Switztrader limited.

Switztrader limited.

SWITZTRADER EBOOK.
Who am I?

1) Introduction to the Forex Market

1)Difference between the Forex market and the Stock market
2)Different time zones
3) Leverage
4) Lot size and PIP
5) Margin level
6) Risk management

2) Self-control, Forex Market

1)Emotions control
2) Develop your trader edge.
3) Traders Mindset.

3)Technical analyze of the Forex Market:

1) Trend lines.
2) Resistance and Supports.
3) Stochastic.
4) Parabolic SAR.
5) Elliott waves.
6) Candlesticks.
7) Bollinger Band.
8) Fibonacci.

34 Fundamental Part of the Forex Market:

1)Economic news
2) NFP

5) More elements:
Market Makers & Trader Mindset
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Before starting this Ebook I would like to introduce myself, this way you can gain a
little insight into my life. So my name is Djordje Novakovic and I’m a 22-year-old
trader. I was born in France but my parents decided to move to Switzerland for a
better life. In fact, during my scholarship I got the chance to study in a good high-
school which gave me the chance to be accepted at HEC, Lausanne.

You’re probably wondering how I discovered the forex world?

My father’s best friend was working in Credit Suisse in Geneva Switzerland. His
daily mission was to be the best private banker in Geneva. He was travelling all
around the world to meet his clients.
One day my family and the family of my father’s best friend were eating, and I got
the chance to talk a lot with him and he explained everything to me, including how he
was investing for his clients and trading currencies. For me the most interesting thing
was how he used to make money with trading currencies.
At this moment, my father admitted me that he was also trading currencies when
some big news was coming. At this moment I thought that it was easy to make
money.

During the next couple of days, I spent my days watching charts, watching economic
news. I also spent a lot of time on social media to see if there were some ‘’ famous
traders ‘’, someone legit to teach me. I was lucky, my father was pushing me to
believe in my dreams, he told me to keep working hard on it and that nothing could
stop me if I worked my ass off.

After seeing that my own research and my own strategies were not working I decided
to pay a few mentors on social media. I firstly started with Facebook, where I lost
3 000 euros.

After a little break I finally decided to start again with other mentors on Instagram,
where I made the same mistake and lost over 2 000 euros in less than a month.

I was so pissed off because when I try something new, most of the time I’m pretty
good at it, but this time, it was a big disaster.
My father told me to take a break, because I was probably emotionally weak or that
my strategy wasn’t on point. Instead of listening to him I decided to keep working
harder, and harder. But I lost another 2 000euros in a month.

To be honest I was lost. For me the forex market was a big scam, I thought that all of
those traders were fake (in fact they all were fake because they all helped me to blow
my account). I decided to stop trading the forex market until I could find someone
that I could meet personally.

For 3 months I was stalking every single trader on Instagram, I was stalking all of
their movements on social media to see if they were legit, or if I was that stupid to not
understand the market.
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Luckily, one day I followed one guy Called Omar Mohamed Khalifah. This man was
a young trader from London. He was 25 years old and he graduated with Masters at
the London School of Economics.
I asked him for legit proof of bank statements, brokers statements, testimonies and he
got me everything.

Silly me, the next day I told him that in a few weeks I was coming to London to meet
him, to learn his way of trading. He told me ‘’Hey Djordje, no problem. Come here,
but my fees are pretty high, it will cost you £ 3 500 for 2 mornings of 3 hours‘’.
I asked him why that much if you’re already making that amount of money? He
simply replied to me that by paying these kinds of fees I’ll be much more involved;
I’ll be much more open to listen to him. And he concluded by saying that every single
job has to be paid.

So I asked him for his PayPal details and just did the transfer. To be honest with you,
those £3 500 were all my remaining savings that I got as an 18th gift from my
grandparents. I was so stressed because I spent more than 12 000 euros to learn how
to trade but still had no results. This man could have scammed me.

Few weeks later I got the chance to go to London and meet up with this incredible
trader, Omar Mohamed Khalifah. To be honest with you he wasn’t that impressive
but when he was talking I was 100% in, I was listening every single word, my brain
was on fire, I didn’t let any word escape my brain. It was like a lobotomy, after the
first day I was able to repeat every single word that he said during the lesson. After
this big session, he decided to spend the afternoon with me. He told me his story he
told me why he accepted to help me even if his time was worth much more. The next
morning session was even more intense; my brain wasn’t on fire but it was burning.

Those 6 hours of personal coaching literally changed my life. This session gave me
the possibility to be free, to become what I wanted to be, a free man. For me the most
important sentence he said was: I can give you all the knowledge that I have but then
if you don’t practice, you won’t be able to make any money. Trading is like
mathematics, I’m your teacher, I gave you the theory but now it’s your turn to
practice.

After 2 months of hard work my demo account was damn profitable. I was able to
flip a 10 000 euro account into a 20 000 euro account in 2 months. After those
incredible results I asked my father to lend me some cash and he told me ‘’ here is 1
000 euros my son, if you’re able to flip them within 2 months into 2 000 euros, then
they’re yours.’’ And yes I made it, I successfully flipped those 1 000 euros into 2 000
euros in less than 2 months.

I asked my father if he could lend me 10 000 euros to start trading, and if I failed I
will engage myself to work for his firm for 1 year for free. He accepted the deal. At
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the same time, I took a student loan of 30 000 euros, even if I didn’t need it, just to
deposit it into my account. Lucky me, I had some friends who had pretty rich parents
who decided to invest with me, I had 4 friends who gave me 15 000 euros each.
My portfolio was composed of 60 000 euros of my friends, 30 000 euros of my
student loan and 10 000 euros of my father. During the first month I lost nearly 20%
of the account, because I was stressed about this huge amount of money. I didn’t
actually realize that I was trading a100k account. For me it was unreal. I decided to
withdraw 2k of the account and went to Thailand for 2 weeks alone, with nobody. I
decided to trade from there, this way I wouldn’t be stressed with my friends asking
me how it was going. And God damn it. In 2 weeks I went back to the initial 100k
and even more. To be exact I was at 105k, so 5k profit even if I spent 2k for my
vacation.

This little break helped me to understand how I should emotionally react to those lot
sizes and to my fear.

During the next 6 months I was 100% in the FX game, I flipped this 100k account
into a 250k account. I paid back my friends and my father with a 20% return. I paid
back my student loan and I had around 100k left.
Being stupid, I decided to go big with the NFP. This trade is my biggest one. I put a
70.00 lot size in a buy position with EURUSD and I made over 70 000 euros profit in
one day, with one trade.
From that moment I understood that yes I should trade safer, and that I already make
enough.

That’s my story. This is how I became a millionaire.

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1)Different elements of the Forex Market:

1)Difference between the Forex market and the Stock market
- The stock market is the most traditional method to profit from an investment,
you can invest in a company or something similar. With the stock market it’s
rather difficult to perfect a system that will make you more than 10-15%
returns on a year and it’s also impossible to know when the company will
decide to go bankrupt or fail completely. You’ve huge places where you can
trade the stock market.

- At the opposite the forex market has no central market for the forex. The
currency pairs traded in the FX market are products quoted by all the major
banks. So as there is no central market place the broker is doing the
transaction. So when you’re buying a pair it’s your broker who is selling it to
you and not another trader.

In the Forex market you can use a bigger leverage and there is more liquidity
(one FX day is equal to 1 month of stock market).

The forex market is active 5 days a week, 24 hours per day but it doesn’t mean
that the market is always very active. It’s composed of 4 sessions: New York,
London, Tokyo and Sydney. I don’t have a special time where I’m trading
because I’m a swing trader so I can hold my positions for few days and make a
good profit.
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Who is trading the Forex market and why?

We’ve a lot of companies and corporations:

- They have a vital aspect linked to the forex because of their activity. Huge
companies are constantly looking to exchange currency because they’re
working with a lot of countries and they need to pay them with their local
money. For example, if you’re producing an iPhone from Chicago you need to
be able to pay the engineer in the us (local money so no transaction) but you
also need to pay the materials from Europe in euros and people in china who’re
assembling the final product in yen.

Hedge funds & investors:

They’re one of the biggest forex players. Hedge funds usually have a large amount of
capital that belongs to many clients and investors. Anything they make over their
yearly percentage figure they keep for themselves, it’s how they make money.

Central banks:

The central banks are responsible for forex fixing. Any action taken by a central bank
is most often implemented in order to stabilize or increase the competitiveness of a
nation’s economy. Their actions policies and decisions trigger increases and decreases
in the value of the country’s currency rates, mainly in the form of inflation. They’re
able to play with the interest rate.
Retail traders and small investors:

When we’re saying retail traders we’re referring to traders who sit in an office or
those who are at home trading their own accounts and learning just like you. The
volume of retail traders is extremely low in comparison to the banks, hedge funds and
other heavyweight financial institutions. We can note that because of the easy access
to those new trading platforms and brokers the number of retail traders is growing at
a rapid pace
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2)Different times zones:

In the previous topic we quickly talked about the different trading sessions, but let’s
talk about it in more details.

Those different sessions are creating ‘’ movement in the market ‘’ those movements
are representing the volatility.
Of course this volatility doesn’t have an impact on you in your daily life, but if you’re
using a leverage, you can take an advantage of this volatility and make money.

This graphic is more visual; we can see the different trading session.

Now you know that the market is active, volatile during the different trading session,
but you’re probably wondering, when is the market the most volatile during those
different sessions?
The market is very volatile at the opening of every single session:
- London session à 8AM
- New York session à 1PM
- Sydney session à 10PM
- Tokyo session à Midnight

Let me explain you with a simple metaphor why the market is so volatile at the
opening of each session?
à When you’ve your own company you’ve few competitors who’re not necessary at
the same place as you, so they can take advantage of your when you’re sleeping.
When you’re sleeping you’re not active, so your competitors are working hard to be
few steps ahead of you, but when you’re waking up you’re back to the grind, you are
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here to correct those steps ahead. So your first action is to correct this distance
between you and your competitors.
Different trading sessions are exactly doing the same thing.

The best moment to trade the forex market is during the prime time. The reason why
it’s interesting during this period of the day is because we’ve few sessions at the same
time, so they’re all fighting.
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3) Leverage:
It’s funny to see how many persons are claiming themselves traders, but they don’t
know what is a leverage. At least some of them know that it helps you to get in bigger
positions but they don’t know how it works behind.

What is a leverage?

The market is volatile but it moves in such small amounts, that we need to magnify
the trade sizes in order to make any real money.
Leverage is also called ‘’ the trade size multiplier ‘’.

How can the leverage multiple your lot size?

It’s pretty simple, it means that your Brooker lends you the additional capital,
although no money changes hands.
Depending of the Brookers, your leverage can be different. But Brookers are offering
you a wide range of leverage, anywhere from 10:1 to as much as 500:1.
Be careful, your localization, so your country can have some restriction. For example,
US citizen can’t have a bigger leverage than 50:1

How does the leverage work?

If you’ve a 100:1 leverage, it means that you only need 1000$ to trade 100 000$
To find how much you can trade you have to multiply the first number (here the 100)
with your capital.
So if we’re taking another example à You have deposit 36 500$ in your trading
account which is located in the US, and your Brooker is offering you the biggest
leverage they can (so 50:1). You’ll be able to trade 36 500 x 50 which is 1 825 000$

Be careful with the leverage:

A lot of traders are ONLY seeing the positive aspect of the leverage because it helps
you to increase your gain, but remember that because you’re using a leverage you’re
also increasing your probability to lose.
AND YES, you can’t only increase your profit without thinking about your losses.
BE REALISTIC.

Leverage is one of the main reason why traders fail: they’re going big without
thinking about the possibility to lose. The day they lose, they lose all of their capital.
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4) Lot size:
A lot size is how you’ll determine what each pip you earn is worth. But what is a pip?

A lot of traders don’t know the difference between a PIP and a Micropipette (also
called pipette), but the difference is HUGE.

If EURUSD goes from 1.1050 to 1.1051 then we’ve a variation of 1 PIP

If GBPUSD goes from 1.30542 to 1.30543 then we’ve a variation of 1 PIPETTE.

As you can see 1PIP is equal to 10 PIPETTE, so :

à 1 PIP = 10 PIPETTE
à 10 PIPS = 100 PIPETTE
à 100 PIPS = 1 000 PIPETTE
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PIP is a very important information for you as a trader because, depending of the
SPREAD of the Brooker you’ll decide to go with him or not.
Let’s study a case:

Let’s say you’re choosing FXTM and you want to trade EURUSD at the current
price of 1.10510.

à If you want to buy it then your Brooker will give it to you at a lower price.
à If you want to sell it then your Brooker will give it to you at a higher price.
This is the ‘’ spread ‘’

The spread is the difference between your Brooker price and the real price.

If you want to buy EURUSD they will give it to you at a higher price, let’s say that
this day FXTM is offering you a 1 PIP spread. Let’s also consider the fact that you
placed a 1.00 lot size:

You’ll get EURUSD at the current price of: 1.10500 AND NOT 1.10510
à This is the reason why you’re directly in losses.

To understand how much in losses, you are you’ve to multiply your lot size by the
number of PIPETTE (in your spread):
à 1.00 (Lot size) x 10 PIPETTE (which is the SPREAD) = 10$ in losses when
you’re getting in the trade.
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Now let’s get back to the lot size system:

When you place a trade you’ve to trade in a little currency block or units, these little
blocs are called lots.
A lot is a certain size of currency traded (a certain dollar amount), here are the
different one:

LOT SIZE: MICRO LOT MINI LOT STANDAR LOT

WORTH IN $ 1 000$ 10 000$ 100 000$
PER PIP 0.10$ PER PIP 1.00 PER PIP 10.00 PER PIP

It’s very important for you, as a trader, to use a proportional lot size, for your
account. If you use a bad one you can easily get out of the trade. Let me
illustrate it with an example:

You’ve a 1 000$ account, and during this beautiful month of August you’re deciding
to trade big because you slept well.
You are seeing a good opportunity with EURUSD at the current price of 1.10510, and
your Brooker has a 1 PIP spread. So you are deciding to get in with a 10.00 lot size
(so 5 mini lots) à You’re directly 10.00 x 10 = 100$ in losses.
Because you were so impatient you didn’t check out the news, and unfortunately it
was the NFP day and booom, EURUSD is dropping to 1.10410 you’re – 1000$ so
your Brooker is automatically closing your position and you have blown your
account.
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5) Margin:

The margin is a deposit required to open and to maintain open positions.

ATTENTION the margin is not a fee or a transaction cost, it’s simple a portion of
your account equity set aside and allocated as a deposit to initiate the trade.

It’s much easier to define how much your margin will be with an example:

- You’ve a 10 000$ account

- If you want to trade 2.00 lot size, it means that you’ll have 20 000$
- Your Brooker is offering you a 50:1 leverage

Margin = investment / leverage

Margin = 20 000$ / 50 = 400$

à Your Brooker will take 400$ to open your trades.

à When your trade is finished, they are ‘’ refunding ‘’ you those 400$
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6) Risk management:
Risk management is one of the key element in the forex industry.
A lot of traders are failing because they can’t respect their own risk management. I
understand that sometimes we can be tempted to avoid our own rules and to trade
bigger, but please respect your OWN risk management.
You’re the only one who’s deciding if you want to risk 1, 2 or 3% per capital. You’ve
to decide how much you’re willing to risk? Do you like the risk? Are you neutral?
Are you scarred from the risk? Fixing your own limit of the risk is an important
step for you as a trader.
A lot of traders who’re failing think that the only reason why they are losing is
because of their trades. In fact, most of those trades are pretty good at analyzing
charts, but they’re not good at following the fundamental rules like, risk management
and using the good lot size.

Yes, using the realistic lot size shows that you’re using a correct Risk management:

Let’s take an easy example:

- You’ve a 10 000$ account
- You decided to risk 3%
à you’re risking 300$
- Your Stop loss is: 50 pips

To find the correct lot size you’ve to use this formula:

à Risk amount / by the stop loss size
So for our example, we’ve to do: 300$ (RISK) / 50 (pips SL) = 6$ Per pip
It means that you can use 6 micro lot, so you can trade 0.60$ per PIP

Let’s take another example:

- You’ve a 6 000$ account.

- You decided to risk 2%
à You’re risking 120$
- Your SL is 30 pips down

à 120$ / 30 (PIPS) = 4$ per PIP

It means that you can use a 4 micro lot, so you can trade 0.40$ per PIP.

There are 3 elements that you should respect in the risk management:

1) You should have a good risk management a proper risk-reward:

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- 1:1 means that you need to win one trade over two to be breakeven.
- 1:2 means that you need to win one trade over 3 to be breakeven.
- 2:1 means that you need to win 2 trade over 3 to be breakeven.

à Traders who’re using a 2:1 risk-reward are in the long-term not profitable.

2) Don’t fail in the stacking system:

- Stacking is when the trades goes wrong, traders are attempt to reenter in the
trade.
- Stacking is one of the main reason why traders are losing their money. If the
market isn’t going in your direction 1 hour ago, it won’t change now.

3) Don’t be scarred of the losing streaks:

- Sometimes it happens that you’ve few consecutive losing trades. If you’ve

been consistent for a while, those ‘’ losing ‘’ trades are probably not from your
fault. Maybe the market is slow, maybe there is some macroeconomic news.

- Some traders are attempt to stop trading because of the losing streaks, but hella
NO! Stick to your trading plan and it will pay off
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2) Self-control, Forex Market

1) Emotion control:
We generally say that 90% of traders are losing and this is the truth. Most of
traders thing that the success on depends of your trading knowledge and not about
the emotion control. If you don’t know how to keep calm when you see lose or if
you don’t know how to accept a lost, then it will have an impact in your trades and
in your future results. The trading strategy is just one piece of the puzzle.
Balancing your emotions in line with your mental processes is vital. If you do not
manage these aspects, you will find yourself unable to consistently make money in
the market over the long-term.
A lot of people think that:
- The forex market is an easy way to become rich very quickly. They think that
they can turn 1 000$ into 100 000à within a matter of months. This absolutely
the wrong mentality. The best traders on the world have a monthly return of
25-30%. They also think
- They ‘’need’’ to make money because of their debt or something else, but no one
is becoming quickly rich with trading. If it would be so easy everyone would be
trading the forex market, but as you can see a lot of people are scared of it. So if
you’re only trading for this ‘’need’’ you’ll be losing because in trading we’re
trying to always win our trades but sometimes it happens that the market goes
against us. So when you’ll see some negative, you’ll inevitably trade emotionally
and you’ll directly close your trades.

You need to understand few things:

- Never doubt of yourself, this is the worst thing a trader can do. Always remind
yourself that your opinion is all that matters, trust your own judgment.
- Don’t be fearful of the market, particularly for beginning traders or people
who are losing few trades. If you’re not fear because of those reasons, it’s
probably because you’re trading and risking too much. There is a simple
solution for this: only trade and risk as much as you’re comfortable with
losing.
- Don’t be greedy. Greed is possibly the most dangerous emotions, when you
will win a trade you’ll probably feel on top of the world and this can cause the
greed. If you see that your trade is going good, don’t add positions let’s take
your profit.
- When you’re trading you should always have a goal. Trading without goal is
like driving without a destination.
- Every day is not the good day for trading.
- Don’t over trade, only trade when you’re sure of you. Trading must be done
with absolute clarity, your mindset has to be almost robotics and you cannot
allow stress to dominate your actions.
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2) Develop your traders edge:

-
This book is supposed to transform you. Through this formation you will become an
independent trader.

Trading is easy but when you are using wrong tools you’ll definitely lose and it will directly
affect your motivation. Trading is not easy but it’s also not hard.

To become a real trader, you need to understand that sometimes there is nothing to trade,
sometimes it’s better to go out with your friends and spend your money in something you
will appreciate whereas being stressed in front of your computer and losing your money.

As a trader you need to develop your trader’s edge:

- Creating an edge means that you have found your own way of trading. You found the
advantage which gives you the highest probability to win your trade. Trading is all
about probabilities. You have to find a good setup which will win most likely of the
time.

- How do we find this edge? So I can give you all the knowledge that I’ve but if you’re
not working hard it won’t be useful. You’ve to work your ass off until it pays. To
find your own strategy you have to start with demo account. You’ll need at least 1 or
two months of demo demo and demo.

- If you find your edge you’ll be able to kill the market because it would mean that you
have found the strategy that is working for YOU

What I would recommend to you is to start with:

- Trading Plan: a trading plan is the name of your own document where you will
note all of your winning and losing trades. Inside this document you’ll have to
explain for each of your trades why you’re getting in this or this trade. Like
that, through the time you’ll see which method is working or not for you.

- Risk management: Manage your account with your rules, don’t over trade and
keep patience. During the lesson I’ll be explaining to find a good risk manage-
ment à TP/SL & Lot size)

Demo is great to build experience and to test your entries and exists live with-
out losing your money. Once your edge is consistently wining you will be able
to move to a live account.
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3) Trader Mindset:
Only trade when you have chosen your trades meticulously, when all of your conditions
have been respected. When you’re trading be 100% focus on what you’re doing don’t worry
about what’s happening next to you: when you’re trading, you’re trading nothing else
matter. Your mind needs to be clean and still. It has to be calm, I cannot say relaxed because
you’re working with real money, this money is yours or this is the money of your client and
you cannot lose it, but try to be as relaxed as you can. Stressed people are never successful.
Be patient some days there is nothing to trade, it’s prefer to spend your money with your
friends whereas in the forex market. Learning how to be patient is another piece of the
puzzle.
Your analyses need to be clear and organized. If your chart is not clean then you won’t be
glad to open your computer to look at them. At the opposite when they’re clean you’re
happy to be here, to check if everything is ok, to see if there is a new opportunity. Don’t
rush, if the market is near to your set-up don’t trade, only trade when it’s reaching your step-
up.
Be careful when you’re jumping from Demo too Real, there is a big difference. On demo
you don’t have emotion control so you’ll more easily win your trades, you’ll feel invincible
but then when you’ll go live you’ll be under prepared. To be honest most of my students
who becomes really successful are on demo for a period of 3 to 6 months before going live.
Don’t rush it’s not because you’re spending one more month on demo ago that the forex
market will disappear. We’ve the whole life in front of us! The market will always be here,
even ten years from now.

I always say that trading is an art, don’t try to make it looks harder than it
really is
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What types of trader I want you to be?

1) Technical trader

To be honest 90% of the market is purely technical. This style is rarely used in other
financial markets. The technical analysis entails the study of historical currency price
chart in order to recognize patterns and technical signals. So you’re a kind of artist
who’s trying to understand how this lovely market is working by using your own
tools. In technical analysis we generally use simple tools as trend lines, support and
resistance, candlesticks and few indicators.
You can note that your technical analyze can be different depending of your time
frame.

2) Who is swinging.

Swing trading is a style which is trades based on a medium term market views. Swing
traders are generally using 4H, daily, weekly and monthly timeframes. A swing trade
can be hold from 1 day to few months.
When you’re a swing trader you’re not stressed, you’re not waiting behind your
computer counting every single pips before hitting your take profit. Swing traders are
generally trading the trend, they rather prefer to go with the trend. They trend is their
friends.

- Fundamental trading is something more complicate where you

need to work with different types of economic models.

- Scalp trading is not working consistently in the forex industry. If

you can win once or twice take your profit but stop or it will
burn you.
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3) Technical Analyze, Forex Market

1) First step, trend-lines

What is a trend line?

The first thing that you have to do when you’re opening your charts is to watch if we’ve bearish or
bullish trend. What’s bearish and what’s bullish?
Bullish means it’s going up.
Bearish means it’s going down.

It is necessary to know the type of your trend because we never sell in a bullish trend and never buy
in a bearish trend.

Few things about trend lines:

- To find your trend-line you have to go at the weekly chart.
- Trend-line need to touch shadows.
- They also need to be parallel (90% of the time)
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Example of trend line:

Some tip for trend-line:

- Trends lines generally break at the end of the year as a new trend is begins.
- Trend lines are extremely important because they release a lot of information’s:

Now you know what’s a trend-line but what do we’ve behind it?

When we’ve a peak formation low or a peak formation high, several spikes may appear which are
all apparently contained by a trend-line. But what is really happening here? The market maker
(MM) is trapping volume and it’s important to notice that each subsequent spike it’s not lower or
higher than the previous so that any new trades taken in the direction of the spike do not have an
opportunity to become profitable: they become trapped.

We can see in the example below, the speak low is identified and followed by 2 further downward
spikes. The important feature to notice is that each of the spikes is higher than the previous which
prevents short position holders from taking any profit whilst potentially encouraging new short in
this region.
So in a bullish trend there is no logic to sell and in a bearish trend there is no logic to buy.
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Now let’s talk about Wedge zone: (type of trend)

In the example below you can observe that on the lower boundary of the wedge the peaks become
slightly higher each time it comes down to the line. ( à So there is no logic to sell) This has the
effect of ensuring that none of the trades that are taken short in these region can turn a profit.
Similarly, on the upper boundary of the wedge, the same thing is happening with each of the peaks
becoming progressively lower and trapping the higher level longs and pulling them down. (No logic
to buy).
I would recommend to you to not trade Wedge zones: they’re risky. There is no way of predicting
which direction the price will ultimately breakout. This will be determinate by the net volume that
occur. In other words, if there is a greater build-up of short positions over the long positions then
then wedge will break up.
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2) Resistance and support

What’s a Support?

The support is the price level to which historically a stock has had difficulty falling below. It is
thought of as the level at which a lot of buyers tend to enter the stock.

What is a resistance?

A resistance is an area of resistance which indicates that the stock or index is finding it difficult to
break through it, and may decrease soon after. The more times that the stock or index has failed at
breaking through the resistance level, the more formidable that area of resistance becomes.

When you’re trading you have different kinds of resistance and supports.
We have stronger resistance and stronger supports that we call major resistance and major supports.
Major Resistance and support are very hard to break; to break them you generally need economic
news.
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How to find Major resistance and Major support?

- To find them you have to refer to the daily charts

- The major resistance is the highest resistance
- The major support is the lowest support.

Then you can look for the intra resistance and intra supports. They’re situated between the major
resistance and the major support.
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Why do we use Resistance and Supports?

Resistance and supports levels are widely used by experienced traders, to formulate trading
strategies. For example, if a stock is approaching to a resistance level, maybe you could look for a
sell position, and close your buy position. The market is bouncing between the resistance and
supports. So generally people are using the concept of buy low sell high.

Let’s analyze one chart:

Here we’re in a bullish trend, which means we only buy.

As I explained to you, we buy low, so we’re buying when the market is near to the support. All of
the orange area are positions that I traded.
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3) Stochastic

What is the stochastic?

The stochastic oscillator is an indicator that measures overbought and oversold conditions in the
currency market. The two lines are similar to MACD lines in the sense that one line is faster than
the other.
The stochastic tells us when the market is overbought or oversold, it is on a scale of 0 to 100.
- From 0 to 20 we say that the market is oversold.
- From 80 to 100 we say that the market is overbought.
- When the stochastic is between 20 and 80, it is useless.

When the market is overbought it means that the price will drop à Therefore we sell.
When the market is oversold it means that the price will go up à Therefore we buy.

That’s the basis of the Stochastic. Many forex traders use the stochastic in different ways but the
main purpose of this indicator is to show us where the market condition could be overbought or
oversold.
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Personal example of how I use stochastic:

This indicator helps us to determine when we want to get in a trade. For example, when in a bullish
trend, we’re near to a resistance and we want to buy, we can refer us to the stochastic to confirm
that this entry is good:

What can we notice?

- In this example we can clearly see the correlation between support and the
stochastic.
- If there is no link between them it’s probably that you have drawn the wrong
resistance and the wrong support.
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4) Parabolic SAR

What is the parabolic SAR?

The parabolic SAR is an indicator that shows us the trend, it is totally different of the stochastic.
It’s composed of dots which can be above the candles or below.

The parabolic SAR is very simple:

- When the dots are below the candles it means that it is a bullish area so we can buy.
- When the dots are above the candles it means that it is a bearish area so we sell.
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How do we use the parabolic SAR?

The parabolic SAR is not useful at the beginning it won’t help you to find the good entry, to find the
trend. If you want to use this tool to find you entries, you’ll always be late and probably lose most
of your trades. I use this tool help me to determine when I should close my trade.

For example, if I’m in a buying position the dots are below the candles. I’ll hold my trade until the
dots start being above the candles.

Here an example:

When the dots are showing a buy positions with EURGBP, purchases are easy. But then when
they’re showing a selling, it must be closed. It means that we reached our take profit.
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5) Elliot waves

What’s the Elliott waves?

Elliott wave is a theory developed by Ralph Nelson Elliott. This theory identified a certain structure
to price movement in the financial markets. The basic Elliott wave is composed of 5 wave/impulse
sequences and 3 corrective waves. People generally find this strategy pretty hard to understand but
I’m going to show you how it can be easily used.

Elliott wave illustrates that EVERY action is followed by a reaction.

There are two types of waves:

- Impulse ones move with the trend (Wave 1, 3 and 5)
- And Corrective ones move against the trend. (Wave 2 and 4)

Some rules to respect:

Rule 1: Wave 2 cannot retrace more than 100% of the Wave 1.

Rule 2: Wave 3 cannot retrace more than 100% of the wave 2.
Rule 3: If Wave 3 is very long, wave 5 will be short.

- We generally buy at the end of the 2nd and 4th steps.

- Elliott waves are generally present at the daily and 4H charts
- Do not only focus on Elliott wave. Elliott wave is extra information, if there is no Elliott
wave it does not matter.
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Elliott wave is not only composed of the 1,2,3,4,5 steps but also the A, B, C correction. I personally
don’t trade each step of the Elliott wave correction I just put a sell order when it reaches the 5th step.

Example of Elliott waves:

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6) Candlesticks

First, what is a candle?

There are two types of candles: bearish and bullish one.

- A bullish candle is a candle which is going up, it means that if it is opening at 36.00
it will close at 36.50
- A bearish candle is the exact opposite of this one. So if the candle opens at 36.00 it
will close at 35.00

Candles have a rectangle form and they generally have shadows but it's possible to have a candle
without any shadows. Shadow represent the highest level and the lowest level that the candle
reached during the time frame selected.

There are different types of candles: the 5 minutes’ candle, 1 hour, 4 hours, daily, the weekly,
monthly... So if we take a daily candle each candle represents a day, so you will have from 28 to 31
candles per month. You also have the same with the 1 hour charts, each candle represents 1 hour so
we have 24 candles per day.

Most important thing with candlesticks:

The 1st and perhaps most important thing to understand about candlesticks and price action is that in
the wrong market conditions they have little or no meaning. You’ll see that a hammer in the middle
of the trend is relatively meaningless. At the opposite, a hammer at the high or a low of the day has
a great deal of significance.
à Candlesticks are like books; they deliver us information about what will happen in the market.
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DODJI CANDELSTICKS:

What is a Dodji candle?

You need to have a micro-candle that has the same opening and closing price but has big shadows.
The Dodji candles is the most popular candlestick. The Dodji is a pivot candlestick, it changes the
trend: if it's going up after the Dodji it will go down, but if it's going down it will then go up.

How to trade it?

We ALAWYS Trade Dodji when they are near the resistance or the support.
When the Dodji is near to the resistance We sell
When the Dodji is near to the support We buy
It is important to be careful when the Dodji is in the middle as it is too risky to trade.
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MARUBOZU CANDELSTICKS:
What is a MARUBOZU?
A marabou is a full candle that has no shadows. It only pushes one way, pushing up or down. This is
a conviction candlestick.

How to trade it?

If the Marubozu breaks the resistance, the bullish Marubozu show us that the breakout has been
successful and there is no possibility of sale. Our resistance is now our support.

If the Marubozu is near the resistance and it’s bearish it means it's going to change the market trend,
and it's going to go down.
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HAMMER/ HANGING MAN CANDELSTICKS:

What is a Hammer?

It's a bullish reversal signal. It means if the trend is going up, it's going to go down immediately
after. If it's going down, it's going to go up after the Hammer. The Hammer is composed of a Long
Lower shadow, (at least 2x the size of the real body) but no upper shadow, and a small real body.

How do we trade it?

The Hammer is a pivot candle which means it changes the trend. So the HAMMER here represents
a buying action. The trend is going down, then goes up. The hanging man is the same candlestick as
the Hammer, they only have a different name.
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SHOTING STAR/ INVERTED HAMMER CANDLESTICK:

What are Shooting stars/inverted hammers?

It's the exact opposite of the hammer. So it's not a bullish reversal signal but a bearish reversal one.
It means the same as the hammer, so if the trend is going up, it's going to go down immediately
after. If it's going down, it's going to go up after the Hammer. The Shooting star is composed of a
Long Upper shadow, (at least 2x the size of the real body) but no lower shadow, and a small real
body.

How to trade it?

The star is a pivot candles so it changes the trend, so the ' Shooting star ' here represents a selling
action. The trend was going down, now it will go up. The inverted Hammer is also going to ensure
an upward trend.
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DARK CLOUD COVER PATTERN CANDELSTICKS:

What is a Dark Cloud Cover?

The first is a long bullish candle, the second one is bearish that closes below the middle point of the
1st candle. They generally don't have shadows, but they can. The real body needs to be big. We need
to see a change in a market that is not a micro-change. The dark cloud cover needs to be done
during a strong upward trend.

How to trade it?

The first one is a Dark cloud cover because it formed after a strong upward trend. But the second
one is not a Dark cloud cover because it’s a down trend
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THE BULLISH PIERCING PATTERN:

What is a Bullish piercing pattern?

The first is a long bearish candle. The second one is bullish that is closing below the middle point of
the 1st candle. The real body needs to be big. We need to see a change in a market. The dark cloud
cover needs to be done during a strong upward trend.

RISING THREE METHOD CANDLESTICKS:

What is a Rising three method candles?

The first one is a long bullish candle. The next 3 candles are small and are bearish. The 4th one is a
long bullish candle that closes above the first bullish candles. The 3rd candle can sometimes also be
bearish.
What is a Dark Cloud Cover?
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FALLING THREE METHOD CANDLESTICKS:

What is a Falling three method candle?

The first one is a long bearish candle. The next 3 candles are small and are bullish, but the 4th one is
a long bearish candle that close above the first bearish candles. The 3rd candles can sometimes also
be bullish.

How to trade the RISING AND THE FALLING three methods?

RISING:
When you have an uptrend, and you see long candles like the first one, you need to wait and see a
candle confirmation. Here, you would sell after the 2nd bearish candlestick. It can also be traded
after the high level. It is important to sell after a Dodji or another special candle.

FALLING:
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It must be traded during a DOWNTREND. When after the first long bearish candle and the 2nd
bullish candle can be seen: buy, take profit and then close. Then you can also sell the long bearish
candlestick.

THREE WHITE SOLDIERS:

What do we need?
The three white soldiers are a bit harder to trade, and are rarer, but are tradeable.
We need to have 3 candlesticks with real large bodies,
They also need to have small or no shadows.
The first candle is usually a bullish piercing or engulfing candle.
The second candles have to be bigger than the first ones.
The third one should be at least the same size as the second candle.
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THREE BLACK CROWS:

What is needed: the same as a Three with soldiers, but for a bearish zone.

The last thing with candlesticks:

After a big drop the market must chop à So it will go up.

After three days (max 4) of drop the market must chop à So it will go up.
After a big rise the market needs more guys à So it will go down.
After three days (max4) of rise the market needs more guys à So it will go down.

That’s nice for swing positions: If you are in a bullish trend you bought when it was near to the
support and now it’s going up. Then you see 3 bearish candle so you know that you can rebuy. Of
course this new positions needs to be smaller than the 1st one.

à This is not a real strategy this is more something we can notice in the market. It cannot guarantee
you a 100%-win ratio.
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Here is the key to your success:

Generally, people think that there is only one real strategy in the forex
market but that is wrong. In the forex market you need to learn FEW
strategies. When you’ve all of the knowledge needed you can finally start
to trade. But how?

If you want to trade you need to know and understand all the information
that the charts reveal. Here is an example:

- Candle rejecting the support So buy.

- Dodji candle, so changing the market trend. Going down now will go up Buy.
- Stochastic is oversold so it means it will go up. Buy.
- RAS sell signal stopped, now we have a Buy signal Buy.
- Kind of Elliott wave done (5th step reached so ABC correction) Buy.
- Support, simple strategy of buy low Buy.
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7) Bollinger Band
What’s the Bollinger band?

Now that we’ve seen how to be a swing trader, I’ve to show you how a real trader can scalp.
Scalping is riskier, there is more speculation. When you’re a swing trader you’re always trading the
trend. At the opposite a scalper trader can sell in a bullish trend or buy in a bearish trend. I
personally think that the best scalping strategy is the Bollinger bander.
Be careful, this tool can be used for swinging or scalping.

I’m going to show many ways of how the Bollinger bander can be used.

The composition of the Bollinger bander:

The Set-up is:
Length: 20
Standard deviation: 2

There are 3 lines:

- The highest one which is a kind of resistance
- The lowest one which is a kind of support
- The middle one which is the moving average.

In our case we will only focus on the resistance and the support.

The Bollinger band is an indicator that is used to measure the market volatility. Basically, this tool
tells us whether the market is quiet or whether the market is loud.

When the market is quiet the band is contracted:

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When the market is loud the band is expanded:

How is this information important?

When the Bollinger bands are contracted it means that the market is in a consolidation area. If
they’re contracted near to a support it means it will go up.
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If they’re contracted and near to a resistance it means it will go down.

So to conclude this first part with Bollinger band, this tool helps us to see when a breakout will
appear. When the bands are contract it means that a break out will happen. If they’re near to the
support the breakout will be bullish, if they’re near to the resistance the break out will push down.
Like I told you before the Bollinger band is composed of the 2 important lines, the highest one :
resistance and the lowest one: support. When a candle is closing under the Bollinger band resistance
we can consider that we’ve a good opportunity to sell.
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Here is an example of all of the information’s that you can mix with the Bollinger band:

The 2nd way of how do we use the stochastic: (Only at the 4H charts)

This is probably the only strategy that I would recommend to you to directly trade from your phone
on MetaTrader4.

This is only a logical part that you can understand after having some experience in the forex market
and understanding how everything is working behind it. If you don’t understand just buy and sell
when the conditions are respected.

If the highest line (resistance) of the BB is broken, then we sell.

WHY?
Because it means that in this short period there is too many people who bought this pair and this is
the reason why this pair is rising up. But market makers need to correct that, so to trap you they’ll
sell a higher volume than all of the retail traders and it will go back to the initial trend in the short
term.

If the lowest line (support) of the BB is broken, then we buy.

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8) Fibonacci
How do we use it?

A lot of people are contacting me to understand how Fibonacci works. There is an infinite way to
use this tool, but I prefer to use it as an indicator which shows us resistance and support.

Fibonacci retracement lines are based on the Fibonacci sequence and are considered a predictive
technical indicator providing feedback on possible future exchange rate levels. Some traders only
swear by the accuracy which Fibonacci retracement give us. A small part of trader think that
Fibonacci is more an art than a science. But trading is an Art, isn’t it?

I’m going to show how I’m using this tool:

- I always use it at Daily chart.

- It’s only giving me confirmation of my resistance and supports.
- When you’re drawing the Fibonacci retracement you’ve to draw it thank to the shadows.

Here is a virgin chart where I draw:

- Weekly trend: Bearish, so only sell positions.
- Daily Resistances and supports. We see that the market broke the last support which
becomes a new resistance. The candle is trying to go back up. Let’s see if we will have a
candle rejection or not.
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NOW I’m going to show you how I use Fibonacci to confirm that my resistance and support are ok.

Now let’s insert the Fibonacci like I explained to you.

As we can see the Fibonacci retracement is showing us that I’ve draw the good resistance and the
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good support.

And as excepted, it dropped:

Not let me tell you what people think about Fibonacci:

Fibonacci is composed of few ratios:

The first set of ratios is used as a price retracement levels and is used in trading as possible support
and resistance levels. The reasons we have this expectation is that traders all over the world are
watching these levels and placing buy and sell order at these levels which becomes a self-fulfilling
expectation.

The second set is used as price extension levels and is used in trading as possible profit taking
levels. Again, traders all over the world are watching these levels and placing buy and sell orders to
take profits at these levels which becomes a self-fulfilling expectation.
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4) Fundamental Part of the Forex Market:

1) Economic news
Every day the market sees the release of important piece of economic data. The FED minutes, US
CPI or manufacturing number and Eurozone interest rate are called macroeconomic data. And these
data releases impact price action, both long term and short term.

Fundamental announcement is a vital part of trading Forex, stocks and pretty much all markets. The
help to move the Market along faster, creating huge liquidity in short periods of time. They also
create a lot of volatility, this combined with liquidity can be taken advantage of. The general
consensus is and always has been the Market will follow the economic numbers.

Let’s talk about the most important factors: Interest rates and higher interest rates:

First of all, you need to understand the difference between the real interest rate and the interest rate
in the economy. BUT don’t worry, even if you don’t understand it doesn’t really matter because
90% of the time on the economic calendar you’ll only have the economic interest rate and not the
real interest rate.
1) If I’m talking about the real interest rate of the country, yes there is the economies interest
rate but not only there is a lot of other elements.
I made this example with 2 models: IS-LM and Mundell-Fleming.
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2) NFP
To summaries: For that kind of news if we’ve a higher interest rate it will provoke an appreciation
of our currency. So today you, the British investor, you’re giving me 1£ for 1.3CHF but tomorrow
you’ll give me 1£ for 1.2CHF, so you’ll receive less, so you won’t continue to invest in my country
because it becomes too expensive for you.
But 90% of the time the interest rate works like that:

- Lower interest rates will provoke a currency de-value. There is less investment, due to the
lower rate of return. Interest rate drive the flow of money, which is the very back bone of the
Forex Markets.

- A Higher interest rates at the opposite will provoke a better value for the currency. More
people will invest in the country.

- Manufacturing data are strong data for industrialized countries. It’s positive if the No’s are
higher than expected, and Bearish if the No’s are lower than expected.

- Employment data: higher employment, weak inflation and a strong consumer confidence
No’s will be positive for the currency. If we have a weak employment, consumer confidence
and a strong inflation it will have a negative impact on the currency.

Special information’s: (not always true)

If the price of the Crude oil increase, then WTI will rise up.
If we’ve growth of the inflation gold will rise up.

What’s the NFP?

NFP is the Non-Farm Payroll. This is a statistic researched recorded and reported by the US
bureau of Labor Statistics intended to represent the total number of paid US. Workers of any
business, excluding the following employees:
General government employees
Private household employees
Employees of non-profit organizations that provide assistant to individuals
Farm employees.
The NFP is reported monthly, on the first Friday on the month and is used to assist
government policy makers and economist determine the current state of the economy and
predict future levels of economic activity. So it’s normal that NFP create a lot of volatility
and havoc in the market. Straight after the data release there will be sudden spikes in price
across all USD pairs.
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5) More elements
How everything is working in the market:

A large number of transactions are required to shift the price. It costs about 10 000 lots to move the
market by one pip. If one institution places an order to buy 1 000 000 000$ which is 10 000
contracts of Euro then it would require 10 000 trader selling one contract each, or 100 000 traders
selling 0.1
A market maker is someone who has the intermediaries function in sales and purchases between
two currencies. For example, a bank will function as a market maker when it collects sellers of the
US dollar to then sell to investors who have Euros in exchange. The value of each currency is based
on the current market value.
What you need to understand is that Market Makers (MM’S) are traders and their objective is to
make money. The major difference between them and other trader is that they’ve massive volumes,
so they can move the price as they wish. So to make money they achieve this:
- Including traders to take positions:
They play with a range of price movement to trick traders into taking a position in a given
direction but then reversing it again. For example:
MM can sell a specific currency at a certain price and then buy it back at a lower price when the
retail traders feels to much pain from the currency value moving backward and wanting to sell it
again.
- Create panic and fear to induce traders to become emotional and think irrationally:
Quick moves
Spike candles
News releases
Inexplicable price behavior.
- Hit the stops and clear the board:
This forces traders into ‘’margin trouble’’ and ultimately out of the game. One of the most
powerful tool they’ve.

Brokers and dealers have mechanisms available to them for manipulating price to enable the
process of taking money from traders, who are also their clients.. That’s sad.
Traders transactions are dealt from their house and they never make it to the interbank market so it’s
very easy for them to manipulate price to their own advantage.
They have a number of additional tools at their disposition:
- Requoting the pair
- Trigger all stops in a given price range
- Changing the spread à This is why the scalping method often fail.
- Throw a price spike to hit stop lost.
- Target traders who are in a margin trouble and move price against their positions to ‘’finish
them off’’.
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STEP 1: here the Money makers oups.. the market makers already knew that this pair will go back
up. But as we can see there is a resistance so if we’re trading at the daily timeframe it doesn’t really
matter because the daily candle didn’t break the support. But if we’re at the 4H charts or 1H then
we have a problem: the candle broke the support so should we continue to short//sell this position?
The answer is NO! Market makers are playing with you; they’re trying to show you the wrong
direction like that you’ll sell but then it will rise up.
With my strategy we call the 1st candle: candle rejection.
STEP 2: here we’ve a dodji candle which is another information that the price will go back up. For
short term trader it a weird zone where they don’t know what’s happening because the candle
number 1 broke the support, but then it’s rising up.
STEP 3: here we’re holding, nothing special is happening: consolidation zone.
STEP 4: Our profit is here!
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Few rules to respect in trading:

1)The most important rule for me is, when you want to get in a
trade be sure about it, never trade when you're scarred. Sometimes
there is nothing to trade, so don't be aggressive with the market, take
your time.

2) The second one is when you close your trade and you see that
it’s still going up, don’t rebuy, it’s too risky! If you closed your trades
it means, there is a reason. Better to trade safely.

3) Be careful with the risk management, don't trade 0.50 lot size
if you only have 200$ on your account: use the leverage.

NEVER, NEVER listen the others, if you trust in you you’ll be

4)
successful. Never trust the others. You're the future Warren Buffet.

5)Your analyze need to be CLEAN. Don't try to put 100

resistances, 100 supports and 20 trend-lines, just try to do your
analyze clearly, trading is already an art, it has to be beautiful.

6)When you are trading all of the strategies are not good for you,
try to find your own strategy, and this strategy will make the
difference between you and the others.

If you follow all of this rules, you'll make money, Good Luck.
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