIEVABLE

REALISTIC

TIME BOUND

112
You need to factor all the above into consideration

I would share with U all, my personal Trading Plan

This Plan should be like a Guide, so that U can use it to form yours.

MY TRADING PLAN

I would earn 100% of my trading equity in 1 month

I would set a near term goal and make at least 25% make at least 25% of my trading
Capital in 1 week and I would plot this target daily

If I am behind my trading plan for the quarter; I would take a brief break to re-evaluate
my trading system.

I would not trade more than 3 markets per day (ie more than 3 currencies pairs)

If I have more than 4 loosing trades in a row , I would take a trading break of 2 days to
reaccess the Market.

Anytime I take a break, I would close loosing trades set protective stops on a Winning
trades and TP at reasonable targets; should I be unavailable and Market gets to my
Target level.

I would take 70% out of my account and invest in non Fx related business …

The above is a summarized version of my Trading Plan

It shows the salient points in the plan

I printed this out and pasted on the wall near my Trading desk, because the more you
look at it, U would be more obliged to follow the plan

While forming your plans, especially your targets, make it realistic depending on your
capacity

Because I set my target at $100 per day or another person sets his at $500 per day.

That should not influence yours

113
Always make it realistic

If for a start, U makes $20 per day, believe it's a good start

For a little capital of $100 to $200, U can set up your target at $20 to $40 per day.

In a week, my brother that's $100 to $200.

That's equivalent of 36k to 72K in a week in Naira

The main aim of Forex in this early stage is to support your normal expenses.

Something to make u not depend on salary alone

If you can hit your target of $100 in a week.

In a month that's $400.

Which is almost 144K and it's more than some people's salary in a month

With this u can support yourself and your family

Whether u are in school, doing a day job or into business.

Its an additional source of income to everyone

Then as u now grow in Forex, U can now increase your capital.

Hence increasing your daily target

A time would come that u wouldn't depend on your salary again for anything.

So always start it step by step.... With time u'll get there

Next is that it's important to always review your plan

If you look at the second point in my plan

Review it weekly

ie at the end of the Trading week

Check your Transaction history for the week.

Have you achieved 1/4 the of this plan.

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Where are you currently and what part of your target is remaining

That would influence your Trading for the upcoming week

May be if you are few $ behind your target and you analyzed only 2 currency pairs last
week.

U might add one currency pair this week to make it 3 and maximize your profits

Another important aspect of of the Plan is once you have reached your target for the
day.

Always close and go and rest for that day.

The cash flow would still continue tmrw.

Forex market has been around for decades, so it won't close that day.

So always take your bow off, when u reach your target.

U Guys would notice that immediately I reach my target, I would close for the day

May be, u set a target of $100 per day (let’s assume u have a capital of $500).

Then you have already made $99.2.

Some of your Fx colleagues just called you that Donald Trump just pulled the plug on
Iran deal that you should Buy Brent Oil

And you immediately rush back into the market

Instead of waiting for the next Trading day as if the market won't continue tmrw

So U must eliminate that factor of Greed while formulating or trying to stick to your
Trading plan

By taking the market, slow and steady.

U would always be comfortable with forex

So I believe everyone would use this week we are entering and formulate their own
Trading Plan

After forming the Plan, Ensure U write it down or print it out (Very important)

115
And paste it near where you think, U would be making your Trade Analysis

After forming the plan, U can chat me up to help U. Review it or if you have any
clarification with any aspect of the Template I gave which u don't understand

Hence I would always be there to offer anyone Guide and Support

Let's move on to the next topic

COMMON MISTAKES MADE BY TRADERS

Another important principle in life, is to learn from other peoples mistakes

Never wait to learn from your own mistakes..

Those that have gone this part ahead of U would tell U this are what people have done
which didn't yield positive results and hence u should modify your own actions

So I would be highlighting some of these mistakes so as we all should be wary of it

The 1st is Not having a Trading Plan.....

Which I have already highlighted above of the importance of planning your Trades from
daily to weekly to monthly

Next is Paper trading for too long

Paper Trading is same as Demo trading...

Even though it's good to demo trade, but dwell in the fantasy world for too long

Get into the real market and trade and Analyze with your emotions on the line...

That's makes you stronger.

Dwelling in the fantasy world would make you feel relaxed and u won't learn because u
would always say to yourself

"it's paper money"

Next is not Using a Stop loss..

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Always remember to put it in all your trades

Technology has made it there to protect your accounts

No matter how good, u might have analyzed the market.

You may not know when a major news would be released and it could change the
direction of the market . (that's why it's always good to look at the Economic calendar
before the beginning of every week ).

But by setting your Stop-loss, no matter the news whether it's against your direction, U
would be protected

Next is

Opening so many Trades

U would see someone open

GBPUSD

EURUSD

USDJPY

USDCHF

AUDUSD

AUDCAD

EURJPY

GBPJPY

EURCAD

EURGBP

NZDUSD

Only one person

Tell me, how can you monitor, all these trades

117
It all bows down to Greed

Because you want to grab every single pip in the market

Since its $6.6 Trillion dollars liquid cap, u want to go home with as half of the market
volume

As if there won't be another market day

Never open so many trades, that U can't monitor

It tends to distract U and divide your concentration

I always limit myself to 3 currency pairs per time

If you see me open another Currency pair to monitor, that means one entered my target
profit quite early in the day so I had to open another trade

It's better to open multiple positions on one trade (ie on one currency pair) and monitor
it judiciously, than to open multiple currency pairs and distract your attention

I would teach, U all later how to enter the market multiple times on a particular
currency pair.

We call it "Riding the Trend"

The last but not the least (as we would address others as we encounter them within the
course of the Training).

Is Anticipating how the News would affect the market

Remember we talked about Fundamental Analysis

We mentioned that Fundamental Analysis is trading the market using the News

MT4 shows u important News releases in its News section

U can also use www.forexfactory.com

www.dailyfx.com

www.investing.com

www.myfxbook.com

118
On these sites, U would see important releases for the week

Now before, important major news events like Nonfarm Pay roll

Forex analysts used to release, what we call forecasts

These forecasts tend to come in the form of figures

When many Forex analysts has the same value, that value arrived upon by majority of
Forex analysts is called consensus

This consensus are published in various news platforms before the main News is
released by 8:30am.EST (IE 12:30 pm GMT)

Now this is just a forecast, not the real value

So many traders, would now go ahead and start making trading decisions with those
forecasts because they want to get in early and make huge profits.

Thats a big mistake, to make,

Always wait till the main News is released before riding the trend, created by the news

We would learn various Strategies on how to trade Nonfarm payroll soon

So no need to get in quick, even if it's 20 pips, u could catch its Ok

Than trying to get in early and catch the whole 100 pips.

It's always good to be patient with the market

So these are the common mistakes made by Traders.

So it's always important, to note them down and try as much as possible to avoid them
during your Forex journey

On the topic of *Risk management *

Its composed of all these topics we have been teaching in this stage 2.

Topics like Lot size

Stop loss, Trading plan, Greed elimination etc

119
It's all a spectrum

Because I told you guys that 1.0 Lotsize gives $10 per pip

And

0.1 Lotsize gives $1 per pip

U would see someone trying to go and use 1.0 Lotsize on a $100 or $200 account

Because he wants to get rich overnight

That's what we Call Over trading in Forex

Always stick to a Lotsize commiserate to your account.

Never get greedy.

The market would always be there.

Even if it's 0.1 , U are starting with.

It's still OK.

If you make $50 daily and you couldn't reach $100 daily.

It's still fair

$50 daily is $250 in a week.

It's not bad for a starter

As time goes on u progress to $70 to $80 to $100 daily etc

As u go along in the course of your Training, u would be seeing how we apply all these
practically

This is about knowing how to use the MT4.

Where to see each function

How to place trades

120
Where to see your indicators

Where to input your TP and SL etc

We have seen some of these during the course of our Training and we would see more
as time goes on

However as a form of a Guide, I normally give a Link to a video to watch that explains
most of these...

However as u trade and grow in Forex, u would have all these at your fingertips.

https://youtu.be/rL9wxvryPOg

So we can all watch it during our spare time..

It's not a long clip

Just a beginners Guide

As always, if any feature is not clear...

Just drop your question on the group or Chat me up to explain further

https://youtu.be/39YCfYaJgqU

https://youtu.be/3oXGK4QkoB4

HOW TO USE MT4 FOR TABLETS

THE ABOVE 2 IS FOR IPHONE USERS AND THOSE USING TABLETS

SO LET'S TAKE OUR TIME TO GO THROUGH

I would stop here for today.

This would bring us to the end of this Stage 1 and 2.

I would forward you the Guidelines for the registration of your Live Account

https://www.hotforex.com/?refid=335949

Let's start processing your account.

121
Register your Live account using the link below

Before you fill the forms

Read the Guidelines that I would drop below

https://www.hotforex.com/?refid=335949

THESE ARE DETAILED STEPS ON HOW TO COMPLETE YOUR REGISTRATION PROCESS

OPEN THE LINK I JUST DROPPED

FILL IN THE INFORMATION AS I WOULD OUTLINE BELOW.

1) UNDER ACCOUNT TYPE.... SELECT USD

2) UNDER CLIENT TYPE....... INDIVIDUAL

3) PERSONAL INFORMATION

SELECT COUNTRY OF RESIDENCE AND TITLE AS YOUR NORMAL ONES.

4) UNDER NAME...

TAKE NOTE

USE THE NAMES EXACTLY ON YOUR ID CARD. (Or any Means of Identification that you
will be using)

IF POSSIBLE USE YOUR COMPLETE 3 NAMES.

This is to avoid Withdrawal and Approval of account issues.

5) Fill in the Date of Birth on your Passport or ID card. Very important Please.

6) Another Important thing to Note is this.

If you encounter any Place that requires Address.

Please Use the Address that you used i…

https://youtu.be/E-qk7IMaxdM

122
STAGE 2

AFTER REGISTRATION.. U CAN PROCEED TO UPLOADING YOUR DOCUMENTS.

THE DOCUMNETS REQUIRED INCLUDE

1) VALID MEANS OF IDENTIFICATION which can be one of

a) INTERNATIONAL PASSPORT

b) NATIONAL ID CARD

c) DRIVERS LICENSE

d) Permanent Voters card

e) National ID card slip (though this would require birth certificate)

f) NHIS card for GHANA clients

2) PROOF OF ADDRESS

a) BANK STATEMENT OF ACCOUNT.

(That’s why the Names on your Bank account and the Address on your Bank needs to
rhyme with what you gave to Hotforex because that’s what they would be verifying)

Remember Computer is Garbage in Garbage out.

So ensure you type in exactly what’s on your Bank account both in terms of Names and
Address while Registering your Account in Stage 1

…STAGE 3 (FINAL PHASE)

To Open your Trading account, that u would use in Logging into your MT4.

Login to your Hotforex dashboard.(using your myHf ID and password)

Go to Menu

Under Menu... Click on Accounts.

Under Accounts.....Select Open a Trading account.

123
U would see a Form to Fill.

Remember Under account type

SELECT MICRO

When you grow in Fx u can choose to open premium or ECN

Under Leverage SELECT from 1:400 or 1:500 OR 1:1000 upwards

Just fill in any Leverage, it doesn’t really matter, it’s Lotsize that counts.

Under Currency Base

SELECT USD

Under Are You Planning To Follow a Signal Provider

SELECT NO

Under Bonus

SELECT NO BONUS

Under Introducer Broker ID

Leave it Blank

Then Submit the Form.

They would now Send your

Trading ID and Password to your mail.

The lectures would resume in few minutes

WE WOULD KICK OFF NOW

TO THIS STAGE OF THE FOREX TRAINING.

ITS GONNA BE AN AWESOME TIME TOGETHER AS I WOULD TAKE U ALL THROUGH THIS
AMAZING WORLD OF FOREX

At the end of these Intensive Training, Ur Level in the Sphere of Forex would be
markedly improve
124
So like we all learn in Stage 1 and 2 , we Buy (or go Long) a currency pair when it's going
up

And we Sell (or go short) on a currency pair when it's going down

That's simple enough right?

But the Big question is, how do I know that it would go up and how do I know if it would
go down

That's what we are going to be learning in this Stage....

To teach you all, how to trade and command the market like a BOSS.

Even if you are already trading before, I would be giving u all along our Training,

Strategies that U wouldn't have come across in your Trading career

The Training in this Stage is going to be intensive and sometimes stressful, but I urge U
all to Tag along.

At the end, u would be glad you did

Try to actively participate in any activities that we would be doing in the group

Like I said earlier, If Assignment are given, always try to do them.

It's for the advancement of your own knowledge

The Big question like I said in Forex is to know when to Buy or Sell

There are so many ways in Technical Analysis that tells U when to buy or Sell...

Also different strategies that accompany each of these Analysis

They range from

Indicators

Candlestick Analysis

Support and Resistance zones

Pivot points

125
 Fibonacci tools

Elliot waves

Chart patterns etc

And each of them has some details u should all be familiar with before implementing
them

We are going to be covering all of the above during the Training

NOW, WE ARE GOING TO BE STARTING FROM THE SCRATCH

THOSE WHO ARE ENCOUNTERING FOREX FOR THE FIRST TIME

WE ARE STILL GOING TO GET TO THE BEDROCK, WHICH ARE PRICE ACTION, MARKET
STRUCTURE AND CONFLUENCING ALL OF THEM

BUT FOR NOW, LETS START FROM THE SCRATCH SO AS TO CARRY EVERYONE ALONG

INDICATORS

Indicators are tools that help you forecast future price actions

They help you know which direction the Trade would move towards to so as to correctly
place your Trade order

There are different types of Indicators

Moving Average

Stochastic Oscillator

Bollinger Bands

RSI

ADX

MACD

ATR

126
 ICHIMOKU

ETC

We are going to be taking each one by one and also teaching u guys, how to trade with
them and salient strategies that are accompanied with each

Let's start from the Silky Moving Average

Moving Average is a very popular indicator used by many and has lots of strategies
attached to it

Let's start by seeing what it does

Moving Average is an Indicator that Calculates the Average Closing price of a particular
currency pair of the last "X" periods

Where x can be any number

Eg

If you use a "5" moving average on a 1 hour Chart ,it calculates the average closing
prices over the past 5 hours and plots them as points a line graph

Eg

Let's say a Currency has average closing prices for the past 5 hours as

$12, $14, $10, $11, $13.

It calculates there average as 12 + 14 + 10 + 11 +13 = 60

60/5 = 12

It does this for other past 5 hours and goes back in time...

Plotting them on graph as it moves

That's the basic calculation for Moving averages..

However u don't have to do all these calculations but your chart does it for U

127
However it's good to know these basics because when we come to its settings and
strategies that we would be discussing, u should know why we are choosing which value
for the period of our moving average

There are 2 types of Moving averages

1) Simple Moving Average

2.) Exponential Moving Average

Let's briefly explain both

Simple moving average, just sums up the average for you without giving weight
to recent price actions, so if there was a previous spike; it would add it in its
calculations.

Let's give another example

Let's take same currency pair in above as an example..

Let's say the closing piece shot up in the 2nd value and we have

$12, $35, $10, $11, $13

If you calculate the average of the above...

That extreme value of $35 would affect the average of these set of numbers

Hence distorting the average

This is corrected by the use of Exponential moving average

However most traders still use Simple moving average, because even though it's slow to
react u are less likely to encountering fake outs (fake outs are like wrong signals, we
would see that later)

When some Traders use EMA are mostly after Volatile News events (Example if there
was a Volatile News event the previous Day), but apart from that, generally Simple
Moving average is still the most popular

So let's quickly go to the practical section and add Moving average to our MT4

I would show u guys, Screenshots of how to add it

128
SO, IF YOU CAN'T ADD YOURS USING THE STEPS I WOULD HIGHLIGHT

ITS PERFECTLY NORMAL

U MIGHT STILL BE A BEGINNER

SO USE THIS IMAGES TO LEARN FOR TODAY

STEP 1

OPEN YOUR MT4

CLICK ON THAT ICON POINTED AT BY THE RED ARROW TO TAKE YOU TO YOUR CHARTS

129
130
STEP 2

AFTER GETTING TO YOUR CHART PAGE.

CLICK ON THAT "f" ICON POINTED AT BY THE RED ARROW TO TAKE U TO WHERE YOU
WOULD ADD INDICATORS

131
132
STEP 3

ON GETTING TO THIS NEXT PAGE

CLICK ON THAT MAIN CHART WINDOW � SIGN

133
134
STEP 4

THIS WOULD NOW TAKE YOU TO WHERE YOU WOULD SEE ALL THE INDICATORS LISTED
OUT.

SEARCH FOR MOVING AVERAGE AND CLICK ON IT

135
136
STEP 5

AFTER CLICKING ON THE MOVING AVERAGE.

IT WOULD TAKE U TO WHERE YOU CAN SEE THE SETTINGS FOR THE MOVING AVERAGE
INDICATOR.

THERE YOU WOULD SEE THE VALUE OF THE PERIOD WRITTEN AS ""10""

THIS IS THE DEFAULT SETTINGS

CHANGE IT TO ""7""

ie Delete the "10" and type in "7"

137
138
CLICK ON ""DONE"" WRITTEN ABOVE AFTER YOU ARE THROUGH

139
140
IT WOULD AUTOMATICALLY DRAW THE "7" PERIOD MOVING AVERAGE FOR YOU ON
YOUR CHART AS SHOWN BY THE RED LINE

SO YOU DON'T HAVE TO CALCULATE ANYTHING, THE CHART HAS CALCULATED IT AND
DRAWN IT FOR YOU.

141
142
LIKE I SAID

IF YOU CAN T GET IT THIS FIRST TIME

IT’S ABSOLUTELY NORMAL

THIS IS JUST THE BEGINNING

FOR THOSE HAVING TWO LINES

ONE CAME BY DEFAULT

THAT'S THE 10 MA

WE WOULD SEE HOW TO DELETE INDICATORS SOON

Yeah

U are on track

However you can Delete one of the MAs

To Delete one of the MAs

Go to where the Indicators are listed

Long Press on the First MA there (that's the default 10 MA)

So when you Press and Hold it

A Delete Button would pop up

Then you can now Delete it

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THE NEXT STEP IS TO GO BACK TO YOUR CHART AGAIN AND REPEAT FROM STEP 1 TO
STEP 4

SO AS TO BRING YOU TO THIS SAME INDICATORS PAGE AGAIN

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WHEN IT BRINGS YOU BACK HERE AGAIN

CLICK ON THE MOVING AVERAGE FOR THE SECOND TIME.

AS U DO SO IT WOULD BRING U BACK TO THE SETTINGS PAGE OF THE MOVING

AVERAGE.

WHEN IT BRINGS YOU BACK THERE

REMEMBER YOU INITIALLY TYPED IN "7"

DELETE THE "7" AND TYPE IN ""14""

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AFTER YOU HAVE TYPED IN THE "14" IN PLACE OF "7"

LOOK DOWN

YOU WOULD SEE WHERE MY RED ARROW IS POINTING AT.

CLICK ON THERE TO CHANGE THE COLOR OF THIS SECOND MOVING AVERAGE THAT
YOU WANT TO ADD.

REMEMBER THE FIRST WAS RED, SO YOU CAN MAKE THIS ONE BLUE

THIS IS TO DIFFERENTIATE IT FROM THE FIRST MOVING AVERAGE THAT YOU ADDED ON
YOUR CHART

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AFTER YOU HAVE CLICKED ON ""DONE"

THE SECOND MOVING AVERAGE WOULD AUTOMATICALLY BE ADDED TO YOUR CHARTS.

YOU WOULD SEE SOMETHING LIKE THIS, SHOWING ONE RED LINE AND ONE BLUE LINE

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So how do we trade with Moving Averages?

The basic principle u have to note in Moving Averages, is that they work well in trending
markets

What is now a Trending Market?

A Trending market is one that it's either moving upwards or downwards...

Not just sideways

Hence moving average works well, in this type of market.

So that u can correctly use it.

Because u would see most traders saying that MA is not working for them, without
knowing that they used it in a wrong market condition

So HOW DO YOU TRADE WITH MOVING AVERAGES

The. 1st is to easily identify the start of a New move and ride it

We use what we call the "Golden cross"

After inputting your "7" period MA and the "14" period MA in your Chart with different
colors

The 7 period is called the fast moving MA

The 14 MA is slower than it hence called the slow moving MA

U should note that The smaller the period of a Moving Average, the faster it is to react
to the price

Also the larger the period of a Moving Average ,the slower it is to react to the price

So in order of fast to slow

We can arrange these 6 MA as follows below

5 MA

7 MA

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10 MA

14 MA

20 MA

32 MA

So the smaller the period, the faster

So as u insert your MA to the Charts,

U watch and wait to see the time when the fast MA on your Chart (it depends on the
one u added)..

So you watch and wait when the fast MA on your Chart crosses the Slower moving MA

Many traders use 7 $ 14

Or 10 & 20

I prefer 7 and 14

When you spot the 7 MA cross the 14 MA... U should note the direction of the cross

LET'S SEE SOME PRACTICAL EXAMPLES

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IN THE IMAGE ABOVE

THE RED LINE IS MY "7" MA WHILE THE BLUE LINE IS MY "14" MA

When you spot the 7 MA cross the 14 MA... U should note the direction of the cross

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From the GBPUSD charts above... My Red (7 MA) crossed my Blue (14 MA) to the
downward side

Watch that immediately, the 7 MA crosses the 14 MA above...

Watch how the price just suddenly fell doooowwwwn..

U should have grabbed a number of pips assuming u entered immediately that crosses
happened above

This image we saw above is a downward trend

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Notice how the price was moving downwards

Now that Golden Cross of the Moving average to the downward side gave us a Clue that
GBPUSD would fall and so it did

And from this image above it fell from around 1.3022 to around 1.2833

That's almost 200 pips

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SO ASSUMING YOU SOLD GBPUSD FROM THAT CROSS AT THE TOP

U SHOULD HAVE BAGGED IN AT LEAST 100 PIPS FROM THIS DROP

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Remember from Stage 2. We are making money when a Currency pair is Falling and we
are Selling

LET'S SEE ANOTHER EXAMPLE FOR AN UPWARD TREND

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HERE IS A CHART OF USDCHF

SHOWING AN UPWARD TREND

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As u see from above

The Red MA (which is my fast moving MA) Crossed my Blue "14" MA from below to the
Upward side.

Remember like I said, U should always take note of direction of the cross

In this case it crossed it and started moving upwards

Signalling to us that this Market would soon start soaring up

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ie that USDCHF would start moving upwards

Watch what happened to the market afterwards

It skyrocketed upwards

Assuming u entered at that Red Cross right there and Placed a Buy Signal (Remember If
UP ,u Buy)..

So if you would have placed a Buy order after that Upwards Signal giving by the Moving
Average Indicator.

U would have grabbed over 60 pips right there

ie from around 0.9973 to that upward value around 1.0041

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So that's one way to use MAs...

That's is determining entry of trades

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HERE IS ANOTHER DOWNWARD GOLDEN CROSS ON AUDUSD

Just as what is about to happen in that arrow pointed

MY red MA which is the fast one, crossed the Blue MA and started moving downwards

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U enter at that top where they crossed for a Sell and you exit at that end when the
opposite cross occurred

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In this case above... Since it's a Downward cross

We SELL

Another important Way to use MAs that most people don't know is to identify a Trend

There is one saying in Forex...

THE TREND IS YOUR FRIEND

THEY WOULD ALWAYS TELL U..

NEVER GO AGAINST THE TREND

write these 2 words down

So we also use MA to identify Trends and When a Trend would likely change...

We mean the overall market trend here

The Secret Moving Averages used are

200 MA

89 MA

WE WOULD TALK ABOUT THESE SECRET MAs TOMORROW

We would Continue Our Lectures Tomorrow with These Secret MAs

Before we go

I would Give an Assignment so as to make a Concept Clear

Someone Just Chatted me up that She really doesn't understand why we Buy when
market is rising

I explained this in stage 2

U Buy when you know that it would rise may after spotting an Upward Golden cross

However as it's now going up,U would be making money

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However, I would Give a practical Assignment regarding this this Night

So that all of us can visualize it clearly

As I was saying, I would Give U all an Assignment

It would enable some of you understand that concept that I was saying , that U Buy
when the Market is going Up and Sell when its going down.

After this Practical session that we are going to embark on, The Concept of Buying nd
Selling would be Clear to Everyone.

Because some people would always ask, Why Buy when its rising.? And why Sell when
its Falling..This Would make it all Clear.

THE ASSIGNMENT

SYDNEY SESSION IS ABOUT TO OPEN

SO OUR ASSIGNMENT WOULD BE TO OPEN AUDUSD PAIR

PLACE TWO SIMULTANEOUS ORDERS ON IT.

Open a Buy order and come back immediately and Open A Sell Order.

Leave both Open to Run till Tmrw Evening at the End of New York Session

We would now Close it.

Our Task would be to Note where u entered (at what price u entered) and note the price
u closed.

Also Note whether the AUDUSD pair moved Up or down.

Then come back to check which of your orders made profit

Is it the Buy Order or the Sell Order

Then Lastly Calculate how many Pips profit u made.

Let's all do this on Demo accounts.

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We would review it tmrw Evening.

To See the BUY AND SELL BUTTON. ...FOR AUDUSD

Here are the Steps....

IN THE EXAMPLE BELOW, I USED EURUSD TO SHOW THE STEPS

HOWEVER WHAT YOU SHOULD USE FOR ASSIGNMENT IS AUDUSD

Let’s all take note

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STEP 1

CLICK ON THAT DOUBLE ARROW ICON FROM ANYWHERE YOU ARE ON THE INTERFACE

STEP 2

It would bring you to a Page where you would see Currency Pairs.

Serach for EURUSD with the symbol pointed at by the Red arrow. ..

If EURUSD has not been added to your Quotes lists.

Click on that Plus sign pointed at by the Purple arrow.

It would Take You to Forex Folders containing Numerous Currency pairs and u can now
add EURUSD from there by Clicking on it

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STEP 3

After, U have Located EURUSD

Press and Hold it and it Would Open up a place for you to Click on New order

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STEP 4

After U have , Clicked on New Order

It would bring U to a Page where you would see the BUY and SELL button.

Click on BUY...

GO BACK AGAIN USING THE SAME PROCESS FROM STEP 1 AND CLICK ON SELL

It would automatically Open Two Trades for U.

Leave both Trades to Run till New York Session Tomorrow Evening and We would Come
back to Analyze it together

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We are now in New York Session

So Let's all Close the Assignment I gave yesterday so that we would Study what
happened.

Steps on Closing an Open Trade

Press and Hold the Trade... A Pop up menu would come out.

On the Pop up menu, U would see a Close order icon.

Click on the Close order option...This would take u to another page where you would
see another Close Button as you Look below.

INTERPRETATION

IF YOU LOOK AT YOUR ORDERS , U WOULD SEE THAT ITS ONLY THE BUY ORDER
ENTERED PROFIT.

WHY IS THIS SO?

THE PAIR AUDUSD ROSE TODAY ON ACCOUNT OF A GENERAL STRENGTHENING OF THE

AUSTRALIAN CURRENCY. AUSTRALIA KEPT THEIR INTEREST RATE UNCHANGED TODAY IN
THE MORNING WHICH COINCIDENCDED WITH INVESTORS EXPECTATIONS.

WE WOULD SOON SEE HOW ALL THESE GAVE STRE…

we talked about Moving Averages

We saw the various ways to set it up and how to determine our entry and exit points
through them

Today we would be starting our Lectures by talking about how to determine the Trend
using them

As I was saying yesterday, another important Way to use MAs that most people don't
know is to identify a Trend

There is one saying in Forex...

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THE TREND IS YOUR FRIEND

THEY WOULD ALWAYS TELL U..

NEVER GO AGAINST THE TREND

write these 2 words down

So we also use MA to identify Trends and When a Trend would likely change...

We mean the overall market trend here

The Secret MA used are

200 MA

89 MA

Everyone should add these 2 MAs to their charts again

USING THE SAME 5 STEPS THAT WE SAW YESTERDAY

Use different colors to the ones u used for 7 and 14

Because your 7 & 14 MA are already in red and blue

Choose other different colours

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Type in "89" to that place where we added "14" last time and Use the icon pointed at by
the purple arrow to change the color

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After Adding that, Another 3rd MA with another color would be added to your charts

That's the 89 MA above

After Adding 89 MA

Repeat the same process from step 1 and add the 4th MA with a different color

Which is the 200 MA

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Just Clean the "89" and type in "200"

Then change the color with another different colour

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It would automatically add the 200 MA for you

Now my Chart has 4 different MAs (Moving Averages)

Zoom � in your charts ie compress it to see yours too

To zoom in OR zoom out, just use your 2 fingers, the way you zoom your phone camera
Now these two longer periods MAs Tells us about the trend

Let's start with the 200 MA

So when u insert your 200 MA and you see that the Candlesticks are below it, that's a
downtrend

Those White and Black things on your Chart are referred to as Candlesticks

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These Black and White Rectangles as shown in the image above pointed at by different
red markers are referred to as Candlesticks

So

So like I said

When u insert your 200 MA and you see that the Candlesticks are below it, that's a
downtrend

However when it's the reverse

ie

U see the Candlesticks above it, then thats an Uptrend

Let me remove my 89 MA and leave only my 200 MA so as to show you all Examples

199
200
That Brown Line above the Candlesticks is my 200 MA

Let's Now see for An uptrend

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In This Other Chart of GBPUSD

THE Candlesticks are Clearly above My 200 MA pointed at by the red arrow, hence
indicating that the Overall Trend of the market is Up

THE 200 MA CAN ALSO BE USED AS DYNAMIC SUPPORT AND RESISTANCE

WE WOULD SEE THAT WHEN WE GET TO SUPPORT AND RESISTANCE

Now let's get to 89 MA

89 MA would give us an early sign if the trend is about to change

So if you see the Candles trying to cross the 89 MA from down to Up.. ⬆

It's a giving u a signal that an uptrend is about to start

Hence if you are already on a Sell, u should start to close....

As the downward trend might soon reverse

[Let's see an example of this

[I would now remove my 200 MA, to leave only the 89 MA with another color so as to
make it clearer for you all

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[The Green Line is our 89 MA while the Red And Blue Line are our usual 7 & 14 MA that
determines our entry

[Now Look at that image..

U Can see that initially as of 3rd Oct (as seen at the foot of the chart),

So as of 3rd Oct., the Candlesticks were below the 89 MA, then towards the end of the
Trading day on 4th Oct, it crossed it to the Upward side

(this example was gotten on scrolling backwards)

This is signalling to you that an Uptrend is about to Kick off

So if you are selling, U should start Closing and get ready to Buy

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[Then watch what happened... Immediately it crossed it fully from 5th Oct... It started to
shoot Upwards, confirming the Uptrend

This is a past chart of GBPUSD, we are just using it to show examples and how the
market reacted to the MAs

[So u use these 2 MAs , (ie 89 & 200)

To determine the Trend

[SOON WE WOULD ALSO SEE A STRATEGY THAT INVOLVES THE 89 MA ALONE

TOGETHER WITH CANDLESTICKS

We would also See Another Strategy that involves 5 , 9 and 20 Moving Averages

THAT WOULD BE AFTER OUR LECTURES ON CANDLESTICKS

[Now how do we combine all these information on MA

And use them to trade....

[ie How do you combine the smaller ones of 7 & 14 (that we saw earlier on)

With the Bigger ones of 89 & 200

And make Analysis so as to enter a Trade

That's where we are getting at right now, because that's the aim of the group

[U first of all use your longer MAs ie the 200 and 89

To determine the overall trend

[Let's say for example that the candles are above them

[U now wait for a perfect golden cross (using your smaller MAs) to the upward direction
, then you can hop into the ride....

[Ie U BUY

since its an Uptrend

Remember like I said, the Candles are above the 200 & 89

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[Of course, there would be some downward crosses for sure

[But remember, u only want to go in the direction of the Trend

[So since the overall direction of the Trend is upwards

[U wait for that golden upward cross and you quickly enter

[ie open your BUY ORDER

[There is something you all would come to understand later in forex

[Because the market is moving upwards doesn't mean, it can't fall down a little..

We call it retracements in forex

[It's bound to happen....

[It happens all the time

[However u wouldn't want to open a trade in the direction of those retracements

[Because u wouldnt know how long they would last

[Though Scalp traders may open orders and go in the direction of such retracements..

But it's risky

[Scalp traders...

Are ultra short term traders

[They enter the market quickly and exit (they just target 5 to 10 pips and zoom off) and
maximise profits by increasing their Lotsizes

[So as I was saying

U wouldn't want to open a trade in the direction of those retracements

Because it might just happen for few minutes and resume back in its original trend
direction

So Always enter a trade in the direction of the trend

If a retracement is happening
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Wait for it to finish and enter your order..

When the golden cross has occurred in the direction of your overall market trend

BECAUSE TRADING IS ALSO ALL ABOUT PATIENCE

So that's how to effectively use Moving Average

Use the longer MAs to determine the Overall trend

Then use your smaller ones to time your perfect entry

Moving Averages are very good indicators only if you know when and how to use it

I would give an Assignment on Moving Averages by the end of the Lectures

Let's try and do it and submit on the group by posting your answer

We would move on to another important Indicator

Which is

STOCHASTIC INDICATOR

This is a Very popular Indicator

Used also by many traders

Let's get to it

STOCHASTIC

THIS IS AN OSCILLATOR

Sometimes u hear people call it Stochastic Oscillator

Let's all add it to our Charts even as we progress

LET'S GO TO THAT SAME PLACE WHERE WE SAW MOVING AVERAGES

ie WHERE ALL THOSE INDICATORS ARE LISTED

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FOLLOW THOSE STEPS AS I OUTLINED EARLIER

WHEN YOU GET TO THAT PAGE

SCROLL DOWN A LITTLE AND YOU WOULD SEE THE STOCHASTIC OSCILLATOR

CLICK ON IT

IT WOULD TAKE U TO THE SETTINGS PAGE

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LEAVE ALL THE SETTINGS AS DEFAULT AND THEN CLICK ON DONE ABOVE

DONT TAMPER WITH OR CHANGE ANYTHING ON THE SETTINGS PAGE

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AFTER ADDING IT, IT WOULD APPEAR BELOW IN YOUR CHART AS SEEN IN THE IMAGE
ABOVE

U WOULD SEE AN OSCILLATING RED AND GREEN LINE

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THAT'S THE STOCHASTIC INDICATOR

So let's move on

It was invented by George Lane

A Financial Analyst

It is used to determine the momentum of price movements

ie

The state of motion of the market prices of a currency pair

Let's get to the structure

As We are Talking about its Structure

Be Looking at your Charts Intermittently so as To have A Clearer View of it

So

Stochastic is scaled from 0 to 100

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U can see it by the right side of the Stochastic Window

So, Let's get to their meaning and interpretation

From 80 to 100 is called OVERBOUGHT REGION

WHILE

From 20 to 0 IS CALLED OVERSOLD REGION

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IF YOU LOOK CLOSELY YOU WOULD SEE DOTTED LINES DEMARCATING IT

So let me repeat again

From 80 to 100 is called OVERBOUGHT REGION

WHILE

From 20 to 0 IS CALLED OVERSOLD REGION

While between

20 to 80 Is just Neutral

What does Overbought and Oversold region mean

Let's now focus

When the 2 lines of the Stochastic cross the 80 Stochastic line and start moving up,

It means that the buyers in the market would soon be exhausted IE this upward trend
might soon come to an end..

It's telling you that this Market is Overbought

Hence assuming you wanted to place a Buy order before, u might just hold on a little bit
to see where next the market would move

In Reverse...

When you see

When the 2 lines of the Stochastic cross the 20 Stochastic line and start going further
down ,

It means that the sellers in the market would soon be exhausted

ie this downward trend might soon come to an end..

It's telling you that this Market is Oversold

Hence if you wanted to place a Sell order before, u might have to temporise on that a
little bit to evaluate the market further and see the next direction

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That the market would take

So basically Stochastic, shows us Overbought and Oversold regions...

Using the 80 line mark and 20 line mark respectively

So how do we enter trades with Stochastic?

There are two lines in the Stochastic, if you notice

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The Green line and the Red line

The Green line is the fast Stochastic line...

While the Red line is the Slow Stochastic line....

U can note the above down too

When you see the two lines of the Stochastic in the Overbought region..

They are telling you that the market is Overbought

This implies that the next likely place the price would move is down (because if the
buyers are getting exhausted, the sellers would take over).

However because it's in overbought region is not signal to immediately Sell, u wait for a
sign that I would explain now

When the Green line of the Stochastic (IE the fast Stochastic line).... crosses the Red
stochastic to the downward side while still in that overbought zone and starts coming
down..

Then it's a signal to Sell

So in essence u waiting for the same Golden cross like we saw in Moving averages

The Green and the Red Stochastic Lines are now acting like your 7 & 14 MA. (ie fast
crossing the slow)

Please another important point.

Never use one INDICATOR IN ISOLATION

So U confirm with other Indicators whether it's actually going in that direction before
you open your order.

Also Stochastic gives you a warning sign too

If you are initially buying and the 2 lines of the Stochastic starts moving into the
Overbought region,

It's a sign that the upward trend might soon reverse..

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So you should start closing your long orders or start locking � in your profits if you still
want to leave the trade open

We would soon learn how to Lock � in profits without actually closing the trades..

We would do that when we finish our lessons on all the indicators before we get to the
next section involving Candlestick Analysis.

So also in reverse

If you are initially selling and the 2 lines of the Stochastic starts moving into the Oversold
region,

It's a sign that the current downward trend might soon reverse..

So you should start closing your short (sell) orders or start locking In your profits if you
still want to leave the trade open

Let's see some practical examples

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In The above is a Chart of GBPUSD...

If you notice from the Purple arrow below

The Two Stochastic Lines entered the Overbought Region, showing that the Upward
Momentum might be dwindling down

Few minutes after, The Green Stochastic Line crossed the Red Stochastic Line and
started to move downwards...

This is a signal that the Market would soon start going down

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Now Look above on same Chart

It actually went downwards, Just like your Stochastic indicated...

Also note another important thing

If you look up at the purple arrow up

U would notice that a Downward Golden cross also occurred on The Moving averages

Hence 2 Indicators are Now Telling you to Sell...

This Further Confirms the SELL POSITION

REMEMBER

NEVER USE ONE INDICATOR IN ISOLATION

ALWAYS REMEMBER THAT

So assuming u placed a sell order...

Immediately that downward cross occurred on the Stochastic

U would have gotten a number of pips from that drop

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That's about 99 pips .....

From 1.3195 to 1.3094. Even if it's 40 pips u caught from it. U are good for the day...... U
wake up another day and trade.

With 0.1 lotsize

40 pips is $40

If one makes $40 daily

In a week that's $200

I believe, U can use that always support your self as a beginner then grow your daily
target as you stay on in the Business

So Still on same Charts

Let's see how Stochastic told us to exit

Remember Stochastic Gives you a Warning Sign too

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As the price approached point 1 labelled on the Stochastic window ,u see its
approaching oversold region..

U would immediately close your Sell order because the market would soon start reverse
to buying...

So you exit and take your profits immediately

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EXIT POINT

Let's See. Another Example

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Here is a Chart of US Vs Canadian Dollars (USDCAD)

Notice that the 2 the Two Lines of the Stochastic entered the Oversold Region

This is telling you that the Downward momentum would soon be over

So start getting ready to Buy

And watch what happened

Almost immediately the Green Stochastic Line (fast) crossed the Red Stochastic Line
(slow) and the Market started Moving Upwards

Now To even further confirm, Your BUY ORDER

A Smart Trader would also wait For same Golden Cross on The Moving Average (so as to
be sure, to avoid fakeouts)

REMEMBER TRADING IS ALSO ABOUT PATIENCE

237
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Watch what Happened

About Few Moments later

The Upward Golden Cross that your were waiting for on your Moving Averages also
Occurred

Further Confirming the Buy order for you

Here is where you now Confidently enter

See how we are combining indicators, to Filter out our trades

And time our perfect entry

Most traders, have this knowledge but their problem is nobody has told them how to
merge all the informations they have to Perfectly enter a trade

We would see more strategies later, We are just even starting

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So After Combining these Indicators to enter

The market moved from around 1.2942 to around 1.3032

That's around 90 pips

Even if you pick 20 to 30 pips from this move

I believe that's OK for a pair

There is another important thing, I want u all to see and note

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Look at those points labeled 1 & 2

There is another point I want to show you guys from those point 1 and 2

Watch that at point 1....

None of the Stochastic lines have entered the oversold region...

So even though there was a cross, it's not a strong Buy...

(The Cross occurred at the Neutral region)

So, U should hold on first...

Now watch that at point 2... .Both the Green and red stochastic crossed the Oversold
line...

Hence when they gave the upward cross...

U can now confidently Buy having seen that the market is truly oversold

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Because as you can see from the Chart

When that cross happened in the Neutral region

Even though it was an Upward cross, the market didn't Buy, it was. Just selling (ie
moving downwards) as shown in the image

It only started Moving Upwards after the Real Cross occurred at point 2

Here both Lines entered the Oversold region before giving the Upward cross

Hence this is a True cross

So that is how you use your Stochastic

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I pointed out those points 1 and 2 , so that u would not open an order when the cross
occurred in the Neutral region (IE between 80 to 20)

It can still move in your direction when it crosses in the neutral region , but it's risky

Always wait for the Stochastics golden cross to occur in either the oversold or
overbought region before you place your order

So In summary... We buy when the market is oversold, and we sell when the market is
overbought.

After our golden cross has occurred in those regions

Also after Confirmation from other Indicators and not just Stochastic alone

We would see more related indicators soon

ALSO ITS IMPORTANT TO NOTE AT THIS JUNCTURE THAT STOCHASTIC AND MOVING
AVERAGES WOULD NOT ALWAYS RHYME

TAKE NOTE OF THIS

THERE ARE CERTAIN TIMES WHERE MA WOULD BE SHOWING BUY WHY STOCHASTIC
WOULD BE SIGNALING YOU TO SELL

IN THIS CASE, WE EITHER STAY OUT OF THE PAIR AND MONITOR OR FILTER OUT THE
SIGNAL WITH A 3rd INDICATOR

WE WOULD SEE MORE OF THEM SOON

WE WOULD STOP HERE FOR TODAY

Assignment on Moving Averages

WE ARE GOING TO BE USING OUR MOVING AVERAGES

SCROLL BACK YOUR CHARTS TO SEE PERFECT GOLDEN CROSSES THAT HAVE OCCURRED.

Check where there was a Clear cut trend and notice to which direction the golden cross
occurred (confirm if it's in the direction of the trend)

Then estimate how many pips the market moved from that cross to another opposite
cross

248
That's our activity for tonight

Thanks for ur time.

TRADE UPDATE

THIS WEEK I'LL BE LOOKING AT THE POUNDS AS VERY IMPORTANT FUNDAMENTALS

WOULD BE ROCKING THE POUNDS THIS WEEK

STARTING FROM THE QUARTER 1 INFLATION REPORT TO THE BANK OF ENGLAND

MONETARY POLICY ON THURSDAY, SO THERE IS GOING TO MASSIVE VOLATILITY ON
GBP CROSSES WITHIN THE WEEK

THE BANK OF ENGLAND MIGHT TAKE A DOVISH STANCE THIS WEEK, HENCE MOUNTING
PRESSURE ON GBP PAIRS

SO I'LL BE PICKING ONE GBP PAIR FOR NOW ,

GBPCHF

GBPCHF IS CURRENTLY CONSOLIDATING...

I HAVE SAME BEARISH BIAS ON THE PAIR, HOWEVER I'LL BE WAITING FOR A BULLISH
CORRECTION BEFORE ENTERING TO ALLOW THE TRADE COME TO A KILL ZONE

249
SO AS TO HAVE A GOOD RISK-REWARD RATIO, WE WOULD ALLOW THE PAIR RETEST
THE ZONE MARKED IN RECTANGLE ABOVE (AROUND 1.2175 TO 1.2185)

BY DOING SO, WE WOULD HAVE A TRIPLE TEST.

AS THE ZONE WAS TESTED ON 28TH AND 30TH OF APRIL AND STILL REJECTED THE
BULLISH PUSH AS CAN BE SEEN ON H4

SO WE WOULD LOOK TO SHORT THE PAIR FROM THAT HIGH,

SL SHOULD BE AROUND 30 PIPS ABOVE THE RECTANGULAR ZONE SO AS TO GIVE US A

RISK REWARD RATIO OF AROUND 1:4.5 WHEN IT GETS TO OUR FINAL TP OF 1.2040.
WHICH WOULD BE AROUND 135 PIPS

TP 1 SHOULD BE AROUND 1.2140

TP 2 AROUND 1.2100 WHILE FINAL TP WOULD AROUND 1.2040

WISHING EVERYONE A SUCCESSFUL TRADING DAY AHEAD

UPDATE

THE MASSIVE DROP WE WERE ANTICIPATING ON GBP PAIRS AS DESCRIBED ABOVE EVEN
STARTED EARLIER THAN EXPECTED

GBPCHF IS ALMOST APPROACHING OUR TP 3

WE CAN NOW REMOVE OUR SELL LIMIT ORDER AT THAT HIGH

NEXT TIME TO AVOID MISSING SUCH MASSIVE MOVE, WE WOULD SET BOTH A LIMIT
AND A STOP ORDER INCASE PRICE FAILS TO REACH OUR EXPECTED ZONE , SO THAT WE
CAN STILL GRAB SOME PIPS EVEN IF IT'S NOT UP TO THE FULL PIP RANGE

MANY MORE OPPORTUNITIES WOULD ARISE, WE MOVE.

IMPORTANT ANNOUNCEMENT

FOR OUR LECTURES TODAY

LET'S ALL ENDEAVOR TO OPEN THE CALL LEVEL APP I ASKED YOU ALL TO DOWNLOAD
IN STAGE 1

OPEN IT AND REGISTER IT WITH YOUR email or By Signing Up before Todays Lectures.

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WE WOULD BE USING IT FOR THE LECTURES THIS NIGHT.

IT'S ASSOCIATED WITH WHAT WE WOULD BE DISCUSSING THIS NIGHT

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IF YOU HAVE NOT DOWNLOADED THE APP

USE THE LINK BELOW

ANDROID CALL LEVEL APP

https://play.google.com/store/apps/details?id=com.calllevelsapp

IPHONE CALL LEVEL APP

Call Levels - Market Assistant by Call Levels Pte. Ltd.

https://apps.apple.com/ng/app/call-levels-market-assistant/id937109871

once again Its another great time to further increase our knowledge of this Global
market

We have been adding new techniques to our Forex Analysis, more indicators, more
strategies

Different market are encountered in different environments

So it's good to have variety of armoury in your arsenal, so as to deal with different
market environment

That's why U are here

U need to expand your knowledge of this Awesome market...

Gather many tools and learn to adapt where to use each one

With time u would even become professionals or experts in certain strategies because
you have mastered them over time

But you need to learn all... So as to talk boldly when discussing with your Fx colleagues

So Today we would be Talking about A very Powerful Indicator

BOLLINGER BANDS

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It also have some awesome Strategies linked to it, that amass pips for traders

Infact , there was a Lady a colleague of mine during the training that chatted me up and
told me she is not going to be trading any other thing apart from Bollinger Strategies....

That she is leaving all the Fibonacci's tools, Pennant, Flags, Engulfing stuff etc to us

u all would soon see why she made this decision.

And she is making her daily target of 20 pips with it

So let's get to it

Bollinger Bands was developed by John Bollinger, a famous Technical Analyst

It is a very powerful indicator that tells you how LOUD OR QUIET a market is

Please close your other indicator windows, leave let's say just 1 window so as to view
the indicator clearly

To Delete an Indicator

Go to the indicator window

Long Press on any Indicator you want to Close

A Close Button would pop up

Then you can Click on it

So Let's Delete all our Moving Averages for now

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LET'S NOW ADD IT TO OUR CHARTS

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AFTER ADDING IT, U WOULD SEE 3 GREEN LINES, AS SHOWN IN THE IMAGE ABOVE...

THATS THE BOLLINGER BANDS

Let's get to the Structure of Bollinger Bands

It has 3 Bands

A middle Band

An Upper Band

And a Lower band

The middle band shows the Average price of the particular currency pair it's on over a
particular time period

It corresponds to a 20 period moving average

That is the middle band

While the Upper and Lower band are plotted 2 standard deviations away from the
middle band

Which corresponds to the mean price

It's in recent MT4 versions that we have the Middle band

Forex in 2008.

The MT4 they use then has no middle band,

So they need to add a 20 period MA to it, to form the middle band.

Also then sometimes they may not even have the MT4 available, because Android
phones was not available.

So they use to login into a Web based trading platform on their Brookers website.

Also then Laptops were not common on campus, so they use to go and do Night
Browsing (many of you remembered the days of night browsing and yahoo chat
messenger).

But the recent MT4 now has 3 bands for the bollinger...

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No need for all those stress.

And now. U can even trade in a bus with your android phones

Forex has really advanced

With the invent of technology

Now what causes the bands to expand is volatility

When there is minimal volatility or movement, the bands contract and come close to
each other

So it is advisable to hold on to placing your trading orders when the market is Quiet (IE
Low Volatility)

Let me reiterate

NEVER TRADE A QUIET MARKET

there is no movement, so where will your pips come from

From the moon?

U need volatility to make money in Forex

So we trade the market, when it's Loud

That is the 1st thing, Bollinger bands show u immediately u opened it up

U decide whether to even trade or not by just looking at the bands irrespective of the
indicator u are using

However we would soon see that Quiet markets gives us another sign

We would see that later

Now that we have seen the structures and what a Bollinger bands tells us at a glance,

Let's get to the strategies

BOLLINGER BAND STRATEGIES

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Like I said earlier on before we start this lectures, there are hundreds of strategies to
bag in pips in Forex..

U just need to know which one enjoy using the most and master it

Indicators are many, but you don't actually need to use all, select the ones u
understand and ride on with it..

Become a Specialist in those ones

For those in the educational line,

We may call u a Professor in Bollinger bands

Or an Emeritus in Moving averages

So choose the ones u have mastered...

But I need to show you all, because you are in a Forex Academy

Also like I said, different market environments needs to be approached differently ,so
it's good to have variety of tools to tackle each market condition

So there are basically 2 strategies used for Bollinger Bands

BOLLINGER BOUNCE

&

BOLLINGER SQUEEZE

let's follow closely from here....

We are entering serious business now

Let's start from the 1st

Bollinger Bounce is a Strategy is mainly used in ranging markets

Let me repeat

RANGING MARKETS

What is a Ranging Market

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A Ranging market is one in the currency pair has no clear cut trend, it would just move
up and come down

Let me show an example

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Look at these 2 markets above

The Bollinger bands are expanded quite alright, meaning that the market is Loud

But there is no clear trend

It is neither moving up nor coming down

So in the above two images, the market is just Ranging

Remember the opposite of Ranging is Trending

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This is an example of a Trending market...

If you notice it has a particular direction which is upwards in this case

While the Ranging markets we saw have not direction

They would just go up and come down

So that's the first thing to note

That u use the Bollinger bounce in a Ranging market

Now what is the Principle behind trading Bollinger bounce

It is based on the fact that price in a ranging market always have a tendency of coming
towards the mean price

ie the price always returns to the middle of the bands

The Upper and lower band always acts as Dynamic Supports and Resistance that tends
to push the price to the middle of the band

So how do you trade the "Bounce”

When the market is Ranging and you already see the candlesticks coming upwards
towards the upper band

U already know that the Upper band would push the price back down towards the
middle band

So you sell immediately it bounces off the Upper band and take your profit when it
reaches the middle band (IE U set your TP at the middle band price)

We would see pictures later

Also in reverse

When the market is Ranging and you see the candlesticks moving downwards towards
the lower band

U also know that the lower band would push the price back up towards the middle band

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So you Buy immediately it bounces off the lower band and take your profit when it
reaches the middle band

So that's the principle behind the bounce

U Buy at the Lower band and Sell at the Upper band

Remember u wait for it to bounce off the bands and start moving in the direction u
want before placing your order

Let's see some examples

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Look at this image above and note where I labelled 1 ,2 ,3 $ 4

Because the market is Ranging,

Immediately the market reaches the lower part of the bands that I labeled 1, U BUY and
set your TP at the price that corresponds to the Location "2".

Also when the price rises to the part I labeled 3, U immediately SELL as it starts to
bounce off downwards

And set your TP at the point labelled 4

Someone would ask why would we limit the number of pips we made to the middle
band,

Why not Buy at the lower band and ride it all through to the Upper band... Since that
would yield to u more profits

An experienced trader would counsel u that Its not all the time that the price leaves the
Lower band that it would get to the Upper band...

So instead of being greedy and target the opposite band, it might not reach your TP

So we are playing safe, by picking only the pips we would get when the price gets to the
middle band

Because u are sure, the price in a ranging market, always tends to return to the middle
of the band.

.So no matter how small, u would catch some pips

Also it would even be larger if you catch the ranging market in a larger time frame

This is a 4 hour charts, so those small move u are seeing between the farther band and
the middle band is almost 100 pips each

Let's see another example

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So in the image above

U buy at point 1 and set your TP at point 2 (remember just limit your TP to the middle
band)

Then still on that same image, U sell at point 3 and set your TP at point 4

Let's see another example

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In this example above

U buy at point a and set your TP at point b

While u sell at point c and set your TP at point d

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That small rise you saw from a to b is from around 0.8695 to around 0.8748

That's around 53 pips

So you can actually take your daily 20 pips and exit the market

Like I said, even if you start with a small target of $20 daily

That's $100 in a week

Imagine if you get two good trades daily

U are already up and running

So

That's the strategy used in Bollinger bounce

Some people who spot a ranging market on a smaller time frame charts let's say an
M15 or M30

Can sit on their computer screen and scalp that market all day long

Remember Scalping is a form of Ultrashort term Traidng (Quick entry and Quick exit)
,increasing their Lotsizes to maximize profit in that short while

They would just buy at the low, exit at the middle, enter again as a sell at the high exit
as it comes back to the middle band again

Scalp traders can do this all day long...

They would just be scrolling through their charts looking for a ranging market.

And when they catch one, they have made it for that day

Like I told u guys earlier, there are many ways to grab these pips

Just know all so that u can adapt in any environment u see the market

Be it Trending or Ranging

Let's get to the other Powerful Strategy of Bollinger

Like I told you guys, this is a very Powerful Indicator if you know how to use it

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The Next strategy is

BOLLINGER SQUEEZE

This is the strategy my colleagues likes searching for,

I've met all sorts of people in this business �

So let's get to it

Remember when I told you guys, never to trade a Quiet market earlier

Yeah, stick to that rule

However whenever you see a Quiet market, always know that U have sited a Gold mine

Whenever a market is Quiet, it's "incubating" and a Breakout is imminent

That's the Principle utilised in Bollinger Squeeze

A Bollinger Squeeze occurs whenever the market becomes so Quiet that the Bands
contract

They come very close to each other

Of course u wouldn't open a trade on such a market, because there is little or no

volatility.

However u should be on alert as a Break out with massive number of pips is around the
corner

This is the strategy that Traders love Trading,

However one drawback is that it doesn't occur often

U can only spot it few times in a week

It can occur on all Time frames, though it's usually more common on the M15 (15
minutes time frame)

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Here is How To Change your Time Frames

CLICK ON THAT CLOCK, A DROP DOWN WOULD COME OUT, WHERE YOU CAN NOW
SELECT THE TIME FRAMES U WANT

However u can spot it anywhere

Also another thing to note in Bollinger Squeeze is that

THE LONGER THE SQUEEZE, THE MORE MASSIVE THE BREAKOUT

Note this down in your exercise books

These are Examples of some Squeezes that have occurred in past Charts

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Now there is another problem u would encounter with Bollinger Squeeze

In fact 2 problems actually

Number 1

U don't know when this breakout would occur

Number 2

U don't know to which direction they would occur

Ie whether they would breakout to the upward side or downward side

Don't worry, Relax, we would solve those 2 problems now.

Technology has made things easier for us...

Remember that Call Level App I asked you guys to download and install in Stage 1 and
2

This is where to use it

I told you all earlier on to Register it before the Lectures

I Believe everyone did that

Now let everyone open their CALL LEVEL APP

This App is going to solve these 2 problems for us

Ie

When And Where the Breakout would occur

U may be a working class, so you don't even have time to look at your charts but u have
sighted a Squeeze which is a potential Gold mine

So all u have to do is this

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STEP 1

CLICK ON THE PURPLE ARROW ICON TO GET YOUR CROSSHAIR CURSOR

STEP 2

IMMEDIATELY IT THE CROSSHAIR CURSOR POPS OUT...

DRAG IT ACROSS YOUR CHARTS TO PLACE IT ON EITHER OF THE BANDS SO THAT IT

WOULD GIVE YOU THE CORRESPONDING PRICE VALUES

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IN THIS IMAGE ABOVE, THE CROSSHAIR CURSOR IS CURRENTLY PLACED AT THE LOWER
BAND

LOOK CAREFULLY, U WOULD SEE THAT ITS LYING DIRECTLY ON THE LOWER BAND

AND ITS GIVING US A PRICE LEVEL OF 0.8987

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THE NEXT THING TO DO AFTER NOTING DOWN THE PRICE OF THE LOWER BAND ON A
PIECE OF PAPER IS TO DRAG THE CROSSHAIR CURSOR AGAIN AND PLACE IT ON THE
UPPER BAND.

IN THIS IMAGE ABOVE , THE UPPER BAND IS CURRENTLY AT 0.8991

Note this second price down also ....

Now we have

Upper band... 0.8991

Lower band.... 0.8987

Now the Next thing to do is to

Add 10 pips to the upper band and

In reverse

Subtract 10 pips from the lower band

So after doing this to the above values. We would now have...

Upper band... 0.9001

Lower Band..... 0.8977

That's after adding and subtracting 10 pips

U Now open your Call level App

Let me now Show You Guys how to Set it up on Call Level App

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STEP 1

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GO TO THE DASHBOARD OF YOUR CALL LEVEL APP AND CLICK ON THAT PLUS ICON
POINTED AT BY THE RED ARROW

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STEP 2

IT WOULD TAKE U TO WHERE YOU WANT TO SELECT, WHAT YOU WANT TO TRACK.

CLICK ON FOREX

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STEP 3

IT WOULD NOW BRING YOU TO WHERE YOU WANT TO INPUT THE CURRENCY THAT YOU
WANT TO TRACK.

WHEN YOU CLICK ON THAT DROP DOWN ARROW POINTED AT BY THE RED ARROW, IT
WOULD BRING OUT A LIST OF ALL THE CURRENCIES FOR U, WHERE YOU CAN NOW
SELECT WHICH ONE YOU WANT TO TRACK

FOR CURRENCY PAIRS IN WHICH USD IS THE BASE, CLICK ON SWAP (PURPLE ARROW)
TO SWAP IT AND BRING USD IN FRONT

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BECAUSE THE CHART, WE ARE USING FOR EXAMPLE IS EURGBP CHART

WE WOULD BE SELECTING GBP FROM THE QUOTE SIDE (ie as the 2nd pair)

BECAUSE THE CHART, WE ARE USING FOR EXAMPLE IS EURGBP CHART

WE WOULD BE SELECTING GBP FROM THE QUOTE SIDE (ie as the 2nd pair)

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STEP 4

AFTER SELECTING THE CURRENCY PAIR THAT YOU WANT TO TRACK, CLICK ON NEXT
BELOW

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STEP 5

IT WOULD NOW TAKE YOU TO A NEXT PAGE, WHERE YOU WOULD NOW INPUT IN THE
PRICE OF THE CURRENCY AT WHICH YOU WANT THE APP TO ALERT YOU.

SO IN THIS CASE, WE WOULD BE STARTING FROM THE UPPER BAND VALUE.

NOTE :

IN THIS CASE, ITS THE NEW UPPER BAND VALUE THAT YOU WOULD BE ADDING TO THE
APP

ie The Value you Got after Adding 10 pips

Let me repost it again, to refresh our memories

Though we did it up there

So after doing this to the above values. We would now have...

New Upper band... 0.9001

New Lower Band..... 0.8977

ie These Values that we Calculated above

So lets fire on

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STEP 6

AFTER TYPING IN THE NEW UPPER BAND VALUE..

CLICK ON ADD NOTE, SO AS TO LABEL IT.

THIS WOULD AID YOU, IN KNOWING WHICH OF THE BANDS WAS BROKEN WHEN THE
CALL LEVEL ALERTS YOU

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STEP 7

AFTER LABELLING IT, UPPER BAND

CLICK ON SET LEVEL FOR THE APP TO AUTOMATICALLY SET THE ALARM FOR YOU.

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AFTER YOU ARE DONE, SOMETHING LIKE THIS WOULD APPEAR TELLING YOU THE PRICE
AT WHICH YOUR ALARM WOULD RING

AFTER DOING THIS FOR THE UPPER BAND

REPEAT STEPS 1 TO 5 ABOVE

WHEN YOU GET TO STEP 6

INPUT THE NEW VALUE OF THE LOWER BAND THAT YOU GOT

ALSO LABEL IT *LOWER BAND, LIKE YOU DID FOR THE FIRST ONE AND SET THIS SECOND
LEVEL ONCE AGAIN

AFTER DOING THIS FOR THE UPPER BAND

REPEAT STEPS 1 TO 5 ABOVE

WHEN YOU GET TO STEP 6

INPUT THE NEW VALUE OF THE LOWER BAND THAT YOU GOT

ALSO LABEL IT *LOWER BAND, LIKE YOU DID FOR THE FIRST ONE AND SET THIS SECOND
LEVEL ONCE AGAIN

SO U WOULD NOW HAVE TWO PRICE ALARMS SET

ONE FOR THE NEW UPPER BAND AND THE SECOND ONE FOR THE NEW LOWER BAND

So

Whenever the price of a market pair reaches the level that you set it at

It would automatically notify U..

Isn't that Awesome

So you don't have to be on your computer � screen monitoring a currency pair

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U can go to the Call Level App Settings and set a Louder Ring tone and Enable Email
notification to aid the whole process for you.

During that period you set a Call Level.

U need on your Data connection

Because people would always say that they didn't get the notification without knowing
that they are offline

So for that brief period that you spotted the Gold mine (Squeeze). Just keep it on

The 10 pips u added above the upper band is to make sure the price has broken the
Upper band before you are notified

While

The 10 pips, u substrated to the lower band is to make sure the price has successfully
broken the lower band and not just touching

So depending on the price that your Call level App alarm notifies u at..

U now either Buy or sell

If it's Upper band that gets broken U BUY

If it's Lower band that the breakout is occurring at, u SELL

Whenever such breakouts occur. They are usually massive, sometimes up to 50 to 80

pips before it reverses

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This is a Bollinger Squeeze that broke out to the Downward side

If U have Sold

This is almost a 70 pips drop

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This is another Bollinger Squeeze... That broke out to the Upward side

This is almost over 150 pips Move ���

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Downward Breakout

These are Just Examples

So as I was saying

Whenever such breakouts occur. They are usually massive, sometimes up to 50 to 80

pips before it reverses

However this would depend on the Time frame u saw the Bollinger Squeeze and also
how long the Squeeze has Lasted

If the Squeeze has lasted for a looooong time...

My brother , the Breakout is going to be massive

So be on alert..

Don't let that Gold mine pass u by

Then for TP (Take Profit)

Even though we know that the breakout, is going to be massive

I always advice my students to always target just 20 pips

U can increase your lot size , but don't go more than 20 pips

Some Traders ,when they spot this,, just increase their lot size and even target only 10
pips. ,because they would be rest assured that. Even if it was not a long squeeze, they
would catch something from the breakout

Thats one sure trade that whenever u spot it, U smile

Now another problem that I highlighted above is it doesn't occur often

.Now we solve that problem by sensitising ourselves in various Traders whatsapp

groups.

That is why we are all here

Immediately u spot it, U rush and inform everyone on the group..

Not just for them to be aware , but to help you confirm its a Squeeze.

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I always notice these from people

Immediately we finish the lectures on Bollinger Squeeze, everybody starts seeing

squeeze..

Anything that looks as if it's coming together becomes a squeeze ��

So it's better when you spot one, snap it

Tell people the pair and the time frame u saw it, then u all would analyse it together

Calculate the Call levels together and set your alarm

Immediately it notifies U..... ,Just activate either your Buy or Sell order depending on
which Band gets broken and smile to the bank

So that's how to use this Powerful Indicator with so many wonderful Strategies

It's one of my Favorite indicators

And has yielded me more pips that I can even remember

So we would stop here for today

I believe u all have added yet another knowledge and powerful tool to your Forex
Arsenal today

And I hope it's all clear and understood

SO OUR ACTIVITIES FROM TODAY ONWARDS, WOULD BE TO START LOOKING AT

CHARTS OF DIFFERENT CURRENCY PAIRS AND BE ON ALERT..

IF ANYONE SEES A NEW ONE THAT IS STILL FORMING

U CAN COME TO THE GROUP AND INFORM EVERYONE SO THAT WE ALL WOULD KEEP
AN EYE ON IT

THAT'S WHY WE ARE ALL HERE

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I want us to check all GBP pairs and see the squeeze they formed. Use 15min TF and
5min TF to check.

The squeeze happened early morning today before the release of the news.. that is
telling us the market is in consolidation waiting for the news to be released. Use
forexfactory to see the economic calendar �

We are going to be continuing our lessons on Indicators today

We are going to be continuing our lessons on Indicators today

RELATIVE STRENGTH INDEX

RSI

This is another Indicator, utilised by many Forex traders

It was developed by Welles Wider....

It also helps you spot....

When the market is oversold or overbought

Let's all add RSI to our charts

Though it comes with default for new traders that open their charts newly

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Let's look at the structure of RSI

U can see it labeled on the chart above

RSI (14)

RSI IS ALSO SCALED FROM 0 TO 100

Just like the Stochastic

For RSI

From 70 to 100 is called OVERBOUGHT REGION

WHILE

From 30 to 0 IS CALLED OVERSOLD REGION

let me paste for stochastic below so as to compare them

STOCHASTIC

From 80 to 100 is called OVERBOUGHT REGION

WHILE

From 20 to 0 IS CALLED OVERSOLD REGION

So both are almost the same the only difference is that Overbought in RSI starts from 70
while it starts from from

80 in Stochastic

Also

Oversold in RSI starts from 30 while it starts from 20 in Stochastic

So u apply the same principle that we saw with Stochastic

If you see the RSI entering the overbought region, it's better to hold on your Buy orders
and watch the market movement closely before entering

So also in reverse

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When you see the market entering into the Oversold region as signalled by the RSI... U
should hold on to your Sell orders at least in the short term to see where the market
would head to

Before deciding a position to enter

Another sweet thing about RSI is that apart from showing U when the market is
oversold or overbought

It also helps you in confirming the Trend...

How does RSI do this?

The Cut off point for this in RSI is 50

To see the 50 mark.... Use your cross hair cursor

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If you tap on that plus sign.. U would activate the crosshair cursor

Then u bring (drag) it down to the RSI indicator window

It would now show you where the 50 point is

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Though with experience and practice, u would not need that cross hairs cursor again ..

With your eyes, u can easily gauge if the RSI is above or below 50�

When you see the RSI line cross the 50 mark and starts going upwards, it has further
confirmed to U that this market is actually in an uptrend and it's not just ranging, then u
can place your BUY order or relax properly if you are already Buying

In Reverse....

If the RSI crosses the 50 line and starts moving downwards....

It's a sign that the market is truly in a downward trend, then you can confidently place
your Sell order

U may have gotten your Sell signal from your Moving average or Stochastic but you are
now using the RSI to confirm it...

To avoid fakeouts

That's why I said u should never trade with one indicator alone...

Always combine Indicators

So that's the Principle involved in Using RSI

U use it to spot oversold and overbought regions and you use it to confirm the trend
before entering

Another Indicator we would talk about today is

Average Directional Index

This is another strong indicator, not known by many

However if you know how to use, it can be a very invaluable aid

It is also an Oscillator

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While adding it to our Charts... Let's take of the color of that first line... If possible, keep
it at that red, so that u can always identify it.

That's the Main ADX line that we would looking at

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That's the line, we would be concentrating on

Everyone should add it to their charts

Let's get to its Structure

It has 3 lines...

But we only need one of those lines

ie

The Red one labelled "style"

Let's continue with its Structure

ADX is also scaled from 0 to 100

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Though you may not see it labeled like in Stochastic and RSI, but the reading is always
there

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The First value there is the Current value of the red ADX line

So

It is an important indicator used to measure the strength of a current trend

In Forex market...

It's not just enough to know that the market is moving Upwards or downwards...

Because if a trend is not strong, u may enter and found out that the market would just
reverse on U...

So it's good to have an idea, the strength of the current trend..

REMEMBER IN FOREX, THE TREND IS YOUR FRIEND

ADX like I said is scaled from 1 to 100

Levels above 50...

Indicate a Strong trend....

While levels below 20 indicate a Weak trend

WHILE BETWEEN 20 AND 50 IS JUST NEUTRAL

Let's note

ADX is not showing u whether the Market is Overbought or Oversold

Just like Stochastic and RSI

It's just measuring the Strength of the Current trend for u

Also let's note...

ADX when it's above 50 ,it's not telling you that the trend is upwards just like what RSI
does

Rather when it's above 50 it's telling you that the current trend....irrespective of
whether it's upward or downward is a strong one

So u have to use other indicators to confirm whether the Market is going up or down....

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Let's see practical example of ADX and it's value

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We are using the Crosshair cursor to trace the exact value and not the value written on
the ADX chart because I scrolled backwards

This is a previous chart

Let's note, because someone would ask me why didn't I use 31.59 written on the ADX

This is just an Old chart, that I want to use and show example

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Am not using this value for now.....

This is the current value of though,

But I had to scroll back, that's why I'm using the Crosshair cursor

Let me repeat

Don't use The Crosshair cursor to read the Value of the ADX.

Please read the Value directly from the ADX Chart

It's that that 1st value that I pointed at by the red arrow

Don't read it using the Crosshair cursor

Let's now fire on

After clarifying this

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If you Look at that Value of the ADX above, it's currently at 51.46

Which is above 50

This is telling you that the above trend is strong

And the trend is a downward trend... So it's telling you that this Downward trend, U are
seeing above is Strong

So if you are already on a Sell Order, u can relax and not hurry to close.

If you are planning to enter on a Sell after Confirmation from other indicators, Then you
can confidently enter

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This is another example of the ADX on EURGBP

From the image above, U would notice that the ADX rose to a value of around 55.06

As you can see from the intersection of the Crosshair cursor

This is clearly above 50....

So it's telling you that the ongoing trend is a strong one

And from the Chart above it, The market is rallying upwards...

So it's telling you that this Upward trend is a strong

So If you find perfect entry points from the other strategies that you are using, U can
now confidently Place your Buy order.

is strong

So that is basically how to use your ADX

Let's move to the Next indicator

The Last Indicator that we would be looking at this Night is

PARABOLIC SAR

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Majority of the indicators that we have covered in this part of the Training has been
telling us where to BUY or where to SELL

ie they have been telling us where to enter a trade...

Only few has told us when to exit

Where to exit a trade is equally as important as where to enter

Because if you don't have a good exit strategy, u might gain all those pips and end up
not getting as much u could assuming u exited the trade earlier because the market
reversed on u

Everything would just reverse back

So PSAR gives us an idea where to exit

That's what this Indicator does for us

PARABOLIC SAR

Meaning

Parabolic Stop and Reverse

It was also developed by Welles Wilder

Those dotted Green lines below

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So if you observe these green lines, u would observe something

When the price is moving upwards, it's always below the chart

And

When the price is moving downwards it's always above the chart

Now how do we use this Indicator

Let's say we are Long on a currency pair (ie we are buying)

Remember that the PSAR would be below the chart

Immediately u see about 2 dots of the PSAR change direction and switch sides to come
above the chart

U should immediately exit that Long position if u are already in profit or start locking in
your profits

We would talk about how to Lock in profits after indicators

So if one dot appear, u may still stay in the trade, but it's giving you a sign that a
reversal is imminent

Immediately the 2nd dot appears on the opposite side,, just start packing your bags and
leave the trade

In Reverse...

Assuming u were selling a pair and the market is going down nicely...

Remember that in this case, the PSAR would be above the candles

Immediately u see the PSAR start switching sides to move from above to below the
chart, U should know that a reversal is around the corner

And you should either close the Trade or start locking in profits

That's the method of using PSAR.

So as to add it to your Trading strategies to further refine your Exit points

Let's see an example

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This shows EURUSD on an Uptrend

Watch how the PSAR dotted lines were lined nicely below it

Then look upwards

U can see that immediately the dotted lines of PSAR started appearing above... The
EURUSD pair switched from the Uptrend to start falling

So assuming, u were Buying earlier, U would closed your Buy order or Locked � in your
profit when the second PSAR dot appeared above

Because they appear, dot by dot as the chart is moving

I believe one of our Activities for tonight would be to scroll back the charts and watch
how the PSAR reacted to reversal in trends so as to understand it properly

We have discussed

RSI

ADX

&

PSAR

Let's now use them to practice in our demo..

U can scroll back and watch signals given by each and scroll forwards to see how it
panned out

That's what we call Back-testing in Forex

I believe we all added to our knowledge of Forex Today

The thing in Forex is that, u must not necessarily use all indicators at once to analyze
every trade

Different market are encountered in different environments

So that's why U are here

U need to expand your knowledge of this Awesome market...

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Gather many tools and learn to adapt where to use each one

UPDATE

RECENTLY NEWS TRADING HASN'T BEEN VOLATILE AS WE WANT IT TO BE

NO ONE KNOWS IF IT'S DUE TO THE GLOBAL PANDEMIC OR WHAT

THE NEW ZEALAND NEWS,I TRADED ON WEDNESDAY BARELY MOVED 10 PIPS

IMMEDIATELY THE NEWS WAS RELEASED

IT TOOK ALMOST 40 TO 45 MINUTES BEFORE IT COULD EVEN GET TO WHERE OUR

SELLSTOP ORDER WAS AND THEN TO TP

THAT'S NOT WHAT WE WANT IN NEWS, WE NEED THOSE MASSIVE SPIKES THAT GOES
FOR 50 TO 80 PIPS IN ONE MOVE

SO BECAUSE OF THIS, I WOULD TEST RUN SUBSEQUENT NFPS TO AVOID RISKING OUR
ACCOUNTS, IS PARTOF RISK MANAGEMENT

THIS WOULD ENABLE ME TO RE- ACCESS THE VOLATILITY OF THESE NEWS, SO THAT I
DROP IT FOR EVERYONE HERE

IT'S BETTER, OUR ACCOUNTS ARE SAFE, THAN RISK TRADING NEWS THAT MIGHT NOT
MOVE THE WAY WE EXPECT

FOREX INVOLVES K…

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We would kick off immediately

Today We would be Completing our Lectures on Indicators so that we would Move on to

other Sections of Analysis

We would be starting with a Very Important Indicator

Moving Average Convergence Divergence

MACD

This is another popular indicator used by many traders

It's an indicator that helps you to identify the Trend

Remember in Forex, we are all about riding the trend

We want to always spot the direction in which the trend is headed and jump in on the
ride

That's what MACD helps you to track

So let's all add the Indicator to our Chart window

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Please delete all other indicators u have below so as to visualize MACD properly

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Let's get to the structure of MACD

MACD contains 3 important components

The first is the number of periods that is used to calculate the faster moving average

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The first is the number of periods that is used to calculate the faster moving average

The second is the number of periods that is used in the slower moving average

Because MACD combines 2 moving averages in its setting

Then the last component

Is the number of bars that is used to calculate the moving average of

the difference between the faster and slower moving averages

Also referred to as MACD SMA (simple moving average)

Though the computer would calculate all that for U

U don't need to bother yourself

So as u can see when you were setting up your MACD, the default settings was at

12

26

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The 12 represents the previous 12 bars of the faster moving average

The 26 represents the previous 26 bars of the slower moving average

The 9 represents the previous 9 bars of the difference between the two moving
averages

Let's now head straight to how to use MACD

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These Long black lines are Called the Histogram

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Then that red line that is called the signal line

When a market is Bullish ie the Trend is Bullish

U would see that the histogram is increasing above the zero line

In reverse

When the market is Bearish, u would see that the histogram is increasing below the zero
line

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This dotted line is the zero line

Then what gives you the sign that the trend would change

It's the signal Red line

When the signal line crosses above the zero line and starts moving upwards,

Then an upward trend is developing,

Meaning the market is bullish

In reverse

When the signal line crosses below the zero line and starts moving downwards

Then a downward trend is developing,

Meaning the market is bearish

Let's see an example

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372
So let's look at the chart above...

Notice that immediately the red line crosses the zero line and starts moving downwards
, it indicated a downward trend and someone that SOLD would have caught some pips
out of that Massive 80 pips drop

Also another signal of note is this

Notice that before the red line crossed below and started moving downwards

The histogram that was above started reducing in length few minutes before that

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More clearer on 1 hour Chart of same pair

Then at a point, it now disappeared from above and started appearing below

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That's another sign that the trend would soon reverse

Though u don't enter until the Signal line (ie red line) crosses over the zero line to
further confirm what the Histogram are saying

That is the way to use MACD

There is one problem with MACD

It's a lagging indicator

It delays before it gives u this sign

So most times, u can be late to the Party

Not catching up on the Trend on time

However, remember we always profer solutions to these problems

There is a way we use to make the MACD work in your favor and tell u about these
trend change on time

Am going to share it all with U

It's a. Secret strategy which I paid quite a sum to obtain.....so you all should guard it as
precious

There is a way in which you can tweak the settings of MACD

From this default setting to work more in your favor

So Go to your Indicator Window

Press and Hold the MACD indicator

Click on Edit

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379
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Change that

12

26

To

13

Change it in that order

So replace 12 with 3

Replace 26 with 5

And replace 9 with 13

By doing so, MACD would now be more responsive to your price actions and it would
eliminate the lag

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So many traders have developed their trading strategies around the MACD indicator

So with practice, u would come to see how this wonderful indicator works

Let's now wrap up the section on Indicators by looking at this Next Indicator

ATR

Average True Range

This is another Indicator developed by Welles Wilder

The Man was a Core Technical Analyst that influenced the Financial Market

Welles Wilder influenced the market with his Publications

May be as grow older in Forex

U can take time to read his book

"New Concepts in Technical Trading Systems"

So let's get to ATR

ATR is another powerful indicator that just few traders know how to use it

However if you learn it, it's another Great armoury to add to your Trading arsenal

Average true range (ATR) is a volatility indicator that shows how much an instrument
moves, on average, over a given time frame

It was originally developed for commodities but now adapted into Fx variants because it
has been shown to work on any. Financial instrument, be it currency pairs, stocks etc

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Let's all add it to our Charts

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386
Let's leave the Settings at the default value of "14"

So let's get to its structure

It is an indicator that gives you the average range of a currency pair over a given time
period

Ie

It gives u an idea of how a particular pair has been moving over time (it's volatility)

This time around it gives it to u in actual number (calculates it in pips)

Remember Bollinger gives you an idea of the volatility with the width of its bands

This one gives it to you in numbers

Let's get to its structure

Before it calculates the Range, it gets the True Range first

It uses the 3 methods to do that

Method 1: Current High minus the current Low

Method 2: Current High minus the previous Close (absolute value)

Method 3: Current Low minus the previous Close (absolute value)

It selects whichever one with the highest value

And inputs into the formula

ATR = [(Prior ATR x 13) + Current TR] / 14

However, U don't need to stress over all these

Your MT4 does all these for U

However you could be called upon in a Forex forum or gathering to talk, so you should
have all these basics behind you

So that ,u can talk and understand what any Analyst, no matter his cadre is saying...

And challenge him when he goes astray

387
That is why u are here and not in a 2 day seminar on forex

Let's get directly to How To use it

Which is what many have been waiting for

U can use ATR in various ways

The first method of using ATR is to measure the volatility of the market

Can I trade this Pair?

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From this H1 Chart of GBPUSD that I uploaded above....

The value of ATR there is 0.00236

Ie 23.6 pips

Now to interpret this, u should know that the default settings of ATR is at 14.

That is fair enough movt

Remember u can only make money when the market is volatile

Remember our Dictum

NEVER TRADE A QUIET MARKET

So movements above 20 pips per hour.....is considered Ok for a pair

So for Intraday Traders, Checking the Value of ATR on H1 Chart is ideal

Another popular use of ATR is in setting our Stop loss

Even though some people especially beginners, set their Stop loss arbitrarily by just
choosing any value they like.

It's not actually Technical that way

U can't just wake up and decide that my Stop-loss for this Trade is 10 or 20 pips

Without considering that it could be tight

U would come to see certain scenarios, in which you entered a trade....

It initially went against you but later entered profit

Like I told you all in Forex, the market doesn't just move like its in a one way traffic

Even if a market is going up, it would retrace a little and come down before going up
again

So, some market conditions are like that

So it's always important to be Technical while setting your Stop-loss

Some people use Support and Resistance lines as markers for where to set their SL
390
(we would discuss Support and Resistance soon)

Others use, Necklines like we would see in Chart patterns soon..

So it's all depends on the trading strategy u are using

So since ATR gives us the average range of a currency pair

It's a popular method by Traders in setting their Stop loss

The formula used is

SL = 2 * ATR

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Here the ATR value is at 0.00168

Ie 16.8 pips

So inputting it into the above formula we have

SL = 2 * 16.8 = 33.6

ie my Stop-loss should be placed at approximately 34 pips

That means no matter how EURUSD ranges, I won't be cut off before my Trade enters
profit

So I'm given Room for movements within the pair

And not making it too tight

That's also another reason why many of you get that error message while placing your
order's

MT4 would tell you "invalid SL or TP"

It's because the value you entered was too tight

ie so close to the market price

So those are the various ways in which you can use ATR....

So, all these Indicators we just covered...

It's not a must that we must use all...

Just know the ones u are comfortable with and use them

We did all these many Indicators, because we are in Forex Training and you need to
learn all

So as to master all areas of the market environments and adapt to all, no matter what

However with practice, u can select the ones that u are more familiar and comfortable
with

The other Indicator left if you check our outline is Ichimoku, however I’ll teach that after
I have taught Support and Resistance so as to carry everyone along

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This brings our Section of Indicators to a close

Our last topic for today is a brief one

We would learn how to � Lock-in profits. Or how to BreakEven. U will hear traders
saying move SL to BE

I promised I was going to talk about it

So let's move on

Let's say u are Buying a currency pair

U bought at $20.

Your Stop loss is at $10

While your TP is at $80

Or you've not set your TP yet

Locking in profit....

Is a method of securing your profit

Without Exiting the Trade

So let's say that pair u bought moved in your favor and climbed from $20 to $40

20 pips in your direction

What u would do is to move your stop loss from the previous position of $10 to $30 (not
too close to the current price of $40 to accommodate pull backs)

If the price moves again from $40 and climbs to $60

U further move your Stop loss again to let's say $45 from the previous place that you
kept it before (which was $30)

By doing this u have secured 25 pips

(IE 45 - 20)By doing this u have secured 25 pips

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(IE 45 - 20)

Remember you bought at $20

Let's say the market now wants to move back

And change direction

Remember you entered at $20

So from $20 to $45 , where it finally closed on falling back is $25 profit

Locking in profit is also used when u think that the trend would continue and you don't
want set a. TP

U want to ride the trend for as long as it lasts

In this case, u leave the space for TP empty

Let's say for that same pair

As it moves from

$20 to $60

U won't set any TP,

Or you delete the TP if you have set it before at $80

U just keep on moving your Stop loss forward

As the market moved from $60 to $80

U move your Stop loss from $45 to $60

(locking in 40 pips)

Remember u entered at $20

As it moves again from $80 to $140

U move your stop loss

From $60 to $120

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So you would keep on doing this until the market goes back and hits your Stoploss

Though in this case, it's not Technically a stop-loss because u are not loosing, however u
are in massive profits

Any Profit Locked is already yours, the market can't take it back from you again

So that's how we lock in profit

In our day to day practice we would be seeing some practical examples

For Selling a pair

Remember in selling u are going down

U also do the. Reverse

So in this case, instead of moving the Stop loss upwards

U would now keep on bringing your Stop loss down

To lock in the profits u made

Let's see a practical example

Let's say u bought EURUSD at 1.1420

And you put your SL at 1.1400

As it moves from 1.1420 to 1.1460 (ie 40 pips in your favor )

U can move your SL to 1.1440

Hence locking � 20 pips

Remember you bought at 1.1420

If EURUSD moves again from 1.1460 to 1.1490

U can move your SL again from 1.1440 to 1.1470

Hence Locking � 50 pips

Remember you bought at 1.1420

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And you continue doing it like that riding the trend upwards so far it's going in your
favor while giving it a little breathing space too (not too tight)

Your trade would only close if EURUSD starts falling and reaches your new SL that you
set

However by then, you must have been in massive profit

We would close here for today

I hope we all had a Great time and we added new Knowledge of Forex to ourselves
today

WE WOULD USE THE WEEKEND TO REST, CATCH UP AND REVISE ALL WHAT WE HAVE
DONE SO FAR

BY MONDAY, WE WOULD BE KICKING OFF WITH THE REAL MEAT OF FOREX ACTION,
WHICH IS PRICE ACTION

AS A TRADER,, IF YOU DON'T KNOW ABOUT PRICE ACTION, YOUR JOURNEY HAS NEVER
BEGUN

THE REASON WHY MOST TRADER'S DON'T GET IT RIGHT IS BECAUSE THEY GO TO A
SEMINAR THAT ONLY TEACHES THEM INDICATORS WITHOUT PRICE ACTION, IF YOU
TRADE WITH INDICATORS ALONE WITHOUT UNDERSTANDING PRICE ACTION, U WOULD
ALWAYS BE ON THE WRONG SIDE OF THE MARKET. THAT'S THE MISTAKE MANY
TRADER'S MAKE

THAT'S THE REASON WHY I STARTED WITH INDICATORS BEFORE PRICE ACTION TOPICS.
THE BEDROCK OF FOREX ANALYSIS.

ITS GOING TO BE A WONDERFUL TIME TOGETHER

LET'S JUST BE FOLLOWING MY LEAD CLOSELY

AT THIS JUNCTURE , LET ME SAY THIS SO THAT YOU ALL CAN NOTE IT DOWN EVEN AS
WE ADVANCE IN OUR FOREX CAREER

MOST INDICATORS ARE LAGGING

NOTE THIS DOWN

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I SHOULD HAVE REMOVED INDICATORS FROM OUR COURSE OUTLINE BUT I LEAVE IT
BECAUSE IT'S OF BENEFIT FOR SCALPERS AND NEW BEGINNERS

SECONDLY, IT WOULD BE HARD TO KICK OFF THE FIRST WEEK WITH PRICE ACTION
TOPICS, MOST BEGINNERS WOULD END UP BEING CONFUSED

BUT STARTING FROM SOMETHING AS BASIC AS INDICATORS ALLOWS THE NEW

BEGINNER'S TO FAMILIARISE THEMSELVES WITH THE MT4 AND ENABLES THEM HAVE A
FEEL OF HOW THE MARKET WORKS

HAVING SAID THIS, PLEASE AND PLEASE , ONLY USE INDICATORS IF YOU ARE SCALPING.

IF YOU ARE A TAKING TRADES LONGER THAN ONE HOUR, (IE LONG INTRADAY TRADER'S)
OR YOU ARE TAKING TRADES THAT WOULD ENTER THE NEXT DAY (IE SWING TRADERS)

PLEASE ANALYSE THAT TRADE USING PRICE ACTION. INDICATORS SHOULD STRICTLY BE
USED FOR SCALPING (QUICK ENTRY QUICK EXIT) , BECAUSE THEY ARE LAGGING

PERSONALLY I'M A PRICE ACTION TRADER. I DON'T USE INDICATORS TO TRADE

AND THAT'S WHAT I WANT FOR YOU ALSO

IF I'VE TAKEN 5000 TRADES, I'VE ONLY USED INDICATORS FOR 30 OF THEM. EVEN THOSE
LITTLE , I USE THEM WHEN I WANT TO COME DOWN TO THE LEVEL OF A NEW
BEGINNER. HOWEVER I MUST HAVE HAD A FUNDAMENTAL BIAS IN MIND EVEN BEFORE
USING THAT INDICATOR WITH THE NEW BEGINNER

SO DON'T GO OUT THERE AND START TRADING WITH INDICATORS SAYING THAT I
COACH YOU INDICATORS USING SIR FRANKIE LECTURE NOTE, I WOULDN'T RISK MY
MONEY WITH INDICATORS ALONE

TRY AND LEARN PRICE ACTION. SO IF YOU HAVE NOT BEEN SERIOUS SO FAR. TRY AND
BUCKLE UP BECAUSE WE ARE KICKING OFF WITH THE MAIN ASPECT OF FOREX ANALYSIS
FROM MONDAY WHICH IS PRICE ACTION ANALYSIS

WHAT WE JUST DID SO FAR WAS JUST TO GET YOU ACQUAINTED WITH THE FOREX
MARKET AND MAKE YOU HAVE A FEEL OF THE MARKET

WE WOULD USE THIS WEEKEND TO REST AND REVISE AND KICK OFF FULLY ON
MONDAY.

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TRADE TO LOOK OUT FOR THIS WEEK

WE WOULD START WITH BTCUSD.

BTCUSD TOOK A NOSE-DIVE OVER THE WEEKEND

FOR MOST CHARTS THAT WERE LOCKED OVER THE WEEKEND, IT OPENED WITH A
MASSIVE GAP DOWN

WE WOULD BE LOOKING TO TAKE ADVANTAGE OF THIS MASSIVE GAP DOWN

WE WOULD USE A BUYSTOP FEW PIPS ABOVE THE CURRENT PRICE OF 8730. OR ALLOW
THE PRICE TO RETRACE TO AROUND THE 8700 REGION SO AS TO GET A BETTER ENTRY

TP 1 SHOULD BE AT 8800

TP 2 AT 9000 WHILE FINAL TP SHOULD BE AT 9100.

SL SHOULD BE FEW PIPS BELOW THE RECTANGLE BELOW

THAT'S THE LAST KEY LEVEL TESTED BEFORE THE RALLY

PIP COUNT FOR BTCUSD STARTS FROM THE 3RD DIGIT. FOR EXAMPLE A MOVE FROM
8600 TO 8700 IS A 10 PIP MOVE. SOME WOULD CALL IT 100 POINTS.

WISHING US A SUCCESSFUL TRADING DAY AHEAD

399
AUDJPY

RECENTLY NEWS CAME OUT ABOUT A CONFRONTATION BETWEEN AUSTRALIA AND

CHINA

BACK TO HISTORY LANES, WE SHOULD KNOW THAT CHINA IS AUSTRALIA'S LARGEST

EXPORT PARTNER...

SO ANY INCREASE IN TARIFFS ON AUSTRALIA'S EXPORTS BY CHINA WOULD SERIOUSLY

WEIGH ON THE AUSTRALIAN ECONOMY....

TECHNICAL ANALYSIS

NOW COMING DOWN TO THE TECHNICAL POINT OF VIEW, THE PAIR HAD A NICE RALLY
LAST WEEK , TRYING TO UPDATE LOCAL HIGHS LAST SEEN ON THE 30TH OF APRIL

THE PAIR IS GRADUALLY COMING UP TO TEST THE MINOR SUPPLY ZONE AROUND 70.00
KEY PSYCHOLOGICAL LEVEL....TO FORM A DOUBLE TOP

THIS COULD BE A ZONE WHERE THE BULLS WOULD GET EXHAUSTED, THEN GIVE US A
BETTER ENTRY POINT TO SHORT THE PAIR FROM THAT HIGH HIGHLIGHTED BY THE
RECTANGLE AFTER APPEARANCE OF REVERSAL SIGNS

TP 1 SHOULD BE AT 69.50, TP 2 AT 69.30 WHILE THE FINAL TP WOULD BE AT 68.90.

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SL CAN BE 20 PIPS ABOVE THOSE WICKS FORMED AROUND 30TH OF APRIL, TO GIVE US
A R:R RATIO OF AROUND 1:3.5

IN SUCH SCENARIOS WHEREBY THE PAIR FAILS TO GET TO THE ZONE ABOVE, WE
WOULD WAIT FOR IT WITH A SELLSTOP ORDER BELOW AFTER IT HAS PUSHED UP SO AS
NOT TO MISS OUT ENTIRELY ON THE MOVE., AS WE MISSED OUT ON GBPCHF LAST
WEEK. FOR THE SECOND SCENARIO, WE WOULD JUST TARGET TP 2 & 3.

WISHING US A SUCCESSFUL TRADING WEEK AHEAD�

UPDATE ON AUDJPY

AUDJPY SNIPED, CURRENTLY AT 69.58, FROM OUR 70.00 ZONE

THAT'S AROUND 40 PIPS IN PROFIT

WE CAN MODIFY THIS AS OUR NEW TP 1

LET'S TAKE PARTIAL PROFIT HERE AND MOVE SL TO BREAK EVEN WHILE WE AWAIT TP 2

We would kick off immediately

We have successfully finished our Lectures on Indicators

Where we saw different types of Indicators used in Forex ,

How they are set up and how to use them

Today we would discuss Time Frames, so that Everyone would understand it properly

I hope we all have been actively learning all these indicators and practicing how to use
even if it means using a Demo account as its with practice that we would get a clearer
view on how they truly work in Live market conditions

So today we would be discussing another important topic

TIMEFRAMES

Let's follow this important Topic closely

I hope we all have sometimes noticed this sometimes in our charts

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U open 15 time frames, all the indicators are saying sell, u open 1 hour time frame are
saying Buy

U now get confused...

And ask yourself,

"Are the indicators wrong"

Why is M5, M30 and H1 showing contrasting signals

And I'm talking about same indicators here

Ie

Let's say stochastic signal alone on all 3 time frames

Are all given contradicting signals

On M5 ,

It's telling you that it's Oversold

On M30 .,it's telling u that it's Overbought

On H4, its showing u neutral

Ur head would now be scattered

U keep on asking yourself

Why are they different?

Are they not supposed to be the same Stochastic?

Could they all be Wrong?

The answer is they are Not?

They are all showing U what is happening with respect to time

They are all analysing the same data, but with respect to different times

Let me use Moving average to explain this concept

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Follow me closely...

Remember when we did Moving Average Indicators

We explained that they are calculating the average closing price of a particular currency
pair

Over a fixed period

Eg

If you are using a 10 Moving average

It calculates the average closing prices for the previous 10 candles

Let's now say , u are on a 5 minutes chart

That means it's calculating the average closing price over the past 50 minutes

(IE 5 * 10 )

Also if you are on a 1 hour chart

That means it's calculating the average closing price over the past 10 hours

(IE 1 * 10 )

If u are on a 4 hours chart

That means it's calculating the average closing price over the past 40 hours

(IE 4 * 10 )

And so on.....

Now in the 1st example of a 5 minutes chart

The Moving average is analysing and given you what has been happening to the market
over the past 50 minutes

In the 2nd example, it's telling U what has been going on in the market over the last 10
hours

While in the last example

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It's given you an insight on what has been happening too to that same currency pair
however over the past 40 hours

As u can see from the examples above..

These indicators are analysing the same piece of data, however over varying
Timeframes

Remember when you are setting your indicator...

Their setting is always left constant, even while you are changing Time frames

Eg

If you set your Moving Average to "10".

It's left there at 10 across all time frames, u don't change it even when you switch
Timeframes

So thats why the indicators are analysing the same data, however over different time
periods

That's why their information would be different

So they are all correct in their analysis of what was happening

We are still coming to discuss how to harmonise all these different signals on different
time frames

Now the Next Question is this

What is the Best Time Frame to use?

The answer is, there is no such thing as the best time frame to use

It all depends on U

What kind of personality do you have

What kind of trader are U

Do you like the fast actions and the adrenaline spikes of the moving charts

OR

404
Do you want it to calm and steady

Secondly are you are A Scalper, an Intraday, Swing (short term) or Long term trader

The smaller time frame charts are suitable for short term traders ,

The longer ones are suitable for long term traders

A scalper, may prefer to use M1 and M5

ie 1 minute and 5 minutes charts �

An intraday trader may stick to M15 to H1

A swing trader, may just use H1 to D1

IE 1 hour, 4 hours or Daily charts

While a Long-term trader (Investment Banks hedgers etc).....may be more comfortable

with Weekly and Monthly charts

Again

While trading

Do. U just open just one Chart and Analyze

Let's say U are an Intraday trader

Do you just open M15

Make all your Analysis on M15

Check what all the Indicator on M15 are saying

And then blindly open a trade, without looking at other Time frames

Thats a Wrong thing to do

����

405
����

That's why some Forex traders especially those that are just starting would always ask,,
why are they not right in analysing where the market would go

They would ask themselves

Didn't they use all the indicators, the way it was asked to be used?

The answer is that...

They had a narrow vision

They just focused on what what time frame is saying

Without trying to find out

What are other Time frames saying?

Just like I advised U guys earlier to

Never USE ONLY ONE INDICATOR RIGHT

SAME ALSO

NEVER MAKE A TRADING DECISON BY MAKING ANALYSIS ON ONE TIME FRAME ALONE

NEVER TRY THAT

After today's Lectures, ur perspective would change

Those who have been trading before here would see that they would start
understanding the market more

This would reflect in everyone's Trading balance and profits

U would not just enter Trades blindly again

So let's get to How To Analyze the market with different Time Frames

I believe everyone here ranges from

SCALPERS (few minutes traders) to INTRADAY AND FINALLY SWING TRADERS

406
We don't have Long term traders here, so I would be keeping that in mind when giving
examples

Let's say u are an Intraday Trader

U want to Analyze GBP/JPY and place a trrade

U open your MT4 App and switch to your favorite time frame.

Let's say it's M30

Now before you Place any Trades

Where Long or Short

IE Buy or Sell

U would need to ascertain what is the Current Trend of GBPJPY

Remember I use to tell u guys

THE TREND IS YOUR FRIEND

NEVER GO AGAINST THE TREND

(Unless you are a Scalper)

IE U do Scalp Trading (few minutes, in and out)

APART FROM SUCH CATEGORY

NEVER GO AGAINST THE TREND

So let's get back to our GBPJPY trade

Before u place a trade, use the Larger time frame period relative to the kind of trader u
are to determine the overall. Trend

Let's say as an Intraday u can use H4

As a swing trader, U can use D1

As a Scalper you can use H1

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Trends are generally best followed on larger time frames because they have taken time
to form

It would take a bigger market move to reverse them

A trend u see on a 5 minutes chart or 30 minutes chart is very likely Ultrashort term

Remember these indicators are just calculating what is happening over the time frame
that u requested them to calculate

Like I told you all in Forex market

Because a market is in an uptrend does not mean it would just continue up like a one
way. Traffic,

It can retracce, go down a little bit before going up again

That period it's going down an indicator on a smaller time frame would regard it and
show it to you as if the market was now in a downtrend (it's not wrong) ,it's just
showing you what u asked it to calculate, remember that computer is garbage in
garbage out.

However its left to u to decipher that this is just a temporary change in trend keeping in
mind that you are on a smaller time frame

So you have to filter the information yourself

So as an Intraday Trader

Before you place that your Trade on your favorite Time frame of M30 (IE 30 minutes)

Switch to H4....

And let's say add your 200 or 89 Moving Average to determine what is the current trend
of GBPJPY

remember on using 200 Simple Average

When the Candlesticks are above the 200 MA

The pair is an uptrend

In reverse

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When the Candlesticks are in a below the 200 MA, it's in a downtrend

So u quickly switch to H4 (IE 4 hour time frame)

To actually know what is the Overall trend of GBPJPY as of that day or that time

Using any of your strategies be it Indicators or Trendlines(we would see this later) or any
other method u can use to determine the trend

Remember, U want to follow the Trend

U don't want to go against it

So that why you are looking at the Bigger Picture on H4

U don't want to have Narrow vision by focusing on one Time frame alone

So after getting to know the trend

U can come back to your Preferred Time frame be it M30 or M15

To know what the indicators there are currently saying

Let's say on H4...

U've discovered that GBPJPY is on an Uptrend

So that means, u are only looking for Buy signals

So when you now zoom in to M30 or M15

It's only Buy signal u are interested in

Even if you see the 7 MA crossing the 14 MA to the downward side for a sell...

U won't enter

Rather U wait

Patience is part of Trading

As u were now monitoring the pair,

U now see that may be after some time, Stochastic or RSI is now entering oversold
region in your M30 or M15 , u can now wait for the Upward cross...
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Once you see a Buy signal from any of your indicators after the short term sell is over

U can now enter for a buy

Because you looked at the Big picture

U knew that the Sell would only last for a while

Another scenario

U still see an Upward trend on GBPJPY

H4 Chart

U switch to M30 and u see an upward cross between MA 7 and MA 14

Saying BUY too

To further filter out your entry

Go a little bit lower to M5

IE 5 minutes Time frame to see what the price is doing there

Remember in Buying, u want to enter at the lowest price possible

So as u switch to M5 and see that GBPJPY is selling, don't enter Buy yet and wait for the
Market to be oversold

As it finishes selling and now wants to come up,

U can now push the Buy button

By doing that u have entered at a better price which is far lower

Let's say your friend that didn't go further down at a lower time frame to see what is
happening there

He didnt notice that it was still selling

So he entered his buy at

147.60

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Because you attended these Lectures and you know about Time frames and how to
manipulate them

U checked further lower

and found out that it was still going down

So u waited

And entered your Buy at

147.40

Even though, the market later rose in u both favor and u both has your TP at same point
of

147.80

Your profits would be different

You would have made 40 pips while he will only make 20 pips

That's because you filtered your entry using a smaller time frame

Also

He would have a larger drawback before entering profit

He would have had a drawback of 20 pips or more

Before the market starts moving up again in his favor

While in your case

Your drawback would be minimal because u entered at a far lower price

Because you zoomed � into your time frame , to see what the smaller one was saying

And while having the drawbacks

He may not be patient and close on a loss, because his account may not have been a
large account

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Or maybe he put a stop-loss at 20 pips and would even get cutoff in the trade before
entering profit

He may have been using a small account that can't accommodate drawbacks

That's one disadvantage too of using a Small account.

Because some people have been asking what's the minimum accepted by Brokers

I use to tell them, even though most Broker's accept a Minimum of $10 doesn't mean
you should go and start up your Forex journey with $10.

U would just be wasting your time

Drawbacks are meant to happen before you enter profit and you should use a capital
that can accommodate such before you eventually enter profit

Not one that you would be cut off easily

I used to tell People after they have graduated.

Take your time and gather Capital..

FOREX is not running away

Always take your time and raise up a reasonable capital of at least $100 before you kick
off

I’ll soon add u to a group where people have accounts of $2500 to $5000

U must not have such, U can start small and grow gradually

But let it be at least reasonable before you kick off

So that's the way of Analysing the Markets using Multiple Time frames to your
Advantage

So in summary

Use the Larger Time frames to Determine the Overall Trend

Zoom � out to see what the larger time frame is saying about the pair

Then Zoom in � to smaller Time Frames to filter out your entry

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Let's say u are an Intraday trader and you like using M30 or H1

Zoom out to H4 to view the overall trend

Make your analysis in your H1 or M30

Then Zoom in to smaller time frames like M5 or M15

To now filter out your entry point

So as to enter at the best price possible

It's always all about maximising profits

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**I BELIEVE EVERYONE KNOWS HOW TO CHANGE THE TIME FRAMES AND SWITCH IN
BETWEEN THEM

FOR THOSE THAT DON'T KNOW, CLICK ON THAT � CLOCK ICON POINTED AT BY THE RED
ARROW SO AS TO BRING OUT THE DIFFERENT TIME FRAMES FOR YOU**

Now,

Even as we Encourage u to use Multiple Time Frames

Never use more than 3 please

Stick to 2 or 3 Time frames

Viewing Many Time Frames. , would just get u more confused

So like I'm encouraging u guys, Keep on practicing

After a while,

U would just discover the Time Frame that U are comfortable with

It all depends on U...

Your personality , What kind of Trader U really are and the Time frames that u have
understood and mastered properly

So don't let anyone decide for U.

Use this General guide and fine tune your Trading Strategy based on the Time frame u
are comfortable with

We would stop Here for Today

So Today we are going to be looking at a Very Important form of Analysis

One in which you must know as a Trader

No matter the Strategy or Indicators U are Using

Many have devised important strategies based on this form of Analysis

We are now in SECTION B part of THIS STAGE

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We would now be going into how to Analyze the markets like a Pro

All those things ,U see. People Analyse online and u would be wondering when would I
ever learn these Stuffs

Don't worry yourself too much as you are already in that Stage...

All you need to do is just put in more efforts, Ensure you are not distracted and you are
following closely.

Today we are going to be kicking off this Advanced Stage with

CANDLESTICK ANALYSIS

Candlestick Analysis is an important form Technical Analysis that helps you read
meaning into the markets price actions

Those Up and down fluctuations of the market

There are 3 types of Graphs on your MT4

Line Chart

Bar Chart

Candlesticks Chart

However because of how detailed Candlesticks are and because of the Tons of
information they give by just merely looking at them,

It is now one of the most Popular Charts on MT4 and used by many

Infact when u install MT4 , it's charts are already placed on Candlesticks by default

The only time I think Traders Use Line Charts is when you want to draw your Support
and Resistance Lines (That would be our next topic)

So let's get on to Candlestick Analysis

Candlesticks was initially used by the Ancient Japanese to study the Price of Cereals

Traders who deal in Agricultural products use it to monitor and make market decisions

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That's why sometimes u hear people Call it, Japanese Candlesticks

It was later in the last Century that a Forex Trader known as Steve Nison copied the idea
from his Japanese friend and developed it into what we are seeing today

Let's get to the Structure of Candlesticks

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SO AS TO CLEARLY FOLLOW THIS TOPIC

ZOOM � OUT YOUR CHART TO MAKE IT LARGE AS IN THE IMAGE ABOVE

So

Candlesticks are composed of some components

The Open

HIGH

LOW

CLOSE

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let's explain each component of this their structure

Please, U would need to understand this basics.

Because, if your foundation is shaky at this introductory level of Candlesticks

When we get to some strategies that involves Candlesticks like Pivot points, Fibonacci
etc

U would find it hard to understand what we are saying

So just follow closely to understand these basics

So let's continue with the Structure of Candlesticks

The Candlesticks is basically composed of a BODY and a WICK

These are formed by the Open , High, Low and Close of the market price of a particular
currency pair

The Open refers to the opening price of the Candlesticks in that particular period

Let's say u are on a 1 hour Time frame

Every hour, A new Candlestick forms

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So immediately we are entering the New hour, and a new Candlestick starts forming.

That particular market price that it started forming from is the Opening price

(Also called the Open of a Candlestick)

The High of a Candlesticks is the Highest price touched by the Currency pair within that
period of time

The Low of a Candlestick is the Lowest price touched by the Currency pair within that
period too

While

The Close is the price at which that particular candle closed... This depends on the Time
frame that u are viewing the candle

Like I highlighted earlier, In a 1 hour time frame, the Candles would close. Every Hour.

In 30 minutes Timeframe, the. Candles would Close every 30 minutes and so on.....

So the Closing price of that Currency pair in that period would form the Close of the
Candlesticks

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Now you would notice that the Candles are Coloured

They are either Red or Green or

White or Black depending on your settings

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So let's move on

The White Or Green Candles (depending on your settings) are called the Bullish
Candlestick

While

The Red Or Black Candles are called the Bearish Candles

How do the Bullish and Bearish Candles form?

The Bullish Candlesticks are formed when the Close of that Candle is above the Open

That means that the Closing price in that particular period was higher than the Opening
price (that means price went up)

IE Bullish

While

The Bearish Candles are formed when the Close of that Candle is below the Open

That means that the Closing price in that particular period was lower than the Opening
price (that means price went down )

Meaning Bearish

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That's how they are constantly formed as the fluctuations in the market occur

These points I mentioned would be utilized extensively when we would be having

Lectures on Pivot points,

So you need to know which Candle u are Calculating for..

Is it Bullish or Bearish so that u wouldnt input the wrong values in your Pivot point
Calculator

Let's move on to Types of Candlesticks

There are Various Forms of Candlesticks

Just relax and don't be scared of their names

So far it makes you money,

That's all that matters�

The

HARAMIS

MARABUZO

SPINNING TOP

HAMMER

INVERTED HAMMER

SHOOTING STAR

HANGING MAN

DOJI

We would explain each of them and their significance

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So let's take them one after the other

Haramis

It's also Known as Big Bullish Candle or Big Bearish Candle

This is a Bullish or Bearish candle with Large body and small wicks on both sides

Wicks are those projections, pointing up and down on both sides of the candle

Sometimes referred to as Shadows

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All these pointing above and below which are pointed at by the arrows, are the wicks

Next like Haramis is

MARABOZU

This is Another Strongly Bullish or Bearish Candle

It has no shadows (or wicks)

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They signify Intense Buying or Selling Pressure

In Bullish Marabozu...

The Close is the same as the High

While the Low is same as the Open. (because of no wicks)

While

In Bearish Marabozu...

The Close is the same as the Low

While the High is same as the Open. (because of no wicks)

Take note of these above points down

People usually ask get confused about them when we get to Pivot point Calculations

They would be asking for what value to use in place of the wicks

446
When you see them forming in Charts, they signify intense Buying or Selling pressure

For a Bullish Marabozu , it tells you that the Bulls were in control through out the whole
session (period)

While

For bearish Marabozu it Tells u that the Bears (IE the Sellers). Were in Control all
through the period

Next is DOJI

This is Another Significant Candlestick

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It has Little or no Body and has

Wicks on both sides

Ie

Neither Buyers nor Sellers had the Upper hand during that period

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The Bulls dragged the price up to a High

The Bears also dragged the price down to form the low

But at the end, they still ended up at a tie

To close back at or very near to the opening price

IT SIGNIFIES INDECISION

It's one Candle that many Traders look out for when exiting or before entering a trade

If a market is in an Uptrend and a doji forms

If you wanted to enter before, u should hold on and. Wait for more confirmation of the
Buy signal before you enter

After this Section on Candlesticks,

U won't be seeing the Candlesticks again as normal Graphs

However you would be studying then in great details because u would soon know that
they express Tons of information of what is happening in the market

Next is HAMMER & HANGING MAN

We are Listing both together because they have the same structure...

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However they differ in that they occur in different aspects of the market

A Hammer Occurs in a Downtrend

While a Hanging Man occurs in an Uptrend

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They consist of a Body

A Long Wick that is below the body

And a very small or non existent wick above

They are majorly REVERSAL SIGNALS

When you see a Hammer form after a Long downward trend

U should start locking in your profits as a reversal might be around the corner

Remember a Hammer formed at the bottom of a downtrend

They are warning signs

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They are however not telling you to Buy the pair yet...

However they are giving a sign that the Selling pressure is getting to an end..

So you should also start looking for other Buy signals

A Hammer formed because the Bears dragged the price down to form that long Lower
wick which is the Low..

But the Bulls dragged the price up again to a higher close

It's a sign that the Selling pressure is reducing

So if you have been riding that downtrend, start Locking in your profit

The Color of the hammer does not matter,

Whether it is White or Black

Ie Bullish or Bearish

Another reversal Signal just like Hammer is the

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HANGING MAN

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This has the same Structure as the Hammer however it is seen at the top of an Uptrend
460
It's a warning Sign that the Upward trend could be coming to an end...

IE the Buying pressure is reducing

Here Sellers dragged the Price. Down forming same lower wick,

However Buyers still pushed it Up but couldn't push it any higher

Signifying low buying pools

So if you are in the Uptrend, start locking in your profits

Further Upward confirmations is needed if the price is to still continue in the Upward
trend

The NEXT Reverssal Forms of Candlesticks are the

SHOOTING STAR

&

INVERTED HAMMER

This also consists of a Small Body and a Long Upper wick

With a small or no lower wick

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They are also Reversal Signals

Shooting Star occurs at the top of an Uptrend

While

Inverted Hammer occurs at the bottom of a downtrend

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After a prolonged Uptrend and U sight a Shooting star �

It's a warning � that the uptrend would soon come to an end and a reversal is imminent

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Remember don't enter to the opposite side immediately (IE don't sell until you have
confirmed that the trend has reversed)

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Shooting star formed because the Buyers pushed the price very high up (forming a High
which corresponds to the end of that long wick), but couldn't sustain the momentum
(the Bulls are getting tired)

So the sellers swam in and pushed the price lower towards the Open

Signalling that the Upward trend is coming to an end

In Reverse

Inverted Hammer is found at the bottom of a prolonged downward trend

It also signifies a reversal to the Upward side...

Signalling that the downward trend is coming to an end and a reversal might be
imminent

It formed because, the Buyers pushed the price upwards (forming the upper wick) but
the seller still dragged it down near the open but couldn't push it any lower down....
Signalling a weakening of the Selling pressure

So if you are selling before, U should start locking in your profits

The last Type of Candlesticks is

SPINNING TOPS

This consists of a Body and two long Upper and Lower shadows

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It also signifies indecision of the market

When they occur, the market could go either way

It signifies that Buyers and Sellers are at a tie

Some could lead to reverssal

However further confirmation is needed to know where the market would continue to

However further confirmation is needed to know where the market would continue to

So Candlesticks can provide useful information only if you are looking and u know what
U are looking for...

I believe once we finish the Training on Candlesticks,

U wouldnt be seeing the Charts as mere graphs again but as a Technical tool for
Analysing your entry and exit points

We would stop here for today

Our Personal Assignment today would be to pick

EURUSD 1 HOUR CHART

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START SCROLLING BACKWARDS AND BE NAMING ALL THE CANDLESTICKS ON THAT
CHART

STOP AT DECEMBER 1 2019

It's another Great day

We are going to continue our Training session immediately

We saw the the Origin of Candlesticks, Their Structure,, How they are formed.....

We also went ahead to discuss the various types of candlesticks and their significance

Most of the things we discussed were Single Candle sticks patterns, but it's more
confirmative when u add more than one Candlesticks together to the Analysis

Eg

U seeing a Hammer at the bottom of a trend does not automatically mean the trend
would reverse

But assuming the hammer was confirmed by some patterns which we are going to see
today, it would give you a better confirmation

So we combine Candlesticks together,

ie

We analyse them with respect to each other in order to get a better view of the market

So let's get on to the Candlesticks Patterns

They include

BULLISH ENGULFING

BEARISH ENGULFING

TWEEZER TOPS

TWEEZER BOTTOM

MORNING STAR

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EVENING STAR

BULLISH REJECTION

BEARISH REJECTION

We are going to be discussing each of this patterns one after the other and we would be
making it more clearer by seeing them on Charts where they have occurred before

After these series lectures on Candlesticks, U all would not be looking at your Charts
again just like normal lines

Even while you use your indicators to trade, U would be taking note of what the
Candlesticks are telling you,

It gives u an edge over someone that just looks at indicator and jumps in immediately

That's why I said that at least when we have covered most of these topics

U all would now be getting the clearer picture,

As u would be putting everything together

Because making market Analysis is all about putting in all this your knowledge to make
market decisions in few minutes

Let's start with the first pattern

BULLISH ENGULFING

This is a Candlestick pattern that connotes a Bullish tendency of the market

When you spot this pattern, U should know that a the downward trend is about to be
turned into an Uptrend

Hence it's a Bullish reversal Candlestick Pattern

It forms after the market has been in a downtrend

Then a Bullish Candle appears that totally engulfs the Body of the previous bearish
Candle in the opposite side

Here are images captured on where they appeared on Real charts

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U could see that a Bullish Candle appeared after a downward trend and enfgulfed a
previous Bearish candle

And immediately that happened, the market began to shoot up in the opposite side

It signifies that a strong Buying pool has entered the market, hence a reversal in trends
is imminent.

So Traders normally open their buy orders when the next candle starts forming and
place a SL below the low of the Engulfing Bullish Candle

Criterias to Watch out for, to confirm that it's a Bullish Engulfing Pattern

1) The market must be in a downtrend

2) The 2nd candle engulfs the previous candles body in the opposite side

3) More stronger if 2 or 3 previous candles are engulfed

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Let's go to the Next Pattern

BEARISH ENGULFING PATTERN

This is the opposite of Bullish Engulfing pattern

It is a Bearish Reversal Sign

It occurs when, a Bearish Candle Engulfs a previous Bullish candle in the opposite side

Let's see some images

Including some on Real charts

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So when this occurs it signifies that the Selling pool in the market has just increased

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The Bears are increasing in numbers

And they would soon pull the price down

What more than to join the majority

If you are in a Long trade, u better close the Trade and exit with your profit, then plan
on going Short on the currency pair

Criterias to fulfill to confirm this Trend

1) The market must be in an Uptrend

2) The 2nd candle engulfs the previous Candle in the opposite side

(IE the previous candlestick should be a bullish candle)

3) The more previous Candles are engulfed...the stronger would be the reversal

So when this occurs, U immediately place a sell order at the start of the next candle to
the bearish side

And place your SL at the middle part or high of the engulfing candle....depending on
how tight, u want it to be

Let's get on to the next pattern

TWEEZER TOPS

This is also another reversal pattern

If you are looking closely at charts, u would spot it

They are 2 candlesticks with matching Tops

They signify a bearish reversal

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That means it's telling you that the market would soon enter into a downtrend

Usually after a long Uptrend

The Opposite form of it is

TWEEZER BOTTOM

Its also a Reversal Sign

Signifies a Bullish Reversal

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They are formed by 2 or more Candles with matching bottom

Either on the body or the Wicks

They signify that price is rejected at a very STRONG Support (for Tweezers bottom) or at
a very STRONG resistance (for Tweezer Top)

We would talk about Support and Resistance in our Next Class

So when you see this pattern occurring

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It's a signal that a reversal to the opposite side is imminent

So as u study your Charts, don't see the Charts as normal candles again

Be looking at them closely to know what they are telling you.

The chart is always speaking to U,

But are you ready to listen?

U guys are no longer ordinary traders again, who only depend on Indicators alone

I want you all to be Market commanders

Analyze the market and give reasons

So always look closely at your Charts from today onwards

The next Pattern we are going to be discussing is

MORNING STAR

This is a Bullish Reversal Candlestick Pattern

When it occurs, it signifies reversal of a downward trend

It includes a Hammer or doji in its structure

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That was what I was trying to explain earlier that u seeing Hammer or Doji or Shooting
star or Inverted hammer alone isn't enough to confirm a reversal

Look around them to see what is forming around them, this would further increase your
precision

Hence more than one candle is used in forming all these Candlestick patterns (the
more the better)

Let's see some images to help visualize how Morning star looks like

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They are formed by a Bearish candle

A Doji or a Hammer or and inverted hammer

Then a Bullish candle

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U spot them at the end of downtrends

And signify that a bullish reversal is imminent

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It further strengthens the reversal signal given by the Hammer or Inverted Hammer ...

Hence u can now enter confidently

U place your Buy order after the formation of the Bullish candle

And your SL just below the low of the Hammer or doji

The next Reversal Pattern is

EVENING STAR

This is another similar Candlestick Pattern

It is a Bearish reversal Pattern

It signifies that an Uptrend after it has run its long course would soon reverse back to a
downward trend

It is formed by a

Bullish candle

Shooting star, Hanging man or doji (in between)

Then

A Bearish Candle

Let's see some examples

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Sometimes you would even see 2 reversal Candles inbetween the Bullish and Bearish
Candles

Eg seeing a doji and a shooting star

It further strengthens the Reversal signal

This also applies to Morning Star Pattern

Next Candlestick Patterns which I forgot to add to the list above are

3 WHITE SOLDIERS

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3 BLACK CROWS

let's start with 3 White Soldiers

This is a Strong Bullish Pattern

It is formed by 3 Bullish Candles following each other consecutively

It signifies that the pool of Buyers in the current trend is more

Hence they can push the price higher up

Remember, U are always going in the direction of the majority

There is strength in numbers

Let's see some examples

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The opposite of this is

3 BLACK CROWS

It signifies a strong Bearish trend

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It means there are more pool of sellers in the market

So you join in their strength and grab your own pips

It's not beneficial to ride against the wave

Let's see the examples too

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For the signal to be valid

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Both for the 3 black crows and 3 white soldiers

The body of the 2nd candle, must be bigger than the body of the first candle in the
pattern.

The 3rd may be the same but not smaller

It signifies an increasing buying or selling pressure

They are very potent Bullish or Bearish patterns

So be on the lookout for them

The last pattern we have is

BEARISH AND BULLISH REJECTION PATTERN

They are formed when more than 2 candles gets stopped out at a very strong resistance
or support point

Price could not break. Any of those points

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We would talk more on this when we discuss Resistance and support in our next Class

So that it would be clearer

Because u need to know what Support and Resistance are

We would stop here for today

So these Patterns,

Are always forming and when U are looking closely U would spot it.

Candlesticks are very important tool for any Trader and as Forex trader, U need to be
well accustomed to it

Someone asked about how to Reduce your Lotsize while in a Trade

I once said that you can edit Lotsize even while in a Trade

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The thing is , You can only Reduce but you can't increase

We call it taking partial profit

Procedure

To reduce your Lotsize

Press and Hold the open trade, it would take you bring out the Close Button

When you now get to the usual close trade interface, you can type in (ie edit) the
amount of lots, u want to close and leave the rest.

Example if you previously on 1.0 Lotsize on the trade, you can reduce it to 0.5 before
clicking on Close.

It would now close 0.5 and Leave the rest 0.5

I would drop a video below for more visual Explanation

HOW TO SEE THE MEANING OF THOSE NEWS ON FOREX FACTORY

I want to start priming you all for News interpretation

I highlighted this earlier

But let me do it again

Go to forexfactory.com

Tap on any of the News icons

It would drop down

Inside the drop down space, U would see a folder by the right

Click on the folder and it would show you the meaning of each of those news there

It's part of your learning process

The folder I'm talking about is pointed at by the arrows

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FOR THOSE STILL HAVING PROBLEMS ON HOW TO NAVIGATE AROUND
WWW.FOREXFACTORY.COM WEBSITE

LET ME DROP THIS DETAILED EXPLANATORY LINK FOR EVERYONE TO TAKE THEIR TIME
AND READ IT UP

ITS A GUIDE ON HOW TO NAVIGATE THROUGH THE SITE

https://dailypriceaction.com/forex-beginners/how-to-use-the-forex-factory-calendar

We would continue with our Training from where we stopped

Last time we discussed about Candlesticks and Candlesticks Analysis

And we saw different patterns of Candlesticks that can occur and what they signify

SUPPORT AND RESISTANCE

This is a very powerful concept in Forex and has many Trading strategies built around it

So we should all do well to understand it, because it's the basis for so many forms of
Technical Analysis in Forex

Supports and Resistance are like Strongholds of the market

They are regarded as strong Pillars that would either push the price to a downward or
upward direction

Whenever a market is heading up...

The highest point reached before turning back is called RESISTANCE

In Reverse...

If a market is going down, the Lowest point reached before turning up again is Called
Support

To fully understand the concept of Support and Resistance

It's good to keep it at the back of our minds that Support and Resistance are not mere
points

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They are best considered as zones

When the market is moving up for example, U would find that there is a particular zone
that the price couldn't break to go upwards,

If you scroll back that same chart, u would see that previous candles on reaching that
same price area turned back and starts going down..

That is Resistance in action

It's like a barricade pushing the price down

In Reverse....

When you look at a chart that has been going down, U would see certain price zones
that Price couldn't just get pass across, when price reaches that zone it turns back
upwards

That's support in action

However , remember just like everything in Life...

Supports and Resistance don't last forever as they would sooner or later be broken and
price would get past them

(We would come to that later)

Let's get to how to draw our Support and Resistance

To draw Support and Resistance lines,

U would need to identify those Swing Highs and Swing lows

(IE those TOPS AND VALLEYS)

because that is where you want to draw your lines across

To do that, U would need to set your Chart to a Line Graph to be easier to spot them,
just like the image below

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For those that use phone

521
522
STEP 1

GO TO THE SETTINGS MENU ON YOUR MT4 AND CLICK ON IT

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STEP 2

WHEN IT BRINGS YOU TO THE SETTINGS PAGE...

LOOK FOR CHART TYPE AND CLICK ON IT

STEP 3

WHEN YOU CLICK ON IT.... IT WOULD BRING YOU TO WHERE THE TYPES OF CHART ARE
LOCATED

CLICK ON LINE CHART

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IT WOULD NOW AUTOMATICALLY SWITCH YOUR CHART FROM THE PREVIOUS FORM OF
CANDLESTICKS TO A LINE CHART

U CAN ALWAYS CHANGE IT LATER AFTER DRAWING YOUR SUPPORT AND RESISTANCE

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For MT4 on PC, the line graph logo is just there on the task bar just beside the tools

Why dont we use Candlesticks to draw Support and Resistance

Now, if you notice during our Candlesticks Lectures,

We talked about the Structures of Candlesticks

Where we mentioned the

OPEN

HIGH

LOW

CLOSE

Those High and Lows of the Candlesticks (the one we Call shadows) are just reflex
reactions of the market, they are not the true movements

Candlesticks would show u all those Highs and Lows

For most Technical analysis like we would see in Fibonacci later on ..... U actually need
those Highs and Lows

However for Support and Resistance they are deceptive because even though price
actually touched those points, All u actually need is where the price closed

Your concern in Support and Resistance is to identify whether Price closed above or
below Support or it closed Above or below Resistance

So by setting your Charts � to Line Charts (which doesn't show those shadows), U would
be able to draw or identify your Support and Resistance zones accurately

Though after drawing the lines with your drawing tools, U can now switch back to your
Candlesticks charts

For those using PC, your drawing tool is on the taskbar on top of the charts

For those using phone

529
FOLLOW THESE STEPS TO SEE YOUR DRAWING TOOL

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531
STEP 1

OPEN THE CHART FOR ANY PAIR THAT YOU WANT TO DRAW YOUR SUPPORT AND
RESISTANCE ON.

CLICK ON ANY OF THE PRICE VALUES WRITTEN ON THE RIGHT

532
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STEP 2

AFTER CLICKING ON IT

IT WOULD BRING OUT A CIRCLE TASK BAR MENU FOR YOU.

WHEN IT BRINGS IT OUT, CLICK ON THAT MENU OPTION , POINTED AT BY THE RED
ARROW

534
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STEP 3

AFTER CLICKING ON IT,

CLICK ON THE PLUS ICON POINTED AT BY THE RED ARROW TO TAKE U WHERE TO ADD
DIFFERENT TOOLS

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STEP 4

IT WOULD BRING TO WHERE YOU WOULD SEE DIFFERENT DRAWING TOOLS FOR YOUR
CHART

U CAN NOW CLICK ON HORIZONTAL LINE.

THATS THE TOOL, TO BE USED IN DRAWING YOUR SUPPORT AND RESISTANCE

538
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STEP 5

AFTER CLICKING ON THE HORIZONTAL LINE TOOL...

U JUST COME BACK TO YOUR CHART AND TAP IT AT THE HIGH OR LOW WHERE YOU
WANT IT TO DRAW A SUPPORT OR RESISTANCE FOR U AND IT WOULD AUTOMATICALLY
DRAW IT.

U CAN ALWAYS ADJUST IT BY PRESSING ON IT AND DRAGGING IT UPWARDS OR

DOWNWARDS

FOR IPHONE USERS

CLICK ON SAME NUMBERS BY THE RIGHT

AND CLICK ON OBJECTS

540
541
For those that didn't get it

Just follow my images for now

I would show anyone who couldn't do it after the Lectures

Though drawing These Lines are more easier on PC

But with practice, u can learn how to draw horizontal lines on your phone

So that's how all these guys, u see online draw all these tools they add to their charts,
it's not rocket science

So after identifying the Tops and Valleys that the price turned around in your charts

U can just identify, 2 or 3 points and connect them

Those points becomes your Support and resistance points

542
543
544
545
546
Even if you can't draw it,
547
Use your crosshair cursor and place on those Tops and Valleys to know their price levels

Then use your pen to write them down

Let's look at some important points to note about Support and resistance

Before we go to how to trade with them

Remember I told you guys that Support and resistance points can be broken

When a Resistance is broken it becomes Support (because the candles would now be
above it)

While

When a Support is broken it becomes Resistance (because the candles would now be
below it)

As can be seen in the image above

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549
So from the above,

U can see that Support points are those strong pillars below the price

While the Resistance would be above the price

Just to remember

Support = Below

Resistance =Above

However look at same image,

U would see that , as the price is going up, any Resistance it breaks becomes a Support

550
Its also vice versa for downward trends

Another important point to note about Resistance and Support is that,

The more price tests a Support or Resistance point, the Stronger those zones become

U would not just open a 5 minutes chart and say u are drawing Support and Resistance
and you think they would hold

Price would just be breaking through them like glass

So while drawing your Support and Resistance points, u use larger time frames like

H4

Daily

Weekly Charts(esp long term traders)

551
But for Swing and short term traders

H4 and Daily charts is OK

The 4th thing to note about Support and Resistance is that,

When they eventually break,

How massive the breakout becomes depends on how Strong the Support and Resistance
point has been holding

If the Resistance and. Support has been there for long ,when they break, the breakout is
usually massive

Like what happened to EURUSD this week

Analysts reviewed the pair backwards and found out that the point has been holding as
a Support for long

And when it broke that this week, the price almost made a 200 pip move downwards
before this recent correction

So those are important things to note about Support and resistance

Another form of Support and Resistance are Trendlines

This is another Popular use of Resistance and Support that you would usually see
Traders use

U would see them drawing it on forums. Pasting on their blogs or website

It's still on same principle of Support and Resistance

So it's same principle of Support and Resistance

However this one takes into consideration that the market is either moving up or down

Also Instead of. Using Horizontal lines to draw this, U would use DIAGONAL LINES

U can see diagonal lines, still on same place either on Phone or PC

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So Trend lines are Mainly Diagonal Support and Resistance

554
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So to draw a Trendline (either Upward trend line or Downward Trendline)

For Upward Trendline

Identify the bottom of identifiable Support areas and connect them using your diagonal
tool

For Downward Trendline

Identify the top of identifiable Resistance areas and connect them using your diagonal
tool

In drawing your Trendlines, never force them to fit in

556
Connect only the Tops or Bottoms

See this 2 images below

557
OUT OF THESE 2 IMAGES, THE ONE BELOW IS THE CORRECT METHOD OF DRAWING IT

Also,

The Steeper the Trendline is, the less reliable it would be and would be broken easily

Also, just like we saw in normal Support and Resistance.

The More a Trendline is tested, the stronger they become

Let's get to how to trade using Support and Resistance

Support and Resistance can be traded using two methods

BOUNCE METHOD

BREAKOUT METHOD

LETS start. With Bounce Method

Remember our Bollinger bounce right?

558
That's almost the same principle used

However this one may not occur as frequently as Bollinger bounce

U are doing that with the believe that A Support or Resistance point would hold

The principle to use is simple

U Buy when the price bounces off Support and starts moving upwards

And..

U Sell when the price bounces off Resistance and starts moving downwards

Let's now go into it in details

Let's take support zone as an example

When price reaches a Support zone...

U don't just immediately Click on the Buy button

559
U have to see confirmation signals that the Support would actually hold (remember that
price could break through it)

We normally use the Candlestick method

U have to wait for the Candle that touched that Support to close..

If it closes above the support that's a good indicator.

However, to enter the Buy position, we have to wait for a second candle to close in the
Bullish direction (IE close when it's coming upwards)

Then we can confidently buy after that second candlestick has closed

Here is where you input your Candlesticks knowledge into play

The kind of Candle that closes around that Support zone would give u a clue what is
about to happen

That was I told u guys earlier that all these knowledge of Forex are complimentary to
each other dont use one in isolation

Because u must have gathered enough knowledge and now harmonise them

U can even add one more week and trade Demo fully and go Live the upper week

So Let's move on

So you wait for the. candle to close above Support to start getting ready

Then wait for another candle to close in a Bullish direction before u pull the Buy trigger

Hence we are waiting for 2 candles

Like I said, the kind of candle that formed around the Support zone would give you a
clue to what would likely happen next

Imagine seeing a Hammer Candle, Closing right smack on the Support line, it's a signal
that a Reversal is imminent

So that is how you trade the bounce

For Resistance, it's the same principle

560
U wait for a Candle to close below Resistance point to give you a clue whether it would
hold

After U've confirmed that the candle actually closed below the Resistance, U now wait
for the 2nd candle to form and close in a bearish direction, then U SELL

Remember it's the close we are looking at, not the Highs and lowest

So in Bounce method

We Buy at Support and Sell at Resistance

After confirming that they held

The 2nd method used in Trading Support and Resistance is the

BREAKOUT

Even if the Support or Resistance did not hold that does not mean u should stay out of a
profitable trade

U should trade the opposite which is the Breakout

561
Infact.

This is where more Pips are bagged in

Remember I told u guys about EURUSD end of last week/Beginning of this week

Whenever a Support or Resistance is broken (especially those that has been holding for
long)

The breakout is always massive

How do we trade Breakouts

We use same Candlestick method

Let's take Resistance as the first example

To confirm that a Resistance zone has broken

U wait for at least 2 candles to break that resistance in an upward (bullish) direction

Then you now Buy the pair

U can come down to Lower Time Frames to Monitor these 2 Candles , not necessarily on
same H4 or D1 that you drew the Support and Resistance lines

After Drawing on H4 or D1

U can come down to M30 or H1 to start Monitoring and see how the Candles react as
they approach those zones

Why are we always waiting for 2 candles to close above these zones?

We don't want fakeouts

We want to be actually sure that they are broken before we Buy or sell

So in the reverse scenario which is Support zones

We sell when a Support zone is broken

562
However we have to be sure that it's broken before we enter

So we wait for at least 2 candles to Close below that Support line before we sell

Because we want to be confident in the trade before we enter

For stop-loss

When selling, put your SL few pips above the Support

When buying

Put your SL few pips below the Resistance

563
Just Like it's labelled Exit points in the image below

564
IT IS ALSO IMPORTANT TO NOTE THAT IN BREAKOUT STRATEGY, SOME TRADERS WAIT
FOR A RETEST OF THE BROKEN SUPPORT AND RESISTANCE BEFORE ENTRY

565
THATS ALSO ANOTHER PERFECT WAY TO AVOID FAKEOUTS

YOU WOULD OFTEN HEAR TRADERS SAY, ‘’NO RETEST, NO ENTRY’’

566
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So all these highlighted above are the strategies we utilise when trading Support and
Resistance

It's a very important strategy that is linked to many Technical Analysis tools

So as u practice it and trade with them, u would understand fully how they work

I believe by now, we all now have an idea what support and resistance are and how to
trade them

We would stop here for today

568
Our activity this Night would be to take USDCHF 4 hour line chart and draw their
Support and resistance points

UPDATE

FOR TODAYS LECTURE, WE WOULD BE USING THE PIVOT POINT CALCULATOR

PIVOT POINT CALCULATOR FOR ANDROID PHONES

https://play.google.com/store/apps/details?id=com.mobtower.pivotcalculatorforex

FOR Iphones PIVOT POINTS FOR iPHONES

FX Calculators by Societe informatique Tyrcord Inc

https://apps.apple.com/ng/app/fx-calculators/id1427831135

Hope we scanned through different Line Charts to see how Support and Resistance
appeared in them

Today we are going to be discussing another Important topic

PIVOT POINTS

Just like we Discussed Support and Resistance

Pivot points are also another method of estimating potential Support and Resistance
areas

The Awesome thing about this method is that they are Objective

That's why many traders love it

The support and Resistance lines we did the last time, involves drawing Horizontal lines

Across highs and lows of the market

This can be very subjective

569
Because 2 traders could draw it differently

Also different traders would be drawing it on different Time frames hence they would
be having different values

However Pivot points are very Objective because Every ones uses almost the same
values to calculate it

Hence we would all be in tandem...

No matter where u are in the world

Because it's same values

So let's get to Pivot points

Pivot points are Potential Support and Resistance areas of the market..

They are regarded as Turning points (just like from the word "Pivot")

The prices of currency pairs tend to turn around these areas....

Hence that's why they are a major point of interest for traders

Let's get to Types of Pivot points

We have about 4 different methods of Calculating Pivot points in Forex

They include

Standard

Woodie

Camarilla

Fibonacci

Standard Pivot points is the most Common one and the one used by most traders

Let's get to how to Calculate the Standard Pivot points as that would be the one we
would be using

In calculating Pivot points, u would need the Previous days High

570
Low and Close

IE the high price

Low price

Closing price

Of the previous day

That's why the Daily Chart � is used in Calculating the Pivot points

Take Note

DAIILY CHART �

ie D1

Take Note

DAIILY CHART �

ie D1

Take Note

DAIILY CHART �

ie D1

Because the Daily Chart candle of the Previous day contains all these points....

571
(hope we remember our lectures on Structure of a candlestick)

A candlestick has

A high

A low

A close

An open

All these points coincide with certain price values

Which u can get using your crosshair cursor

Also take note that the Candle for the day stops forming by 9pm GMT

Though during Winter it can change to 10pm GMT because of Daylight Savings

ie 00:00 MT4 time (12am)

572
Mt4 time is usually GMT+2 or GMT+3

So for example , if I want to calculate the Pivot points for tomorrows trading ( Monday
since tomorrow is Saturday)

I would wait for the candle of today to finish forming and then use it's values.

For today's trading, I would have used the candle that formed yesterday.

So that's how u do it

U use the previous Day's candle to calculate it

So let's get to how to Calculate our Pivot points

They are Calculated using the Formula below

Let's note them down

Pivot point = (High + Low + Close) / 3

From the above, we would now estimate our Support and Resistance points

As follows

R 1 = (2 x PP) – Low

R = resistance

PP = Pivot points

S1 = (2 x PP) – High

S = Support

R2 = PP + (High – Low)

R3 = High + 2(PP – Low)

S3= Low – 2(High – PP)

This is how it's calculated from Support 1 to Support 3

Also from Resistance 1 to Resistance 3

573
However technology has made things easier..

Even if you don't like Maths in school..

Don't be afraid

Hope u all downloaded, the Pivot Point Calculator that I asked you all to download....

If you have not use the link below

PIVOT POINT CALCULATOR FOR ANDROID PHONES

https://play.google.com/store/apps/details?id=com.mobtower.pivotcalculatorforex

FOR iPHONES

FX Calculators by Societe informatique Tyrcord Inc

https://apps.apple.com/ng/app/fx-calculators/id1427831135

This App has been configured with the above formulas, so all u have to do is input the
values into the App and it would calculate all the different levels of Support and
Resistance for U

So let's all open the Apps to see how it looks like and see the values the App requires
from U

FOR IPHONES

IT WOULD LOOK LIKE THIS BELOW

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576
WHEN YOU OPEN THE APP, U WOULD SEE SOMETHING LIKE THIS.

AND YOU WOULD SEE THE SPACE REQUIRED TO INPUT IN YOUR

HIGH

LOW

&

CLOSE

Let's Now do a Practical Example...

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So we would be using the Candle of Yesterday..

Which I pointed using the red arrow..

Zoom � Your Charts.. To see the Candles clearly

For this Calculation that we are about to do now

So like I said earlier

Since the market has not closed for today,

We would use the Candle of yesterday

Remember, u always use the previous days High Low and Close in your calculations

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580
For the High,

I got 107.35

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582
For the Low,

I got 107.76

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584
For the Close,

I got 107.23

So,

I got the following values

High... 107.35

Low.... 106.76

Close.. 107.23

Remember to take note of whether the Candle is bullish or bearish

The close for bullish is up

While the close for bearish is down

So In This Illustration above

I used the Close value which is above, because it's a Bullish candle

585
Let's all trace these points on our charts..

It must not be exact.. But u would get approximate values

As Always after giving you Guys the Long method

I would also give you Guys the shortcut

Not that I don't like giving only the shortcut

But giving you the shortcut alone wouldn't groom you properly

U wouldn't know how each values are gotten

Like I always say, U don't know where Forex would take you in the Future and the crowd
that you would be talking to

So I would Give the shortcut to get these points below

SHORTCUT

TAKE YOUR CROSSHAIR CURSOR

PLACE IT ON THE DAILY CANDLE IN QUESTION

AND IT WOULD AUTOMATICALLY HIGHLIGHT THE

OPEN

HIGH

LOW

&

CLOSE PRICE

FOR YOU ABOVE THE CHART IN THAT EXACT ORDER

Let's see what I'm talking about below

Let's look at the image below

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If you Notice

They are same Values (may be few micro pips different) with the values I got using the
Long method

High... 107.35

Low.... 107.76

Close.. 107.23

So there are many ways to get it in Forex, Just be confident of what you are doing

That's why this is not just a 3 days seminar, U are here to be drilled.

Let's now input them in our Pivot point calculator

588
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After Inputting them, U would now Click On Calculate... for android phones

590
591
When You Click on Calculate.... It would automatically Calculate the Pivot points for you,
from R3 to R1

And from S1 to S3

As shown in the image above

Remember it's the Standard values on the Left that we are using , not the values on the
right

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FOR IPHONE USERS

JUST CLICK ON DONE

IT WOULD AUTOMATICALLY CALCULATE IT FOR YOU

ALSO ON IPHONE

ONLY THE IMPORTANT STANDARD VALUES IS GIVEN

LETS FIRE ON

Now let's note that value of PP and S1 on the Pivots above

And can someone notice that USDJPY broke the Level of PP today in a Downward Trend
and upon reaching S1 it turn upward and broke PP again to the upward and met R1 and
now still ranging between R1 and PP

PP value can be switched to become a Support or Resistance depending on where the

closing price of the previous Day falls

I’ll address that soon

for now

(LET'S SWITCH AND KEEP OUR CHART TO H1, TO UNDERSTAND THIS EXPLANATION
BELOW)

USDJPY as you can see from Yesterday's Candle and from the Value on our Pivot point
Calculator closed Yesterday at a price of 107.23, then continued its Bearish move and
came to Support 1 (which is PP in this case) at 107.11 because of the weakness of the
Dollar , it smashed that Support 1, continued in this Downward Trend and approached
Support 2 (which is the S1 Pivot) at 107.87 it then couldn’t Break this Support Level
which was our S2

Then some few hours to London session opened, it started correcting Upwards
reaching a High of around 107.32 and has been Ranging within a Zone of around 30 to
40 pips since then

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Use the Values on the Pivot Calculators to compare with USDJPY Daily Candle today and
see how it range from downwards to upward all through today Breaking PP on its way
down and breaking it again on it way upward

Also open your H1 Chart, to Study it's Movement today after the Lectures

That's how awesome Pivot points can be

It makes you see the Market moves clearly

Let's now get to how to trade using Pivot points

U can trade using pivot points just like your Normal Support and Resistance that we
discussed yesterday

U can Trade using

The Bounce method (Thats within the Range)

Or using the

Breakout method

So to trade the Bounce method (IE within the range)

U are assuming that this Support and resistance points would hold

So you enter after u see confirmations that they have held

After noting those points down....

U would Watch and see what the price would do when it gets to them

Let's say,

U want to Buy at the Support point

595
As the candles approaches the Support line and bounces off to start rising up again..

U wait for the first candlestick to close above the support

That is confirming that it's holding

Then if the second candlestick rises and close in the bullish direction ,u now buy

Remember you are looking out for these Candles on smaller time Frames like M30 or H1

So as to pick up these reversals easily as an intraday trader

Same also for Resistance

U sell, when you see that a Resistance point is holding

596
So immediately u see confirmation that it held and another candle starts forming and
close in the bearish direction, u would now Sell

So it's exactly the way you trade your normal Support and Resistance..

No difference

The next method is Breakout method

Just like your Support and resistance breakout strategy

U wait for at least, 2 candles to close past these points then u now buy or sell

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598
If it's a Support that was Broken...

U sell

If it's a resistance that was broken ,

U Buy

Let's look at same USDJPY

(OPEN YOUR USDJPY CHART TO H1 ONCE AGAIN AND FOLLOW THE SEQUENCE OF
EVENTS)

The Market ranged a little during Sydney session

Then around the early hours of of Tokyo Session , the Market make a Sharp Upward
move and continued in thatUpward Breaking Resistance at 107.11 (which is the pp )
and Continued with the move before touching a high of 107.35 today before reversing
downward

Now as you can see from your Chart it's currently ranging

Assuming we did this calculation, Yesterday night and saw that breakout of R1 level

599
We would have Sold USDJPY and set our TP at least halfway between two of those
significant points

Ie set our TP between R1 and R2

I’m using R1 as resistance 1 because Yesterday’s closing price fell in between PP and R1

Assuming it was in between PP and S1, PP would have become Resistance 1 while S1
would retain its position as Support 1

So always take note that PP can always switch to server as Support or Resistance
because it’s the Median value. It all depends on where the closing price fell

We would see all these during Practicals

Why set out TP half way?

Remember we always play it safe...

We don't want greed to creep in

Assuming Price Bounced off Support or Resistance ,

We would have either Sold at Resistance or Bought at Support

Ie using the Bounce Technique

So that's how we trade breakouts and Bounce in Pivot points

Just like your normal support and resistance

Let me teach you guys another way to catch these breakouts...

Even if u are not online

I promised I would talk about it when we come to this Suport and Resistance section

It's the other 2 forms of market orders

STOP ORDERS

LIMIT ORDERS

U can also utilize this awesome technique for your Bollinger Squeeze,

600
Even if you are not around to hear your Call level App notify U

Let's start with the first one which is the Stop orders

This is another form of Market order

It's a Form of Pending order

The other type which was Instant Market Execution..

U are buying or selling at that instantaneous market price

But in Pending orders, u want to Buy at a Future price

The price is not there yet

So,

Let's start with STOP ORDERS

This form of order is usually used in Breakout strategy

Either for Support and Resistance breakouts

OR

Bollinger Squeeze breakouts

Let's say that the Resistance point is at $10

And you want to buy the pair, if it breaks out by 10 pips

U would now set a Buystop order at $20

Immediately the price breaks the $10 resistance point and reaches your buystop order
at $20 ., it would activate your Buy order

So let's see the reverse scenario which is SELL STOP

let's say your Support for a pair is at $50

And u want to enter if it breaks the Support by 20 pips

Let's say the price is at $55 and has not reached the point yet

601
All u need to do is set a Sell stop orders at 20 pips below your support

Which is at $30....

When the price falls and reaches $30...

Ur sell order would activate

Let's use that USDJPY as an example

602
603
Let use the value of R1

Assuming I wanted to Buy the pair

I would set the buystop orders at 5 to 10 pips above R1

Why am I using R1 as Resistance?

It's because the closing price of USDJPY the day before was 107.23 (as you can see on
the Pivot point Calculator)

This value fell inbetween PP and R1

So PP is automatically now my support 1 while S1 is now my Resistance 1

Assuming the Closing price fell inbetween PP and S1

PP value would automatically become my resistance 1 while S1 becomes my Support 1

I just want to highlight it here that PP can be Support or Resistance, it's just dependent
on where the Closing price fell

So I would have

Buystop@ 107.51

(ie 108.46+5 pips)

So I would set my Buy stop order there

Some use 10 pips

The range is 5 to 15 pips

The aim is let it not be too far and let it not be too close to the Support or Resistance

Either when u are Buying or Selling

U can also use this Stop orders for your Bollinger bands

After noting down the price of the Upper and lower bands like we use to do

Add 10 pips to the upper band price and go and set it as Buystop

Set your Stop-loss and TP AND close

604
For SL, u can set it few pips below the lower band price

For TP, we always target small and exit

Also go to the lower band value

Subtract 10 Pips from that point

Use it to set your Sell stop order

Input your TP AND SL and close

For SL, in this case, it would be the reverse ie few pips above the Upper band.

For TP., also target Little and exit

We don't target far TP, the smaller the better

We can maximize profits by increasing our lotsizes depending on our account size but
not by increasing the TP range

It's safer that way

People usually target 10 to 20 pips

For me, even if I get 10 pips , am ok

With 0.5 , that's $50

With 1.0 lot, that's already $100 for me

And am done for that Pair

So by Using BUYSTOP and SELLSTOP orders,

Even if you are not around when your Call level App rang..

Ur order would be activated

Isn't that Awesome

Like I told you guys...

U all would be learning new things everyday in this Training

605
At the end... Everyone would become an Fx Boss

So let's get to the other form of order

LIMIT ORDER

This is used for Range trading Support and resistance

However this method is risky that's why I don't usually use limit orders

I prefer using the 2 candle method I mentioned during the lectures

Limit orders assumes that the Support and Resistance would hold

Which it's not in all cases that they would hold...

Remember that they can be broken....

Assuming the support is at $20

And u want to Buy at support...

And the price is at $40

U would now set a Buy limit at $20

So that if it Reaches there, it would activate

And then start coming up

It's better to confirm with Candles that the support actually held

So I mostly use Stop orders

To catch breakouts and for

Bollinger Squeeze

606
I would show u all a pictures that summarizes all these forms of Market orders

607
608
609
610
So we would stop here for today

Our Assignment for today would be to Calculate the Pivot points for USDCHF for
Mondays Trading using this Friday’s Candle

Remember we use the Previous Candle for the next Trading day

In this Case Friday Candle precedes Monday Candle

To See where to Locate your BUYSTOP and SELLSTOP

Use this Steps below

611
612
STEP 1

OPEN THE CHART OF THE CURRENCY PAIR YOU WANT TO TRADE AND CLICK ON THAT
ICON ABOVE POINTED BY THE RED ARROW

U CAN ALSO CLICK ON NEW ORDER FROM YOUR QUOTES

613
614
615
STEP 2

AFTER CLICKING ON NEW ORDER

IT WOULD BRING U TO THIS PAGE

WHWRE YOU WOULD NOW CLICK ON THE DROP DOWN ARROW POINTED AT BY THE
RED ARROW

616
617
STEP 3

AFTER CLICKING ON THE DROP DOWN ARROW

IT WOULD NOW BRING YOU TO WHERE ALL PENDING ORDERS ARE LISTED..

U WOULD NOW CLICK ON THE ONE U WANT

618
619
LETS ASSUME WE HAVE CLICKED ON BUYSTOP ORDER

Ie We want to Place a Pending Buy Order

U would Now Input the Price you want to Buy at inside the Space pointed at by the
purple arrow

Eg after adding 10 pips to the Upper band of your Bollinger bands... U input that New
value you got into that Space pointed at by the purple arrow

Then U input your TP of 10 pips or so into the usual TP box as pointed at by the Blue
arrow

After Setting Up Everything... U would now, Scroll down and Click on Place

It would automatically place your pending Buyorder for You

https://youtu.be/_OQGVaTR9aw

https://youtu.be/dnyDSeawMM4

FOR THOSE STILL HAVING PROBLEMS TRYING TO VISUALISE FORMS OF MARKET ORDERS
AND TRYING COMPREHEND BREAKOUT AND BOUNCE STRATEGY

I HAVE TO SEARCH FOR 2 GOOD VIDEOS THAT WOULD AID US IN VISUALISING IT

I BELIEVE NOT EVERYONE IS A FAST LEARNER , SO LETS ALSO CARRY THE WEAKER ONES
ALONG

UPDATE

Another subtle thing to note is

When using Pivot points for BUYSTop and Sellstop

It's not all Candles that are favourable

Avoid Daily Candles that are Marabuzo or Large Haramis. Also All those reversal Candles
with Long wicks like Hammers, Shooting starts , Hanging man and inverted hammers.

It tends to take time to activate or just Activate and reverse back because price must
moved a long way

620
Use Smaller Daily Candles like Small Dojis and Small Spinning tops. Those ones that
signify indecision of the Market Day

Just like the USDCHF I gave as Assignment

UPDATE

These are Commonly asked Questions

1) What Kind of Daily Candles should we watch out for Before selecting the Pair to use in
our Pivot Point Analysis

2) Secondly, What are Other things to look out for Before selecting the pair, or is it just
to select any pair arbitrarily

ANSWER

For the Practicals that we did we chose the pair in whose Daily Candle was a Small Doji.

Candles to use are Small Spinning Tops and Small Dojis. That’s Dojis whose bodies are
small and doesn’t have unnecessary long wicks

The smaller the body of the Candles selected , the better

Avoid Marabozus, AVOID Haramis Candles or all these Hammers and Shooting Stars and
other reversal Candles with Long wicks

Just Generally avoid Large Candles

Read the Update I dropped after Yesterdays Lectures

Also to improve the efficiency of the Pivots , Check if any of the Currency amongst the
pair you want to select have at least a High Impact News the Next Day. ( High impact
News are coloured with red folder � on forex factory) .

U can use it too, as it's a Sign that the pair would be Volatile that Next Day

These are ways to improve to your Pivot efficiency and also

To improve the Chances of hitting ur TP.

However these Scenarios I listed above does not occur often

621
That's why Pivot Points can't be used to Trade Everyday, or you just select Random
Candles just because you want to trade pivots

That's why I'm teaching you Guys Other Methods too , so as to have many Tools in your
Arsenal incase the conditions for one were not met so that you can use another
Technique

That's why we are here

It's time for us to further our knowledge on this wonderful Financial sphere

Our last topics was on Supports & Resistance and on Pivot points

We saw how they serve as Strongholds of price actions and in some cases Potential
reversal points

We also learnt how to trade with them, either using the Bounce method or the Breakout
method

Today we are going to be discussing another Powerful topic

FIBONACCI TOOL

This is a very Powerful tool in Forex Analysis

If you have reached the Stage of using Fibonacci in Forex Analysis then you need to tell
yourself a Big Congratulations

This is like you are entering the Post graduate � Phase of Forex

Your level has Upgraded

U are now dining in the Table of BIG BOYS

So Let's get on to it

Please do follow me closely here

Fibonacci was an Italian Scientist, majorly a Mathematician.

He invented the Concept of Fibonacci numbers

622
Those of you who did Further Maths in School or studied some Engineering courses
must have heard of Fibonacci numbers

Which are as follows

0 , 1, 1, 2 , 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377......etc

This was gotten by adding up 2 digits consecutively in that sequence to get the next

So after writing 0 and 1, u now start adding

Eg

0+1=1

1+1=2

1+2=3

2+3=5

3+5=8

21+34=55

34+55=89

55+89=144

Etc

So that's how he got these set of numbers up to infinity

He discovered a recurring concept in these set of numbers

After the initial few numbers

When you divide 2 consecutive numbers in the series u would get a ratio of 0.618 or
61.8%

Eg

34/55= 0.618

55/89= 0.618
623
89/144=0.618

Etc

U can try these yourselves

Also he discovered that

When u find the ratio of 2 alternate numbers , they would give u 0.382

Eg

34/89= 0.382

55/144 = 0.382

Etc

He called these ratios....

THE GOLDEN MEAN

From these set of Golden mean, he brought out certain important Numbers which forms
the Fibonacci Ratios

But in Forex, we are only concerned with just 2 of them

1) FIBONACCI RETRACEMENT LEVELS

2) FIBONACCI EXTENSION LEVELS

I Would give you all the numbers soon

However like I said, I'm not Training U all for today.

U won't know where u would be called on to speak on Forex.

Assuming I didn't take my Training seriously, I wouldn't be where I am today

So let's move on

The 2 set of Fibonacci Tools used in forex are

1) FIBONACCI RETRACEMENT LEVELS

624
2) FIBONACCI EXTENSION LEVELS

They consist of some set of important numbers which include....

Fibonacci Retracement Levels

0.236

0.382

0.50

0.618

0.764

And

Fibonacci Extension Levels

0.382

0.618

1.000

1.382

1.618

Let's note them down

These are the significant levels on the Fibonacci tool

Let's now get to How To Draw this Fibonacci tools on our Charts

This is easily drawn on MT4 for PC �

Please after today's Class, everyone should download MT4 for PC

Login to your Hotforex Homepage and Download it from the Menu there

Or Just search for MT4 for PC on Google

Let's now get to How To Draw this Fibonacci tools on our Charts(phones)

625
For u to effectively draw Fibonacci tools on your Chart, u need to identify two significant
points

1) SWING HIGH

2) SWING LOWS

I would explain what they mean with pictures

626
627
628
629
630
631
A Swing High is a candlestick with at least two lower highs on both the left and right of
itself

What this means is that

In the current chart u are viewing,

the candlestick that touched the highest point with its shadow

Let me show some images to make it clearer

While

A Swing Low is a candlestick with at least two higher lows on both the left and right of
itself

It means it's the lowest candlesticks in the set of Candles around it

632
633
So those are what are swing high and Swing lows

Just simply either the highest or the lowest candle in a group of candles clustered
together

Because u need to identify those two points before you draw the Fibonacci tool

Before we draw them, let's get to what each of the Fibonacci tools signify

Fibonacci Retracement levels are Potential Support and Resistance Levels

While

Fibonacci Extension Level are Potential Take profit levels

634
So after drawing them on your chart ,u would use the Retracement as potential support
and resistance levels and use the Extension as potential Take profit levels

Before you use Fibonacci on a pair, U should take note of this

IT IS ALWAYS USED WHEN THE MARKET IS TRENDING

that's very important

Never Forget that

Don't go and start drawing Fibonacci when the market is Ranging (Fibonacci is different
from Bollinger bounce)

I would drop a video clip today after this class to show you guys how to Draw Fibonacci
on your charts

So let's still continue

To draw the Fibonacci, u need to identify the Swing high and swing low for that period,

Just like I mentioned earlier

After u have Clicked the tool

U now place it on the Swing high and drag your mouse or cursor to the Swing low

For Upward market, U start from the Swing low and drag the Mouse to the Swing High

While for Downward market

U start from the Swing High and drag it to Swing Low

TAKE NOTE OF THESE TWO IMPORTANT POINTS

After connecting these two points on the Candles

The MT4 would automatically Calculate and draw the Fibonacci Retracement for U

Let's See How To Add The FIBONACCI Tool to Our Charts

635
636
GO TO THE OBJECT SECTION ON YOUR MT4

THAT SAME PLACE WHERE WE SAW HORIZONTAL LINES AND TREND LINES WHEN WE
WERE DOING SUPPORT AND RESISTANCE

WHEN YOU GET THERE,

SCROLL DOWN A LITTLE, U WOULD NOW SEE WHERE DIFFERENT FIBONACCI TOOLS ARE
LISTED

REMEMBER WE ARE ONLY USING TWO, OUT OF THEM

WHEN YOU TAP ON IT, IT WOULD ACTIVATE AND READY TO DRAW

AND YOU CAN NOW GO BACK TO YOUR CHARTS TO DRAW IT

Though, like I said earlier... I would drop a Video on how to draw it later on...

So don't worry yourself for now...

Just be using my images

FOR PC:

U WOULD SEE THE FIBONACCI ICON

REPRESENTED AS ""F"" ON THE TASK BAR OF YOUR PC

U WOULD NOW CLICK ON IT AND SELECT THE FORM OF FIBONACCI THAT YOU WANT

OR

U CAN GO TO INSERT ON YOUR TASK BAR

SCROLL DOWN AND LOOK FOR FIBONACCI AND THEN SELECT THE ONE, U WANT TO USE
AT THAT PARTICULAR TIME

637
So

After connecting these two points on the Candles

The MT4 would automatically Calculate and draw the Fibonacci Retracement for U

U would see things like these images below

So after connecting the Swing high and Swing low when you must have clicked on that
"F" icon...

It would draw these Nice lines for you and label the respective levels for U

Remember u must have clicked on any of the Fibonacci tool that u want, it would
automatically activate and follow u to your chart where all u now have to do is to
connect one Swing Low to another Swing High

It's much easier and clearer on PC... but with practice u would be used to it on the
phone �

I took my time to explain how to draw it because if you didn't draw it correctly... Or you
don't even know how to draw them

U can't even trade with it

So that's the basic step first... ,

Learning how to draw them

So after u have successfully drawn your MT4....

638
We would now get to

HOW TO TRADE USING FIBONACCI

639
640
641
642
643
We are now going to look at how to Analyze the market and trade using this Powerful
Forex tool

Like I mentioned earlier ,

The Fibonacci tool is used in a Trending market

It's used by Traders to perfectly identify whether to Key in the ongoing trend

In Forex,

When a market is trending upwards for example... It doesn't just continue up just like
that like a rollercoaster

644
I've mentioned this before

The market pauses a bit and retraces backwards before going up again

It can't just continue like a one way traffic without catching it's breath

That's the Law of price action

That retracement is Everly bound to happen even if it's for a brief period of time...

U all can check through previous charts and study previous trends that occurred in the
past

So traders who didn't follow this trend from the beginning would always wait for this
retracement to enable them join on in the trend at a better price

(U know its not always that you can catch a trend from the beginning, sometimes its
after a long run of candles that you can confidently say that this is actually a trend)

So because you can't always catch a trend from it's outset...

U would need a tool to guide you on the perfect time to enter the trend

THAT TOOL IS FIBONACCI

How does this work?

Let's start with FIBONACCI RETRACEMENT

This is a tool that helps us enter a trade

They are potential Support and Resistance levels

The levels are

0.236

0.382

0.500

0.618

0.764

645
When a market is making such retracements after its long trend, it tends to find
potential support and resistance at these Fibonacci levels

Let's take an upward trend for an example

For an upward trend, after price has rallied upwards for a while

The next thing for it to do is to retrace or pull back

And where those retracement always stops or encounter Support is at Fibonacci levels

So if you saw an uptrend, but u saw it late,

U now saw it where it's already stalling.

Just be calm and pull out your Fibonacci tool

646
Identify the Swing low of the uptrend and drag the Fibonacci tool to the swing high

It would immediately draw the Fibonacci lines for you

U now wait for price to bounce of any of the Fibonacci levels and then u place your Buy
order

LET'S SEE A PRACTICAL EXAMPLE

The pair was initially know an Uptrend...

647
It now reached a Swing high and retraced.

It now finally encountered Support (remember Supports are strongholds or pillars of the
Market)

So it encountered Support at 0.618 Fibonacci level and resumed it's uptrend again.

Trading is also all about Patience.

Because you are an experienced trader with the basic knowledge of Analysis and you
know the Law of Price action...

"That after a trend, price would always always retrace"

So you now wait for that retracement, which eventually happened

It now retraced to 0.618 and continued it's uptrend again.

That 0.618 would now be a Perfect place to buy

U would make more profit than someone that hurriedly entered his own Buy order at
the Swing high

Infact if that person doesn't have a large Equity , his account might not be able to
withstand that retracement up to 0.618 level

But because u were more experienced and you had this knowledge,

U now waited and entered at a better price

The thing about this Retracement, is that u don't know which of the Fibonacci level
would hold as a Support

Whether it's 0.236 or 0.382 or 0.5 or 0.618 etc

That's the only dilemma

However we always have a solution to it

What you do is u pick up your Call level App

(remember u can't be online all day monitoring the chart) ...

648
What if you have Champions League to watch or you need to hang out with friends or u
might even be at work.

So you set the levels of

0.236

0.382

0.50

&0.618

U set the corresponding price levels on your App

When price gets there it would alert u to start monitoring

Note: I said to start monitoring,, Not ENTER

You don't just enter immediately

U watch and see if any of the above levels would hold as Support

U guys remember our Lectures on Support and Resistance

U wait for at least 2 candles to form

The 1st candle u are interested in, is the Candle that tested that Level

U check whether it closed above that level

The 2nd candle u are interested in is the one following that candle...

U watch and see if it would close above the high of the previous one

These are signs that the particular Fibonacci level u are currently observing is holding,

Then you can now confidently place your Buy order and join in the trend

If the particular Fibonacci level u are observing didn't hold

And price broke through it

Still have patience and wait to see how price would react when it gets to the next level

649
Trading like I said is all about Patience,

Entering at the Perfect time is always key

Let's see another example of a downtrend

For a downward trend...

If you spot the market already in an established downtrend...

Don't rush to enter...

Wait for that retracement

(LAW OF PRICE ACTION)

It would always happen

So when the retracement starts, pull the Fibonacci retracement tool and draw it....

Then start monitoring to see the level that would hold as Resistance

Immediately u confirm that a level held as Resistance and you see market going down
again

U can now confidently enter

650
Let's see the example above

It was initially in a downward trend

651
And started retracing.

It now retraced back to 0.500 (50%) Fibonacci level which now held as resistance and
now started going back down again

So entering your Sell order at that 0.50 level after confirmation would have been a very
profitable trade...

Rather than someone who didnt have patience and joined the trend at the Swing low

So if you learnt another new thing today

Let it be that u now know that Trading is all about Patience

If you won't be there to monitor it

Set a price Alarm

Normally for me,

When the retracement moves and crosses the 0.618 Fibonacci level I won't enter again

Its most likely that the Trend has changed

Remember like we said in The Lectures Support and Resistance

They won't last forever, Price would eventually break them

So also is the Trend

A trend won't last forever,

They could also change and follow the opposite direction

They won't last forever, Price would eventually break them

So also is the Trend

A trend won't last forever,

They could also change and follow the opposite direction

So when price breaks 0.236, 0.382, 0.500 and 0.618

I normally see it as a sign that the trend has changed

652
I just wait for another trend in another currency pair

Some people use 0.764 level as their deal breaker

That if price retraces and breaks all levels even up to breaking 0.764

They would know that its a sign that the trend has changed, so it's better to leave the
trade

And it might not be good to enter

Fibonacci can also be use as Stop loss

Let's say u entered at 0.500 Fibonacci level after u found out that it's holding as Support

U can place your Stop loss just Below 0.618

Which is the next level below it

And so on. ....

It all depends at the Fibonacci level that you entered

Remember I told you guys, We would be seeing other Ways to Technically Set our SL

We saw ATR indicator, We saw Support and Resistance, We saw Pivot values... Now we
are seeing it in Fibonacci setups

As I earlier pointed out that you can combine Fibonacci with your Candlesticks analysis
for a better entry

Just like watching how the candles closed at those Fibonacci levels

Apart from Watching how they closed at those levels ie whether it was above or below
the level

U can also Watch the kind of Candle that formed at that level

Ask yourself, whether it's an exhaustive candle

Eg Doji, Hammer, Shooting star etc

All those candles that we discussed that signify reversal In trends

653
For Example...

That was a Bullish pin bar, otherwise known as a Hammer , though can also be a Doji...

Forming right smack on the 61.8% Fibonacci level

It's already telling that A reversal is imminent

So you wait and observe subsequent Candles..

Then you can now confidently enter, if they start going in the Bullish direction

654
655
In This other example.... This was a Shooting star forming right there on the 50.0
Fibonacci level

Confirming that a reversal might be imminent

Hence double confirmation using Candlesticks and FIBONACCI

So you observe and now enter

THIS CONCEPT OF MULTIPLE COMFIRMATIONS IS WHAT IS REFERRED TO AS

CONFLUENCE

MEANING THAT YOU ARE NOT JUST ENTERING THE MARKET WITH ONE SIGNAL ALONE,
U ARE WAITING FOR OTHER CONFIRMATION SIGNALS

So like I told you guys earlier

Don't compartmentalise this Knowledge of Forex

Don't use any in isolation

Because u are analysing with Fibonacci does not mean u won't look and see what the
Candlesticks or Indicators are telling U.

Harness all these knowledge and combine them together

So apart from Candlesticks,

U can also combine your Fibonacci with Your Normal Support and Resistance points

U set your graph on Line chart like we discussed during The Training on Support and
Resistance and

U draw your Support and Resistance horizontal lines

U now estimate , which of the Previous areas or zones of Support and Resistance line
up closely with your Fibonacci level

If such levels now later eventually holds ...

Then it would increase your confidence in entering the trade

THIS IS ALSO BASED ON THE PRINCIPLES OF CONFLUENCE

656
YOU ARE USING MULTIPLE CONFIRMATIONS TO FILTER YOUR ENTRY POINT

THE MORE THE CONFIRMATIONS THE BETTER

U see how we now combine Fibonacci with another Technical Analysis tool to further
increase our confidence in entering the trade

The next Fibonacci tool is FIBONACCI EXTENSIONS

The Fibonacci extension levels are

0.382

0.618

1.00

1.382

1.618

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These ones are mainly meant to give you a clue on where to take profit

So after entering on a retracement....

U now draw the extensions. To see the likely places that the market is headed

This is what all those Analysts u see online that give you signal

This is the tool they use to give you their Take profit level

Because after retracement, market would always tend reach those levels

Though for day traders ,

I would advise you just take the little u can and leave

If you caught the trend early and u think u can ride it, u can set your TP as high as 30 to
40 pips and close

Those extension levels used to be more.. Some up to 100 pips

For Swing traders or long-term traders

It's an essential tool to use in setting your TP

So that's basically How To trade using the Fibonacci tool...

U use the Fibonacci Retracement as your Potential Support and resistance levels to time
a perfect entry for your trades

Because u know from the Law of price action that price would always always retrace
after a long trend in a particular direction

U wait for this retracement to occur and then u perfectly enter your trade

While you use the Fibonacci extension levels as your take profit levels

So like I mentioned earlier, Fibonacci is a very Powerful tool that is used in Forex
Analysis

It's very informative if you know how to use it

And as an Advanced Forex trader. , U need to learn how to trade with it

659
I would drop some Video clips on how to draw Fibonacci , so that we all can watch
and get acclimatised to it.

Here is the link to a small tutorial clip

https://youtu.be/zjiieTN5qtM

It's a YouTube video, so just spend 5 minutes of your time to actually watch how to draw
it

https://youtu.be/ydkUSMZKUSE

https://youtu.be/9FUbQYsUZXs

https://youtu.be/Kz6-8nQLRHM

WE WOULD STOP HERE FOR TODAY

We would commence the Training immediately

ELLIOTT WAVES

This is another advanced form of Technical Analysis that you have to add to your
Trading arsenal

Because the market conditions are varying, U would need as many trading tools as
possible so as to adapt in any condition u find yourself

Elliott waves theory was postulated by a Forex Analyst named Ralph Elliott

He studied over 70 years worth of Stock data before coming out with these wonderful
theory

He discovered that the Financial market, thought to move randomly previously actually
moved in an ordered fashion, which he called WAVES

hence the name Elliott Waves

There are 2 Elliott Wave Patterns

1) IMPULSE WAVES

660
2) CORRECTIVE WAVES

let's see some images of how Elliott waves looks like both diagramatically and in charts,
before we start taking them one after the other

661
662
663
664
[Let's start from the first wave

[IMPULSE WAVE

[The market was said to move in a 5 - 3 wave pattern

665
[The first 5 waves is the one called Impulse waves

[While the second , which is a 3 wave pattern is called Corrective waves

[So, the first 5 waves called IMPULSE WAVE is further divided into 2

[Wave 1

Wave 3 &

Wave 5

Are called MOTIVE WAVES

[WHILE

[Wave 2

&

Wave 4

666
is called corrective waves (different from the major Corrective waves , I mentioned up
there)

[So let me repeat again

[Wave 1, 3 & 5 .....Motive

[Wave 2 & 4..... corrective

[The 1, 3 & 5 move in the direction of the trend

[While 2 & 4 move in opposite direction to the trend

[Lets see why these waves come about

[Let me use Bitcoin as an example

[This theory works in most Financial instrument,

Years of data has proven that....

[I believe u people here know about Bitcoin

[This was what we normally call Wave 1

[Here people are starting to know about the trading instrument, it's not yet that
common

[From $900 , it retraced a little back to $700

[Here what happened is that those that bought when it was still in cents, sold off and
took profit

[From $700 back to around $1000 by the end of December 2016

Then shot up again to around $6000

[This was in the early part of 2017

[This is Wave 3

[Here many people are gradually coming into the market and buying in on the Financial
instrument

667
[Then it would normally retrace again to form Wave 4

[Corrective Wave 4

[Then lastly by the end of 2017.... Those following Bitcoin would remember when it
touched around a Massive price of over $19,000 per BTC

[This is Wave 5

This is normally driven by Hysteria, Hype, News etc

Here is where people would start hyping the Financial instrument, telling you reasons
why to invest

As an experienced Trader, u should know that, that high price is not right time to buy

Wave 5 is usually the peak

Now after Wave 5 of the Impulse Wave

Comes what we Call CORRECTIVE WAVES

After every move of a currency pair in the Financial market, the market would always
always correct it self

That is the phase that Bitcoin is currently in now

Bitcoin has finally dropped from that high of over $19,000 and corrected to its current
price now

Bitcoin has finally dropped from that high of over $19,000 and corrected to its current
price now

As of this evening , the price of 1 BTC was around $8,318

It even touched a Low of around $3000 before bouncing back up

668
669
Thats the Correction in play

So Ralph Elliott observed these sequence of moves on mostly all Financial commodities,
be it Stocks , Currencies etc and concluded that they move in Waves

So we have seen IMPULSE waves

Labelled 1 to 5

Let's now move on to

CORRECTIVE WAVES

This usually happens after the main move

It is labeled

&

670
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672
This corrective waves occur in the opposite direction to the main trend

Ie

If the trend is upward (IE wave 1 to 5 is upward)

These A, B, C corrective waves, would now be downwards

In Reverse

If the trend is downwards, then the Corrective waves would be upwards.

Let's take note that Elliott can be used for both Upward or downward trend

673
So let's continue with the Corrective WAVES

THERE are many Corrective wave Patterns but can be categorized into 3 broad patterns

ZIGZAG FORMATION

FLAT FORMATION

TRIANGLE FORMATION

No matter, the pattern, the most important thing to note is that the market is correcting
itself

Let's get to the most important part

HOW TO TRADE USING ELLIOTT WAVES

In order to Trade using Elliott Waves, we need to correctly draw it

674
So let's get to how to identify the waves... Because you can't be able to Trade using
Elliott Wave Principles, if you can't draw nor identify the Waves

There are 3 CARDINAL RULES to have at the back of your mind while trying to draw your
Elliott waves

These Rules are not meant to be broken, as it may cause mislabelling of the waves

CARDINAL RULES IN DRAWING ELLIOTT WAVES

RULE 1 :

WAVE 3 can never be the Shortest Impulse Wave.

In the original Elliott publication, he identified Wave 5 as the longest Wave....but as time
went by, traders now began to notice That Wave 3 is most times the longest

However it doesn't matter whether you identify Wave 3 or 5 as the longest.

The most important thing the RULE is telling you is that, Wave 3 can never be the
shortest impulse Wave. (NEVER BREAK THAT)

RULE 2

Wave 2 can never go beyond the start of Wave 1

RULE 3

Wave 4 can never cross in the same price area as Wave 1

Engrave these 3 rules where you won't forget them

U can write them down also in your Jotters too

Apart from these Rules, there are other Guidelines that also help us identify Elliott
waves before trading with it

These Guidelines are not as strict as the Rules because they can be bent and they must
not necessarily be present for us to identify our Waves...

Unlike the rules above that must be followed to the letter

GUIDELINES in drawing Elliott waves*GUIDELINES* in drawing Elliott waves

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❇ Sometimes Wave 5 does not move beyond the end of Wave 3

(This is called Truncation)

❇ Wave 3 tend to be very Long, sharp and extended

❇ Wave 2 and 4 , frequently bounce of Fibonacci RETRACEMENT

This last guideline is among my favorites and has given me more pips that I can even
remember

So let's take an example to see how to catch some moves and trade using the wonderful
Elliott waves

Let's take a look at this GBPJPY PAIR above

Assuming you didn't catch this Uptrend from the beginning

(because of course, it's not all trends, u would catch from the beginning)

Let's say u met the pair at around that Purple arrow

As an experienced trader, U already know, may be from your News that GBP is strong at
that moment and should be Bullish...

However you still don't want to enter on Fundamentals alone,

Because you have learnt in this Forex academy to always combine Fundamentals with
Technical and never use any strategy in isolation

So u initially label that first move...

Wave 1

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As u see it going down again, u shouldn't be shaky whether it's not going up again..

U should know that the Natural LAW of price action shows that price always corrects
itself

So u observe that RETRACEMENT to know whether it would be qualified as Wave2

Remember RULE 2 :

Wave 2 can never go beyond the start of Wave 1

Because Rule 2 is violated

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Now if everything is already going your way and Wave 2 seems to be obeying the Elliott
principles

The next thing is now to look for where to enter

U now remember Guideline number 3.

Which says that Wave 2 and 4 frequently bounce off Fibonacci RETRACEMENT

Remember our Fibonacci lectures last time....

So you pick out your Fibonacci tool

Place it at the Swing low, around that beginning of Wave 1....then drag it to the Swing
high around that end of Wave 1.

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It would automatically draw the Fibonacci for you

So having that Guideline 3 in mind, u can now immediately Start planning on Buying
immediately it bounced off a Fib level and signify that Wave 2 is over

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Hence because of your knowledge of Elliot waves, U know that after the end of Wave 2 ,
the next Impulse wave which is Wave 3 would commence

Now you can confidently enter the trend and ride move upwards

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The above picture is another picture of Elliot waves but in a downtrend...

Just to show you guys That Elliott waves can be used in both directions

In this case too, depending on where you catch the trend

That's how we trade with Elliot waves

There is another important thing to note

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Elliott Waves are FRACTALS

Fractals are structures that can be split into parts, each of which is a very similar copy of
the whole.

Scientists call it principle of Self similarity

Meaning that there are smaller Elliott waves within an Elliott wave

Meaning there can be many Subwaves within a wave

This comes into play when viewing multiple time frames

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So u should bear that in mind

Someone may be on Wave 1 on H4 TIME FRAME

While it's Wave 3 on another trader on M30

On same currency pair

So don't be moved when u see such,

That's why it's always good to review 2 or 3 time frames before you start trading to
know which part of the larger picture u are currently on

If possible as a Swing trader , from time to time, always pop up Daily Chart to see the
Bigger picture

So that's how you combine these different knowledge into your trading

Never compartmentalise knowledge, Never use one in Isolation.

Combine them as you make your Analysis

We would stop here for today

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I believe when you all go through the Lectures once again and as we commence trading
with them.... It would get more clearer

Let's watch these Videos to get a Clearer view of how to identify Elliott waves

https://youtu.be/SxXlJG6Yevo

https://youtu.be/ra0apDkv_Hg

Today We would be Learning How To Trade the News and we would be Using NFP as a
Prototype

We are gradually approaching NFP (ie 5th june)

We are going to be discussing in. Details about NFP and the various strategies that we
would use to Trade it

Let's start with understanding what NFP is

Non Farm Payroll is one of the Biggest News that every trader awaits on

It's a News that contains various data and statistics released by the US Bureau of Labor
and Statistics

It's very influential as an indicator of US Economy because the US Federal Reserve

makes monetary policy decisions based on this data

Hence Investors, Financial Analysts, Forex traders, Stock traders make trading decisions
with the News

It is released every 1st Friday of the Month by 8:30amEST

ie 12:30pm GMT

Ie 1:30 pm Nigerian time

NB

These times may vary by an additional 1 hour depending on Daylight Savings time

So always check forexfactory.com to confirm the exact time of the release

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The data released include

1). Non Farm Payroll increase

This is the number of new jobs added in the US labor sector in the previous month

These data includes employment in the manufacturing sector, Construction sector,

Goods sector etc

Excluding Farm workers (hence the name), Also excluding Private Household employees
and non profit organizations

It is usually compared to the previous data

For example

This one coming up on Friday, 5th of june....is the number of new jobs added in May

It also includes

2) Unemployment rate of the US

3) Which sectors of the economy, these jobs were added mostly

It gives investors and traders where are the possible sectors to invest in as the sector
that added more jobs would be most likely to have experienced growth

4). It also includes the Average hourly earnings of the workers in the US

This is also an Economic indicator because even if the number of workers didn't change.

But however their earnings increased...

It would have the same effect as if their number increased

Same also could be interpreted in reverse, if their earnings reduced

5.) Then lastly the data includes a revision of previous non farm payroll

Because investors compare these values together....

Whether there has been an improvement or reduction.

This also gives you an idea if the economy is growing or reducing

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Let's get to how to interpret the data

INTERPRETATION OF NFP

So when more jobs are added, it means that Business ventures are growing and
remember that these newly employed would be paid....

Hence more people would have money to spend on goods and services hence increasing
the growth of the economy

However

When the number of jobs added are reduced.

The reverse occurs... People won't have money to spend on goods produced and
services... hence dwindling the economy.

Also the US govt has an amount of money paid to the unemployed.

When more jobs are added, more people would be employed.

This reduces the unemployment rate, as the unemployed citizens reduce

, less money leaves the govts pocket, hence boosting the economy

Generally it's like that for all News from all other News from other countries

Same interpretation

However we are just using NFP as a Prototype

Also Generally for all News, When the Actual comes out better than Forecast or
Previous

It's Good news for that Currency

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Always Click that Folder on Forexfactory.com

For the interpretation of every News schedule that you see there

FOR THOSE STILL FINDING IT DIFFICULT TO NAVIGATE THROUGH FOREX FACTORY

U CAN READ UP USING THIS GUIDE BELOW

https://dailypriceaction.com/forex-beginners/how-to-use-the-forex-factory-calendar

Let's now get to STRATEGIES TO TRADE NFP

There are various strategies, to trade NFP....

But with time and practice, U would know which one works for U...

I would give you guys 2 strategies that I normally use...

Let's discuss the General strategies before we narrow down to specifics......

Because it's always better to have a broad knowledge so that u too can choose for
yourself.

As u may have a different approach to what works for another person...

Also I'm Training u guys to Stand on your feet when you meet other traders ....

So that u can be able to interact with them

So there are broadly 2 Strategies to trade NFP....

1) DIRECTIONAL STRATEGY

2) NON DIRECTIONAL STRATEGY

Let's start from the first one

Few days before NFP release, Analysts come up with what they call a Forecast
(Predicted value)

What infers this decision?

The value reached by majority of the Analysts is called CONSENSUS

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Let's say they may forecast that 190K jobs were added

This is not the actual value, because it's even illegal to know the actual value (in Stock
Exchange they call it, Insider Trading).

Though there are no such rules In FOREX

But even at that, U won't know the actual value till 12:30pm GMT

So when they see this forecast and notice that NFP value has increased.

That means there is every likelihood that US economy would increase in strength

They would place a Buy order on the currency that USD is the base....

And SELL the Currency pairs that USD is the Quote

Eg

If you see that the value is in favor of US (ie the number of jobs increase and the
Unemployment rate reduced)

U BUY

USD/XXX

And

SELL

XXX/USD

because when USD is the base, U would expect that the pair would rise in value.

And when USD is the quote, U would expect that the pair would reduce in value.

(ie all these, if the USD gains strength)

However when the value is Negative for USD

U sell the pair that USD is the Base And BUY those that USD is the Quote

This is because the USD is weak

Eg
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If you see that the value is against US (ie the number of jobs reduced and the
Unemployment rate increased)

U SELL

USD/XXX

AND

BUY

XXX/USD

Just reverse of what you would have done if USD was strong

So this is the principle used in Directional Trading....

U make your Analysis based on these Forecasts.

However this has disadvantages in that

Number 1

These are mainly Forecasts and may not be a true reflection of the real values

Number 2

Even if the forecasts are correct... The movements of the economy or the value of US
currency is not just dependent on one factor

It's an interplay between various factors....

Imagine if the economy has been dwindling, just one value won't change everything

So it's just one part of a bigger interplay

The next method is

NON DIRECTIONAL STRATEGY

Here u don't care which way the Currency pair goes....

U are just there to catch the Breakaway on any sides.

And bag in the pips

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This is the Strategy used by many and it has the advantage of limiting u being on the
wrong side of the move...

This is also the method I trade.....

The Non Directional way

We're just in it for the money

I would discuss two Strategies here...

That are usually High yielding

Before I move on, Let's note that only USD pairs are traded during NFP

Majorly

EURUSD

GBPUSD

USDCAD

Others are

USDJPY

USDCHF

AUDUSD etc

I normally only trade EURUSD , GBPUSD or USDCAD

The first non directional strategy , We call it

STRADDLE STRATEGY

Please for this Strategy only focus on one pair alone

For the next strategy I'm going to discuss...

U can trade more than one pair

So let's talk about the Strategy.... It's what you all have been doing before now

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Before the release of the NFP

Like 30 mins before the time

U open your Chart on M5

U scroll back and view the range that the pair u want to trade has been moving..

Most times they would appear like a Squeeze.....

Because the market is Quiet at that moment..

Waiting for the Explosion to occur �

Though it may not always be a typical squeeze, but it would be a little bit quiet.

So after observing the range of the Currency pair from the beginning of that day.....

U can also check back if the range continued to the previous day...

But if it didn't range the previous day...

Focus on the day u are currently trading in

Draw your Crosshair cursor to note the highest candle in that range

Note down the value, just like you do when you want to trade Bollinger squeeze

U can also use FRACTALS indicator to identify these Highs

So you add the Fractals to help you identify these tops and bottoms

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ALL THESE RED TINY ARROW HEAD IN THE CHART ABOVE ARE THE FRACTALS
INDICATORS

Also take your Crosshair cursor and place on the Lowest lows of the candles in that
range or squeeze that you identified....

Note the value of that lowest low too,

So after noting down all these values

U now set numerous BUYSTOP and SELLSTOP ORDERS about 5 to 10 pips above and
below these values...

Just use your intuition to choose how many u want to add , depending on the range u
saw

Just set the BUYSTOP and SELLSTOP orders just like we do in Bollinger Squeezes

In this case we now set Multiple orders depending on your account size

For your TP, make it very small

About 5 to 10 pips

However to maximize profits, we use Large lotsizes and multiple entries.

Still depending on your account size, but you may increase the Lotsize a little from what
you use for your normal trading

This is not a time, U would be going for 20 or 30 pips profit.

Infact some traders, just set their TP at 5 pips,

But may use a Lotsize of 1.0

By doing that each pip for them is $10, so that 5 pips is $50

Imagine if you have 5 positions that's $250 already.

So you increase your Lotsize according to your account size

That's why Capital is very important in Forex Business.

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Just like I said earlier, because they allow you deposit $10 , doesn't mean u should go
and kick off your trading career with that

Forex is not running away, take your time and gather capital to at least $100 or $200
before kicking off

By doing so, you can withstand retracements

Because not all trades would go your way immediately.

For TP, let me repeat.

Take small and Run �

PLEASE DON'T BE GREEDY.

10 pips is ok

The market is very Volatile....

So rather than increase TP..

Just increase your Lotsize inorder to maximize profit

That's the way to Roll in this Strategy

Another way to maximize profit apart from increasing the Lotsize is by opening Multiple
Slots

About 3 to 5 BUYSTOP and SELLSTOP orders each

Now, you need to be in front of your Computer or Hold your Phone, immediately it's 5
mins before time

This is not the type of trade, U set up and walk away

THE MARKET IS HIGHLY VOLATILE DURING THIS PERIOD

Very Volatile

So immediately one set of the orders that you set up is activated....

Quickly delete the other orders

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That's why it's good to set it away from the range to avoid being activated
prematurely....

So by staying away from the range,.... U are only activated when the market goes in the
direction of either BUY OR SELL STOP and not both

PLEASE DON'T USE WEAK INTERNET CONNECTION

PLEASE DON'T USE WEAK INTERNET CONNECTION

PLEASE DON'T USE WEAK INTERNET CONNECTION

The above point is also very important to avoid Slippage

Slippage is a Phenomenon that occurs during time of large Volatility

Imagine U set a BUYSTOP at $10 and you get activated at $20

That's Slippage

It occurred because the market rapidly moved pass your entry price

That's bad as the move might already have been made

So after deleting the orders not activated...

U can now close and smile to the Bank...

People have closed $500 to $1000 in one NFP.

With just 5 to 10 pips

It's a matter of the size of your account

The Lotsize u used and the number of orders u opened

This is the 1st Strategy under Non directional

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THESE ARE SCREENSHOTS OF ONE OF THE NFPs THAT WE TRADED IN THE PAST

THE ARROWS ARE POINTING AT HOW I GOT MY LOWS AND HIGHS INORDER TO USE
THEM IN CALCULATING THE BUYSTOP AND SELLSTOP ORDER.

This image was Screenshoted after the NFP move have occured

Next is the 2nd Strategy that I also trade

This is the less aggressive strategy

If you know that u are emotional,

Internet connection in your area is poor..

Or

U don't want to be involved in the initial rush

Then use this 2nd strategy

It's Called TRADING THE FADE

So Let's get right to the Strategy

Immediately after NFP release... There is Always a Spike. (Just as u see with other News)

Remember u can also use this Trading the Fade for other High Volatile news

This could be an Upshoot or Down shoot....

Depending on the pair and News results.

However in this strategy, U are not entering immediately or Setting Pending orders to
catch this Up or Down Spike

Here we are trading the aftermath of what happens after the spike (hence Trading the
Fade)

Now

How do we enter...?

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If you have observed NFP or other High Volatile News , U would notice that after every
Upwards or Downwards Spike of the Market, there always comes what we Call
Retracements

The Law of Price Action states that ........... The Market always always Corrects itself

So Let's take an Upward Spike to explain this strategy

For this strategy... U would be using M1 or M5 Time Frame

Let's Say the Initial move was an Upward Spike. ...

After this Upward Spike which can last for few minutes ....The market would always
correct itself, because it would actually be Overbought in the Ultrashort term...

The Upward Trend might still continue later if it wishes...but the Market must correct
itself before Moving Up again

BASIC LAW OF PRICE ACTION

Because why the Retracement is Happening is because some people's must have Taken
Profit... Ie Those that entered early or those who set Pending orders .

So after all these Liquidation of positions...

Retracement of That Upward Spike would start happening

So We would now Be Looking for A Sell Position

Not a Buy...

Because we want to Trade this Retracement

Hence the Name TRADING THE FADE

704
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HERE IS SAME USDCAD PAIR THAT WE TRADED WITH THE STRADDLE STRATEGY ABOVE
AND MADE MONEY

WE STILL TRADED THE FADE AND STILL MADE MONEY

SO U CAN TRADE BOTH STRATEGIES

AS YOU CAN SEE FROM THE IMAGE ABOVE, THAT AFTER USDCAD RALLIED

IT IMMEDIATELY DROPPED

IT RALLIED AGAIN , STILL MET RESISTANCE BEFORE DROPPING EVEN MORE AGAIN

SO IRRESPECTIVE OF WHERE YOU CAUGHT THE SWING HIGH, U COULD HAVE MADE
MONEY FROM THAT CORRECTION

THAT'S BASIC LAW OF PRICE ACTION IN PLAY

So How Do We Now Time our Entry?

We Look Out For Exhaustion Candle Stick Patterns

For The Upshoot... , We would be Looking for Shooting Star � Candlestick .

While for Downward spikes... U would be looking at For Hammers

These signify Exhaustion of the current momentum and a sign of an imminent reversal.

Now What would determine, where you would be Looking For Reversal...?

U don't just Look out for Reversal at any Random Point .....it carries more weight when
these Retracement (ie exhaustion Candles) are occurring at significant Levels

So, How do you Get this

On the Morning of NFP..

Draw your Support and Resistance Levels and Map them out with Horizontal Lines or
Write them down

Draw Like 2 or 3 Supports and 2 or 3 Resistance Levels

Use H1 or H4 to draw them

706
Or another easier Way

Pick out Your Pivot Point Calculator and Calculate S1 to S3

And R1 to R3

Then you Note these points down

These are Zones That You Would be Monitoring... When the Exhaustion Candles forms
around these zones and starts Reversing

This is when you should enter...

And Trade such reversals

(The Fade)

For Your TP Level. ....

Please Make it as Small as Possible

No need for Staying in these forms of Trades for Long .

Target as Little as Possible And Run �.

Just take 5 to 10 pips and Zoom off....

U can just increase your Lotsize from what it normally use to be so as to maximize profit
...Depending on your account size.

Rather than increasing TP, it's better to maximize profit that way.

AS YOU CAN SEE FROM THE IMAGE ABOVE....

BOTH RETRACEMENTS , THE ONE IMMEDIATELY AFTER THE SPIKE AND THE SECOND
CONFIDENT DOWNWARD RALLY WERE BOTH UP TO 10 PIPS

SO BY TAKING SMALL, WE ARE SURE THAT IT WOULD DEFINITELY HIT

THAT'S HOW YOU INCREASE YOUR EFFICIENCY WHILE TRADING

Though some Guidelines for this Strategy is saying take 20% of the Initial Spike..

Eg If the Initial Spike, Let's say is 100 pips on M5

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They are saying u should take 20% which is 20 pips and Close.

However my Modified Strategy is Telling you to take 10 pips and Run

We don't want their 20 pips

10 pips Is OK for Us...

It's Part of Risk Management

10 pips is always sure to hit..

Though the Retracement might be far more than that, like we usually see in some NFPs
and Other high Volatile News, but 10 pips is OK for us.

Remember all these should happen within the first 5mins to 30 mins of NFP (ie is when
Retracements always occur from experience)

So U still need to Observe the Ground Rules of NFP

Ie Being Focused on your Phone � or Computer �

Also Ensuring U have Strong Internet Connection.

NOW THERE ARE SOME RARE OCCASIONS WHERE AN NFP SPIKE MIGHT ACTIVATE A
PENDING ORDER AND RETRACE WITHOUT HITTING TP

SO WHAT SHOULD WE DO IN THISE SCENARIOS?

LET ME ADDRESS IT AT THIS JUNCTURE

Like I would always tell you, I'm a Strong pioneer of Growing Slowly but Surely

Cos I've been around in this Forex to find out that the greatest enemy of Forex Traders is
not that they don't have the Skills.

They do , they even have many strategies at their disposal but it's GREED that affects
most of them

So I wouldn't want any you to walk in those paths or make those mistakes. The Joy of
every Teacher is to see his/her student excel.

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So, during NFP , Let's endeavour to trade with a Lotsize commiserate with our Account
Balance. Don't over risk your Account

So as I was saying, there are rare situations when one of the orders would Activate, it
would not get to TP and now tries to reverse.

What would we do in such situations�

To prevent this occurrence...

We do what we call hedging a trade.

Let me use an initial Upward spike to explain what we usually do

Let's say after the release of the News, you see the Candles moving Upwards. Be on
alert near your Sell orders

Immediately the Buystop order activates.

Rush immediately to your Sellstop orders and Delete the TP that you set.

Delete it and leave the TP space blank. Then Click on Modify to effect your Changes

This is not the time to Delete the Opposite Sellstop orders. We only Delete the Opposite
Sellstop order when we are sure that the TP for the Buystop order has hit Successfully

WHY ARE WE DOING THIS

This is done so that, incase the Buystop activates and reverses without reaching TP.

Of course, you would know that the Buystop would now be in loss if the Market starts
going down

However as the Market tries to go down, the Sellstop would Activate and automatically
start growing in profit.

This would not automatically erase all the loss of the Buystop order, but it would
drastically reduce the loss to protect your Account from any damage.

Remember that the Sellstop can now go as far it wants because you have Deleted it's TP

The Wonderful thing about hedging our accounts is that

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When the Fade wants to start,

We would now immediately close the Sell order in profit

And Ride the Buy order back up

Even if the Buy order does not get into Profit

By riding it back up , U would have reduced its loss.

We do same for an Opposite scenario where the Sellstop order activates first

In this case, we delete the TP of Buystop order, just in case any Reversal happens

Remember, this doesnt occur always

We always pray for a One way Spike

However We learn the Strategies to use in minimising any loss that wants to occur

Because my Joy is Always Complete, when u make money and ur Accounts are safe

That’s the Goal

ANOTHER WAY TO PROTECT OUR ACCOUNTS IS TO RISK HALF OF OUR ACCOUNTS

DURING ANY NEWS

BECAUSE NEWS CAN BE VOLATILE, ITS ALWAYS GOOD TO RISK LITTLE

LETS SAY HAVE $200 IN YOUR WALLET

ON THE DAY OF NFP, DIVIDE IT INTO TWO AND MOVE $100 BACK TO YOUR WALLET
AND LEAVE JUST HALF IN THE MT4

THANK GOD THAT THE BROKER WE ARE USING ALLOWS THAT, IT HAS A SEPARATE
INTERNAL WALLET FROM THE MT4 WALLET

SOME BROKERS DONT, WITH SOME WHEN YOU ARE TRADING, YOU ARE RISKING ALL

SO BY DIVIDING OUR BALANCE INTO TWO , WE ARE FURTHER MINIMISING OUR

EXPOSURE

Remember that Trading would always continue after NFP

710
SO FOR THE STRADDLE STRATEGY

I WOULD REPEAT

ENDEAVOUR TO BE ON ALERT

AND ENDEAVOUR TO HAVE A STRONG INTERNET CONNECTION

THIS IS NOT CHILD'S PLAY

I REPEAT

THIS IS NOT A DRILL

THIS IS SERIOUS BUSINESS

Wishing Us all the Best as We Trade NFP .....

We Must Continue to Improve And Learn to Make More money.

So that's how we Trade NFP and most other Highly Volatile News and Roll in the
Profits...

So it's all about selecting any method, U are comfortable with and Trade with it

WE WOULD NOW STOP HERE FOR TODAY

We would resume with our Training once again

Today We would be Adding yet another Strategy to our Arsenal

Remember you don't have to use all because the setups don't even occur in all market
conditions

So select the ones that work for you and key into other ones that occurs once in a while

So Let's kick off

We would be starting with

Gaps Trading Strategy

Gaps are areas on a chart where the price of a financial instrument moves sharply up or
down with little or no trading in between

711
Gaps occur as a result of the release of a report that causes sharp price movements with
little to no liquidity (usually over the weekend when market is closed) .

However Gaps can occur even Intraday but it's rare.

Usually seen when the Market opens after the weekend

Others may occur Intraday but may be so minute to be seen

In the forex market, the only visible gaps that occur on a chart happen when the market
opens after the weekend.

Let's see some images of Gaps

THIS IS A GAP DOWN

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Let's me Upload Other Gap Images below

I believe with the above examples, you can decipher whether they are Gap up or Gap
down

713
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NOW WHAT IS PRINCIPLE IN TRADING GAPS

GAP TRADING IS BASED ON ONE OF THE LAWS OF PRICE ACTION

WHICH STATES THAT PRICE ALWAYS CORRECTS ITSELF

What does this mean...

It means that after every heavy move

The price would always correct itself

We used this same Principle in TRADING THE FADE NEWS STRATEGY

So in essence...

Its telling u that after every heavy move upwards ..there is always going to be a
correction move to the downward side... No matter how brief

717
In Reverse

Price tends to repeat this over and over again

We saw this In Elliott waves Trading Strategy too

HOW DO WE NOW TRADE GAPS

Trading Gaps is straight forward

Whenever a Gap occurs...

Take your Trade position in Opposite Directions of the Gap

Example

If there is a Gap Up

U would immediately SELL

Ie U should Open a SELL ORDER using Instant Market Execution

In Reverse

If there is a Gap Down

U would immediately BUY

Ie U should Open a BUY ORDER using Instant Market Execution

These Trades should be as brief as Possible

because remember it's like you want to Trade the Fade.

ie

U are Trading the Correction

So U open these Positions and set your TP at 10 pips max.

This is not the time, U start aiming for 50 to 100 pips

This is a Short Term Strategy

Another thing to note is that

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The Volatility of the Market is always low at that early parts of the Sydney session when
market is just resuming from the Weekend

This also affects the spread as it would be higher than when Liquidity is in the market.

ie when the Market has fully opened

However we still Trade because we are going few pips which would easily hit and we
would cover up.

To also minimize these effects

We Look for Gaps on USD pairs mostly

Not as if, we don't trade Gaps on Counter currency pairs

But USD pairs have Minimal spreads even during these Periods of Low Liquidity

Gaps cuts across all Time Frames

Because it's same pair

However it's more Clearer and more Obvious on Smaller Time Frames

That does not Change the price,

It just makes you see it Clearly...

U can place your order on Any Time Frame

So That's how we Trade Gaps in the Forex Market

IN SUMMARY

IF THERE IS

GAP UP..... YOU SELL

IF THERE IS

GAP DOWN....... YOU BUY

IN ALL OF THE ABOVE

ENTER WITH INSTANT EXECUTION.....

719
SET TP @ 10 pips and Go and Sleep.

Wake Up In Profit ���

It doesn't Occur Always

Just like we said in Bollinger Squeeze strategy

However when they Occur

It's Always sure to Increase your Account

I Believe we added yet another Strategy to Our Trading Arsenal

Lets move on to the next topic

RISK MANAGEMENT

Risk Management is a very important aspect of Forex Trading

Too many traders downplay the importance of risk management.

Successful traders, who understand how to trade Forex, are much more concerned
about not losing money than they are about making money

The difference between a successful trader and one who loses everything is rarely
defined simply by luck but rather by how they manage their exposure to risky trades, as
well as by knowing what kind of trader they want to be

You need to always remember that you will not always be right...you will not win every
trade. Always have that at the back of your mind.

Good trading strategies have an average win rate of 55% to 60%

i.e out of 100 trades, 55 to 60 will be wins, and 40 to 45 will be losses.

And that's enough to be so profitable in this business

So knowing that you won't always be right, you need to also acknowledge that you can't
put all your eggs in one basket.

You can't say because you feel you're gonna win a certain trade, you'll put all the money
in your trading account on it.

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If you do that, you'll eventually blow your account.

I'm sure you've all been having personal experience with this as you're practicing on
your accounts, both demo and live.

You'll analyse a setup and go for it but then it'll end up being red

Then later you'll start seeing places you made a mistake or things you overlooked.

It's because we're human and we're prone to mistakes.

So we can't let this result in us blowing our accounts

Trader's are advised to risk between 1% to 5% of their Accounts per trade

So how do you convert this percentage Risk so as to determine the Lotsize to use?

It's Calculated using the Formula

(%Risk × Account balance) ÷ (No. of pips for stop loss × pip value of standard lot)

This formula will give you the lot size to use for that trade

However there are many Apps used for Risk Calculations

One of the most popular ones is STINU

We Can Download it using the Link below

FOR ANDROID

https://play.google.com/store/apps/details?id=com.blacktowerinvestments.stinu

FOR IPHONE

Stinu by Black Tower Investments Ltd.

https://apps.apple.com/ng/app/stinu/id1415292923

Let's say that a trader has $1000 as capital

And he wants to risk 2% of his capital on a EURUSD trade

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And his Stop loss for that trade is 20 pips

OPEN THE APP AND

Go to STINU settings

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Change the position size to Lots

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Then type in the Capital

The percentage of the account one is willing to risk

And Stop loss for that trade in pips

The next step is to select the Currency pair that you want to Trade

CLICK ON THE ARROW ➡ BELOW TO TAKE YOU THERE

Then Click on Calculate after that

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It would now show you the Lotsize to use for that trade

This means that if I use 0.1 Lotsize on this account with 20 pips SL

That I'm risking just 2% of the account

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So it would take 50 of such trades successively to blow my account

And believe me if that Strategy is right

U can't loose 50 trades in a row

Unless Karma is following you

Someone would be wondering, whether you'll be profitable when risking so little

Yeah it's possible to be profitable even by risking little.

This is done with the aid of the risk to reward ratio

The risk to reward ratio is basically the ratio of the amount you're risking (your stop loss)
to your reward/profit (your take profit)

Most people go for a risk:reward ratio of 1:2 or 1:3 or 1:4 or 1:5 , some even as low as
1:1

So if for example, you are using a risk reward ratio of 1:2

This means that for example, if your stop loss for a trade is 20 pips, the take profit will
be 40 pips

Let's say you are risking 2 percent of your account

So if the price hits your SL, you are only loosing 2% of your account, while when you hit
TP you would gain 4% of the account

While using a Risk : reward ratio of 1:2

Let's now do a little Calculation to see how you would be profitable even if you loose
45% of your trades and only win 55%

So let's say a Trader risked only 1% of his account on a particular trade

So now using it in conjunction with this...

It means that those 45 losses are (45×1% of account) and the 55 wins are (55×2% of
account)

So total loss=45%

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Total win=110%

Net profit=110%-45%

=65% of account

So in a nutshell, this means that after taking 100 trades using your strategy of a 55% win
rate, and risking 1% per trade with a 1:2 risk to reward ratio, you'll have made a 65% net
profit on your account

Let's try with a lower win rate of 50%

50% is literally uncertainty. Same probability as coin toss.

Wins = 50×2 = 100%

Losses = 50×1= 50%

Net profit = 50%

So you see how we've basically just turned uncertainty to profitablity just by using a
good risk to reward

Let's go further and try even a lower win rate. 40%

This means you're even losing more trades than you're winning.

In every 100 trades, you're winning 40 and losing 60.

So

Wins = 40×2=80%

Losses= 60×1=60%

Net profit = 20%

You're still profitable even though you're losing more trades than you're winning. Isn't
that awesome?

That's the power of risk management

You can have the best forex trading system in the world, but without a solid forex risk
management plan in place, you could lose everything.

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In conclusion, If Forex trading is to be a money making business for you, you must
control your risk. You need to reduce risk through keeping track of critical ratios of risk-
loss, and understanding where your limitations are. That's what makes the most
successful traders.

Our last topic for today is the ICHIMOKU INDICATOR

I promised I was going to talk about this indicator

Whenever we've understood the concept of Support and Resistance

It's one of my favorite Indicators

And Very Very POWERFUL

It looks scattered but when you understand how to use it,

U would always be bagging in pips

Let's all add it to our Charts

ICHIMOKU INDICATOR

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Here is the Indicator

All other Indicators on the Main Chart have been removed

So apart from the Candlesticks, everything you are seeing there is the Ichimoku
Indicator.

Let's remove all other indicators on our Main indicator window so as to see it clearly.

Don't be scared of the Indicator....

I would take time to explain it properly

Just follow me closely

Ichimoku is a Japanese word

The full name of the indicator is called ICHIMOKU KINKO HYO

Which means A glance at a chart in equilibrium

However to avoid biting our tongues we usually keep it simple in Forex and call it
Ichimoku

It consists of the following components

U can note them down

KIJUN SEN (BLUE LINE )

TENKAN SEN (RED LINE)

SENKOU SPAN (ORANGE LINES)

U may just know them by the color of their lines instead of their Japanese for your
personal trading

However, U need to know these Japanese terms because very soon , U all would start
Live Trading. ..and u would start meeting people online; Listening to news by some
Analysts; Joining forex forums and when you discuss with these people, everyone uses
technical terms

No one calls it green line or red line etc

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I won't bore U all with how each of this lines are calculated because your MT4 has done
all that..

Let's get to what they signify and how to use them to Trade

Let's start with the Senkouspan (ie The Orange line)

If you notice from your chart u would discover that there are 2 orange lines there

Though it can sometimes change to purple

But when we refer to orange lines... We are referring to both

They are sometimes referred to as the Clouds of ICHIMOKU

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Sometimes they can switch to purple too

It's still same Senkouspan

They serve as Support and Resistance lines (Very Strong ones )

When the price is above the Senkou span; they serve as Support lines

The 1st Senkou span line would now be S1

While

The 2nd Senkouspan line would now be S2

In reverse

When the prices (ie candles) are below the Senkou span, they serve as Resistance lines

The first 1st one just immediately above the price serves as R1

While the

2nd line serves as R2

Let's get to the next line which is the Tenkan Sen

The Tenkansen (ie the Redline) is an Indicator of the Market trend

If it's moving up or down , it indicates that the market is trending either upwards or
downwards respectively

If it moves horizontally , it signifies that the market is ranging (ie there is no clear
trend)

It can also be used in combination with the Kijousen (ie the blue line)..to catch new
trends..

Just like the way u use your Moving average to catch new trends

When there is a cross between the red line and blue line; then a new trend is likely to
begin

Example

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When the Redline crosses the blue line from below upwards, then most likely the
market would start moving upwards

Just exactly like u trade using the cross between your MA 7 and MA14

The red line serves as MA 7 (fast one)

While the blue line serves as MA 14 ( slower one)

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The next line is

KIJUN SEN (BLUE LINE)

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This serves as an indicator of future price movements

If the price is higher than it ; then the price could continue to go up

In Reverse

When the price is below it; then it could continue to go down

Also apart from an indicator of future price movements; it's cross with the Tenkan Sen
helps us catch new trends; just like I explained above

Using both like u use your Moving averages

The last line on that Bulky looking but Powerful indicator is the

CHIKOU SPAN

(GREEN LINE)

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This is sometime called

THE SIGNAL LINE

When it crosses the candle the Candles from the down to Up...

That's a Buysignal

In Reverse

When it crosses the Candles from Up to down

That's a Sell Signal

Ichimoku don't always start working immediately but in few hours from the cross it
would definitely behave just like the signal u saw

It's one indicator that is almost accurate in 90% of scenarios

It's not only used by Longterm traders ...Swing traders use it too

Not that it cant be used in smaller time frames but more significant in these longer ones

From H1 upwards

It's an all in one indicator because it gauges future price movements for You. .

Helps u catch new trends

Shows u support and resistance points

Gives you a Buy or Sell signal using the Chikouspan

Isn't that awesome

It's a very powerful indicator if you know how to use it

With consistency and practice, U all would come to understand it well

Just scroll back through your charts today .

Select H4 and H1

Check all the places where the Chikou span gives either a Buy or Sell signal and see what
happened to the chart few hours later
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Another subtle thing to note about the ICHIMOKU is that those other lines also could
serve as Support or resistance lines (not just the orange lines)

The blue ; red and green lines too

Let's say that the price is above the Red line; Blue line and the 2 orange lines

The 1st line immediately close to the candles (let's say it's red line )

Serves as S1

The next line after that (let's say it's blue)

Serves as S2

While the 2 orange lines now becomes S3 and S4

The only difference is that the orange lines would be more stronger supports than the
above 2

Now the resistance in this case would be the highest point touched by the Green line in
that time period

In Reverse

Assuming the candles are below the other 3 lines

The 1st line just above the candle is the 1st resistance

Ie R1

The 2nd line after that still above would be R2

While the 2 orange lines would now be R3 and R4

However just like I explained above. ..The orange lines that formed the R3 and R4 would
be the strongest of all 4 reisistance

Remember

Just like in your normal Reisistance. .

The higher u go the stronger the reisistance

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Also in reverse

The lower u go ..

The stronger the support

Then in this case where the other 3 lines forms the Reistance since they are above the
price...

The place that would now be our Support is now the lowest point touched by the Green
line (Signal line)

When you take your time to study these indicator ; u would come to understand it

So everyone should take tonight and tmrw and use this Lectures we had today.

Slowly scroll through these chats line by line and use it to study the Ichimoku

We would stop here for today

We would be resuming our Lectures for today

Hope you all had a wonderful day...

And everyone has been actively practicing all through the week

Today we would be looking at a very Powerful Concept

SUPPLY AND DEMAND

Supply and Demand is a from Technical Analysis based purely on price Action

There is a school of thought that believes that the forces that drives any Market are the
Supply and Demand of commodities in that Market

Let's get back to our "O" Level Economics a little bit

In our basic Economics Class, we were taught that supply and demand is an economic
model of price determination in any market.

It postulates that, holding all else equal, in a competitive market, the unit price for a
particular good, or other traded item such as labor or liquid financial assets, will vary

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until it settles at a point where the quantity demanded (at the current price) will equal
the quantity supplied (at the current price), resulting in an economic equilibrium for
price and quantity transacted

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This simply means that, if demand increases and supply remains unchanged, a shortage
occurs leading to a higher equilibrium price

While, if demand reduces, a surplus occurs leading to a lower equilibrium price

On the other hand

If Supply increases and demand remains unchanged, a surplus occurs leading to a lower
equilibrium

While

If supply decreases , a shortage would occur leading to a higher equilibrium price

HOW IS THIS RELATED TO FOREX

In Forex, Demand can be referred to as Willing Buyers while Supply is referred to as

Willing Sellers

Or even more directly

A demand zone is referred to as a zone with a large pile of BUY ORDERS

According to this school of thought

Market is said to move where there is an imbalance between Demand and Supply

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The Market is said to move Upwards, when Demand Greatly exceeds supply

On the other hand,

The Market is said to move downwards when Supply Greatly exceeds Demand

Sam Seiden is said to be among the Pioneers of Supply and Demand Trading Strategies

U all can find time to read some of his works as you progress in Forex

HOW TO IDENTIFY SUPPLY AND DEMAND ZONES

The general idea is to locate points on the chart where price has made a strong advance
or decline

A demand zone is typically formed after a strong rally Upwards.

In reverse, a supply zone is effectively created following a noticeable move to the

downside

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There are four key areas of interest on the charts to look for

1) The rally base rally, or RBR

2) The drop base rally, or DBR

3) The drop base drop, or DBD

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4) The rally base drop, or RBD

The first two (ie RBR and DBR) forms the Demand zone

While the last 2 (ie DBD and RBD) forms a Supply zone

Let's look at some images to see what they mean and see which ones forms in an
Uptrend or Downtrend

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A ‘RBR’ demand zone primarily forms within an uptrend.

From the images above, notice that price begins with an advance, and then moves into a
consolidation phase (the base), which is then followed up with a continuation move to
the upside.

These barriers are effective at bouncing price, especially on the first time back.

A ‘DBD’ supply zone is essentially the same formation as a ‘RBR’ area, but formed within
a down trending environment.

Referring to the images above, we can see that price begins with a decline in value, and
then enters into a consolidation phase, which eventually follows through with a
continuation move to the downside.

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The area formed is typically a stable zone in which one can look to short (sell) from

A ‘DBR’ demand is a zone which normally denotes a market bottom.

As we can see from the images above, price was initially trending downwards until the
piece began to bottom out (or base) and then reverse to the upside.

The zone is usually an effective area to hunt for long positions (buys).

A ‘RBD’ supply is basically constructed in the same manner as the ‘DBR’ formation.

The only difference is that instead of a market bottom, this pattern forms a market top
and is used to hunt for selling opportunities

HOW TO IDENTIFY AND PLOT THESE ZONES

There are different Methods of identifying these Zones

1)

The first method is identifying where there is an Obvious Change in the direction of the
Trend

So here is where we would draw our zone

We look for the Reversal Candle that formed the turning point and draw our Rectangle
using our Rectangle tool to cover the top and bottom of that candle

Some school of thought would draw it from lowest point of the wick to the close of the
Candle (in an Upward Reversal)

Or

From the higher Point of the wick to the close of the candle below (in a Downward
Reversal)

If the area covered by the Candle on the Time Frame you are drawing it is too Large

U can come down to the next Time Frame below inorder to pinpoint the exact Candle
that heralded the Reversal

This reduces the size of the zone.....

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This concept is important while Calculating your risk and setting your SL

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Here is where you see your Rectangle tool on MT4

Just tap on it and place it where your demand or Supply zone would be and expand it to
cover the Candle of interest

Let's see some images of this method of identifying Supply and Demand

As you can see from this image above, the Market was initially in an Uptrend before the
Shooting star appeared and the Market turned Downwards almost immediately
indicating that Supply outweighed Demand at that point

Note : The Colour of the Body of the Pivot Candle does not matter

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Here the market was initially in a Downward Trend , then a Tweezer bottom formed and
the market swiftly reversed from there Upwards

Showing us that the Volume of Demand (willing Buyers) exceeds Supply at that point

Let's get to the next way of identifying a Supply and Demand Zone

2)

The second method of identifying a Supply and Demand zone is to look for an area of
consolidation (ie an area where price has been Trading sideways in a tight range) for
several bars and then suddenly shoots away from that range

Let's some see some images illustrating this

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As you can see from the image above (pointed by the red arrow) , the Market
consolidated a little bit for a couple of bars before Shooting up out of the Range

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When price returned to that same zone several days after , it provided a Long
Opportunity for Buyers as we can see it rally out of that zone

We would talk more about this when we get to how to trade with Demand and Supply

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Also in this second image we see the Market move sideways for about 4 bars before
that Sudden drop

This is showing us that there are Pile of Sell orders concentrated within that zone

Meaning that Supply outweighed Demand in that Zone

Hence making that a Supply zone where we would look out for Selling Opportunities in
the future

Notice that as price rose back to that Zone few days later, it created a Selling
Opportunity as price dropped back down

3)

The third method of identifying Demand and Supply zones is to look for areas of
indecision roughly halfway through a strong downtrend for a Supply zone and or roughly
halfway through an Uptrend for a demand zone

These areas of indecision are best spoted by identifying Doji candles or other indecision
candles occuring inbetween Strong rallies

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4) The Last method of looking of identifying Demand and Supply zones is by looking for
Gaps.

This is because Gaps is said to occur when there is an imbalance between Demand and
Supply

If there is a Gap down

The place where the price Gapped down from would automatically create a Supply zone

In Reverse

If there is a Gap up

The place where the price Gapped up from would automatically create a Demand zone

Hence price is more likely to reverse when they Revisit those zones

That's why when Trading Gaps in the Gap Trading Strategy that we did earlier on

Just take few pips as TP. Don't Trade the Gap hoping that the Gap would be covered
because they might not be covered. So take the Retracement of few pips and zoom off

DIFFERENCE BETWEEN SUPPLY & DEMAND AND SUPPORT & RESISTANCE

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Many New Trader's often ask what's the difference between Support and Resistance
and Supply and Demand?

Support and resistance levels and Supply and Demand levels are 2 different trading
concepts that are very similar

Supply & Demand are related to market orders while Support & Resistance are chart
patterns. This doesn't mean we can't try to put Supply & Demand on the chart.

In essence Support & Resistance is born from Supply & Demand.

A Support and Resistance line requires at least two points seperated by time to be
drawn

Whereas

A Supply and Demand Zone can be plotted from one candle

In the Concept of Support and Resistance, the more price bounces off a level, the
Stronger the level
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While

In Demand and Supply , the more price tests a Level, the weaker the Level

Remember that Supply and Demand are caused by an imbalance btw Sellers and Buyers

Let's take a Supply Zone with excess number of Sell order's. Anytime price visit's that
zone, it mops up some of the Sell order, so a time would come when there won't be any
more sell order's left and hence price would break the zone

So in essence

Support and resistance often works on historical levels

while Supply and Demand works on fresh levels. (We would talk more about this soon)

SIMILARITIES BETWEEN THEM

Supply and Demand Zones are similar to Support and Resistance lines in that Supply
zones provide resistance and Demand Zones provide Support

Next

When price breaks through a Supply zone , it becomes a Demand zone and when price
breaks through a Demand zone, it becomes a Supply zone

The same way a resistance line turns into a Support when broken and a Support line
turns into s Resistance

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Compare the above scenarios to these scenarios below that occurred using Support and
Resistance Strategy

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So a summary of their comparison is this

Support/resistance are simply the result of supply or demand. There is support at a

particular price level simply because of the demand for the commodity at that price
level. On the other hand there is resistance at a particular price level due to the
available supply at that price level.

DETERMINING THE STRENGTH OF A SUPPLY AND DEMAND ZONE

The Concept of Demand and Supply proposes that Changes in direction of a Trend
occurs whenever there is an imbalance between Supply and Demand

In this concept, every time price moves into a Supply or Demand zone. The excess
Sellers or Buyers (ie Buy and Sell order's) are being used up until they eventually get
exhausted and price breaks through the zone

So we need to estimate the Strength of a zone so that we would know the likelihood of
the imbalance being there, next time we return to the zone

The first method of determining the strength of a Zone is to look for areas where price
has moved away swiftly.

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This is even better confirmed, if price moved into that particular zone quickly before
leaving

In the image above, notice how price entered and left that zone pointed by the red
arrow almost swiftly

Telling us that there is a high level of demand (ie a large number of buy orders) in that
zone

So it should be a zone to keep an eye on once price goes up and returns to it again

Another way of determining a Strong Demand and Supply Zone is to check, how "Fresh"
is the zone

By Fresh, we mean the number of times the zone has been tested in the past

Trading the first time price returns to a zone is in the opinion of many Analysts, the
highest probability trading point.

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As you can see in the image above

After the Supply zone was initially created by the initial Downward Trend, price came
back and tested it first time

This first test is a Strong zone , so we can Sell at that point

However when price came back to test it for the second time, it broke it because the
zone was no longer strong because the number of Sellers at the zone must have been
exhausted, so buyers took over and turned the broken Supply zone to a demand zone

Some Trader's can backtest at least 5 years on their Charts to ensure that the zone is a
fresh one

Another way of knowing if a Zone is Fresh is if price recently passed through that zone

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As you can see in this image above

If you Scroll to the left, you would observe that price recently traded through the area

So the current demand zone forming now is a fresh one

Also

If the Zone was created by price moving sideways in a tight range followed by a
Breakout, then 3 to 6 Candles within that Range on Daily Chart is acceptable.

The bottom line is , the shorter time price spends in a zone before leaving the better.

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As you can see from this image above , Price Ranged for about 4 Candles in that Tight
box before shooting down

So this is an acceptable number.

U wouldn't want to draw a zone where price spent so much time before breaking out

The Strength of a Demand and Supply zone can also be estimated by observing strong
obvious moves that have taken out prior highs and lows in the Market.

This shows that the Demand or Supply zone where that move originated from, would be
a strong one

NOTE:

Higher Time Frames are more reliable when drawing your Supply and Demand Zones.

That's D1, W1, and Monthly Charts. Some Traders also consider H4

HOW TO TRADE USING DEMAND AND SUPPLY ZONES

Supply and Demand Zones represents where Large Institutional orders are placed in the
Market

Hence, it's always good to key into the Direction of the majority

Supply Zones represents where Large Sell orders are placed , meaning that Sellers
outweigh the Buyers at this zone

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Hence we would be looking to sell from a Supply Zone

While

Demand Zones represents where Large Buy orders are placed, meaning that Buyers
exceeds the Sellers at this zone

Hence we would be looking to buy from a Demand Zone

We usually employ the technique of the Bounce

I hope we all remember the Bounce Trading Strategies during our Support and
Resistance Lectures

So we would be looking to Buy when price Bounces off a Demand Zone

And Looking to Sell when price Bounces off a Supply Zone

However we Buy or Sell when price comes back into the Zone

Why is this so?

This is because , as of the first time when price was at the Zone

U wouldn't know whether it's a Zone

However depending on how it leaves and how long it stayed , you can now comfortably
say that this is truly a zone, then you can Draw your Rectangle around it

(We talked about this earlier on)

Let's see some Examples

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Let's look at the Market above, Market was initially in a Downtrend, it reached a Low at
around 125.00 and quickly reversed Upwards immediately as shown by the spot pointed
at by the red arrow

After that sharp Reversal in Trend, we would draw that as a Demand Zone because we
knew that what caused the sharp reversal was a Large pile of Buy orders (Demand
exceeded Supply)

So we would be looking out for a Nice entry point to go Long on this pair (ie a Buy
scenario on this pair)

However we are not entering at that initial spot pointed at by the red arrow because
price would have gone far before we spot the Zone

What you have to do as a Trader is to Map out the Zone

Then, once price returns back to that Zone which it would, U can now key in for a Buy

This is because , there is likely to be more Buy orders Left at that zone which was not
filled up (executed) when price first visited the zone

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That's why we are always looking for Fresh Zones as they have more tendency to hold as
Demand or Supply Zones

Still on same pair

As you would observe, after several bars, price made a return to the same area around
125.00

Providing us with an Opportunity to Buy the pair

So we would make our entry immediately after that Bullish Pin bar (Hammer) occured
and set our SL few pips below the Demand Zone

This is what we call "Sniper Entry"

This is because it's Low risk, High reward

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This is the Example of such entry on a Live Chart.

As you can see I've moved my SL forward locking in Locking in some Profit incase of any
Reversal.

However we are riding the Trend up to the Supply Zone above

So when you buy at a Demand Zone , U can Take your time Profit at the closest Supply
Zone above or a previous broken demand Zone above your entry point

In the image above, we saw how price dropped dramatically from the point pointed at
by the red arrow , automatically creating a Supply Zone right there

That Swift drop is giving us an idea of how Strong, the Zone would be

So as Traders, we would now Map it out and Monitor

As you continue monitoring

U would see that price later returned to the same Zone as you can see from the point
pointed at by the purple arrow.

This is now a perfect opportunity to Short this pair after the Tweezer Top Formed

Then set out SL few pips above the Supply Zone giving us a Low risk and High reward
Opportunity

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TP 1 should be around the place labelled 1, where an old demand was broken

TP 2 should be around second demand zone that heralded the last Upward move

While TP 3 should be at the swing Low as you can see in the image above

NOTE

When we say TP 1 , 2 and 3.

It's not as if there is a special place in your MT4 where you would insert the 3 TPs

The Analyst is simply telling you that when you get to TP 1, u can either Close as an
Intraday Trader or you start Locking in Profit as a Swing Trader even as you Ride it to the
other TPs

SOME TRADERS ALSO TAKE PARTIAL PROFIT WHEN THEY GET TO TP1

MOVE THEIR STOP LOSS TO BREAK EVEN (ie TO THEIR ENTRY POINT ON THAT TRADE)

THEN ALLOW THE REST OF THE TRADE TO RUN TO TP 2 or 3 , RISK FREE

BECAUSE SL IS AT BREAK EVEN

Demand and Supply Zones can also be used to Ride the Trend just like we use Fibonacci

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RIDING THE TREND USING SUPPLY AND DEMAND ZONES

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This is based on the principle of Rally - Base - Rally for an Uptrend

&

Drop - Base Drop for a Downtrend

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This involves buying at dips when a pair is an Uptrend and Selling at brief rallies when
the price is in a Downtrend

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In essence, you are waiting for Retracements that would occur during a Trend so that
you can key in on the trend

Here are Other Setups where Supply and Demand Occured so that we can all go through
and Study them

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IMPORTANT POINTS TO NOTE DOWN

1) Do not Buy into a Supply Zone.

In other words, if there is a Supply zone directly above your entry, you must either wait
until price breaks through the zone or do not take the trade

2) Do not Sell into a Demand Zone

In other words, if you wanted to Sell a pair and there is a Demand zone directly below
your entry, you must either wait until price breaks through the zone or do not take the
trade

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So as a Price Action Trader, Adding the Knowledge of Supply and Demand to your
Trading Strategies Greatly improves your profitable trades

WE WOULD STOP HERE FOR TODAY.

I would drop some Videos for us to watch so as to get a Clearer view of Supply and
Demand

https://youtu.be/_IgcIza20_4

https://youtu.be/sxYcGsAUkIE

While our Assignment this Weekend is to read this Book on Supply and Demand by
Kelvin Baker

As you all Advance in Forex , I would drop more for Additional Knowledge

Remember that Forex is a Journey. U need to broaden your knowledge inorder to

always be ahead of the Market

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 We would be looking at Market Structure &

Chart Patterns

If you look at our Outline...

U would notice that this is the last topic there

LETS START FROM

MARKET STRUCTURE

The Forex Market in general doesn't move linearly

Price never makes a one way movement

The movement of price is always undulating, going up and coming down as can be
observed from all time frames

These price movements can be said to be comprised of 4 Key points

HH ➡ Higher high

HL ➡ Higher low

LL ➡ Lower low

LH ➡ Lower high

The movement of the Forex Market can be summarised into 3

❇Uptrend

❇Downtrend

❇Consolidation

The market is always in one these states at any time “t”

An Uptrend occurs when a Market is seen to be making HIGHER HIGHS & HIGHER LOWS

While

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A Downtrend occurs when the Market is making a series of LOWER HIGHS & LOWER
LOWS

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So if the Market is in an Uptrend, as you saw the Market making Higher highs and Lower
lows

U should be looking to Buy

In Reverse

When the Market is in a Downtrend, as you saw the Market making Lower Highs and
Lower Lows

U should be looking to Sell

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However remember that you are not just buying or selling immediately

U wait for pull backs so as to key in at a better price

Fibonacci tool is good in this regard

As a Rule of Thumb

NEVER BUY IN A SELLERS MARKET AND

NEVER SELL IN A BUYERS MARKET

Unless there is a break of Structure

What is BREAK OF STRUCTURE

Break of Structure is what alerts you as a Trader that a Change of Trend might be
imminent so as to act accordingly

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Structure is said to have been broken when either of the following occurs

In a Downward Trend, Structure is said to have been broken if Market makes a move
and attains a Higher High which is moves past the last High

And subsequently creates a Higher Low , Higher than the previous Low

As you can see from the image below

This single move marked by the black line above heralds the possible

Beginning of an Uptrend

This is because, the move broke the Previous high of the Downward Trend

More examples of a Break in Structure in a Downward Trend

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In reverse

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In an Upward Trend, Structure is said to have been broken if Market makes a move and
attains a Lower High which moves lower than the last High

And subsequently creates a Lower Low , lower than the previous Low

As you can see from the image below

This single move marked by the black line above heralds the possible

Beginning of a Downtrend

This is because, the move broke the Previous Low of the Upward Trend

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More examples of a Break in Structure in an Upward Trend

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So in essence, a Downward Trend Structure is broken when price breaks the most
recent High and forms a New High

As can be seen the image above

While

An Upward Trend Structure is broken when price breaks the most recent Low and forms
a New Low

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Let's take time to Study that Green line labeled Beginning of Uptrend

And the Purple line labeled Start of Downtrend so as to have a clearer view of what we
are saying

It's important to note that not all Break in Structure would eventually lead to full blown
Trend Reversals

However, it's of utmost importance to help you spot where the buyers/sellers are
gaining strength so as to either hold on to an order you initially wanted to place or
change your bias for that pair

Though most of them could lead to an eventual trend change

This is one of the Benefits of understanding Market Structure

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Finally, mapping out your charts and basing trading ideas off of market structure is an
incredibly organized approach to trading the markets

LET’S MOVE ON TO

Chart Patterns

If you look at our Outline...

U would notice that this is the last topic there

Chart patterns are wonderful Trading Strategy that when you learn them, U can always
make pips out of them whenever you spot them

They are patterns formed by our Charts whether Candlestick, Bar or Line Charts

Chart patterns can be classified into 2

I) REVERSAL PATTERNS

2) CONTINUATION PATTERNS

REVERSAL PATTERNS INCLUDE

HEAD AND SHOULDER

DOUBLE TOP

ASCENDING AND DESCENDING WEDGES

While

CONTINUATION PATTERNS INCLUDE

CHANNELS/ RECTANGLES

FLAGS AND PENNANTS

TRIANGLES

Let's start with the Reversal Patterns

1) HEAD AND SHOULDERS

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This is a reversal Chart pattern that is formed when price fails to break a certain price
zone

It can be for a bullish market or bearish

For bearish market, we call it Reverse Head and Shoulder

Let's see some images

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Here price makes a move in a certain direction

Let's take the Bullish market as an example

The price rallies up and meets a Resistance...

Then it falls...

Forming the first peak

Then it rallies up again, bypasses the first peak and still meets another Resistance
(remember that resistance gets stronger even as u goes up)

On meeting this 2nd higher Resistance, It couldn't surpass it and it falls down again

Forming the 2nd peak as it does so

After the fall, it rallies up for the 3rd time, in this case, the momentum is not much and
hence it couldn't reach the Peak make by the 2nd move upwards...

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Then it again falls again

Forming the 3rd peak as it does so

The 1st and 3rd are the shoulders while the 2nd peak is labeled the head

When you see a pattern like that, then you should be on alert as a reversal is around
the corner

To enter this Trade, U do so when the Neckline is broken

So once the price comes down for the 3rd time and breaks that Neckline

U enter your Sell order

We are selling here because you because that the price is about to go down as it
couldn't break that Resistance up there

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You Place your TP at least an equivalent amount of pips made from the Head to the
Neckline

Though ,I usually Teach my students to Divide that into two and take half of it

I believe is small TPs that would hit than larger ones that end up not reaching our TP

Example if from the head to the Neckline is 80 pips...

Take 40 pips as your TP

For your stop-loss....

Place it just above the High of the Head

Or halfway in-between the Head and the Neckline depending on your account size

The Next Reversal Pattern is

DOUBLE TOP AND BOTTOMS

This reversal pattern can also be formed either in an Uptrend or Downtrend

For Uptrends it's called Double tops while for Downtrends it's called Double Bottoms

Here are some images

Let's now use a Bearish market in this case as an example

First of all

Double Top or bottom forms when Price rises or fall to meet a strong Resistance or
Support resistance respectively

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For a bearish market

When price falls and meets a Strong support that it couldn't break or pass through it..

It then rises up forming the 1st Low

It then goes down again and hits the Support again and then rises up for the second
time

On doing that it forms the 2nd Low

This now forms the Double Bottom pattern

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For a bullish pattern, it would form two peaks when it meets the Resistance that it
couldn't pass through

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When you see such patterns form on Chart then a reversal is imminent

How do you now trade this pattern?

U use almost the same method as the Head and Shoulder pattern

So for our bearish market

When price rises up for the 2nd time and breaks the Neckline...

Then you enter for a Buy

U place your TP at about half of the pip value between the bottom and the Neckline

And place your stop-loss just below the double bottom

The next reversal pattern is

ASCENDING AND DESCENDING WEDGES

These are also Reversal Patterns

They occur when price is being compressed into a narrow range

A wedge is an object with a thick end and tappers into a thiner end, use to secure or
separate 2 objects

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Just picture the Wedge, u use in a car

U place a wedge to prevent the car from rolling

Let's see some pictures

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For wedge patterns...

If you see a rising wedge, then the price would fall

In reverse

When you see a Falling wedge, then you should know that the price would rise.

That's why it's a Reversal pattern

So as u see the price narrowing into a range

U don't enter immediately,

U wait for the breakout

So immediately 2 candles break out of the wedge in your analysed direction, u can now
open up a trade

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The Next sets of Chart Patterns are Continuation Patterns

They include

CHANNELS/ RECTANGLES

FLAGS AND PENNANTS

TRIANGLES

Let's start with Channels / Rectangles

These are continuation Chart patterns

Though in some situations, the price could reverse

That's why it's always good to wait for the breakout before entering

This pattern occurs after a prolonged trend....

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Example after a prolonged uptrend or downtrend

After a prolonged uptrend...

The pair would stall and consolidate to catch it's breath

During that period it's stalling, it would behave as if it's within a box

Just like what happens in Bollinger squeeze

Let's see some images

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U would notice something like this in your charts

This shows that price has been moving upwards and backwards between a narrow
Support and Resistance.

So just like we did in Wedges, u wait for the breakout usually as a continuation of the
overall trend... Then u open up a trade position

The next Chart pattern is

Flags and Pennants

This resembles a Flag and the pole of a � flag

It could also signify continuation of an ongoing trend that has stalled a little to
consolidate

The Flag forms because price range is narrowing into a point and is preparing for a
breakout

They almost resemble Rectangles and Channel patterns

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Just that they have a more tappered end than a rectangle

However both signify continuation of the overall trend

Let's see some pictures

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The initial part of the trend represents the Flag � pole while the part where the price is
consolidating is the Flag itself

When such patterns occurs, then it's signifying that the price is just gathering
momentum to continue in its overall trend

So u either place a Stop order at the tapering edge of the flag or wait for it to breakout

The last Chart pattern we mentioned is

TRIANGLES

3 forms of Triangle can be formed on Forex Charts

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Symmetrical

Ascending

Or

Descending

In symmetrical Triangle

Price is converging into a narrow range

Because price is making Lower highs and higher lows

We would see pictures soon

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Here price can break out on both sides

Whether upwards or downwards

In Ascending Triangle

There is a fixed Resistance point that price can't get above

While the lower part is making some higher slopes and ascending as it goes into a
tapering end

Here price below is making Higher lows

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Most times this pressure becomes so much that this Resistance point gets broken and
points move up

Since its ascending triangle and a continuation pattern

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However I always advice that you should wait for the breakout to the upward side to
occur before opening your order

The last form of Triangle is the Descending Triangle

Here there is a Fixed Support level that price is struggling to break while the price is
consistently making Lower highs trying to break and that support

Hence forming what would now look like a descending slope hence the name
descending Triangle

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It usually signifies Continuation...

However it's always good to wait for the price to breakout which it would do sooner or
later before opening up trade positions

So these are the various forms of Triangle Chart patterns that can occur

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I also included the summary of some of the other patterns that we saw earlier

These Chart Patterns occur always, it all depends on your power of observation to spot
them, analyse them and trade with them

As advanced Forex traders, u all would no longer be looking at your Charts as just mere
lines but rather a Gold mine with hidden information

So look closely, spot these patterns and Utilise them

In terms of trading with them, Always wait for the breakout before entering...

U can use your Call level App to put price alarms if need be

WE WOULD BE DRAWING THE TRAINING TO A CLOSE AT THIS JUNCTURE...

THOUGH WE WOULD STILL BE RECEIVING UPDATES AS WE GO ON

SO BECAUSE THE LECTURES HAS ENDED DOESNT MEAN THAT THE TRAINING HAS ENDED

THE LEARNING IS A CONTINOUS PROCESS AS WE WOULD STILL BE BREAKING DOWN

ANALYSIS AND PRACTICE WHAT WE HAVE LEARNT SO FAR EVEN AS WE PROCEED

THIS IS ALSO NOT A TIME FOR YOU TO GO AND RELAX

ITS A TIME FOR YOU TO REVISE WHERE YOU ARE LAGGING BEHIND AND CATCH UP ON
GREY AREAS

SO ITS A LONG TERM PROCESS, NOT JUST A FEW DAYS TRAINING LIKE I SAID EARLIER
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Those that haven't gone LIVE

use the coming weeks to Finalise opening and Verification of your accounts so that we
can make this money together � �

Remember that it’s at everyone’s pace, different traders operate differently

I BELIEVE IT HAS BEEN AN AWESOME TIME TOGETHER

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