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 CONTENU
Section 1: Une introduction au marché Forex

C1: Qu'est-ce que le Forex Trading?

C2: Histoire du Forex

C3: Comment fonctionne le Forex

C4: Principaux acteurs du Forex

C5: Terminologies Forex

C6: Séances de trading Forex

C7: Trading démo vs trading en direct

C8: Types d'analyses de marché

Section 2: Guide du débutant pour l'analyse technique

- Introduction à l'analyse technique

C1: Bases des tendances

C2: Ligne, barres et chandeliers

C3: Niveaux clés

C4: Lignes de tendance

C5: Ratios de Fibonacci

C6: Points de pivot

C7: Moyennes mobiles

C8: Elliot Wave Theory

C9: Modèles de graphique

C10: Indicateurs techniques

 Section 3: Guide du débutant pour l'analyse fondamentale

Il est extrêmement difficile pour le commerçant de détail de s'appuyer uniquement sur cette méthode pour générer des

transactions à forte probabilité. En effet, au niveau de la vente au détail, la plupart des commerçants sont des commerçants swing et

day, cela signifie qu'ils ne conserveront pas de positions sur les marchés pendant longtemps, il est également extrêmement difficile

d'obtenir rapidement des données au niveau du commerce de détail. Les institutions sont très appréciées en matière de diffusion des

données. Nous n'avons donc pas passé en revue de nombreux concepts sous ce thème; c'est le travail du commerçant d'approfondir

ce sujet afin de comprendre les communiqués de données et la géopolitique qui sont les principaux moteurs

des fondamentaux.

Section 4: Guide du débutant en psychologie du trading Forex

- introduction

C1: Nature aléatoire des marchés

C2: Cohérence dans un marché aléatoire

C3: Émotions et leurs effets

C4: Surradiation

C5: Biais commerciaux courants

C6: Leçons des commerçants légendaires

 Section 5: Guide du débutant pour la gestion des risques et de l'argent

- Introduction à la gestion des risques

C1: Volatilité

C2: Probabilité et risque / rapport de récompense

C3: Spreads et risque de marge

C4: Placement Stoploss

C5: Dimensionnement de la position

Section 6: Guide du journaliste pour les débutants

La journalisation a été désignée comme l'une des six habitudes qui ont mené au succès de nombreuses

personnes et organisations prospères. L'acte de journalisation est fortement recommandé sur les marchés

financiers, ce qui permet au trader d'apprendre ses erreurs lors d'une revue de journal. Le trader est également

en mesure de garder un œil sur la progression de ses performances. Ignorer cet acte et emprunter l'autre voie

est

quelque chose que vous regretterez profondément après avoir séjourné longtemps sur les marchés. Apprendre à

échanger est un exercice qui nécessitera l'utilisation de la boucle de rétroaction qui sera facilitée par l'utilisation du

journal. Nous n'avons cependant pas partagé la façon dont nous journalisons notre travail, c'est parce que nous

pensons que c'est un acte qui doit être fait personnellement. Les commerçants sont donc censés être créatifs et

trouver

idées novatrices et créatives de journalisation.

 INTRODUCTION
AVEZ-VOUS ENTENDU DU COMMERCE DE FOREX? Je parie que oui, le fait que vous ayez rencontré ce livre signifie

que vous avez un intérêt à apprendre et à comprendre comment gagner sa vie en négociant sur le marché des changes.

Au cours des 3 dernières années, nous

(Équipe Financial Hub) ont été engagés dans le commerce du marché des changes, pendant ce temps, nous avons pu

apprendre beaucoup; à la fois ce qui fonctionne et ce qui ne fonctionne pas sur les marchés.

Nous avons étudié histoire des marchés, stratégies, indicateurs, analyse technique, analyse fondamentale, analyse

mentale, technologie et même robots. Nous avons testé des indicateurs, des stratégies, des signaux de trading et même

des nouvelles de trading essayées, mais rien de tout cela n'a fonctionné tout le temps. Nous avons continué à frapper le

mur, sans parvenir à la rentabilité. Ce n'est que lorsque nous avons compris comment fonctionnent les marchés que nous avons

pu combiner tout ce que nous avions appris en quelque chose de concret qui peut être utilisé pour échanger les marchés.

POURQUOI ÉCRIRE CE LIVRE? Nous n'avions aucune intention d'écrire un livre. En fait, nous n'avons jamais eu l'intention

d'enseigner le trading forex. Ce n'est qu'après que des amis ont demandé que nous partagions ce que nous apprenions que

nous avons pensé à concevoir un cours. Dans le processus de conception, nous avions un package qui devait être distribué

gratuitement.

Pourquoi vous vous demandez peut-être gratuitement? Au cours de notre parcours commercial, nous sommes tombés sur de

nombreuses ressources qui nous ont été très utiles pour apprendre à négocier les marchés. Nous avons également rencontré des

escrocs, je me souviens avoir payé à un moment donné 50 $ pour obtenir des signaux que nous n'avons jamais reçus. Ces deux

scénarios nous ont inspiré à partager un contenu et des informations précieux qui pourraient aider le débutant dans son parcours de

trading. C'est aussi un complot pour faire honte et fuir les escrocs, ceux qui vendent des informations de base promettant des

résultats rapides sur les marchés.

Considérez ceci comme une impression bleue sur la façon de faire votre voyage de trading forex. Cela ressemble plus à

une introduction de base au marché des changes vous offrant ce qui est important pour vous de réussir sur les marchés.

Ce livre est donc conçu pour guider de la manière suivante dans votre voyage de trading.
Première nous allons vous présenter les marchés financiers, mentionnant les nombreux actifs qui peuvent être échangés

dans cet espace. Nous allons ensuite se concentrer sur les devises

vous montrant comment cela a commencé et comment les marchés ont évolué en un marché de six billions de dollars

par jour. La section suivante couvrira le fonctionnement des marchés, les acteurs, les terminologies à utiliser dans cette

industrie et enfin vous guidera sur la façon d'ouvrir une démo (compte virtuel) qui peut être utilisée pour la pratique.

Seconde, nous vous guiderons dans plusieurs outils techniques qui peuvent être utilisés pour former une stratégie de trading et générer

des configurations de trading à forte probabilité. Nous couvrirons chaque outil individuellement, en partageant comment les outils

peuvent être utilisés. Le commerçant devrait donc s'entraîner à utiliser ces outils, car notre cerveau n'apprend qu'en fonction de la

répétition.

Nous vous présenterons également des indicateurs techniques et vous montrerons pourquoi nous pensons qu'ils ne sont pas bons

pour être utilisés dans le trading de forex, le trader peut cependant aller de l'avant pour examiner et tester ces indicateurs sur un

compte de démonstration. Nous pensons toujours que tester vos hypothèses et vos croyances est le seul moyen de confirmer vos

soupçons.

Troisième nous allons vous guider à travers quelques concepts simples sur les fondamentaux, nous avons

consciemment choisi de ne pas approfondir ce sujet car nous pensons que l'on ne peut compter que sur l'analyse

technique et réussir sur les marchés. Nous pensons également qu'il est extrêmement difficile pour le débutant de

comprendre et de saisir ce concept dès le départ sans expérience en finance ou sur les marchés.

Quatrième, nous aborderons l'un des sujets les plus à comprendre pour réussir sur les marchés. La psychologie du

trading est conçue pour que le trader comprenne la nature des marchés et surtout pour se comprendre. Se

connaître est primordial sur les marchés; nous croyons que nous ne commercialisons pas les marchés, mais nos

croyances, nos espoirs et nos préjugés. Apprendre les techniques de l'esprit et les façons de penser est essentiel

pour réussir sur les marchés des changes.

Cinquième, nous aborderons le sujet de la gestion des risques et de l'argent. On dit que «ce n'est que
lorsque la marée se retire que l'on sait qui nage nue».
L'essence de comprendre ce sujet est de s'assurer que les traders protègent les inconvénients. L'élimination du risque est

impossible, sans risque fondamentalement, il n'y a pas de retour. Apprendre à gérer les risques est ce qui fera votre

fortune, la gestion des risques est subjective. Nous avons tous des niveaux de tolérance au risque, des appétits pour le

risque et des niveaux de confiance différents. Nous avons donc décidé de partager les différentes stratégies
nous utilisons pour trouver des tactiques dans la gestion des risques et de l'argent, vous laissant la tâche de concevoir vos

propres tactiques.

Finalement, nous aborderons le sujet d'un plan de trading et d'un journal de trading. Nous vous montrerons
les différents éléments importants dans la conception de votre plan de trading. Cela sera crucial car cela
servira à vous guider dans votre voyage de trading.

En plus de cela, nous avons filmé des vidéos qui seront publiées chaque semaine sur notre chaîne YouTube.

Certains des liens ont été partagés sur le texte ci-dessous, mais on peut également accéder et voir la chaîne en

utilisant les liens ci-dessous:

https://www.youtube.com/channel/UCGZ595tFkjl4UOH3S9_GQ7Q/videos

Les lecteurs peuvent donc parcourir ce livre en regardant simultanément les vidéos; cela servira à aider
le commerçant à comprendre le sujet et les concepts en profondeur.

Nous espérons que ce livre atteindra autant de débutants et de commerçants de devises que possible, si vous trouvez certaines

des informations ici précieuses, veuillez les partager avec vos collègues commerçants. Nous aimerions également vous avertir dès

le départ que nous ne nous attendons pas à ce que vous choisissiez tout dans le livre, apprendre un concept ou deux sur les

marchés s'avérera précieux à la fois pour nous et pour vous, le lecteur.

En conclusion, si vous êtes en mesure de repérer quelque chose de précieux dans ce livre, vous pouvez alors envisager d'acheter

notre cours ou de rejoindre notre communauté de commerçants sur le site pour des mises à jour sur le forex et les matières premières.

Les liens suivants vous aideront à rejoindre nos différentes plateformes de mises à jour:

TÉLÉGRAMME - https://t.me/FinancialHub

WHATSAPP - https://chat.whatsapp.com/B5oCDvf8Pd00UvR9wMpXDt

SITE INTERNET - http://financialhub.co.ke/

 INTRODUCTION AUX MARCHÉS FINANCIERS :

Les marchés financiers sont composés d'acheteurs et de vendeurs qui participent à l'échange de nombreux les

atouts échangés à un prix déterminé par les forces de l'offre et de la demande.

Certaines des classes d'actifs comprennent;

• Matières premières et métaux précieux tels que: l'or et l'argent, l'énergie (pétrole brut, essence),
l'agriculture (coton, fèves de soja), entre autres.
• Actions - c'est simplement le marché boursier
• Obligations du Trésor et bons du Trésor

• Les obligations de sociétés

• Dérivés
• Crypto monnaies
• Devises (devises)

Chez Financial Hub, nous nous concentrons principalement sur le trading Devises et matières premières avec un accent particulier sur

Pétrole et or.

QU'EST-CE QUE LE MARCHÉ FOREX?

Le marché des changes est l'endroit où les grands investisseurs, les banques, les entreprises, le gouvernement et les

particuliers achètent et vendent des devises mondiales. C'est de loin le marché le plus grand et le plus liquide du monde, avec

environ 6 billions de dollars échangés chaque jour. Son Open 24 heures par jour, cinq jours par semaine, offrant ainsi la

liquidité en raison du volume important de transactions.

La liquidité est importante dans ce cas car elle permet aux participants d'entrer et de sortir rapidement du
marché.

Contrairement au marché boursier, le commerce de forex est un marché de gré à gré (OTC), ce qui signifie qu'il

n'est pas effectué dans un lieu physique, mais ce n'était pas le cas au début. Nous allons donc parcourir une

brève histoire du marché des changes.

 HISTOIRE DU COMMERCE DE FOREX

Entre 1944 et 1971, la valeur de toutes les monnaies du monde était entièrement indexée sur le dollar
américain (USD $), qui était indexé sur l'or. C'était un moyen de stabiliser l'économie qui était très volatile
après la Seconde Guerre mondiale, mais au fil des années, les pays se sont lassés de ce système. Cela a
duré jusqu'en 1971, lorsque le président américain de l'époque, le président Richard Nixon, a éliminé l'étalon-or
pour les États-Unis, coupant effectivement le lien entre le dollar américain et l'or.

Ce nouvel environnement flottant dans lequel la valeur des devises s'apprécie ou se déprécie en fonction des facteurs

de l'offre et de la demande a rapidement donné naissance au marché forex moderne.

Des exemples de la plupart des devises échangées sont les Dollar américain, euro, yen japonais,
livre sterling, franc suisse, dollar australien, dollar néo-zélandais, couronne suédoise, dollar
canadien et couronne norvégienne.

Ils sont communément appelés Monnaies du G10.

COMMENT FONCTIONNE LE MARCHÉ FOREX?

Les devises sont échangées par paires sur le marché des changes, il y a toujours deux instruments (devises) échangés

l'un contre l'autre. Par exemple, lorsqu'une personne en provenance d'Europe voyage en Amérique, à son arrivée, elle

doit convertir sa monnaie d'origine, qui est en euros en dollars américains. Et pour chaque 1 euro que vous donnez, vous

recevez 1,5 dollar américain (1 euro = 1,5 dollar américain). Dans un tel scénario, il est toujours déprécié sous forme de

paire échangeable, par exemple EUR / USD = 1 / 1,5. La première monnaie à gauche, dans ce cas l'euro, est appelée Base,

et ce dernier est connu sous le nom Citation, dans ce cas, le dollar américain.

Les paires échangées les plus populaires, également connues sous le nom de majors, sont les devises qui sont

échangées contre les Dollars américain. Par exemple, Euro contre dollar américain (EUR / USD), livre sterling

contre dollar américain (GBP / USD) ou

Dollar américain contre Yen japonais (USD / JPY). Ces paires sont largement négociées par les traders et ont une

très forte volatilité.

Les autres paires qui ne sont pas citées contre le Le dollar américain est connu comme Cross Devises. Ils

comprennent Euro contre Yen japonais (EUR / JPY), Grande livre sterling contre Yen japonais (GBP / JPY) entre

autres. Les devises croisées sont avantageuses car elles permettent aux traders de négocier des devises qui ne sont

pas liées au dollar américain, en particulier lorsque le dollar américain est instable.

Il est donc très important pour vous de comprendre comment ces paires se déplacent. À tout moment, lorsque
l'une des paires s'apprécie en prix et en valeur, l'autre se déprécie.

Dans ce cas, lorsque l'euro devient plus fort, cela signifie que le dollar américain s'affaiblit, et
lorsque le dollar américain devient plus fort, l'euro s'affaiblit. Elles sont simplement inversement
proportionnelle lorsqu'ils sont cités l'un contre l'autre. Il n'y a pas une seule fois où vous obtiendrez les
deux paires cotées l'une contre l'autre à la fois apprécier et déprécier le prix et la valeur à la fois.

Vous pouvez regarder la vidéo suivante pour plus de précisions: ( https://www.youtube.com/watch?v=ZBlavOewhic&t=11s

)

ACTEURS PRINCIPAUX DU MARCHÉ FOREX

Nous commencerons par souligner que le marché Forex est un marché international de gré à gré (OTC). Cela

signifie qu'il s'agit d'un marché décentralisé et autorégulé sans bourse centrale ni chambre de compensation,

contrairement aux marchés boursiers et à terme.

Cette structure élimine les frais d'échange et de compensation, réduisant ainsi les coûts de transaction.

Le marché Forex OTC est formé de différents participants - avec des besoins et des intérêts différents - qui négocient

directement les uns avec les autres. Ces participants peuvent être répartis en différents groupes.

Interbancaire - Ces grandes banques contrôlent collectivement les plus gros volumes de transactions forex
chaque jour pour leurs clients et pour eux-mêmes. Les exemples comprennent Citi, JPMorgan, UBS,
Barclays, Deutsche Bank et HSBC. Ils contrôlent plus de 50% de l'argent dans ce secteur.
Banques commerciales / grandes sociétés - Ce sont d'énormes entreprises qui effectuent des transactions d'argent en

dollars. Par exemple; Les fusions et acquisitions (M&A) entre grandes entreprises peuvent créer des fluctuations de taux

de change (EUR / USD). Si entreprise X en Europe acquérait la société Z aux États-Unis, ils devraient effectuer leurs

transactions dans l'une ou l'autre des devises natives.

Étant donné que le volume de leurs échanges est beaucoup plus faible que ceux du marché interbancaire, ce type d'acteur de

marché traite généralement avec des banques commerciales pour leurs transactions.

Les sociétés représentent les entreprises qui sont engagées dans des activités d'importation / exportation avec des

homologues étrangers. Leur activité principale les oblige à acheter et vendre des devises étrangères en échange de

marchandises, ce qui les expose aux risques de change.

Hedge Funds- Ce sont des fonds d'investissement privés qui spéculent dans différentes classes d'actifs. Les Macro Hedge

Funds recherchent des opportunités de trading sur le marché Forex. Ils conçoivent et exécutent des transactions après avoir

effectué une analyse macroéconomique.

En raison de leurs grandes liquidités et de leurs stratégies agressives, ils contribuent largement à la
dynamique du marché Forex.

Ils mettent en commun l'argent des riches et des institutions telles que les fonds de pension, les fonds de retraite, les

compagnies d'assurance, etc.

Commerçants au détail - Ce sont des commerçants individuels qui négocient le marché Forex en utilisant leur

propre capital afin de profiter de la spéculation sur les taux de change futurs.

Ils opèrent principalement via des plateformes Forex qui offrent des spreads serrés, une exécution immédiate et des comptes sur

marge à effet de levier. Les commerçants de détail contrôlent le moins d'argent sur le marché des changes.

Nous avons également réalisé une vidéo illustrant la hiérarchie des acteurs du marché des changes. Liens

ci-dessous ( https://www.youtube.com/watch?v=T5dFVjhxKg4&t=4s )
 TERMINOLOGIES FOREX

Action de prix- Il s'agit de l'analyse globale du mouvement des prix d'un marché donné pour une période de temps affichée

dans des schémas globaux.

Graphique - Il présente l'action des prix et les opportunités de trading sur le marché. L'axe vertical montre le

mouvement des prix et horizontal montre la période de temps.

Citation - Taux de change entre deux devises (EUR / USD)

Demander le prix - Citation par laquelle une certaine paire est vendue à un moment donné

Prix ​de l'offre - Citation par laquelle cette paire est achetée.

Propagé - La différence entre le cours acheteur et le cours vendeur. Il représente les frais de service de courtage et

remplace les frais de transaction.

Longue - C'est un processus d'achat d'une certaine devise lorsque le prix est bas afin de pousser le prix vers un prix

plus élevé

Court - C'est le processus de vente d'une devise lorsque le prix est élevé dans l'espoir de la faire
baisser.

PIP (pourcentage en points) - Il s'agit de la plus petite unité d'une paire de devises. Par exemple, l'EUR / USD est au

prix de 1,1555, la quatrième décimale dans ce cas 0,0005, est connue sous le nom de PIP. Si cette paire monte de 1

PIP, dans ce cas 1.1555, vous ajoutez 1 à la 4ème virgule décimale (1.1555 + 0.0001), ce qui vous donnera alors

1.1556.

Lot - Il s'agit de la taille standard d'un contrat de trading. Les lots sont répartis en Standard (100 000
unités), Mini (10 000 unités) et Micro (1 000 unités).

Marge - Il s'agit d'une garantie qu'un trader dépose auprès du courtier lorsqu'il exécute une transaction pour maintenir une

position ouverte.

Appel de marge - Demande du courtier au commerçant de recharger son compte sur marge lorsqu'il tombe en

dessous du niveau minimum accepté.

Effet de levier - C'est le montant d'argent emprunté à un courtier comme capital pour augmenter le potentiel de

retour sur investissement. Par exemple, si votre compte a 1000 dollars et demande un effet de levier de 1: 100,

vous pourrez contrôler les devises valant

100 000 dollars.
Exécution du marché - Il met en évidence les différents types d'exécutions sur le marché lors de l'entrée et de la

sortie d'un métier.

Ordre de marché - C'est un type d'exécution pour le courtier d'acheter ou de vendre une devise à un cours actuel, également

appelé exécution instantanée.

Ordre à cours limité - Il s'agit d'un type de commande en attente. C'est un type d'exécution au courtier pour

acheter ou vendre une devise à un prix futur. Il est subdivisé en ordre limite de vente et ordre limite d'achat.

Un ordre limite d'achat ne peut être exécuté qu'au prix limite ou inférieur, et un ordre limite de vente ne peut être
exécuté qu'au prix limite ou supérieur

Arrêter l'entrée - C'est l'opposé de l'ordre limite. Il s'agit d'un ordre d'entrer sur le marché à un prix moins favorable.

Lors de l'achat d'une paire de devises, l'entrée stop sera placée au-dessus du prix actuel du marché. Lorsque

vous placez un ordre d'entrée à vendre, l'ordre d'entrée stop sera placé en dessous du prix actuel du marché.

Ordre d'arrêt des pertes - Il s'agit d'un ordre au courtier de liquider une transaction perdante à un niveau prédéterminé.

Tirer profit - Un ordre de prise de bénéfices est un ordre qui ferme votre transaction une fois qu'il atteint un certain niveau de

profit.

Commandes à but lucratif sont souvent placés à des niveaux définis par d'autres formes de

analyse technique, comprenant analyse de la configuration graphique et niveaux de support et de résistance, ou en

utilisant gestion de l'argent techniques qui seront mises en évidence plus loin dans ce cours.

Premium - Il s'agit d'intérêts payés ou facturés au commerçant pour la détention de devises à la différence de taux

d'intérêt (IR). Un bon exemple est Swap.

Haussier - Caractérisé par la hausse des prix sur le marché, il s'agit simplement d'une tendance à la hausse.

Baissier - Associé à la baisse des cours des actions sur le marché, il s'agit simplement d'une tendance à la baisse.
 SESSIONS DE COMMERCE DE FOREX

Au début du sujet, nous avons indiqué que le marché Forex est ouvert 24h / 24. Il offre une excellente occasion
aux commerçants de négocier à tout moment du jour ou de la nuit. Cependant, même si cela ne semble pas si
important au début, le bon moment pour le commerce est crucial.

Le meilleur moment pour trader est celui où le marché est le plus actif dans le cadre des quatre sessions de trading, à savoir; Session

de New York, Session de Londres, Session de Tokyo et Session de Sydney. La session de Londres a le plus volatilité du

mouvement PIP. Les marchés activement négociés créeront une bonne chance de saisir une bonne opportunité commerciale et

de réaliser des bénéfices. Ci-dessous un tableau montrant les sessions de temps du marché Forex:

Session Démarre (GMT) Fin (GMT)

New York 13h00 22h00

Londres 8h00 17h00

Tokyo 00h00 21h00

Sydney 22h00 7h00

DEMO TRADING VERSUS LIVE TRADING

Les nouveaux traders ont tendance à commencer leur parcours de trading avec un compte démo. Un compte démo est un

compte qui a de l'argent virtuel et qui est utilisé pour trader les marchés financiers.

L'utilisation d'un compte démo est un moyen pratique et pratique d'apprendre les bases du trading. Il n'y a pas de risque

monétaire réel lors de la négociation d'une démo, vous trouverez donc très peu d'émotions attachées à vos métiers et

aucun jeu de gestion des risques. Les contraintes de capital sont également minimes, car le trading de démonstration

permet généralement au trader de choisir le montant de capital avec lequel il souhaite travailler.

Les montants varient, mais sont souvent très importants et dépassent le capital réel dont dispose le commerçant

pour négocier son propre compte. Un compte démo est efficace pour tester vos stratégies et comprendre le

fonctionnement du marché des changes.

Ici, au Financial Hub, nous recommandons aux traders débutants de commencer à trader sur un compte de démonstration, ce qui est

non seulement vital pour consolider les bonnes connaissances et la bonne stratégie, mais aide également à comprendre le

fonctionnement du marché des changes.

Lorsque vous arrivez sur le compte en direct, c'est un jeu d'esprit complètement différent. En effet, la plupart des

commerçants connaissent un blocage psychologique, qui peut être très fort et distrayant. Pendant le trading en

argent réel, les émotions mises en jeu sont très différentes.

La peur, la cupidité, l'insécurité et parfois la pensée fondamentale de perdre de l'argent durement gagné nous

obligent à prendre des décisions discutables. Presque tout le monde est émotionnellement attaché à l'argent et au

succès et cet attachement marque l'origine de tous les ennuis.

De nombreux commerçants, en particulier au début de leur carrière, voient le marché des changes comme un outil pour gagner de

l'argent facilement et ne considèrent pas le risque de perdre.

Les traders qui envisagent de trader le forex comme un emploi à temps plein doivent tenir compte du fait qu'un

pourcentage solide de leurs trades aura des résultats négatifs; nous ne pouvons pas espérer tirer profit de chaque métier.

Pour cette raison, le maintien d'un bon rapport risque / rendement est un élément clé d'une stratégie de

négociation réussie à long terme, de sorte qu'un seul échange émotionnel ne nous affectera pas trop lorsque

nous examinons les résultats à long terme. Avant de vous lancer dans le vrai trading, assurez-vous d'avoir un plan pour

tous les types de conditions de marché.

Dans la vidéo suivante, vous pouvez regarder précisément différences entre démo de trading et
comptes live: ( https://www.youtube.com/watch?v=QW2-C1SaVFo )
 TYPES D'ANALYSE DE MARCHÉ

Il existe différentes formes d'analyse que les traders doivent connaître afin de négocier avec succès le
marché des changes, nous allons donc vous présenter ces différentes formes et vous montrer comment les
utiliser sur le marché.

• Analyse technique
• Analyse fondamentale
• Analyse mentale

Analyse technique implique étude de l'évolution historique des prix pour déterminer où une devise
donnée peut être dirigée.

Les traders qui utilisent l'analyse technique auront tendance à se concentrer sur comportement de l'action des prix, étudier

les modèles qui se forment sur les marchés. Les analystes techniques estiment que comportement de l'action des prix peut

nous donner des probabilités d’orienter le marché.

Analyse fondamentale est un méthode d'analyse des états financiers dans le but de prévoir
les prix.

L'analyse fondamentale du Forex se concentre sur l'ensemble l'état de l'économie et étudie divers facteurs,
notamment les taux d'intérêt, l'emploi, le PIB, le commerce international et la fabrication, ainsi que leur
impact relatif sur la valeur de la monnaie nationale à laquelle ils se rapportent.

Par exemple, un commerçant effectuant une analyse fondamentale de la Paire de devises EUR / USD trouverait

des informations sur les taux d'intérêt de la zone euro plus utiles que le comportement récent de l'action des prix

sur la paire.

L'analyse mentale est également appelée la psychologie du commerce, sous ce sujet, nous arrivons à discuter de certains

des techniques de l'esprit qui sont utiles pour la performance tout en négociant le marché des changes. Le trading est un jeu

qui implique rétroaction constante,

votre niveau de réussite et d'amélioration dépendra directement de votre capacité à gérer l'adversité,
la gestion des émotions et la gestion de l'incertitude.
 GUIDE DU DÉBUTANT DE L'ANALYSE TECHNIQUE

UNE INTRODUCTION À L'ANALYSE TECHNIQUE

Qu'est-ce que l'analyse technique? L'analyse technique est une méthode d'évaluation du prix d'un actif en

analysant les statistiques générées par l'activité du marché, telles que les prix et le volume passés.

Les analystes techniques n'essaient pas de mesurer la valeur intrinsèque d'un actif, mais utilisent plutôt des graphiques et

d'autres outils pour identifier les modèles pouvant suggérer une activité future.

Tout comme il existe de nombreux styles d'investissement du côté fondamental, il existe également de nombreux types de

traders techniques. Certains s'appuient sur des modèles de graphiques; d'autres utilisent des indicateurs techniques et des

oscillateurs, et la plupart utilisent une combinaison des deux.

Dans tous les cas, l'utilisation exclusive par les analystes techniques des données historiques sur les prix et les volumes est ce qui

les sépare de leurs homologues fondamentaux.

Contrairement aux analystes fondamentaux, les analystes techniques ne se soucient pas de savoir si un titre est sous-évalué - la

seule chose qui compte, ce sont les données de négociation passées d'un titre et les informations que ces données peuvent fournir

sur l'endroit où l'actif pourrait se déplacer à l'avenir.

Le domaine de l'analyse technique repose sur trois hypothèses:

• Le marché réduit tout - les analystes techniques estiment que tout ce qui est important pour
déterminer la valeur est rattaché au prix; par conséquent, en étudiant l'action des prix, nous pouvons
être en mesure de générer des idées.

• Les prix évoluent dans les tendances - Une tendance peut être définie comme la direction générale de quelque chose,

les analystes techniques estiment que les prix évolueront la plupart du temps en raison de la nature humaine.

• L'histoire a tendance à se répéter - Il n'y a rien de nouveau sous le soleil, seulement ce que vous n'avez

pas vu. Dans ce domaine, nous croyons fermement que tout ce qui s'est passé dans le passé se produira

probablement à l'avenir.
 BASES DES TENDANCES

L'un des concepts les plus importants de l'analyse technique est celui de la tendance. Le sens de la finance
n'est pas si différent de la définition générale du terme - une tendance n'est rien de plus que la direction
générale dans laquelle un actif ou un marché se dirige.

Malheureusement, les tendances ne sont pas toujours faciles à voir. En d'autres termes, définir une tendance va bien au-delà de

l'évidence. Dans un graphique donné, vous remarquerez probablement que

les prix n'ont pas tendance à évoluer en ligne droite dans aucune direction, mais plutôt dans une série de hauts et

de bas.

En analyse technique, c'est le mouvement des hauts et des bas qui constitue une tendance. Par exemple, une tendance à

la hausse est classée comme une série de hauts et de bas plus élevés, tandis qu'une tendance à la baisse est l'un

des bas et des hauts les plus bas.

TYPES DE TENDANCES

Tendance à la hausse composé d'une série de plus bas et de plus hauts plus élevés sur le marché des changes.
Tendance à la baisse composé d'une série de hauts et de bas plus bas.

Tendance latérale- composé d'une série de hauts et de bas égaux.

Comme les noms l'indiquent, lorsque chaque pic et creux successifs est plus élevé, on parle de tendance à la hausse. Si

les pics et les creux diminuent, c'est une tendance à la baisse. Lorsqu'il y a peu de mouvement vers le haut ou vers le bas

dans les sommets et les creux, c'est une tendance latérale ou horizontale.
Si vous voulez devenir vraiment technique, vous pourriez même dire qu'une tendance latérale n'est en fait pas une

tendance en soi, mais un manque de tendance bien définie dans les deux sens. Dans tous les cas, le marché ne peut

vraiment évoluer que de ces trois manières: en haut, en bas ou nulle part.

Avec ces trois directions de tendance, il y a trois classifications de tendance. Une tendance de n'importe quelle

direction peut être classée tendance à long terme, tendance intermédiaire ou tendance à court terme.

En termes de marché des changes, un la tendance majeure est généralement classée comme s'étalant sur

plus d'un an.

Une la tendance intermédiaire est censée durer entre un et trois mois et une tendance à court
terme est inférieure à un mois.

UNE la tendance à long terme est composée de plusieurs tendances intermédiaires, qui vont souvent à

l'encontre de la tendance principale.

Si la tendance principale est à la hausse et qu'il y a une correction à la baisse du mouvement des prix suivie d'une poursuite

de la tendance à la hausse, la correction est considérée comme une tendance intermédiaire. Les tendances à court terme

sont des composantes des tendances majeures et intermédiaires.

Nous vous avons maintenant présenté le concept d'analyse technique et expliqué le sens d'une tendance qui est l'un

des concepts les plus importants dans ce domaine. Nous allons maintenant plonger dans des outils techniques

individuels vous présentant comment nous utilisons ces outils techniques et pourquoi il est important de les avoir dans

vos graphiques.

Nous allons donc décomposer les outils et vous montrer comment vous utilisez les outils en les combinant, considérez ceci un

guide de base pour comprendre non seulement les outils, mais aussi pour comprendre le processus de réflexion

d'un opérateur technique.

Dans votre processus d'apprentissage de ces outils, une pratique constante et cohérente sera mise en avant.

C'est parce que l'esprit apprend uniquement par la répétition; il faut donc s'assurer que sa pratique est riche et

efficace.
 GRAPHIQUE DE LIGNE, TABLEAUX À BARRES ET TABLEAUX À BOUGIE

Au début de votre parcours vers l'analyse des graphiques, je suis sûr que certains d'entre vous ont entendu la phrase à la fois

un art et une science, de notre compréhension, la science intervient lors du choix et du développement du type et de la

disposition de votre graphique, mais l'art est la façon dont vous déchiffrez et agissez selon les informations que vos graphiques

vous présentent.

Les commerçants techniques sont différents des commerçants fondamentaux; les traders fondamentaux qui sont principalement de

grandes institutions financières analysent les données économiques pour prendre des décisions d'investissement tandis que les traders

techniques analysent les mouvements des prix et les modèles de marché pour les aider à spéculer sur les mouvements du marché.

Aucun n'a de pouvoir sur l'autre. Dans cette section, nous nous concentrerons sur les fiches techniques pour vous aider à comprendre

comment fonctionne le marché et comment bénéficier de ce style.

Les graphiques montrent simplement les données fondamentales factorisées sous forme de prix et indiquent aux traders

techniques la direction passée, présente et future du marché; simplement l'image globale du marché. Il y a tellement de types de

graphiques utilisés pour analyser les marchés, mais nous ne vous expliquerons que trois types de graphiques:

1. Graphique en ligne.

2. Diagramme à bandes.

3. Graphique en chandelier.

GRAPHIQUE EN LIGNE

Le graphique linéaire est le plus simple de tous les graphiques à comprendre car ils ne montrent que les prix de clôture

séquentiels de l'instrument / marché soumis en utilisant une ligne sur le graphique.

Il est bénéfique car il cartographie les mouvements des prix de manière ordonnée, réduit au silence les prix extrêmes ou les

comportements instables du marché, identifie les modèles de graphique et peut aider les traders à trouver des niveaux de support et

de résistance importants.

Cela comporte cependant un inconvénient: vous ne pouvez pas savoir ce qui s'est passé en une seule session, mais

vous pouvez savoir qui a gagné la bataille grâce au cours de clôture.

D'après le chat ci-dessous, il est bien évident qu'il est vraiment difficile de faire des déductions à partir du tableau

suivant, nous ne préconisons donc pas l'utilisation de ces graphiques dans vos pannes techniques.

DIAGRAMME À BANDES

Les graphiques à barres nous fournissent plus d'informations par rapport aux graphiques en courbes, Comment? Ils

indiquent un time-frame’s/market’s open, high, low and close on a vertical bar.

On the bar’s left hand side is a tiny horizontal line that indicates the opening price while the tiny horizontal
line on the right side indicates the closing price.
The height of the bar represents price range of the highlighted time-frame, the
high represents the highest price and the low represent the lowest price.

Traditionally bar charts used to be black and white, white bars representing a rise in price while black
bars represent a drop in price from previous time-frames but as trading advanced different platforms
introduced different colors; green and red being the most common ones.

We also don’t use this charts for any analysis, because we believe candlestick charts are better for
Analysis.

CANDLESTICK CHARTS

Candlesticks have been named the first concept because most traders will use candlesticks to
generate market information in relation to price action. Candlesticks basically display the same
information as bar charts but in a more appealing way.

They indicate the high and lows of a given time-frame using vertical lines known as ‘wicks’ or
‘shadows’ that appear on top and below of the block structure.

Candlesticks differentiate themselves from bars through opening and closing price range, candlesticks
display the opening and closing range in form of ‘block-like’ structure known as the candle body which
appear in different preferential colors depending on the closing price compared to the opening price.
Green and red are the most common/basic colors for candlestick, green candlestick indicate that in a
particular time-frame the closing price is above the opening price; termed as bullish while red is
the vice-versa and it’s termed as bearish.

Candlesticks often appear in different sizes, large candle bodies indicate strong price movement while
short candle bodies indicate market indecision between buyers and sellers.

We will therefore go ahead to look at various candlestick patterns and what they mean for the
markets:

The image below is an illustration of both a bullish and bearish candle respectively
 SINGLE CANDLE LINES

SHOOTING STAR AND PIN BAR

These two candlesticks are popularly known for stop hunting. That’s why in some trades I don’t
use a tight stop or automatic stop. Instead I choose to watch price action and see what will happen.

SHOOTING STAR

It is formed when prices open higher, but go down closing substantially lower being unable to
close above a certain level. It’s a very strong reversal signal and especially on major key levels.

It is observed after an uptrend, mainly at resistance areas.

It’s mainly seen as a good reversal sign on key Fibonacci levels and on the key levels
(Resistance).Always wait for the candles that come after it has formed for further confluence

The following is a representation of a shooting star candlestick.

The following is the effect of the candlestick on the charts: we can observe how price traded higher
during the session but towards the close it trades lower closing below the resistance zone. The
candlestick that follows confirms a short bias.

PINBAR

This formation is mainly the same only that it’s observed mainly on support areas. It is formed when
prices open lower but as the session is closing prices rally back up signaling a lot of buying
pressure coming into the market.

When it occurs after an extended downtrend and at a crucial support area it’s a better signal.

The same rules that apply to the shooting star apply when executing trades based on this candlestick

The following is a representation of a pin bar candlestick:

The following is a potential trade that could be executed and result in profit based on a pin bar
candle: observe how a bullish engulfing candle is formed immediately after formation of the pin bar,
confirming bullish bias.

DOJI

Doji are known as danger signs when they are seen after an uptrend or downtrend.

It’s a very strong reversal signal and especially while using the top down approach of trading the
markets.

Doji has no real body.

There are 4 types of doji:

1. Grave stone doji

2. Long legged doji
3. Dragons fly doji
4. Four price doji
The following is an illustration of the types of doji candles:

GRAVE STONE DOJI

This candlestick Is a strong bearish indicator, it starts when the open implies that buyers pushed prices
higher then sellers stepped on orders pushing the prices back lower as the session was closing.

Occurs rarely but gives even clear signal of some bearish momentum in place.

LONG LEGGED DOJI

The candlestick is formed when closing prices are equal despite fluctuations throughout the day.

This candlestick is a formation which mainly indicates balance of power between the buyers and
sellers. It shows indecision in the markets.

But always remember that doji is a main reversal pattern, so once you have seen it you better be ready
or prepare for some reversal especially on key levels.

But once you have seen it among some group of some high wave candles then you can wait for the
reversal to take place.

This candlestick is a show of stalemate between supply and demand.

 DRAGONS FLY DOJI

This candlestick starts the session with the prices going lower and before the session closes
prices are pushed back up closing back up.

This indicates that sellers opened the session with enthusiasm but once the session was closing buyers
stepped on orders hence causing prices to be pushed back up.

If you happen to see this candlestick on the support especially one using the top down approach of
investing you should be ready to set some buy orders at the support especially after confirmation of
the shift in momentum.

HAMMER AND HANGING MAN

The following is an illustration of both candlesticks. They look the same only
differ on point of appearance.
 HAMMER

It’s formed when prices trade lower during a session but later rally back closing near the
opening price or at the opening price, marks reversal of a bottom or of an important support
level.

Candle shows that buyers have seized control.

The candle should appear after a significant downturn in an oversold market to have significance and
for the setups to be fulfilled.

Color doesn’t really matter, but if the candle is green it indicates more bullish momentum and
confirms the reversal.

There could be a possibility of some selling rally to go back to test the support.

The following is an example of a chart and the aftermath of what followed after the formation of the
hammer:

The hammer formation confirms the polarity of the support zone.

 HANGING MAN

Basically same as hammer only that it appears in areas of resistance mainly.

There should be some more bearish confirmation ( wait for the next candlestick close) for you to
make a decision.

For this candlesticks to materialize always look at the prior trends. Remember they must act as reversal
signals; therefore price has to have been in an uptrend for this candlestick to make more meaning and be
more accurate.

The following is an illustration: it is mainly formed among many indecision candles on the
resistance zone resulting in consolidation before meltdowns.
 TWEEZER TOPS AND BOTTOMS

This is a candlestick pattern that involves two candlesticks which close at the same level and
open at the same level, they simply match highs and lows.

The two candlesticks must not be the same color; in fact the candlestick should have different
colors.

Take major importance when they occur after an extended move, this could signal a potential reversal.

Markets should not close above the level for the pattern to be validated

The following is an illustration of each candlestick after its formation:

 DUAL CANDLE LINES

BULLISH AND BEARISH ENGULFING PATTERNS:

These are two major candlesticks which bear different colors.

They are better and have more weight when they occur on the weekly and daily
key levels.

The following is an illustration:

BULLISH ENGULFING PATTERN:

This is a candlestick pattern that is a major reversal signal.

It usually occurs at areas of support after a down trend or bear market.

It comprises of two candles the 2nd candle engulfing the first candles real body.

The bigger and the stronger the engulfing pattern the more momentum is behind the move causing
the move to be more significant.

Also it is important to check how many candles have been engulfed and the colors of the two candles
have to be different.

It’s not important if it engulfs the wicks of the preceding candles.

The following is an example of the candle pattern:

BEARISH ENGULFING PATTERN:

It’s the opposite of bullish engulfing pattern only that now it occurs in the areas of resistance.

It’s a strong indication of some strong bearish momentum.

The same rules that apply to the bullish engulfing apply to this pattern.

The following is an example of the bearish engulfing:

 SUMMARY

We have gone through the concept of candlesticks, and introduced you to several candlestick
patterns. It is our hope that you now understand the formation of a candlestick and you can be able to
interpret the information that the candlestick communicates.

We also want to warn you that we have not covered all candlestick patterns comprehensively; you
should therefore take the time to dive deep into the topic.

We will now move to the next technical tool and concept: support and resistance.
 KEY LEVELS (SUPPORT AND RESISTANCE)

The concept of supply and demand has been the building block of capitalism. In every free market, when
supply overwhelms demand then prices will fall and when demand overwhelms supply then
price will rise. It is this relationship between prices, supply and demand that results to the formation
of key levels.

In Financial markets, this same concept will apply which ever asset you are trading. The basic
rule of “Buying Low and Selling High” is built on this principle.

This means that when prices are low, then majority of traders must be sellers and minority will be
buyers. The opposite scenario applies when prices are high, at this point majority are buyers pushing
the prices high. In order to benefit from this rule, we must always strive to join the minority side in the
markets.

The concept of supply and demand is what will enable forex traders to map out
support and resistance levels within a trend which enables traders to benefit especially in timing
entries and exits in the markets.

Markets will always move up, down or sideways. This simply means that
markets will trend and at times they will range.

It is through our understanding of the market structure that we will be able to identify what is
going on in the markets.

In a trending market we will get the formation of higher lows and higher highs
if the market is trending upwards. In a down trend, the markets will form lower highs and lower
lows.

It is this pattern formation that results to the formation of demand zones and supply zones in the
markets.

The demand zones are generally called support while the supply zones are called
resistance.

Support can be easily defined as a point where a bear market has stopped and bounced higher.
Resistance on the other hand can be defined as a point where a bull market has stopped and
moved lower.

The following chart can serve as a good illustration to explain these concepts:

The image below clearly represents an Uptrend and a downtrend, in the case of an uptrend we have
the formation of higher lows and higher highs which result to the formation of Support and Resistance
Levels.

In the Case of a downtrend, the reverse scenario would be the case meaning we would have support
levels replacing resistance levels and resistance levels replacing support levels.
The image below represents the support and resistance levels in a ranging market.

Forex traders must learn to identify these areas ( Key levels) especially since this is the building block of technical
analysis.

We will go ahead to show you these levels in a real candlestick chart,

The following is a USDCAD daily chart with the key levels marked; from the illustration below it is
quite clear, that by marking the key levels I could be able to
anticipate market movements and understand partly why the markets are behaving in a certain way.

Currency markets can be easily understood using only technical analysis; this is due to the huge
liquidity, speculation capital and volume being traded on a daily basis. This means that currencies
will tend to respect levels and especially if you have marked the levels accurately.

It is important to remember that when we talk about key levels, we don’t talk about a one price
target, we tend to look for a zone of maybe 30 to 40 pips and map that as a demand or supply
zone depending on the underlying trend.

Key levels will exist because of two reasons, one is emotional attachment and the other one is
memory. Apparently, the memory of a particular level will be remembered or forgotten easily
depending on how price action struggled to break past that level and whether we had a complete
change in the direction of the trend in the markets.

MAJOR AND MINOR LEVELS OF SUPPORT AND RESISTANCE

The different levels of support and resistance will have different weights and importance in the
currency markets.

Major levels of support and resistance are the levels where we had a change in trend direction; this
means that these levels are very important for traders as they signify which zones to look for when the
markets are changing direction.

Minor levels will show us the zones where we expect pullbacks and retracements to come into
the markets before we have a trend continuation in the markets. A trend continuation will demand
that traders map out the next level they expect to be hit in the markets.

Traders should therefore understand the difference between these two levels, in marking of your levels to
ensure you get the accurate major and minor levels, it is important to use the top down approach. This is
a concept we have gone through in our professional and legendary packages.
 LEVELS AND ROUND NUMBERS

The best levels to use in the markets are the round numbers, this is because humans will tend to
remember the round figures and are more emotionally attached to those levels.

The round numbers we are talking about can be like 1.300 on the GBPUSD pair. To understand this
further, think about the price of items. When an item is priced at
999, people will tend to round it up to 1000. This is how we build the association between levels and
round numbers.

SUMMARY

We have introduced you to the concept of support and resistance; the beginner should therefore take
time to learn how to mark the levels. This is well covered in our professional and legendary package.

It is important to understand this concept because much of the game of technical analysis is to
understand the metrics of supply and demand.

You can check out our YouTube Channel to get a basic introduction to this concept: https://www.youtube.com/wat

We will now move to the next concept which is trend lines.

 TREND LINES

Many traders are familiar with trading price action techniques using horizontal support and
resistance lines, but some traders find it difficult to trade using trend lines, and this is rightfully so, since
trend line analysis requires a little more discretion on the part of the trader.

Trend lines are very useful in helping you determine the trend, and also the strength of that trend
as well. Today we are going to take a closer look at this important price action analysis
technique.

WHAT ARE FOREX TREND LINES?

Trend line analysis in Forex is a crucial price action method that helps us first and foremost in trend
detection. Trend lines measure the price move of a Forex pair when the price is increasing or
decreasing. In this manner, there are two types of trend lines:

BULLISH TREND LINES

We have a bullish trend when the Forex pair is increasing. In this manner, the price of the pair
records higher bottoms and higher tops.

The bullish trend line should be located below the price action and it should connect the bottoms of
the currency pair. This way the bullish trend line acts as a support for the price action.
 BEARISH TREND LINES

The bearish trend has the opposite character of the bullish trend. We use a bearish trend line in order to
measure the price action during a price decrease.

In this manner, the bearish trend requires the price to record lower tops and lower bottoms. This
indicates that the price is dropping. The bearish trend line should be located above the price action during
a price decrease. The bearish trend line plays the role of resistance for the price.
In order to draw a trend line (bearish or bullish), you first need to identify a trend.

Look at this chart below: On the chart below it is evident that the formation of higher lows and
higher highs could signal to us the formation of an uptrend.

In order to gain a better understanding of how to draw trend lines, we must first recognize the
composition of the typical candlestick. Every Japanese candlestick consists of five elements – body,
top of the body, bottom of the body, upper candlewick, and lower candlewick.

We need to understand these elements in order to build a proper trend line. So, if you want to build a
bullish trend line, you need the spot the lower candlewicks and the candle body bottoms on the
chart.

Most times you would use the candlewicks to compose the trend line; however, you could use the
candle body in instances where short term volatility spikes occur outside the normal range of the sloping
trend line. Then, if the price is moving upwards, you connect these with a straight line.
 THREE IMPORTANT RULES FOR DRAWING TREND LINES

In order to confirm a trend, you need at least three points lying on the same line!

When drawing trend lines, you must have a minimum of two points. In order to confirm a sloping
support or resistance, you need a third confirmation point, lying on the same line as the two previous
points.

Never think of the trend as contained within of a single line. The trend is not a line, but an area.

When you draw a bullish trend line you should take into consideration the lower candlewicks and the
body bottoms. Very often the lower wicks of the candlesticks might go outside the scope of the trend
line.

However, we know to think of the trend line as an area and not as a single line written in stone.

In this manner, if the price action breaks the trend line with its candlewick, this doesn’t mean that
the trend is broken.

An important point also to keep in mind is that as trend lines mature, there will be more of a tendency
for price reactions at the trend line levels, and many times you will see false breakouts around these
areas.

Trading trend line strategies will be a whole topic on our PRO package but here we will just highlight
a few ways to use trend lines.

1. Trend line Bounce

2. Trend Line Breaks

To clearly understand this two uses, make sure to check out the following videos:
https://www.youtube.com/channel/UCGZ595tFkjl4UOH3S9_GQ7Q/videos
 TRENDLINE BOUNCE

As previously discussed, trend lines can be used as areas of support or resistance. Price action will
always respect these levels and traders usually step up orders when it comes to trading these areas.

When trading the trend line bounce we want to identify an opportunity on the 3rd or 4th point of
bounce on a correctly and accurately drawn trend line.

TRENDLINE BREAK

Trend line breaks, as the name suggests, occur when the market breaks the trend line instead of
bouncing off it. They act as a good sign of a reversal of the underlying trend. Trend line breaks are
some of the set ups which will often offer very good risk reward ratios. This is because they offer an
opportunity to place tight stops and get nice projected targets.
 SUMMARY

Remember these three important rules when you analyze potential trends:

You need at least three points lying on the same line in order to confirm tendency.

The trend line responds to an area and not to a single line on the chart. We will now dive to the
next topic which is Fibonacci Concepts.
 FIBONACCI RATIOS

“Learn to see how everything connects to everything else”

Leonardo Pisano also famously known as Fibonacci was the one who discovered that there was a
sequence of patterns in the world. He was born in 1170 in Italy.

Fibonacci came from the field of mathematics, Fibonacci ratios follow a sequence of numbers and
ratios that are often found in nature e.g. uncurling of a flower.

Everything in the universe is constructed geometrically using Fibonacci, Fibonacci sequence – construct
nature and physical make up of human body.

When you add the previous number and the current number you get the next number: e.g. 0, 1,
1, 2, 3, 5, 8, 13, 21, 34, 55, 89 and 144……………………………………….

The further ahead you keep dividing the 2 numbers after each other respectively you
get the golden ratio e.g.

2 divide by 1 = 2

3 / 2 = 1.5

5 / 3 = 1.667

8 / 5 = 1.6

13 / 8 = 1.625

21 / 13 = 1.615

34 / 21 = 1.619

55 / 34 = 1.618

89 / 55 = 1.618

144 / 89 = 1.618 …
The 1.618 is known as the golden ratio. When you do the reciprocal to this number you get
0.618. This level also known as the 61.8% is one of the retracement levels used by many traders
to get entry points in the markets.

PERCENTAGE OF VALUES WHICH ARE MAINLY USED FOR

RETRACEMENTS

1. 38.2% - strong trend, fast pull back bounce.

2. 50% - medium trend widely monitored.
3. 61.8 % - golden ratio.
4. 78.6% - weak trend and sign of reversal.

Examples shown: The following is an example of a golden ratio retracement with a series of
lower highs in formation.

61.8%

Fibonacci is also one of the most commonly used set ups by traders to get trade set ups and make profit
in the markets.

In the forex market we will use Fibonacci in 2 ways:

1. To get entry triggers.( Fibonacci Retracements)

2. Set targets to get out in the markets while in profit.( Fibonacci
Extensions)

We will first look at how to plot Fibonacci and then look at each concept individually then combine the
two of them to get a perfect relationship to be used by understanding how to use the combined
concepts.
HOW TO DRAW RETRACEMENTS CORRECTLY AND ACCURATELY:

1. You should draw Fibonacci levels from prior swing highs and swing
lows.
2. Draw them on points which people can view, so that they become a
self- fulfilling prophecy and can be used by other traders to make it an area of interest
and increase the probability of the setup fulfilling.

Traders should also note down the following key points when drawing Fibonacci levels:

1. Use of wicks is advisable on plotting this levels, this is because wicks show
the highs and lows which are key when using this concept.
2. They are reliable swings while using the long time frames e.g. 1HR and 4HR
Charts which show the opening and closing of candlesticks.
 FIBONACCI RETRACEMENTS

A retracement can be defined as counter trend reaction that retraces a trend.

Also it can be referred to as percentage of values which can be used to predict length of
corrections in a trending market.

The markets move in a wave like motion due to aspects like profit taking and some areas of supply and
demand in the market.

We therefore use Fibonacci to get this levels so as to be able to get profitable set ups in order for you
to get in and out of the markets.

The following is an example of the same scenario but on a daily chart:

From the following example one can deduce that the market bounced of the golden fib region which
was also in confluence with the trend line bounce and rolled over to the extension level. Clearly this
would be a good execution point for your trade in the financial markets.
 FIBONACCI EXTENSIONS

Fibonacci extensions can be defined as an impulsive action that continues a trend after a retracement.

There are 2 main ones 1.272 and 1.618 extensions.

Good for finding targets in trends especially if they are in confluence with key levels as trends are
likely to terminate at this levels if not permanently, temporarily due to profit taking.

Examples shown: The following is an example of a move showing the Fibonacci extensions
especially the 127.2%

The markets moved directly to our extension targets after bouncing of the 61.8% retracement level.
Extensions are mainly used together with retracements which results in the formation of the ( A.
B. C. D) pattern:

Traders are emotionally attached to the key levels and extension levels which are used by many
traders to set take profit targets in the markets.

SUMMARY

We have introduced you to the concept of Fibonacci ratios, sharing with you the two methods that we
use to break down markets and come up with high probability trades.

It is now your task as a newbie to practice plotting this levels watching how the market has reacted
to this levels, back testing will be a great strategy in helping you familiar with this concepts.

We should also warn that we have not shared several techniques that we used combined with this tool
to generate ideas, for those fortunate to purchase our other course packages you will be lucky to get this
methods in trading the financial markets.

You can also watch our YouTube channel for further breakdown of the charts and an introduction
to this concept:
https://www.youtube.com/channel/UCGZ595tFkjl4UOH3S9_GQ7Q/videos
 PIVOT POINTS

What Are Pivot Points?

If you are a novice in trading then this can be a new tool to you but if you have been trading or have
been involved in the financial markets then you must have come across the term pivot points.

This will be a brief but detailed introduction into this analytical tool used by many traders to try and
form an edge which they can profit from.

A pivot point is the price at which the direction of price movement changes. It is calculated using data
from the previous trading session.

Here at Financial Hub we don’t consider it to be an indicator but a technical tool.

Traders are always on a mission to find the next level of support and resistance
on the asset they are trading. Back in the floor trading days, professional traders developed this tool to
help them identify future zones of supply and demand using previous session’s data.

Pivot point analysis is often used in conjunction with calculating support and resistance levels,
similar to a trend line analysis. In a pivot point analysis, the first support and resistance levels are
calculated by using the width of the trading range between the pivot point and either the high or low
prices of the previous day. The second support and resistance levels are calculated using the full width
between the high and low prices of the previous day.

Pivot points are commonly used as intra-day indicators for trading currencies, stocks, futures,
commodities and bonds.

Unlike moving averages or oscillators, they are static and remain at the same prices throughout the day,
week or month depending on the timeframe you are watching.

Data from the prior session's trading range is used as an input to generate five pivot point levels.

The pivot point levels are composed of a pivot point, three higher resistance levels known as R1, R2
and R3, and three lower support levels S1, S2 and S3.
Here is the formula:

Resistance 3 = High + 2*(Pivot - Low)

Resistance 2 = Pivot + (R1 - S1)

Resistance 1 = 2 * Pivot – Low

Pivot Point = (High + Close + Low)/3

Support 1 = 2 * Pivot - High

Support 2 = Pivot - (R1 - S1)

Support 3 = Low - 2*(High - Pivot)

Pivots are used by most traders to find entries, take profit zone and stop loss levels. Traders will
watch for the market to reach these levels for them to make a sound trading decision.

Suppose the price is below the pivot at the open and you decide to go short at that point. The first
price you will look at to cover is the first support level.

Of course, you would rather hold onto the short position if there were an indication that prices will fall
further but S1 will be the first point of hindrance for the downside. S2 will be your second level to watch
if traders continue to lower the prices.

The converse applies to an uptrend. If prices were above the pivot, you would enter a long position and
use the first and second resistance levels as your profit objectives.

Pivot points will be calculated automatically for you in the markets; it is therefore your task as a student
to observe how price action behaves on the various support and resistance levels.
How Pivots Look On a Chart:

On the Chart Above you can see how the Pivot Levels are plotted.

Learning to profit from this tool will be discussed deeply in our PRO package and with that one can
apply this tool into his or her daily analysis.

SUMMARY

Using this technical tool is easy and simple to understand, however traders must understand that
use of this tool is highly intuitive. Traders should therefore learn the value of patience while still
familiarizing themselves with this tool.
 MOVING AVERAGES

A moving average is a technique to get an overall idea of the trends in a data set; it is an average
of any subset of numbers.

The moving average is extremely useful for forecasting long-term trends in sales, prices, yields,
population etc.

You can calculate it for any period of time. For example, if you have sales data for a twenty-year period,
you can calculate a five-year moving average, a four-year moving average, a three-year moving
average and so on.

Financial Market analysts will often use a 50 or 200 day moving average to help them see trends in
the financial market and (hopefully) forecast where the prices are headed.

Financial Markets are choppy and erratic in nature; the chart of a certain asset is not as smooth so as to
clearly gauge the dominant direction. Traders then came up with this tool to help them smoothen out the
choppy price action into a clear line that can show the sense of direction.

We have three main type of moving averages.

• Simple Moving Average

• Exponential Moving Average
• Weighted Moving Average

The difference is in how they are calculated and averaged. We will not go down to show you the details
of how they are calculated since the markets will always do the calculations for you. Any trader who
wants to know how to calculate can however do a Google search and that will enable the trader to
understand how to calculate the formation of this tool.

We will only give you the three ways which we use this technical tool in the following section:
How Moving Averages look on a chart:

USES OF MOVING AVERAGES

Moving Averages serve the main purpose of smoothening out price from the choppy nature of
the market.

With that it helps a lot of traders past just smoothening the price, moving averages have been used to:

1. Confirm the trend.

2. Show momentum.
3. Find dynamic areas of support and resistance.
4. Identify take profits and stop loss levels.
 ELLIOT WAVE THEORY

Ralph Nelson Elliot discovered that the markets thought to behave in a chaotic manner, actually didn’t.
According to him, the markets traded in repetitive cycles, which he pointed out were the emotions of
investors caused by outside influences or the predominant psychology of the masses at the time.

Elliot explained that the upward and downward swings in price caused by the collective psychology
always showed in the same repetitive patterns. He called these upward and downward swings
‘waves’.

Elliot waves are used to give traders precise points to identify where price is most likely going to
reverse.

Elliot waves are made up of Motive waves and Corrective Waves. Motive waves have a 5 wave
structure (1-2-3-4-5) while corrective waves have a 3 wave structure (a-b-c) as shown below.

b
3

c
1

2
 MOTIVE WAVES

Motive waves are subdivided into 5 waves and always move in the direction as the trend of one larger
degree. Three of these waves, which are labelled 1, 3 and 5, are generally known as Impulse waves,
actually effect the directional movement. They are separated by two countertrend interruptions, which are
labelled 2 and 4.

WAVE 1

The currency makes its initial move upwards. This is usually caused by a relatively small number of
people that all of a sudden feel that the price of a stock is cheap so it’s a perfect time to buy. This causes
price to rise.

WAVE 2

At this point, enough people who were in the original wave consider the price overvalued and take
profits. This causes the stock to go down. However, the stock will not make it to its previous lows before
the stock is considered a bargain again.
WAVE 3

This is usually the longest and strongest wave. The price has caught the attention of the mass public.
More people find out about the pair and want to buy it. This causes the price to go higher and higher.
This wave usually exceeds the high created at the end of wave 1.

WAVE 4

Traders take profits because the pair is considered expensive again. This wave tends to be weak
because there are usually more people that are still bullish on the stock and are waiting to buy on the
dips.

WAVE 5

This is the point that most people get on the market and is most driven by hysteria, an example is the
stock market. Traders and investors start coming up with ridiculous reasons to buy the stock and try to
choke you when you disagree with them. This is when the price becomes the most overpriced.
Contrarians start shorting the stock which starts the Corrective Wave (ABC).
 CORRECTIVE WAVE
The 5 wave trends are then corrected and reversed by 3 wave counter trends. Letters are used
instead of numbers to track the correction.

Corrective waves are divided into 3 main types:

1. Zigzag
2. Flats
3. Triangles

The above image is a simple example of a zigzag ‘a.b.c’ wave.

A Flat is quite different from the zigzag formation and looks like the image below:

It is usually called a flat because of the same distance that all the waves cover. Wave A begins the
correction after the market peaked at wave 5. As wave B
begins, it reaches the same level where the market had peaked and then drops forming wave c
which finds support at the same level wave A did.

The Triangle forms in sort of a symmetrical way, just like we covered in Chart Patterns. What is of
importance when it comes to the Elliot Triangle is that is made up of 5 points:

RULES TO FOLLOW WHILE TRADING THE ELLIOT WAVES

1. Wave 3 can NEVER be the shortest impulse wave

2. Wave 2 can NEVER go beyond the start of wave 1
3. Wave 4 can NEVER cross on the same price area as wave 1
4. Wave 3 tends to be very long, sharp and extended
5. Waves 2 and 4 often bounce off Fibonacci Retracement levels
 CHART PATTERNS

In the Top down Analysis, apart from the Trend lines, Key Levels and Price Actions that we have
already covered, Chart Patterns are as important to add to your analysis as they give a clearer picture
of what exactly is happening in a trend or while the market is in a consolidation.

They are formed as a result of people’s behavior in the market and a repeat of history in the markets.
These two aspects contribute greatly to the aspect of chart patterns.

We will go through several chart pattern formations showing and explaining why they are formed and
how the markets play out after hitting these levels.

The trader will be able to understand the following concepts as you read through:

1. Chart patterns and market sentiment.

2. Trade execution based on chart patterns.

HEAD & SHOULDER

The head and shoulder also a good trade pattern to rely on in order to catch some crazy PIPs.

They are mainly Reversal Patterns and form after an uptrend. They also form after a downtrend but in
this case they are called Inverse Head and Shoulder, but basically have the exact same characteristics
as those that form after an uptrend. The Head and Shoulder pattern basically has two shoulders and
one head, just like the human body.

The left shoulder, which begins the pattern, forms after a series of higher highs and higher lows. The
market reaches a significant high, left shoulder (resistant level), and then retraces back down,
forming a higher low (neck line) and then continues to a higher high (Head) where it loses
momentum and reverses back down.

Upon changing the trend direction, the market is pushed to the previous low (neck line) which acts as a
support, then rallies back up to a resistance level in line with the left shoulder.

At this point, the right shoulder is formed. This in turn paves way for the market to go to lower lows,
finishing the last leg of the pattern.
A sell trade can then be executed upon break of the neckline confirming a downtrend in play.

INVERSE HEAD AND SHOULDER

The Inverse Head and Shoulder is the exact same as the Head and Shoulder but forms after a
significant downtrend, reversing the trend back to an uptrend, applying the same principles but
opposite.
Note: The neckline is the line that acts as support or resistance before and after the formation of the
head. Better seen if a support line, resistance line or trend line is drawn to join them.
The distance between the Head and neckline is known as the Neck. It is best if drawn with an arrow as
shown below and then duplicating the arrow and plotting it above or below the neckline.

This distance is important in this formation as it helps one know how far up or down the market might
move after bouncing off the right shoulder and where to set target profits.

Head and Shoulder Pattern can be used in line with other indicators especially the Fibonacci Tool to
confirm resistance and support levels (turning points).

DOUBLE TOP & BOTTOM

This common pattern is one that is often formed on both a trending market and ranging markets. They
basically form when the market retests a point of previous high or low.

Just as the name suggests, Double Top forms as the market retests the previous high during an
uptrend and then moves downwards, forming ‘M’ shape. The Double Bottom forms as the market
retests the previous low in a downtrend before going back up, forming a ‘W’ shape.
Just like the Head and Shoulder, the double top and bottom too have a neckline.
Using the Double Top as an example; the market reaches the top of the trend to a resistance point,
which acts as a rejection zone. It has a short pull back to a point of significant support. At this
point, a neckline/base is established and the markets heads to retest the resistance point again.

In the case of a double bottom, the reverse would happen and we can be able to observe this on
the following chart patterns.
The neck formed in the process (distance between the top and neckline) is then used to determine how
far the market will reach, by drawing an arrow between this two points and duplicating it below the
neckline.
This lower point can be used as a target profit area as the market can bounce back up, consolidate or
head further down after reaching this point.

We personally like this pattern because of two important reasons:

• It greatly confirms that the market has tried to break a resistance or support level twice and
both times got rejected, pushing the market in the opposite direction, confirming the new trend
direction.

• One can have a stop entry at two levels. If a person is an aggressive trader, he or she can
execute a trade after a close of the candle stick which retested the resistance or support,
depending on how the candlestick closes.

• Or if you’re a conservative trader, it is best if you wait for the market to close above or below
the neckline, confirming the market has changed direction as it forms a higher high or lower
low. Now imagine if you executed a trade at both levels, your PIP count would explode just
from this chart pattern.

TRIANGLES
Triangles are very common trading patterns that can easily be spotted on multiple charts.

Triangles are a form of consolidation pattern that anticipates a break on either side depending on what
kind of triangle was formed.
There are various types of triangles; we will however go through the symmetric triangle:

• Symmetric Triangle
• Ascending Triangle
• Descending Triangle
 SYMMETRIC TRIANGLE

These are triangles that are formed after a series of lower highs and higher lows. If trend lines are drawn
to connect the two, they converge at a point to form a symmetric triangle as shown below.

Just as we said in the beginning of this topic, triangles are a form of consolidation pattern, and therefore
we should anticipate a breakout at either side. The formation of the lower highs and higher lows shows
that there is indecision in the market, and no clear sense of direction. This is the reason one should
anticipate a break on either side.

It is also important to measure the length of the opening of the triangle, known as
base, with an arrow, and then duplicated to either side of the triangle, as this gives an estimation of how
far the market will reach after the breakout.
 WEDGES

Wedges signal a pause (consolidation) in the current trend. At this point, traders are still deciding where to
take the pair next, and therefore wedges can serve as either continuation or reversal patterns.

Wedges have almost the same characteristics as the Triangles.

There are two types of Wedges:

• Rising Wedge

• Falling Wedge

RISING WEDGE

A rising wedge is formed with higher highs and higher lows, and they act as a
bearish signal.
If a trend line is drawn to join the higher highs and another to join the higher lows, you will notice the
slope of the support is steeper than that of the resistance. This indicates that the Bulls are slowly losing
control and can’t take the market to significant higher levels, and therefore the bears take advantage
and pull it back down.
If the rising wedge is formed after an uptrend, you should anticipate a bearish reversal. If it is formed
after a downward trend, then in means a continuation to the down side is imminent.

FALLING WEDGE

A falling wedge is formed with a series of lower lows and lower highs, and they act as a bullish signal.

If a trend line is drawn to join the lower lows and another to join the lower highs, you will notice the slope
of the resistance is steeper than that of the support. This indicates that the Bears are slowly losing
control and can’t take the market to significant lower levels, and therefore the bulls take advantage and
rally it back up. If the falling wedge is formed after a downtrend, you should anticipate a bullish reversal.
If it is formed after an uptrend trend, then in means a continuation to the upside is imminent.
 SUMMARY

We have gone through various chart patterns but not all; it is your task as a student to make sure you
dive deeper into understanding this topic. Traders should also spend a great amount of time on their
charts trying to identify and plot chart patterns.

We will therefore show you a photo illustrating the various chart patterns:
 TECHNICAL INDICATORS

Technical indicators can be defined as tools that use a series of data points and various
mathematical formulas to define a perspective on market behavior.

Just like any other tool, technical indicators are used by traders as a means of knowing where the
markets are headed and to confirm certain biases in the financial markets.

There are several technical indicators that can be used to trade markets; we will however categorize
them into 2 major categories: Leading Indicators and Lagging Indicators.

Leading indicators give us an indication or price signal just before an actual price level is hit; they
simply inform us before price action has behaved in a certain way. Most leading indicators will tend to
measure the momentum or the degree of the slope of current price movement.

They Include: Relative Strength Index (RSI), Stochastic Oscillator, Commodity

Channel Index (CCI) and Pivot Points.

Lagging indicators on the other hand give us an indication or price signal after a new trend has started.
Unlike the leading indicators, Lagging Indicators will inform us based on the behavior of price action.

They Include: Moving averages, Bollinger Bands and Moving average convergence
divergence (MACD).

We will not go into detail to describe the use of each and every tool and we will instead leave that
research to be done by the reader.

We will however warn that using all of this in your trading will make trading complex while success in
trading is about simplicity. This is because most of these indicators are used for the same purpose
which is identifying trade setups and capitalizing on them which can be done in a simpler and more
accurate manner.
Newbies often make the mistake of making their charts full of indicators with the hope of making trading
easier and instead they end up confused not knowing when to buy and sell.

The following is a chart example full of indicators and tools in the markets:

We would recommend sticking to at most one or two indicators and perfecting how to use the two rather
than trying to use all with mastery at none of this tools.

The following is an example of a neat chart with analysis from pro trader:

You will clearly observe how easy it is for the pro trader to make decisions in the market unlike the
Beginner who believes that more is better, in this game the only mantra you can live by and succeed is “less
is better”.
 SUMMARY OF TECHNICAL ANALYSIS

Technical analysis is broad; we can’t use all the resources available to us. This is because we will end
up confused with our decision making limited since we have many tools to look at. In the markets,
making decisions fast is a skill that must be mastered by traders.

We should therefore learn to follow the principle less is more. By mastering three or four tools and
combining them together one can be able to come up with a high probability edge which can enable
you to make money trading.

It is an exercise in futility trying to get a system that will work all the time that system does not exist. In
an environment where randomness is the rule then it is extremely hard to get something that works all
the time. We have not shown you how we combine these tools and come with high probability setups.
One can however watch our market breakdowns on YouTube and you can get a rough idea on how to
go about the markets. The link is below:

https://www.youtube.com/channel/UCGZ595tFkjl4UOH3S9_GQ7Q/videos
 BEGINNERS GUIDE TO FUNDAMENTAL ANALYSIS

As a new trader you’ll often see price movements on the charts be it in candlestick form, line graph or
whichever layout you prefer but most probably you might not know the reason to such movements.

Fundamental is the answer, fundamental analysis focuses on the ‘Why’ of price

valuation of different financial instruments; stocks, indexes or currencies.
Fundamental analysis affects the market in both long and short term durations and they assist
investors/traders in making investment decisions.
Historically fundamentals were used to evaluate company worth by stock price valuation but the model
was passed on as new markets emerged to assist in doing the same.

The two main purpose of fundamental analysis in the financial markets are:

1. Determining the short-term impact on currency pairs.

2. Forecasting long-term trends.

We’ll take a brief look on the four important factors in the pricing process for financial markets:

• Current business conditions

• Interest rates
• Inflation
• Spending Habits

BUSINESS CONDITIONS/CLIMATE

Businesses and currencies share the same factors that affect their values. But in the financial world
governments tend to focus more on the economic conditions to help them determine what fiscal policies
to set.
Governments watch the overall economic conditions periodically through various departments to make
sure the economic health is at balance, for example if an economy is doing well through more
production than consumption more money gets to be borrowed in order to expand.

This triggers governments to raise borrowing rates to maintain inflation levels at a healthy standard but
attract more investors at the same time due to a strong currency.

When business conditions deteriorate, rates get lowered making investors flee to other countries with
better business conditions and currencies that yield high cause low interest rates have negative impacts
on business returns i.e. high interest rates mean a stronger currency and lower interest rates mean
a weaker currency.
 INTEREST RATES

Just as we have explained in the previous section interest rates play a key role when it comes to making
investments decisions. One way through which investors take advantage of interest rates differential is
by buying a currency with higher interest rates, collecting that interest and then selling a currency with a
lower interest rate; carry trade.

The Business cycle also plays a big role in the movement of interest rates; one can therefore learn how
interest rates move up and down by understanding the business cycle.

INFLATION AND COMMODITIES

Inflation has different meanings depending on who you ask but the most common simple definition
known by many is simply upward spiral in price. When inflation picks up many intelligent people or
investors buy commodity products in bulk to hedge themselves against future high prices, fear being
the main influence instead of good business conditions.

Governments on the other hand try to counter the move by raising cash deposit rates so as to lure
individuals to sell off their stock piles in exchange for cash which can earn from high interest rates, a
trick that doesn’t work for everyone. Some weigh returns of both opportunities and hang on to their
commodity stocks, to cut the long story short; a rise in commodity causes a rise in value of the
currency of a country that holds large supplies of the commodity but it’s wise to keep in mind that
currency valuations are relative and commodities should be traded individually on the basis of price
movements.

CONSUMER HABITS

Individual and government spending also have significant impacts on the economy. We know the
question running in your mind right now is “How does my spending nature affect the economy?” Human
nature of interdependence often leads us to share different traits and characteristics, not all but some of
us. Generations(X,Y,Z) is a good example of how we humans share traits; kids are known to be playful,
teenagers known to be curious about life and contain both traits of adults and kids, and adults known to
develop a sense of responsibility.

The main purpose of the above example/explanation is to show you how one generation or age group
can have a significant effect to the economy if an epidemic habit is formed among them. Take an
example of selfie-sticks, social media or
technology in general, when the technology boomed Generation Y (millennial) became the major
consumers leading to significant growth in tech companies. Back to the main point, excessive spending
without income flow to fill in the gap created leads to debt accumulation in order for people, businesses
and governments to survive. Debt is mostly considered a harmful thing but it’s also a useful tool
especially when used to generate income with guaranteed payment but when payment isn’t guaranteed
individual and government economic positions decline. Governments come to the rescue by lowering
interest rates to ease spending which fuels consumer spending, lending to and buying into industries and
companies.

Now we’ll dive into some of the key economic reports but we won’t focus on all currency reports but the
U.S. fundamentals because the dollar is the most involved currency in world transactions,
approximately 70% of all currency transactions. The same interpretations we make on the U.S.
economic indicators apply the same way to other countries’ fundamentals in relation to their country
valuations.

SUMMARY

We have not covered any concept under this topic broadly; this is because we don’t use fundamental
analysis a lot compared to technical analysis. We use the 80/20 rule when it comes to fundamental
analysis. This means we only rely on fundamentals 20% of the time.

This is because at the retail level, getting Data is hard and again one gets data pretty late. This
makes this method a disadvantage for the swing trader.

However in determining the long term trend or direction of a pair or asset, fundamentals can be more
instrumental than technical. Understanding this field is therefore still important since one has to switch
roles in the markets at times.

We will now move to the next topic which is psychology of forex trading.
 BEGINNERS GUIDE TO PSYCHOLOGY OF FOREX TRADING

“Know the Enemy and Know thyself and in a hundred battles you will never be in peril”

Success or failure is a choice, those who succeed and those who fail have totally different traits and
thinking patterns.

Our minds and thinking as humans is the greatest advantage we have over all other creatures, it is
unfortunate some of us don’t tap into our full potential in our lives and in many activities we do such as
trading.

Trading psychology will contribute greatly to your success or failure as a trader. It is evident that anyone
can understand technical analysis or fundamental analysis when taught, but no one can teach you how
to develop a feel for the markets. The psychology of trading will play a big role in taking you down the
path to understand markets clearly and get in sync so as to make money.

When it narrows down to trading psychology there are so many things that you will learn that are not
only useful in trading but also in general life and business.

Trading is directly opposite to human nature, you have to be willing to deal with the emotional roller
coaster and stressful times for you to reap the rewards that follow when you become a successful
trader.

The psychology of trading involves the study of a trader’s behavior and mind with an intention of
building the best habits and developing a trader’s mindset. Good trading habits is what will make the
best traders, this is because in the long run what matters is not a single trade but the multiple trades
that you execute in the forex market.

Successful trading will demand that the trader get to narrow down to understanding how the mind works
and specifically pay attention to his own mind, a deep understanding of the two will unveil the road map
that traders need to take so as to master the psychology of trading. Understanding how the mind is
wired will help in getting to know and predict the behavior of the consensus in the markets that don’t
make money in the long run. A deep understanding of thyself will enable you to build the best habits and
join the minority in the markets who will mainly be
profitable in forex trading. We will outline some of the most important concepts under this field and
expect that you guys will go deeper to understand this topic.

RANDOM NATURE OF MARKETS

One of my best trading psychologist and educator , who recently passed Mark Douglas in his two books
The Disciplined trader and Trading in the Zone explains in a layman’s language the psychology of
trading like nobody else does, Giving the reality of the financial markets that many dodge and the role of
emotions in the success of a trader.

He insists that the uncertainty of any trade or the random outcome of trades is the reason why it
seems so difficult to determine when to close a trade, both in profit and loss. And that’s the hardest
skill to actually understand and profit from in trading.

As humans, we tend to have an innate desire to control things, situations, and emotions, so when
the fierce desire meets the uncontrollable market we almost automatically get a cognitive
dissonance and no harmony .And for sure when things unfold otherwise we feel wrong and
frustrated.

• Every trade has a random outcome.

Before making any trading decision, even when analyzing the markets, a trader should be aware that
each trade has a possibility of either being a loser or winner, despite the amount of confluence and
technical tools used to make the decision. A trader must always think in probabilities and put on risk
measures to curb the loss side to prevent extreme drawdowns and also get a reasonable reward target
too. From my experience in the market, I can say the normal market is one that never existed. And as a
trader we have already decided to live in an uncertain world.

Blind trading is one of the reason why traders lose money in the markets and fail to account for it even
when journaling , it’s not that the trader did not analyze the market neither did he do enough due
diligence before executing the trade, NO! It’s basically they didn’t understand that the outcome of that
trade was almost 100% unpredictable at the time of execution and instead of getting cautious a trader
gets hopeful that his analysis will fulfill and ends up not adapting to the edge, even
if it was a working profitable edge. Every trade you take is totally unconnected and independent of the
last trade you took or the next one you will take.

For sure it can be difficult to understand how you could how you could make money in the markets
if every trade has an essentially random outcome; this is because the fact is in conflict with the fact
that traders do actually make money consistently over time which is possible.

The difficulty lies in the fact that you need to hold two different understandings of trading in your mind:

1. You can make money consistently over time if you trade execute your
trading strategy consistently over time.

2. You cannot control the market and every trade has a random
outcome of any other trade you take.

“It’s the ability to believe in the unpredictability of the game at the micro level and simultaneously
believe in the predictability of the game at the macro level that makes the casino and the
professional gambler effective and successful at what they do.”~ Mark Douglas.

CONSISTENCY IN A RANDOM MAKET.

“Millions come easily to a trader after he knows how to trade than hundreds did in the years of
ignorance’’- Jesse Livermore

The random walk theory states that the movement of prices in the markets are random and that
we can’t be able to predict where prices are headed based on the past behavior of price action. We
partly agree and disagree with this statement; in the context of technical analysis we totally disagree with
this theory but in the field of psychology we want to be believers of this statement. This only means that
despite developing an edge in the markets it is extremely hard to tell which trade will be the winner and
which one will lose money. The only option that we are left with then is to repeat some activities in the
market with the condition that our system has a positive expectancy. We therefore can make money in
the long run.
Consistency can be simply defined as doing an activity in the same way over time. The overall
goal in trading is not to just get one winner trade but to get multiple trades right and wrong and still be
able to make money. This can only be achieved by understanding consistency.

Simply meaning that you have to understand that at the level of one trade anything can happen
but at the level thirty trades my methodology will make me money.

Consistency is achieved by understanding that every moment in the market is unique and getting your
mind across the fact that not all trades you take will turn out well. You have to be disciplined and have
general rules of thumb that can help you get to that level of consistency.

This does not happen overnight within a month or two it takes time constantly designing an edge that fits
your personality and taking opportunities to observe what works and what doesn’t work. Trading to
achieve consistency is simply doing more of what works and less of what doesn’t work. Remember it’s
not the best lawyer who wins the case but the one who is most prepared.

The simple lesson here is you shouldn’t focus on what you can’t control; rather focus on yourself
and taking absolute responsibility for your decisions.

People tend to be overconfident when they have more knowledge and think that they can control
events. This belief will result to losses and the risk of ruin in the forex markets. If you can’t go against
human nature and learn from other peoples mistakes then you my friend will be taught the hard way by
the markets.

EMOTIONS AND THEIR EFFECTS IN TRADING

“Never let emotions overpower your intelligence”

Emotion is best defined as disturbance by a very good author Eckhart Tolle in his book The Power
of Now. He claims that the word emotion was deprived from
‘emovere’ which is a Greek word meaning disturbance. The reason we love this definition is simply
because in trading if you become a slave to emotions and
concentrate on fulfilling emotions you will end up with no money made at all with frustrations after
losing all your money.

• FEAR AND GREED

Fear is an emotion that has killed so many dreams and destroyed so many visions; in fact 65% of
sources of error in trading are attributed to fear.

It does not only exist in trading but also in life, the surprising fact is that the brain which should be
leading us over fear is the same one which is subjected to fear.

In trading fear prevents you from being patient because you think you will miss out, popularly
known as the fear of missing out.

Fear also prevents you from sticking to your winners as you think that the trade will eventually go
against you so you cut your winners early.

You have to overcome fear not by trying to avoid it but by learning to know that it exists and acting
against it when you feel it is the reason behind some reckless decisions.

Greed on the other hand is the reason why so many traders will stick with positions even after their target
has been met, the market then reverses and takes out their profits. Also it is the reason why people don’t
think of risk and over position size and if the trade doesn’t turn out well the trader ends up on great loss
that damages his account.

We will not tell you what percentage of your account you should risk but always remember that the
important aspect in trading is to protect your capital first.

Basically the market movements are driven by only two emotional factors Fear and Greed. These two
factors are the ones responsible for the market’s volatility, actually the emotion of fear is stronger than
greed and that’s why markets tend to fall faster than they rise.

• OVER CONFIDENCE AND EUPHORIA

Euphoria and over confidence work in tandem. It is your ability to control these two emotions that will
make you a very good trader who is not only consistent but also able to control his drawdowns.
Traders will start taking more risks and stop being careful after a string of wins in the markets; you
should keep your emotions in check when it comes to trading and be very careful especially after string
of wins.

This emotions result in people over estimating their knowledge, underestimating risk and
exaggerating their ability to control events.

The markets are uncertain and random; you have to be ready to deal with anything that is happening at
the moment and understand that you are not in control of moving the markets.

• HOW TO DEAL WITH OVER-CONFIDENCE IN FOREX TRADING “Always ask yourself

what can go wrong in the markets?”

Over confidence as much as fear has been long blamed for failure in the markets. Forex traders will end
up on bad trading traits like over position sizing and over trading due to over confidence in the markets.
Confidence which is a fine line between fear and overconfidence is what is required for you to become a
master at this game. I will share my different styles of dealing with over confidence in the forex
markets

It is unfortunate that most of us will result to overconfidence after a string of wins in the market and
fearful after string of losses in the markets. In a random world, there must always be a series of losses
and a series of wins. In order to watch your behavior after a string of wins, the best approach is to use
reverse psychology. This means that just when you feel like a god in the markets after several winning
trades in a row, you could think of the winning trades like losing trades. Great traders understand that it’s
only by building good trading traits that they can survive in the markets in the long run. If you think of the
winning trades like losing trades, you will be forced to focus on your trading and watch your trading
behavior which is very important in the markets.

Complacency is accompanied by lack of focus and a less detailed approach to your work. Good trading
is not about overcoming your weaknesses; rather it is a matter of capitalizing on your strength. This
means you should be more focused when trading well to understand your feel for the markets and what
results to good trading patterns for you. Traders who are keen to try and overcome their
weaknesses are using the wrong approach to mastery in the markets, it is important to always seek to
work on your weaknesses but the best approach is to capitalize on your strengths and improve on your
weaknesses.

Over trading is what will kill most traders who understand the markets and have an edge in the markets. Selectivity
and timing have resulted to great trading success among many traders in the world. Trading well entails
execution of only trades that are favorable in your system and edge in trading. Forex traders will result to

overtrading only because they think that the pattern they are trading will work all the time, take the
example of a trader who greatly relies on Fibonacci ratios while trading, this trader is likely to end up
over trading after most of his setups align properly for execution. It is important to factor in the number
of trades you are willing to execute within a month in your trading plan as this will enable you to know
when you are going overboard in your trading plan.

In conclusion, we can avoid overconfidence from taking over by simply living in the present
moment. Thinking about the past and future has trapped most people’s lives and this is not good
for trading.

Zen in the markets is a good read on how you can be present in the markets and how you can
avoid bad disciplines like emotions taking over and other bad habits while trading. Meditation is a
good practice for traders each and every day before trading. This will help you remain calm and to
take each day with an open mind. The best traders have a way of disengaging for the market and I
am glad to say I found mine in meditation.

• WISHFUL THINKING AND HOPE

Wishful thinking can be defined as pitting of hope against facts.

Traders often find themselves wishing the market would move in a certain way that could favor their
beliefs.

The problem is that our brains are programmed to avoid pain, so most traders find themselves wishing so
that they could avoid the pain caused by loss and also avoid taking responsibility for their losses. Instead
you should use these losses as a pay for learning the markets.
Hope does the same damage to your account. If you find yourself wishing and hoping then you are
probably wrong and should be out of the current position you are in, Markets will move despite your
hopes and wishes.

When trading it’s always good to deal with the cold hard truth and pain that accompanies the truth.
The most important lesson from this section is getting that mind shift from the world of fantasy and
wishful thinking to the world of reality.

• POSITIVE SIDE OF EMOTIONAL TRADING

We have outlined to you some of the costly emotions in the markets. We however have the positive
side of emotions which will work to your favor if you can be able to maximize on them in the markets.

“Great traders are not motivated by making money; to them a feel for the markets is the
main goal”

All traders by now are familiar with the great book Market Wizards by Jack Schwagger. I am interested
in the statement of one trader William Eckhart who said he would rather bet on someone with a shoe
string who can’t afford to lose than on a rich man who is not affected by losses. What this trader meant
was that if you channel the frustration and pain associated with losses in the markets to trading lessons,
you are more likely to learn faster and succeed in the market.

Emotions have been blamed for most of the mistakes in the markets. I believe we can reverse what
everyone terms as the cause of failure in the markets, to be the reason for success in the markets. Worry
and fear are mainly caused as a result of the trader rehearsing what might go wrong in the markets. This
worry and fear should therefore force the trader to plan ahead what he will do when the markets do what
they are going to do threaten his profit in the markets. This only means that upon every execution a
trader should be keen to watch for stop loss points and how to manage the trade efficiently. A stop loss
is point at which your initial trade idea is nullified and becomes wrong in the markets, only when
you fear losses being big than your account allows will you be concerned with setting stop losses and
correct position sizing in the markets.

A forex trader will notice his bad trading habits and struggle to change until he experiences pain
that will enforces change. Changing behavior is easy, but
sustaining change is hard. Traders need to look at emotions in the markets as an aid to help them master
trading, rather than as a hindrance to their trading. Great traders are not the traders who don’t have
losses; rather they are traders who use their losses as pay for learning what not to do in the markets. Trading
is the best career to be involved in if you are constantly seeking improvement (open minded and
growth mindset) I believe every trader always seeks to reach perfection in the markets, but the great
traders understand that it is impossible to reach perfection in the markets.

Inspiration and motivation will always be emotional. In trading, two traders execute a break out trade
and it turns out to be a false breakout. Both traders end up with losses but one trader uses the loss as
an example of false break out and learns how to differentiate the two, the other trader sabotages himself
and gets bitter at the market, trying to make money from the market without an opportunity and ends up
in more losses. This is a clear example of how emotions resulted to positive behavior and improved
trading generally for one trader, while the other trader ended up on the negative side of the market.

Setting goals and accomplishing them will only satisfy you emotionally. It is important as you start
every trading week to set small, goals in the markets that will drive you to research and develop good
trading habits generally. I will take the example of a trader who sets a goal of banking 100 pips in a
trading week, the trader is likely to make better decisions in the market unlike a trader who starts trading
without any goals, the trader is likely to trade without any edge or opportunity in the markets to make
money.

When setting goals always remember to set achievable goals that will propel you to trade effectively in
the markets, setting unrealistic goals is likely not to drive you to trade properly in the markets. Aiming
low will not give you the motivation you need to rise and grind, so set your goals effectively.
 OVER TRADING

“When the profits of trade happen to be greater than ordinary, over trading becomes a general
error both among great and small traders”

Over trading is the one killer that destroys many trading accounts? Too much of everything is
poisonous. The driving force behind over trading is over confidence and greed. This two will work in
tandem to make traders make this big mistake in the markets.

Over trading means that people place too many trades thinking that the more the trades the more
money you will make, that is directly false.

In trading the fewer positions you take the better for you while trading. People also over trade by opening
a very big position in relation to their account size and especially after wins in a row, you can also end up
over trading once you use very high amounts of leverage.

Always under trade, I have not heard of any trader who over trades and accumulates a fortune. Jim Rogers
who is a master trader says that he always waits till money is fixed in a corner and he just steps there
to take it.

COMMON TRADING BIASES

“Learn how to think, not what to think”

A bias is best defined by Evans Dylan in the book Risk Intelligence as a tendency to make mistakes of
a particular kind, not random errors but ones that are skewed in one direction. In the financial
markets traders often end up on the wrong side of the market due to bad trading habits that are cultivated
over time. Traders are humans, they therefore go through biases. In this section we go through some of
the common biases that traders go through:

• CONFIRMATION BIAS
In the markets traders trade their beliefs about markets. It is therefore normal for traders to form
opinions after observing the charts and reading patterns. A trader executes a trade after forming
hypotheses about the markets, the markets
either go his way making the trade a winner or the opposite resulting to a looser. The problem arises
when upon execution the trader only looks for information that supports his idea. This results to
locking out information that is contradicting which is more important when trading the financial
markets. In the markets, mental flexibility is underrated by most traders while it could be the best way to
learn how to cut losses early and to ride winners. A flexible mind will not hold on to trades only looking
for information to support it, instead it will focus on looking for contrary evidence which could make you
realize you were wrong. The solution to this bias is to form an open mind upon execution, knowing that
the trade could move to any direction and always be keen to look at every tick of the market and what
that means.

• RECENCY BIAS
Our brains are constantly receiving new information and experiences. Scientific research has proven that
our brains put more weight on recent information than on preceding information. Traders have strings of
losses and strings of wins in their trades. A string of wins will often result to overconfidence and
complacency among traders resulting to over trading and over position sizing which is dangerous for
traders. A string of losses will also result to fear of taking opportunities in the markets. The solution to
recency bias is using reverse psychology. This means that you should remain calm and focused,
no matter what is going on in your trading. When you have a winning streak, you can perceive it as a
losing streak which will help you focus and remain calm avoiding euphoria. Behaviors in the markets
are very important and it is important for you as a trader to master your behaviors.

• LOSS AVERSION
No one loves losing. We all want to be winners. Our emotional brain is wired to avoid losses. It is
this tendency to avoid losses that will cause traders to execute trades and if the trade is a winner
the trader will cut the profits early only to satisfy his emotions. The same trader will also do the
reverse of holding loosing trades for long in the hope of the markets going back, instead of cutting them
early. The true test of a trader is how he handles losses and wins. Truly in trading, “if you bring in
normal human tendencies toward trading, then you will gravitate toward the majority and
invariably lose”
 LESSONS FROM LEGENDARY TRADERS

In every industry there are general codes of ethic that define success and failure.
The easiest way to define and differentiate the two is to study those who came before us; in the markets
we can get lessons from some of the best traders like Ray Dalio and Jesse Livermore. We can also look
at some great failures like the collapse of Lehman Brothers and Long Term Capital Management. We
have studied these two patterns and have come up with the following general rules;

• Cut your losses early and ride your winners.

• Stay in the present moment while trading, forget the recent performance and don’t be anxious
about the future. Focus on what is happening now in the markets.

• Take full responsibility of trading, blame games don’t work in the markets.
• It takes effort, practice and time but the payoff is great. When beginning your journey in the
markets, you must be ready to go through the hard times and put in the work so as to succeed.
Success will not just follow you in the markets.

• Don’t chase good money after bad; Revenge trading will make you retire faster than you
have anticipated in the markets.
• Humility and discipline will take you places in trading; remember good trading is about
building and cultivating the winning traits in the markets.
• Don’t get attached to money, stay focused on doing the right thing.
• Fear is what results to 65% of errors in trading, so be courageous but not over confident.

• Be market neutral; don’t get attached to either side of the market. As a trader you only want
movement in order for you to make money, so be keen on the market movement and your
opinions about the movement.
• Implementation and execution is more important than the trade analysis, breaking down
markets and getting an insight on what is going on is a skill that is easily mastered but
execution is something that few are able to master.
• Always speculate and anticipate the market, but don’t always expect to be right. Traders need to
be flexible to change their minds when facts change in the markets.

• Effort is the money one pays for development. Discipline, commitment, hard work,
tenacity and consistency will help you greatly in trading.
• Self-mastery is what you will struggle with to make money in the markets. If you don’t know
yourself then the stock market is an expensive place to find out.

• Don’t average losers.

• Be more concerned with your point of exit, rather than the point of entry. This is a synonym
of protect your capital in the markets.
• Differentiate between trading based on an edge and trading based on ones ego. If you
struggle to cut losses, then it’s pretty clear that you are still trading based on your Ego.

• When there is no directional bias, it is better to stay out and wait for the perfect
movements in the markets. Sitting tight and waiting for the right opportunity is what will
make you rich in the markets.
• Don’t be perfect, it is virtually impossible. Perfection can’t be achieved in an uncertain
environment.
 BEGINNERS GUIDE TO RISK AND MONEY MANAGEMENT

“In trading you have to be aggressive and defensive in order to make money’’

Risk means more things happening than one can imagine, in trading the financial markets you must
have observed that with the markets nothing is guaranteed. Risk can also be defined as the amount and
probability of loss or a series of loss occurring.

You have to understand and know the risks involved with trading, because this will determine not only
how much money you make but most importantly how much you are left with in the long run which is
important when it comes to trading. When there is no risk involved, unfortunately no reward is made.

Money management is what will enable you to make money while managing risk and avoid big
drawdowns. There are two types of capital which should be managed in the markets, Emotional capital
and the bankroll that is cash.

The emotional capital will be managed by understanding psychology and getting the mental clarity to
prosper and thrive in the financial markets. Trading also has no holy grail; it is all about consistency
and minimizing the drawdowns by managing risk.

In the markets waiting for the perfect time and valid reason to pull the trigger you’ll find yourself missing
the opportunities, you also have to understand that not all bets you make that will turn out well. In every
game of chance there is a losing streak you should therefore be prepared for some losing periods. In
this business perfection is the enemy of profitability.

Some trades will be good, some will be bad. The good news is it doesn’t matter how many are good
and how many are bad, what matters is how much you end up with when right and how much you are
left with when wrong.

You have to understand that losses are part of the game, if you fail to accept losses as part of the
game you better stop trading, this is because you will always encounter losses on your journey as
you will be wrong on some of your bets.
Remember just as compound interest works for you in accumulating a fortune, it kills your account
once you get big drawdowns which are very hard to recover. In trading sometimes it’s not about
making money, but protecting what you have.

Risk is accompanied with mistakes, avoiding mistakes makes people stupid and having to be right
makes you obsolete, so understand how to manage risk and accept it as an element of trading.

MANAGING RISK AND MONEY

“ Don’t be a fool and eat like a pigeon and shit like an elephant”

We will look at different market aspects when looking at the concept of risk and money management.

This will guide you and enable you to understand the importance of the following:

• Importance of trading plan

• Journaling and record keeping.
• Important factors under risk and money management.
The following are factors to look at when it narrows down to managing risk and money:

• Volatility.
• Law of Probability
• Risk Reward ratio.
• Position sizing.

• Slippage and spread

• Randomness in the markets.
• Stop loss placement.
We will outline each of these elements and guide you on the path to the best methodology of managing
risk and money. It is however important to remember that you will have to do some in depth research to
understand this risks in a better way.
 VOLATILITY

“Volatility is greatest at turning points, diminishing as the new trend emerges”

Volatility can be defined as the range to which a price of a security may increase or
decrease.

Volatility is measured by calculating the standard of deviation of the annualized returns over a given
period of time.

When trading currencies, different currencies have different forms of volatility. Some currency
pairs are highly volatile e.g. EURJPY while others like kiwi are less volatile and slow moving.

The difference in volatility will mean that you should use different position sizes and the stop loss range
should be greater in the more volatile assets and less in the less volatile assets.

This will also help in knowing if you are wrong or correct, e.g. you don’t expect to set a 100 pip stop on
a slow moving pair like EURGBP and use the same range for Gold which is a fast moving pair.

Once you do this you may not breakeven even with a profitable system this is because the system
will not balance the winners and losers which is what is important when trading the financial
markets.

So before deciding on position sizing and the stop loss placement remember to factor in volatility so that
you can decide the position size, however more volatility does not mean more risk.

PROBABILTIY AND RISK TO REWARD RATIO

“The theory of probability is the only mathematical tool available to help us map the unknown
and the uncontrollable. It is fortunate that while this tool is tricky, it is also extraordinarily
powerful and convenient”
In the development of a winning system you must have noticed the probability of winning and losing. A
good system will have probably anything between 50% and 70% winning rate.

Such a system with a good risk to reward ratio of (1:2) will eventually be profitable, this means that for
every dollar lost you make two dollars. This is more like the theory of asymmetric risk reward ratios.

Learn to factor in risk to reward ratios before placing of trades. If you make the same amount when you
are right and loose the same amount when you are wrong, then you my friend are setting up yourself
for failure.

You have to put in the discipline to stick with your system even during bad times; this is because most
traders will start looking for a different system after two loosing trades hence jumping from system to
system and ending up in a string of losses and loss of capital.

The percentage of capital you risk will also be determined by how probable you think that the trade will
play out. Record keeping and journaling will enable one to decide how much bankroll to risk on one
trade as with time you will be able to tell what works and what doesn’t work in your system
development.

SPREADS AND MARGIN RISK

Spread is the amount your broker gets for offering you an opportunity to trade.

Different brokers and different account sizes have different spreads; you should also factor in this
cost while opening a position. This is because during times of great volatility and momentum the
brokers offer wider spreads.

Margin risk is the safety you have when your positions are open, if you don’t look at the margin keenly
and over leverage your account then you will be exposing yourself to great risks of blowing up the
account.

Always make sure you are keen on the margin your broker takes. Margin is also affected by the
amount of leverage you choose for your account.
Great amounts of leverage mean greater margin is required as you are controlling a bigger account,
therefore be keen on leverage as they are correlated to amount of margin.

STOP LOSS PLACEMENT

“If you place your stop loss poorly, 9 out of 10 times it will be taken out”

Traders will often lose money not because they are wrong but primarily because they placed their stop
loss too tight or at a point where a market maker will take it out.

When placing your stop always make sure you place it where it needs to be, if you find yourself placing
stops based on the amount of money you are willing to loose then you will end up in a pool of losses as
most of the times you will place your stop loss too tight to avoid losing money.

Place your stops at places where the market makers won’t take them out and also at points where the
general masses won’t place theirs.

Ensure you give the market time and space to breath once you execute your trades. In the markets every
moment is unique; you have to accept the randomness of the markets in order for you to make money.

Randomness means that nothing is guaranteed in the market and not every opportunity will be
like every other opportunity that you execute in trading.

POSITION SIZING

“If you don’t bet you can’t win and if you lose all your chips, you can’t bet.

This is one of the very important factors that will determine how much money you end up with after all
other factors are considered.

Traders often go wrong in the position sizing aspect; we will look at some factors that can help you in
making the decision of how much size should be taken on each position.

• Volatility
• Probability of trade playing out
 • Percentage of bankroll at risk( risk profile)
• System development
When learning how to trade it is advisable to start with small lots, this will help in your survival and
composure in the markets while forward testing your developed system, remember not to risk so much
that one trade can ruin you. Also don’t risk very little that a win doesn’t make any meaning.

SUMMARY

We have listed some of the important factors you need to look at when placing your trades and
developing your system under the topic of risk and money management. These are some of the
most important factors you need to look at when trading the financial markets and make sure you
understand the different aspects for you to be able to develop a system that fits your personality.
 BEGINNERS GUIDE TO TRADING PHILOSOPHY AND
JOURNALING

“A goal without a plan is merely a wish”

Philosophy can be defined as a theory or attitude that acts as a guiding principle of behavior.

In trading you have to build your own philosophy and believe in your own judgment in order for you to
make any money in the markets. You’ll be able to do this by having a trading plan that guides your
behavior in the markets and by keeping a record of the trades that you execute in the trading journal.

TRADING PLAN

We all have heard that failing to plan is planning to fail; this rule of thumb applies in the
markets.

We reckon every successful person always has a goal that drives him every morning when they wake
up and start grinding, the same applies to trading. Your trading goal will determine your trading plan.
Make sure you set realistic goals as most newbie traders are lost in the lifestyle of wealthy traders
forgetting that eventually you will get that level of financial freedom if you concentrate on the right
aspects of trading generally. In fact the financial freedom is a reward of doing the right thing in the
markets.

You have to make a trading plan and routine depending on the type of trader you decide to be, your
risk profile, amount of money you want to make and even depending on your account size.

For us trading the markets we decided to adopt my plan based on various aspects.

The following is a sample trading plan guide that you can use to guide you while making your own
trading plan:

Financial assets traded:

You can’t trade all currencies or financial assets; you have to choose some pairs or assets that you will
specialize in for you to be able to make money in the markets.
If you decide to trade mainly yen pairs then you should be keen on the Asian session as that will
contribute most movement under your category of assets.

If you decide to take on the dollar and the majors then you have to be keen on the European session and
the New York session. So before making a decision which markets you will trade make a decision based
on your criteria and other factors which assets you will put your time and effort into. Before you decide
which assets you will trade take a look at the following aspects?

1. Volatility
2. Account size
3. Goal
4. Personality and time available for you
Methodology:

Day trader, swing trader or scalper? They all do different things in the markets and pay attention to
different timeframes and tools while trading the markets.

You have to decide which role you’ll take after determining your personality and which methodology
you think will make you a heap of money

By the end of the day what really matters in the markets is how much money you end up with, not
which method you use.

So you have to find a methodology that suits your personality and routine especially. This is what
makes trading primarily difficult because it takes time, effort, persistence and great determination to
decide which methodology will make you most money while minimizing drawdown the most.

Time and personality are the two factors that will contribute mainly to this category, but remember
that the only thing that matters in trading is how much money you end up with and not which
method was used.

Setups:

What are the set ups or scenarios you look for to benefit you in the markets? This will help you greatly
in eliminating noise in the markets and help you under trade which is healthy for your trading.
You will also have to decide which criteria should be met before execution of your trades and what will
make you get out when you are both wrong or in profit when trading.

Which tools do you use? Is it trend lines, moving averages, key levels, Fibonacci etc. this will help in
filtering set ups and enable you to identify which setups work best for you ?

As time progresses you learn pretty fast what really works for you and what doesn’t work for
you.

Basically in a setup you have to get the following aspects fulfilled?

1. Entry trigger
2. Two exit strategies i.e. one for profits and one for loss.
Trade management:

All trades will not play out as you expect due to the many factors that will influence the markets.
The key to long term success in the markets will be accompanied by trade management and how
to avoid bad characters like over trading and revenge trading.

Trade management will also help in minimizing of risk as you manage the executed trades.

You have to be willing to deal with the bad hard days of trading. Discipline and flexibility will help you
tremendously in managing of your trades and mental state which is very important. Flexibility is
important since markets do change and with change we have to be adaptable and make changes as
the market progresses.

Trade management will also help you in composure during trading. This is because you will be able to
monitor risk and drawdowns while executing trades.

SUMMARY

This are the core principles that you need to make a plan, we have not really dived in deep into details
because we believe this can help you greatly in making the plan for your business of trading.
 JOURNALING

“Keeping a journal of what’s going on your life is a good way to help you distill what
is important and what is not.

Journaling is a record of ideas or experiences kept for private use.

When you start a business you always have all the numbers at your head or else the business will tank.
In your journey of trading, without a journal you are preparing for death in the markets.

You can’t make money in the markets without mastering your mistakes and keeping records in order
for you to know if you are trading poorly what’s wrong and how to correct your trading. Remember you
have to be completely honest with yourself when it comes to trading.

You also observe so many things in the market, through journaling and keeping records that you will
always remember once you visit your books again.

Journaling will help you maintain the consistency curve which is also important; it will also help you
bring some investors to invest in you.

You also need to believe in yourself, this will help you build confidence as you will be able to watch
your decisions and their outcome.

Don’t be involved with the biases that affect people in trading, in trading we concentrate on the process
of making the decision and not the outcome involved with your decision.

We always do Trade Post Mortem to enable us identify which setups had the best outcomes and which
ones are not doing good, with time this will help you in identifying which markets and setups are not
good to trade for your criteria and methodology.

It is also important to deal with the truth and reality which help you make your decisions in life as every
decision you make has a consequence.
Be Sure To Purchase our Online

Forex Course for a further deep

Understanding of the

Forex Market.
www.financialhub.co.ke