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TRADING SEMINAR

Raising Investment Standards. TRADING SEMINAR. Raising Investment Standards.

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TRADING SEMINAR

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  1. Raising Investment Standards TRADING SEMINAR

  2. Raising Investment Standards Leveraged foreign exchange and options trading carries a significant level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with foreign exchange and option trading, and seek advice from an independent financial advisor if you have any doubts. The contents provided in this seminar are subject to change at any time without notice. There is no guarantee that the systems, trading techniques, trading methods, indicators or other information presented at this seminar will result in profits or not result in losses. The content is provided for informational purposes only and is not intended as a trading recommendation. DISCLAIMER

  3. FX TRADING The Basics Trading Tools Money Management

  4. FX Market • What is FX? • Characteristics • High Volume: USD 4 trillion/day • - 80% speculation • High Liquidity: Tight Fixed Spread • High Leverage: 1:100 • Trading Hours: 24/6 • Accessible • Purely Electronic • Short Selling without any rule • Fits Technical Analysis Studies

  5. FX Market • FX as an Asset Class • Major Currencies • USD,EUR,CHF,GBP,CAD,JPY,AUD,NZD • Traded in Pairs: EUR/USD, AUD/USD… • More Combinations EUR/GBP….

  6. FX Market • Tick Size • 0.1 Pip : • the smallest price increment in FX trading • Pip Value : • depends upon the pair being traded and its price

  7. FX Market • Leverage • Loss and Recovery Simulation • Initial Capital: $ 10.000

  8. FX Movers • Global Macro • Key Economic Indicators • Interest Rates Differentials • Risk Appetite V/S Risk Aversion • M&A Activity • Auction Results

  9. Advantages Of AKSYS Trading Platform • Most competitive fixed spread • Commission-free trading • Swap free trading • No slippage • Minimum of 10,000 trading unit • Streamlined dealing on real-time prices • Place orders inside the spread • Hedging capabilities • No debit balance • Built in back-office • Round the clock help desk : • Technical analysis • Macro views • Execution

  10. AKSYS Trading Platform

  11. Order types : • Market Orders

  12. Order Types : • Pending Orders

  13. Understanding The Terminal

  14. Money Management & Trading Strategies • Trading Frequency • Trading Size • Trader Behavior • The Fallacy Of Winning Streak

  15. Trading Frequency • High: • Always in the market • Hit & Run • Between 10 to 30 trades per day • Cut all accumulated losses when breaking a trading range

  16. Trading Frequency • Low : • Opportunistic • Swing Positioning • Between 2 to 3 trades per week • Trailing Stop Loss

  17. Trading Size • On a fixed USD stop loss value basis • Consistency • Check your risk level

  18. Trader Behavior • Trend • Buy / Sell continuous patterns • Counter Trend • Sell Resistance • Buy Support

  19. The Fallacy Of Winning Streak The trader has a 75% winning trades but ends up losing money.

  20. The Fallacy Of Winning Streak The trader has a 50% winning trades and ends up winning money.

  21. Adding To A Winning Position EUR/USD:

  22. Technical Analysis • What is Technical Analysis • Technical analysis is defined as the art of forecasting the market trend direction through analyzing the current and historical price action and projecting it into the future by using different tools. • Historical Glance • Homma Munehisa(1724-1803) • Charles Henry Dow (1851-1902) • Ralph Nelson Elliott (1871- 1948) • William Delbert Gann 1878-1955)

  23. The Use Of Technical Analysis • It provides: • The time to enter the market • Decision: Long, Short, or Not to enter • The Stop Loss Level (invalidation of the scenario or bias) • The Time Frame Of The Trend • The Profit Taking Level (Trade Objective) • All these factors are exploited in product structuring in order to estimate the product maturity (duration of the trend) and the bias of the product (direction of the trend) barrier level (support resistance).

  24. Technical AnalysisTools Explained • The Three Major Factors For Technical Analysis are: • Time • Pattern • Price

  25. TIME • Time is divided into five categories: • Dynamic Projections/Retracements/Alternations form tops and bottoms • Fixed Time Cycles • Seasonal Cycles • Astrologic Cycles • Gann Squares and Fibonacci Numbers

  26. Examples Swings relation based of the Fibonacci ratios to achieve a time cluster for a top

  27. Fixed Cycle GBP/USD daily chart: Every 12 trading days a bottom is marked even though is adown or an uptrend.

  28. Seasonal Cycles Known as “anniversary dates”: you choose a specific date or period for a specific chart and check it historically to know the behavior of the market at this period.

  29. Application of the Fibonacci series number and ratios between bottom and tops on time analysis

  30. PATTERNS • Patterns are divided into three categories: • Classical • One to Three Bars • Elliott Waves

  31. Classical Patterns • These patterns are discovered by observing and studying the historical charts data • Their names often reflect the shape of the formation such as the Double Top, Double Bottom, Head and Shoulders Top, Flags and so on. Example:

  32. An inverted head & shoulder that reverse this daily bearish trend.

  33. A continuation wedge in a daily Bearish trend A continuation wedge in a daily Bearish trend

  34. One to Three Bar Patterns • These reversal bars are telling you that the trend for that time frame has run out of gas and that no new buyers or sellers are coming into the market. • Outside Key Reversal • Key Reversal • Reversal Bar • Snap-Back Reversal • Signal Bar • Gap Signal • Reversal Confirmation

  35. Example: An hourly up trend with a reversal bar pattern at each bottom.

  36. Reversal Bar Pattern at each top on the Euro Hourly Chart.

  37. Elliott Waves • There are five waves in the direction of the main trend followed by three corrective waves (a "5-3" move) • An impulsive wave (1, 3, 5), which goes with the main trend, always shows five waves in its pattern • Corrective waves within a five wave sequence are waves two and four. • Once a five wave pattern completes, the entire sequence should becorrected by a pattern of either three waves (ABC )

  38. PRICE • Wave patterns of a similar degree are related to each other by Fibonacci ratios. • Fibonacci numbers provide the mathematical foundation for the Elliott Wave Theory. • The challenging part of Elliott Wave Theory is figuring out the relativity of the wave structure. • Important price levels will be found when a narrow price zone is projected from several different ratios and from several different degrees.

  39. Here is a squaring between time and price based on Fibonacci ratios that confirm the count of Elliott wave

  40. Minor Factors • Oscillators: • Moving Average Convergence Divergence “MACD” • Relative Strength Index: RSI • The Oscillators are used to indicate: • Overbought and Oversold Areas • Divergences • Moving Averages: • The Moving Averages are used to indicate: • The direction of the trend • Dynamic Supports and Resistances

  41. Putting all together:

  42. Here (EUR chart above) is a combination of all technical tools described before: • Time: • Fixed Cycle Bottom vs. Top that indicates a time zone for a top. • Patterns: • Elliott Wave count for four degree (lesser degree confirm the higher ones) • One bar reversal at each bottom to confirm the new up move. • Price: • Price relations Elliott Wave Theory using Fibonacci Ratios to marker objectives: 100% 161% form WI, 38.2% from WI-III, 100% from last swing projected from the bottom of WIV. • EMA: • Exponential moving averages (50,66,252) acting as dynamic supports and resistance. • RSI and MACD: • Reaching a repeated historically level that confirm the reversal bar at each bottom.

  43. After:

  44. Since 13 June 2007 the EUR is trending upward forming a 5 waves cycle (blue degree) confirmed by the lesser ones (green & red). Forming on the highs, a potential double top accompanied by a clear divergences on both MACD (39.19.9)& RSI (14) on daily and weekly charts & a confirmed Head & Shoulder at the right top. • Over a year this upward rally was sustained by the 133 EMA (green dotted line) and the Red trend line that are breached 2 times. • The sideways range since 23 April 2008 has overbalanced in Price and Time the similar formation that started 23Nov 2007 ended 7 Feb 2008. • All these technical indications suggest that the EUR is suffering at these levels to test bearish first support 1.5285 (neckline of double top + W4) that will squeeze the market on its break at least 750 pips gradually 1.4968, 1.4652, 1.4311 • What invalid the bearish bias is the break of 1.6038 otherwise every upward rally is considered as a selling opportunity.

  45. GBP/USD hourly chart shows a market rhythm (equality between the impulsive down moves and the corrective up ounces)

  46. CONCLUSION • Technical analysis is a tactical method that generates substantial profits. • The selection of the trade is done by the combination of the different technical methods and dimensions.  • Besides, technical analysis is a decision tool for asset allocators, product structures, hedge fund managers for its high probability of accuracy in market timing and opportunity spotting.

  47. Raising Investment Standards 6th Floor, Netherlands Tower, Charles Malek AvenueP.O.Box: 16-6631, Beirut, LebanonPhone: +961 1 217 888 Fax: +961 1 217 889E-mail: contact@aksyscapital.comWeb: www.aksyscapital.com

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