FOREX for Beginners
................................................................................................................................................................................................ 4
First thing first, What are you? ........................................................................................................................................................... 5
Investment Psychology ...................................................................................................................................................................... 6
Deriving Crowd Psychology from Bars ................................................................................................................................................. 8
Trend Is Your Friend ....................................................................................................................................................................... 10
................................................................................................................................................ 14
The Last 'M' (or) Trade Management ................................................................................................................................................ 17
STOP! ............................................................................................................................................................................................. 18
Candlesticks - Part I ........................................................................................................................................................................ 20
Candlesticks - Part II ....................................................................................................................................................................... 26
Two is better than One .................................................................................................................................................................... 29
How to Stop .................................................................................................................................................................................... 32
.......................................................................................................................................................................... 34
Moving Average .............................................................................................................................................................................. 37
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Page 2
FOREX for Beginners
MACD / Mac D ................................................................................................................................................................................ 40
Triangle Breakout ............................................................................................................................................................................ 44
Combining Crowd Thinking with Crowd Commitment ......................................................................................................................... 45
(၁) ........................................................................................................................................................................... 48
(၂) ........................................................................................................................................................................... 50
.......................................................................................................................................................................... 52
Psychology of Losing ....................................................................................................................................................................... 55
Short with me ................................................................................................................................................................................. 57
How to Trade Like a Professional ..................................................................................................................................................... 57
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Page 3
FOREX for Beginners
႔ Trader
႔ Methods, Mindset
Trading
႔
Methods
႔
Methods (Technical Analysis)
႔ Trading
႔
႔
႔
႔
႔
႔ ႕ Trading History
႔ Technical Analysis
႔
႔
႔
႔
႔
Winning Trade
Losing Trade
႔ Fundamental Analysis
႔
႔
႕
႔ Trade Management
႔
႔ Trading
႔
႔ Methods
႕
95% of traders lose money
႔
႔ Mindset
႔
Mindset
႔ Trade Management
႔
႔
႔
႔ ႕ Mindset
Trading
႔
႔
႔ ႕ Mindset
႔ Trade Management
႔
Trading
႔
႔ Ko Aung Myo Htet (aungs.investment@gmail.com)
႕
႕
႔
႔ Trader
႕ www.aunginvestment.blogspot.com
႔ Ko
Aung Myo Htet
Naing Aung Soe
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Page 4
FOREX for Beginners
First thing first, What are you?
Investment
႕ Investment Objective
႔
Spender
Investment
Credit Card
Saver
Risk free Interest rate
) ႔ Tax(
႔
Saver
)
ဝ
႔
Inflation
႔
Part-time/Passive Investor
Stock Market
Investor
Part-time
Real Estate
Buy-and-Hold
term/Temporary
႔
႔
Investor
႔
Part-time Investor
Gold ႔ Foreign Currency
Return on Investment (ROI)
Day Job
႔
Short႔
Finance Newsletter
Subscribe
Full-time/Active Investor/Trader
Day Job
႔
႔
ROI
႔
-
Price Fluctuation
Economic Data
Advantage
Objective
႔
ROI
Saver
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Risk
Manage
Retirement
႔
Define
႔
႔ Liquidate
Investment Stragegy
Financial Freedom
႔ Spender
Short-term
Investing/Trading
ဝ Risk
ဝ
Investment
Investing ႔ ဝ ဝ
Page 5
FOREX for Beginners
Investment Psychology
Investment
Seriously
3M
Topic
Mindset
3M
ဝ
Investing
Mindset, Methods
Investor
3M
႔
Get Rich Quick Scheme
႔
You got to be really a financial genius.
Realistic
႔
/
႔ Management
႕
႔
႔
Investing
႔
႕
႔
Apply
႔
Self-Confidence
Reason
႔
႔
Sacrifice
႔
႔
႔
Education
TV
Facebook
Lifestyle
Club
႔
႔
႔
Spending
ဝ
Western
Economy
႔
Investment Debt
႔
Personal Debt
႔
႔ Investment Debt
႔
Saving
႔
Personal
Credit Card
Investment
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Page 6
FOREX for Beginners
Isn't Investing same as Gambling
3M
Manage
M
၁
႔ 3M
%
Every Investment
Investment
Risk
Risk
Risk
Analyse
႔
Risk
It takes a Genius to become rich
Absolutely Rubbish
Average IQ
႔
Investor
Reasonable Objective
႔
discipline
Financially
Educate
Common Sense
Genius
Brave
Plain
႔
႔
႔
႔
႔
႔ Spouse/Partner
႔
႔
Invest
Reason
႔
ဝ
႔
႔
Self-
Single
ဝ
Investing
Concept
Mindset
႔
Mindset
Robert Kiyosaki
႔ Dr. Alexander Elder
႔
Material
႕
Reference
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Page 7
FOREX for Beginners
Deriving Crowd Psychology from Bars
Topic
3M
Method
Method
Dividend, Shareholder Equity, Net Tangible Assets
႕ Income, Expenses, Debt, Tax,
Analysis
Data
Fundamental Analysis(FA)
Earning
Expense
႔
FA ႕
Affect
Significant
FA
Active Investor
Trader
TA
ဝ
Stock
FA
႕ Price ႔ Volume
ဝ
Technical Analysis(TA)
Analysis
Two types of Crowd
Price
Two types of Crowd
(Bulls
႕
Bears
Bear Market
TA
Price ႔ Volume
႔
Chart
Market
႔ Represent
Bull Market
႔ CNBC
႔
Media
Close Price
Open, High, Low, Close
Type
Stock
Bulls
Bear
Bullish
႔
႔
Generally close price
High
ဝ(Bears
Investing
for now, let's stick to Bulls. Professionals
Bearish
ဝ
႔ Low
OHLC
႔
႔
Period
႔
OHLC
႔
Line Chart
႔
Line Chart
Period
Open
႔ Close
႔
OHLC Bar Chart
Represent
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Page 8
FOREX for Beginners
"Period
"
႔
႕
15min, 1hr, 1day, 1week, 1month
႔
Close
TA
FA
Generally
Bar
Translate
Open
Period
႔
႔
႔
OHLC Bar
Low
Trader
Open
႔
Professional
High
Bears
Institutions
Pro
5min,
Period
Interpretation
႕
ဝ
႔
Point
Amateur
Professional
႔
Normally
Bulls
႔ ဝ
႔
Define
႔
႔
႔
႔
Low
ဝ
႔
Close
႔
Institutions
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Page 9
FOREX for Beginners
႔
Volume Volume
Volume
Very Bullish Day
႔
OHLC
Investor
Volume
TA ႕ Holy Grail
Analyse
Period
Units
Average
ဝ
OHLC
Topic
Bar
႔
Market
႔
Serious
Crowd Psychology
Guess
႔
Trend Is Your Friend
OHLC Bar
Trend Line
Trend Line
Confirmation
Price Trend
႔
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Trend
Price
႕
Direction
within normal range
Trend Line
႔ Price Trend
႔
Page 10
႔
FOREX for Beginners
Technical Analysis Indicators
Confirm
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Trend Line
Generally
Priority
႔
Trend Line
Page 11
FOREX for Beginners
Trend
obviously Bull/Up Trend
Up Trend
႔
Up Trend
Analyse
Professional
Period
Lowest Low
Low before the most recent Highest Low
႔
Up Trend
Low
Down Trend
High
before the most recent Lowest High
႔
Down Trend
downward slope line
Up Trend rule
ဝ
Up Trend
(
Period
Highest High
High
႔
Apply
႔ Down Trend
Up Trend
Down Trend
Rule
Up Trend
Reverse
႕
Apply
) Highest High
High
Bar
Reliable
႔
Generalise
႔
႔
Price Trend
Slope
႔
႔
႔
Translate
Trend
႔
႔
Baseline
႔
Up Trend
ဝ
၁
႔
Close
Trend Line
Close
Confirm
Confirm
၂) Trend
၃) Lowest Low
Hold
႔
Horizontal
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႔
Angle
Price
Angle
႔
Momentum
Near Future
Angle
Page 12
FOREX for Beginners
Rule
၁
Down Trend
႕
Rule
Close
Close
Generally
Confirm
Confirm
Confirm
Trend Line
Technical Indicator
ဝ
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Page 13
FOREX for Beginners
၂) Trend
Hold
၃) Highest High
႔
Future Date
႔
Horizontal
Price
Angle
Angle
႔
Near Future
Momentum
Angle
Correction
Technical Analyst
Topic
႕
Stock Price
Technical Support and Resistance
႔
Support
Support ႔ Resistance
Support
limit
႔
Support
Break
႔)
႔
Resistance
Resistance
Horizontal Line
႔ Resistance
(
႔
၉၉%
Detail
Typical Stock Price
Price
Straight
Price
-
-
-
-
Pattern
Price
႔
Support
႔ Resistance
႔
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Page 14
FOREX for Beginners
Support ႔ Resistance
Crow Psychology
ဝ
Bulls
ဝ
႔
႔ဝ
ဝ
႕
႕
Realise
Stock
႕
႔
႕
႕
ဝ
႔
Support
Bull
ဝ
Resistance
႔
Drive
႕
႔
႔
ဝ
Herd Mentality
Bulls
႔
ဝ
ဝ
Resistance
Resistance
႕
Bulls
႕
Cycle
႔
႕
Bearish Cycle
႔
Support
႔ Resistance
Crowd Psychology
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Page 15
FOREX for Beginners
Support
႔ Resistance
Period
Resistance
Reliable
Support
Resistance
Event
Investor
႔
Data
Potential
Support
Resistance
Low/Close
Support & Resistance
႔
႔
Stock
Significant
Support &
Breakout
Annoucement
Resistance
Break
႔
Annoucement
ဝ
Buy-and-pray
Major Support
High/Close
ဝ
Support
Floor
႔
႔ Resistance
Support
႔ Resistance
႔
Breakout
႔
Resistance
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Page 16
FOREX for Beginners
The Last 'M' (or) Trade Management
3M
Method
႔
႔
Mindset
Another M
M
Method
Basic
႕
3M
႔
Management
Management
႔
႔
Trader/Investor
႔
Management
၁) Trade Management
၂) Portfolio Management
၃) Tax Management
၄) Wealth Management
႔ Trade Management
Trade Management
Trade
ဝ
Management
႔
႔
ဝ
႔
ဝ
ဝ
ဝ
Trading Plan
Trading Plan
၁) Entry Price -
Main Field
႔ဝ
၂) Profit-taking price ၃) Stop-loss price ၄) If Entry price is not achievable with initial bids, how far you would go chasing it? - Entry Price
၅)
(
႔)
Trading Plan
Stock Quote ႔
Follow
႔
Self-discipline
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ဝ
Record
႔
Trader
Page 17
FOREX for Beginners
3M – Management
Preparation
Plannig
Introduction
ဝ
Investor
႕
Stock
ဝ
Trading
Plan
႔
STOP!
Topic
႔
-
-
-
Finance
ဝ
ဝ
-
-
Section
႔
Recommend
Buy-and-pray Model
႔
႕
Stop-loss target
႔
-
Market
႔
-
-
-
Plan B
ဝ
႔
-
-
-
ဝ
ဝ
-
%
-
-
ဝ
၅%
၁ %
(
႔) ၁၅%
႔ Investment/Trading capital
Concept
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Stock trading
Total Capital
2%
3%
Trade
Page 18
FOREX for Beginners
Risk
႔ Trader
Risk
႔
Risk
႔
၂
၃
႔
ဝ Plan
Main Idea behind this concept
၂%
$100,000 capital
Trader
႔
႔ Rule No.1
၄၉
%
Trade
Amount
Profit
(၂% x ၅
႔
Capital Preservation
=၁
Survival
%) ၃%
႔
၃၂
Market
႔
Stock Price
ဝ
Capital
၁
႔ Assume
30
30
30
30
30
Acceptable loss as % of price
5%
10%
15%
20%
25%
Acceptable $ loss over price
1.5
3
4.5
6
7.5
Capital $
10000
10000
10000
10000
10000
Acceptable loss as % of capital
3%
3%
3%
3%
3%
Acceptable $ loss over capital
300
300
300
300
300
66.67
50.00
40.00
2000
1500
1200
Position $
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200.00 100.00
6000
3000
Loser
Risk
Stock Price $
Position Size / Units / Volume
St
Page 19
FOREX for Beginners
Conclusion
႔
Risk
Amount
႕
Fixed ႔
႔
Risk
Stop-loss
Stop-loss
Professional
Stock price ႔
႔
-
-
ဝ
ဝ
႕
-
Stop-loss
Risk
Position size
႔
Trading
Stop-loss
Stop-loss ႔ Position size
Define
Helmet
႔
႔
OHLC Bar
႔
Candlesticks - Part I
ဝ
Stock Trading
Trading signal
Candlestick
ဝ
Trader
႔ ႕
Timing
Bar
Candlestick
၁ ၅
႔
႔
Munehisa Homma
Financial Consultant
Candlestick Technique
႔
Refine
႔ Exit
Confirmation
Candlestick
Financial
႔ Entry
Candlesticks
႕
႔
Technical Analysis
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႔
႔
Homma
ဝ
၂
Samurai
Steve Nison
႔ ႕
႕
ဝ
Homma
Wal-mart Store(WMT)
Bar
႔
Page 20
FOREX for Beginners
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Page 21
FOREX for Beginners
Candlestick
႔ OHLC data
Candlestick
Open
Body
Shadow
႔
Candlestick
ဝ
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Close
Open
Real Body
႔ Close
Open
႔
႔
႕ Close
Close
High
႔ Low
Upper Shadow
႔ Lower
႕
Page 22
FOREX for Beginners
Candlestick
Reversal Signal
ဝ
Candlestick type
Trend
Down Trend
Hanging Man
Trend Reversal
႔
ဝ
Candle
Lower Shadow
Candle
႔ Hanging Man
Hammer
Real Body Height
Up trend
Hammer ႔ Hanging Man
Hammer
Confirm
Real Body ႔ Lower Shadow
Intro
႔ Trend
႔
႔
Trend
Upper Shadow
Length Ratio
(
Down Trend
႔)
Hammer
၁၂
Circle
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Page 23
FOREX for Beginners
Hammers in AMD chart
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Page 24
FOREX for Beginners
Hanging Men in Black & Decker Chart
Crowd Psychology
Close
Hammer
Idea
Low
႔
႔
ဝ ဝ
႔ Down Trend Line Breakout Signal
Bear
႔
Bull
႔ Confirm
Trade
႔
ဝ
႔
Hammer
Bears
႔
႔
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Page 25
FOREX for Beginners
Hanging Man
Formation
Psychology
Bears
Up Trend
Attack
႔
Hanging Man
႔
႔
႔
Candle
Confirm
Hanging Man
Hanging Man
Hanging Man
Following Candle
Bull
Following Day
Black real body Hammer
White real
body
Hanging Man ႔ Hammer
Potent
White Hammer
႔
Hanging Man
Formation
႔ Hammer
Candle Formation
Candlesticks Technique
႔
႔ Black Hanging Man
႔ Candle
Part II
single-candle formation
Candlesticks - Part II
Part I
Single-candle Formation
Formation
Shooting Star
Shooting Star formation
႔
Bearish reversal signal
Up Trend
Upper Shadow
Shooting Star
Length
Psychology
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Real body
Real body
Example
Hanging Man
Low
Crowd
Psychology
Page 26
FOREX for Beginners
Shooting Star formation
႕
႔
Up trend
reverse
Attempt
႕
Upper Shadow
႔
Bear
Close
Long Upper Shadow
High
႔
Low
Bull
Bull
Trend Reversal
Shooting Star
Bull
႔
႔ Bear
Bull
Real body
Belt-hold lines
Belt-hold
Sumo Wrestling term "Yorikiri"
ဝ
႕
႔
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႔
Trading context
Opponent
Bull ႔ Bear
႔
႔
Page 27
FOREX for Beginners
Down Trend
Belt-hold candle
Bullish Belt-hold candle
Belt-hold candle
႔ Up Trend
down trend
up trend ႔
႔
Open
Open
Steve Nison
Real body
႔ Bearish Belt-hold
႔
႔
Bearish Belt-hold
Black Opening
Up Trend/Down Trend
႔
Reversal Sign
next day candle
႔
Bearish
Low ႔
Belt-hold candle
Trader
႔
Power
High
More reliable
Reliable
Investor
Candlestick Techniques Reference
Close
White Opening Shaven Bottom
Risk
Conservative
႔
Close
Same color, long real body candle
႔
Low
High ႔
Belt-hold candle
Candlestick
Bullish Belt-hold
major characteristic
Bullish Belt-hold
Shaven Head
Belt-hold candle
Candlestick chart
Crowd Psychology
႕
႔
Action
Signal
Bar chart
႔
Refer
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Page 28
FOREX for Beginners
Two is better than One
Powerful
Candlestick
Candle Formation
-
Candle
႔
႔
Confirm
႔
Trend Reversal
ဝ
Bullish / Bearish Counterattack Pattern - Weak reversal signal
Bullish Counterattack
Downtrend
Bearish Counterattack
႔ Bullish
Downtrend
Uptrend
႔ Bear
Duration
၄-၅
Candle
Close
႔
Downtrend
Close
White Candle
Open
Open
White
႔
Crowd Psychology
Close
႔
Close ႔
႔
Formation
Weak Signal
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႔
Page 29
FOREX for Beginners
Piercing Pattern and Dark Cloud Cover Pattern - Good Reversal Signal
Counterattack
႔
White Candle Close
Black Candle Real Body
႔
Black Candle Open
Piercing
Cloud Cover
Black Candle Close
Up Trend
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Pierce
Sunny
႔
Dark
႔
Page 30
FOREX for Beginners
Bullish / Bearish Engulfing Pattern - Strong Reversal Signal
White Candle Open
Strongest Reversal Signal
႕
႔
Black Candle Close
Engulfing
Volume
/ဝ
White Candle Close
Black Candle Open
Technical Analysis
Outside Day
႔
႔
Second Candle
Volume ႔
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Trading Signal
Trend Line Support ႔ Resistance
Page 31
FOREX for Beginners
How to Stop
႔
ဝ
Base
Trend Line
႔ Support
Technical Analysis(TA)
Broker
Stop order
Usability
၁) Stop price -
Sell order
႔
Market
႔
Liquidate
႔ Market
Market ႔
႔
Number of Units to sell
Order
႔ Purge
? Generally, Day order or GTC (Good Till Cancel)
GTC
Cancel
(
)
Ford (F)
Chart
Stop
Close
႕
Side-way
9/11/2009
Define
Major Trend
16/9/2009
Long term Horizontal Support line 6.75
Just above Minor Up Trend
Broker
Generally, it should be less than or equal to the Stop price.
ဝ
normally
Primary Trend
Internet Broker
႔
Day order
Ford
Stop Loss
Define
႔
TA
Professional
႔
Sell Price ႔ ႔
၄) Order expiration – Trigger
႔ Resistance
Generally
၂) Limit price – Market
၃) Position
၁
Stop order
Broker
Website
၅
Long term trend
႔
(Primary Trend
႕
(
႔ Trend
) Minor Up Trend
)
)
Bull ႕ Bear
25/11/2009 Close
႕
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Page 32
႔
FOREX for Beginners
Volume
ဝ
Minor Up Trend
Declining Volume ႔
႕
ဝ
Bull
Commitment
Bull
႕
Horizontal Blue line at 8.95
Pull back
Major Resistance
႕
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Close
Ford
Major Resistance
႕
3/8/2009
႔
Page 33
FOREX for Beginners
႔ 8.95 Resistance
Preferably, Close
Primary Trend
Resistance
႔
႔
Data
Volume
Ford
Medium Term Investor
1 or 2 ticks
႔
႔ Support
Technical Analysis(TA)
႔
Minor Up Trend
Trader
Stop Order
8.95 ဝ
Tick
5.00 (
ဝ
1 or 2 ticks
႔
႔ 1 or 2 ticks
Point
Stop order
Trigger
႔ Resistance
TA
Profit
Y-Axis
Major Support ႔ Resistan
Stop
Current Momentum
႔
Long Term Investor
Setup
Stock
႔
Improvement
Professional
Trend
႔
8.95 Resistance
6.75
Tick
Break out
Original Primary Trend
Investor
Stop Order
Trader
Setting
Line/Bar Chart
Scale
႕
၅
Line/Bar Chart
၁
ticks
၅
၅
Scale
Scale
၁
(
Linear Scale
Scale
Linear Scale
႔
Gap
႔ ၅
႔ ၅
၅၅
%
Commonwealth Bank (CBA)
Plot
၅၅
Gap
Distance
၅
(
႔) ၅
Exactly the same
႔
Semi-Log scale
၁
Stock Price
႔) ၅
႔
႕
Percentage
၁
Linear
Bar/Candle
႔
Bar Chart
Logarithmic
၅
၅၅
၁ %
႔
Charting
Height
႔
၅
Australia
Scale
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Page 34
FOREX for Beginners
Linear Scale
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Page 35
FOREX for Beginners
Semi-Log Scale
Trend Line
Price Trend
Date
Ok
/
႕
Linear Scale
Semi-Log Scale
Scale
Trend
Semi-Log ႔ Linear
Sideways
Outcome
႔
Trend
႕
Question
Semi-log
Long Term Trend
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Page 36
FOREX for Beginners
Long Term Trend
Semi-log
႔
Price Amount
၅
Gap
႔
Semi-log
Charting Software
Link
Y-axis
႕
Long Term Trend
ဝ
Scale
Feature
႔
Chart Scale
Yahoo
TA
website
Chart Settings
Scale
႔
Moving Average
Technical Analysis
Average (MA)
႔ one of the most effective methods
႔
MA
Subcategory
Moving
Simple MA ႔ Exponential MA
႔
MA
ဝ
average price
Trend
ဝ
MA
MA
Formula
Sum of
Prices / No. of Days
Simple MA (SMA)
Formula
႔
High, Low, Close
SMA10
႔
႔
Open
၁
Close
Price
႔
Price
၁
႔
Close
႔
google
Most Recent Price
Weight
႔
Pro
EMA10
Close
႔
EMA
Price
Depend
Dow Jones Industrial (DJI) index
EMA10
႔
၉၉%
Exponential MA(EMA)
႔
Simple
EMA
႔
EMA10
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႔
EMA
EMA10
Short-term uptrend
Bar
Close
႔
Page 37
FOREX for Beginners
Technical Indicator
Bearish Signal
႔
Ready
MA
No. of days
EMA15
Recent Price Activity ႔ Matching
Short-term MA
Traders
Short-term
႔ Long-term
term
Uptrend
Concept
႔
15
MA
Recent Price
Medium to Long-term trend
Long-term EMA
Investors
Group
(Traders & Investors)
Momentum
MA Crossovers
႔
Short
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႔
Short-term EMA
Technical Indicator
Overall Sentiment
႕
Downtrend
Long
႔
Short-term
Long-
႔
Long
Page 38
FOREX for Beginners
Downtrend
ဝ
Downward direction ႔
EMA30, EMA60, EMA100, EMA200
႔
EMA10
EMA30
2009
January
Reverse
Short
Long
႔
MA value
DJI
႔
EMA200
MA
Crossover
Close
EMA100
EMA crossover
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Investor
Signal
႔
Derive
႔ EMA200
Market
April
Bearish
႔
MA
Advanced
Power
Technical Indicator
Page 39
FOREX for Beginners
MACD / Mac D
Advanced
Mac D
MA technique
႔
႔
MACD
Gerald Appel
ဝ
MACD
MACD (Moving Average Convergence Divergence)
late 1970s
႔
႔ MA
Typical MACD Chart
Obama
Example
Beauty
outdate
Chart
Aetna Health Insurance
Technical Analysis
Healthcare bill
႔
႔
႔
MACD
႔ Signal
႕
MACD Histogram
Equaliser
Bar
MACD
MACD = EMA12 - EMA26
Signal Line = SMA9 of MACD
MACD
EMA12
႔ EMA26
႔
Crossover
EMA12
႔
႔
Crossover
႕
Crossover
႔
႕
MACD
MACD
MACD
EMA12
MACD Chart
EMA26
႔ Signal Line
EMA Difference
Signal
MACD
Dotted Line
႔
႔
႔
Buy/Sell Signal
MACD Chart
typically
Simple Moving Average
Signal
႕
႔
Weight
MACD
Signal
Latest MACD
Momentum
၉
Average
Trader
/
ဝ
႔
Signal Line
SMA9
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Page 40
FOREX for Beginners
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Page 41
FOREX for Beginners
MACD Histogram (MACD_H)
႔
MACD_H = MACD - Signal Line
႕
Equaliser Bar
႔
MACD_H
MACD Crossovers, MACD_H
Chart
Trend Slope
႔
႔
ဝ
႔
Divergence
Signal
Difference size
Wave
Divergence
Disagreement
MACD
႔
Convergence
Slope
Agreement
Slope
Direction
MACD
Price
Convergence
႔
To buy
 MACD
 MACD
 Price Trend
Negative
Signal
Positive
Bullish Crossover
Downward Slope
႔
MACD(
႔) MACD_H
Rule
ဝ
MACD
Paper Trade
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႔
႔
Upward slope
Silver Bullet
Aetna
Analysis
Signal
Page 42
FOREX for Beginners
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Page 43
FOREX for Beginners
Triangle Breakout
Triangle Breakout
Technical Chart
Technique
Dow Jones Industrial Average Index
Candle ႔ MACD cha
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Triangle
႔
DJI
႕
Page 44
FOREX for Beginners
Triangle Breakout
Downtrend
Uptrend
႔
Price
Triangle
Obviously
Bullish
Bearish
Crowd Psychology
႔
Triangle
႔
Bears
႔
႔
Translate
႔
DJI
EMA200
Near term market outlook
႔
Technique
Market Direction
႔
Combining Crowd Thinking with Crowd Commitment
Technical Analysis method
MFI
Site
Indicator
႔ Price
Volume
Standard
MFI
Money Flow Index (MFI)
႔
႔
Laszlo Birinyi, Jr.
Charting Software
Web
႔
MFI Formula
၁ Average Price = (High + Low + Close) / 3
၂ Money Flow = Average Price x Volume
၃
Period
Money Flow
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14-period
Page 45
FOREX for Beginners
၄ Positive Money Flow =
၃
No. of Periods
Average Price
Average Price
Previous Average Price
Average Price
Previous Average Price
(Cumulative Total, in other word)
၅ Negative Money Flow =
၃
No. of Periods
Average Price
(Cumulative Total, in other word)
Money Ratio = Positive Money Flow / Negative Money Flow
Money Flow Index (MFI) = 100 - (100 / (1+ Money Ratio))
MFI Formula Step 7
MFI
Value
-၁
Range Bound
MFI value 80
MFI value 20
႔
႔
႔
Design
80
Overbought
MFI 20
ဝ
Oversold/Overbought
Stock
Technical Analysis Technique
Oversold (Bullish)
႔ Trader
Stock
Profit-taking
႔
႔
Fundamental Data
Oversold/
Trading Decision
Common sense
Stock
Dow Jones Industrial
Up trend
Divergence Trend Line
႔
Candle Chart, MFI
Candle Chart
႔
MFI
Trend
MFI
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၁၄
MFI ႔
Bearish Divergence
Bullish Divergence Trend
႔
႔
Bearish
-
Page 46
FOREX for Beginners
Stock
Investor
႔
Commitment
Price
MACD_H
Volume
indicator
Price
Thinking
what the crowd thinks
MFI Index
Price action
Analysis
https://www.facebook.com/groups/468564163238943/
႔
Volume
what the crowd commits
႔
ဝ
႔ MFI
Indicator
Crowd Psychology
Page 47
႔
FOREX for Beginners
Trader
႔
Divergence
Indicator
Divergence Signal
၁
႔
Trading
ဝ
Title
Money Management
႕ Concept
Robert Kiyosaki
႔ Dr. Alexander Elder
Intellectual Property
Trading vs. Investing
Trading
႔ Investing
Stock Investing
ဝ
Trading
Short-term focused
Day job
ဝ
Directly (
Stock
႔
႔) Indirectly Invest
(
Dividends
႕
Tips
႔
ဝ
Investing
solid bluechip stock
"
Long-term
Financial Advisor, Broker
႔ Generally Definition
Stock Market
Investing
၃
Direct Investing
၃
)
"
Time in the Market is More Important than Timing in the Market
႔ Invest
You are going
to need a lot of LUCK.
Trading is a totally different ball game
Stock Trading ဝ
႔
Trading
Market
Washed Out
႔ Totally different mindset
Long-term investing mindset
Technical Analysis(TA)
3M (mindset, method, management)
႔ Fundamental Analysis(FA)
mindset ႔ management
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Trading area
႔
TA
႔ FA
႔
႔
Page 48
FOREX for Beginners
Mythbusting
Trading
Report
႔
Myth
Stock Market Analysis
ဝ
Myth

Analysis

Entry
႔
ဝ

Trading
ဝ
႔
ဝ
Trading
႔
႔ Market
"
႔ Chance
႔
Trade
႔
Professionals
Institutions
႔ "
Net balance
Positive
Lose Less, Make More
Trading
Core Principle
Automatic handle
Stop-loss, Stop-loss
႕
႔
Weight
Loss
Manage
႕
႔
Loss
Profit
Trading Book
Discipline
႔
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Weight
Page 49
FOREX for Beginners
၂
Stop-loss
Technical Analysis
Stock
႔
Long-term Fundamental based investor
Invest
Stock
Technical Analysis
Shorting
Simply Long
)
Oldest and Simplest are the Best
Technical Analysis
႔
Trend line, Support, Resistance
Stop-loss, Profit-taking point
႔
႔
Trade
 Profit is made at the Entry, not at the Exit. (

Define
Support
ဝ
႔
 Support
Close
 Trade
Open
Loss
)
Support
Support
ဝ
Stop-loss
႔
႔
Trade
ဝ
Volume
Cut

႔
႔
Trade
Open
Nearest Resistance
Profit-taking
Resistance
႔
Trade
႔ Exit
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Uptrend
Interval
Clearly Broken
Sign
Page 50
FOREX for Beginners
Mindset
႔
ဝ
Entry
Technical Analysis
Chart
trading risk
႔
Profitable Trade
Technical Analysis
႔
too good to be true
႔
႔
႔
႔
႔
Gambler and Lotto Player
Stock Trading ဝ
Mindset
႕
Trader
႔
Realistic decision
႔
You can't stop-loss!
႔
႔ Probability
Mindset
႔
Stop-loss
1 in a several millions
Trading
႔
Can't bear the feeling of losing money
႔
႕
(Realised Loss)
Feeling
႔
Perspective
Trading
Bad
႔
Think like a business man
Business
Business
Income
Employee
႔
႔
Expense
Expense
႔
Employer
Stop-loss
႔
No way unless it's your daddy's business.
Business
Contribution
The famous "L" word
Business Owner
Revenue/Income
Probability
Loss
Trader
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Business
Expense
Business
Expenses
Run
႔
Layoff!
႔
Profit
႔
Trade
Page 51
FOREX for Beginners
Trade
႔
Resume
Sack
႔
႔
Professional trader
Stock
Open, High, Low, Close, Volume
႔
႔
႔
႔
႔
Technical Analysis
Monthly
Closing Price
Stock
႔
Minute, Hour
Daily, Weekly,
X-axis
Major Support ႔ Resistance
Bank of America (BAC)
Chart
Closing
OHLC, Volume
Dimension
Linear Dimension
Analysis
႔
Technical Analysis
Price
(P&F)
Technical Analysis
P&F
Analysis
Technique
Point & Figure
Chart
႔ Stock
႔
႔
႕
Stock
႔
၁.၅ ႔
Circle
႕
Amount
၁
Amount
Amount
Daily Range x 1.5 times
Cross
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Multiplier
Box size
႔
Box size
႔
Personal Choice
Chart
Cross
႔
Circle
Page 52
FOREX for Beginners
BAC
႔
၄
Cross
Range
Box size
Circle, Circle
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40c x 1.5 = 60c
Cross
႔
BAC P&F chart
Cross/Circle
Column
Page 53
FOREX for Beginners
႕
႔
Reversal
႔ reversal box amount
BAC ၁
/
Cross/Circle
႔
Stock price
Violent
4 box
3 boxes
Chart
Symbol
႔/
Reversal amount
3
Rule of Thumb
box size
Trend
႕
႔ Symbol
႕
႔
Switch
Reversal amount
3 box
4
X-axis
Closing Price
Chart
Reversal
Metastock
P&F
Update
႕
႔
Compressed
Software
႕
Linear Scale
Data
P&F
Circle
႔
႔
႔
႔
ဝ
႔ Reversal amount
Reversal
BAC
၂
Major Support
BAC Chart
Input
P&F
၅
Data ႔
႔
Cross
Major Support
P&F
 Box size = Average daily movement range of a stock price x multiplier (multiplier is personal choice and mine is 1.5)
Daily Range
Price action
Capture
Box size amount
႔
Box size
႔
Major Resistance
Alphabet initials
P&F
႔
ဝ
႔
႔
Stock
႔ ၁.၅
႔
 Reversal boxes = 3 or 4 times of Box size (again, it's personal choice)
 Time scale is no longer linear on X-axis
 Mainly used to identify long term major support and resistance. Resistance
Cross (X)
Support
Circle(O)
 Better to use charting software help to draw P&F
 P&F
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Major resistance/support
P&F
႔
Page 54
FOREX for Beginners
 P&F
Price
 P&F
႔
Major resistance/support
Technical Analysis
Verify
႔
႔
Psychology of Losing
Stock Trading
Beginner
Paper
Loss
Loss/Unrealised
Stop-loss
ဝ
Chance
Money Loss
Perspective
Stop-loss
Realised
Palatable
Forget about $$$
Manage
႔
႔ Point
႔
Casino
Chip
႔
႔
႔
Point
Down
႔
Casualty of War
Civillian
Idea
Trading
Remember how you learned riding a bike
Helmat
Trading
Stop-loss
Trader
Helmat
Trading
Millionaire
႕
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Page 55
FOREX for Beginners
Learn from Beckham
Beckham
Twist
႔
Free kick
Beckham
႔
Penalty Goal Kick
Personality
႔
Achievement
ဝ
Round 1
႔
႔ Chance
Total
Second-half
႔
Losses
႔
Soccer
႔ Goal
First-half
Market
Beckham
Take a break
Analyse
႕
႕
ဝ
႕
ဝ
႔
႔
ဝ
႔
႔
Defense
႔
႔
.....
On Sale
Department Store
Further
Retailer
Further Reduced
loss
off
Trader
cut
Retailer
It's only in your mind
Losing
Trading
special case
mindset
Trade
Losing is only in your
mind and you have to manage losses. Don't let losses manage you.
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Page 56
FOREX for Beginners
Short with me
Trader
Market
႔
႔
ဝ
Market
Long(buy low, sell high)
Short(Sell high, buy low)
How to Trade Like a Professional
trading
ဝ
Analyse
Method
Software
႔
႔ Data
Method
(၁)
႔
Trader
႔
Method
႔
Topic
႔
Knowledge
Apply
Professional trader
႔
Fact No. 1
Method
Develop
႔ Professional Trader
႕
Market
Market
ဝ
See the catch word here? "
Professional Trader
Money Management Skill
Analyse
"
Trade
႔
small managed losses
Good Money Management Skill
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Page 57
FOREX for Beginners
Fact No. 2
Amateur Trader
Market
ဝ
Big Profit
Professional
႔ ဝ
Loss
Manage
Professional
Profit
႔
Auto
႔
Amateur
Dr. Alexander Elder
Profit
Big Losses
"A fool and his money can throw
one hell of a party"
Market
ဝ
Market
Seriously,
Manage your losses and have a good money management discipline.
Fool
One example of good money management: R-multiple system
Dr. Van Tharp
R
R-multiple management system
Risk
Trader
Trade
Trade
total cost
၂%
R
determine
Trading system
crossover
Trading system
ဝ
Define
၅%
၂%-၅%
Professional
R amount
2R or 3R amount
Entry, Exit rules
trend line
၂%-၅%
႔ cut loss
R
$200
Amount
႔
႔
႔
႔
2R
$400
Technical, Fundamental
R amount
multiple
R-multiple
generate
Profit taking
႔
MACD
ဝ
there has to be some probability of success of your trading system.
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Market
၂%
Practical
Trader
R-multiple system
ဝ
၂%
Trade
႔
money management
No system is perfect but
system
%
Page 58
FOREX for Beginners
#
Invest
Capital
Risk or R
Win/Lose
Reward Multiplier
1
2000
10000
200
L
2
2
2000
9800
200
L
2
3
2000
9600
200
L
2
4
2000
9400
200
L
2
5
2000
9200
200
L
2
6
2000
9000
200
W
2
7
2000
9400
200
W
2
8
2000
9800
200
W
2
9
2000
10200
200
W
2
10
2000
10600
200
W
2
NET
Table
၂
11000
Figure
Total
Total
၂%
၁
၂-၅% range
Conservative range
Method(Technical,Fundamental)
System
၅ %
Trader
Trade
၂
Reward multiple
Probability
Market
https://www.facebook.com/groups/468564163238943/
90%
႔
Example
႔
2R
R
Risk
50%
Example
Page 59
FOREX for Beginners
၅ %
System
Probability
Key
R amount
၁
႔
၅ %
Trade
 R
၅
2R
၁ % return
period
၅
Trader
၁ %
၁ %
,
weekly, fortnightly frequency
႔ Trade
၄ %
total equity/cash
 Trade
R amount
cut
 R-multiple amount
profit taking
 Method(Technical, Fundamental

Probability system
Method
Van Tharp
R-multiple system
R
Van Tharp
႕
Amateur
၂
very simple
, 10 trade
Professional
႔ Trade
၁
Trader's life expectancy
၅ %
Pro
Financial Freedom
total profit
႔
Trade
5R
example
႔
5R
10 trade ႔
Trade
0.5R
၁
average
Life expectancy
႕ equity
႔ Market
Washed out
႔
expectan
႔ Success rate
continually refine
၂၁
Risk
႔
Key point
Example ႔
၄
Amateur
Table
၂
Hope
႔ 2R+
Risk
2R
႔
R amount ႔
၁
-0.5R
R amount
႔
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Page 60
FOREX for Beginners
#
Invest
Capital
Risk or 2R
Win/Lose
Reward Multiplier
1
2000
10000
400
L
0.5
2
2000
9600
400
L
0.5
3
2000
9200
400
L
0.5
4
2000
8800
400
L
0.5
5
2000
8400
400
L
0.5
6
2000
8000
400
W
0.5
7
2000
8200
400
W
0.5
8
2000
8400
400
W
0.5
9
2000
8600
400
W
0.5
10
2000
8800
400
W
0.5
NET
9000
"Cut your losses fast and Let your profit run".
Different money management
Professional Trader
႔
trader
R-multiple system
Trade
Probability system
႔
Concept
Happy Trading!
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Page 61